2Q and 1H 2023 Financial Results Report

TBC BANK GROUP PLC ("TBC Bank")
2Q AND 1H 2023 UNAUDITED CONSOLIDATED FINANCIAL RESULTS
Forward-Looking Statements
This document contains forward-looking statements; such forward-looking statements contain known and unknown risks, uncertainties and other important factors, which may cause the actual results, performance or achievements of TBC Bank Group PLC ("the Bank" or "the Group") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on numerous assumptions regarding the Bank's present and future business strategies and the environment in which the Bank will operate in the future. Important factors that, in the view of the Bank, could cause actual results to differ materially from those discussed in the forward-looking statements include, among others: the achievement of anticipated levels of profitability; growth, cost and recent acquisitions; the impact of competitive pricing; the ability to obtain the necessary regulatory approvals and licenses; the impact of developments in the Georgian and Uzbek economies; the impact of COVID-19; the political and legal environment; financial risk management; and the impact of general business and global economic conditions.
None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises, nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects are based are accurate or exhaustive or, in the case of the assumptions, entirely covered in the document. These forward-looking statements speak only as of the date they are made, and, subject to compliance with applicable law and regulations, the Bank expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in the document to reflect actual results, changes in assumptions or changes in factors affecting those statements.
Certain financial information contained in this presentation, which is prepared on the basis of the Group's accounting policies applied consistently from year to year, has been extracted from the Group's unaudited management accounts and financial statements. The areas in which the management accounts might differ from the International Financial Reporting Standards and/or generally accepted U.S. accounting principles could be significant; you should consult your own professional advisors and/or conduct your own due diligence for a complete and detailed understanding of such differences and any implications they might have on the relevant financial information contained in this presentation. Some numerical figures included in this report have been subjected to rounding adjustments. Accordingly, the numerical figures shown as totals in certain tables might not be an arithmetic aggregation of the figures that preceded them.
2Q and 1H 2023 Consolidated Financial Results Conference Call Details
TBC Bank Group PLC ("TBC PLC") published its unaudited consolidated financial results for the second quarter and first half of 2023 on Thursday, 10 August 2023 at 7.00 am BST. The management team will host a conference call on the day at 2.00 pm BST to discuss the results.
Please click the link below to join the webinar:
https://tbc.zoom.us/j/98092026368?pwd=dW0yME1wc3FzQjlQNHNWN3pqc2FwUT09
Webinar ID: 980 9202 6368
Passcode: 525944
Other international numbers are available at: https://tbc.zoom.us/u/acM1CxH4j5
The call will be held in two parts: the first part will comprise presentations, while participants will have the opportunity to ask questions during the second part. All participants will be muted throughout the webinar.
Webinar Instructions:
In order to ask questions, participants joining the webinar should use the "hand icon" visible at the bottom of the screen. The host will unmute those participants who have raised hands one after the other. Once the question is asked, the participant will be muted again.
Call Instructions:
Participants who use the dial-in number to join the webinar should dial *9 to raise their hand.
Contacts
![]() |
Andrew Keeley Director of Investor Relations and International Media
E-mail: [email protected] Tel: +44 (0) 7791 569834 Web: www.tbcbankgroup.com
| Anna Romelashvili Head of Investor Relations
E-mail: [email protected] Tel: +(995 32) 227 27 27 Web: www.tbcbankgroup.com
| Investor Relations Department
E-mail: [email protected] Tel: +(995 32) 227 27 27 Web: www.tbcbankgroup.com
|
Table of Contents
2Q and 1H 2023 Unaudited Consolidated Financial Results Announcement
Interim Management Report
Financial Highlights
Operational Highlights
Letter from the Chief Executive Officer
Economic Overview
Unaudited Consolidated Financial Results Overview for 2Q 2023
Unaudited Consolidated Financial Results Overview for 1H 2023
Additional Disclosures
1) TBC Bank - Background
2) Consolidated Financial Statements and Key Ratios 2Q 2023
3) Consolidated Financial Statements and Key Ratios 1H 2023
4) Financial Disclosures by Business Lines
5) Market shares in Georgia
6) Loan Book Breakdown by Stages According IFRS 9
7) Glossary
8) Ratio Definitions and Exchange Rates
Material Existing and Emerging Risks
Statement of Directors' Responsibilities
Condensed Consolidated Interim Financial Statements (Unaudited)
Independent Review Report ..…………………………………………………………………....……….………….. 46
Condensed Consolidated Interim Statement of Financial Position……………………………………….….………. 48
Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income…….…...……….. 49
Condensed Consolidated Interim Statement of Changes in Equity……………………....…………………..……… 51
Condensed Consolidated Interim Statement of Cash Flows…………………………………………..……….…….. 52
Notes to the Condensed Consolidated Interim Financial Statements……………………………………………..…. 53
2Q and 1H 2023 Unaudited Consolidated Financial Results
2Q 2023 net profit reached GEL 293 million, up by 25% YoY, with ROE at 28.1%.
1H 2023 net profit stood at GEL 548 million, up by 20% YoY, with ROE at 26.7%.
European Union Market Abuse Regulation EU 596/2014 requires TBC Bank Group PLC to disclose that this announcement contains Inside Information, as defined in that Regulation.
The information in this announcement, which was approved by the Board of Directors on 9 August 2023, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022, which contained an unmodified audit report under Section 495 of the Companies Act 2006 and which did not make any statements under Section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
The interim management report is on pages 5 to 43 and the Condensed Consolidated Interim Financial Statements (Unaudited) are on pages 44 to 96.
Financial Highlights
Inome statement
in thousands of GEL | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ | 1H'23 | 1H'22 | Change YoY |
Net interest income | 399,338 | 366,791 | 303,572 | 31.5% | 8.9% | 766,129 | 592,191 | 29.4% |
Net fee and commission income | 105,636 | 92,438 | 75,572 | 39.8% | 14.3% | 198,074 | 141,462 | 40.0% |
Other operating non-interest income | 81,792 | 73,010 | 84,965 | -3.7% | 12.0% | 154,802 | 143,248 | 8.1% |
Operating profit | 586,766 | 532,239 | 464,109 | 26.4% | 10.2% | 1,119,005 | 876,901 | 27.6% |
Total credit loss allowance | (33,934) | (53,168) | (37,854) | -10.4% | -36.2% | (87,102) | (51,590) | 68.8% |
Operating expenses | (203,560) | (182,780) | (163,635) | 24.4% | 11.4% | (386,340) | (314,585) | 22.8% |
Profit before tax | 349,272 | 296,291 | 262,620 | 33.0% | 17.9% | 645,563 | 510,726 | 26.4% |
Income tax expense | (56,186) | (41,331) | (28,056) | NMF | 35.9% | (97,517) | (52,181) | 86.9% |
Profit for the period | 293,086 | 254,960 | 234,564 | 24.9% | 15.0% | 548,046 | 458,545 | 19.5% |
Balance sheet
in thousands of GEL | Jun-23 | Mar-23 | Jun-22 | Change YoY | Change QoQ |
Total Assets | 28,878,826 | 27,138,985 | 25,983,476 | 11.1% | 6.4% |
Gross Loans | 19,360,689 | 18,321,341 | 17,534,515 | 10.4% | 5.7% |
Customer Deposits | 18,992,492 | 17,297,630 | 15,772,905 | 20.4% | 9.8% |
Total Equity | 4,331,529 | 4,238,958 | 3,756,763 | 15.3% | 2.2% |
CET 1 Capital (Basel III) per IFRS | 3,920,004 | 3,667,479 | n/a | n/a | 6.9% |
Tier 1 Capital (Basel III) per IFRS | 4,443,544 | 4,179,559 | n/a | n/a | 6.3% |
Total Capital (Basel III) per IFRS | 4,947,830 | 4,601,884 | n/a | n/a | 7.5% |
Risk Weighted Assets (Basel III) per IFRS | 21,452,808 | 20,767,052 | n/a | n/a | 3.3% |
Number of shares (in thousands) | 55,140 | 54,991 | 55,156 | 0.0% | 0.3% |
Key Ratios | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ | 1H'23 | 1H'22 | Change YoY |
ROE | 28.1% | 25.2% | 25.7% | 2.4 pp | 2.9 pp | 26.7% | 25.9% | 0.8 pp |
ROE - Georgia FS | 27.8% | 23.7% | 25.1% | 2.7 pp | 4.1 pp | 25.7% | 25.4% | 0.3 pp |
ROA | 4.2% | 3.6% | 3.7% | 0.5 pp | 0.6 pp | 3.9% | 3.7% | 0.2 pp |
ROA - Georgia FS | 4.5% | 3.8% | 3.9% | 0.6 pp | 0.7 pp | 4.1% | 4.0% | 0.1 pp |
NIM | 6.8% | 6.4% | 5.8% | 1.0 pp | 0.4 pp | 6.6% | 5.7% | 0.9 pp |
Cost to income | 34.7% | 34.3% | 35.3% | -0.6 pp | 0.4 pp | 34.5% | 35.9% | -1.4 pp |
Cost to income - Georgia FS | 30.2% | 30.4% | 30.3% | -0.1 pp | -0.2 pp | 30.3% | 30.5% | -0.2 pp |
Cost of risk | 0.6% | 1.1% | 0.9% | -0.3 pp | -0.5 pp | 0.9% | 0.6% | 0.3 pp |
NPL to gross loans | 2.1% | 2.2% | 2.3% | -0.2 pp | -0.1 pp | 2.1% | 2.3% | -0.2 pp |
NPL provision coverage ratio | 89.3% | 92.9% | 99.8% | -10.5 pp | -3.6 pp | 89.3% | 99.8% | -10.5 pp |
Total NPL coverage ratio | 153.7% | 154.8% | 167.5% | -13.8 pp | -1.1 pp | 153.7% | 167.5% | -13.8 pp |
CET 1 CAR (Basel III) per IFRS | 18.3% | 17.7% | n/a | n/a | 0.6 pp | 18.3% | n/a | n/a |
Tier 1 CAR (Basel III) per IFRS | 20.7% | 20.1% | n/a | n/a | 0.6 pp | 20.7% | n/a | n/a |
Total CAR (Basel III) per IFRS | 23.1% | 22.2% | n/a | n/a | 0.9 pp | 23.1% | n/a | n/a |
Leverage (Times) | 6.7x | 6.4x | 6.9x | -0.2x | 0.3x | 6.7x | 6.9x | -0.2x |
EPS (GEL) | 5.33 | 4.57 | 4.26 | 25.1% | 16.6% | 9.90 | 8.37 | 18.3% |
Diluted EPS (GEL) | 5.25 | 4.50 | 4.14 | 26.8% | 16.7% | 9.76 | 8.13 | 20.0% |
BVPS (GEL) | 78.21 | 75.91 | 67.61 | 15.7% | 3.0% | 78.21 | 67.61 | 15.7% |
Georgia FS refers to Georgian financial services.
For the ratio definitions please refer to appendix 8.
Operational Highlights
Customer base
In millions | Jun'23 | Mar'23 | Jun'22 | Change YoY | Change QoQ |
Total number of registered users | 16.1 | 14.8 | 11.4 | 41% | 9% |
Georgia | 3.2 | 3.1 | 2.9 | 10% | 3% |
Uzbekistan | 12.9 | 11.7 | 8.5 | 52% | 10% |
Total MAU | 5.1 | 5.1 | 3.7 | 38% | 0% |
Georgia | 1.6 | 1.5 | 1.4 | 14% | 7% |
Uzbekistan | 3.5 | 3.6 | 2.3 | 52% | -3% |
Digital customers
In thousands | Jun'23 | Mar'23 | Jun'22 | Change YoY | Change QoQ |
Digital DAU Georgia | 381 | 368 | 311 | 23% | 4% |
Digital MAU Georgia | 849 | 829 | 704 | 21% | 2% |
Digital DAU/MAU Georgia | 45% | 44% | 44% | 1 pp | 1 pp |
Digital DAU Group | 1,434 | 1,401 | 1,032 | 39% | 2% |
Digital MAU Group | 4,295 | 4,432 | 2,959 | 45% | -3% |
Digital DAU/MAU Group | 33% | 32% | 35% | -2 pp | 1 pp |
Uzbekistan - key highlights
In thousands of GEL | Jun'23 | Mar'23 | Jun'22 | Change YoY | Change QoQ |
Gross loans | 526,843 | 407,993 | 181,345 | NMF | 29.1% |
Customer accounts | 457,340 | 374,429 | 235,780 | 94.0% | 22.1% |
| 2Q'23 | 1Q'23 | Change QoQ | 1H'23 |
Net profit (GEL, thousands) | 12,505 | 12,707 | -1.6% | 25,212 |
ROE | 22.1% | 28.1% | -6.0 pp | 25.1% |
Georgian and Uzbek payments businesses
In millions of GEL | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ | 1H'23 | 1H'22 | Change YoY |
Net revenue - Georgia | 71.0 | 61.1 | 50.7 | 40.0% | 16.2% | 132.1 | 94.0 | 40.5% |
Net revenue - Uzbekistan | 16.8 | 16.5 | 12.0 | 40.0% | 1.8% | 33.3 | 21.5 | 54.9% |
TNET - digital lifestyle platform in Georgia
In millions | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ | 1H'23 | 1H'22 | Change YoY |
Gross merchandise value (GMV, GEL) | 52.8 | 30.4 | 28.1 | 87.9% | 73.7% | 83.2 | 42.9 | 93.9% |
Number of transactions | 4.2 | 3.4 | 3.0 | 40.0% | 23.5% | 7.6 | 5.9 | 28.8% |
Letter from the Chief Executive Officer[1]
I am delighted to report that 2Q 2023 has seen further progress on the strong start to the year that we achieved in 1Q 2023, giving us a very strong first half of the year. Our net profit amounted to GEL 293 million, up by 25% year-on-year, while our return on equity stood at 28.1%. For 1H 2023, our net profit stood at GEL 548 million, up by 20% year-on-year, with return on equity reaching 26.7%. I am proud to see that our fintech businesses in Uzbekistan are not only growing rapidly, but are also profitable, already accounting for almost 5% of the Group's profit in 1H 2023.
