REG - JSC TBC Bank - Half Yearly Report <Origin Href="QuoteRef">BALF.L</Origin> <Origin Href="QuoteRef">TBCBq.L</Origin> - Part 1

Balfour BeattyAnnouncement

12/08/2015 07:01

RNS Number : 7768V
JSC TBC Bank
12 August 2015
TBC BANK
TBC Bank Announces Q2 2015 Unaudited IFRS Consolidated Results; 
Profit for Q2 2015 up by 50.4% YoY to GEL 55.5 million
 
Financial Highlights 
 Total operating income in Q2 2015 up by 31.6% YoY to GEL 142.6 million
 Cost to income ratio improved to 42.8%, compared to 48.9% in Q2 2014
 Provision expenses amounted to GEL 18.3 million in 2Q 2015, up 6.2 million YoY and down 10.8 million QoQ
o Cost of risk on loans stood at 1.8%, up 0.2pp YoY and down 1.2pp QoQ 
 Profit for Q2 2015 up by 50.4% YoY to GEL 55.5 million, delivering return on average equity (ROAE) of 21.0%
 Net interest margin (NIM) at 7.9% in Q2 2015, compared to 8.4% in Q2 2014
 Total assets reached GEL 6,274.0 million as of 30 June 2015, up by 30.8% YoY and by 4.5% QoQ
 Gross loans and advances to customers increased to GEL 4,227.5 million as of 30 June 2015, up by 37.4% YoY (18.9% at constant currency) and by 0.7% QoQ (0.1% at constant currency)
o NPLs+Restructured loans to gross loans stood at 5.3%, up 0.9pp both YoY and QoQ
o NPLs+Restructured loans coverage was 87% or 188% with collateral
 Total customer deposits increased to GEL 3,831.2 million as of 30 June 2015, up by 30.8% YoY (by 13.3% w/o currency exchange rate effect) and by 2.9% QoQ (by 1.8% w/o currency exchange rate effect)
 Net loans to deposit+IFI funding stood at 94% ; net stable funding ratio (NSFR) equaled 116%
 Total equity stood at GEL 1,076.6 millionas of 30 June 2015, up by 16.2% YoY and by 1.5% QoQ
 Tier I and Total Capital Adequacy ratios (CAR) (Basel II/III) stood at 12.2% and 15.1% , respectively
 Tier I and Total Capital Adequacy ratios (CAR) (Basel I) stood at 24.3% and 29.8% , respectively
Recent Developments
 NBG has agreed to remove the additional capital buffer requirement that has been previously applied in relation to TBC Banks's capital position in recognition of TBC Bank's prudent internal policies on risk and capital management.
 TBC Bank's risk management structure was updated and further fine-tuned in accordance with international best practice and the Bank's medium-term targets. The Bank conducted the risk functional and structural review with assistance from a leading international consultancy and we are in the process of implementing the recommendations that arose from this review. We continue substantial upgrades across all risk functions going forward. 
 The Bank has established an enhanced internal research unit focused on macro research, analysis and forecasting. This unit is recruiting top professionals from the field and will support TBC Bank's strategic planning efforts to ensure the Bank is ready to both address any future challenges and capitalize on opportunities. 
 TBC Bank and the Black Sea Trade and Development Bank (BSTDB) have signed a USD 10 million loan agreement aimed at financing SME customers in Georgia and further solidifying the Bank's leading positions in the segment.
Additional Information Disclosure
Additional historical information for certain P&L, Balance Sheet and Capital items and on Asset Quality is disclosed on our Investor Relations website on www.tbcbank.com/ir under the Financial Highlights section. 
Letter from the Chief Executive Officer
"I am proud to report continued strong growth in our net income, which reached GEL 55.5 million in Q2 2015, with a return on average equity (ROAE) of 21.0% for 2Q 2015 and 19.5% for 1H 2015. It was particularly pleasing that these results have been achieved during a period of moderate economic growth as well as the challenges of currency depreciation driven mainly by the developments in the wider region. 
Despite headwinds from the operating environment, the fundamentals of the Georgian economy remain solid. Economic growth during the first half of 2015 continued at the more moderate rate of 2.6%. Furthermore, the Georgian Lari broadly stabilised against the U.S. dollar during Q2 and appreciated by 1.9% against the Turkish Lira, the currency of Georgia's largest trading partner. With respect to the tourism sector, YoY growth in international arrivals accelerated since April 2015, resulting in 9.5% YoY growth in July 2015 and 4.9% YoY in the first seven months of 2015. The annual inflation rate stood at 4.9% in July 2015, slightly below the National Bank of Georgia (NBG) targeted inflation rate of 5.0%.
During 1H 2015, we maintained a strong focus on balance sheet quality through proactive management of the loan book. Consequently, our loan book increased slightly, up by 0.1% QoQ. In terms of YoY loan book growth, we delivered strong growth of 18.9% at constant currency and outperformed the market, increasing our share by 1.1pp to 27.8%. 
By actively managing its way through this period, the Bank recorded only a small increase in NPLs+Restructured loans of 0.9pp on a QoQ basis, which reached 5.3%. The increase of 0.6pp in restructured loans is mainly a result of our proactive approach to offer restructuring to those customers where we saw increased risk from currency devaluation. Our coverage ratio as of 30 June 2015 decreased to 87% or 188% with collateral. However, this ratio remains one of the highest in the region and within the banking industry as a whole.
The stabilisation of the currency in 2Q 2015 meant that only a relatively small technical increase in provisions was required. Thus, our cost of risk for the quarter was 1.8% compared to 3.0% in 1Q 2015 and 1.6% in 2Q 2014. 
In terms of customer deposits, as of 30 June 2015, our portfolio stood at GEL 3,831.2 million, up by 30.8% YoY (13.3% at constant currency) or by 2.9% QoQ (1.8% at constant currency). We maintained our long-standing leadership position in retail deposits with a market share of 34.5%. Our market shares in total assets and total loans stood at 26.0% and 27.8%, respectively.
During Q2 2015, our profitability was mainly driven by a strong net interest margin (NIM) of 7.9%, non-interest income growth of 44.0% YoY to GEL 40.0 million, and a decreasing cost to income to 42.8% (versus 48.9% in 2Q 2014). 
We continued to operate with solid capital and liquidity positions. As of 30 June 2015, the Bank's total capital adequacy ratio (CAR) per Basel II/III regulation stood at 15.1%, against the minimum requirement of 10.5%. As of the same date, net loans to deposits+IFI funding stood at 94% and the net stable funding ratio (NSFR) equaled 116%. 
I am also pleased to report that our unwavering commitment to providing our customers with world-class digital banking services has been recognized for the fourth year in a row and TBC Bank was named as the Best Consumer and Corporate Digital Bank in Georgia in 2015. The Bank's consumer digital banking has also been recognized for the Best SMS/Text Banking 2015 and the Best Integrated Corporate Bank Site in the Central & Eastern European (CEE) region, solidifying our position as a leader in consumer and corporate digital banking in Georgia and in the region.
To sum up, we have shown our ability to deliver a good level of return despite the moderate economic growth and local currency depreciation in 1Q 2015 driven by events in our broader region. The fundamentals of the economy and the Georgian banking sector remain solid and we expect moderate economic growth in 2015 supported by a more stable currency. 
We have taken the necessary steps to protect our asset quality against any further external shocks and believe we are well positioned to deliver strong financial results going forward."
Vakhtang Butskhrikidze
Chief Executive Officer
SECOND QUARTER 2015 FINANCIAL RESULTSCONFERENCE CALL
Wednesday, 12 August 2015
14.00 (BST) / 15.00 (CEST) / 9.00 (EDT)
Hosts:
Vakhtang Butskhrikidze, CEO, andGiorgi Shagidze, CFO
TBC Bank, a leading bank in Georgia, will release its second quarter 2015 financial results on Wednesday, 12 August 2015 at 7am BST (10am GET). 
On that day,Vakhtang Butskhrikidze,CEO, andGiorgi Shagidze, CFO, will host a conference call to discuss the results.
Date & time: Wednesday, 12 August at 14.00 (BST) / 15.00 (CEST) / 9.00 (EDT)
Please dial-in approximately 5 minutes before the start of the call using the number / Confirmation Code below:
Confirmation Code:
3477660
Participants, Local - United Kingdom: 
+44(0)20 3427 0503
Participants, National free phone - United Kingdom: 
0800 279 5736
Participants, National free phone - United States of America: 
1877 280 2296
Participants, Local - Russia: 
+7495 213 0978
Participants, National free phone - Russian Federation: 
8 800 500 9312
Contacts
Anna Romelashvili
Head of Investor Relations
E-mail:ARomelashvili@Tbcbank.com.ge
Web: www.tbcbank.com/ir
Tel: +(995 32) 227 27 27
Address:7 Marjanishvili St. Tbilisi, Georgia 0102
Investor Relations Department
E-mail:ir@tbcbank.com.ge
Web: www.tbcbank.com/ir
Tel: +(995 32) 227 27 27
Address:7 Marjanishvili St. Tbilisi, Georgia 0102
Results Overview Q1 2015
Income Statement Highlights
in thousands of GEL
1H 2015
1H 2014
Change in %
2Q'15
1Q'15
2Q'14
Change YoY
Change QoQ
Net interest income
198,236 
161,021 
23.1%
102,565 
95,671 
80,601 
27.3%
7.2%
Net Fee and Commission Income
34,840 
25,669 
35.7%
18,221 
16,618 
13,987 
30.3%
9.6%
Other operating non-interest income
43,623 
25,049 
74.2%
21,785 
21,838 
13,790 
58.0%
-0.2%
Provisioning charges
(47,258)
(25,091)
88.3%
(18,251)
(29,007)
(12,083)
51.0%
-37.1%
Operating income after provisions for impairment
229,441 
186,648 
22.9%
124,321 
105,120 
96,295 
29.1%
18.3%
Operating expenses
(113,651)
(102,296)
11.1%
(61,058)
(52,593)
(53,047)
15.1%
16.1%
Profit before tax
115,790 
84,352 
37.3%
63,263 
52,527 
43,248 
46.3%
20.4%
Income tax expense 
(14,619)
(11,500)
27.1%
(7,730)
(6,889)
(6,335)
22.0%
12.2%
Profit for the period
101,171 
72,852 
38.9%
55,533 
45,639 
36,913 
50.4%
21.7%
Balance Sheet and Capital Highlights

