REG - TBC Bank Group PLC - 2Q and 1H 2025 Results Report
08/08/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250808:nRSH5024Ua&default-theme=true
RNS Number : 5024U TBC Bank Group PLC 08 August 2025
TBC BANK GROUP PLC ("TBC Bank")
2Q AND 1H 2025 UNAUDITED CONSOLIDATED
FINANCIAL RESULTS
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 the actual results, performance or achievements of
TBC Bank Group PLC ("the Bank" or "the Group" or "TBCG") 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 Bank's present and future business
strategies and the environment in which the Bank will operate in the future.
Important factors that, in the view of the Bank, 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 the necessary regulatory approvals and licenses; the impact
of developments in the Georgian and Uzbek economies; the impact of
Russia-Ukraine war; the 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 regulations, the
Bank 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.
Certain financial information contained in this management report, which is
prepared on the basis of the Group's accounting policies applied consistently
from year to year, has been extracted from the Group's unaudited management
accounts and financial statements. The areas in which the management accounts
might differ from the International Financial Reporting Standards could be
significant; you should consult your own professional advisors and/or conduct
your own due diligence for a complete and detailed understanding of such
differences and any implications they might have on the relevant financial
information contained in this presentation. Some numerical figures included in
this report have been subjected to rounding adjustments. Accordingly, the
numerical figures shown as totals in certain tables might not be an arithmetic
aggregation of the figures that preceded them.
2Q and 1H 2025 consolidated financial results conference call details
TBC Bank Group PLC ("TBC PLC") has published its unaudited consolidated
financial results for the 2Q and 1H 2025 on Friday, 8 August 2025 at 7.00 AM
BST. The management team will host a conference call at 2.00 PM BST.
To participate in the conference call live video webinar, please register
using the following link:
https://www.netroadshow.com/events/login?show=ee411daa&confId=85305
(https://www.netroadshow.com/events/login?show=ee411daa&confId=85305)
You will receive access details via email.
Contacts
Andrew Keeley Anna Investor Relations Department
Romelashvili
Director of Investor Relations
Head of Investor Relations
E-mail: AKeeley@tbcbank.com.ge
E-mail: IR@tbcbank.com.ge
E-mail: ARomelashvili@tbcbank.com.ge
Tel: +44 (0) 7791 569834
Tel: +(995 32) 227 27 27
Tel: +(995) 577 205 290
Web: www.tbcbankgroup.com (https://www.tbcbankgroup.com/)
Web: www.tbcbankgroup.com (https://www.tbcbankgroup.com/)
Web: www.tbcbankgroup.com (https://www.tbcbankgroup.com/)
Table of contents
2Q and 1H 2025 unaudited consolidated financial results announcement
Interim management report
Financial highlights (#_Toc205486046) (#_Toc205486046)
Operational highlights (#_Toc205486047) (#_Toc205486047)
Letter from the Chief Executive Officer (#_Toc205486048) (#_Toc205486048)
Economic overview (#_Toc205486049) (#_Toc205486049)
Unaudited consolidated financial results overview for 2Q 2025 (#_Toc205486050)
(#_Toc205486050)
Unaudited consolidated financial results overview for 1H 2025 (#_Toc205486051)
(#_Toc205486051)
Additional information (#_Toc205486052) (#_Toc205486052)
1) (#_Toc205486053) Financial disclosures by business lines (#_Toc205486053)
(#_Toc205486053)
2) (#_Toc205486054) Glossary (#_Toc205486054) (#_Toc205486054)
3) (#_Toc205486055) Ratio definitions and exchange rates (#_Toc205486055)
(#_Toc205486055)
Risk management (#_Toc205486056) (#_Toc205486056)
Material existing and emerging risks (#_Toc205486057) (#_Toc205486057)
Statement of Directors' Responsibilities (#_Toc205486058) (#_Toc205486058)
Condensed Consolidated Interim Financial Statements (Unaudited)
Independent Review Report
..…………………………………………………………………....……….…………..
53
Condensed Consolidated Interim Statement of Financial
Position……………………………………….….………. 55
Condensed Consolidated Interim Statement of Profit or Loss and Other
Comprehensive Income…….…...……….. 56
Condensed Consolidated Interim Statement of Changes in
Equity……………………....…………………..……… 57
Condensed Consolidated Interim Statement of Cash
Flows…………………………………………..……….…….. 58
Notes to the Condensed Consolidated Interim Financial
Statements……………………………………………..…. 59
2Q and 1H 2025 unaudited consolidated financial results 1 (#_ftn1)
2Q 2025 profit of GEL 346 million, up by 5% YoY, with ROE at 24.3%.
1H 2025 profit of GE L 665 million, up by 6% YoY, with ROE at 23.7%.
European Union Market Abuse Regulation EU 596/2014 requires TBC Bank Group PLC
to disclose that this announcement contains Inside Information, as defined in
that Regulation.
Financial highlights
Income statement
In thousands of GEL 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ 1H'25 1H'24 Change YoY
Net interest income 581,802 533,210 458,111 27.0% 9.1% 1,115,012 900,955 23.8%
Net fee and commission income 155,634 147,997 123,398 26.1% 5.2% 303,631 227,701 33.3%
Other non-interest income 97,191 93,005 96,922 0.3% 4.5% 190,196 167,755 13.4%
Total operating income 834,627 774,212 678,431 23.0% 7.8% 1,608,839 1,296,411 24.1%
Total credit loss allowance (118,579) (118,497) (31,565) NMF 0.1% (237,076) (76,696) NMF
Operating expenses (313,754) (287,944) (256,577) 22.3% 9.0% (601,698) (486,248) 23.7%
Net profit before tax 402,294 367,771 390,289 3.1% 9.4% 770,065 733,467 5.0%
Income tax expense (56,019) (49,265) (60,991) -8.2% 13.7% (105,284) (107,698) -2.2%
Net profit 346,275 318,506 329,298 5.2% 8.7% 664,781 625,769 6.2%
Balance sheet
In thousands of GEL Jun'25 Mar'25 Jun'24 Change YoY Change QoQ
Total assets 41,963,000 40,228,911 35,780,415 17.3% 4.3%
Gross loans 28,469,934 27,350,103 24,611,372 15.7% 4.1%
Customer deposits(*) 23,305,837 22,320,114 20,699,482 12.6% 4.4%
Total equity 5,876,138 5,723,549 5,079,760 15.7% 2.7%
Number of ordinary shares 56,211,873 56,211,873 55,361,967 1.5% 0.0%
*Excludes MOF deposits
Key ratios
2Q'25 1Q'25 2Q'24 Change YoY Change QoQ 1H'25 1H'24 Change YoY
ROE 24.3% 23.2% 27.1% -2.8 pp 1.1 pp 23.7% 26.0% -2.3 pp
ROA 3.4% 3.2% 3.8% -0.4 pp 0.2 pp 3.3% 3.7% -0.4 pp
NIM 7.1% 6.7% 6.4% 0.7 pp 0.4 pp 6.9% 6.4% 0.5 pp
Cost to income 37.6% 37.2% 37.8% -0.2 pp 0.4 pp 37.4% 37.5% -0.1 pp
Cost of risk 1.6% 1.4% 0.5% 1.1 pp 0.2 pp 1.5% 0.7% 0.8 pp
NPL to gross loans 2.5% 2.5% 2.1% 0.4 pp 0.0 pp 2.5% 2.1% 0.4 pp
NPL provision coverage ratio 78.2% 73.6% 74.6% 3.6 pp 4.6 pp 78.2% 74.6% 3.6 pp
Total NPL coverage ratio 142.4% 140.4% 141.6% 0.8 pp 2.0 pp 142.4% 141.6% 0.8 pp
Leverage (x) 7.1x 7.0x 7.0x 0.1x 0.1x 7.1x 7.0x 0.1x
EPS (GEL) 6.14 5.71 5.94 3.3% 7.4% 11.85 11.33 4.6%
Diluted EPS (GEL) 6.07 5.67 5.91 2.7% 7.2% 11.74 11.28 4.0%
BVPS (GEL) 103.14 99.74 90.32 14.2% 3.4% 103.14 90.32 14.2%
Georgia
CET 1 CAR 16.4% 16.4% 16.8% -0.4 pp 0.0 pp 16.4% 16.8% -0.4 pp
Tier 1 CAR 19.8% 19.9% 22.3% -2.5 pp -0.1 pp 19.8% 22.3% -2.5 pp
Total CAR 23.0% 23.1% 25.9% -2.9 pp -0.1 pp 23.0% 25.9% -2.9 pp
Uzbekistan
CET 1 CAR 18.5% 19.4% 12.6% 5.9 pp -0.9 pp 18.5% 12.6% 5.9 pp
Tier 1 CAR 18.5% 19.4% 12.6% 5.9 pp -0.9 pp 18.5% 12.6% 5.9 pp
Total CAR 20.0% 20.3% 16.4% 3.6 pp -0.3 pp 20.0% 16.4% 3.6 pp
Operational highlights
Customer base
In thousands Jun'25 Mar'25 Jun'24 Change YoY Change QoQ
Total unique registered users 24,299 23,156 19,268 26% 5%
Georgia 3,537 3,499 3,360 5% 1%
Uzbekistan 20,762 19,657 15,908 31% 6%
Total monthly active customers 7,407 7,853 6,378 16% -6%
Georgia 1,752 1,736 1,633 7% 1%
Uzbekistan 5,655 6,117 4,745 19% -8%
Total digital monthly active users ("digital MAU") 6,809 7,223 5,695 20% -6%
Georgia 1,154 1,106 950 21% 4%
Uzbekistan 5,655 6,117 4,745 19% -8%
Total digital daily active users ("digital DAU") 2,401 2,547 1,884 27% -6%
Georgia 545 521 441 24% 5%
Uzbekistan 1,856 2,026 1,443 29% -8%
Digital DAU/MAU 35% 35% 33% 2 pp 0 pp
Georgia 47% 47% 46% 1 pp 0 pp
Uzbekistan 33% 33% 30% 3 pp 0 pp
Unique registered users of Uzbekistan have been reclassified since 4Q 2024
Uzbekistan - key highlights
In thousands of GEL Jun'25 Mar'25 Jun'24 Change YoY Change QoQ
Gross loans and advances to customers 2,463,960 2,150,075 1,201,673 105.0% 14.6%
Customer accounts 1,340,365 1,218,048 721,632 85.7% 10.0%
In thousands of GEL 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ 1H'25 1H'24 Change YoY
Total operating income 169,765 161,051 91,081 86.4% 5.4% 330,816 165,126 100.3%
Net profit 32,329 21,561 23,779 36.0% 49.9% 53,890 42,216 27.7%
ROE 20.0% 13.7% 27.8% -7.8 pp 6.3 pp 16.9% 25.7% -8.8 pp
1Q and 1H 2025 financial results include a non-recurring credit impairment
charge of GEL 24.6 mln (pre-tax) in Uzbekistan
Letter from the Chief Executive Officer 2 (#_ftn2)
I am pleased to report that we continued our strong start to the year with a
profitable second quarter. In 2Q 2025, our operating income increased by 23%
year-on-year and amounted to GEL 835 million, while our net profit reached GEL
346 million, up 5% year-on-year, delivering 24.3% ROE. This brought our 1H
2025 net profit to GEL 665 million, up 6% year-on-year, with 23.7% ROE.
I am also glad to announce that our strong profitability and robust capital
position have enabled the Board to declare a quarterly dividend of GEL 1.75
per share for the second quarter of 2025, bringing the 1H 2025 payment to GEL
3.25. In addition, we have announced a GEL 75 million share buyback starting
from the second half of August, a sign of our commitment to returning excess
capital to shareholders.
Further expansion of our Uzbekistan ecosystem
The second quarter was marked by several significant developments in our
Uzbekistan business. The popularity of our flagship debit card and daily
banking product, Salom Card, has exceeded expectations, reaching over 0.5
million cards issued by the end of June. We also continued to build out our
digital ecosystem through the launch of new products and strategic
acquisitions. Notably, we completed the rollout of TBC Insurance and agreed to
acquire a majority stake in BILLZ, Uzbekistan's leading SaaS platform for
businesses serving the retail sector, which will strengthen our business
banking proposition.
In addition, after establishing TBC Digital, the holding company overseeing
TBC PLC's operations in Uzbekistan, we enhanced the company's governance and
knowledge pool by appointing a supervisory board chaired by Oliver Hughes and
joined by global fintech leaders David Nangle from VEF and Matthew Risley from
QED Investors.
We are building a world-class digital ecosystem in Uzbekistan, and I am
delighted that this has been recognized by TBC Uzbekistan's inclusion in the
prestigious list of the world's top fintech companies prepared by CNBC and
Statista, the first such recognition for an Uzbek or Central Asian business.
Robust core revenue generation
Our strong profitability remains underpinned by robust core revenue
generation. Net interest income increased by 27% year-on-year, supported by
loan book growth of 16% and an excellent net interest margin of 7.1%, up by
0.7 pp year-on-year and 0.4 pp quarter-on-quarter. This margin expansion was
helped by higher Georgian loan yields and continued optimization of our
liability structure, as well as the increasing contribution of Uzbekistan.
Over the same period, net fee and commission income grew by 26% year-on-year,
driven by strong performances in both Georgian and Uzbekistan payments
businesses.
Operating expenses increased by 22% year-on-year in the second quarter as we
continue to invest in business growth, with our Uzbek business accounting for
45% of the growth. Consequently, our cost-to-income ratio was at 37.6% in 2Q
2025, slightly down on the 37.8% of a year ago.
The cost of risk for our Georgian operations remained stable
quarter-on-quarter at 0.8%, while in Uzbekistan it increased by 0.6 percentage
points, reaching 9.9%. The pickup was driven to a large degree by planned
moves into thin file, less data rich customer segments as part of our 'test
and learn' approach, and the expansion of our network of POS lending partners
into the long-tail of smaller partners. These elements are ultimately part of
our learning curve, as we pilot new ideas, learn from the data, and scale only
what delivers acceptable risk-adjusted returns.
Continued solid growth in Georgia alongside fast-paced expansion in Uzbekistan
In 2Q 2025, operating income from our Georgian financial services grew by 14%
year-on-year, driven by continued business expansion. However, this was
largely offset by higher provision expenses reflecting a normalization in the
cost of risk as well as increased operating costs. As a result, net profit
increased by 3%, with ROE standing at a very healthy 23.9%.
During 2Q 2025, our digital banking ecosystem in Uzbekistan continued to grow
rapidly. Our loan book more than doubled to GEL 2.5 billion (USD 905 million),
capturing 5.1% of the total retail loan market, while our retail deposits grew
by 86% year-on-year, taking us to 4.1% market share. This growth drove TBC
Uzbekistan's operating income up by 86% year-on-year, reaching GEL 170 million
(USD 62 million), while net profit amounted to GEL 32 million (USD 12
million), up by 36% year-on-year, with 20% ROE. As a result, TBC Uzbekistan
contributed 20% to the Group's total operating income and accounted for 9% of
its net profit in 2Q 2025.
Looking ahead
The Group continued to deliver strong results in the first half of the year,
reflecting solid progress across our strategic priorities. As we enter the
second half of the year, we remain focused on meeting our 2025 targets and
continuing to create long-term value for our shareholders.
Economic overview
Georgia
Economic growth stronger than expected
Georgia's real GDP increased by 7.1% year-on-year in the second quarter of
2025, averaging a robust 8.3% in the first half of the year, following 9.4%
growth in 2024, according to Geostat. Despite relative moderation in monthly
growth dynamics, the economic print remains stronger than the widely expected
growth normalization trend would imply. Heightened political tensions resulted
in lower tourism revenues and domestic demand at the end of 2024 and 1Q 2025,
especially reflected through contracted spending on durable goods. However, a
recovery in consumption was evident from March, with economic growth supported
by continuously improving tourism, recovered migrant spending and slowing,
though still strong credit activity.