In light of our consistently strong business performance, I am pleased to report that the Board has declared an interim dividend of GEL 2.55 per share, payable in October 2022.
Updated mid-term targets
While we are pleased with the progress we are making on a number of fronts, we believe it is important to keep pushing ourselves to achieve more as we both grow our customer base and help our customers transact more, both in Georgia and Uzbekistan. As such, we have revisited and updated our mid-term guidance, providing a set of targets for 2023-25 for both the Group as a whole and our Uzbekistan operations. More details are provided later in my letter, but these include a target of above GEL1.5 billion net profit for the group in 2025, with ROE of above 23%, and at least GEL 200 million net profit and 80% loan growth in Uzbekistan.
We remain committed to combining profitable growth with returning capital to shareholders as appropriate, while continuing to invest in growth. Therefore, we are maintaining our dividend payout range at 25 to 35%.
This is an ambitious set of targets, but one that I personally feel confident that my excellent team at TBC can meet and, hopefully, beat.
I would also like to draw your attention to our improved disclosure in our financial statements and supplementary data, as we now provide full profit and loss and balance sheet split by our Georgian financial services, Uzbekistan and other businesses. We hope this will help enable investors and analysts to better model the key pillars of our business.
Economic growth remains robust, Georgian rate cuts have begun
Having expanded by 7.7% in 1Q 2023, the Georgian economy has continued to show robust growth, with an annual growth rate of 7.4% in 2Q 2023. This growth appears to be broad-based, notably with a material contribution from IT service exports. At the same time, annual headline inflation decreased to 0.3% in July, while the NBG remained hawkish throughout 2023 and delivered only a 0.5 pp cut from 11% in May and 0.25 pp in August.
Uzbekistan's economic performance also remains strong, with 5.7% GDP growth in the 2Q 2023 and 5.6% in the first half of 2023.
Strong financial and operating performance continued in 2Q 2023
In 2Q 2023, our operating income amounted to GEL 587 million, up by 26% year-on-year, driven by both interest and non-interest income. The growth in net interest income was led by an increase in net interest margin, up by 1.0 pp year-on-year to 6.8% in 2Q 2023, as well as loan book expansion of 10%. Over the same period, net fee and commission income increased by 40% year-on-year, mainly led by our payments business, while a slight decrease in other operating income was related to the normalization of FX gains. Importantly, our positive operating jaws translated into a lower cost to income ratio of 34.7%, down by 0.6 pp year-on-year.
In terms of balance sheet growth, our gross loan book increased by 10% year-on -year, or by 16% in constant currency terms, with Uzbekistan accounting for 19% of the growth. Over the same period, customer deposits increased by 20%, or by 28% in constant currency terms, with a 7% contribution from Uzbekistan.
Our liquidity and capital positions remain strong. As of 30 June 2023, our CET1, Tier 1 and Total Capital ratios[2] stood at 18.3%, 20.7% and 23.1%, respectively, and remained comfortably above the minimum regulatory requirements by 3.9 pp, 3.9 pp and 3.2 pp, correspondingly. At the same time, we continued to operate with a high liquidity buffer, with our net stable funding (NSFR)2 and liquidity coverage (LCR)2 ratios standing at 130% and 125%, respectively.
Our key operational metrics also demonstrated good results. Our customer base continued to grow across the group, with retail monthly active users (MAU) reaching 5.1 million by the end of June 2023, out of which our Uzbek customers accounted for around 70%, compared to 3.7 million a year ago. At the same time, the number of digital MAU reached 4.3 million at the Group level, up by 45% year-on-year, driven by our fully digital Uzbek operations. This resulted in a group DAU/MAU ratio of 33% as of June 2023, while the DAU/MAU ratio for the Georgian business stood at 45%.
Dynamic growth in our Uzbek business
In 2Q 2023, our Uzbek fintech businesses (TBC UZ and Payme) continued to generate positive returns with their combined net profit amounting to GEL 12.5 million for 2Q 2023, while return on equity stood at 22.1%. The net profit for 1H 2023 stood at GEL 25.2 million and return on equity was 25.1%. This was driven by net interest income, led by a strong expansion of TBC UZ's retail loan book, and net fee and commission income, related to the growth in payments transaction volumes of Payme.
At the end of 2Q 2023, TBC UZ retail loans amounted to GEL 527 million, up by 29% quarter-on-quarter, which translated into an unsecured consumer / micro loan market share[3] of 12.1%. At the same time, retail deposits reached GEL 457 million, up by 22% quarter-on-quarter, accounting for 2.6% of the retail deposit market share3. Meanwhile, in 2Q 2023, Payme's payments volumes rose by more than 40% year-on-year, reaching GEL 2.4 billion.
I would also like to highlight that the acquisition of the remaining 49% minority share in our Uzbek payments subsidiary, Payme, in May 2023 was an important milestone for our expansion strategy in Uzbekistan. This will allow us to capture the strong synergy potential between our payments business and our digital bank, TBC UZ, by leveraging our large user base and diverse product range.
Our digital ecosystem, TNET, demonstrated outstanding results
Our digital ecosystem, TNET, achieved strong growth in 2Q 2023 with gross merchandise value (GMV) reaching GEL 53 million up by 88% year-on-year and 74% quarter-on-quarter. This was driven by several business initiatives, mainly in lifestyle and e-commerce.
Looking ahead - updated mid-term guidance
Our strong financial results, supported by the rapid growth of our fintechs in Uzbekistan, leaves me confident that we can continue to achieve superior results for our stakeholders. Therefore, I would like to present our updated mid-term targets for 2023-2025.
· For the Group:
o Digital monthly active users of more than 7 mln
o Net profit CAGR of more than 15% to above GEL 1.5 bln
o ROE of above 23%
o Dividend pay-out ratio of 25%-35%
o TNET GMV of above GEL 500 mln.
· For Uzbekistan
o Digital monthly active users of more than 5 mln
o Net profit of above GEL 200 mln
o Loan book CAGR of at least 80%.
Both myself and the whole TBC team remain firmly committed to delivering the best possible services for our customers and meeting our ambitious business targets for the group over the next 2-3 years.
Economic Overview
Georgia
Economic growth
Even though Georgia's economic expansion moderated somewhat after reaching 10.1% in 2022, the growth in the first half of 2023 was still very strong, with real GDP increasing by 7.7% in 1Q YoY and by 7.4% in 2Q, with an average of 7.6% in the first two quarters, according to Geostat's estimates.
External sector
The sustained negative impact of lower international commodity prices on both exports and imports noticeably affected external sector activity in 2Q 2023. Specifically, exports and imports growth moderated to 14.8% and 11.8% YoY, respectively. However, when assessing the half year dynamics, external trade remained elevated with a 19.3% YoY increase in exports and a 20.4% increase in imports in the first six months. Importantly, these commodity price dynamics particularly affected domestic commodity exports, while re-exports continued to perform strongly. At the same time, the share of IT services in Georgian exports increased notably, with migrants arriving over the past year being a major driver. On the imports side, investment goods constituted a considerable share of imports, indicating positive investment sentiment. The terms of trade remained broadly stable, supporting economic growth and the GEL.
Given last year's high base effect, which was caused by the high level of immigration in 2022, the annual growth of tourism inflows adjusted for the migration impact by the NBG normalized to 34.8% in 2Q 2023, while the figure for the half year was 57.9%. At the same time, while the share of conventional tourism in total inflows has increased lately, TBC Capital estimates that the YoY growth of tourism inflows in January-June 2023, including the expenses of migrants counted as residents by the NBG, was 81.8%. Remittances also maintained a positive momentum after adjustment for Russia, expanding by 42.7%[4] YoY in 2Q and by 22.0% in the first six months of 2023. FDIs slowed down in 1Q 2023 and decreased by 13.7% YoY, although the inflow remains strong considering the record-high level of investments last year.
Fiscal stimulus
The fiscal stimulus, although still sizable, negatively affected growth in 2021 as the deficit amounted to around 6.3% of GDP, after an expansionary 9.3% of GDP in 2020. In 2022, the deficit was even lower, at 2.5%. According to the Ministry of Finance, fiscal consolidation is expected to take place in the coming years with deficit-to-GDP ratios of 2.8% and 2.3% in 2023 and 2024, respectively.
Credit growth
As of June 2023, bank credit increased by 13.5% YoY, against 13.8% growth at the end of 1Q 2023, at constant exchange rates[5]. Amid further moderation in inflation, real credit growth strengthened from 8.3% YoY in March 2023 to 12.9% at the end of June 2023.
Inflation, monetary policy, and the exchange rate
Due to continued robust inflows, the US$/GEL exchange rate continued to perform strongly in 2Q 2023, although this trend was affected by shifts in the US$/GEL exchange rate expectations, likely driven by low inflation and the possibility of rate cuts, triggering deposit conversions from GEL to other currencies and a minor depreciation from 2.56 in March to 2.64 at the end of July.
As a result of a stronger GEL and disinflationary pass-through from international markets, CPI inflation continued to decline from 5.3% in March to 0.3% in July 2023. While the import component caused headline inflation to cool down significantly, service inflation remained relatively rigid. The NBG remained hawkish throughout 2023 and delivered only a 0.5 pp cut from 11% in May and 0.25 pp in August. The NBG also accumulated a substantial amount of reserves with a net purchase of US$ 1,058 million on the FX market in January-June 2023, taking total gross international reserves to US$ 5.1 billion.
Uzbekistan
Uzbekistan also demonstrated solid economic activity with 5.7%[6] growth in the second quarter and 5.6% in the first half of 2023. External trade was strong as exports of goods increased by 18.6% and imports by 18.9% YoY in the same period6. Retail loan portfolio grew by 54.7% YoY at the end of May, with mortgage loans expanding by 26.7% and non-mortgage loans by 83.9%[7]. As in Georgia, inflation and the central bank policy rate also declined in Uzbekistan, from 12.3% and 15.0% in December 2022 to 9.0% and 14.0% in June 2023, respectively7. The US$/UZS continued its slight depreciation trend, standing at 11600.2 at the end of July 20237. While depreciating against the US$, in terms of REER the UZS gained value against Uzbekistan's main trade partners' currencies.
Going forward
After two, successive years of double-digit growth in Georgia, recent trends indicate that economic activity should moderate somewhat but remain strong in 2023, with the IMF and the NBG projecting growth of 6% and 5%, respectively, while TBC Capital's baseline stands at 7.2%. As for Uzbekistan, the consensus projection appears to be around 5.1%.
More information on the Georgian economy and financial sector can be found at www.tbccapital.ge.
Unaudited Consolidated Financial Results Overview for 2Q 2023
This statement provides a summary of the unaudited business and financial trends for 2Q 2023 for TBC Bank Group plc and its subsidiaries. The quarterly financial information and trends are unaudited.
TBC Bank Group PLC's financial results have been prepared in accordance with the UK-adopted International Accounting Standard (IAS) 34 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the Financial Conduct Authority (FCA).
Total assets and total liabilities for 31-Mar-2023 were restated due to replacement of IFRS4 with IFRS17. For more details, please refer to Note 2.
Please note that there might be slight differences in previous periods' figures due to rounding.
Net Interest Income
In 2Q 2023, net interest income amounted to GEL 399.3 million, up by 31.5% and 8.9% on a YoY and QoQ basis, respectively.
The YoY rise in interest income of GEL 159.1 million, or 28.8%, was mostly attributable to an increase in interest income from loans related to a rise in the respective yield by 1.6 pp, as well as an increase in the loan portfolio of GEL 1,826.2 million, or 10.4%.