30-Jun-15
31-Mar-15
Change
QoQ
30-Jun-14
Change
YoY
In millions
GEL
USD
GEL
USD

GEL
USD

Total Assets
6,274.0
2,790.6
6,002.6
2,694.8
4.5%
4,798.1
2,712.2
30.8%
Gross Loans
4,227.5
1,880.3
4,198.2
1,884.7
0.7%
3,077.8
1,739.7
37.4%
Customer Deposits
3,831.2
1,704.0
3,724.7
1,672.1
2.9%
2,929.2
1,655.8
30.8%
Total equity
1,076.6
478.9
1,060.9
476.3
1.5%
926.2
523.5
16.2%
Basel I Tier 1 Capital 
1,031.3
458.7
1,013.8
455.1
1.7%
879.7
497.3
17.2%
Basel I Risk weighted assets
4,246.3
1,888.7
4,248.5
1,907.3
-0.1%
3,322.2
1,877.9
27.8%
Basel II/III Tier 1 Capital 
831.4
369.8
835.7
375.2
-0.5%
713.6
403.4
16.5%
Basel II/III Risk weighted assets
6,795.3
3,022.4
6,923.7
3,108.3
-1.9%
5,308.0
3,000.4
28.0%
Key Ratios

1H 2015
1H 2014
Change
YoY
2Q'15
1Q'15
2Q'14
Change
YoY
Change
QoQ
ROAE
19.5%
19.3%
0.1pp
21.0%
17.9%
19.0%
2.0pp
3.1pp
ROAA
3.4%
3.3%
0.1pp
3.6%
3.2%
3.2%
0.3pp
0.4pp
Pre-provision ROAE
28.6%
26.1%
2.5pp
27.9%
29.3%
25.3%
2.6pp
-1.4pp
Cost: Income
41.1%
48.3%
-7.2pp
42.8%
39.2%
48.9%
-6.1pp
3.6pp
Cost of Risk
2.4%
1.8%
0.6pp
1.8%
3.0%
1.6%
0.2pp
-1.2pp
NPL to Gross Loans
1.1%
1.0%
0.1pp
1.1%
0.7%
1.0%
0.1pp
0.4pp
Basel I Total CAR
29.8%
33.0%
-3.2pp
29.8%
29.6%
33.0%
-3.2pp
0.2pp
Basel II/III Total CAR
15.1%
16.7%
-1.6pp
15.1%
15.1%
16.7%
-1.6pp
0.1pp
Leverage (times)
5.8
5.2
0.6
5.8
5.7
5.2
0.6
0.2
Income Statement Discussion
Net Interest Income
in thousands of GEL
1H 2015
1H 2014
Change in %
2Q'15
1Q'15
2Q'14
Change YoY
Change QoQ
Loans and advances to customers
276,401 
224,992 
22.8%
143,838 
132,563 
112,980 
27.3%
8.5%
Investment securities available for sale
11,160 
14,734 
-24.3%
3,119 
8,041 
7,471 
-58.3%
-61.2%
Due from other banks 
4,819 
2,698 
78.6%
2,371 
2,448 
1,287 
84.2%
-3.1%
Investment securities held to maturity
7,368 
0 
NMF
7,368 
0 
0 
NMF
NMF
Investments in leases 
7,128 
4,567 
56.1%
3,631 
3,497 
2,486 
46.1%
3.8%
Interest income 
306,876 
246,991 
24.2%
160,327 
146,549 
124,224 
29.1%
9.4%
Customer accounts 
66,480 
54,812 
21.3%
33,968 
32,512 
27,467 
23.7%
4.5%
Due to credit institutions
28,880 
21,831 
32.3%
16,787 
12,093 
11,311 
48.4%
38.8%
Subordinated debt 
12,187 
8,967 
35.9%
6,459 
5,728 
4,645 
39.1%
12.8%
Debt Securities in issue
1,027 
233 
341.5%
518 
509 
143 
260.7%
1.6%
Other
66 
127 
-48.4%
30 
35 
57 
-46.7%
-13.6%
Interest expense 
108,640 
85,970 
26.4%
57,762 
50,878 
43,623 
32.4%
13.5%
Net interest income
198,236 
161,021 
23.1%
102,565 
95,671 
80,601 
27.3%
7.2%









Net interest margin
8.0%
8.6%
-0.6pp
7.9%
8.0%
8.4%
-0.5pp
-0.1pp
Investment securities held to maturity. Investment securities which the Group intends to hold for an indefinite period and which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices have been classified as available for sale investments in the financial statements ended 31 December 2014. However, in 2015, the Group has reassessed its intention with regard to such securities and has identified certain investments that the Group has both the intention and ability to hold to maturity and has reclassified them into held to maturity category. Investment securities held to maturity are carried at amortised cost. 
1H 2015 to 1H 2014 Comparison
In 1H 2015, net interest income increased by 23.1% YoY to GEL 198.2 million, resulting from the 24.2% higher interest income and 26.4% higher interest expense.
 
The 24.2% YoY increase in interest income to GEL 306.9 million was mainly due to the increase in interest income from loans to customers, primarily related to the gross loan portfolio increase by 37.4% YoY, or by 18.9% at constant currency. The increase in gross loans more than offset the decline in loan yields over the same period to 13.6%, from 15.3%, due to the declining interest rates in the country (which also offset the increased rates on GEL refinancing rate linked loans) and the currency depreciation. The increase in interest income was also supported by the increase in interest income from investment securities (comprising both available for sale and held to maturity securities) by GEL 3.8 million, or 25.7% YoY. This was primarily due to the increase in yields on such securities partially related to the gradual increase of the refinancing rate in the country from 4.0% to 5.5% during 1H 2015. As loans account for c. 82% of interest earning assets, the decline in loan yields led to the decrease in yields on average interest earning assets to 12.3%, compared to 13.1% in 1H 2014.
Interest expense increased by 26.4% YoY to GEL 108.6 million in 1H 2015, mainly due to higher interest expense on customer accounts. The latter increased primarily due to the 30.8% increase in the customer deposit portfolio, or 13.3% at constant currency, which more than offset the decrease in cost of client deposits of 0.3pp to 3.6% in 1H 2015. As a result of reduced interest rates on clients' deposits and other borrowed funds (6.7% in 1H 2015 compared to 7.0% in 1H 2014), the Bank's cost of funding ratio declined by 0.3pp to 4.5% in 1H 2015, compared to 4.8% in 1H 2014. The year-on-year decrease in interest rate of other borrowed funds was due to the decreased rates on USD denominated borrowings, offsetting the increased cost of some of GEL borrowings mostly related to the refinance rate increase.
Consequently, NIM was 8.0% in 1H 2015, compared to 8.6% in 1H 2014. The decrease is also related to the one off interest income of GEL 2.3 million in Q1 2014 and 0.2% decrease due to currency devaluation.
2Q 2015 to 2Q 2014 Comparison
In 2Q 2015, net interest income increased by GEL 22.0 million, or 27.3% YoY to GEL 102.6 million, as a result of a GEL 36.1 million, or 29.1%, increase in interest income and a GEL 14.1 million, or 32.4%, increase in interest expense, compared to 2Q 2014.
 