Following the drop in December 2024, estimated net inflows into Georgia
improved in the first quarter, driven by lower durable imports. Net inflows
improved substantially in 2Q as well, as total exports of goods denominated in
U.S. dollars rose by 20.9% year-on -year in the second quarter with domestic
exports also strengthening, while imports of goods increased by only 0.8%. At
the same time, while FDIs remained subdued, 5.0% growth in tourism revenues
and 10.0% increase in remittances also contributed significantly to the
improvement in net currency inflows into the country.
Fiscal consolidation continues
The government remains committed to fiscal consolidation, as it recorded a
budget surplus equal to 0.5% of GDP in the 1H 2025, while public debt to GDP
ratio declined to 35.1%.
Credit growth is moderating, though remains strong
Bank credit growth has moderated slightly from 16.6% year-on-year in March
2025 to 15.6% in June, at constant exchange rates. Given accelerating
inflation, real credit growth also weakened, though it remained still strong
at 11.2%. As for segments, while retail credit fell only slightly from 15.4%
in March to 14.8% in June, the year-on-year growth of lending to legal
entities declined from 17.9% to 16.6%. The gradual dedollarization of bank
lending continued in 2Q 2025, with the share of foreign currency loans
dropping slightly from 43.2% in March to 42.8% in June, at constant exchange
rates.
GEL strengthens despite domestic and global challenges
Improved net currency inflows resulting from subdued imports and strong
external inflows from exports of goods, tourism and remittances, has combined
with a globally weakened USD and increased deposit larization in the 2Q 2025,
leading to appreciation pressures on the national currency. Leveraging on this
environment, the NBG scaled up reserve replenishment, purchasing around USD
880 million from the FX market in the second quarter, bringing its gross
international reserves to USD 4.7 billion as of the end of June. Meanwhile,
the national currency appreciated by around 3.1% against the USD compared to
the end of 2024 and stood at 2.72 GEL per USD at the end of June 2025.
CPI inflation continued accelerating, standing at 4.0% in June, above the NBG
3.0% target. Higher inflation is being driven by the combination of low base
effect, elevated domestic pressures and a partial pass-through of higher risks
realized in food price dynamics globally. Consequently, the NBG has maintained
an unchanged monetary policy rate ("MPR") at 8.0% since May 2024.
Uzbekistan
Continued strong economic performance
Uzbekistan's economic growth strengthened again to 7.5% year-on-year in 2Q
2025, averaging 7.2% in the first half of the year, compared to 6.5% in 2024.
In terms of external trade, exports of goods in 2Q 2025 increased by an
impressive 38.2% year-on-year due to higher gold exports. On the other hand,
growth of imports was relatively moderate at 15.1%. Retail credit growth
appears to be only slightly strengthening in 2Q 2025, standing at a robust
22.2% at the end of June, with mortgage credit expanding by 17.7% and
non-mortgage credit by 25.0%.
Annual inflation in Uzbekistan stood at 8.7% in June, down from 10.3% in March
and 9.8% in December 2024. The CBU maintained its monetary policy rate
unchanged at 14.0% throughout the quarter, having increased it by 0.5
percentage points in March, citing sustained inflationary pressures. At the
end of June 2025, the UZS was valued at 12,654 per US Dollar, having
appreciated by around 2.2% compared to the end of 2024. UZS appreciation is
supported by a globally weakened USD, moderated credit activity and the
tighter CBU stance. At the same time, as of June, higher gold prices allowed
the CBU to increase its international reserves by USD 7.4 billion (or 18%)
YTD.
Economic growth forecasts
The IMF projects Georgia's economic growth in 2025 at 7.2%, while Fitch and
the World Bank expect 5.6% and 5.5%, respectively. The real GDP growth
forecasts for Uzbekistan by the World Bank, IMF and ADB stand at 5.9%, 5.9%
and 6.6%, respectively. TBC Capital's projection for Georgia stands at 7.1%,
and for Uzbekistan at 7.4%.
More information on the Georgian economy and financial sector can be found at
www.tbccapital.ge (http://www.tbccapital.ge/) .
Unaudited consolidated financial results overview for 2Q 2025
This statement provides a summary of the business and financial trends for 2Q
2025 for TBC Bank Group plc and its subsidiaries. The financial information
and trends are unaudited.
Please note that there might be slight differences in previous periods'
figures due to rounding.
Consolidated income statement and other comprehensive income
In thousands of GEL 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ
Interest income 1,144,935 1,071,739 878,549 30.3% 6.8%
Interest expense (563,133) (538,529) (420,438) 33.9% 4.6%
Net interest income 581,802 533,210 458,111 27.0% 9.1%
Fee and commission income 259,013 231,504 200,874 28.9% 11.9%
Fee and commission expense (103,379) (83,507) (77,476) 33.4% 23.8%
Net fee and commission income 155,634 147,997 123,398 26.1% 5.2%
Net insurance income 14,039 8,735 9,100 54.3% 60.7%
Net gains from currency derivatives, foreign currency operations and 77,775 78,157 85,647 -9.2% -0.5%
translation
Other operating income 5,077 5,974 2,029 NMF -15.0%
Share of profit of associates 300 139 146 NMF NMF
Other operating non-interest income 97,191 93,005 96,922 0.3% 4.5%
Credit loss allowance for loans to customers (105,128) (106,594) (27,665) NMF -1.4%
Credit loss allowance for other financial items and net impairment for (13,451) (11,903) (3,900) NMF 13.0%
non-financial assets
Operating income after expected credit losses 716,048 655,715 646,866 10.7% 9.2%
Staff costs (162,940) (144,951) (135,653) 20.1% 12.4%
Depreciation and amortisation (40,924) (38,650) (35,614) 14.9% 5.9%
Administrative and other operating expenses (109,890) (104,343) (85,310) 28.8% 5.3%
Operating expenses (313,754) (287,944) (256,577) 22.3% 9.0%
Net profit before tax 402,294 367,771 390,289 3.1% 9.4%
Income tax expense (56,019) (49,265) (60,991) -8.2% 13.7%
Net profit 346,275 318,506 329,298 5.2% 8.7%
Net profit attributable to:
- Shareholders of TBCG 340,862 316,552 324,595 5.0% 7.7%
- Non-controlling interest 5,413 1,954 4,703 15.1% NMF
Other comprehensive income:
Other comprehensive expense for the period (52,025) (16,060) (41,840) 24.3% NMF
Total comprehensive income for the period 294,250 302,446 287,458 2.4% -2.7%
Consolidated balance sheet
In thousands of GEL Jun'25 Mar'25 Change QoQ
ASSETS
Cash and cash equivalents 3,548,840 3,281,957 8.1%
Due from other banks 111,130 52,470 NMF
Mandatory cash balances with the NBG and the CBU 2,408,487 2,549,087 -5.5%
Loans and advances to customers and finance lease receivables 27,908,768 26,855,888 3.9%
Investment securities 5,260,446 4,640,823 13.4%
Repurchase receivables - 228,045 NMF
Investment properties 11,569 14,698 -21.3%
Current income tax prepayment 11,546 22,492 -48.7%
Deferred income tax asset 4,254 3,595 18.3%
Other financial assets 436,784 480,372 -9.1%
Other assets 1,538,293 1,415,760 8.7%
Intangible assets 662,919 623,760 6.3%
Goodwill 59,964 59,964 0.0%
TOTAL ASSETS 41,963,000 40,228,911 4.3%
LIABILITIES
Due to credit institutions 7,181,100 7,754,371 -7.4%
Customer accounts 23,921,726 22,529,442 6.2%
Other financial liabilities 1,138,603 820,244 38.8%
Current income tax liability 23,416 1,444 NMF
Deferred income tax liability 51,774 54,489 -5.0%
Debt Securities in issue* 1,861,021 1,512,224 23.1%
Other liabilities 212,332 216,522 -1.9%
Subordinated debt 1,151,490 1,138,204 1.2%
Redemption liability 545,400 478,422 14.0%
TOTAL LIABILITIES 36,086,862 34,505,362 4.6%
EQUITY
Share capital 1,719 1,719 0.0%
Shares held by trust (49,862) (50,424) -1.1%
Share premium 411,088 411,088 0.0%
Retained earnings 5,590,920 5,286,370 5.8%
Other reserves (222,807) (107,391) NMF
Equity attributable to owners of the parent 5,731,058 5,541,362 3.4%
Non-controlling interest 145,080 182,187 -20.4%
TOTAL EQUITY 5,876,138 5,723,549 2.7%
TOTAL LIABILITIES AND EQUITY 41,963,000 40,228,911 4.3%
* Debt securities in issue include Additional Tier 1 capital subordinated
notes
Ratios
Ratios (based on monthly averages, where applicable) 2Q'25 1Q'25 2Q'24
Profitability ratios:
ROE(1) 24.3% 23.2% 27.1%
ROA(2) 3.4% 3.2% 3.8%
Cost to income(3) 37.6% 37.2% 37.8%
NIM(4) 7.1% 6.7% 6.4%
Loan yields(5) 14.5% 14.0% 12.9%
Deposit rates(6) 5.8% 5.6% 5.2%
Cost of funding(7) 6.8% 6.6% 6.0%
Asset quality & portfolio concentration:
Cost of risk(9) 1.6% 1.4% 0.5%
PAR 90 to gross loans(9) 1.7% 1.6% 1.5%
NPLs to gross loans(10) 2.5% 2.5% 2.1%
NPL provision coverage(11) 78.2% 73.6% 74.6%
Total NPL coverage(12) 142.4% 140.4% 141.6%
Credit loss level to gross loans(13) 2.0% 1.8% 1.6%
Related party loans to gross loans(14) 0.0% 0.0% 0.1%
Top 10 borrowers to total portfolio(15) 4.9% 5.3% 5.8%
Top 20 borrowers to total portfolio(16) 7.8% 8.0% 8.6%
Capital & liquidity positions:
Net loans to deposits plus IFI funding(17) 103.5% 105.4% 102.0%
Leverage (x)(18) 7.1x 7.0x 7.0x
Georgia
Net stable funding ratio(19) 124.4% 125.6% 118.2%
Liquidity coverage ratio(20) 116.3% 119.0% 118.1%
CET 1 CAR(21) 16.4% 16.4% 16.8%
Tier 1 CAR(22) 19.8% 19.9% 22.3%
Total 1 CAR(23) 23.0% 23.1% 25.9%
Uzbekistan
CET 1 CAR(24) 18.5% 19.4% 12.6%
Tier 1 CAR(25) 18.5% 19.4% 12.6%
Total 1 CAR(26) 20.0% 20.3% 16.4%
Funding and liquidity in Georgia
Jun'25 Mar'25 Change QoQ
Minimum net stable funding ratio, as defined by the NBG 100.0% 100.0% 0.0 pp
Net stable funding ratio as defined by the NBG 124.4% 125.6% -1.2 pp
Minimum total liquidity coverage ratio, as defined by the NBG 100.0% 100.0% 0.0 pp
Minimum LCR in GEL, as defined by the NBG 75% 75.0% 0.0 pp
Minimum LCR in FC, as defined by the NBG 100.0% 100.0% 0.0 pp
Total liquidity coverage ratio, as defined by the NBG 116.3% 119.0% -2.7 pp
LCR in GEL, as defined by the NBG 115.7% 118.9% -3.2 pp
LCR in FC, as defined by the NBG 116.6% 119.1% -2.5 pp
Regulatory capital
Georgia
In thousands of GEL Jun'25 Mar'25 Change QoQ
CET 1 capital 4,917,529 4,814,010 2.2%
Tier 1 capital 5,938,879 5,851,748 1.5%
Total capital 6,874,774 6,786,892 1.3%
Total risk-weighted assets 29,939,526 29,337,803 2.1%
Minimum CET 1 ratio 14.7% 14.6% 0.1 pp
CET 1 capital adequacy ratio 16.4% 16.4% 0.0 pp
Minimum Tier 1 ratio 16.9% 16.9% 0.0 pp
Tier 1 capital adequacy ratio 19.8% 19.9% -0.1 pp
Minimum total capital adequacy ratio 19.9% 19.9% 0.0 pp
Total capital adequacy ratio 23.0% 23.1% -0.1 pp
Uzbekistan
In thousands of GEL Jun'25 Mar'25 Change QoQ
CET 1 capital 538,892 535,639 0.6%
Tier 1 capital 538,892 535,639 0.6%
Total capital 581,838 559,526 4.0%
Total risk-weighted assets 2,912,132 2,758,355 5.6%
Minimum CET 1 ratio 8.0% 8.0% 0.0 pp
CET 1 capital adequacy ratio 18.5% 19.4% -0.9 pp
Minimum Tier 1 ratio 10.0% 10.0% 0.0 pp
Tier 1 capital adequacy ratio 18.5% 19.4% -0.9 pp
Minimum total capital adequacy ratio 13.0% 13.0% 0.0 pp
Total capital adequacy ratio 20.0% 20.3% -0.3 pp
Loan portfolio
As of 30 June 2025, the gross loan portfolio reached GEL 28,469.9 million, up
by 4.1% QoQ, or up by 3.4% QoQ on a constant currency basis.
By the end of June 2025, our Georgia FS loan portfolio increased by 3.2% on a
QoQ basis and reached GEL 25,992.6 million, with 2.5% QoQ growth on a constant
currency basis. Over the same period, our Uzbek portfolio increased by 14.6%
QoQ, or up by 13.9% QoQ on a constant currency basis.