The QoQ increase in interest income of GEL 39.7 million, or 5.9%, was mainly related to an increase in interest income from loans related to a 0.4 pp rise in the respective loan yield, as well as an increase in the loan portfolio of GEL 1,039.3 million, or 5.7%.
Interest expense increased by GEL 63.3 million, or 25.4%, on a YoY basis, mainly related to an increase in the deposit portfolio of GEL 3,219.6 million, or 20.4%, and a 1.2 pp growth in deposit costs.
On a QoQ basis, interest expense increased by GEL 7.1 million, or 2.3%, primarily driven by the increased portfolio in 2Q 2023 by GEL 1,694.9 million or 9.8%, while deposit cost remained stable.
In 2Q 2023, our NIM stood at 6.8%, up by 1.0 pp and 0.4 pp on YoY and QoQ basis, respectively.
In thousands of GEL | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ |
Interest income | 711,820 | 672,150 | 552,719 | 28.8% | 5.9% |
Interest expense* | (312,482) | (305,359) | (249,147) | 25.4% | 2.3% |
Net interest income | 399,338 | 366,791 | 303,572 | 31.5% | 8.9% |
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NIM | 6.8% | 6.4% | 5.8% | 1.0 pp | 0.4 pp |
* Interest expense includes net interest gains from currency swaps
Non-Interest Income
In 2Q 2023, total non-interest income increased by 16.8% and 13.3% on a YoY and QoQ basis, respectively, amounting to GEL 187.4 million.
Net fee and commission income increased by 39.8% and 14.3% on a YoY and QoQ basis, respectively. The increase was mainly related to increased payments transactions. In 2Q 2023, our Uzbek business contributed around 18% to the Group's net fee & commission income.
In 2Q 2023, net gains from FX operations decreased by 8.1% on a YoY basis, which was mainly related to a high base of 2Q 2022, while on a QoQ basis they remained broadly stable.
In thousands of GEL Non-interest income | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ |
Net fee and commission income | 105,636 | 92,438 | 75,572 | 39.8% | 14.3% |
Net gains from currency derivatives, foreign currency operations and translation | 61,127 | 60,601 | 66,520 | -8.1% | 0.9% |
Insurance profit | 6,184 | 6,218 | 6,698 | -7.7% | -0.5% |
Other operating income | 14,481 | 6,191 | 11,747 | 23.3% | NMF |
Total other non-interest income | 187,428 | 165,448 | 160,537 | 16.8% | 13.3% |
Credit Loss Allowance
Credit loss allowance for loans in 2Q 2023 amounted to GEL 29.4 million. In 2Q 2023, cost of risk stood at 0.6%.
In thousands of GEL | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ |
Credit loss allowance for loans to customers | (29,384) | (50,040) | (39,025) | -24.7% | -41.3% |
Credit loss allowance for other transactions | (4,550) | (3,128) | 1,171 | NMF | 45.5% |
Total credit loss allowance | (33,934) | (53,168) | (37,854) | -10.4% | -36.2% |
Operating profit after expected credit losses and non-financial asset impairment losses | 552,832 | 479,071 | 426,255 | 29.7% | 15.4% |
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Cost of risk | 0.6% | 1.1% | 0.9% | -0.3 pp | -0.5 pp |
Operating Expenses
In 2Q 2023, our operating expenses expanded by 24.4% and 11.4% on a YoY and QoQ basis, respectively.
Both the YoY and QoQ increases were mainly driven by an overall expansion of business in 2Q 2023. Importantly, our investments in the business are driving higher revenues, and our cost to income ratio declined to 34.7%, while our Georgian financial services' cost to income stood at 30.2%.
In thousands of GEL Operating expenses | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ |
Staff costs | (108,724) | (103,426) | (90,332) | 20.4% | 5.1% |
(Allowance)/recovery of provision for liabilities and charges | (50) | (71) | 4 | NMF | -29.6% |
Depreciation and amortisation | (29,587) | (28,361) | (24,321) | 21.7% | 4.3% |
Administrative and other operating expenses | (65,199) | (50,922) | (48,986) | 33.1% | 28.0% |
Total operating expenses | (203,560) | (182,780) | (163,635) | 24.4% | 11.4% |
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Cost to income | 34.7% | 34.3% | 35.3% | -0.6 pp | 0.4 pp |
Georgian financial services' cost to income | 30.2% | 30.4% | 30.3% | -0.1 pp | -0.2 pp |
Net Profit
Our net profit increased by 24.9% and 15.0% on a YoY and QoQ basis, respectively, and amounted to GEL 293.1 million, driven by robust income generation across the board, as well as strong asset quality.
The growth in effective tax rate YoY is related to the changes in tax legislation effective from 1 January 2023, according to which, the corporate income tax rate for banks increased from 15% to 20% and the potential shift to Estonian Tax Model was abolished.
As a result, in 2Q 2023 our ROE stood at 28.1%, while our ROA reached 4.2%.
In thousands of GEL | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ |
Profit before tax | 349,272 | 296,291 | 262,620 | 33.0% | 17.9% |
Income tax expense | (56,186) | (41,331) | (28,056) | NMF | 35.9% |
Profit for the period | 293,086 | 254,960 | 234,564 | 24.9% | 15.0% |
Effective tax rate | 16% | 14% | 11% | 5 pp | 2 pp |
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ROE | 28.1% | 25.2% | 25.7% | 2.4 pp | 2.9 pp |
Georgian financial services' ROE | 27.8% | 23.7% | 25.1% | 2.7 pp | 4.1 pp |
ROA | 4.2% | 3.6% | 3.7% | 0.5 pp | 0.6 pp |
Georgian financial services' ROA | 4.5% | 3.7% | 3.9% | 0.6 pp | 0.8 pp |
Funding and Liquidity
As of 30 June 2023, the total liquidity coverage ratio (LCR), as defined by the NBG, was 124.5%, above the 100% limit, while the LCR in GEL and FC stood at 130.4% and 119.2%, accordingly, above the respective limits of 75% and 100%.
Over the same period, the net stable funding ratio (NSFR), as defined by the NBG, stood at 129.8%, compared to the regulatory limit of 100%.
| Jun'23 | Mar'23 | Change QoQ |
Minimum net stable funding ratio, as defined by the NBG | 100.0% | 100.0% | 0.0 pp |
Net stable funding ratio as defined by the NBG* | 129.8% | 131.3% | -1.5 pp |
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Net loans to deposits + IFI funding | 90.6% | 92.9% | -2.3 pp |
Leverage (Times) | 6.7x | 6.4x | 0.3x |
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Minimum total liquidity coverage ratio, as defined by the NBG | 100.0% | 100.0% | 0.0 pp |
Minimum LCR in GEL, as defined by the NBG | 75.0% | 75.0% | 0.0 pp |
Minimum LCR in FC, as defined by the NBG | 100.0% | 100.0% | 0.0 pp |
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Total liquidity coverage ratio, as defined by the NBG* | 124.5% | 135.7% | -11.2 pp |
LCR in GEL, as defined by the NBG* | 130.4% | 164.2% | -33.8 pp |
LCR in FC, as defined by the NBG* | 119.2% | 116.5% | 2.7 pp |
* Ratios are calculated per IFRS
Regulatory Capital for Georgian Bank
As of 30 June 2023, our CET1, Tier 1 and Total Capital ratios stood at 18.3%, 20.7% and 23.1%, respectively, and remained above the minimum regulatory requirements by 3.9 pp, 3.9 pp and 3.2 pp, accordingly, per IFRS.
The QoQ increases in all CET1, Tier 1 and Total capital adequacy ratios were mainly driven by strong net profit generation, which was partially offset by loan book growth.
In thousands of GEL | Jun'23 | Mar'23 | Change QoQ |
CET 1 Capital | 3,920,004 | 3,667,479 | 6.9% |
Tier 1 Capital | 4,443,544 | 4,179,559 | 6.3% |
Total Capital | 4,947,830 | 4,601,884 | 7.5% |
Total Risk-weighted Exposures | 21,452,808 | 20,767,052 | 3.3% |
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Minimum CET 1 ratio | 14.4% | 14.3% | 0.1 pp |
CET 1 Capital adequacy ratio | 18.3% | 17.7% | 0.6 pp |
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Minimum Tier 1 ratio | 16.8% | 16.7% | 0.1 pp |
Tier 1 Capital adequacy ratio | 20.7% | 20.1% | 0.6 pp |
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Minimum total capital adequacy ratio | 19.9% | 19.7% | 0.2 pp |
Total Capital adequacy ratio | 23.1% | 22.2% | 0.9 pp |
Ratios and numbers are calculated per IFRS
Loan Portfolio
As of 30 June 2023, the gross loan portfolio reached GEL 19,360.7 million, up by 5.7% QoQ, or by 4.4% on a constant currency basis.
By the end of June 2023, our Georgian financial services portfolio increased by 5.1% on a QoQ basis and reached GEL 18,816.1 million, with 3.9% growth on a constant currency basis. Over the same period, our Uzbek portfolio increased by 29.1% and stood at GEL 526.8 million, which translated into growth of 27.4% on a constant currency basis.
In thousands of GEL Gross loans and advances to customers | Jun'23 | Mar'23 | Change QoQ |
Georgian financial services (Georgia FS) | 18,816,052 | 17,896,929 | 5.1% |
Retail Georgia | 6,945,911 | 6,739,925 | 3.1% |
GEL | 4,549,932 | 4,421,734 | 2.9% |
FC | 2,395,979 | 2,318,191 | 3.4% |
CIB Georgia | 6,920,263 | 6,493,610 | 6.6% |
GEL | 2,321,704 | 2,371,886 | -2.1% |
FC | 4,598,559 | 4,121,724 | 11.6% |
MSME Georgia | 4,949,878 | 4,663,394 | 6.1% |
GEL | 2,675,925 | 2,577,034 | 3.8% |
FC | 2,273,953 | 2,086,360 | 9.0% |
Uzbekistan | 526,843 | 407,993 | 29.1% |
UZS | 526,843 | 407,993 | 29.1% |
Total gross loans and advances to customers* | 19,360,689 | 18,321,341 | 5.7% |
* Total gross loans and advances to customers include Azerbaijan loan portfolio
2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ | |
Loan yields | 12.8% | 12.4% | 11.2% | 1.6 pp | 0.4 pp |
GEL | 15.4% | 14.9% | 15.7% | -0.3 pp | 0.5 pp |
FC | 8.4% | 8.2% | 6.6% | 1.8 pp | 0.2 pp |
UZS | 43.0% | 43.6% | 42.4% | 0.6 pp | -0.6 pp |
Georgia FS | 12.0% | 11.7% | 10.9% | 1.1 pp | 0.3 pp |
GEL | 15.4% | 14.9% | 15.7% | -0.3 pp | 0.5 pp |
FC | 8.4% | 8.2% | 6.6% | 1.8 pp | 0.2 pp |
Uzbekistan | 43.0% | 43.6% | 42.4% | 0.6 pp | -0.6 pp |
UZS | 43.0% | 43.6% | 42.4% | 0.6 pp | -0.6 pp |
Total loan yields* | 12.8% | 12.4% | 11.2% | 1.6 pp | 0.4 pp |
* Total loans yields include Azerbaijan
Loan Portfolio Quality
Total PAR 90 and NPL to gross loans slightly improved on the Group level, mainly driven by retail Georgia sub-segment.
PAR 90 | Jun'23 | Mar'23 | Change QoQ |
Georgia FS | 1.1% | 1.2% | -0.1 pp |
Retail Georgia | 0.9% | 1.1% | -0.2 pp |
CIB Georgia | 0.6% | 0.8% | -0.2 pp |
MSME Georgia | 2.3% | 2.2% | 0.1 pp |
Uzbekistan | 2.2% | 2.0% | 0.2 pp |
Total PAR 90* | 1.2% | 1.3% | -0.1 pp |
* Total PAR 90 includes Azerbaijan
In thousands of GEL | Jun'23 | Mar'23 | Change QoQ |
Georgia FS | 387,626 | 386,474 | 0.3% |
Retail Georgia | 127,833 | 138,234 | -7.5% |
CIB Georgia | 98,374 | 88,830 | 10.7% |
MSME Georgia | 161,419 | 159,410 | 1.3% |
Uzbekistan | 11,646 | 8,176 | 42.4% |
Total non-performing loans* | 400,989 | 396,433 | 1.1% |
* Total non-performing loans include Azerbaijan NPLs
NPL to gross loans | Jun'23 | Mar'23 | Change QoQ |
Georgia FS | 2.1% | 2.2% | -0.1 pp |
Retail Georgia | 1.8% | 2.1% | -0.3 pp |
CIB Georgia | 1.4% | 1.4% | 0.0 pp |
MSME Georgia | 3.3% | 3.4% | -0.1 pp |
Uzbekistan | 2.2% | 2.0% | 0.2 pp |
Total NPL to gross loans* | 2.1% | 2.2% | -0.1 pp |
* Total NPL to gross loans include Azerbaijan NPLs
NPL Coverage | Jun'23 | Mar'23 | ||
Provision Coverage | Total Coverage** | Provision Coverage | Total Coverage** | |
Georgia FS | 85.3% | 150.9% | 89.7% | 152.1% |
Retail Georgia | 141.8% | 192.4% | 143.3% | 188.1% |
CIB Georgia | 49.4% | 110.5% | 51.5% | 114.6% |
MSME Georgia | 62.6% | 142.7% | 64.6% | 140.9% |
Uzbekistan | 180.0% | 180.0% | 189.7% | 189.7% |
Total NPL coverage* | 89.3% | 153.7% | 92.9% | 154.8% |
* Total NPL coverage include Azerbaijan loans coverage
** Total NPL coverage ratio includes provision and collateral coverage
Cost of Risk
In terms of cost of risk (CoR), the strong performance in 2Q 2023 was mainly driven by improved actual and estimated macroeconomic parameters in Georgia, which was also reflected in the strong performance of the loan book.