The GEL 36.1 million, or 29.1%, increase in interest income mainly resulted from a GEL 30.9 million, or 27.3%, increase in interest income from loans, which in turn was due to the 37.4% YoY increase in loan portfolio, or 18.9% at constant currency. The increase in the portfolio was partially offset by the decrease in loan yields to 13.6% from 15.1%, resulting from the declining loan yields in the country (which also offset the increased rates on GEL refinancing rate linked loans) as well as the currency depreciation. The increase in interest income was also driven by the increase in interest income from investment securities by GEL 3.0 million, mainly driven by the increased yields on such securities, as described above. Mainly as a result of declining loan yields, yields on average interest earning assets decreased to 12.4%, compared to 12.9% in 2Q 2014.
The GEL 14.1 million, or 32.4%, YoY increase in interest expense was primarily attributable to the increased interest expense on customer deposits by GEL 6.5 million, or 23.7%, mainly resulting from the increase in the respective portfolio by 30.8%, or 13.3% at constant currency. The increase in interest expense on customer deposits was partially offset by the decrease in deposits rates of 0.3pp YoY to 3.6%. The increase in interest expense was also due to the increased interest expense on other borrowed funds primarily due to the increased share of GEL borrowings into the total borrowings and the increased cost of some of GEL-denominated borrowings mainly related to the refinance rate increase. 
As a result, NIM decreased to 7.9% in 2Q 2015,compared to 8.4% in the same quarter of the previous year. The 0.3% YoY decrease was due to currency devaluation.
2Q 2015 to 1Q 2015 Comparison
On a QoQ basis, net interest income increased by GEL 6.9 million, or 7.2%, as a result of a 13.8 million, or 9.4%, higher interest income and GEL 6.9 million, or 13.5%, higher interest expense.
The GEL 13.8 million QoQ increase in interest income mainly resulted from the increase in interest income on loans by GEL 11.3 million, which in turn was due to the 7.3% increase in the average gross loan portfolio despite a 0.7% QoQ loan book increase. The increase in interest income was also driven by an increase in interest income from investment securities by GEL 2.4 million, mainly driven by the increase in its yields by 0.3pp to 6.3%.
The GEL 6.9 million, or 13.5% QoQ, increase in interest expense was primarily due to the increase in interest expense on other borrowed funds by GEL 4.3 million, or 37.8%, resulting from the increased share of GEL borrowings in the total borrowings and the increased cost of some of GEL-denominated borrowings related to the refinance rate increase. The QoQ increase in interest expense on customer deposits was mainly due to the increase in the respective portfolio.
Consequently, on a QoQ basis, NIM decreased by 0.1pp, or stayed broadly flat without the currency rate effect.
Reclassification of Income from Other Operating Income to Fee and Commission Income
Starting from Q4 2014, the Bank has reclassified the operating income of its subsidiaries, TBC Pay and UFC, from Other Operating Income to Fee and Commission Income. The following table gives appropriate details of the adjustment.
in thousands of GEL
Financial statement line item
As previously reported
As reclassified

Fee and Commission Income


H1 2014
Fee and commission income from settlement 
6,993
11,132
Fee and commission income from card operations 
14,655
15,403
Other Operating Income


Revenues from cash-in terminal services
4,541
402
Other operating income
1,191
1,475
Fee and Commission Income 
in thousands of GEL
1H 2015
1H 2015
Change in %
2Q'15
1Q'15
2Q'14
Change YoY
Change QoQ
Card operations 
22,639 
15,403 
47.0%
11,878 
10,761 
8,077 
47.1%
10.4%
Settlement transactions
14,024 
11,132 
26.0%
7,313 
6,711 
6,066 
20.6%
9.0%
Guarantees issued
4,301 
4,361 
-1.4%
2,144 
2,158 
2,691 
-20.3%
-0.7%
Issuance of letters of credit 
3,142 
3,206 
-2.0%
1,392 
1,750 
1,562 
-10.9%
-20.4%
Cash transactions 
4,999 
2,541 
96.7%
2,805 
2,194 
1,374 
104.1%
27.8%
Foreign exchange operations
827 
582 
42.1%
253 
574 
272 
-7.1%
-56.0%
Other 
2,593 
2,160 
20.0%
1,716 
877 
1,197 
43.4%
95.8%
Fee and commission income
52,525 
39,385 
33.4%
27,501 
25,024 
21,239 
29.5%
9.9%
Card operations
11,400 
7,133 
59.8%
6,104 
5,296 
3,756 
62.5%
15.3%
Guarantees received
405 
508 
-20.4%
179 
226 
277 
-35.5%
-20.7%
Cash transactions 
1,287 
1,261 
2.1%
611 
676 
631 
-3.1%
-9.5%
Settlement transactions
1,508 
1,180 
27.8%
806 
702 
726 
11.0%
14.8%
Foreign exchange operations 
3 
31 
-89.7%
1 
2 
17 
-94.0%
-53.0%
Letters of credit
1,082 
1,575 
-31.3%
538 
544 
777 
-30.8%
-1.2%
Other 
2,000 
2,028 
-1.4%
1,041 
959 
1,068 
-2.5%
8.5%
Fee and commission expense
17,685 
13,716 
28.9%
9,280 
8,405 
7,252 
28.0%
10.4%
Net Fee and Commission Income
34,840 
25,669 
35.7%
18,221 
16,618 
13,987 
30.3%
9.6%
1H 2015 to 1H 2014 Comparison
In 1H 2015, net fee and commission income reached GEL 34.8 million, up by GEL 9.2 million, or by 35.7%, compared to 1H 2014. This increase resulted mainly from a GEL 3.0 increase in net fee and commission income from card operations related to the increased number of transactions, a GEL 2.6 million from settlement transactions and a GEL 2.4 million from cash transactions. In addition, net fee and commission income from issuance of letters of credit increased by GEL 0.4 million and foreign exchange operations by 0.3 million. The increase in net fee and commission income was also affected by currency devaluation; without the exchange rate effect, net fee and commission income would have increased by GEL 6.4 million, or 25.1% YoY.
2Q 2015 to 2Q 2014 Comparison
In Q2 2015, net fee and commission income reached GEL 18.2 million, up by GEL 4.2 million, or 30.3%, compared to Q2 2014. This increase resulted mainly from an increase in net fee and commission income from card operations and cash transaction, each by GEL 1.5 million, related to the increased number of transactions, from settlement transactions by GEL 1.2 million, and from issuance of letters of credit by GEL 0.1 million. These increases were partially offset by a GEL 0.4 million decrease in guarantees issued. The increase in net fee and commission income was also affected by currency devaluation; without the exchange rate effect, net fee and commission income would have increased by GEL 2.6 million, or 18.9% YoY.
2Q 2015 to 1Q 2015 Comparison
On a QoQ basis, net fee and commission income increased by GEL 1.6 million, or 9.6%, compared to Q1 2015, primarily due the increased net fee and commission income from cash transactions by GEL 0.7 million, from settlement transactions by GEL 0.5 million and card operations by GEL 0.3 million. These increases more than offset the decrease in net fee and commission income from issuance of letters of credit and foreign exchange operations by GEL 0.4 million and GEL 0.3 million, respectively. Without the exchange rate effect, net fee and commission income would have increased by GEL 0.9 million, or 5.6% YoY. 
Other Operating Non-interest Income
In Q4 2014 the Bank reclassified other operating income to fee and commission income as described above.
in thousands of GEL
1H 2015
1H 2015
Change in %
2Q'15
1Q'15
2Q'14
Change YoY
Change QoQ
Gains less losses from trading in foreign currencies and foreign exchange translations
35,061 
16,164 
116.9%
17,393 
17,668 
8,372 
107.8%
-1.6%
Gains less losses/(losses less gains) from derivative financial instruments
(490)
(546)
-10.3%
(52)
(438)
(369)
-85.9%
-88.1%
Revenues from sale of cash-in terminals
367 
402 
-8.7%
176 
191 
194 
-9.5%
-7.7%
Revenues from operational leasing
4,600 
3,234 
42.2%
2,375 
2,225 
1,655 
43.5%
6.7%
Gain from sale of investment properties
187 
3,033 
-93.8%
27 
160 
2,723 
-99.0%
-82.9%
Gain from sale of inventories of repossessed collateral
935 
679 
37.7%
363 
572 
464 
-21.8%
-36.5%
Administrative fee income from international financial institutions
335 
531 
-37.0%
153 
182 
259 
-41.1%
-16.2%
Revenues from non-credit related fines
54 
18 
197.7%
19 
34 
4 
378.1%
-44.5%
Gain on disposal of premises and equipment
23 
59 
-60.4%
16 
8 
53 
-70.4%
105.3%
Other 
2,551 
1,475 
73.0%
1,315 
1,236 
435 
202.6%
6.4%
Other operating income
9,052 
9,431 
-4.0%
4,444 
4,608 
5,787 
-23.2%
-3.6%
Other operating non-interest income
43,623 
25,049 
74.2%
21,785 
21,838 
13,790 
58.0%
-0.2%
1H 2015 to 1H 2014 Comparison
Total other operating non-interest income increased by GEL 18.6 million, or by 74.2% YoY, to GEL 43.6 million in 1H 2015. This increase was mainly driven by a GEL 18.9 million increase in gains from trading in foreign currencies and foreign exchange translations related to increased volumes of currency exchange operations and volatility of the currency exchange rate in 1H 2015. This increase was partially offset by the decreased gains from sale of investment property in 1H 2015 due to the lower number of sales of such property during the period. 
2Q 2015 to 2Q 2014 Comparison
Total other operating non-interest income increased by GEL 8.0 million, or by 58.0%, YoY to GEL 21.8 million in Q2 2015. This increase was mainly driven by a GEL 9.0 million increase in gains from trading in foreign currencies and foreign exchange translations related to relatively higher volatility in 2Q 2015 vs 2Q 2014. The increase in total other operating income was offset primarily by the decrease in gain from sale of investment properties. 
2Q 2015 to 1Q 2015 Comparison
On a QoQ basis, other operating non-interest income decreased by GEL 0.1 million, or by 0.2%, primarily reflecting the GEL 0.3 million decrease in gains from trading in foreign currencies and foreign exchange translations, compared to 1Q 2105.
Provision for Impairment
in thousands of GEL
1H 2015
1H 2015
Change in %
2Q'15
1Q'15
2Q'14
Change YoY
Change QoQ
Provision for loan impairment
48,723
26,953
80.8%
19,338
29,385
12,367
56.4%
-34.2%
Provision for impairment of investments in finance lease
363
110
229.7%
259
103
101
156.7%
151.0%
Provision for/ (recovery of provision) performance guarantees and credit related commitments
-3,060
-2,613
17.1%
-2,240
-820
-814
175.1%
173.1%
Provision for impairment of other financial assets
1,232
619
99.0%
893
339
429
108.2%
163.8%
Impairment of investment securities available for sale
0
22
NMF
0
0
0
NMF
NMF
Total provision charges for impairment
47,258
25,091
88.3%
18,251
29,007
12,083
51.0%
-37.1%
Operating income after provisions for impairment
229,441
186,648
22.9%
124,321
105,120
96,295
29.1%
18.3%