In thousands of GEL Jun'25 Mar'25 Change QoQ
Gross loans and advances to customers
Georgian financial services ("Georgia FS")* 25,992,620 25,182,536 3.2%
Retail Georgia 9,124,930 8,834,964 3.3%
CIB Georgia 10,491,098 10,055,992 4.3%
MSME Georgia 5,902,254 5,827,911 1.3%
Uzbekistan 2,463,960 2,150,075 14.6%
Total gross loans and advances to customers** 28,469,934 27,350,103 4.1%
Gross loans include finance lease receivables only on Georgia FS, Uzbekistan
and Group levels
* Georgia FS includes sub-segment eliminations
** Total gross loans and advances to customers include Azerbaijan
2Q'25 1Q'25 2Q'24 Change YoY Change QoQ
Loan yields 14.5% 14.0% 12.9% 1.6 pp 0.5 pp
GEL 14.5% 14.2% 13.8% 0.7 pp 0.3 pp
FC 8.9% 8.7% 8.8% 0.1 pp 0.2 pp
UZS 42.7% 44.2% 44.1% -1.4 pp -1.5 pp
Georgia FS 11.9% 11.6% 11.3% 0.6 pp 0.3 pp
GEL 14.5% 14.2% 13.8% 0.7 pp 0.3 pp
FC 8.9% 8.7% 8.8% 0.1 pp 0.2 pp
Uzbekistan 42.7% 44.2% 44.1% -1.4 pp -1.5 pp
UZS 42.7% 44.2% 44.1% -1.4 pp -1.5 pp
Total loan yields* 14.5% 14.0% 12.9% 1.6 pp 0.5 pp
Loan yields include finance lease receivables only on Georgia FS, Uzbekistan
and Group levels
* Total loan yields include Azerbaijan
Loan portfolio quality
PAR 90 Jun'25 Mar'25 Change QoQ
Georgia FS* 1.5% 1.5% 0.0 pp
Retail Georgia 0.8% 0.7% 0.1 pp
CIB Georgia 1.2% 0.9% 0.3 pp
MSME Georgia 2.8% 3.4% -0.6 pp
Uzbekistan 3.9% 2.1% 1.8 pp
Total PAR 90** 1.7% 1.6% 0.1 pp
PAR 90 include finance lease receivables only on Georgia FS, Uzbekistan and
Group levels
* Georgia FS includes sub-segment eliminations
** Total PAR 90 includes Azerbaijan
In thousands of GEL Jun'25 Mar'25 Change QoQ
Non-performing Loans ("NPL")
Georgia FS* 613,751 600,215 2.3%
Retail Georgia 147,242 133,020 10.7%
CIB Georgia 157,590 152,263 3.5%
MSME Georgia 281,300 288,613 -2.5%
Uzbekistan 101,170 68,275 48.2%
Total non-performing loans** 717,615 671,071 6.9%
Non-performing loans include finance lease receivables only on Georgia FS,
Uzbekistan and Group levels
*Georgia FS includes sub-segment eliminations
** Total non-performing loans include Azerbaijan
NPL to gross loans Jun'25 Mar'25 Change QoQ
Georgia FS* 2.4% 2.4% 0.0 pp
Retail Georgia 1.6% 1.5% 0.1 pp
CIB Georgia 1.5% 1.5% 0.0 pp
MSME Georgia 4.8% 5.0% -0.2 pp
Uzbekistan 4.1% 3.2% 0.9 pp
Total NPL to gross loans** 2.5% 2.5% 0.0 pp
Non-performing loans include finance lease receivables only on Georgia FS,
Uzbekistan and Group levels
*Georgia FS includes sub-segment eliminations
** Total NPL to gross loans include Azerbaijan
Jun'25 Mar'25
NPL Coverage Provision Coverage Total Coverage** Provision Coverage Total Coverage**
Georgia FS* 62.6% 137.3% 59.5% 134.1%
Retail Georgia 129.5% 181.7% 127.2% 186.9%
CIB Georgia 43.3% 113.8% 40.2% 111.8%
MSME Georgia 40.7% 124.9% 40.4% 123.9%
Uzbekistan 169.7% 169.7% 192.6% 192.6%
Total NPL coverage** 78.2% 142.4% 73.6% 140.4%
Non-performing loans include finance lease receivables only on Georgia FS,
Uzbekistan and Group levels
*Georgia FS includes sub-segment eliminations
** Total NPL coverage includes Azerbaijan
Cost of risk ("CoR") 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ
Georgia FS* 0.8% 0.8% 0.3% 0.5 pp 0.0 pp
Retail Georgia 1.8% 1.3% 0.4% 1.4 pp 0.5 pp
CIB Georgia 0.2% 0.3% -0.1% 0.3 pp -0.1 pp
MSME Georgia 0.5% 0.8% 0.5% 0.0 pp -0.3 pp
Uzbekistan 9.9% 9.3% 5.7% 4.2 pp 0.6 pp
Total cost of risk** 1.6% 1.4% 0.5% 1.1 pp 0.2 pp
Cost of risk include finance lease receivables only on Georgia FS, Uzbekistan
and Group levels
*Georgia FS includes sub-segment eliminations
** Total cost of risk includes Azerbaijan
Deposit portfolio
As of 30 June 2025, the deposit portfolio reached GEL 23,921.7 million, up by
6.2% QoQ both in nominal terms and on a constant currency basis.
By the end of June 2025, our customer deposit portfolio in Georgia (excluding
MOF) reached GEL 22,030. 9 million, up by 4.2% QoQ, and also up by 4.2% QoQ on
a constant currency basis. Meanwhile, our Uzbekistan deposit portfolio
increased by 10.0% QoQ, or up by 9.4% QoQ on a constant currency basis.
In thousands of GEL Jun'25 Mar'25 Change QoQ
Customer accounts
Georgia FS* 22,646,812 21,355,609 6.0%
Retail Georgia 8,719,633 8,269,131 5.4%
CIB Georgia 11,521,115 11,122,655 3.6%
MSME Georgia 1,951,125 1,913,434 2.0%
MOF 615,889 209,328 NMF
Uzbekistan 1,340,365 1,218,048 10.0%
Total customer accounts** 23,921,726 22,529,442 6.2%
* Georgian FS includes sub-segment eliminations
** Total customer accounts are adjusted for eliminations
2Q'25 1Q'25 2Q'24 Change YoY Change QoQ
Deposit rates 5.8% 5.6% 5.2% 0.6 pp 0.2 pp
GEL 7.9% 8.1% 7.6% 0.3 pp -0.2 pp
FC 1.9% 1.8% 1.3% 0.6 pp 0.1 pp
UZS 24.9% 24.7% 24.8% 0.1 pp 0.2 pp
Georgian financial services 4.6% 4.7% 4.6% 0.0 pp -0.1 pp
GEL 7.9% 8.1% 7.6% 0.3 pp -0.2 pp
FC 1.9% 1.8% 1.3% 0.6 pp 0.1 pp
Uzbek business 24.8% 24.5% 24.8% 0.0 pp 0.3 pp
UZS 24.9% 24.7% 24.8% 0.1 pp 0.2 pp
FC 5.5% 2.8% 2.3% 3.2 pp 2.7 pp
Total deposit rates* 5.8% 5.6% 5.2% 0.6 pp 0.2 pp
* Total deposits rates include MOF deposits
Unaudited consolidated financial results overview for 1H 2025
This statement provides a summary of the business and financial trends for 1H
2025 for TBC Bank Group plc and its subsidiaries. The financial information
and trends are unaudited.
Please note that there might be slight differences in previous periods'
figures due to rounding.
Consolidated income statement and other comprehensive income
In thousands of GEL 1H'25 1H'24 Change YoY
Interest income 2,216,674 1,718,903 29.0%
Interest expense (1,101,662) (817,948) 34.7%
Net interest income 1,115,012 900,955 23.8%
Fee and commission income 490,517 380,362 29.0%
Fee and commission expense (186,886) (152,661) 22.4%
Net fee and commission income 303,631 227,701 33.3%
Net insurance income 22,774 16,903 34.7%
Net gains from currency derivatives, foreign currency operations and 155,932 147,116 6.0%
translation
Other operating income 11,051 3,631 NMF
Share of profit of associates 439 105 NMF
Other operating non-interest income 190,196 167,755 13.4%
Credit loss allowance for loans to customers (211,722) (71,565) NMF
Credit loss allowance for other financial items and net impairment for (25,354) (5,131) NMF
non-financial assets
Operating income after expected credit and non-financial asset impairment 1,371,763 1,219,715 12.5%
losses
Staff costs (307,891) (262,216) 17.4%
Depreciation and amortisation (79,574) (69,722) 14.1%
Administrative and other operating expenses (214,233) (154,310) 38.8%
Operating expenses (601,698) (486,248) 23.7%
Net profit before tax 770,065 733,467 5.0%
Income tax expense (105,284) (107,698) -2.2%
Net profit 664,781 625,769 6.2%
Net profit attributable to:
- Shareholders of TBCG 657,414 617,400 6.5%
- Non-controlling interest 7,367 8,369 -12.0%
Other comprehensive income:
Other comprehensive expense for the period (68,085) (34,164) 99.3%
Total comprehensive income for the period 596,696 591,605 0.9%
Consolidated balance sheet
In thousands of GEL Jun'25 Jun'24 Change YoY
ASSETS
Cash and cash equivalents 3,548,840 3,688,366 -3.8%
Due from other banks 111,130 20,742 NMF
Mandatory cash balances with the NBG and the CBU 2,408,487 1,511,508 59.3%
Loans and advances to customers and finance lease receivables 27,908,768 24,226,246 15.2%
Investment securities 5,260,446 4,213,106 24.9%
Investment properties 11,569 14,506 -20.2%
Current income tax prepayment 11,546 1,704 NMF
Deferred income tax asset 4,254 990 NMF
Other financial assets 436,784 306,561 42.5%
Other assets 1,538,293 1,207,297 27.4%
Intangible assets 662,919 529,425 25.2%
Goodwill 59,964 59,964 0.0%
TOTAL ASSETS 41,963,000 35,780,415 17.3%
LIABILITIES
Due to credit institutions 7,181,100 4,846,332 48.2%
Customer accounts 23,921,726 21,464,578 11.4%
Other financial liabilities 1,138,603 683,382 66.6%
Current income tax liability 23,416 4,350 NMF
Deferred income tax liability 51,774 52,882 -2.1%
Debt Securities in issue* 1,861,021 1,849,800 0.6%
Other liabilities 212,332 226,562 -6.3%
Subordinated debt 1,151,490 1,152,841 -0.1%
Redemption liability 545,400 419,928 29.9%
TOTAL LIABILITIES 36,086,862 30,700,655 17.5%
EQUITY
Share capital 1,719 1,689 1.8%
Shares held by trust (49,862) (66,982) -25.6%
Share premium 411,088 292,734 40.4%
Retained earnings 5,590,920 4,796,051 16.6%
Other reserves (222,807) (101,634) NMF
Equity attributable to owners of the parent 5,731,058 4,921,858 16.4%
Non-controlling interest 145,080 157,902 -8.1%
TOTAL EQUITY 5,876,138 5,079,760 15.7%
TOTAL LIABILITIES AND EQUITY 41,963,000 35,780,415 17.3%
* Debt securities in issue include Additional Tier 1 capital subordinated
notes
Ratios
Ratios (based on monthly averages, where applicable) 1H'25 1H'24
Profitability ratios:
ROE(1) 23.7% 26.0%
ROA(2) 3.3% 3.7%
Cost to income(3) 37.4% 37.5%
NIM(4) 6.9% 6.4%
Loan yields(5) 14.3% 12.9%
Deposit rates(6) 5.7% 5.3%
Cost of funding(7) 6.7% 5.9%
Asset quality & portfolio concentration:
Cost of risk(9) 1.5% 0.7%
PAR 90 to gross loans(9) 1.7% 1.5%
NPLs to gross loans(10) 2.5% 2.1%
NPL provision coverage(11) 78.2% 74.6%
Total NPL coverage(12) 142.4% 141.6%
Credit loss level to gross loans(13) 2.0% 1.6%
Related party loans to gross loans(14) 0.0% 0.1%
Top 10 borrowers to total portfolio(15) 4.9% 5.8%
Top 20 borrowers to total portfolio(16) 7.8% 8.6%
Capital & liquidity positions:
Net loans to deposits plus IFI funding(17) 103.5% 102.0%
Leverage (x)(18) 7.1x 7.0x
Georgia
Net stable funding ratio(19) 124.4% 118.2%
Liquidity coverage ratio(20) 116.3% 118.1%
CET 1 CAR(21) 16.4% 16.8%
Tier 1 CAR(22) 19.8% 22.3%
Total 1 CAR(23) 23.0% 25.9%
Uzbekistan
CET 1 CAR(24) 18.5% 12.6%
Tier 1 CAR(25) 18.5% 12.6%
Total 1 CAR(26) 20.0% 16.4%
Funding and liquidity in Georgia
Jun'25 Jun'24 Change YoY
Minimum net stable funding ratio, as defined by the NBG 100.0% 100.0% 0.0 pp
Net stable funding ratio as defined by the NBG 124.4% 118.2% 6.2 pp
Minimum total liquidity coverage ratio, as defined by the NBG 100.0% 100.0% 0.0 pp
Minimum LCR in GEL, as defined by the NBG 75% 75.0% 0.0 pp
Minimum LCR in FC, as defined by the NBG 100.0% 100.0% 0.0 pp
Total liquidity coverage ratio, as defined by the NBG 116.3% 118.1% -1.8 pp
LCR in GEL, as defined by the NBG 115.7% 100.0% 15.7 pp
LCR in FC, as defined by the NBG 116.6% 129.5% -12.9 pp
Regulatory capital
Georgia
In thousands of GEL Jun'25 Jun'24 Change YoY
CET 1 capital 4,917,529 4,344,472 13.2%
Tier 1 capital 5,938,879 5,749,522 3.3%
Total capital 6,874,774 6,671,739 3.0%
Total risk-weighted assets 29,939,526 25,791,645 16.1%
Minimum CET 1 ratio 14.7% 14.6% 0.1 pp
CET 1 capital adequacy ratio 16.4% 16.8% -0.4 pp
Minimum Tier 1 ratio 16.9% 16.9% 0.0 pp
Tier 1 capital adequacy ratio 19.8% 22.3% -2.5 pp
Minimum total capital adequacy ratio 19.9% 20.0% -0.1 pp
Total capital adequacy ratio 23.0% 25.9% -2.9 pp
Uzbekistan
In thousands of GEL Jun'25 Jun'24 Change YoY
CET 1 capital 538,892 297,508 81.1%
Tier 1 capital 538,892 297,508 81.1%
Total capital 581,838 385,153 51.1%
Total risk-weighted assets 2,912,132 2,355,255 23.6%
Minimum CET 1 ratio 8.0% 8.0% 0.0 pp
CET 1 capital adequacy ratio 18.5% 12.6% 5.9 pp
Minimum Tier 1 ratio 10.0% 10.0% 0.0 pp
Tier 1 capital adequacy ratio 18.5% 12.6% 5.9 pp
Minimum total capital adequacy ratio 13.0% 13.0% 0.0 pp
Total capital adequacy ratio 20.0% 16.4% 3.6 pp
Loan portfolio
As of 30 June 2025, the gross loan portfolio reached GEL 28,469.9 million, up
by 15.7% YoY, or up by 16.0% YoY on a constant currency basis.
By the end of June 2025, our Georgia FS loan portfolio increased by 11.2% on a
YoY and reached GEL 25,992.6 million, with 11.1% YoY growth on a constant
currency basis. Over the same period, our Uzbek portfolio increased by 105.0%,
or 112.9% on a constant currency basis.
In thousands of GEL Jun'25 Jun'24 Change YoY
Gross loans and advances to customers
Georgian financial services ("Georgia FS")* 25,992,620 23,378,409 11.2%
Retail Georgia 9,124,930 8,137,555 12.1%
CIB Georgia 10,491,098 9,082,113 15.5%
MSME Georgia 5,902,254 5,778,382 2.1%
Uzbekistan 2,463,960 1,201,673 105.0%
Total gross loans and advances to customers** 28,469,934 24,611,372 15.7%
Gross loans include finance lease receivables only on Georgia FS, Uzbekistan
and Group levels
* Georgia FS includes sub-segment eliminations
** Total gross loans and advances to customers include Azerbaijan
1H'25 1H'24 Change YoY
Loan yields 14.3% 12.9% 1.4 pp
GEL 14.4% 14.0% 0.4 pp
FC 8.8% 8.9% -0.1 pp
UZS 43.5% 43.6% -0.1 pp
Georgia FS 11.8% 11.5% 0.3 pp
GEL 14.4% 14.0% 0.4 pp
FC 8.8% 8.8% 0.0 pp
Uzbekistan 43.5% 43.6% -0.1 pp
UZS 43.5% 43.6% -0.1 pp
Total loan yields* 14.3% 12.9% 1.4 pp
Loan yields include finance lease receivables only on Georgia FS, Uzbekistan
and Group levels
* Total loan yields include Azerbaijan
Loan portfolio quality
PAR 90 Jun'25 Jun'24 Change YoY
Georgia FS* 1.5% 1.4% 0.1 pp
Retail Georgia 0.8% 0.7% 0.1 pp
CIB Georgia 1.2% 0.9% 0.3 pp
MSME Georgia 2.8% 2.9% -0.1 pp
Uzbekistan 3.9% 2.5% 1.4 pp
Total PAR 90** 1.7% 1.5% 0.2 pp
PAR 90 include finance lease receivables only on Georgia FS, Uzbekistan and
Group levels
* Georgia FS includes sub-segment eliminations
** Total PAR 90 includes Azerbaijan
In thousands of GEL Jun'25 Jun'24 Change YoY
Non-performing Loans ("NPL")
Georgia FS* 613,751 485,015 26.5%
Retail Georgia 147,242 112,924 30.4%
CIB Georgia 157,590 137,804 14.4%
MSME Georgia 281,300 211,772 32.8%
Uzbekistan 101,170 29,786 239.7%
Total non-performing loans** 717,615 516,009 39.1%
Non-performing loans include finance lease receivables only on Georgia FS,
Uzbekistan and Group levels
*Georgia FS includes sub-segment eliminations
** Total non-performing loans include Azerbaijan
NPL to gross loans Jun'25 Jun'24 Change YoY
Georgia FS* 2.4% 2.1% 0.3 pp
Retail Georgia 1.6% 1.4% 0.2 pp
CIB Georgia 1.5% 1.5% 0.0 pp
MSME Georgia 4.8% 3.7% 1.1 pp
Uzbekistan 4.1% 2.5% 1.6 pp
Total NPL to gross loans** 2.5% 2.1% 0.4 pp
Non-performing loans include finance lease receivables only on Georgia FS,
Uzbekistan and Group levels
*Georgia FS includes sub-segment eliminations
** Total NPL to gross loans include Azerbaijan
Jun'25 Jun'24
NPL Coverage Provision Coverage Total Coverage** Provision Coverage Total Coverage**
Georgia FS* 62.6% 137.3% 67.0% 138.0%
Retail Georgia 129.5% 181.7% 133.1% 195.6%
CIB Georgia 43.3% 113.8% 44.1% 108.8%
MSME Georgia 40.7% 124.9% 49.2% 127.2%
Uzbekistan 169.7% 169.7% 191.3% 191.3%
Total NPL coverage** 78.2% 142.4% 74.6% 141.6%
Non-performing loans include finance lease receivables only on Georgia FS,
Uzbekistan and Group levels
*Georgia FS includes sub-segment eliminations
** Total NPL coverage includes Azerbaijan
Cost of risk ("CoR") 1H'25 1H'24 Change YoY
Georgia FS* 0.8% 0.5% 0.3 pp
Retail Georgia 1.6% 0.8% 0.8 pp
CIB Georgia 0.2% 0.1% 0.1 pp
MSME Georgia 0.6% 0.6% 0.0 pp
Uzbekistan 10.2% 5.6% 4.6 pp
Total cost of risk** 1.5% 0.7% 0.8 pp
Cost of risk include finance lease receivables only on Georgia FS, Uzbekistan
and Group levels
*Georgia FS includes sub-segment eliminations
** Total cost of risk includes Azerbaijan
Deposit portfolio
As of 30 June 2025, deposit portfolio reached GEL 23,921.7 million, up by
11.4% YoY, or up by 12.5% YoY on a constant currency basis.