Our Uzbekistan business contributed 0.1 pp to the total CoR. In Uzbekistan, CoR was broadly stable on a YoY basis, while the QoQ increase was driven by the higher portfolio growth compared to 1Q 2023.
Cost of risk (CoR) | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ |
Georgia FS | 0.5% | 1.0% | 0.9% | -0.4 pp | -0.5 pp |
Retail Georgia | 0.5% | 1.4% | 2.4% | -1.9 pp | -0.9 pp |
CIB Georgia | 0.2% | -0.1% | -0.1% | 0.3 pp | 0.3 pp |
MSME Georgia | 0.9% | 2.1% | 0.1% | 0.8 pp | -1.2 pp |
Uzbekistan | 6.6% | 5.6% | 6.3% | 0.3 pp | 1.0 pp |
Total cost of risk* | 0.6% | 1.1% | 0.9% | -0.3 pp | -0.5 pp |
* Total cost of risk includes Azerbaijan CoR
Deposit Portfolio
The total deposit portfolio amounted to GEL 18,992.5 million, up by 9.8% QoQ or by 8.5% on a constant currency basis.
As of 30 June 2023, the Georgian financial services portfolio increased by 9.9% on a QoQ basis and reached GEL 18,639.9 million, with 8.6% growth on a constant currency basis. Over the same period, our Uzbek portfolio increased by 22.1% and stood at GEL 457.3 million, translated into growth of 20.5% on a constant currency basis.
In thousands of GEL Customer accounts | Jun'23 | Mar'23 | Change QoQ |
Georgia FS | 18,639,911 | 16,958,444 | 9.9% |
Retail Georgia | 6,985,211 | 6,455,890 | 8.2% |
GEL | 2,242,193 | 1,941,188 | 15.5% |
FC | 4,743,018 | 4,514,702 | 5.1% |
CIB Georgia | 9,048,955 | 8,302,775 | 9.0% |
GEL | 5,169,170 | 4,641,378 | 11.4% |
FC | 3,879,785 | 3,661,397 | 6.0% |
MSME Georgia | 1,638,612 | 1,590,496 | 3.0% |
GEL | 889,834 | 829,378 | 7.3% |
FC | 748,778 | 761,118 | -1.6% |
MOF | 967,133 | 609,283 | 58.7% |
GEL | 967,133 | 609,283 | 58.7% |
Uzbekistan | 457,340 | 374,429 | 22.1% |
FC | 1,322 | 1,196 | 10.5% |
UZS | 456,018 | 373,233 | 22.2% |
Total customer accounts* | 18,992,492 | 17,297,630 | 9.8% |
* Total customer accounts are adjusted for eliminations
Deposit rates | 2Q'23 | 1Q'23 | 2Q'22 | Change YoY | Change QoQ |
Deposit rates | 4.9% | 4.9% | 3.7% | 1.2 pp | 0.0 pp |
GEL | 8.3% | 8.8% | 7.7% | 0.6 pp | -0.5 pp |
FC | 0.8% | 0.7% | 0.9% | -0.1 pp | 0.1 pp |
UZS | 25.0% | 25.4% | 23.0% | 2.0 pp | -0.4 pp |
Georgian financial services | 4.5% | 4.5% | 3.5% | 1.0 pp | 0.0 pp |
GEL | 8.4% | 8.8% | 7.8% | 0.6 pp | -0.4 pp |
FC | 0.8% | 0.7% | 0.9% | -0.1 pp | 0.1 pp |
Uzbek business | 24.9% | 25.3% | 23.0% | 1.9 pp | -0.4 pp |
FC | 4.7% | 4.9% | n/a | n/a | -0.2 pp |
UZS | 25.0% | 25.4% | 23.0% | 2.0 pp | -0.4 pp |
Total deposit rates* | 4.9% | 4.9% | 3.7% | 1.2 pp | 0.0 pp |
* Total deposits rates include MOF deposits
Unaudited Consolidated Financial Results Overview for 1H 2023
This statement provides a summary of the unaudited business and financial trends for 1H 2023 for TBC Bank Group plc and its subsidiaries. The semi-annual financial information and trends are unaudited.
TBC Bank Group PLC's financial results have been prepared in accordance with the UK-adopted International Accounting Standard (IAS) 34 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the Financial Conduct Authority (FCA).
Total equity and total liabilities were restated for 30-Jun-2022 due to a change in the accounting of option contracts. As a result, ROE and leverage ratios were restated for 1H 2022. In addition, total assets and total liabilities for 30-Jun-2022 were restated due to replacement of IFRS4 with IFRS17. For more details, please refer to Note 2.
Please also note that there might be slight differences in previous periods' figures due to rounding.
Net Interest Income
In 1H 2023, net interest income amounted to GEL 766.1 million, up by 29.4% on a YoY basis.
The YoY rise in interest income by GEL 303.5 million, or 28.1%, was mostly attributable to an increase in interest income from loans related to a GEL 1,826.2 million, or 10.4%, increase in the respective portfolio, as well as a 1.6 pp rise in the respective yield.
YoY interest expense increased by GEL 129.6 million, or 26.5%, mainly related to an increase in the deposit portfolio of GEL 3,219.6 million, or 20.4%, and a 1.2 pp growth in deposit cost.
In 1H 2023, our NIM stood at 6.6%, up by 0.9 pp on a YoY basis.
In thousands of GEL | 1H'23 | 1H'22 | Change YoY |
Interest income | 1,383,970 | 1,080,462 | 28.1% |
Interest expense* | (617,841) | (488,271) | 26.5% |
Net interest income | 766,129 | 592,191 | 29.4% |
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NIM | 6.6% | 5.7% | 0.9 pp |
* Interest expense includes net interest gains from currency swaps
Non-Interest Income
Total non-interest income amounted to GEL 352.9 million in 1H 2023, increasing by 23.9% on a YoY basis.
Net fee and commission income increased by 40.0% on a YoY basis, related to increased payments transactions both in Georgia and Uzbekistan. Our Uzbek business contributed 18% of the Group's net fee and commission income.
In thousands of GEL Other non-interest income | 1H'23 | 1H'22 | Change YoY |
Net fee and commission income | 198,074 | 141,462 | 40.0% |
Net gains from currency derivatives, foreign currency operations and translation | 121,728 | 114,377 | 6.4% |
Insurance profit | 12,402 | 10,965 | 13.1% |
Other operating income | 20,672 | 17,906 | 15.4% |
Total other non-interest income | 352,876 | 284,710 | 23.9% |
Credit Loss Allowance
Credit loss allowance for loans in 1H 2023 amounted to GEL 79.4 million, which translated into a 0.9% cost of risk.
In thousands of GEL | 1H'23 | 1H'22 | Change YoY |
Credit loss (allowance)/recovery for loans to customers | (79,424) | (50,522) | 57.2% |
Credit loss allowance for other transactions | (7,678) | (1,068) | NMF |
Total credit loss (allowance)/recovery | (87,102) | (51,590) | 68.8% |
Operating income after expected credit and non-financial asset impairment losses | 1,031,903 | 825,311 | 25.0% |
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Cost of risk | 0.9% | 0.6% | 0.3 pp |
Operating Expenses
In 1H 2023, our operating expenses expanded by 22.8% on a YoY basis.
In the first half of 2023, the annual increase in operating expenses was mainly driven by overall business expansion, both locally and internationally.
Our investments into the business are continuing to drive strong income generation, and our cost to income ratio amounted to 34.5%, down by 1.4 pp, while our Georgian financial services' cost to income stood at 30.3%, down by 0.2 pp.
In thousands of GEL Operating expenses | 1H'23 | 1H'22 | Change YoY |
Staff costs | (212,150) | (176,491) | 20.2% |
Allowance of provision for liabilities and charges | (121) | (60) | NMF |
Depreciation and amortisation | (57,948) | (47,332) | 22.4% |
Administrative and other operating expenses | (116,121) | (90,702) | 28.0% |
Total operating expenses | (386,340) | (314,585) | 22.8% |
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Cost to income | 34.5% | 35.9% | -1.4 pp |
Georgian financial services' cost to income | 30.3% | 30.5% | -0.2 pp |
Net Profit
In 1H 2023, we delivered robust profitability and generated GEL 548.0 million in net profit, up by 19.5% YoY, driven by robust income generation across the board, as well as strong asset quality.
The growth in effective tax rate YoY is related to the changes in tax legislation effective from 1 January 2023, according to which, the corporate income tax rate for banks increased from 15% to 20% and the potential shift to Estonian Tax Model was abolished.
As a result, our ROE and ROA for 1H 2023 reached 26.7% and 3.9%, accordingly.
In thousands of GEL | 1H'23 | 1H'22 | Change YoY |
Profit before tax | 645,563 | 510,726 | 26.4% |
Income tax expense | (97,517) | (52,181) | 86.9% |
Profit for the period | 548,046 | 458,545 | 19.5% |
Effective tax rate | 15% | 10% | 5 pp |
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ROE | 26.7% | 25.9% | 0.8 pp |
Georgian financial services' ROE | 25.7% | 25.4% | 0.3 pp |
ROA | 3.9% | 3.7% | 0.2 pp |
Georgian financial services' ROA | 4.1% | 4.0% | 0.1 pp |
Loan Portfolio
As of 30 June 2023, the gross loan portfolio reached GEL 19,360.7 million, up by 10.4% YoY or 16.4% on a constant currency basis.
By the end of June 2023, the Georgian financial services' portfolio increased by 8.5% on a YoY basis and reached GEL 18,816.1 million, with 14.0% growth on a constant currency basis. Over the same period, our Uzbek portfolio increased almost three times and reached GEL 526.8 million.
In thousands of GEL Gross loans and advances to customers | Jun'23 | Jun'22 | Change YoY |
Georgian financial services (Georgia FS) | 18,816,052 | 17,334,394 | 8.5% |
Retail Georgia | 6,945,911 | 6,472,248 | 7.3% |
GEL | 4,549,932 | 3,994,645 | 13.9% |
FC | 2,395,979 | 2,477,603 | -3.3% |
CIB Georgia | 6,920,263 | 6,462,635 | 7.1% |
GEL | 2,321,704 | 2,083,255 | 11.4% |
FC | 4,598,559 | 4,379,380 | 5.0% |
MSME Georgia | 4,949,878 | 4,399,511 | 12.5% |
GEL | 2,675,925 | 2,357,652 | 13.5% |
FC | 2,273,953 | 2,041,859 | 11.4% |
Uzbekistan | 526,843 | 181,345 | NMF |
UZS | 526,843 | 181,345 | NMF |
Total gross loans and advances to customers* | 19,360,689 | 17,534,515 | 10.4% |
* Total gross loans and advances to customers include Azerbaijan loan portfolio
1H'23 | 1H'22 | Change YoY | |
Loan yields | 12.6% | 11.0% | 1.6 pp |
GEL | 15.2% | 15.6% | -0.4 pp |
FC | 8.3% | 6.5% | 1.8 pp |
UZS | 43.1% | 41.8% | 1.3 pp |
Georgia FS | 11.9% | 10.8% | 1.1 pp |
GEL | 15.2% | 15.6% | -0.4 pp |
FC | 8.3% | 6.5% | 1.8 pp |
Uzbekistan | 43.1% | 41.8% | 1.3 pp |
UZS | 43.1% | 41.8% | 1.3 pp |
Total loan yields* | 12.6% | 11.0% | 1.6 pp |
* Total loans yields include Azerbaijan
Loan Portfolio Quality
In 1H 2023, PAR 90 for our Georgia FS decreased by 0.3 pp YoY and stood at 1.1%. This improvement was observed across all sub-segments. Over the same period, NPL to gross loans stood at 2.1%, down by 0.2 pp. This decrease was mainly driven by the retail and MSME sub-segments.