Cost of Risk 
2.4%
1.8%
0.6pp
1.8%
3.0%
1.6%
0.2pp
-1.2pp
1H 2015 to 1H 2014 Comparison
In 1H 2015, total provision charges increased by GEL 22.2 million to GEL 47.3 million, compared to 1H 2014. The increase was mainly driven by the increased charges on loans by GEL 21.8 million, caused principally by the technical increase in provisions related to local currency devaluation (65% of our gross loan book is denominated in foreign currency, of which USD loans represent 97%). Without the effect of currency exchange rate devaluation, loan provision charges would have decreased by GEL 2.3 million. 
In 1H 2015, the cost of risk on loans was 2.4% (1.4% w/o currency rate devaluation in 1H 2015), compared to 1.8% in the same period of the previous year. 
2Q 2015 to 2Q 2014 Comparison
In 2Q 2015, total provision charges increased by GEL 6.2 million to GEL 18.3 million, compared to 2Q 2014. The increase was mainly driven by GEL 7.0 million higher charges on loans, caused mainly by increased charges on retail and micro segments. Loan provision charges in 2Q were also affected by one-off provision recoveries of GEL 4.5 million, associated with recovery of one of our corporate borrower's exposure. The increase in loan provision charges was partially offset by the recovery of provisions on performance guarantees and credit related commitments in an amount of GEL 2.2 million.
In 2Q 2015, the cost of risk on loans was 1.8% (2.2% without one-off effect), compared to 1.6% in the same quarter of the previous year.
Q2 2015 to Q1 2015 Comparison
On a QoQ basis, total provision charges decreased by GEL 10.8 million, primarily resulting from a GEL 10.0 million decrease in loan provision charges. The decrease was due the higher technical cost of credit risk in 1Q 2015 related to the currency devaluation. Without the currency exchange rate effect in 1Q 2015, provision charges on loans would have increased by GEL 9.8 million, or by GEL 14.3 million without the currency exchange rate effect in 1Q 2015 and the one-off recovery in 2Q 2015.
Consequently, cost of risk on loans decreased by 1.2pp QoQ. However, cost of risk without the devaluation effect in Q1 and without the one-off recovery in Q2 would have increased by 1.1pp.
Further details on asset quality can be found on page 17.
Operating Expenses
in thousands of GEL
1H 2015
1H 2015
Change in %
2Q'15
1Q'15
2Q'14
Change YoY
Change QoQ
Staff costs
65,308
56,000
16.6%
34,455
30,853
29,016
18.7%
11.7%
Depreciation and amortisation
12,302
10,692
15.1%
6,096
6,206
5,397
12.9%
-1.8%
Professional services
3,817
7,199
-47.0%
2,509
1,308
3,513
-28.6%
91.8%
Advertising and marketing services
4,833
6,393
-24.4%
2,977
1,856
3,710
-19.8%
60.4%
Rent
7,872
5,790
36.0%
4,249
3,624
2,923
45.3%
17.2%
Utility services
2,093
1,839
13.8%
1,064
1,029
819
29.9%
3.4%
Intangible asset enhancement
2,739
1,993
37.5%
1,543
1,197
1,074
43.7%
28.9%
Taxes other than on income
2,382
1,946
22.4%
1,030
1,352
1,052
-2.1%
-23.9%
Communications and supply
1,793
1,600
12.1%
981
812
825
18.9%
20.7%
Stationary and other office expenses
1,487
1,203
23.6%
789
697
505
56.3%
13.2%
Insurance 
1,319
911
44.8%
660
659
469
40.8%
0.2%
Security services
797
755
5.6%
406
391
386
5.1%
3.7%
Premises and equipment maintenance
1,358
734
85.0%
604
754
396
52.6%
-19.8%
Business trip expenses
708
774
-8.5%
373
335
575
-35.1%
11.2%
Transportation and vehicles maintenance
607
572
6.1%
338
269
294
14.9%
25.6%
Charity
541
498
8.5%
239
301
249
-3.8%
-20.5%
Personnel training and recruitment
486
260
87.1%
240
247
192
24.8%
-2.9%
Write-down of current assets to fair value less costs to sell
-451
-98
360.1%
-86
-365
-108
-20.6%
-76.5%
Loss on disposal of Inventory
13
197
-93.2%
12
1
197
-93.9%
716.2%
Loss on disposal of investment properties
3
1
184.7%
-323
326
0
NMF
NMF
Loss on disposal of premises and equipment
0
5
-98.1%
0
0
5
NMF
NMF
Impairment of intangible assets
326
0
#DIV/0!
326
0
0
NMF
NMF
Other
3,318
3,032
9.4%
2,577
741
1,558
65.4%
247.7%
Administrative and other operating expenses
36,042
35,604
1.2%
20,508
15,534
18,634
10.1%
32.0%
Operating expenses
113,651
102,296
11.1%
61,058
52,593
53,047
15.1%
16.1%
Profit before tax
115,790
84,352
37.3%
63,263
52,527
43,248
46.3%
20.4%
Income tax expense 
14,619
11,500
27.1%
7,730
6,889
6,335
22.0%
12.2%
Profit for the period
101,171
72,852
38.9%
55,533
45,639
36,913
50.4%
21.7%









Cost to income ratio
41.1%
48.3%
-7.2pp
42.8%
39.2%
48.9%
-6.1pp
3.6pp
ROAE
19.5%
19.3%
0.1pp
21.0%
17.9%
19.0%
2.0pp
3.1pp
ROAA
3.4%
3.3%
0.1pp
3.6%
3.2%
3.2%
0.3pp
0.4pp
1H 2015 to 1H 2014 Comparison
In 1H 2015, total operating expenses increased to GEL 113.7 million, up by GEL 11.4 million, or by 11.1% YoY. The increase was primarily due to the increase in staff costs by GEL 9.3 million, or 16.6%, YoY primarily due to the general increase in salaries, bonuses and various HR management related costs at TBC Group level related to the overall increase in the scale of the business, and due to the changed accrual method for holidays in accordance with the new IFRS requirements accounting for GEL 1.9 million (implemented in Q2 2015). The increase in operating expenses was also due to the increase in depreciation and amortization expenses.
As a result, the cost to income ratio was 41.1% in 1H 2015, compared to 48.3% (46.0% w/o IPO-related expenses) in 1H 2014.
2Q 2015 to 2Q 2014 Comparison
In 2Q 2015, total operating expenses increased to GEL 61.1 million, up by GEL 8.0 million, or by 15.1% YoY. The increase was primarily due to the increase in staff costs by GEL 5.4 million, or 18.7% YoY (primarily due to the general increase in salaries, bonuses and various HR management related costs on a TBC Group level as well as the changed accrual method for the holidays in accordance with the new IFRS requirements. The increase in operating expenses was also due to the increase in other operating expenses by GEL 1.9 million, mainly related to the rent expenses, which was affected by the currency rate depreciation since the rent is mainly payable in U.S. dollars.
As a result, the cost to income ratio was 42.8% in Q2 2015, compared to 48.9% (45.7% w/o IPO related expenses) in Q2 2014.
2Q 2015 to 1Q 2015 Comparison
On a QoQ basis, operating expenses increased by GEL 8.5 million, or 16.1%, compared to 1Q 2015. The increase was mainly driven by the increase in other operating expenses by GEL 5.0 million, reflecting the increased professional services related costs, higher advertising and marketing expenses, higher rent and the seasonally low cost in Q1. Staff costs also increased by GEL 3.6 million, or 11.7% QoQ, which also reflects the above-mentioned change in the accrual method for holidays.
As a result, the cost to income ratio was up by 3.6pp QoQ.
Balance Sheet Discussion
In millions of GEL
30-Jun-15
31-Mar-15
30-Jun-14
Change QoQ
Change YoY
Cash, due from banks and mandatory cash balances with NBG
1,048.8
872.0
855.2
20.3%
22.6%
Loans and advances to customers (Net)
4,034.9
4,024.0
2,931.5
0.3%
37.6%
Financial securities
640.2
579.1
529.8
10.6%
20.8%
Fixed and intangible assets & investment property
327.5
328.0
303.0
-0.2%
8.1%
Other assets 
222.6
199.5
178.5
11.6%
24.7%
Total assets
6,274.0
6,002.6
4,798.1
4.5%
30.8%
Due to credit institutions
991.1
855.9
660.4
15.8%
50.1%
Customer accounts
3,831.2
3,724.7
2,929.2
2.9%
30.8%
Debt Securities in issue
22.5
22.3
6.9
1.0%
228.9%
Subordinated Debt
232.7
228.5
178.4
1.8%
30.4%
Other liabilities
120.0
110.3
97.0
8.8%
23.6%
Total Liabilities
5,197.4
4,941.7
3,871.9
5.2%
34.2%
Total equity
1,076.6
1,060.9
926.2
1.5%
16.2%
Assets
As of 30 June 2015, TBC Bank's total assets amounted to GEL 6,274.0 million, up by GEL 1,475.9 million, or by 30.8% YoY. This increase in total assets was mainly due to the increase in net loans to customers by GEL 1,103.4 million, or by 37.6% YoY. The YoY increase in total assets also resulted from a GEL 246.7 million, or 18.1%, increase in liquid assets (comprising cash and cash equivalents, amounts due from other banks, mandatory cash balances and investment securities, less corporate shares), compared to 30 June 2014.
On a QoQ basis, total assets increased by GEL 271.5 million, or 4.5%, primarily due to a GEL 167.4 million, or 38.9%, increase in cash and cash equivalents. The liquid assets to liability ratio increased to 30.9%, compared to 28.9% as of 31 March 2015.
 