By the end of June 2025, our customer deposit portfolio in Georgia (excluding
MOF) reached GEL 22,030.9 million, up by 9.6% YoY, or up by 10.5% YoY on a
constant currency basis. Meanwhile, our Uzbekistan deposit portfolio increased
by 85.7% YoY, or up by 92.8% YoY on a constant currency basis.
In thousands of GEL Jun'25 Jun'24 Change YoY
Customer accounts
Georgia FS* 22,646,812 20,867,540 8.5%
Retail Georgia 8,719,633 7,830,406 11.4%
CIB Georgia 11,521,115 10,417,043 10.6%
MSME Georgia 1,951,125 1,960,795 -0.5%
MOF 615,889 765,096 -19.5%
Uzbekistan 1,340,365 721,632 85.7%
Total customer accounts** 23,921,726 21,464,578 11.4%
* Georgian FS includes sub-segment eliminations
** Total customer accounts are adjusted for eliminations
1H'25 1H'24 Change YoY
Deposit rates 5.7% 5.3% 0.4 pp
GEL 7.9% 7.8% 0.1 pp
FC 1.9% 1.3% 0.6 pp
UZS 24.9% 25.2% -0.3 pp
Georgian financial services 4.6% 4.7% -0.1 pp
GEL 7.9% 7.8% 0.1 pp
FC 1.9% 1.3% 0.6 pp
Uzbek business 24.7% 25.1% -0.4 pp
UZS 24.9% 25.2% -0.3 pp
FC 4.2% 2.9% 1.3 pp
Total deposit rates* 5.7% 5.3% 0.4 pp
* Total deposits rates include MOF deposits
Additional information
1) Financial disclosures by business lines
Business line definitions
The operating segments are defined as follows:
· Georgian financial services ("Georgia FS") - include JSC TBC Bank with
its Georgian subsidiaries and JSC TBC Insurance with its subsidiary. The
Georgia financial service segment consists of three major business
sub-segments, while the treasury, leasing and insurance businesses are
combined into the corporate and other sub-segments:
o Corporate and investment banking ("CIB") - a legal entity/group of
affiliated entities with an annual revenue exceeding GEL 20 million or which
has been granted facilities of more than GEL 7.5 million. Some other business
customers may also be assigned to the CIB segment or transferred to the micro,
small and medium enterprises segment on a discretionary basis. In addition,
CIB includes Wealth Management private banking services to high-net-worth
individuals with a threshold of USD 250,000 on assets under management (AUM),
as well as on discretionary basis;
o Retail - non-business individual customers;
o Micro, small and medium enterprises ("MSME") - business customers who are
not included in the CIB sub-segment.
· Uzbekistan - TBC Bank Uzbekistan with respective subsidiaries and Payme
(Inspired LLC).
· Other - includes non-material (including wholly owned subsidiary in
Azerbaijan, TBC Kredit) or non-financial subsidiaries of the Group, and
intra-group eliminations.
Georgian financial services
Profit and loss statement
In thousands of GEL 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ 1H'25 1H'24 Change YoY
Interest income 885,549 845,776 752,671 17.7% 4.7% 1,731,325 1,489,504 16.2%
Interest expense (434,459) (436,673) (364,481) 19.2% -0.5% (871,132) (715,646) 21.7%
Net interest income 451,090 409,103 388,190 16.2% 10.3% 860,193 773,858 11.2%
Fee and commission income 195,794 172,187 164,483 19.0% 13.7% 367,981 312,975 17.6%
Fee and commission expense (81,838) (65,599) (66,562) 23.0% 24.8% (147,437) (133,811) 10.2%
Net fee and commission income 113,956 106,588 97,921 16.4% 6.9% 220,544 179,164 23.1%
Net insurance income 13,827 8,945 9,290 48.8% 54.6% 22,772 17,266 31.9%
Net gains from currency derivatives, foreign currency operations and 81,034 84,090 88,170 -8.1% -3.6% 165,124 152,799 8.1%
translation
Other operating income 4,949 5,520 1,917 NMF -10.3% 10,469 3,469 NMF
Share of profit of associates 300 139 146 NMF NMF 439 105 NMF
Other operating non-interest income 100,110 98,694 99,523 0.6% 1.4% 198,804 173,639 14.5%
Credit loss allowance for loans to customers (54,993) (47,954) (14,103) NMF 14.7% (102,947) (50,928) NMF
Credit loss allowance for other financial items and net impairment for (6,476) (5,359) (2,792) NMF 20.8% (11,835) (3,382) NMF
non-financial assets
Operating income after expected credit and non-financial asset impairment 603,687 561,072 568,739 6.1% 7.6% 1,164,759 1,072,351 8.6%
losses
Staff costs (124,069) (105,795) (105,855) 17.2% 17.3% (229,864) (207,095) 11.0%
Depreciation and amortisation (32,325) (31,267) (30,013) 7.7% 3.4% (63,592) (59,278) 7.3%
Administrative and other operating expenses (65,217) (58,169) (51,998) 25.4% 12.1% (123,386) (96,762) 27.5%
Operating expenses (221,611) (195,231) (187,866) 18.0% 13.5% (416,842) (363,135) 14.8%
Net profit before tax 382,076 365,841 380,873 0.3% 4.4% 747,917 709,216 5.5%
Income tax expense (49,973) (48,201) (57,166) -12.6% 3.7% (98,174) (100,870) -2.7%
Net profit 332,103 317,640 323,707 2.6% 4.6% 649,743 608,346 6.8%
Balance sheet highlights
In thousands of GEL Jun'25 Mar'25 Jun'24 Change YoY Change QoQ
Cash & NBG mandatory reserves 5,601,764 5,598,657 5,000,618 12.0% 0.1%
Due from other banks 104,170 49,449 20,708 NMF NMF
Loans and advances to customers 25,608,360 24,825,243 23,053,614 11.1% 3.2%
Investment securities measured at fair value through OCI 5,000,111 4,702,153 4,110,036 21.7% 6.3%
Intangible assets and Goodwill 458,834 443,665 406,942 12.8% 3.4%
Other assets 1,825,283 1,758,688 1,491,030 22.4% 3.8%
TOTAL ASSETS 38,598,522 37,377,855 34,082,948 13.2% 3.3%
Due to credit institutions 6,646,158 7,243,202 4,675,711 42.1% -8.2%
Customer accounts 22,646,812 21,355,609 20,867,540 8.5% 6.0%
Subordinated debt and debt securities in issue 2,291,411 2,311,275 2,682,703 -14.6% -0.9%
Other liabilities 1,389,607 937,265 902,091 54.0% 48.3%
TOTAL LIABILITIES 32,973,988 31,847,351 29,128,045 13.2% 3.5%
Equity attributable to shareholders 5,624,237 5,530,226 4,954,687 13.5% 1.7%
Non-controlling interest 297 278 216 37.5% 6.8%
TOTAL EQUITY 5,624,534 5,530,504 4,954,903 13.5% 1.7%
TOTAL LIABILITIES AND EQUITY 38,598,522 37,377,855 34,082,948 13.2% 3.3%
Key ratios
Georgian financial services 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ 1H'25 1H'24 Change YoY
Profitability ratios:
ROE(1) 23.9% 23.3% 26.9% -3.0 pp 0.6 pp 23.6% 25.4% -1.8 pp
ROA(2) 3.5% 3.4% 3.9% -0.4 pp 0.1 pp 3.5% 3.8% -0.3 pp
Cost to income(3) 33.3% 31.8% 32.1% 1.2 pp 1.5 pp 32.6% 32.2% 0.4 pp
NIM(4) 5.9% 5.5% 5.6% 0.3 pp 0.4 pp 5.7% 5.7% 0.0 pp
Loan yields(5) 11.9% 11.6% 11.3% 0.6 pp 0.3 pp 11.8% 11.5% 0.3 pp
Deposit rates(6) 4.6% 4.7% 4.6% 0.0 pp -0.1 pp 4.6% 4.7% -0.1 pp
Cost of funding(7) 5.6% 5.6% 5.4% 0.2 pp 0.0 pp 5.6% 5.4% 0.2 pp
Asset quality & portfolio concentration:
Cost of risk(8) 0.8% 0.8% 0.3% 0.5 pp 0.0 pp 0.8% 0.5% 0.3 pp
PAR 90 to gross loans(9) 1.5% 1.5% 1.4% 0.1 pp 0.0 pp 1.5% 1.4% 0.1 pp
NPLs to gross loans(10) 2.4% 2.4% 2.1% 0.3 pp 0.0 pp 2.4% 2.1% 0.3 pp
NPL provision coverage(11) 62.6% 59.5% 67.0% -4.4 pp 3.1 pp 62.6% 67.0% -4.4 pp
Total NPL coverage(12) 137.3% 134.1% 138.0% -0.7 pp 3.2 pp 137.3% 138.0% -0.7 pp
For the ratio definitions and exchange rates, please refer to appendix 3.
Uzbekistan business 3 (#_ftn3)
Profit and loss statement
In thousands of GEL 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ 1H'25 1H'24 Change YoY
Interest income 258,522 224,843 123,740 108.9% 15.0% 483,365 225,064 114.8%
Interest expense (123,268) (101,576) (56,729) 117.3% 21.4% (224,844) (103,757) 116.7%
Net interest income 135,254 123,267 67,011 101.8% 9.7% 258,521 121,307 113.1%
Fee and commission income 60,066 56,362 34,861 72.3% 6.6% 116,428 62,934 85.0%
Fee and commission expense (22,028) (18,326) (10,771) 104.5% 20.2% (40,354) (18,670) 116.1%
Net fee and commission income 38,038 38,036 24,090 57.9% 0.0% 76,074 44,264 71.9%
Net insurance income 413 - - NMF NMF 413 - NMF
Net gains from currency derivatives, foreign currency operations and (3,952) (266) (30) NMF NMF (4,218) (456) NMF
translation
Other operating income 12 14 10 20.0% -14.3% 26 11 136.4%
Other operating non-interest expense (3,527) (252) (20) NMF NMF (3,779) (445) NMF
Credit loss allowance for loans to customers (50,067) (58,514) (14,050) 256.3% -14.4% (108,581) (25,803) NMF
Credit loss allowance for other financial items and net impairment for (7,352) (5,705) (1,029) NMF 28.9% (13,057) (1,552) NMF
non-financial assets
Operating income after expected credit and non-financial asset impairment 112,346 96,832 76,002 47.8% 16.0% 209,178 137,771 51.8%
losses
Staff costs (25,943) (23,104) (15,028) 72.6% 12.3% (49,047) (28,002) 75.2%
Depreciation and amortisation (5,722) (4,674) (3,153) 81.5% 22.4% (10,396) (5,912) 75.8%
Administrative and other operating expenses (42,427) (46,182) (30,181) 40.6% -8.1% (88,609) (54,816) 61.6%
Operating expenses (74,092) (73,960) (48,362) 53.2% 0.2% (148,052) (88,730) 66.9%
Net profit before tax 38,254 22,872 27,640 38.4% 67.3% 61,126 49,041 24.6%
Income tax expense (5,925) (1,311) (3,861) 53.5% NMF (7,236) (6,825) 6.0%
Net profit 32,329 21,561 23,779 36.0% 49.9% 53,890 42,216 27.7%
Balance sheet highlights
In thousands of GEL Jun'25 Mar'25 Jun'24 Change YoY Change QoQ
Cash & CBU mandatory reserves 355,575 245,519 207,848 71.1% 44.8%
Due from other banks 6,936 2,996 - NMF 131.5%
Loans and advances to customers 2,292,297 2,018,553 1,144,689 100.3% 13.6%
Intangible assets and Goodwill 113,634 93,461 60,633 87.4% 21.6%
Other assets 462,985 365,683 153,296 202.0% 26.6%
TOTAL ASSETS 3,231,427 2,726,212 1,566,466 106.3% 18.5%
Due to credit institutions 1,055,440 683,532 331,137 218.7% 54.4%
Customer accounts 1,340,365 1,218,048 721,632 85.7% 10.0%
Subordinated debt and debt securities in issue 37,084 37,878 46,869 -20.9% -2.1%
Other liabilities 128,806 153,384 78,852 63.4% -16.0%
TOTAL LIABILITIES 2,561,695 2,092,842 1,178,490 117.4% 22.4%
Equity attributable to shareholders 669,732 633,370 387,976 72.6% 5.7%
TOTQL EQUITY 669,732 633,370 387,976 72.6% 5.7%
TOTAL LIABILITIES AND EQUITY 3,231,427 2,726,212 1,566,466 106.3% 18.5%
Key ratios
Uzbekistan 2Q'25 1Q'25 2Q'24 Change YoY Change QoQ 1H'25 1H'24 Change YoY
Profitability ratios:
ROE(1) 20.0% 13.7% 27.8% -7.8 pp 6.3 pp 16.9% 25.7% -8.8 pp
ROA(2) 4.4% 3.5% 6.9% -2.5 pp 0.9 pp 4.0% 6.7% -2.7 pp
Cost to income(3) 43.6% 45.9% 53.1% -9.5 pp -2.3 pp 44.8% 53.7% -8.9 pp
NIM(4) 22.9% 24.7% 24.4% -1.5 pp -1.8 pp 23.7% 24.0% -0.3 pp
Loan yields(5) 42.7% 44.2% 44.1% -1.4 pp -1.5 pp 43.5% 43.6% -0.1 pp
Deposit rates(6) 24.8% 24.5% 24.8% 0.0 pp 0.3 pp 24.7% 25.1% -0.4 pp
Cost of funding(7) 22.9% 23.3% 23.1% -0.2 pp -0.4 pp 23.1% 23.6% -0.5 pp
Asset quality & portfolio concentration:
Cost of risk(8) 9.9% 9.3% 5.7% 4.2 pp 0.6 pp 10.2% 5.6% 4.6 pp
PAR 90 to gross loans(9) 3.9% 2.1% 2.5% 1.4 pp 1.8 pp 3.9% 2.5% 1.4 pp
NPLs to gross loans(10) 4.1% 3.2% 2.5% 1.6 pp 0.9 pp 4.1% 2.5% 1.6 pp
NPL provision coverage(11) 169.7% 192.6% 191.3% -21.6 pp -22.9 pp 169.7% 191.3% -21.6 pp
Total NPL coverage(12) 169.7% 192.6% 191.3% -21.6 pp -22.9 pp 169.7% 191.3% -21.6 pp
For the ratio definitions and exchange rates, please refer to appendix 3.
