Georgia strength helps lift Q1 profit for TBC Bank

(Sharecast News) - TBC Bank Group reported a 15% rise in first-quarter profit and declared a quarterly dividend on Wednesday, as strong performance in Georgia offset weaker profitability in Uzbekistan during a period of heightened global volatility.

The FTSE 250 Georgia and Uzbekistan-focused bank said net profit rose to GEL 365m in the three months ended 31 March, from GEL 319m a year earlier.

Return on equity was 23.4%, compared with 23.2% in the first quarter of 2025, while return on assets edged up to 3.3% from 3.2%.

Net interest income increased 17.2% year on year to GEL 625.0m, supported by loan growth and a higher net interest margin.

Total operating income rose 11.0% to GEL 859.3m.

Net fee and commission income fell 8.5% to GEL 135.4m, while other non-interest income increased 6.3% to GEL 98.9m.

Operating expenses increased 20.0% to GEL 345.5m, lifting the cost-to-income ratio to 40.2% from 37.2%.

Total credit loss allowances fell 11.5% year on year to GEL 104.8m, while the cost of risk declined to 1.3% from 1.4%.

Gross loans rose 11.4% year on year to GEL 30.47bn, and customer deposits, excluding Ministry of Finance deposits, increased 13.9% to GEL 25.42bn.

Total assets rose 10.8% to GEL 44.58bn, while total equity increased 13.8% to GEL 6.51bn.

Chief executive Vakhtang Butskhrikidze said TBC had made "a strong start to the year" with sustainably high profitability and robust growth.

"This performance comes against a backdrop of increased global volatility and uncertainty following the start of the US-Iran war in late February," he said.

"Like elsewhere, the countries in which we operate, Georgia and Uzbekistan, are not immune to the fallout from this conflict.

"However, so far, the economic impact has been relatively muted and, for now, we still expect to see strong economic growth in both countries in 2026, with a 7.4% real GDP growth forecast for Georgia and 7.9% for Uzbekistan."

The group's Georgia financial services business generated net profit of GEL 362.2m, up 14.0% year on year, with ROE of 24.1%.

Net interest income in Georgia rose 23.9% to GEL 507.0m, helped by 12% loan growth and a 70 basis-point rise in net interest margin to 6.2%.

Butskhrikidze said Georgia remained a "consistently strong performer", adding that more than 200,000 new digital monthly users had joined over the past year and almost half of monthly users were now interacting with TBC daily.

In Uzbekistan, net profit fell 4.0% year on year to GEL 20.7m, with ROE declining to 10.9% from 13.7%.

TBC said the first quarter was shaped by the ongoing recalibration of its loan book following changed regulatory requirements, which reduced lending and weighed on core revenue and profitability.

Uzbekistan gross loans rose 6.9% year on year but fell 9.9% quarter on quarter to GEL 2.30bn.

Customer accounts increased 28.2% year on year and 5.5% from the end of 2025 to GEL 1.56bn.

The Uzbek business reported total operating income of GEL 155.1m, down 3.7% year on year.

Butskhrikidze said TBC continued to diversify lending in Uzbekistan, with its business loan portfolio growing to more than $150m in its first year of operation and now accounting for 18% of the loan book.

He said demand remained strong across spending, borrowing, saving and protection products, with more than 1.0m Salom Cards issued and payments value up 40% year on year.

The group's total digital monthly active users stood at 7.15m at the end of March, down 1% year on year, reflecting a decline in Uzbekistan, while digital daily active users rose 3% to 2.63m.

In Georgia, digital monthly active users increased 19% and daily active users rose 24%.

Asset quality weakened modestly, with the group's non-performing loan ratio rising to 3.0% from 2.5% a year earlier.

The NPL provision coverage ratio fell to 65.4% from 73.6%, while total NPL coverage declined to 123.1% from 140.4%.

TBC's capital position remained strong.

In Georgia, its common equity tier one capital adequacy ratio was 16.6%, unchanged from the end of 2025 and up from 16.4% a year earlier.

The total capital adequacy ratio was 22.4%.

In Uzbekistan, the CET1 ratio was 18.5% and total capital adequacy ratio was 19.6%.

The board declared a first-quarter dividend of GEL 1.75 per share.

The dividend would be paid in sterling on 11 September to shareholders on the register on 14 August, with an ex-dividend date of 13 August.

The conversion into sterling will use the average National Bank of Georgia exchange rate for the five days from 17 August to 21 August.

TBC said Georgia's economy grew 9.1% year on year in the first quarter, supported by resilient foreign currency inflows, credit activity and wages.

Uzbekistan's economy grew 8.7%, with inflation easing to 7.1% in March.

Butskhrikidze said the group remained confident in the long-term financial services opportunity in both countries.

"Having started 2026 well, our strong growth outlook for the full year remains in place as we work to deliver on the strategic goals we have outlined," he said.

At 0950 BST, shares in TBC Bank Group were down 0.21% at 4,692p.

Reporting by Josh White for Sharecast.com.

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