Over the same period, both PAR 90 and NPL for the Uzbek business remained broadly stable and stood at 2.2%.
Par 90 | Jun'23 | Jun'22 | Change YoY |
Georgia FS | 1.1% | 1.4% | -0.3 pp |
Retail Georgia | 0.9% | 1.2% | -0.3 pp |
CIB Georgia | 0.6% | 0.7% | -0.1 pp |
MSME Georgia | 2.3% | 2.6% | -0.3 pp |
Uzbekistan | 2.2% | 2.1% | 0.1 pp |
Total PAR 90* | 1.2% | 1.4% | -0.2 pp |
* Total PAR 90 includes Azerbaijan
In thousands of GEL | Jun'23 | Jun'22 | Change YoY |
Georgia FS | 387,626 | 400,520 | -3.2% |
Retail Georgia | 127,833 | 147,847 | -13.5% |
CIB Georgia | 98,374 | 84,314 | 16.7% |
MSME Georgia | 161,419 | 168,359 | -4.1% |
Uzbekistan | 11,646 | 3,849 | NMF |
Total non-performing loans* | 400,989 | 407,855 | -1.7% |
* Total non-performing loans include Azerbaijan NPLs
NPL to gross loans | Jun'23 | Jun'22 | Change YoY |
Georgia FS | 2.1% | 2.3% | -0.2 pp |
Retail Georgia | 1.8% | 2.3% | -0.5 pp |
CIB Georgia | 1.4% | 1.3% | 0.1 pp |
MSME Georgia | 3.3% | 3.8% | -0.5 pp |
Uzbekistan | 2.2% | 2.1% | 0.1 pp |
Total NPL to gross loans* | 2.1% | 2.3% | -0.2 pp |
* Total NPL to gross loans include Azerbaijan NPLs
NPL Coverage | Jun'23 | Jun'22 | ||
Provision Coverage | Total Coverage** | Provision Coverage | Total Coverage** | |
Georgia FS | 85.3% | 150.9% | 97.6% | 164.4% |
Retail Georgia | 141.8% | 192.4% | 167.6% | 218.4% |
CIB Georgia | 49.4% | 110.5% | 55.4% | 118.7% |
MSME Georgia | 62.6% | 142.7% | 57.5% | 139.9% |
Uzbekistan | 180.0% | 180.0% | 142.5% | 142.5% |
Total NPL coverage* | 89.3% | 153.7% | 99.8% | 167.5% |
* Total NPL coverage include Azerbaijan loans coverage
** Total NPL coverage ratio includes provision and collateral coverage
Cost of Risk
In 1H 2023, our cost of risk amounted to 0.9%.
In the first half of 2023, cost of risk (CoR) for our Georgia FS amounted to 0.8%, up by 0.2 pp on a YoY basis. The increase was mainly caused by the unusually low CoR for the MSME sub-segment in 1H 2022.
Over the same period, cost of risk of our Uzbek business amounted to 6.1%, up by 0.7 pp on a YoY basis. The increase was mainly driven by the enhancement of the provisioning approach with more internal data accumulated since the launch of the Uzbek bank.
Cost of risk (CoR) | 1H'23 | 1H'22 | Change YoY |
Georgia FS | 0.8% | 0.6% | 0.2 pp |
Retail Georgia | 1.0% | 1.5% | -0.5 pp |
CIB Georgia | 0.0% | -0.1% | 0.1 pp |
MSME Georgia | 1.5% | 0.3% | 1.2 pp |
Uzbekistan | 6.1% | 5.4% | 0.7 pp |
Total cost of risk* | 0.9% | 0.6% | 0.3 pp |
* Total cost of risk includes Azerbaijan CoR
Deposit Portfolio
The total deposit portfolio amounted to GEL 18,992.5 million, increasing by 20.4% YoY or 27.5% on a constant currency basis.
As of 30 June 2023, the Georgian financial services' portfolio increased by 19.4% on a YoY basis and reached GEL 18,639.9 million, with 26.0% growth on a constant currency basis. Over the same period, our Uzbek portfolio almost doubled and stood at GEL 457.3 million.
In thousands of GEL Customer accounts | Jun'23 | Jun'22 | Change YoY |
Georgia FS | 18,639,911 | 15,612,455 | 19.4% |
Retail Georgia | 6,985,211 | 5,671,380 | 23.2% |
GEL | 2,242,193 | 1,571,547 | 42.7% |
FC | 4,743,018 | 4,099,833 | 15.7% |
CIB Georgia | 9,048,955 | 7,659,931 | 18.1% |
GEL | 5,169,170 | 3,176,650 | 62.7% |
FC | 3,879,785 | 4,483,281 | -13.5% |
MSME Georgia | 1,638,612 | 1,566,524 | 4.6% |
GEL | 889,834 | 723,118 | 23.1% |
FC | 748,778 | 843,406 | -11.2% |
MOF | 967,133 | 714,620 | 35.3% |
GEL | 967,133 | 714,620 | 35.3% |
Uzbekistan | 457,340 | 235,780 | 94.0% |
FC | 1,322 | - | NMF |
UZS | 456,018 | 235,780 | 93.4% |
Total customer accounts* | 18,992,492 | 15,772,905 | 20.4% |
* Total customer accounts are adjusted for eliminations
Deposit rates | 1H'23 | 1H'22 | Change YoY |
Deposit rates | 4.9% | 3.7% | 1.2 pp |
GEL | 8.5% | 7.6% | 0.9 pp |
FC | 0.7% | 1.0% | -0.3 pp |
UZS | 25.1% | 22.3% | 2.8 pp |
Georgian financial services | 4.5% | 3.5% | 1.0 pp |
GEL | 8.6% | 7.6% | 1.0 pp |
FC | 0.8% | 1.0% | -0.2 pp |
Uzbek business | 25.0% | 22.3% | 2.7 pp |
FC | 4.8% | n/a | n/a |
UZS | 25.1% | 22.3% | 2.8 pp |
Total deposit rates* | 4.9% | 3.7% | 1.2 pp |
* Total deposit rates include MOF deposits
Additional Disclosures
1) TBC Bank - Background
TBC Bank Group PLC ("TBC PLC") is a public limited company registered in England and Wales. TBC PLC is the parent company of JSC TBC Bank ("TBC Bank") and a group of companies that principally operate in Georgia in the financial sector. TBC PLC also offers non-financial services via TNET, the largest digital ecosystem in Georgia. Since 2019, TBC PLC has expanded its operations into Uzbekistan by operating fast growing retail digital financial services in the country. TBC PLC is listed on the London Stock Exchange under the symbol TBCG and is a constituent of the FTSE 250 Index. It is also a member of the FTSE4Good Index Series and the MSCI United Kingdom Small Cap Index.
TBC Bank, together with its subsidiaries, is a leading universal banking group in Georgia, with a total market share of 38.8% of customer loans and 40.1% of customer deposits as of 30 June 2023, according to data published by the National Bank of Georgia.
2) Consolidated Financial Statements and Key Ratios 2Q 2023
Consolidated Balance Sheet
In thousands of GEL | Jun'23 | Mar'23 |
ASSETS | ||
Cash and cash equivalents | 2,940,359 | 2,188,553 |
Due from other banks | 52,550 | 38,738 |
Mandatory cash balances with National Bank of Georgia and the Central Bank of Uzbekistan | 1,706,981 | 1,817,145 |
Loans and advances to customers | 19,002,657 | 17,953,053 |
Investment securities measured at fair value through other comprehensive income | 2,942,679 | 3,047,598 |
Bonds carried at amortised cost | 87,213 | 30,967 |
Finance lease receivables | 338,203 | 316,247 |
Investment properties | 20,741 | 21,080 |
Current income tax prepayment | 3,005 | 856 |
Deferred income tax asset | 12,573 | 13,867 |
Other financial assets | 266,969 | 258,135 |
Other assets | 441,756 | 426,343 |
Premises and equipment | 463,407 | 448,041 |
Right of use assets | 117,634 | 112,977 |
Intangible assets | 418,468 | 401,326 |
Goodwill | 59,964 | 59,964 |
Investments in associates | 3,667 | 4,095 |
TOTAL ASSETS | 28,878,826 | 27,138,985 |
LIABILITIES |
|
|
Due to credit institutions | 2,448,662 | 2,596,880 |
Customer accounts | 18,992,492 | 17,297,630 |
Lease liabilities | 87,324 | 79,989 |
Other financial liabilities | 387,595 | 345,017 |
Current income tax liability | 27,559 | 6,659 |
Debt Securities in issue | 1,392,872 | 1,324,815 |
Deferred income tax liability | 112,095 | 114,300 |
Provision for liabilities and charges | 20,767 | 19,228 |
Other liabilities | 91,839 | 67,026 |
Redemption liability | 347,044 | 464,805 |
Subordinated debt | 639,048 | 583,678 |
TOTAL LIABILITIES | 24,547,297 | 22,900,027 |
EQUITY |
|
|
Share capital | 1,682 | 1,676 |
Shares held by trust | (75,470) | (37,239) |
Share premium | 272,930 | 261,719 |
Retained earnings | 3,984,493 | 3,993,387 |
Merger reserve | 402,862 | 402,862 |
Share based payment reserve | 5,181 | (2,815) |
Fair value reserve for investment securities measured at fair value through other comprehensive income | 16,461 | 13,503 |
Cumulative currency translation reserve | (36,804) | (41,024) |
Other reserve | (347,044) | (464,805) |
Equity attributable to owners of the parent | 4,224,291 | 4,127,264 |
Non-controlling interest | 107,238 | 111,694 |
TOTAL EQUITY | 4,331,529 | 4,238,958 |
TOTAL LIABILITIES AND EQUITY | 28,878,826 | 27,138,985 |
Consolidated Income Statement and Other Comprehensive Income
In thousands of GEL | 2Q'23 | 1Q'23 | 2Q'22 |
Interest income | 711,820 | 672,150 | 552,719 |
Interest expense | (312,482) | (305,359) | (249,147) |
Net interest income | 399,338 | 366,791 | 303,572 |
Fee and commission income | 161,729 | 151,801 | 127,490 |
Fee and commission expense | (56,093) | (59,363) | (51,918) |
Net fee and commission income | 105,636 | 92,438 | 75,572 |
Insurance contract revenue | 31,552 | 29,524 | 27,201 |
Reinsurance service result | (1,517) | (2,870) | (614) |
Insurance service claims and expenses incurred | (23,851) | (20,436) | (19,889) |
Insurance profit | 6,184 | 6,218 | 6,698 |
Net gains from currency derivatives, foreign currency operations and translation | 61,127 | 60,601 | 66,520 |
Net gains from disposal of investment securities measured at fair value through other comprehensive income | 2,307 | 2,012 | 108 |
Other operating income | 11,906 | 3,905 | 11,461 |
Share of profit of associates | 268 | 274 | 178 |
Other operating non-interest income | 75,608 | 66,792 | 78,267 |
Credit loss allowance for loans to customers | (29,384) | (50,040) | (39,025) |
Credit loss (allowance)/recovery for finance lease receivable | (1,059) | (1,073) | 883 |
Credit loss (allowance)/recovery for performance guarantees and credit related commitments | (1,273) | 337 | (1,659) |
Credit loss (allowance)/recovery for other financial assets | (2,136) | (1,954) | 992 |
Credit loss recovery/(allowance) for financial assets measured at fair value through other comprehensive income | 134 | (296) | 1,183 |
Net impairment of non-financial assets | (216) | (142) | (228) |
Operating income after expected credit and non-financial asset impairment losses | 552,832 | 479,071 | 426,255 |
Losses from modifications of financial instruments | - | - | - |
Staff costs | (108,724) | (103,426) | (90,332) |
Depreciation and amortisation | (29,587) | (28,361) | (24,321) |
(Allowance)/recovery of provision for liabilities and charges | (50) | (71) | 4 |
Administrative and other operating expenses | (65,199) | (50,922) | (48,986) |
Operating expenses | (203,560) | (182,780) | (163,635) |
Profit before tax | 349,272 | 296,291 | 262,620 |
Income tax expense | (56,186) | (41,331) | (28,056) |
Profit for the period | 293,086 | 254,960 | 234,564 |
Other comprehensive income: | |||
Items that may be reclassified subsequently to profit or loss: | |||
Movement in fair value reserve | 2,958 | 8,036 | (1,597) |
Exchange differences on translation to presentation currency | 4,220 | (5,166) | (8,703) |
Other comprehensive income for the period | 7,178 | 2,870 | (10,300) |
Total comprehensive income for the period | 300,264 | 257,830 | 224,264 |
Profit attributable to: | |||
- Shareholders of TBCG | 288,791 | 248,668 | 233,799 |
- Non-controlling interest | 4,295 | 6,292 | 765 |
Profit for the period | 293,086 | 254,960 | 234,564 |
Total comprehensive income is attributable to: | |||
- Shareholders of TBCG | 295,969 | 251,538 | 223,499 |
- Non-controlling interest | 4,295 | 6,292 | 765 |
Total comprehensive income for the period | 300,264 | 257,830 | 224,264 |
* Interest expense includes net interest gains from currency swaps
Key Ratios 2Q'23
Total equity and total liabilities were restated for 30-Jun-2022 due to a change in the accounting of option contracts. As a result, ROE and leverage ratios were restated for 2Q 2022.
