TBC Bank Group Regulatory News (TBCG)

Contingency planning - COVID-19

Key points

· Implemented actions to protect customers and staff and minimize disruption

· High digital penetration assists in minimizing visits to branch network

· Strong February 2020 liquidity and capital buffers

· Working closely with National Bank of Georgia ("NBG"), government and other businesses to ensure coordination

· Granting a 3-month grace period on principal and interest payments for individual and MSME customers as well as those corporate customers who are affected by current situation

· The Board not to recommend dividend

Vakhtang Butskhrikidze, Chief Executive Officer, TBC Bank, commented:

"During this time of hardship for the whole world, the TBC team is mobilized to provide full support and guidance to our customers. We are actively coordinating with all relevant parties in order to proactively offer all the solutions needed. Our digital support is very strong, and our customers are able to conduct all banking transactions online, without any need to visit the branch. The health and safety of our staff and customers remains our main priority, and we are confident that together we will get through these difficult times. "

TBC Bank has implemented a number of actions to protect its customers and staff members and to minimize disruption to the Group's operations during the COVID-19 outbreak. In developing our response, we have looked at best practices from major global companies as well as organizations like the World Health Organization. We are also closely coordinating with the Government of Georgia, NBG and the other banks in the country.

Our first priority is the health, safety and well-being of our staff and our customers. While for the time being most of our branches remain open, we have introduced a number of additional security and infection prevention measures in our branch network. We have introduced remote working practices for most of our head office and back office units and divided all our critical service units into different groups and locations. We have also refreshed the list of critical roles in the company and ensured their continuous operational engagement and remote access.

In order to support our customers during the coming difficult months, in coordination with the Government, NBG and the banking sector, we have introduced a three-month grace period on principle and interest payments for all our individual and MSME customers as well as those corporate customers whose business is the most exposed in the current situation.

On Monday, 16 March 2020 we held a conference call with more than 250 of our business customers, representatives of NGOs, experts as well as NBG and government representatives, where we shared our economists' outlook on the economy and its key sectors. We believe such communication will help our customers in planning their activities and managing their finances in the coming weeks. You can find the presentation at

www.tbcresearch.ge/en/Research/covid-19-eng.

Our digital penetration is very high, with an offloading ratio of 92.7% as of the end of 2019, mainly driven by mobile banking transactions. To ensure continued communication and customer care, we have activated and enhanced all our channels, launched intensive communication campaigns to promote cashless transactions (cash is a potential transmission vector for the virus) and active usage of our digital channels. For the next three months, we have revised tariff plans to further incentivize our digital channel usage. The multichannel promotion campaigns together with the loan repayment grace period are expected to substantially decrease customer flow in our branch network and reduce the risk of spreading the infection. If needed, this will allow us to further optimize branch network operations and decrease the number of front office staff as well as to introduce different shifts in branches. In terms of our IT infrastructure, we have rigorous measures to ensure adequate capacity and security, and we are closely monitoring the system with all controls active.

We expect the pandemic to have a negative economic effect as long as the number of cases is expanding, but we expect a gradual return of economic strength as the number of cases eases. The government has come up with a number of initiatives to support businesses and the economy. The most important ones are as follows:

· Income taxes will be deferred by the Government for an initial four-month period for companies operating in tourism industry;

· The Government will subsidize interest payments for six months, for small and medium sized hotels with less than 50 rooms. This project will apply to about 2000 hotels operating in the country;

· The Government will double the volume of VAT refunds to companies, with an aim of supplying them with working capital, from an expected GEL 600 million to an anticipated GEL 1.2 billion this year;

· The Government will increase its proposed capital expenditure by GEL 300 million this year with the aim of providing additional economic incentives.

As of 29 February 2020 we maintained strong liquidity buffers with the liquidity coverage ratio at 108.2% and net stable funding ratio at 126.8%. We operate on capital buffers of 2.43%, 2.91%, 2.34% above minimum requirements for CET1, Tier 1 and total capital requirements, respectively.

NBG has presented number of initiatives they are implementing:

In relation to capital adequacy requirements:

· Postponing the phasing in of additional capital requirements planned in March with an 0.44 pp effect on CET 1;

· Allowing banks to use the conservation buffer (currently at 2.5pp on CET1) if necessary. However, in this case, the banks will not be allowed to distribute any capital (including dividend payments);

· Leaving open the possibility of releasing all pillar 2 buffers (CICR, HHI and Net Grape buffers);

In relation to liquidity requirements, if necessary, NBG will consider the following measures:

· Decreasing LCR limits;

· Decreasing FX mandatory reserve requirements;

· Updating criteria for security or repo pledging to support GEL liquidity.

In addition, NBG will impose no monetary sanctions in case of the breach of economic normatives and limits driven by external factors (e.g. currency rate deprecation);

Today, NBG Monetary Policy Committee has left the refinance rate unchanged at 9.0%. NBG has disclosed they have approached the International Monetary Fund to increase access to funding in the near future under its Extended Fund Facility (EFF) program. Moreover, additional funds will be allocated by other international donors to mitigate the effects of the coronavirus pandemic. It will help eliminate the external imbalance and will positively impact the nominal effective exchange rate and, consequently, the medium-term inflation dynamics. For the full statement please see the link https://www.nbg.gov.ge/index.php?m=340&newsid=3882&lng=eng.

However, taking into consideration the unprecedented uncertainty triggered by the COVID-19 outbreak, the Board of Directors has decided not to recommend a dividend. The decision will be revisited once there is better visibility on the potential economic impact of the outbreak, which we do not expect to occur before the end of May 2020.

Obviously, this is an evolving and fast-moving situation; we expect to update our policies as events warrant, and we will provide updates as we do.

For further enquiries, please contact:Director of International Media and Investor RelationsZoltan Szalai

Or

Head of Investor Relations

Anna Romelashvili

ir@tbcbank.com.ge

About TBC Bank Group PLC ("TBC PLC")

TBC PLC is a public limited company registered in England and Wales that was incorporated in February 2016. TBC PLC became the parent company of JSC TBC Bank ("TBC Bank") on 10 August 2016. TBC PLC is listed on the London Stock Exchange under the symbol TBCG.

TBC Bank, together with its subsidiaries, is the leading universal banking group in Georgia, with a total market share of 39.5% of loans and 39.0% of non-banking deposits as of 31 December 2019, according to data published by the National Bank of Georgia.