As of 30 June 2015, the gross loan portfolio reached 4,227.5 million, up by 37.4% YoY and by 0.7% QoQ. At the same time, gross loans denominated in foreign currency accounted for 65.3% of total gross loans, compared to 65.1% as of 30 June 2014 and 66.7% as of 31 March 2015, which reflects the local currency devaluation in 1H 2015. The NPL ratio, defined as loans overdue more than 90 days over gross loan portfolio, stood at 1.1%, compared to 1.0% and 0.7% as of 30 June 2014 and 31 March 2015, respectively. The NPLs+Restructured ratio stood at 5.3%, compared to 4.4% each as of 30 June 2014 and 31 March 2015, respectively, and the NPL+Restructured loans coverage ratio stood at 86.7% (188.0% including the collateral), compared to 109.1% as of 30 June 2014 and 95.0% as of 31 March 2015.
Asset Quality
Foreign Currency Income Linked Borrowers

30-Jun-15
31-Mar-15
Segments
FC share
FC linked borrowers share
FC share
FC linked borrowers share
Retail
60.4%
35.1%
60.4%
35.1%
Consumer
29.5%
20.4%
29.4%
19.8%
Mortgage
84.1%
25.3%
84.5%
24.9%
Pawn
82.4%
93.7%
81.1%
93.0%
Corporate
74.8%
53.8%*
75.7%
54.0%**
SME
84.3%
27.5%
86.4%
26.6%
Micro
33.5%
5.0%
37.7%
N/A
Total Loan Portfolio
65.3%
39.0%
66.7%
38.7%
(*) Pureexports account for 16.1% of total Corporate USD denominated loans.
(**) Pureexports account for15.5% of total Corporate USD denominated loans. 
PAR 30 by Segments and Currencies
Par 30
30-Jun-15
31-Mar-15
30-Jun-14

GEL
FC
Total
GEL
FC
Total
GEL
FC
Total
Corporate
0.1%
0.8%
0.6%
1.1%
2.0%
1.8%
2.8%
1.4%
1.8%
Retail
2.4%
2.3%
2.3%
2.2%
1.9%
2.0%
2.9%
1.8%
2.3%
SME
1.4%
3.1%
2.9%
1.0%
3.4%
3.0%
1.3%
2.4%
2.2%
Micro
2.0%
3.6%
2.5%
2.2%
3.0%
2.5%
1.0%
1.9%
1.4%
Total
1.7%
2.0%
1.9%
1.8%
2.3%
2.1%
2.5%
1.7%
2.0%
Loans overdue more than 30 days (PAR 30) equaled 1.9% as of 30 June 2015, down 0.1pp YoY and 0.2pp QoQ. The decrease was mainly due to the reduction in corporate segment PAR 30, due to the restructuring of one large borrower's exposure. Retail segment PAR 30 was broadly stable on a YoY basis, however increased by 0.3pp on QoQ basis, mainly resulting from lower levels of PAR30 in 1Q 2015 and increased level of overdue loans mostly related to GEL depreciation. The 0.7pp YoY increase in SME segment PAR 30 was mainly due to one SME borrower and slower growth rate of the portfolio due to the shift of the Bank's focus towards portfolio quality and the stricter underwriting procedures. Micro segment PAR 30 was unchanged QoQ, while it increased by 1.1pp YoY as a result of lower level of PAR30 in 2Q'2014 and increased overdue loans mostly related to GEL depreciation.
NPLs+Restructured Loans to Gross Loans by Segments and Currencies
NPLs+Restructured loans
30-Jun-15
31-Mar-15
30-Jun-14

GEL
FC
Total
GEL
FC
Total
GEL
FC
Total
Corporate
5.6%
9.8%
8.8%
0.7%
9.2%
7.1%
6.1%
9.2%
8.3%
Retail
2.4%
3.4%
3.0%
2.0%
3.3%
2.8%
2.6%
2.3%
2.4%
SME
2.2%
5.1%
4.6%
4.2%
2.7%
2.9%
1.0%
2.1%
1.9%
Micro
2.6%
8.2%
4.5%
2.6%
5.8%
3.8%
0.9%
3.6%
2.0%
Total
3.2%
6.4%
5.3%
1.9%
5.6%
4.4%
3.2%
5.0%
4.4%
NPLs+Restructured loans to gross loans stood at 5.3% as of 30 June 2015, up by 0.9pp both on a YoY and QoQ basis. The increase in restructured loans was mainly a result of our proactive approach to offer restructuring to those customers where we saw increased risk due to currency devaluation. The 170bp QoQ increase in the corporate segment NPLs+Restructured loans ratio mainly resulted from the restructuring of a few corporate loans, which were of high risks (developers, construction companies) due to the borrowers' vulnerability to recent GEL devaluation; however the collateralization level of these borrowers is at 263%. 
NPLs+Restructured Loans Coverage
NPLs+Restructured loans coverage
30-Jun-15
31-Mar-15
30-Jun-14

excl. collateral
incl. collateral
excl. collateral
incl. collateral
excl. collateral
incl. collateral
Corporate
89.1%
180.3%
100.4%
185.8%
103.6%
n/a
Retail
114.3%
221.7%
108.3%
217.1%
133.5%
n/a
SME
28.4%
166.1%
44.1%
177.4%
64.9%
n/a
Micro
75.4%
174.0%
76.6%
176.5%
120.0%
n/a
Total
86.7%
188.0%
95.0%
192.3%
109.1%
n/a
NPLs+Restructured loans coverage decreased to 86.7%, mainly reflecting the increase in restructuring loans due to the reasons described above. Yet, NPLs+Restructured loans coverage including discounted value of collateral was at 188.0% compared to 192.3% as of 31 March 2015. However, the coverage ratio is certainly one of the highest in the region and actually, in the broader industry as well.
Liabilities
As of 30 June 2015, TBC Bank's total liabilities amounted to GEL 5,197.4 million, up by 34.2% YoY and by 5.2% QoQ. 
On a YoY basis, the GEL 1,325.5 million, or 34.2%, increase in total liabilities was primarily due to theGEL 902.0 million, or 30.8%, increase in customer deposits, which was primarily driven by the increase in retail deposits, as well as a GEL 284.0 million YoY increase in other borrowed funds. The latter resulted from the EUR 20 million loan facility from the European Investment Bank (EIB) in December 2014, the GEL 100 million local currency borrowing from the Asian Development Bank (ADB) and the USD 10 million trade finance facility from the OPEC Fund for International Development (OFID) in Q1 2015, as well as the currency rate devaluation during the period. 
On a QoQ basis, the GEL 255.7 million, or 5.2%, increase in total liabilities was primarily due to the GEL 135.2 million, or 15.8%, increase in due to credit institutions, mainly repo operations as part of liquidity management process.
Liquidity 
The Bank's liquidity ratio, as defined by the National Bank of Georgia, was 33.0% as of 30 June 2015, compared to 36.7% and 33.8% as of 30 June 2014 and 31 March 2015, respectively.
Total Equity
As of 30 June 2015, TBC's total equity amounted to GEL 1,076.6 million, compared to GEL 926.2 million as of 30 June 2014 and GEL 1,060.9 million as of 31 March 2015. The YoY increase in total equity was primarily driven by the net income attributable to owners of the bank. On a QoQ basis, the slight increase in total equity was due to the net income generated in the second quarter, which more than offset distribution of dividends in the amount of GEL 39.1 million in Q2 2015. 
Regulatory Capital
As of 30 June 2015, the Bank's Basel II/III1 tier 1 and total capital adequacy ratios (CAR) were 12.2% and 15.1%, respectively, compared to 13.4% and 16.7% as of 30 June 2014, and 12.1% and 15.1% as of 31 March 2015. The minimum capital requirements set by NBG for Basel II/III tier 1 and total capital ratios are 8.5% and 10.5%, respectively. The Bank's Basel II/III tier 1 capital reached GEL 831.4 million, compared to GEL 713.6 million as of 30 June 2014 and GEL 835.7 million as of 31 March 2015. Risk weighted assets were GEL 6,795.3 million as of 30 June 2015, up GEL 1,487.3 million YoY and down GEL 128.4 million QoQ.
The Bank's Basel I tier 1 capital ratio was 24.3%, compared to 26.5% and 23.9% as of 30 June 2014 and 31 March 2015, respectively. Tier 1 capital reached GEL 1,031.3 million, compared to 879.7 million and 1,013.8 million as of 30 June 2014 and 31 March 2015, respectively. Risk weighted assets were GEL 4,246.3 million as of 30 June 2015, up by GEL 924.2 million YoY and down by GEL 2.2 million QoQ.
Market Shares2
Asset Market Shares
TBC Bank's market share in total assets increased by 0.3pp YoY and by 0.5pp QoQ, attaining 26.0% as of 30 June 2015.
Loans Market Shares
TBC Bank's market share in total loans was 27.8% as of 30 June 2015, up by 1.1pp YoY and down by 0.2pp QoQ. 
In terms of individual loans, the Bank had a market share of 31.1% as of 30 June 2015, up by 3.1pp YoY and by 0.6pp QoQ. The market share for legal entity loans was 24.8%, down by 0.7pp YoY and down by 0.9pp QoQ.
Deposits Market Shares
TBC Bank's market share of total deposits was 30.0% as of 30 June 2015, up by 1.6pp YoY and up by 0.6pp QoQ. 
The Bank maintains its longstanding leadership in individual deposits with a market share of 34.5%, up by 1.2pp YoY and up by 0.2pp QoQ. In terms of legal entity deposits, TBC Bank's market share was 25.0%, up by 1.6pp YoY and up by 0.8pp QoQ. The Bank uses corporate deposits mainly for liquidity management purposes.
1 Starting from June 2014 National Bank of Georgia enforced Basel II/III regulation
2 Market shares are based on National Bank of Georgia (NBG)
Results by Segments and Subsidiaries
Following the merger with Bank Constanta in January 2015, the Bank revised the segment definitions as per below:
 Corporate segment includes business customers that have annual revenue of GEL 8.0 million or more or have been granted a loan in an amount equivalent to USD 1.5 million or more. Some other business customers may also be assigned to the Corporate segment on a discretionary basis;
 Micro segment business customers with loans below USD 70K, as well as pawn loans, credit cards and cash cover loans granted in TBC Bank Constanta branches, and deposits up to USD 20 K in urban areas and up to USD 100 K in rural areas of the customers of TBC Bank Constanta branches. Some other customers may also be assigned to the Micro segment on a discretionary basis;
 SME segment includes business customers that are not included in either Corporate or Micro segments; Some other legal entity customers may also be assigned to the SME segment on a discretionary basis;
 Retail segment includes individuals that are not included in the other categories.
 Corporate Center and Other Operations comprise the Treasury, other support and back office functions, and non-banking subsidiaries of the Group.
As a result, loans amounting to GEL 93.3 million were reclassified from the retail to the micro segment and GEL 2.0 million was reclassified from the retail to the SME segment. In deposits, GEL 54.3 million was reclassified from retail to micro deposits, GEL 1.2 million from retail to SME deposits, and GEL 8.1 million from SME to corporate deposits.
The following table sets out the information on the financial results of TBC Bank's segments for Q2 2015:
In thousands of GEL
Retail
Corporate
SME
Micro
Corp. Center
Total 
2Q 2015