2) Glossary
Terminology Definition
ADB Asian Development Bank
BVPS Book value per share
CBU Central Bank of Uzbekistan
Consumer loans Unsecured loans to individuals
Digital daily active users (Digital DAU) The number of retail digital users who logged into our digital channels at
least once per day
Digital monthly active users The number of retail digital users who logged into our digital channels at
(Digital MAU) least once a month
EPS Earnings per share
FC Foreign currency
Gross/net loans Includes gross/net loans and advances to customers and gross/net finance lease
receivables
IMF International Monetary Fund
Monthly active customers (MAC) For Georgian business, an individual user who has at least one active product
as of the reporting date or performed at least one transaction during the past
month. For Uzbekistan business, an individual user who logged into the digital
application at least once during the month
NBG National Bank of Georgia
NMF No Meaningful Figure
3) Ratio definitions and exchange rates
Ratio definitions
1. Return on average total equity (ROE) equals profit attributable to owners
divided by the monthly average of total shareholders' equity attributable to
the PLC's equity holders for the same period; annualised where applicable.
2. Return on average total assets (ROA) equals profit of the period divided by
monthly average total assets for the same period; 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. Net interest margin (NIM) is net interest income divided by monthly average
interest-earning assets; annualised where applicable. Interest-earning assets
include investment securities (excluding CIB shares), net investment in
finance lease, net loans, and amounts due from credit institutions.
5. Loan yields equal interest income on loans and advances to customers
divided by monthly average gross loans and advances to customers; annualised
where applicable.
6. Deposit rates equal interest expense on customer accounts divided by
monthly average total customer deposits; annualised where applicable.
7. Cost of funding equals sum of the total interest expense and net interest
gains on currency swaps (entered for funding management purposes), divided by
monthly average interest-bearing liabilities; annualised where applicable.
8. Cost of risk equals credit loss allowance for loans to customers divided by
monthly average gross loans and advances to customers; annualised where
applicable.
9. PAR 90 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.
10. NPLs to gross loans equals loans with 90 days past due on principal or
interest payments, and loans with a well-defined weakness, regardless of the
existence of any past-due amount or of the number of days past due divided by
the gross loan portfolio for the same period.
11. NPL provision coverage equals total credit loss allowance for loans to
customers divided by the NPL loans.
12. Total NPL coverage equals total credit loss allowance plus the minimum of
collateral amount of the respective NPL loan (after applying haircuts in the
range of 0%-50% for cash, gold, real estate and PPE) and its gross loan
exposure divided by the gross exposure of total NPL loans.
13. Credit loss level to gross loans equals credit loss allowance for loans to
customers divided by the gross loan portfolio for the same period.
14. Related party loans to total loans equals related party loans divided by
the gross loan portfolio.
15. Top 10 borrowers to total portfolio equals the total loan amount of the
top 10 borrowers divided by the gross loan portfolio.
16. Top 20 borrowers to total portfolio equals the total loan amount of the
top 20 borrowers divided by the gross loan portfolio.
17. Net loans to deposits plus IFI funding ratio equals net loans divided by
total deposits plus borrowings received from international financial
institutions.
18. Leverage equals total assets to total equity.
19. Net stable funding ratio equals the available amount of stable funding
divided by the required amount of stable funding as defined by NBG in line
with Basel III guidelines. Calculations are made for TBC Bank standalone.
20. Liquidity coverage ratio equals high-quality liquid assets divided by the
total net cash outflow amount as defined by the NBG. Calculations are made for
TBC Bank standalone.
21. CET 1 CAR equals CET 1 capital divided by total risk weighted assets, both
calculated in accordance with requirements of the NBG Basel III standards.
Calculations are made for TBC Bank standalone.
22. Tier 1 CAR equals tier I capital divided by total risk weighted assets,
both calculated in accordance with the requirements of the NBG Basel III
standards. Calculations are made for TBC Bank standalone.
23. Total CAR equals total capital divided by total risk weighted assets, both
calculated in accordance with the requirements of the NBG Basel III standards.
Calculations are made for TBC Bank standalone.
24. CET 1 CAR equals CET 1 capital divided by total risk weighted assets, both
calculated in accordance with requirements of the CBU in national accounting
standards. Calculations are made for TBC UZ Bank standalone.
25. Tier 1 CAR equals tier I capital divided by total risk weighted assets,
both calculated in accordance with the requirements of the CBU in national
accounting standards. Calculations are made for TBC UZ Bank standalone.
26. Total CAR equals total capital divided by total risk weighted assets, both
calculated in accordance with the requirements of the CBU in national
accounting standards. Calculations are made for TBC UZ Bank standalone.
Exchange rates
To calculate the QoQ growth of the balance sheet items without the currency
exchange rate effect, we used the USD/GEL exchange rate of 2.7673 as of 31
March 2025. To calculate the YoY growth without the currency exchange rate
effect, we used the USD/GEL exchange rate of 2.8101 as of 30 June 2024 . As of
30 June 2025, the USD/GEL exchange rate equalled 2.7236. For P&L items
growth calculations without the currency effect, we used the average USD/GEL
exchange rate for the following periods: 1Q 2025 of 2.8137 and 2Q 2024 of
2.7396. As of 2Q 2025, the USD/GEL exchange rate equalled 2.7418, 1H 2025 of
2.7776, 1H 2024 of 2.7054.
Risk management
Overview
The Group operates a strong, independent, business-minded risk management
framework. Its main objective is to safeguard the long-term earnings capacity
of the balance sheet on the basis of risk-adjusted returns. This objective is
achieved through the implementation of an effective risk management framework.
The Group has adopted four primary risk management principles to better
accomplish its major objectives:
• Govern risks transparently to ensure clear understanding of
risk landscape, cross-functional alignment in risk management practices, and
stakeholder trust. Transparency and consistency in risk-related processes and
policies form the foundation for effective risk management and reinforcement
of stakeholder trust. Communicating risk goals and strategic priorities to
governing bodies and providing a comprehensive follow-up in an accountable
manner are key priorities for the staff responsible for risk management;
• Manage risks prudently to promote long-term earnings growth
and resilience. Risk management balances strategic risk-taking for earnings
growth with robust safeguards against market disruptions, enabling the Group
to pursue opportunities while withstanding stress events;
• Ensure that risk management underpins the implementation of
strategy. The risk management function is embedded throughout the organisation
to support achievement of strategic objectives. It promotes identification and
management of risks at all levels. The risk management function provides a
framework under which stakeholders are empowered to make risk-based decisions
by identifying, quantifying, and adequately pricing risks. It also creates the
conditions for formulating risk mitigation actions, thus supporting the
long-term generation of desired returns and the achievement of planned
targets;
• Use risk management to gain a competitive advantage. Providing
tools for faster decision-making and supporting business operations, ensuring
the long-term earnings growth and resilience of the business model,
establishes risk management as a core component of the Group's competitive
strategy.
Risk management framework
The Group employs a comprehensive, enterprise-wide Risk Management Framework,
placing a strong emphasis on cultivating a robust risk culture throughout the
organisation. This framework is strategically designed to ensure that
effective governance capabilities and methodologies are in place, facilitating
sound risk management and informed decision-making.
Aligned with the Group's overarching strategic objectives, the Risk Management
Framework establishes standards and objectives while delineating roles and
responsibilities. The Group's principal risks, as detailed in this section,
are systematically controlled and managed within the framework, promoting
consistency across the organisation and its subsidiaries.
Led by the Chief Risk Officer and developed by the Group's independent Risk
function, the framework undergoes an annual review and approval process by the
Board. It encompasses risk governance through the Group's "three lines of
defence" operating model.
The Group's risk appetite, supported by a robust set of principles, policies,
and practices, defines the acceptable levels of tolerance for various risks.
This structured approach guides risk-taking within established boundaries,
ensuring a proactive and disciplined risk management stance.
The Group operates under the principle that all teams share responsibility for
managing risk, with a particular emphasis on those facing the client. However,
the Risk function assumes a crucial role in overseeing and monitoring risk
management activities. This includes development of the framework and ensuring
adherence to supporting policies, standards, and operational procedures. The
Chief Risk Officer regularly reports to the Board Risk Committee on the
Group's risk profile, performance, and the effectiveness of the Group's
internal control system.
Moreover, the Group has instituted a rigorous process to identify and manage
material and emerging threats. These threats, which are deemed to potentially
adversely affect the Group's ability to meet its strategic objectives, are
regularly reported to the Board. The Group's applied, comprehensive approach
considers the interdependence of material and emerging threats, enhancing the
overall risk intelligence provided to stakeholders.
Governance
The Group's risk governance structure is crafted to ensure robust oversight
and strategic decision-making within risk management. At its core,
risk-focused committees and risk functions assume pivotal roles in
orchestrating effective risk management practices within the Group as a whole
and its individual subsidiaries.
At the Supervisory Board level, while the boards are responsible for
overseeing risk management, in some instances activities within risk
management and control are delegated to risk-focused committees for effective
handling. These committees' responsibilities encompass aligning risk practices
with strategic goals, setting the risk appetite, discussing and approving risk
policies, fostering a culture of responsible risk-taking, and monitoring risk
identification and assessment processes. The committees are tasked with
overseeing regular assessments of emerging and principal risks that could
impact the business model, performance, solvency, and liquidity. Their
leadership is critical for effective risk management and the long-term
viability of the Group.
At the Management Board level, committees assume a crucial role in steering
effective risk management within TBC's subsidiaries. Whether through a single
risk committee or multiple committees with more granular scopes (e.g.
financial risks, reputational risk, or information security), their
responsibilities include closely overseeing risk exposures and making key
decisions on risk mitigation and control. While specific duties may differ,
the overall mission remains consistent: aligning risk management practices
with regulatory requirements and risk tolerance. In cases where smaller-scale
Group companies do not have their own risk committees, the Management Board
itself assumes these responsibilities.
Risk culture and the three lines of defence
At the core of the Group's Risk Management Framework and practices is a robust
risk culture that underscores the institution's commitment to prudent and
strategic risk-taking. The Group expects its leaders to demonstrate strong
risk management behaviour, providing clarity on the desired level of risk
taking, developing their respective capabilities and frameworks, and
motivating employees to ensure risk-minded decision making.
The key principles governing risk culture across all the Group's subsidiaries
include: Board leadership (the Board sets the tone and establishes a
foundation for a risk-aware culture throughout the organisation); employee
understanding and accountability (the Group ensures that employees at every
level understand the institution's approach to risk, with a clear
understanding that individuals are accountable for their actions concerning
risk-taking behaviours aligned with the Group's standards); communication
(open, transparent, and effective communication is fundamental to the Group's
risk culture); and remuneration incentives (the Group reinforces its risk
culture by aligning remuneration incentives with sound risk management
practices).
This holistic approach to risk culture ensures that the Group and its
subsidiaries are equipped with a resilient and proactive mindset, where risk
management is ingrained in the organisational DNA.
To comprehensively manage risks, the Group ensures adherence to the three
lines of defence model:
· First Line of Defence: Business lines, as frontline defenders,
engage in risk-taking activities with awareness of their impact on risks that
may contribute to or hinder the achievement of the Group's objectives. A well
established risk culture is fundamental to risk-taking decisions.
· Second Line of Defence: Risk management functions ensure
effective risk management and controls by consolidating expertise,
identifying, measuring, and monitoring risks, and assisting the first line.
They act independently from the business lines and provide frameworks and
tools for effective risk management.
· Third Line of Defence: The internal audit function provides
assurance to the Board of Directors that the risk management and control
efforts of both the first and second lines of defence meet the expectations
set by the Board of Directors.
Risk appetite
Risk appetite is defined as the set of acceptable limits that shape the
combined level of risk that the Group or its key subsidiaries are prepared to
accept in pursuit of return and value creation consistent with the approved
strategy. The Group's Risk Appetite Framework, which governs enterprise risk
management, establishes the extent and process of permissible risk-taking to
guide the Group's business outcomes.
Considering the ever-changing risk profile of the Group, the Risk Appetite
Frameworks of the Group and its key subsidiaries are regularly reviewed,
updated, and approved by the Board to make sure that they remain aligned with
the Group's desired level of risk-taking.
Risk identification
The identification of risks serves as the foundational step in the Group's
risk management process. This process systematically recognises and documents
any potential direct or indirect risks that could impact the achievement of
organisational objectives. To ensure comprehensive, anticipatory
identification of these risks, this process leverages input both from the
Group's lines of defence within the organisation and from external
stakeholders.
The risk identification process within the Group is governed by the Risk
Registry Framework. Regular reviews and adjustments of the Risk Registry are
undertaken to ensure its consistent relevance and effectiveness.
Risk measurement
The Group places significant emphasis on a comprehensive approach to risk
measurement, aligning with its commitment to proactive risk management
practices. Each identified risk direction is accompanied by tools for
quantitative and qualitative measurement. The process is dynamic, continuously
adapting to changes in the financial landscape and regulatory environment.
Regular reviews and assessments ensure the effectiveness of the risk
measurement tools and methodologies.
Risk mitigation
Risk mitigation is a proactive approach aimed at minimising the potential
negative consequences of risks. To proactively approach every material risk,
the Group develops and implements harmonised risk policies and frameworks,
which play a key role by:
· Setting standards and guidelines - risk policies outline the
standards and guidelines for how risks should be managed within the
organisation and provide a structured approach to addressing risks, ensuring
consistency and compliance with regulatory and internal requirements.
· Defining roles and responsibilities - risk policies clarify the
roles and responsibilities of different individuals and departments in the
risk mitigation process.
· Establishing procedures - risk policies provide a guiding
framework for developing procedures for risk mitigation activities.
All policies are subject to regular reviews and updates to adapt to new
challenges and refine its risk management strategies over time.
Risk monitoring and reporting
Risk reporting is a cornerstone of the Group's robust Risk Management
Framework. The Group and its subsidiaries are mandated to establish robust
risk reporting processes. These processes are designed to regularly
communicate material risk exposures and the overall risk profile to the
Supervisory and Management Boards and to senior management.
Regular monitoring is essential to ensure compliance with the established risk
appetite and regulatory limits. It serves as a proactive measure to observe
the evolution of the prevailing risk environment. The Group emphasises a
structured approach to risk reporting, including monitoring, to effectively
capture, assess, and communicate risks. This ensures the provision of clear
and timely information, fostering accountability among stakeholders in
managing and addressing risks.
In addition to routine reporting, ad-hoc reporting can be triggered by key
vulnerabilities, significant risk identification, or deviations from the
targeted risk profile. This agile approach ensures that the risk reporting
mechanism remains responsive to emerging risks and evolving circumstances.
Internal control
TBC Group has established its streamlined Integrated Control Assurance
Framework, seamlessly aligning its risk, control, compliance, and internal
audit functions for integrity, efficiency, and regulatory compliance. This
comprehensive framework ensures meticulous adherence to policies and
procedures, catering to the diverse needs of our products and services. It
also enables an integrated, unified repository of audit findings and
risk-related insights generated from our first, second, and third lines of
defence and our regulatory and legal functions, reflecting our commitment to
transparency and accountability.
