TBC Bank Group PLC LON:TBCG (TBC) is Georgia’s largest bank, but it’s a close-run thing with the other FTSE250-listed Georgian bank, the Bank of Georgia LON:BGEO (BoG), which The Armchair Trader has previously reported on.
TBC Bank has had a strong year. In its last results, published last month to end-September, it reported 3Q24 profit was up 16% year-on-year to GEL347m (GBP95.6m). Over the nine months of the year, profits were up 15% y-o-y to GEL973m. This was despite ongoing civil protests, mainly in the capital Tblisi, following the Georgian government’s decision to suspend the country’s bid to join the EU.
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The company has been good for its shareholders with 3Q24 ROE at 26.6m and nine-month ROE of 26.2%. TBC doesn’t just operate in Georgia, though – a good hedge against local interruptions. As well as being listed in London, and headquartered in Tblisi, the company also operates in Central Asia’s Uzbekistan. Uzbekistan is becoming more significant for TBC, with the Uzbek subsidiary now representing 15% of the group’s total operating income and 9% of TBC Group’s profit.
The bank has ridden the growing demand for digital banking services in Georgia and its other emerging market, Uzbekistan. Digital active users have reached nearly 6 million, a 30% jump y-o-y. Georgia’s domestic market remains the core of TBC’s operations, with management claiming that it had increased its loan book by 17% y-o-y and bank deposits increasing 18%.
Solid domestic performance with significant overseas growth
TBC Bank is in a strong position in its home market, with a solid capital position with CET1, Tier 1, and Total Capital ratios standing at 16.6%, 20.4%, and 23.9%, respectively, all well above the minimum regulatory requirements.
The growth in Uzbekistan surpassed the Georgian figures, doubling its loan book y-o-y to GEL1.3bn, which TBC’s chief executive, Vakhtang Butskhrikidze, said was 15% of the country’s microloan market. The Uzbek loans also represented 44% of the group’s unsecured loans, said Butskhrikidze. Retail customers in Uzbekistan also seemed to trust the Georgian brand, with retail deposits up 66% y-o-y to GEL856m, making up 10% of the group’s total retail deposits, and as an entity the Uzbekistan bank saw operating income of GEL111m, up 105% y-o-y and GEL32m in net profit, up 131% y-o-y.
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TBC Bank well-supported
The bank continues to be well-supported by the international community, and as it is penetrating a new Central Asian market has received development funds for on-lending. Up until the close of November, TBC had received total wholesale funding for TBC Uzbekistan of USD105m (GBP82.8m), which included USD40m from Dutch development finance institution FMO; USD20m of credit lines from Swiss responsible investment institution, ResponsAbility; USD25 of debt financing from Blue Orchard and; a USD10m loan from DFI, EBRD. Most recently the bank received USD10m of funding through the Global Gender-Smart Fund from Dutch impact-focused investment manager, Triple Jump to increase lending to women in the Uzbek market.
TBC Group opened trading this week (2nd December) at 2,969.01p, up 9.6% over one-year with the company’s shares ranging between 2,264.07p and 3,590p. Given the current political unrest in Georgia, now might be a good buying point to get exposure to two rapidly developing economies. TBC Bank has a market cap of GBP1.7bn.