interest income
66,216
33,762
17,170
26,690
16,489
160,327
interest expense
-23,849
-7,287
-2,268
-563
-23,795
-57,762
Intersegment interest income/(expense)
4,205
-9,301
-740
-6,569
12,405
0
Net interest income
46,572
17,175
14,162
19,558
5,099
102,565
Fee and commission income
19,785
1,079
2,794
2,020
1,823
27,501
Fee and commission expense
-7,724
-331
-823
-300
-103
-9,280
Net Fee and commission income
12,061
749
1,971
1,720
1,721
18,221
Gains less losses from trading in foreign currencies
3,254
4,420
4,321
425
9,810
22,230
Foreign exchange translation losses less gains
0
0
0
0
-4,837
-4,837
Net gain from derivative financial instruments
0
0
0
0
-52
-52
Other operating income
2,173
3,946
902
175
-2,751
4,444
Other operating noninterest income
5,427
8,366
5,222
600
2,170
21,785
Provision for loan impairment
-12,600
-1,777
107
-5,069
0
-19,338
Provision for performance guarantees and credit related commitments
0
2,180
60
0
0
2,240
Provision for impairment of investments in finance lease
0
0
0
0
-259
-259
Provision for impairment of other financial assets
0
0
0
0
-893
-893
Profit before administrative and other expenses and income taxes
51,460
26,692
21,522
16,809
7,837
124,320
Staff costs
-18,793
-4,482
-4,830
-7,803
1,454
-34,455
Depreciation and amortisation
-3,975
-244
-529
-1,645
298
-6,096
Provision for liabilities and charges
0
0
0
0
0
0
Administrative and other operating expenses
-12,601
-1,496
-2,193
-3,878
-339
-20,508
Operating expenses
-35,370
-6,222
-7,552
-13,327
1,412
-61,058
Profit before tax
16,091
20,469
13,971
3,482
9,249
63,262
Income tax expense
-2,294
-3,528
-2,438
-610
1,140
-7,730
Profit for the year
13,797
16,941
11,533
2,872
10,390
55,532
The following table sets out the loans and customer deposits portfolios of TBC Bank's business segments as of 30 June 2015, 31 March 2015 and 30 June 2014.



Not reclassified per new segment definition
In thousands of GEL
30-Jun-15
31-Mar-15
30-Jun-14
Loans and Advances to Customers



Consumer 
775,392
746,389
626,705
Mortgage 
814,511
796,229
580,974
Pawn
209,729
194,775
135,278
Retail 
1,799,632
1,737,394
1,342,957
Corporate 
1,380,488
1,418,558
1,060,485
SME 
569,091
585,685
438,565
Micro 
478,307
456,573
235,760
Total loans and advances to customers (gross)
4,227,518
4,198,209
3,077,766
Less: Provision for loan impairment
-192,585
-174,178
-146,222
Total loans and advances to customers (net)
4,034,933
4,024,031
2,931,544
Customer Accounts



Retail 
2,254,095
2,198,572
1,746,626
Corporate 
912,902
916,265
743,464
SME 
596,670
546,679
434,922
Micro 
67,514
63,151
4,203
Total customer accounts
3,831,182
3,724,667
2,929,214
 
Q2 2015 (In thousands of GEL)
Corporate
Consumer
Mortgage
SME
Micro
Total







Provision for loan impairment at 31 March 2015
101,387 
39,740 
12,235 
7,508 
13,309 
174,178 
(Recovery of)/provision for impairment during the year
1,777 
7,471 
5,128 
(107)
5,069 
19,337 
Amounts written off during the year as uncollectible
0 
(5,215)
(281)
(430)
(2,830)
(8,755)
Recoveries
4,539 
1,817 
266 
488 
725 
7,836 
Effect of translation to presentation currency
0 
(12)
15 
(13)
0 
(10)














Provision for loan impairment at 30 June 2015
107,703 
43,802 
17,363 
7,446 
16,273 
192,586 
Retail Banking
As of 30 June 2015, retail loans stood at GEL 1,799.6 million, up by 3.6% QoQ and accounted for 31.1% market share in individual loans. As of 30 June 2015, foreign currency loans represented 60.4% of the total retail loan portfolio.
As of 30 June 2015, retail deposits increased to GEL 2,254.1 million, up by 2.5% QoQ, and accounted for 34.5% market share in individual deposits. Term deposits represented 64.6% of the total retail deposit portfolio as of 30 June 2015. Foreign currency deposits represented 87.1% of the total retail deposit portfolio.
In Q2 2015, retail loan yields and deposit rates stood at 14.9% and 4.2% respectively, and the segment's cost of risk was 2.8%. The retail segment contributed to 24.8%, or GEL 13.8 million, to TBC's total net income in Q2 2015.
Corporate Banking
As of 30 June 2015, corporate loans amounted to GEL 1,380.5 million, down by 2.7% QoQ. The QoQ decrease in corporate loans was due to the more stringent new loan underwriting criteria for certain industries and due to the scheduled repayments. As of the same date, foreign currency loans represented 74.8% of the total corporate loan portfolio.
As of 30 June 2015, corporate deposits stood at GEL 912.9 million, down by 0.4% QoQ. As of the same date, foreign currency corporate deposits represented 47.1% of the total corporate deposit portfolio.
In Q2 2015, corporate loan yields and deposit rates stood at 9.5% and 3.3%, respectively. In the same period, the cost of risk was 0.5%. In terms of profitability, the corporate segment's net profit reached GEL 16.9 million, or 30.5% of TBCs total net income.
SME Banking
As of 30 June 2015, SME loans amounted to GEL 569.1 million, down 2.8% QoQ, mainly resulting from the refinance of several large loans internally classified as high-risk profile loans, as well as the stricter underwriting criteria. As of 30 June 2015, foreign currency loans represented 84.3% of the total SME portfolio.
As of 30 June 2015, SME deposits stood at GEL 596.7 million, up by 9.1% QoQ. Foreign currency SME deposits represented 60.6% of the total SME deposit portfolio.
In Q2 2015, SME loan yields and deposit rates stood at 11.8% and 1.6%, respectively. In the same period, cost of risk was negative 0.1% due to the recoveries of provision in the second quarter. In terms of profitability, net profit for the SME segment reached GEL 11.5 million, or 20.8%, of TBC's total net income. 
Micro Banking
Micro loans reached GEL 478.3 million as of 30 June 2015, up by 4.8% QoQ. As of the same date, foreign currency loans represented 33.5% of the total micro loan portfolio.
As of 30 June 2015, micro customer deposits amounted to GEL 67.5 million, up 6.9% QoQ. Foreign currency micro deposits represented 60.2% of the total micro deposit portfolio.
In Q2 2015, micro loan yields and deposit rates stood at 22.8% and 3.4%, respectively. In the same period, the cost of risk was 4.3%. In terms of profitability, the micro segment's net profit reached GEL 2.9 million, or 5.2% of TBC's total net income.
Annexes
Subsidiaries 