The Internal Control Framework extends to the evaluation, testing, and
follow-up of high and critical-risk processes, while simultaneously focusing
on enhancing risk awareness and refining internal controls. Continuous
monitoring and improvement initiatives are integral components of the
framework, enhancing operational effectiveness. This approach fosters a
culture of internal control, showcasing our dedication to excellence in
managing internal controls and risks.
Stress testing and contingency planning
It is essential for the Group to examine its financial performance under
conditions that diverge from baseline expectations. For that reason, the Group
subjects itself to various stress scenarios in order to identify
vulnerabilities, quantify potential losses, and assess the sufficiency of its
risk mitigation measures. Currently, JSC TBC Bank has established its own
comprehensive stress testing framework, which encompasses a range of scenarios
to assess its resilience. This includes scenarios related to capital,
liquidity, credit, cyber and other risk factors relevant to the prevailing
risk environment. Stress testing is crucial to evaluate the ability to
withstand adverse conditions, such as economic downturns, market volatility,
and unforeseen events. Regular reviews and adjustments are essential to ensure
the consistent relevance and effectiveness of the stress testing frameworks.
Stress testing procedures have also been implemented for TBC Uzbekistan,
focusing on the economic and financial environment of the market in
Uzbekistan.
The Bank regularly performs stress test exercises. Stress tests are conducted
within predefined frameworks such as ICAAP, ILAAP and Recovery Planning,
and/or on an ad-hoc basis to assess the impact of certain system-wide or
idiosyncratic events on the Bank's capital, liquidity, and financial
positions. Although the overall stress testing approach is consistent, the
severity of the stress scenarios differs according to the relevant framework.
In addition to stress testing analysis, the Recovery Plan serves as a
strategic blueprint for both the Supervisory Board and the management to
ensure its readiness for specific stress conditions. The Recovery Plan
provides clear recovery options with specific steps to be undertaken including
transparent and timely communication to internal and external stakeholders.
The framework is subject to regular reviews and adjustments to ensure its
consistent relevance and effectiveness.
The Bank also has a Business Continuity Plan in place. This plan ensures that
the organisation is prepared to respond effectively to disruptions. By
outlining strategies to maintain revenue streams and minimise financial losses
during disruptions, these practices help to safeguard the organisation's
financial stability and long-term viability.
Material existing and emerging risks
Risk management is a critical pillar of the Group's strategy. It is essential
to identify emerging risks and uncertainties that could adversely impact the
Group's performance, financial condition, and prospects. This section analyses
the material principal and emerging risks and uncertainties that the Group
faces. However, we cannot exclude the possibility of the Group's performance
being affected by risks and uncertainties other than those listed below.
The Board has undertaken a robust assessment of both the principal and
emerging risks facing the Group and the long-term viability of the Group's
operations, in order to determine whether to adopt the going concern basis of
accounting.
PRINCIPAL RISKS AND UNCERTAINTIES
SPECIFIC FOCUS IN 1H 2025
1. The Group is exposed to the potential adverse effects of internal political
tensions and uncertainty in its countries of operation.
Risk description
The Group's performance is highly vulnerable to geopolitical developments in
its two major operational markets -Georgia and Uzbekistan.
The political climate in Georgia has been strained following the parliamentary
elections on October 26(th) 2024, as opposition parties disputed the election
results, with tensions increasing after November 28th when Government
announced a temporary suspension of EU integration talks until the end of
2028. The announcement sparked protests that began in Tbilisi and spread
across the major cities of Georgia. Street demonstrations have been ongoing
for weeks, followed by interventions by law enforcement and the detention of
several protesters. Political tensions relatively lowered in the country
throughout the first half of 2025, with moderated scale of street
demonstrations, however, jail sentences for several opposition leaders and
protesters might revive the tensions, especially around local government
elections scheduled for October by the government. Against this backdrop,
Georgia's political environment continues to be influenced by evolving
international dynamics, including shifting relations with key global and
regional partners. While no direct measures affecting the broader economy or
institutions have been introduced by the U.S. or European countries, increased
scrutiny and changes in international engagement contribute to an atmosphere
of uncertainty, which remains a potential risk factor in 2025.
The most notable economic consequence of political tensions throughout 2024
was increased pressure on the GEL exchange rate. Due to election related
expectation of a depreciation in the national currency in October, the Bank's
customers began to convert a substantial part of their deposits into foreign
currencies in August 2024, as demand for national currency credit increased,
causing downward pressure on the GEL and a liquidity deficit in the market. At
the same time, while foreign currency inflows remained broadly strong
throughout the year, the National Bank of Georgia (NBG) intervened heavily in
the foreign exchange market, spending around USD 700 million in
September-October to keep the GEL stable in a range between 2.70-2.75 USD,
followed by the purchase of USD 153 million in November and December.
Political tensions peaked at the end of November when the GEL responded by
depreciating against the USD, peaking at 2.87 GEL per USD on December 4th,
while stabilising at around 2.80 at the end of the year. At the same time,
these developments created a buffer against future GEL depreciation, with
foreign currency deposits expected to be converted back to the national
currency, providing the market with foreign currency liquidity that would
support the GEL. Indeed, throughout the 1H of 2025, deposit conversions have
flattened and the trend of gradually switching back to the GEL appears to have
started. At the same time, lower imports driven by moderated spending on
durable goods, as opposed to stronger exports, have led to the improved net
currency inflows to the country. Combined with globally weakened USD, these
factors enabled the NBG to scale up USD-buying side interventions on the
market, purchasing around USD 880 million in Mar-Jun 2025, while the GEL has
appreciated by around 3.1% against the USD compared to the end of 2024, with
USD/GEL exchange rate standing at 2.72 as of June 30.
More broadly, political tensions had a negative, though rather moderate effect
on tourism and consumer spending on durable goods at the end of 2024 and in
the first months of 2025, though, recovery in both spending dynamics was
evident from March. Overall, while some signs of slowdown have appeared in
politically turbulent December, economic and credit activity remained stronger
than expected so far with only gradual moderation towards the long-term trend.
Real GDP growth averaged to a robust 8.3% in the first half of 2025, following
9.4% in 2024, 7.8% in 2023 and consecutive double-digit growth in 2021 and
2022, while total credit increased by 15.6% YoY at the end of June.
Risk mitigation
The Group implemented appropriate measures to minimise the potential negative
effect on the Bank's performance and the availability of its services to
customers. The Bank utilises a comprehensive stress testing framework and a
range of risk measurement and monitoring tools. The effect of more severe
stress assumptions is assessed as part of the annual Recovery Plan process. In
addition, the Group has specifically developed several theoretical scenarios
analysing the possible outcomes of the parliamentary elections, and designed
stress tests to calibrate the potential effects on the Bank's performance.
2. The Group's performance may be compromised by adverse developments in the
region, in particular the war in Ukraine, the possible spread of the
geopolitical crisis and/or the potential outflow of migrants from Georgia, and
further military escalation in the Middle East, which could have a material
impact on the operating environment in Georgia and Uzbekistan.
Risk description
The Group's performance is dependent on geopolitical developments in its two
major operation markets - Georgia and Uzbekistan.
Although inflows to the Georgian economy are quite diversified, the country is
still vulnerable to geopolitical and economic developments in the region.
Risks that are still tangible stemming from the Russian invasion of Ukraine
and the consequent sanctions imposed on Russia, with the resulting elevated
uncertainties, remain the major external potential threat to the Georgian
economy. The country is also exposed to renewed military conflicts in its
breakaway regions occupied by Russia, while some relatively distant conflicts,
such as the escalation in the Middle East, might affect the Georgian economy
through a stronger USD, higher oil prices, migration flows, etc.
While the migration effect is moderating, it continues to make an important
contribution to economic activity; therefore, any sizeable outflow could lead
to a deterioration in the business environment. The reverse would probably be
the case in any rapid conflict resolution scenario, which would be likely to
create positive economic spillover effects, such as strong rebound growth in
Russia and Ukraine.
Moreover, the Russian invasion of Ukraine, related economic policies, and
geopolitical uncertainties pose a risk to the business environment in
Uzbekistan, including but not limited to geopolitical tensions in Central
Asia.
The materialisation of these risks could severely hamper economic activity in
Georgia and Uzbekistan, and negatively impact the business environment and the
client and customer base of the Group.
Risk mitigation
The Group actively employs stress testing and other risk measurement and
monitoring tools to ensure that early triggers are identified and translated
into specific action plans to minimise any negative impact on the Bank's
capital adequacy, liquidity, and portfolio quality. In extreme stress cases,
where regulatory requirements may be breached, the Bank has a Recovery Plan in
place, which helps to guide the Board and the management through the process
of recovery of the capital and/or liquidity positions within a prescribed
timeframe.
3. The Group's operating region introduces financial crime risk.
Risk description
Financial crime risk encompasses money laundering, terrorist financing,
bribery and corruption, and sanctions-related risks. Sanctions risk, in
particular, has continued to escalate in recent years. As such, in the first
half of 2025, the Group maintained a strong focus on managing and enhancing
its sanctions risk control framework.
Georgia has historically maintained close business and financial ties with
both Russia and Ukraine. However, the Russian Federation's full-scale invasion
of Ukraine on 24 February 2022 triggered a robust international response,
including the imposition of extensive economic sanctions by the US, EU, UK,
and other global partners. These sanctions targeted a broad range of Russian
and Belarusian government officials, oligarchs, businesses, financial
institutions, and state-owned enterprises, along with sectoral restrictions
and export/import bans across critical industries.
Since late 2023, leading sanctioning authorities have continued to tighten and
expand restrictions, targeting Russia's military, energy, and trade sectors
through multiple packages in early 2024 and 2025. The growing complexity and
evolving scope of these measures, alongside escalating political tensions in
Georgia, have intensified scrutiny from international financial institutions
and correspondent banks. These institutions have adopted a more cautious
stance, implementing stricter requirements for transaction monitoring and
customer due diligence.
The relocation of a significant number of Russian nationals to Georgia has
further elevated sanctions risk. Given the Group's interactions with Russian
entities and individuals, there is an increased risk of exposure to sanctions
circumvention attempts.
In December 2023, the US Office of Foreign Assets Control (OFAC) issued an
executive order requiring Georgian financial institutions to apply enhanced
scrutiny to transactions involving Russian entities operating within the
Russian economy, particularly those linked to military-industrial activities.
Since then, additional sanctions packages from the EU, UK, and US have
introduced further restrictions aimed at disrupting sanctions evasion networks
and undermining support for Russia's war effort.
Domestically, the adoption of new regulatory measures by the Georgian
authorities-designed to control the re-export of restricted goods of EU/UK/US
origin to Russia and Belarus-has prompted the Group to further enhance its
sanctions controls. This includes implementing AI-driven monitoring tools and
bolstering trade surveillance systems to prevent the illicit flow of
sanctioned goods to or from restricted jurisdictions.
Political developments in Georgia during late 2024 and early 2025 have also
contributed to the evolving risk landscape. In response to rising concerns
around democratic backsliding, the US and UK imposed sanctions on several
Georgian government officials and public figures. In April 2025, a second
round of targeted measures extended to members of the judiciary. There remains
an ongoing risk of additional designations involving individuals with close
ties to the ruling political establishment, depending on how the domestic
situation unfolds.
While the Red Sea crisis has eased, emerging trade corridors such as the
Middle Corridor have gained prominence. Previously, Georgia faced risks
related to Iran-linked transshipments in its Asia-bound trade, particularly in
routes affected by US sanctions. However, these risks have diminished as trade
flows shift toward alternative pathways.
Non-compliance with the US, EU, or UK sanctions regimes could result in
significant regulatory penalties and enforcement actions by both the National
Bank of Georgia and international authorities. Beyond regulatory consequences,
the Group remains exposed to reputational risks, particularly with
correspondent banks and other critical financial partners.
Risk mitigation
The Group maintains a zero-tolerance policy towards any breach or facilitation
of breaches of UN, UK, US, and EU sanctions. We are committed to restricting
any dealings with sanctioned parties or goods and services, whether directly
or indirectly.
In line with our commitment, the Group has implemented a comprehensive
Anti-Financial Crime Policy that addresses key risk areas, including money
laundering, terrorist financing, bribery, corruption, and sanctions. This
policy applies uniformly across all Group member companies, business
activities, and employees. To ensure adherence, employees receive regular
training on financial crime risk management and are made aware of the Group's
approach and the potential consequences of non-compliance.
Our objective is to protect our customers, shareholders, and society from
financial crime and associated threats. The Group is fully committed to
complying with applicable international and domestic laws and regulations
related to financial crime, as well as relevant legislation in other countries
where Group member financial institutions operate. We strive to meet industry
best practice standards consistently.
To prevent any association with unlawful activities such as money laundering,
terrorist financing, bribery, corruption, sanctions violations, or tax
evasion, the Group has implemented internal policies, procedures, and detailed
instructions. Our Anti-Money Laundering and Counter-Terrorist Financing
(AML/CTF) compliance program includes:
· Policies and procedures to ensure compliance with AML laws and
regulations.
· Know Your Customer (KYC) and customer due diligence procedures.
· A customer acceptance policy.
· Screening against global sanctions lists of all relevant
authorities.
· Regular staff training and awareness-raising.
· Procedures for monitoring and reporting suspicious activities.
The Bank has allocated specific resources to sanctions risk management,
including:
· Acquisition of software and databases to assist in sanctions risk
mitigation.
· Engagement of external advisers to provide recommendations for
improvements.
· Conducting external audits to assess internal policies and
procedures.
· Empowering dedicated staff with the relevant knowledge.
· Establishing new arrangements within the Compliance Division,
including the addition of new human resources.
As part of the second line of defence, the Bank's Compliance Division manages
risk in accordance with the risk appetite defined by the Group and promotes a
strong risk culture throughout the organisation. The Group has implemented a
sophisticated, artificial intelligence-based AML solution to enable AML
Officers to monitor client transactions and identify suspicious behaviour.
This system utilizes data analytics and machine learning to detect anomalies,
identify organized money laundering activities, and create automated systems
for pattern recognition. The tool compiles incidents into dashboards for AML
officers to take further action. The Bank's Compliance Division continuously
works to enhance the efficiency of AI- and technology-based tools by
addressing a broader spectrum of constraints.
The Bank conducts an annual Enterprise-Wide Risk Assessment (EWRA) in line
with the approved methodology, separately evaluating the inherent risks and
control environments for Anti-Money Laundering and Counter-Terrorist Financing
(AML/CTF) and Sanctions risks. AML/CTF Risk: The final risk level was assessed
as Medium, which is lower than the Medium-High classification in the National
Risk Assessment (NRA) for the banking sector. Sanctions Risk: The final risk
level was assessed as Medium-Tending High, reflecting heightened geopolitical
concerns.
The Bank remains committed to robust financial crime compliance and continues
to reinforce the role and capacity of its AML and Sanctions Controls
Departments.
FINANCIAL RISKS
1. The majority of the Group's earnings capacity is generated via credit risk
bearing asset side elements.
Risk description
Credit risk is the greatest material risk faced by the Group, given that the
Group is principally engaged in traditional lending activities. It is the risk
of losses due to the failure of a customer or counterparty to meet their
obligations to settle outstanding amounts in accordance with agreed terms. The
Group's customers include legal entities as well as individual borrowers. Due
to the high level of dollarisation in Georgia's financial sector,
currency-induced credit risk is a component of credit risk, which relates to
risks arising from foreign currency-denominated loans to unhedged borrowers in
the Group's portfolio. Credit risk also includes concentration risk, which is
the risk related to credit portfolio quality deterioration as a result of
large exposures to single borrowers or groups of connected borrowers, or loan
concentration in certain economic industries. Losses incurred due to credit
risk may be further aggravated by unfavourable macroeconomic conditions.