Average Balances
The average balances included in this document are calculated as the average of the relevant monthly balances as of the end of each month. Balances have been extracted from TBC's unaudited and consolidated management accounts, which were prepared from TBC's accounting records. These were used by the management for monitoring and control purposes.
Ratios (based on monthly averages, where applicable) | 2Q'23 | 1Q'23 | 2Q'22 |
| |||
Profitability ratios: | |||
ROE1 | 28.1% | 25.2% | 25.7% |
ROA2 | 4.2% | 3.6% | 3.7% |
Cost to income3 | 34.7% | 34.3% | 35.3% |
NIM4 | 6.8% | 6.4% | 5.8% |
Loan yields5 | 12.8% | 12.4% | 11.2% |
Deposit rates6 | 4.9% | 4.9% | 3.7% |
Cost of funding7 | 5.6% | 5.4% | 4.8% |
Asset quality & portfolio concentration: | |||
Cost of risk9 | 0.6% | 1.1% | 0.9% |
PAR 90 to Gross Loans9 | 1.2% | 1.3% | 1.4% |
NPLs to Gross Loans10 | 2.1% | 2.2% | 2.3% |
NPL provision coverage11 | 89.3% | 92.9% | 99.8% |
Total NPL coverage12 | 153.7% | 154.8% | 167.5% |
Credit loss level to Gross Loans13 | 1.8% | 2.0% | 2.3% |
Related Party Loans to Gross Loans14 | 0.1% | 0.1% | 0.1% |
Top 10 Borrowers to Total Portfolio15 | 5.8% | 6.0% | 6.6% |
Top 20 Borrowers to Total Portfolio16 | 8.7% | 9.0% | 8.8% |
Capital & liquidity positions: | |||
Net Loans to Deposits plus IFI Funding17 | 90.6% | 92.9% | 97.7% |
Net Stable Funding Ratio** 18 | 129.8% | 131.3% | n/a |
Liquidity Coverage Ratio** 19 | 124.5% | 135.7% | n/a |
Leverage20 | 6.7x | 6.4x | 6.9x |
CET 1 CAR* (Basel III)21 | 18.3% | 17.7% | n/a |
Tier 1 CAR* (Basel III)22 | 20.7% | 20.1% | n/a |
Total 1 CAR* (Basel III)23 | 23.1% | 22.2% | n/a |
* Ratios are calculated per IFRS
For the ratio definitions and exchange rates, please refer to appendix 8.
3) Consolidated Financial Statements and Key Ratios 1H 2023
Consolidated Balance Sheet
In thousands of GEL | Jun'23 | Jun'22 |
ASSETS | ||
Cash and cash equivalents | 2,940,359 | 2,739,226 |
Due from other banks | 52,550 | 42,552 |
Mandatory cash balances with National Bank of Georgia and the Central Bank of Uzbekistan | 1,706,981 | 2,108,455 |
Loans and advances to customers | 19,002,657 | 17,131,009 |
Investment securities measured at fair value through other comprehensive income | 2,942,679 | 1,915,987 |
Bonds carried at amortised cost | 87,213 | 27,962 |
Finance lease receivables | 338,203 | 253,057 |
Investment properties | 20,741 | 20,506 |
Current income tax prepayment | 3,005 | 1,565 |
Deferred income tax asset | 12,573 | 13,876 |
Other financial assets | 266,969 | 365,207 |
Other assets | 441,756 | 448,588 |
Premises and equipment | 463,407 | 429,726 |
Right of use assets | 117,634 | 77,039 |
Intangible assets | 418,468 | 345,291 |
Goodwill | 59,964 | 59,964 |
Investments in associates | 3,667 | 3,466 |
TOTAL ASSETS | 28,878,826 | 25,983,476 |
LIABILITIES |
| |
Due to credit institutions | 2,448,662 | 3,575,808 |
Customer accounts | 18,992,492 | 15,772,905 |
Lease liabilities | 87,324 | 70,491 |
Other financial liabilities | 387,595 | 300,152 |
Current income tax liability | 27,559 | 13,870 |
Debt Securities in issue | 1,392,872 | 1,514,106 |
Deferred income tax liability | 112,095 | 4,349 |
Provision for liabilities and charges | 20,767 | 16,650 |
Other liabilities | 91,839 | 69,571 |
Redemption liability | 347,044 | 254,492 |
Subordinated debt | 639,048 | 634,319 |
TOTAL LIABILITIES | 24,547,297 | 22,226,713 |
EQUITY |
| |
Share capital | 1,682 | 1,682 |
Shares held by trust | (75,470) | (7,900) |
Share premium | 272,930 | 283,430 |
Retained earnings | 3,984,493 | 3,345,183 |
Merger reserve | 402,862 | 402,862 |
Share based payment reserve | 5,181 | (12,488) |
Fair value reserve for investment securities measured at fair value through other comprehensive income | 16,461 | (25,609) |
Cumulative currency translation reserve | (36,804) | (18,023) |
Other reserve | (347,044) | (254,492) |
Equity attributable to owners of the parent | 4,224,291 | 3,714,645 |
Non-controlling interest | 107,238 | 42,118 |
TOTAL EQUITY | 4,331,529 | 3,756,763 |
TOTAL LIABILITIES AND EQUITY | 28,878,826 | 25,983,476 |
Consolidated Income Statement and Other Comprehensive Income
In thousands of GEL | 1H'23 | 1H'22 |
Interest income | 1,383,970 | 1,080,462 |
Interest expense* | (617,841) | (488,271) |
Net interest income | 766,129 | 592,191 |
Fee and commission income | 313,530 | 240,383 |
Fee and commission expense | (115,456) | (98,921) |
Net fee and commission income | 198,074 | 141,462 |
Insurance contract revenue | 61,076 | 51,369 |
Reinsurance service result | (4,387) | (3,260) |
Insurance service claims and expenses incurred | (44,287) | (37,144) |
Insurance profit | 12,402 | 10,965 |
Net gains from currency derivatives, foreign currency operations and translation | 121,728 | 114,377 |
Net gains from disposal of investment securities measured at fair value through other comprehensive income | 4,319 | 2,225 |
Other operating income | 15,811 | 15,558 |
Share of profit of associates | 542 | 123 |
Other operating non-interest income | 142,400 | 132,283 |
Credit loss allowance for loans to customers | (79,424) | (50,522) |
Credit loss allowance for finance lease receivable | (2,132) | (562) |
Credit loss allowance for performance guarantees and credit related commitments | (936) | (1,070) |
Credit loss allowance for other financial assets | (4,090) | (698) |
Credit loss (allowance)/recovery for financial assets measured at fair value through other comprehensive income | (162) | 1,268 |
Net impairment of non-financial assets | (358) | (6) |
Operating income after expected credit and non-financial asset impairment losses | 1,031,903 | 825,311 |
Staff costs | (212,150) | (176,491) |
Depreciation and amortisation | (57,948) | (47,332) |
Allowance of provision for liabilities and charges | (121) | (60) |
Administrative and other operating expenses | (116,121) | (90,702) |
Operating expenses | (386,340) | (314,585) |
Profit before tax | 645,563 | 510,726 |
Income tax expense | (97,517) | (52,181) |
Profit for the period | 548,046 | 458,545 |
Other comprehensive income: | ||
Items that may be reclassified subsequently to profit or loss: | ||
Movement in fair value reserve | 10,994 | (14,747) |
Exchange differences on translation to presentation currency | (946) | (8,573) |
Other comprehensive income for the period | 10,048 | (23,320) |
Total comprehensive income for the period | 558,094 | 435,225 |
Profit attributable to: | ||
- Shareholders of TBCG | 537,459 | 458,465 |
- Non-controlling interest | 10,587 | 80 |
Profit for the period | 548,046 | 458,545 |
Total comprehensive income is attributable to: | ||
- Shareholders of TBCG | 547,507 | 435,145 |
- Non-controlling interest | 10,587 | 80 |
Total comprehensive income for the period | 558,094 | 435,225 |
* Interest expense includes net interest gains from currency swaps
Key Ratios 1H'23
Total equity and total liabilities were restated for 30-Jun-2022 due to a change in the accounting of option contracts. As a result, ROE and leverage ratios were restated for 1H 2022.
Average Balances
The average balances included in this document are calculated as the average of the relevant monthly balances as of the end of each month. Balances have been extracted from TBC's unaudited and consolidated management accounts, which were prepared from TBC's accounting records. These were used by the management for monitoring and control purposes.
Ratios (based on monthly averages, where applicable) | 1H'23 | 1H'22 |
| ||
Profitability ratios: |
| |
ROE1 | 26.7% | 25.9% |
ROA2 | 3.9% | 3.7% |
Cost to income3 | 34.5% | 35.9% |
NIM4 | 6.6% | 5.7% |
Loan yields5 | 12.6% | 11.0% |
Deposit rates6 | 4.9% | 3.7% |
Cost of funding7 | 5.5% | 4.8% |
Asset quality & portfolio concentration: |
| |
Cost of risk9 | 0.9% | 0.6% |
PAR 90 to Gross Loans9 | 1.2% | 1.4% |
NPLs to Gross Loans10 | 2.1% | 2.3% |
NPL provision coverage11 | 89.3% | 99.8% |
Total NPL coverage12 | 153.7% | 167.5% |
Credit loss level to Gross Loans13 | 1.8% | 2.3% |
Related Party Loans to Gross Loans14 | 0.1% | 0.1% |
Top 10 Borrowers to Total Portfolio15 | 5.8% | 6.6% |
Top 20 Borrowers to Total Portfolio16 | 8.7% | 8.8% |
Capital & liquidity positions: |
| |
Net Loans to Deposits plus IFI Funding17 | 90.6% | 97.7% |
Net Stable Funding Ratio** 18 | 129.8% | n/a |
Liquidity Coverage Ratio** 19 | 124.5% | n/a |
Leverage20 | 6.7x | 6.9x |
CET 1 CAR* (Basel III)21 | 18.3% | n/a |
Tier 1 CAR* (Basel III)22 | 20.7% | n/a |
Total 1 CAR* (Basel III)23 | 23.1% | n/a |
* Ratios are calculated per IFRS
For the ratio definitions and exchange rates, please refer to appendix 8.
4) Financial Disclosures by Business Lines
The definitions of business lines are defined in Note 17.
