An introduction to the TBC Bank Group by Zoltan Szalai, the Director of International Media and Investor Relations. Held at Edison.

TBC Bank Group Plc is a FTSE250 member with a 40% banking / financial market share in Georgia (home to 3.7m people) having IPOed in 2014 but set up 27 years ago. The current market cap is around £700m and the share price is trading at almost a year’s low. I met with the IR director on the 25/11 just after the Q3 numbers. 8 brokers cover the stock.

TBC offers retail, corporate and SME banking services and has been voted the best bank in Georgia in 16 out of the past 18 years, having 2.6m customers & 7500 employees. TBC recently won the best global mobile bank award (from Global Finance) for Space, a new product which offers an open banking platform to users with the advantage of being easy to open using official Georgian ID along with central data checks.

The Q3 numbers were published 14/11 and net profits up 20%, ROE 20%, cost income ratio 40% and net interest margins 5% or 5.5% for the whole 9 months (YOY was 7%). Total assets were up 26% to $6bn, gross loans 21% and mostly funded by deposits which were up 13% and some IFI funding. Non- performing loans were 2.9% of book. Basel 3 Tier 1 capital was 14. 7% versus the minimum required of 11.9%. Other highlights were that 92% of all transaction were conducted on a digital channel with such transactions up 20% but branch transactions were down 4.7%. Mobile banking penetration ratio was 38% and across the ages. The core is ‘doing well’. Moody rating is Ba2/ stable.

The share price has fallen from £17 in July this year to the current 1260p with no explanation given in the lunch meeting. However, two recent and separate board change RNS releases hit the share price by around 10% each time as the Chairman and Deputy (both founders) decided to stand down as money laundering investigations were begun by the Public prosecutor for the years 2007 and 2008. The bank has not been charged. The two founders RNSed that they were considering offloading shares in the bank for a lending arrangement and this prompted a Board governance review. The shares had had a good run up until these matters and in June…

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