Currency-induced credit risk (CICR) - While the Group's banking business in
Uzbekistan is focused on lending in the local currency, the banking business
in Georgia has a significant credit portfolio in foreign currencies. A
potential material GEL depreciation is one of the most significant risks that
could negatively impact credit portfolio quality. As of 30 June 2025, 51.7% of
the Group's total gross loans and advances to customers (before provision for
loan impairment) was denominated in foreign currencies. The income of many
customers is directly linked to foreign currencies via remittances, tourism,
or exports. Nevertheless, customers may not be protected against significant
fluctuations in the GEL exchange rate against the currency of the loan. The
GEL remains in free float and is exposed to a range of internal and external
factors that, in some circumstances, could lead to its depreciation. In the
first half of 2025, the average USD/GEL currency exchange rate depreciated by
1.5% year-on-year.
Concentration risk - Although the Group is exposed to single-name and sectoral
concentration risks, the Group's portfolio is well diversified both across
sectors and single-name borrowers, resulting in only a moderate vulnerability
to concentration risks. However, should exposure to common risk drivers
increase, the risks are expected to amplify accordingly. At a consolidated
level, the Group's maximum exposure to the single largest industry (real
estate) stood at 11% of the loan portfolio as of 30 June 2025. At the same
time, exposure to the 20 largest borrowers stood at 7.8% of the loan
portfolio.
In addition, credit risk also includes counterparty credit risk, as the Group
engages in various financial transactions with both banking and non-banking
financial institutions. Through performing banking services such as lending in
the interbank money market, settling a transaction in the interbank foreign
exchange market, entering into interbank transactions related to trade
finance, or investing in securities, the Group is exposed to the risk of
losses due to the failure of a counterparty bank to meet its obligations.
Risk mitigation
A comprehensive Credit Risk Assessment Framework is in place with a clear
division of duties among the parties involved in the credit analysis and
approval process. The credit assessment and monitoring processes differ by
segment and product type to reflect the diverse nature of these asset classes.
The Group's credit portfolio is highly diversified across customer types,
product types, and industry segments, which minimises credit risk at the Group
level. As of 30 June 2025, the GFS (Georgian Financial Services) accounted
91.3% of total portfolio, with retail segment comprising 35.1%. Within the
retail segment, mortgage and non-mortgage exposures amounted 56.5% and 43.5%
respectively.
Credit approval
The Group focuses on robust credit-granting by establishing clear lending
criteria and efficient credit risk assessment processes, including CICR and
concentration risk.
Credit assessments vary by segment and product, reflecting the characteristics
of the different asset classes. Decisions are either automated or manually
assessed, following segment-specific guidelines. Automated decisions use
internal credit risk scorecards, aiming for increased automation to enhance
decision speed and competitive advantage. For loans needing manual review or
unsuited to automation, credit committees decide, based on the client's
indebtedness and risk profile, in legal compliance. These committees,
structured in multiple tiers, review and approve loans, differing by size and
risk of the credit product.
To address the CICR, the client's ability to withstand a certain amount of
exchange rate depreciation is incorporated into the credit underwriting
framework, which also includes significant currency depreciation buffers for
unhedged borrowers.
By the decision of the NBG's Financial Stability Committee, dated November 27,
2024 commercial banks were required to increase the unhedged foreign currency
loan limit from current 400,000 GEL to 500,000 GEL. This directive mandated
that loans or bank credits of up to 500,000 GEL must have been disbursed
exclusively in the national currency, ensuring greater financial stability and
reducing the risk of foreign currency exposure to borrowers. The amendment
came into force on January 1, 2025. On May 28, 2025 a further adjustment was
announced-raising the limit from GEL 500,000 to GEL 750,000, taking effect
on August 1, 2025.
Since the beginning of 2024 this is the third increase in the ceiling on
unhedged foreign loan amounts. Before, the limit was increased from 300,000
GEL to 400,000 GEL on May 1st 2024 in order to promote larisation. As of
mid‑2025, the reserve requirement on foreign currency liabilities remains
unchanged at 25%. Previously, the National Bank of Georgia increased the
reserve requirement by 5pp from 20% to 25% in November 2024, to further
support larisation of the banking system.
Credit monitoring
The Group emphasises proactive risk management, with credit risk monitoring as
a core element. We use a robust system to quickly respond to macro and micro
changes, identifying vulnerabilities in our credit portfolio to make informed
decisions. Our risk resilience involves regular monitoring of concentration
risk, CICR, and other credit risk factors. We employ a portfolio supervision
system to detect weaknesses in credit exposures, analyse risk trends, and
recommend actions against emerging risks. Particular attention is paid to CICR
due to the high share of loans denominated in foreign currencies in the Bank's
portfolio. Vulnerability to exchange rate depreciation is monitored in order
to promptly implement an action plan, as and when needed. Given the experience
and knowledge built through recent currency volatility, the Bank is in a good
position to promptly mitigate exchange rate depreciation risks.
Tailoring monitoring to segment specifics, we focus on individual credit
exposures, portfolio performance, and external trends affecting risk profiles.
Our vigilant stance includes early-warning systems to identify financial
deterioration or fraud in clients' positions. These systems track signs like
overdue days, refinancing, LTV changes, or tax liens. Large overdue exposures
receive individual monitoring to assess clients' loan servicing capabilities.
In fraud prevention, we monitor first payment defaults across credit experts,
bank branches, or companies employing our clients. Our institutions have
credit monitoring and reporting processes for their Supervisory and Management
Boards or risk committees, ensuring transparency and informed decision-making.
In addition to our underwriting and monitoring efforts, relevant buffers are
built into our capital adequacy requirements to ensure that our banks are
sufficiently capitalised to cover CICR, concentration risk, and credit risk in
general. We utilise stress testing and sensitivity analysis to assess our
credit portfolio's resilience, preparing for different economic conditions and
evolving client needs.
Credit risk appetite
The credit risk appetite of the Group is defined by the Risk Appetite
Frameworks of the Group and its financial institution subsidiaries, guiding
credit risk-taking. These frameworks offer qualitative guidance and
quantitative limits to set acceptable credit risk levels. Key quantitative
metrics include NPL proportion, cost of risk, and NPL coverage. Risk appetite
frameworks also set strict limits and ensure close monitoring of
Currency-Induced Credit Risk and Concentration Risk, covering sectoral and
single-name concentrations.
Credit ratings are essential in determining credit risk tolerance. They
provide a thorough assessment of a borrower's creditworthiness, which is
crucial for understanding their ability to fulfil their financial commitments.
These ratings are fundamental in establishing guidelines for acceptable risk
levels and are integrated into our Risk Management Framework. They enhance our
ability to define and manage credit risk, allowing for a detailed
understanding of borrower creditworthiness, leading to informed
decision-making and appropriate risk threshold setting.
We approach credit risk by combining comprehensive Risk Appetite Frameworks
with the strategic use of credit ratings. This integrated approach enables the
Group to effectively navigate the changing credit risk landscape with
resilience and agility.
Collateral management
In our Georgian Bank, collateral is a key factor in mitigating credit risk,
forming a large part of loan portfolios, while in our Uzbekistan bank, the
loan portfolio is solely unsecured. The Georgian Bank accepts diverse
collaterals like real estate, cash deposits, vehicles, equipment, inventory,
precious metals, securities, and third-party guarantees, according to credit
product type and the borrower's credit risk. Real estate is a major collateral
component, while a centralised unit oversees collateral management, ensuring
its adequacy in credit risk mitigation.
The Collateral Management Framework includes policy-making, independent
valuation, a haircut system during underwriting, monitoring (revaluations,
statistical analysis), and portfolio analysis. The Bank's Collateral
Management and Appraisal Department defines collateral management policy for
the Group (approved by Supervisory Board of PLC) and procedures on collateral
management & valuation for the JSC TBC Bank (approved by the Board). The
department aligns appraisal services with International Valuation Standards,
acting regulations of the National Bank of Georgia, and internal rules,
authorises appraisal reports, and manages the collateral monitoring process.
High-value assets are re-evaluated annually, while low-value collaterals
undergo statistical monitoring.
The Collateral Management and Appraisal Department's quality checks systems
for valuations involves internal staff reviews and external company
assessments. Collateral management activities are largely automated through a
web application that is integrated with other banking systems.
Collections and recoveries
In managing credit risk, the Group activates collection and recovery
procedures when clients miss payments or their financial standing
deteriorates, threatening exposure coverage. This process begins after failed
attempts at restructuring non-performing exposures. Specialised teams in each
segment handle overdue exposures, creating loan recovery plans tailored to
clients' specific situations and adhering to our ethical code.
Our collections processes involve supporting clients struggling to meet their
obligations. The strategies depend on exposure size and type, with customised
plans for different customer subgroups based on their risk levels. The goal is
to negotiate with clients to secure cash recoveries through revised payment
schedules as the primary repayment source.
If acceptable terms are not reached, recovery may involve selling assets or
repossessing collateral. Foreclosure may be initiated through legal processes
if negotiation fails. Additional recovery strategies include sale of the
unsecured portfolio to third parties (debt collection agencies).
These measures reflect our commitment to responsible credit risk management,
safeguarding financial stability, and maintaining ethical standards within the
Group.
Counterparty risk
To manage counterparty risk, the Group defines limits on an individual basis
for each counterparty, while on a portfolio basis it limits the expected loss
from treasury, trade finance and other business exposures. As of 30 June 2025,
the Bank's interbank exposure was concentrated with banks that external
agencies, such as Fitch, Moody's and Standard and Poor's, have assigned high
A-grade credit ratings.
2. The Bank underwrites the responsibility to adhere at all times to minimum
regulatory requirements on capital, which may compromise growth and strategic
targets. Additionally, adverse changes in FX rates may impact capital adequacy
ratios.
Risk description
Capital risk is a significant focus area for the Group. Capital risk is the
risk that a bank may not have a sufficient level of capital to maintain its
normal business activities, and to meet its regulatory capital requirements
under normal or stressed operating conditions. The management's objectives in
terms of capital management are to maintain appropriate levels of capital to
support the business strategy, meet regulatory and stress testing-related
requirements, and safeguard the Group's ability to continue as a going
concern.
The Group's ability to comply with regulatory requirements can be affected by
both internal and external factors. Some key concerns include the
deterioration of asset quality leading to losses, reductions in income, rising
expenses, and potential difficulties in raising capital.
Local currency volatility has been and remains a significant risk for the JSC
TBC Bank's capital adequacy. A 10% GEL depreciation would translate into a
0.8pp, 0.7pp and 0.6pp drop in JSC TBC Bank's excess CET 1, Tier 1 and Total
regulatory capital, respectively.
Risk mitigation
The Group's entities undertake stress testing and sensitivity analysis to
quantify extra capital consumption under different scenarios. Such analyses
indicate that the Bank holds sufficient capital to meet the current minimum
regulatory requirements. Capital forecasts, as well as the results of stress
testing and what-if scenarios, are actively monitored with the involvement of
the Bank's Executive Management and the Risk Committee of the Supervisory
Board to help ensure prudent management and timely action, when needed. These
analyses are used to set appropriate risk appetite buffers internally, on top
of the regulatory requirements.
The Bank regularly performs stress tests serving multiple purposes. They are
performed routinely, either under the frameworks listed or on an ad-hoc basis,
to assess the magnitude of certain stressful environments. Stress tests are
performed for the Internal Capital Adequacy Assessment Process (ICAAP),
regulatory stress tests and the Recovery Plan, among other purposes.
The key objective of the regulatory stress test is to define the net stress
test buffer under the capital adequacy minimum requirement framework. Starting
from 2018, regulatory stress tests are performed and submitted to the
regulator upon their request.
The purpose of the ICAAP is to identify all the material risks faced by the
Bank and to have an internal view of the capital needed to cover those risks.
The objective of the ICAAP is to contribute to the Bank's continuity from a
capital perspective by ensuring that it has sufficient capital to bear its
risks, absorb losses and follow a sustainable strategy, even during a stress
period.
Stress testing under the Recovery Plan assumes more severe stress scenarios,
specifically aimed at breaching regulatory requirements and assessing the
Bank's ability to recover the capital position with the help of viable
recovery options within a reasonable timeframe.
Under the risk appetite and the capital planning process, the Bank sets aside
capital as a buffer to withstand certain amount of local currency fluctuation.
3. The Group inherently is exposed to funding and market liquidity risks.
Liquidity risk is the risk that the Group either may not have sufficient
financial resources available to meet all its obligations and commitments as
they fall due, or may only be able to access those resources at a high cost.
Liquidity risk is categorised into two risk types: funding liquidity risk and
market liquidity risk.
a. Funding liquidity risk is the risk that the Group will not be able to
efficiently meet both expected and unexpected current and future cash flows
without affecting either its daily operations or its financial condition under
both normal conditions and during a crisis.
b. Market liquidity risk is the risk that the Group cannot easily offset
or eliminate a position at the then-current market price because of inadequate
market depth or market disruption.
While the Group currently has sufficient financial resources available to meet
its obligations as they fall due, liquidity risk is inherent in banking
operations and can be heightened by numerous factors. These include an
over-reliance on, or an inability to access, a particular source of funding,
as well as changes in credit ratings or market-wide phenomena. Access to
credit for companies in emerging markets is significantly influenced by the
level of investor confidence and, as such, any factors affecting investor
confidence (e.g. a downgrade in credit ratings, central bank or state
interventions, or debt restructurings in a relevant industry) could influence
the price or the ability to access the funding necessary to make payments in
respect of the Group's future indebtedness.
Both funding and market liquidity risks can emerge from a number of factors
that are beyond the Group's control. There is adequate liquidity to withstand
significant withdrawals of customer deposits, but the unexpected and rapid
withdrawal of a substantial number of deposits could have a material adverse
impact on the Group's business, financial condition, and results of operations
and/or prospects.
Risk mitigation
The Group's liquidity risk is managed though the Board's Group Liquidity Risk
Management Policy. The Assets and Liabilities Management Committee (ALCO) is
the core asset-liability management body ensuring that the principal
objectives of the Group's Liquidity Risk Management Policy are met on a daily
basis. The approved Liquidity Risk Management Framework ensures the Group
meets it payment obligations under both normal and stress situations.
To mitigate the liquidity risk, the Group holds a solid liquidity position by
maintaining comfortable buffers over the regulatory minimum requirements. All
regulatory ratios are monitored regularly, with an early-warning system in
place to detect potential adverse liquidity events. This is facilitated by the
Risk Appetite Frameworks of the Group's relevant financial institutions, which
set buffers over the regulatory limits, ensuring early detection of potential
liquidity vulnerabilities. The liquidity risk position and compliance with
internal limits are closely monitored by the ALCOs of JSC TBC Bank and JSC UZ
TBC Bank.
JSC TBC Bank's liquidity risk is managed by the Balance Sheet Management
division and Treasury department and is monitored by the Management Board and
the ALCO, within their pre-defined functions. The Financial and Capital Risk
Management (FCRM) division is responsible for developing procedures and policy
documents and setting risk appetites on funding and market liquidity risk
management. In addition, the FCRM performs liquidity risk assessments and
communicates the results to the Management Board and the Risk Committee of the
Supervisory Board on a regular basis.
The Bank maintains a diversified funding structure to manage the respective
liquidity risks. The Bank's principal sources of liquidity include customer
deposits and accounts, borrowings from local and international banks and
financial institutions, subordinated loans from international financial
institution investors, local interbank short-duration term deposits and loans,
proceeds from the sale of investment securities, principal repayments on
loans, interest income, and fee and commission income. The Bank relies on
relatively stable deposits from Georgia as its main source of funding. The
Bank also monitors the deposit concentration for large deposits and sets
limits for deposits by non-Georgian residents in its deposit portfolio.