Consolidated Balance Sheet Mar'23
In thousands of GEL | Georgia FS | Uzbekistan* | Payme | TBC UZ | Other** | Group |
ASSETS | ||||||
Cash and cash equivalents | 2,035,505 | 149,564 | 19,318 | 139,530 | 3,484 | 2,188,553 |
Due from other banks | 38,708 | - | - | - | 30 | 38,738 |
Mandatory cash balances with National Bank of Georgia and Central Bank of Uzbekistan | 1,814,320 | 2,825 | - | 2,825 | - | 1,817,145 |
Loans and advances to customers | 17,550,137 | 392,483 | - | 392,483 | 10,433 | 17,953,053 |
Investment securities measured at fair value through other comprehensive income | 3,047,597 | - | - | - | 1 | 3,047,598 |
Bonds carried at amortised cost | 8,317 | 22,650 | - | 22,650 | - | 30,967 |
Finance lease receivables | 285,724 | 24,075 | - | 24,075 | 6,448 | 316,247 |
Investment properties | 21,080 | - | - | - | - | 21,080 |
Current income tax prepayment | 40 | - | - | - | 816 | 856 |
Deferred income tax asset | 122 | 13,423 | - | 13,423 | 322 | 13,867 |
Other financial assets | 274,727 | 2,676 | 5,348 | - | (19,268) | 258,135 |
Other assets | 413,708 | 12,652 | 1,947 | 10,705 | (17) | 426,343 |
Premises and equipment | 431,318 | 12,491 | 2,219 | 10,272 | 4,232 | 448,041 |
Right of use assets | 103,208 | 7,850 | 1,789 | 6,061 | 1,919 | 112,977 |
Intangible assets | 321,687 | 22,201 | 1,052 | 21,149 | 57,438 | 401,326 |
Goodwill | 28,197 | 1,912 | - | 1,912 | 29,855 | 59,964 |
Investments in associates | 18,711 | - | - | - | (14,616) | 4,095 |
TOTAL ASSETS | 26,393,106 | 664,802 | 31,673 | 645,085 | 81,077 | 27,138,985 |
LIABILITIES | ||||||
Due to credit institutions | 2,530,753 | 19,877 | - | 19,877 | 46,250 | 2,596,880 |
Customer accounts | 16,958,443 | 374,429 | - | 383,713 | (35,242) | 17,297,630 |
Lease liabilities | 69,988 | 8,520 | 1,784 | 6,736 | 1,481 | 79,989 |
Other financial liabilities | 726,484 | 19,065 | 18,467 | 598 | (400,532) | 345,017 |
Current income tax liability | 6,626 | - | - | - | 33 | 6,659 |
Debt Securities in issue | 1,159,541 | - | - | - | 165,274 | 1,324,815 |
Deferred income tax liability | 114,280 | - | - | - | 20 | 114,300 |
Provisions for liabilities and charges | 19,228 | - | - | - | - | 19,228 |
Other liabilities | 51,335 | 17,695 | 1,145 | 19,222 | (2,004) | 67,026 |
Redemption liability | - | - | - | - | 464,805 | 464,805 |
Subordinated debt | 583,678 | - | - | - | - | 583,678 |
TOTAL LIABILITIES | 22,220,356 | 439,586 | 21,396 | 430,146 | 240,085 | 22,900,027 |
EQUITY | ||||||
Share capital | 28,498 | 277,189 | 495 | 276,694 | (304,011) | 1,676 |
Shares held by trust | - | - | - | - | (37,239) | (37,239) |
Share premium | 521,190 | 27,860 | - | 27,860 | (287,331) | 261,719 |
Retained earnings | 3,667,049 | (51,549) | 14,059 | (65,608) | 377,887 | 3,993,387 |
Merger reserve | - | 67 | 67 | - | 402,795 | 402,862 |
Share based payment reserve | (57,660) | - | - | - | 54,845 | (2,815) |
Fair value reserve for investment securities measured at fair value through other comprehensive income | 13,498 | 211 | 211 | - | (206) | 13,503 |
Cumulative currency translation reserve | - | (28,562) | (4,555) | (24,007) | (12,462) | (41,024) |
Other reserve | - | - | - | - | (464,805) | (464,805) |
Net assets attributable to owners | 4,172,575 | 225,216 | 10,277 | 214,939 | (270,527) | 4,127,264 |
Non-controlling interest | 175 | - | - | - | 111,519 | 111,694 |
TOTAL EQUITY | 4,172,750 | 225,216 | 10,277 | 214,939 | (159,008) | 4,238,958 |
TOTAL LIABILITIES AND EQUITY | 26,393,106 | 664,802 | 31,673 | 645,085 | 81,077 | 27,138,985 |
* Includes intergroup eliminations
** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations
Consolidated Balance Sheet Jun'23
In thousands of GEL | Georgia FS | Uzbekistan* | Payme | TBC UZ | Other** | Group |
ASSETS | ||||||
Cash and cash equivalents | 2,866,361 | 68,577 | 3,976 | 64,828 | 5,421 | 2,940,359 |
Due from other banks | 52,523 | - | - | - | 27 | 52,550 |
Mandatory cash balances with National Bank of Georgia and Central Bank of Uzbekistan | 1,703,444 | 3,537 | - | 3,537 | - | 1,706,981 |
Loans and advances to customers | 18,485,251 | 505,878 | - | 505,878 | 11,528 | 19,002,657 |
Investment securities measured at fair value through other comprehensive income | 2,942,679 | - | - | - | - | 2,942,679 |
Bonds carried at amortised cost | 9,382 | 77,831 | - | 77,831 | - | 87,213 |
Finance lease receivables | 305,761 | 25,366 | - | 25,366 | 7,076 | 338,203 |
Investment properties | 20,741 | - | - | - | - | 20,741 |
Current income tax prepayment | 2,508 | - | - | - | 497 | 3,005 |
Deferred income tax asset | 122 | 11,993 | - | 11,993 | 458 | 12,573 |
Other financial assets | 282,803 | 1,850 | 5,482 | - | (17,684) | 266,969 |
Other assets | 424,040 | 16,715 | 2,056 | 14,659 | 1,001 | 441,756 |
Premises and equipment | 446,146 | 12,803 | 2,450 | 10,353 | 4,458 | 463,407 |
Right of use assets | 108,579 | 7,210 | 1,614 | 5,596 | 1,845 | 117,634 |
Intangible assets | 329,917 | 22,916 | 2,182 | 20,734 | 65,635 | 418,468 |
Goodwill | 28,197 | 1,912 | - | 1,912 | 29,855 | 59,964 |
Investments in associates | 18,284 | - | - | - | (14,617) | 3,667 |
TOTAL ASSETS | 28,026,738 | 756,588 | 17,760 | 742,687 | 95,500 | 28,878,826 |
LIABILITIES | ||||||
Due to credit institutions | 2,417,293 | 29,083 | - | 29,083 | 2,286 | 2,448,662 |
Customer accounts | 18,639,911 | 457,340 | - | 457,567 | (104,759) | 18,992,492 |
Lease liabilities | 77,869 | 8,018 | 1,677 | 6,341 | 1,437 | 87,324 |
Other financial liabilities | 369,419 | 2,389 | 1,790 | 599 | 15,787 | 387,595 |
Current income tax liability | 27,523 | - | - | - | 36 | 27,559 |
Debt Securities in issue | 1,223,719 | - | - | - | 169,153 | 1,392,872 |
Deferred income tax liability | 112,071 | - | - | - | 24 | 112,095 |
Provisions for liabilities and charges | 20,767 | - | - | - | - | 20,767 |
Other liabilities | 58,215 | 28,652 | 3,300 | 28,984 | 4,972 | 91,839 |
Redemption liability | - | - | - | - | 347,044 | 347,044 |
Subordinated debt | 639,048 | - | - | - | - | 639,048 |
TOTAL LIABILITIES | 23,585,835 | 525,482 | 6,767 | 522,574 | 435,980 | 24,547,297 |
EQUITY | - | |||||
Share capital | 28,498 | 277,189 | 495 | 276,694 | (304,005) | 1,682 |
Shares held by trust | - | - | - | - | (75,470) | (75,470) |
Share premium | 521,190 | 27,860 | - | 27,860 | (276,120) | 272,930 |
Retained earnings | 3,965,894 | (48,584) | 14,820 | (63,404) | 67,183 | 3,984,493 |
Merger reserve | - | 67 | 67 | - | 402,795 | 402,862 |
Share based payment reserve | (91,320) | - | - | - | 96,501 | 5,181 |
Fair value reserve for investment securities measured at fair value through other comprehensive income | 16,456 | 211 | 211 | - | (206) | 16,461 |
Cumulative currency translation reserve | - | (25,637) | (4,600) | (21,037) | (11,167) | (36,804) |
Other reserve | - | - | - | - | (347,044) | (347,044) |
Net assets attributable to owners | 4,440,718 | 231,106 | 10,993 | 220,113 | (447,533) | 4,224,291 |
Non-controlling interest | 185 | - | - | - | 107,053 | 107,238 |
TOTAL EQUITY | 4,440,903 | 231,106 | 10,993 | 220,113 | (340,480) | 4,331,529 |
TOTAL LIABILITIES AND EQUITY | 28,026,738 | 756,588 | 17,760 | 742,687 | 95,500 | 28,878,826 |
* Includes intergroup eliminations
** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations
Consolidated Income Statement and Other Comprehensive Income 1Q'23
In thousands of GEL | Georgia FS | Uzbekistan** | Payme | TBC UZ | Other *** | Group |
Interest income | 624,316 | 46,266 | - | 46,266 | 1,568 | 672,150 |
Interest expense* | (280,005) | (23,138) | (90) | (23,048) | (2,216) | (305,359) |
Net interest income | 344,311 | 23,128 | (90) | 23,218 | (648) | 366,791 |
Fee and commission income | 129,740 | 20,863 | 18,261 | 5,309 | 1,198 | 151,801 |
Fee and commission expense | (55,319) | (4,005) | (1,649) | (5,063) | (39) | (59,363) |
Net fee and commission income | 74,421 | 16,858 | 16,612 | 246 | 1,159 | 92,438 |
Insurance profit | 6,398 | - | - | - | (180) | 6,218 |
Net gains from currency derivatives, foreign currency operations and translation | 62,914 | 68 | 2 | 66 | (2,381) | 60,601 |
Net gains from disposal of investment securities measured at fair value through other comprehensive income | 2,012 | - | - | - | - | 2,012 |
Other operating income | 2,877 | 28 | 1 | 27 | 1,000 | 3,905 |
Share of profit of associates | 274 | - | - | - | - | 274 |
Other operating non-interest income | 74,475 | 96 | 3 | 93 | (1,561) | 73,010 |
Credit loss allowance for loans to customers | (45,198) | (5,241) | - | (5,241) | 399 | (50,040) |
Credit loss allowance for finance lease receivable | (786) | (335) | - | (335) | 48 | (1,073) |
Credit loss recovery for performance guarantees and credit related commitments | 337 | - | - | - | - | 337 |
Credit loss allowance for other financial assets | (1,680) | (274) | (179) | (95) | - | (1,954) |
Credit loss allowance for financial assets measured at fair value through other comprehensive income | (296) | - | - | - | - | (296) |
Net recovery of non-financial assets | 312 | - | - | - | (454) | (142) |
Operating income after expected credit and non-financial asset impairment losses | 445,896 | 34,232 | 16,346 | 17,886 | (1,057) | 479,071 |
Staff costs | (86,607) | (8,990) | (2,217) | (6,773) | (7,829) | (103,426) |
Depreciation and amortisation | (24,587) | (2,110) | (248) | (1,862) | (1,664) | (28,361) |
Allowance of provision for liabilities and charges | (71) | - | - | - | - | (71) |
Administrative and other operating expenses | (38,803) | (10,114) | (2,279) | (7,835) | (2,005) | (50,922) |
Operating expenses | (150,068) | (21,214) | (4,744) | (16,470) | (11,498) | (182,780) |
Profit before tax | 295,828 | 13,018 | 11,602 | 1,416 | (12,555) | 296,291 |
Income tax expense | (41,016) | (311) | - | (311) | (4) | (41,331) |
Profit for the period | 254,812 | 12,707 | 11,602 | 1,105 | (12,559) | 254,960 |
Profit attributable to: |
|
| ||||
- Shareholders of TBCG | 254,801 | 12,707 | 11,602 | 1,105 | (18,840) | 248,668 |
- Non-controlling interest | 11 | - | - | - | 6,281 | 6,292 |
Profit for the period | 254,812 | 12,707 | 11,602 | 1,105 | (12,559) | 254,960 |
* Interest expense includes net interest gains from currency swaps
** Includes intergroup eliminations
*** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations
Consolidated Income Statement and Other Comprehensive Income 2Q'23
In thousands of GEL | Georgia FS | Uzbekistan** | Payme | TBC UZ | Other *** | Group |
Interest income | 653,209 | 56,989 | - | 56,989 | 1,622 | 711,820 |
Interest expense* | (285,241) | (27,228) | (83) | (27,145) | (13) | (312,482) |
Net interest income | 367,968 | 29,761 | (83) | 29,844 | 1,609 | 399,338 |
Fee and commission income | 136,481 | 24,978 | 18,451 | 17,204 | 270 | 161,729 |
Fee and commission expense | (49,501) | (6,467) | (1,553) | (15,591) | (125) | (56,093) |
Net fee and commission income | 86,980 | 18,511 | 16,898 | 1,613 | 145 | 105,636 |
Insurance profit | 6,362 | - | - | - | (178) | 6,184 |
Net gains from currency derivatives, foreign currency operations and translation | 70,405 | 15 | 1 | 14 | (9,293) | 61,127 |
Net gains from disposal of investment securities measured at fair value through other comprehensive income | 2,307 | - | - | - | - | 2,307 |
Other operating income | 9,037 | 4 | - | 4 | 2,865 | 11,906 |
Share of profit of associates | 268 | - | - | - | - | 268 |
Other operating non-interest income | 88,379 | 19 | 1 | 18 | (6,606) | 81,792 |
Credit loss allowance for loans to customers | (22,054) | (7,641) | - | (7,641) | 311 | (29,384) |
Credit loss allowance for finance lease receivable | (473) | (586) | - | (586) | - | (1,059) |
Credit loss allowance for performance guarantees and credit related commitments | (1,273) | - | - | - | - | (1,273) |
Credit loss allowance for other financial assets | (2,030) | (106) | (84) | (22) | - | (2,136) |
