TBC Bank Group Regulatory News (TBCG)

Joint Venture with IFC and EBRD in relation to TBC's Uzbek subsidiary

TBC Bank Group PLC ("TBC PLC") is pleased to announce that it has entered into a joint venture arrangement with the International Finance Corporation ("IFC") and the European Bank for Reconstruction and Development ("EBRD"), whereby IFC and EBRD intend to invest equity into TBC PLC's wholly owned Uzbek subsidiary, TBC Bank ("TBC UZ") to support its continued growth.

Under the terms of a subscription agreement, by the end of 2021, IFC and EBRD will, subject to certain conditions, each invest USD 9.4 million into TBC UZ in exchange for up to a 20% equity interest each. TBC PLC will retain 60% ownership of TBC UZ. The terms of the joint venture will be regulated by a shareholders' agreement. In addition, IFC and EBRD have agreed subject to certain conditions, to make additional capital injections of, in aggregate, up to USD 34.3 million during the period up to 2024. The shareholders' agreement also contains customary board and shareholder reserved matters.

In connection with the joint venture, IFC and EBRD have also entered into an option agreement with TBC PLC. This provides that they may exercise a put of their shares in TBC UZ to TBC PLC following the sixth anniversary of the arrangement. The put option would be settled by the issue of new shares of TBC PLC or, to the extent that was not practicable, in cash. In addition, TBC PLC has a call option from the tenth anniversary of the arrangement pursuant to which it would be able to acquire any shares held by IFC and EBRD at that time for cash.

TBC UZ is the first digital bank in Uzbekistan, which was launched in October 2020 and has already gained over 850,000 downloads, while the number of its registered users reached more than 630,000. TBC UZ operates by leveraging TBC's innovative fintech platform Space, which offers retail banking solutions through the mobile app. Following its initial launch in Georgia in 2018, Space platform currently successfully operates in two countries, Georgia and Uzbekistan.

Vakhtang Butskhrikidze, Chief Executive Officer of TBC Bank, commented: "This joint venture arrangement marks another important milestone for our Uzbek expansion. It will allow us to accelerate our growth in the country and offer a wide range of innovative and affordable products to the Uzbek population.  We have a long history of successful cooperation with IFC and EBRD, who have firmly stood by our side for two decades. I am extremely grateful to EBRD and IFC for embarking on this exciting next stage of our journey with us." 

Wiebke Schloemer, IFC Director for Europe and Central Asia, said:

"We are further deepening our partnership with TBC Bank Group. IFC is supporting TBC's efforts in expanding banking services, based on innovative and technological solutions, across Uzbekistan. This investment is also well-aligned with our strategy to help Uzbekistan promote greater market competitiveness through increasing the share of private sector participation in the banking industry."

Alkis Drakinos, EBRD Director, Head of Uzbekistan, said:

"This is the first equity investment in the Uzbek banking sector since the Bank's re-engagement with the country in 2017. TBC has been our longstanding and trusted partner for a few decades now. We are happy to support its expansion in Uzbekistan, thus increasing the percentage of private capital in the local banking sector. We welcome competition and expect it to benefit everyone."

For further enquiries, please contact:

Director of International Media and Investor Relations

Zoltan Szalai

Or

Head of Investor Relations

Anna Romelashvili

ir@tbcbank.com.ge

Further information on the joint venture arrangement.

The joint venture constitutes a Class 2 transaction under the UK Listing Rules.

For the purposes of LR 10.4.1R (Notification of class 2 transactions), as at 30 June 2021 the value of the gross assets of TBC UZ was USD 22.5 million and the losses for the year ended 31 December 2020 were USD 2.3 million.

In the event that TBC PLC used cash to settle any option it would determine the appropriate source of funds at the time.

About TBC Bank Group PLC ("TBC PLC")

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 and other closely related fields. TBC PLC also recently expanded its operations in Uzbekistan. TBC PLC is listed on the London Stock Exchange under the symbol TBCG and is a constituent of the FTSE Small Cap 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 38.1% of customer loans and 37.8% of customer deposits as of 30 June 2021, according to data published by the National Bank of Georgia.