Ownership / voting
% as of 30 June 2015
Country
Year of incorporation or acquisition
Industry
Total Assets
(after elimination)
Subsidiary
Amount
GEL'000
% in TBC Group
United Financial Corporation JSC
98.7%
Georgia
1997
Card processing
8,435
0.13%
TBC Broker LLC
100.0%
Georgia
1999
Brokerage
696
0.01%
TBC Leasing JSC
99.6%
Georgia
2003
Leasing
94,961
1.51%
TBC Kredit LLC
75.0%
Azerbaijan
2008
Non-banking credit institution
92,425
1.47%
Banking System Service Company LLC
100.0%
Georgia
2009
Information services
536
0.01%
TBC Pay LLC
100.0%
Georgia
2009
Processing
24,532
0.39%
Real Estate Management Fund JSC
100.0%
Georgia
2010
Real estate management
1,387
0.02%
TBC Invest LLC
100.0%
Israel
2011
PR and marketing
177
0.00%
Consolidated Balance Sheet
In thousands of GEL
30-Jun-15
31-Mar-15
30-Jun-14
Cash and cash equivalents 
597,580
430,213
544,433
Due from other banks
42,788
40,829
2,645
Mandatory cash balances with National Bank of Georgia
408,456
400,948
308,164
Loans and advances to customers (Net)
4,034,933
4,024,031
2,931,545
Investment securities available for sale
204,440
569,113
515,029
Repurchase receivables
69,156
9,980
14,810
Investment securities held to maturity 
366,639
0
0
Investments in finance leases 
62,353
58,775
40,913
Investment properties
75,236
75,606
78,847
Goodwill 
2,726
2,726
2,726
Intangible assets 
40,978
39,965
27,050
Premises and equipment 
211,250
212,434
197,055
Other financial assets 
62,263
48,510
42,538
Deffered income tax asset
944
400
359
Current income tax prepayment
6,010
8,021
1,749
Other assets 
88,292
81,040
90,241
TOTAL ASSETS 
6,274,044
6,002,591
4,798,104
LIABILITIES 



Due to Credit Institutions
991,069
855,887
660,416
Customer accounts 
3,831,182
3,724,667
2,929,214
Current income tax liability 
486
364
1,120
Debt Securities in issue
22,540
22,321
6,853
Deferred income tax liability 
25,470
27,795
27,758
Provisions for liabilities and charges 
8,202
10,675
9,767
Other financial liabilities 
53,574
45,919
33,368
Subordinated debt 
232,658
228,514
178,418
Other liabilities 
32,230
25,540
25,029
TOTAL LIABILITIES 
5,197,413
4,941,682
3,871,943
EQUITY 



Share capital
19,587
19,576
19,576
Share premium
406,058
405,658
405,872
Retained earnings
594,863
578,532
446,088
Share based payment reserve
5,926
5,248
3,189
Other reserves
42,653
44,424
43,708
TOTAL EQUITY
1,069,087
1,053,438
918,433
Non-controlling interest 
7,543
7,471
7,728
TOTAL EQUITY 
1,076,631
1,060,909
926,161
TOTAL LIABILITIES AND EQUITY 
6,274,044
6,002,591
4,798,104
Consolidated Income Statement
In thousands of GEL
1H 2015
1H 2014
2Q'15
1Q'15
2Q'14
Interest income 
306,876
246,991
160,327
146,549
124,224
Interest expense 
-108,640
-85,970
-57,762
-50,878
-43,623
Net interest income
198,236
161,021
102,565
95,671
80,601
Fee and commission income
52,525
39,385
27,501
25,024
21,239
Fee and commission expense
-17,685
-13,716
-9,280
-8,405
-7,252
Net Fee and Commission Income
34,840
25,669
18,221
16,618
13,987
Gains less losses from trading in foreign currencies
30,561
16,721
22,230
8,331
7,228
Foreign exchange translation gains less losses
4,500
-557
-4,837
9,338
1,144
Gains less losses/(losses less gains) from derivative financial instruments
-490
-546
-52
-438
-369
Other operating income
9,052
9,431
4,444
4,608
5,787
Other operating non-interest income
43,623
25,049
21,785
21,838
13,790
Provision for loan impairment
-48,723
-26,953
-19,338
-29,385
-12,367
Provision for impairment of investments in finance lease
-363
-110
-259
-103
-101
Provision for/ (recovery of provision) performance guarantees and credit related commitments
3,060
2,613
2,240
820
814
Provision for impairment of other financial assets
-1,232
-619
-893
-339
-429
Impairment of investment securities available for sale
0
-22
0
0
0
Operating income after provisions for impairment
229,441
186,648
124,321
105,120
96,295
Staff costs
-65,308
-56,000
-34,455
-30,853
-29,016
Depreciation and amortisation
-12,302
-10,692
-6,096
-6,206
-5,397
Administrative and other operating expenses
-36,042
-35,604
-20,508
-15,534
-18,634
Operating expenses
-113,651
-102,296
-61,058
-52,593
-53,047
Profit before tax
115,790
84,352
63,263
52,527
43,248
Income tax expense 
-14,619
-11,500
-7,730
-6,889
-6,335
Profit for the period
101,171
72,852
55,533
45,639
36,913
Profit attributable to owners of the bank
101,000
72,032
55,460
45,539
36,617
Key Ratios
Average Balances
Average balances included in this document are calculated as the average of the relevant monthly balances as of each month end. Balances have been extracted from TBC's unaudited and consolidated management accounts prepared from TBC's accounting records and used by Management for monitoring and control purposes.
Ratios (based on monthly averages, where applicable)
1H 2015
1H 2014
2Q'15
1Q'15
2Q'14
ROAE1
19.5%
19.3%
21.0%
17.9%
19.0%
ROAA2
3.4%
3.3%
3.6%
3.2%
3.2%
Pre-provision ROAE
28.6%
26.1%
27.9%
29.3%
25.3%
Pre-provision ROAA
5.0%
4.4%
4.7%
5.3%
4.3%
Cost: Income3
41.1%
48.3%
42.8%
39.2%
48.9%
Cost of Risk4
2.4%
1.8%
1.8%
3.0%
1.6%
NIM5
8.0%
8.6%
7.9%
8.0%
8.4%
Loan yields6
13.6%
15.3%
13.6%
13.5%
15.1%
Deposit rates7
3.6%
3.9%
3.6%
3.7%
3.9%
Yields on interest earning assets 8
12.3%
13.1%
12.4%
12.3%
12.9%
Cost of Funding9
4.5%
4.8%
4.6%
4.5%
4.7%
Spread10
7.8%
8.4%
7.8%
7.8%
8.2%
NPLs to gross loans11
1.1%
1.0%
1.1%
0.7%
1.0%
NPLs+restructured loans to gross loans12
5.3%
4.4%
5.3%
4.4%
4.4%
Provision Level to Gross Loans13
4.6%
4.8%
4.6%
4.1%
4.8%
NPLs+Restructured loans coverage ratio14
86.7%
109.1%
86.7%
95.0%
109.1%
BIS Tier 115
24.3%
26.5%
24.3%
23.9%
26.5%
Total BIS CAR16
29.8%
33.0%
29.8%
29.6%
33.0%
NBG Basel II Tier 1 CAR17
12.2%
13.4%
12.2%
12.1%
13.4%
NBG Basel II Total CAR18
15.1%
16.7%
15.1%
15.1%
16.7%
Ratio definitions
1. Return on average total equity (ROAE) equals net income attributable to owners divided by monthly average of total shareholders' equity attributable to the Bank's equity holders for the same period; Pre-provision ROAE excludes all provision charges. Annualised where applicable. 
2. Return on average total assets (ROAA) equals net income of the period divided by monthly average total assets for the same period. Pre-provision ROAE excludes all provision charges. Annualised where applicable.
3. Cost to Income ratio equals total operating expenses for the period divided by the total revenue for the same period. (Revenue represents the sum of net interest income, net fee and commission income and other non-interest income).
4. Cost of risk equals provision for loan impairment divided by monthly average gross loans and advances to customers. Annualised where applicable. 
5. Net interest margin (NIM) is net interest income divided by monthly average interest-earning assets. Annualised where applicable. 
6. Loan yields equal interest income on loans and advances to customers divided by monthly average gross loans and advances to customers. Annualised where applicable.
7. Deposit rates equal interest expense on customer accounts divided by monthly average total customer deposits. Annualised where applicable. 
8. Yields on interest earning assets equals total interest income divided by monthly average interest earning assets. Annualised where applicable.
9. Cost of funding equals total interest expense divided by monthly average interest bearing liabilities. Annualised where applicable.
10. Spread equals difference between yields on interest earning assets and cost of funding.
11. NPLs to gross loans ratio equals loans for which principal or interest repayment is overdue for more than 90 days divided by the gross loan portfolio for the same period.
12. NPLs+restructured loans to gross loans equal NPLs plus those restructured loans that are overdue by 90 days or less divided by the gross loan portfolio for the same period.
13. Provision Level to Gross Loans equal loan loss provision divided by the gross loan portfolio for the same period.
14. NPLs+Restructured loans coverage ratio equals loan loss provision divided by the sum of NPLs plus those restructured loans that are overdue by 90 days or less.
15. NPLs+Restructured loans collateral coverage ratio equals the discounted value of collateral divided by the sum of NPLs plus those restructured loans that are overdue by 90 days or less.
16. BIS Tier 1 capital adequacy ratio Tier 1 capital over total risk weighted assets, both calculated in accordance with Basel I requirements.
17. Total BIS CAR equals total capital over total risk weighted assets, both calculated in accordance with Basel I requirements.
18. NBG Basel II Tier 1 CAR equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the NBG Basel II requirements. After adoption of NBG Basel II/III requirements, the Bank also calculates its capital requirements and risk weighted assets separately for Pillar 1. Detailed instructions of Pillar 1 calculations are given by NBG. The reporting started from the end of 2012.
19. NBG Basel II Total CAR equals total capital divided by total risk weighted assets, both calculated in accordance with the NBG Basel II requirements. After adoption of NBG Basel II/III requirements, the Bank also calculates its capital requirements and risk weighted assets separately for Pillar 1. Detailed instructions of Pillar 1 calculations are given by NBG. The reporting started from the end of 2012.
Exchange Rates
For calculations of Balance Sheet items QoQ growth without currency exchange rate effect, we used USD/GEL exchange rate of 2.2275 as of March 2015. For calculations of YoY growth without currency exchange rate effect, we used USD/GEL exchange rate of 1.7691 as of June 2014. The USD/GEL exchange rate as of June 2015 equaled 2.2483. For P&L items growth calculations without currency effect, we used the average USD/GEL exchange rate for the following periods: Q2 2015 of 2.2816, Q1 2015 of 2.0729 and Q2 2014 of 1.7625.
Additional Disclosures
Mid-term Performance Aspirations
Mid-term performance aspirations
Current performance* 
Mid-term targets
Loan book growth (gross)**
37.4% p.a.
c.20% p.a.
ROE
21%
 18%
Cost income ratio***
42.8%
< 45%
Equity Tier I capital ratio**** (Basel II/III)
12.2%
c.10.5%
Dividend payout ratio*****
25%
25%
(*) Figures (unless stated otherwise) for 2Q 2015; IFRS consolidated figures (**) 12-month growth as of 2Q 2015
(***) Cost income ratio calculated as ratio of operating expenses to operating income (excl. loan impairment expense); TBC consolidated IFRS basis (2Q 2015)
(****) Based on the relevant Basel II/III methodology prevailing at current time; subject to capital targets and dividend payouts
(*****) Dividends under "Current performance" shows TBC Bank payout ratio in 2015 based on 2014 performance; under "Mid-term targets" - on TBC consolidated IFRS basis; dividend target was approved on shareholder meeting in May 2015
Sensitivity Scenario
Sensitivity Scenario
30-Jun-15
10% Currency Devaluation Effect
NIM*