Credit loss recovery for financial assets measured at fair value through other comprehensive income | 134 | - | - | - | - | 134 |
Net impairment of non-financial assets | (121) | - | - | - | (95) | (216) |
Operating income after expected credit and non-financial asset impairment losses | 517,510 | 39,958 | 16,732 | 23,226 | (4,636) | 552,832 |
Staff costs | (90,862) | (9,310) | (2,767) | (6,543) | (8,552) | (108,724) |
Depreciation and amortisation | (25,706) | (2,120) | (237) | (1,883) | (1,761) | (29,587) |
Allowance of provision for liabilities and charges | (50) | - | - | - | - | (50) |
Administrative and other operating expenses | (47,488) | (14,711) | (3,427) | (11,284) | (3,000) | (65,199) |
Operating expenses | (164,106) | (26,141) | (6,431) | (19,710) | (13,313) | (203,560) |
Profit before tax | 353,404 | 13,817 | 10,301 | 3,516 | (17,949) | 349,272 |
Income tax (expense)/credit | (54,942) | (1,312) | - | (1,312) | 68 | (56,186) |
Profit for the period | 298,462 | 12,505 | 10,301 | 2,204 | (17,881) | 293,086 |
Profit attributable to: |
|
| ||||
- Shareholders of TBCG | 298,452 | 12,505 | 10,301 | 2,204 | (22,166) | 288,791 |
- Non-controlling interest | 10 | - | - | - | 4,285 | 4,295 |
Profit for the period | 298,462 | 12,505 | 10,301 | 2,204 | (17,881) | 293,086 |
* Interest expense includes net interest gains from currency swaps
** Includes intergroup eliminations
*** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations
Consolidated Key Ratios by Business Lines
1Q'23 | Georgia FS | Uzbekistan | Group |
Profitability ratios: |
| ||
ROE1 | 23.7% | 28.1% | 25.2% |
ROA2 | 3.7% | 8.9% | 3.6% |
Cost to income3 | 30.4% | 52.9% | 34.3% |
NIM4 | 6.1% | 19.7% | 6.4% |
Loan yields5 | 11.7% | 43.6% | 12.4% |
Deposit rates6 | 4.5% | 25.3% | 4.9% |
Cost of funding7 | 5.1% | 24.9% | 5.4% |
Asset quality & portfolio concentration: |
| ||
Cost of risk8 | 1.0% | 5.6% | 1.1% |
PAR 90 to Gross Loans9 | 1.2% | 2.0% | 1.3% |
NPLs to Gross Loans10 | 2.2% | 2.0% | 2.2% |
NPL provision coverage11 | 89.7% | 189.7% | 92.9% |
Total NPL coverage12 | 152.1% | 189.7% | 154.8% |
2Q'23 | Georgia FS | Uzbekistan | Group |
Profitability ratios: |
| ||
ROE1 | 27.8% | 22.1% | 28.1% |
ROA2 | 4.5% | 7.1% | 4.2% |
Cost to income3 | 30.2% | 54.1% | 34.7% |
NIM4 | 6.5% | 20.1% | 6.8% |
Loan yields5 | 12.0% | 43.0% | 12.8% |
Deposit rates6 | 4.5% | 24.9% | 4.9% |
Cost of funding7 | 5.2% | 24.5% | 5.6% |
Asset quality & portfolio concentration: |
| ||
Cost of risk8 | 0.5% | 6.6% | 0.6% |
PAR 90 to Gross Loans9 | 1.1% | 2.2% | 1.2% |
NPLs to Gross Loans10 | 2.1% | 2.2% | 2.1% |
NPL provision coverage11 | 85.3% | 180.0% | 89.3% |
Total NPL coverage12 | 150.9% | 180.0% | 153.7% |
1H'23 | Georgia FS | Uzbekistan | Group |
Profitability ratios: |
| ||
ROE1 | 25.7% | 25.1% | 26.70% |
ROA2 | 4.1% | 8.0% | 3.9% |
Cost to income3 | 30.3% | 53.6% | 34.5% |
NIM4 | 6.3% | 20.1% | 6.6% |
Loan yields5 | 11.9% | 43.1% | 12.6% |
Deposit rates6 | 4.5% | 25.0% | 4.9% |
Cost of funding7 | 5.2% | 24.6% | 5.5% |
Asset quality & portfolio concentration: |
| ||
Cost of risk8 | 0.8% | 6.1% | 0.9% |
PAR 90 to Gross Loans9 | 1.1% | 2.2% | 1.2% |
NPLs to Gross Loans10 | 2.1% | 2.2% | 2.1% |
NPL provision coverage11 | 85.3% | 180.0% | 89.3% |
Total NPL coverage12 | 150.9% | 180.0% | 153.7% |
For the ratio definitions and exchange rates, please refer to appendix 8.
5) Market shares[8] in Georgia
Market shares | Jun'23 | Mar'23 | Jun'22 | Change YoY | Change QoQ |
Total loans | 38.8% | 39.1% | 39.1% | -0.3 pp | -0.3 pp |
Individual loans | 38.3% | 38.4% | 38.5% | -0.2 pp | -0.1 pp |
Legal entities loans | 39.5% | 39.8% | 39.7% | -0.2 pp | -0.3 pp |
Total deposits | 40.1% | 39.3% | 40.7% | -0.6 pp | 0.8 pp |
Individual deposits | 37.9% | 37.7% | 39.2% | -1.3 pp | 0.2 pp |
Legal entities deposits | 42.4% | 41.1% | 42.4% | 0.0 pp | 1.3 pp |
6) Loan Book Breakdown by Stages According IFRS 9
In millions of GEL | Jun'23 | Mar'23 | Jun'22 | |||
Stage | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions |
1 | 17,687 | 99 | 16,470 | 101 | 15,480 | 109 |
2 | 1,279 | 100 | 1,461 | 104 | 1,610 | 114 |
3 | 395 | 159 | 390 | 163 | 445 | 181 |
Total | 19,361 | 358 | 18,321 | 368 | 17,535 | 404 |
| ||||||
Georgia FS Retail | Jun'23 | Mar'23 | Jun'22 | |||
Stage | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions |
1 | 6,249 | 48 | 5,953 | 52 | 5,647 | 60 |
2 | 584 | 64 | 664 | 69 | 661 | 90 |
3 | 113 | 71 | 123 | 77 | 163 | 93 |
Total | 6,946 | 183 | 6,740 | 198 | 6,471 | 243 |
| ||||||
Georgia FS CIB | Jun'23 | Mar'23 | Jun'22 | |||
Stage | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions |
1 | 6,474 | 18 | 5,980 | 18 | 5,777 | 21 |
2 | 346 | 0 | 424 | 1 | 602 | 1 |
3 | 100 | 30 | 90 | 27 | 84 | 25 |
Total | 6,920 | 48 | 6,494 | 46 | 6,463 | 47 |
| ||||||
Georgia FS MSME | Jun'23 | Mar'23 | Jun'22 | |||
Stage | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions |
1 | 4,463 | 24 | 4,145 | 24 | 3,874 | 25 |
2 | 320 | 28 | 352 | 29 | 337 | 21 |
3 | 167 | 48 | 166 | 50 | 189 | 56 |
Total | 4,950 | 100 | 4,663 | 103 | 4,400 | 102 |
| ||||||
Uzbekistan | Jun'23 | Mar'23 | Jun'22 | |||
Stage | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions | Gross loans | Loan loss provisions |
1 | 492 | 8 | 384 | 7 | 171 | 3 |
2 | 22 | 4 | 15 | 3 | 6 | 0 |
3 | 13 | 9 | 9 | 6 | 4 | 2 |
Total | 527 | 21 | 408 | 16 | 181 | 5 |
* Total loans include Azerbaijan loan portfolio
7) Glossary
Terminology | Definition |
BVPS | Book value per share. |
Digital daily active users (Digital DAU) | The number of retail digital users, who logged into our digital channels at least once per day. |
Digital monthly active users (Digital MAU) | The number of retail digital users, who logged into our digital channels at least once a month. |
EPS | Earnings per share. |
Gross merchandise value (GMV) | GMV equals the total value of sales over the given period, including auctions through housing and auto platforms, as well as listing fees. |
IFI | Internatiodnal Financial Institutions. |
Jaw ratio | Difference between growth rate of operating income and expenses. |
NBG | National Bank of Georgia. |
Net combined ratio | Net insurance claims plus acquisition costs and administrative expenses divided by net earned premium. |
8) Ratio Definitions and Exchange Rates
Ratio definitions
1. Return on average total equity (ROE) equals net profit attributable to owners divided by the monthly average of total shareholders' equity attributable to the PLC's equity holders for the same period; annualised where applicable.
2. Return on average total assets (ROA) equals net profit of the period divided by monthly average total assets for the same period; annualised where applicable.
3. Cost to income ratio equals total operating expenses for the period divided by the total revenue for the same period. (Revenue represents the sum of net interest income, net fee and commission income and other non-interest income).
4. Net interest margin (NIM) is net interest income divided by monthly average interest-earning assets; annualised where applicable. Interest-earning assets include investment securities (excluding CIB shares), net investment in finance lease, net loans, and amounts due from credit institutions.
5. Loan yields equal interest income on loans and advances to customers divided by monthly average gross loans and advances to customers; annualised where applicable.
6. Deposit rates equal interest expense on customer accounts divided by monthly average total customer deposits; annualised where applicable.
7. Cost of funding equals sum of the total interest expense and net interest gains on currency swaps (entered for funding management purposes), divided by monthly average interest-bearing liabilities; annualised where applicable.
8. Cost of risk equals credit loss allowance for loans to customers divided by monthly average gross loans and advances to customers; annualised where applicable.
9. PAR 90 to gross loans ratio equals loans for which principal or interest repayment is overdue for more than 90 days divided by the gross loan portfolio for the same period.
10. NPLs to gross loans equals loans with 90 days past due on principal or interest payments, and loans with a well-defined weakness, regardless of the existence of any past-due amount or of the number of days past due divided by the gross loan portfolio for the same period.
11. NPL provision coverage equals total credit loss allowance for loans to customers divided by the NPL loans.
12. Total NPL coverage equals total credit loss allowance plus the minimum of collateral amount of the respective NPL loan (after applying haircuts in the range of 0%-50% for cash, gold, real estate and PPE) and its gross loan exposure divided by the gross exposure of total NPL loans.
13. Credit loss level to gross loans equals credit loss allowance for loans to customers divided by the gross loan portfolio for the same period.
14. Related party loans to total loans equals related party loans divided by the gross loan portfolio.
15. Top 10 borrowers to total portfolio equals the total loan amount of the top 10 borrowers divided by the gross loan portfolio.
16. Top 20 borrowers to total portfolio equals the total loan amount of the top 20 borrowers divided by the gross loan portfolio.
17. Net loans to deposits plus IFI funding ratio equals net loans divided by total deposits plus borrowings received from international financial institutions.
18. Net stable funding ratio equals the available amount of stable funding divided by the required amount of stable funding as defined by NBG in line with Basel III guidelines. Calculations are made for TBC Bank standalone, based on IFRS.
19. Liquidity coverage ratio equals high-quality liquid assets divided by the total net cash outflow amount as defined by the NBG. Calculations are made for TBC Bank standalone, based on IFRS.
20. Leverage equals total assets to total equity.
21. CET 1 CAR equals CET 1 capital divided by total risk weighted assets, both calculated in accordance with requirements of the NBG Basel III standards. Calculations are made for TBC Bank standalone, based on IFRS.
22. Tier 1 CAR equals tier I capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG Basel III standards. Calculations are made for TBC Bank standalone, based on IFRS.
23. Total CAR equals total capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG Basel III standards. Calculations are made for TBC Bank standalone, based on IFRS.
Exchange Rates
To calculate the QoQ growth of the Balance Sheet items without the currency exchange rate effect, we used the US$/GEL exchange rate of 2.5604 as of 31 March 2023. To calculate the YoY growth without the currency exchange rate effect, we used the US$/GEL exchange rate of 2.9289 as of 30 June 2022. As of 30 June 2023, the US$/GEL exchange rate equalled 2.6177. For P&L items growth calculations without the currency effect, we used the average US$/GEL exchange rate for the following periods: 2Q 2023 of 2.5586, 1Q 2023 of 2.6372, 2Q 2022 of 2.9967, 1H 2023 of 2.5975, 1H 2022 of 3.0548.
Material Existing and Emerging Risks
Risk Management is a critical pillar of the Group's strategy. It is essential to identify emerging risks and uncertainties that could adversely impact the Group's performance, financial condition, and prospects. This section analyses the material principal and emerging risks and uncertainties that the Group faces. However, we cannot exclude the possibility of the Group's performance being affected by risks and uncertainties other than those listed below. Since there remains some uncertainty regarding the war in Ukraine, its potential impact is summarised as a separate risk in the emerging risks section.
In this section, the main focus is on the key subsidiary of the Group - JSC TBC Bank (the Bank), the bank based in Georgia - unless there is a reference to the Group itself.
PRINCIPAL RISKS