-0.1%
Cost of Risk

+0.2%



Total Capital per Basel II/III
1,028
1,031
Capital adequacy ratios per both tier 1 and total per Basel II/III and NBG regulation decrease by

0.8% - 1%
(*) Linear depreciation is assumed for NIM sensitivity analysis
Source: IFRS statements and Internal Reporting
FC details for Selected P/L Items
Selected P&L Items
FC % of Respective Totals
Interest Income
52%
Interest Expense
70%
Fee and Commission Income
48%
Fee and Commission Expense
63%
Administrative Expenses
17%
Source: IFRS statements and Internal Reporting
Refinanced and Libor Linked B/S Items
Refinance Rate Linked



Libor Linked 


Refinance Rate Gap
GEL -12 m

Libor Gap
GEL 64 - 332 m




Assets
689
11%
Assets
805
13%

Nostro**
64
37%
Fixed securities ( 1y)*
297
46%

NBG Reserves**
204
40%
Floating Securities 
101
16%

Libor Loans 
421
10%
Floating Loans
360
9%

Liabilities 
357
7%
 NBG Reserves
48
9%

Senior Loans 
231
26%
Liabilities 
817
16%

Subordinated Loans 
126
54%
Total Deposits
412
11%




NBG Loan
195
22%




Interbank Deposits
24
17%




IFI & Interbank Loans
186
21%




(*) 56% of the less than 1 year securities are maturing in 6 months. 
(**) Income on NBG reserves and Nostros are calculated as benchmark minus margin whereby benchmarks are correlated with Libor. These two items close the gap only in case of upward movement of the Libor rate
Source: IFRS Group Data
Yields and Rates

2Q'15
1Q'15
4Q'14
3Q'14
2Q'14
Loan yields
13.6%
13.5%
14.3%
14.9%
15.1%
Retail loan yields GEL
20.0%
19.2%
22.2%
22.1%
23.2%
Retail loan yields FX
11.6%
11.7%
12.9%
13.2%
13.8%
Retail Loan Yields
14.9%
14.8%
17.0%
17.1%
17.8%
Corporate loan yields GEL
10.1%
10.4%
9.5%
10.8%
11.2%
Corporate loan yields FX
9.3%
9.1%
9.7%
10.9%
10.5%
Corporate Loan Yields
9.7%
9.4%
9.5%
10.5%
10.8%
SME loan yields GEL
11.3%
11.8%
11.3%
11.8%
11.9%
SME loan yields FX
11.9%
11.7%
11.6%
12.6%
12.4%
SME Loan Yields
11.9%
11.9%
11.4%
12.3%
12.3%
Micro loan yields GEL
24.7%
26.8%
27.1%
26.9%
27.7%
Micro loan yields FX
19.5%
19.8%
21.1%
20.5%
21.2%
Micro Loan Yields
22.9%
26.9%
24.5%
24.3%
25.1%
Deposit rates
3.6%
3.7%
3.5%
3.6%
3.9%
Retail deposit rates GEL
3.7%
3.9%
4.3%
4.4%
5.0%
Retail deposit rates FX
4.3%
4.5%
4.4%
4.6%
4.6%
Retail Deposit Yields
4.3%
4.4%
4.4%
4.6%
4.7%
Corporate deposit rates GEL
4.6%
4.5%
3.4%
3.7%
3.8%
Corporate deposit rates FX
1.6%
1.9%
2.0%
2.1%
3.0%
Corporate Deposit Yields
3.2%
3.4%
2.8%
2.7%
3.2%
SME deposit rates GEL
1.5%
1.3%
1.6%
1.4%
1.9%
SME deposit rates FX
1.6%
1.5%
1.3%
1.4%
1.6%
SME Deposit Yields
1.6%
1.5%
1.4%
1.4%
1.7%
Micro deposit rates GEL
4.0%
6.4%
5.0%
2.9%
2.6%
Micro deposit rates FX
3.1%
2.9%
5.3%
2.4%
5.4%
Micro Deposit Yields
3.5%
7.9%
5.2%
3.0%
3.3%
Yields on Securities
6.8%
6.3%
6.2%
5.9%
5.6%
Loan Quality per NBG
Sub-Standard, Doubtful and Loss (SDL) Loans Ratio per NBG

Jun-15
Mar-15
Dec-14
Sep-14
Jun-14
SDL Loans as % of Gross Loans
6.8%
6.0%
6.0%
8.4%
7.2%
Source: NBG
Capital 
NBG Basel II Capital adequacy ratio
30-Jun-15
31-Mar-15
31-Dec-14
30-Sep-14
30-Jun-14
Tier 1 Capital
831,400
835,688
783,360
743,614
713,644
Regulatory capital
1,028,113
1,042,654
946,865
913,829
886,050
Credit Risk Weighted Exposures
6,313,075

5,879,120

4,911,779
Risk Weighted Exposures for Market Risk
30,169

27,186

5,835
Risk Weighted Exposures for Operational Risk
452,089

390,378

390,378
Total Risk-weighted Exposures
6,795,333
6,923,736
6,296,684
5,486,786
5,307,993
Tier 1 Capital adequacy ratio
12.2%
12.1%
12.4%
13.6%
13.4%
Total Capital adequacy ratio
15.1%
15.1%
15.0%
16.7%
16.7%






NBG Capital adequacy ratio
30-Jun-15
31-Mar-15
31-Dec-14
30-Sep-14
30-Jun-14
Tier 1 Capital
786,141
822,579
671,491
672,262
674,420
Regulatory capital
1,010,366
1,026,203
872,924
856,240
828,692
Credit risk weighted assets (including off-balance obligations)
4,819,329

4,125,740

3,529,558
Currency Induced Credit Risk 
1,919,273

1,525,435

1,313,684
minus general and special reserves
-190,019

-155,192

-170,220
Total Risk-weighted Exposures
6,548,583
6,581,758
5,495,983
4,835,565
4,673,022
Tier 1 Capital adequacy ratio
12.0%
12.5%
12.2%
13.9%
14.4%
Total Capital adequacy ratio
15.4%
15.6%
15.9%
17.7%
17.7%






Capital adequacy ratio under Basel Capital Accord 1988
30-Jun-15
31-Mar-15
31-Dec-14
30-Sep-14
30-Jun-14
Tier 1 Capital
1,031,253
1,013,759
967,496
926,087
879,727
Total Capital
1,263,335
1,257,103
1,188,187
1,140,807
1,095,428
Credit risk weighted assets (including off-balance obligations)
4,351,684

3,949,360

3,378,920
Less: General Reserve
-138,189

-100,397

-103,985
Market Risk
32,848

61,864

47,251
Total Risk-weighted Exposures
4,246,343
4,248,507
3,910,827
3,456,306
3,322,186
Tier 1 Capital adequacy ratio
24.3%
23.9%
24.7%
26.8%
26.5%
Total Capital adequacy ratio
29.8%
29.6%
30.4%
33.0%
33.0%
Source: IFRS Group data for Basel I, NBG data for Basel II & NBG Capital
Forward-Looking Statements
This document contains forward-looking statements; such forward-looking statements contain known and unknown risks, uncertainties and other important factors, which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Important factors that, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements include, among others, the achievement of anticipated levels of profitability, growth, cost and recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Georgian economic, political and legal environment, financial risk management and the impact of general business and global economic conditions.
None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects are based are accurate or exhaustive or, in the case of the assumptions, entirely covered in the document. These forward-looking statements speak only as of the date they are made, and subject to compliance with applicable law and regulation the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in the document to reflect actual results, changes in assumptions or changes in factors affecting those statements.

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