To maintain and further enhance its liability structure, the Bank sets targets
for deposits and funds received from international financial institution
investors in its risk appetite via the respective ratios. The loan to deposit
and IFI funding ratio (defined as the total value of net loans divided by the
sum of the total value of deposits and funds received from international
financial institutions) stood at 103.5%, 102.0% and 92.2%, as at 30 June 2025,
2024 and 2023, respectively.
The management believes that, in spite of a substantial portion of customers'
accounts being on demand, the diversification of these deposits by the number
and type of depositors, coupled with the Bank's past experience, indicates
that these customer accounts provide a long-term and stable source of funding
for the Bank. Moreover, the Bank's liquidity risk management includes the
estimation of maturities for its current deposits. The estimate is based on
statistical methods applied to historic information about the fluctuations of
customer account balances.
Stress testing is a major tool for managing liquidity risk. Stress testing
exercises are performed within the ILAAP and Recovery Plan Frameworks as well
as on an ad hoc basis, when there is a significant change in the prevailing
risk environment. The former assesses the adequacy of the liquidity position
and relevant buffers and whether they can sustain plausible severe shocks,
while the latter provides a set of possible actions that could be taken in the
unlikely event of regulatory requirement breaches to support a fast recovery
in the liquidity position. The recovery plan encompasses a Liquidity
Contingency Funding Plan which, along with the risk indicators and mitigation
actions, outlines the roles and responsibilities of those involved in
executing the plan. Both the ILAAP and the Recovery Plan are performed by the
Bank on an annual basis.
4. Market risk arises from optimising capital allocation and asset liability
management operations.
Risk description
Market risk is the risk that the fair value or future cash flows of financial
instruments will fluctuate due to changes in market variables such as interest
rates, foreign exchange rates, and equity prices.
Foreign exchange (FX) risk arises from the potential change in foreign
currency exchange rates, which can affect the value of a financial instrument.
This risk stems from the open currency positions created due to mismatches in
foreign currency assets and liabilities. The Group identifies, assesses,
monitors, and communicates the risk arising from exchange rate movements and
the factors that influence this risk.
Interest rate risk arises from potential changes in market interest rates that
can adversely affect the value of the Group's financial assets and
liabilities. This risk can arise from maturity mismatches between assets and
liabilities, as well as from the re-pricing characteristics of such assets and
liabilities.
The biggest share of the Bank's deposits, more than half of the borrowings
and part of the loans are at fixed interest rates. In addition, the Bank
actively uses floating and combined interest rate structures in its loan
portfolio. Since the assets and liabilities have different repricing
characteristics, their corresponding interest margins may increase or decrease
as a result of market interest rate changes potentially entailing negative
effect on net interest income.
Risk Mitigation
The Group's market risk is governed through the Board's Group FX Risk
Management and Group Interest Rate Risk Management policies.
FX risk: To mitigate FX Risk, the Group sets risk appetite and operational
limits on the level of exposure by currency as well as on aggregate exposure
positions that are more conservative than those set by the regulators.
Compliance with the limits is closely monitored by the respective ALCOs of JSC
TBC Bank and JSC UZ TBC Bank. Compliance with these limits is also reported
periodically to the Management Board and to the Supervisory Board and its Risk
Committee.
In addition, the treasury department and financial and capital risk management
division separately monitor the Group's compliance with the set limits daily.
In order to safeguard against the inherent volatility in the foreign exchange
market, the Group employs a risk management process aimed at mitigating FX
risk. This involves the strategic use of spot, forward, and swap transactions.
To assess currency risk, JSC TBC Bank performs a VAR sensitivity analysis on a
regular basis. This analysis calculates the effect on the Group's income
determined by the worst possible movements of currency rates against the
Georgian Lari, with all other variables held constant. During the years ended
30 June 2025 and 2024, this sensitivity analysis did not reveal any
significant potential effect on the Group's equity: as of 30 June 2025, the
maximum loss with a 99% confidence interval was equal to GEL 11.9 million,
compared to a maximum loss of GEL 11.7 million as of 30 June 2024.
Interest Rate Risk: To mitigate interest rate risk, JSC TBC Bank considers
numerous stress scenarios, including different yield curve shifts and
behavioural adjustments to cash flows (such as deposit withdrawals or loan
prepayments), to calculate the impact on one year profitability and the
enterprise value of equity. In addition, appropriate limits on both net
interest income (NII) and economic value of equity (EVE) sensitivities are set
within the Risk Appetite Framework approved by the Supervisory Board.
Interest rate risk in JSC TBC Bank is managed by the Balance Sheet Management
division and the Treasury department and is monitored by the ALCO. The ALCO
decides on actions that are necessary for effective interest rate risk
management and follows up on their implementation. The Financial and Capital
Risk Management division is responsible for developing guidelines and policy
documents and setting the risk appetite for interest rate risk. The major
aspects of interest rate risk management development and the respective
reporting is periodically provided to the Management Board, the Supervisory
Board, and the Risk Committee.
To minimize interest rate risk, the Bank regularly monitors interest rate
(re-pricing) gaps by currencies and, in case of need, decides to enter into
interest rate derivatives contracts.
Furthermore, many of the Bank's loans to customers contain a clause allowing
it to adjust the interest rate on the loan in case of adverse interest rate
movements, thereby limiting exposure to interest rate risk. The management
also believes that the Group's interest rate margins provide a reasonable
buffer to mitigate the effect of a possible adverse interest rate movement.
5. Any decline in the Group's net interest income or net interest margin (NIM)
could lead to a reduction in profitability, impacting the accumulation of
organic capital.
Risk description
Net interest income accounts for most of the Group's total income. Potential
new regulations, along with a high level of competition in Georgia and
Uzbekistan, may negatively impact the Group's net interest margin. At the same
time, the cost of funding is largely exogenous to the Group and is derived
from both local and international markets.
In 1H 2025, NIM amounted to 6.9%, with an 0.5% YoY increase, mainly driven by
higher loan yields, partially offset by an increase in funding costs. In
addition, Uzbekistan continues to contribute positively to the Group's NIM.
Risk mitigation
The Group continues to focus on the growth of fee and commission income,
driven by increased efforts towards customer experience-related initiatives
and innovative products in both the Georgian and Uzbekistan markets. This
safeguards the Group from potential margin compressions on lending and deposit
products in the future. Additionally, the scale-up of operations in Uzbekistan
prevents a decrease in NIM on a Group level and ensures the diversification of
income streams, aligning with the Group's profitability goals in compliance
with the strategy and medium-term targets.
To meet its asset-liability objectives and manage the interest rate risk, the
Group uses a high-quality investment securities portfolio, long-term funding,
and derivative contracts.
6. The Group's performance may be compromised by adverse developments in the
economic environment.
Risk description
A potential slowdown in economic growth in Georgia or Uzbekistan will likely
have an adverse impact on the repayment capacity of borrowers, restraining
their future investment and expansion plans. Negative macroeconomic
developments could compromise the Group's performance in various ways, such as
exchange rate depreciation, a sizable decline in gold prices, a spike in
interest rates, rising unemployment, a decrease in household disposable
income, falling property prices, worsening loan collateralisation, or falling
debt service capabilities of companies as a result of decreasing sales.
Potential political and economic instability in Georgia's or Uzbekistan's
neighbouring countries and main trading/economic partners could negatively
affect their economic outlook through worsening current and financial accounts
in the balance of payments (e.g. decreased exports, tourism inflows,
remittances and foreign direct investments). As for 1H 2025, despite
politically still somewhat tense environment in Georgia and global
geopolitical shifts, no significant materialisation of the abovementioned
macroeconomic risks was observed in the countries of the Group's operations.
Georgian economy expanded by double digits in 2021-2022, 7.8% in 2023 and,
despite internal political turbulence, by 9.4% in 2024. The strong growth
momentum continued in 2025 as well with only gradual moderation towards the
long term-trend as the real GDP grew by 8.3% on average in the first half of
the year. Strong real credit growth, improved external trade balance and
robust currency inflows from tourism and remittances contributed the most in
the higher than expected economic print, unlike the declined FDIs and broadly
flat migrant expenses. Here it should be underlined that, while largely
re-export driven exports posted strong growth in 2025, improved trade balance
was resulted due to weaker imports, especially of durable goods, pointing to
the somewhat restrained domestic demand affected by market expectations. On
the backdrop of strengthened net currency inflows, deposit conversions
gradually switching back from the FX to GEL and globally weakened USD, the
National Bank of Georgia focused on replenishing its international reserves in
the 1H 2025. The NBG purchased around USD 880 million from the FX market,
increasing its gross reserves to USD 4.7 billion, while the GEL exchange rate
appreciated by around 3.1% against the USD. At the same time, consumer price
inflation has accelerated in the country, though, in line with expectations,
standing at 4.0% in June, slightly above the NBG 3% target. Still, taking
strong growth and elevating inflation in consideration, the NBG maintained its
monetary policy rate unchanged at 8.0%.
Uzbekistan, the second country of the Group's operations, also demonstrated
solid economic activity, with real GDP growth in the first half of 2025
accelerating to 7.2%, following 6.5% in 2024. The external trade balance
improved as USD-denominated exports grew by 29.2% YoY due to historically high
gold prices, while imports increased by weak 4.7%, affected by lower car
imports. FDIs remained resilient while remittances experienced a significant
27% increase in annual terms in the 1H of 2025, partially driven by
strengthening of Uzbekistan's trade partners' currencies against the USD. At
the same time, while the depreciation trend of the UZS against the USD
weakened over 2024, Uzbekistan national currency even strengthened against the
greenback by around 2.1% in the first half of the year, supported by the CBU's
tight stance, globally weakened USD, decelerating consumer credit growth and
higher gold prices, which enabled the CBU to substantially increase its
international reserves. On the other hand, despite the gradual deceleration
trend, especially in month-over-month dynamics, inflation remained high in
Uzbekistan, standing at 8.7% YoY in June 2025, compared to 9.8% at the end of
2024. In response, the central bank has increased its monetary policy rate by
0.5 percentage points in March, bringing the MPR to 14.0%.
Risk mitigation
To decrease its vulnerability to economic cycles, the Group identifies
cyclical industries and proactively manages its underwriting approach and
clients within its Risk Appetite Framework. The Group has in place a
macroeconomic monitoring process that relies on close, recurrent observation
of the economic developments in Georgia and neighbouring countries to identify
early warning signals indicating imminent economic risks. This system allows
the Group to promptly assess significant economic and political events and
analyse their implications for the Group's performance. These implications are
duly translated into specific action plans with regards to reviewing
underwriting standards, risk appetite metrics, and limits, including the
limits for each of the most vulnerable industries. Additionally, the stress
testing and scenario analysis conducted during the credit review and
portfolio-monitoring processes enable the Group to evaluate the impact of
macroeconomic shocks on its business in advance. Resilience towards a changing
macroeconomic environment is incorporated into the Group's credit underwriting
standards. As such, borrowers are expected to withstand certain adverse
economic developments through prudent financials, debt-servicing capabilities,
and conservative collateral coverage.
Taking into account the regional crisis, the Group adjusted its Risk
Management Framework, leveraging its pre-existing stress testing practices.
This included more thorough and frequent monitoring of the portfolio as well
as stress testing, to ensure close control of changes in capital, liquidity,
and portfolio quality in times of increased uncertainty.
NON-FINANCIAL RISKS
1. The Group is exposed to regulatory and enforcement action risk.
Risk description
The Group's operations are subject to a complex regulatory environment, which
introduces various regulatory risks. In Georgia, the NBG sets lending limits
and other economic ratios (including, but not limited to, lending, liquidity,
and investment ratios) along with the mandatory capital adequacy ratio. In
addition to complying with the minimum reserves and financial ratios, the Bank
is required to submit periodic reports. It is also subject to the Georgian tax
code and other relevant laws.
Following its listing on the London Stock Exchange's premium segment, the
Group became subject to additional oversight by the UK's Financial Conduct
Authority (FCA), resulting in increased regulatory scrutiny. In addition to
its core banking operations, the Group also offers a range of regulated
financial services products, including leasing, insurance, brokerage and
investment services. Moreover, with the Group's expansion into Uzbekistan, its
regulatory obligations have increased, as the banking sector in Uzbekistan is
highly regulated and requires strict compliance with local laws and
supervisory requirements.
The Group is also subject to financial covenants in its debt agreements. For
more information, see the Group's Audited Financial Statements.
As the Bank increases its use of AI and machine learning models, particularly
in areas such as credit risk, fraud detection, and customer segmentation, we
are continuously working on enhancing our model risk management framework to
ensure transparency, explainability, and regulatory compliance. All AI
applications are subject to ethical reviews and risk assessments to prevent
bias, discrimination, and unfair treatment of customers. We ensure that all
AI systems comply with applicable data protection laws, including the General
Data Protection Regulation (GDPR). Privacy impact assessments are conducted
for AI tools that process personal data. A cross-functional AI governance
group-including Compliance, Model, Legal, and Technology-oversees adherence to
data privacy standards and the ethical handling of customer data. We actively
monitor global regulatory developments related to AI and digital
technologies.The Bank's risk management framework has been expanded to
incorporate AI-specific governance, including explainability requirements,
bias detection, and periodic validation protocols.
Risk mitigation
The Group has implemented robust systems and processes to ensure comprehensive
regulatory compliance, embedding these practices all levels of the
organisation. The Group's "three lines of defence" model clearly defines the
roles and responsibilities for identifying, managing and mitigating regulatory
and compliance risks. This structured approach supports proactive risk
management and reinforces a strong compliance culture throughout the Group.
The first line of defence is responsible for managing compliance risks within
their respective business areas, with the Bank's operational teams taking
ownership of day-to-day risk identification and mitigation. The Compliance
Division serves as the second line of defence, supporting and monitoring
compliance efforts across the Group through providing independent oversight,
guidance, and monitoring of compliance activities across the Group. The Chief
Compliance Officer oversees compliance within the Bank and reports quarterly
to the Audit Committee of the Supervisory Board, while maintaining a
managerial reporting line to the Chief Risk Officer (CRO). The Group's Audit
Committee is responsible for overseeing the effectiveness of the regulatory
compliance framework and ensuring alignment with applicable laws and standards
at the Board level.
The Group's compliance programme encompasses a wide range of activities
designed to address compliance risks effectively, including the development
and maintenance of compliance policies, regular employee trainings, risk-based
oversight, and rigorous monitoring of regulatory adherence.
The Compliance Division manages regulatory risk through the following key
actions:
· Monitoring and ensuring that changes in laws and regulations are
implemented in a timely and effective manner by the respective process owners;
· Participating in the risk approval and review process for new
products and services to ensure regulatory compliance;
· Analysing customer complaints, operational risk events, internal
audit findings, and litigation cases to proactively identify and address
process or control weaknesses;
· Conducting annual compliance risk assessments and targeted reviews
of internal processes to ensure ongoing alignment with regulatory
expectations;
· Engaging in regular dialogue with regulators and industry bodies
to stay informed on regulatory developments and best practices;
· Performing thematic and ad-hoc compliance reviews in higher-risk
areas or in response to emerging risks; and
· Maintaining a whistleblower mechanism that allows for the
confidential reporting of compliance concerns, thereby promoting a culture of
transparency and accountability.
The Compliance Division ensures that the outcomes of these activities are
addressed promptly and appropriately. In its oversight capacity, the Division
establishes key risk indicators and monitors them in line with the Group's
Risk Appetite Framework. Any breaches of established thresholds are
immediately escalated to the relevant boards for timely resolution.
Demonstrating its commitment to safeguarding personal data and maintaining
compliance with relevant data protection laws, the Bank has appointed a Data
Protection Officer (DPO). The DPO is responsible for overseeing the Bank's
Data Protection Strategy and ensuring ongoing compliance with applicable
regulations, including the General Data Protection Regulation (GDPR). To
further support GDPR compliance within the European Union, the Bank has also
engaged a representative legal firm based in the EU to act as its official EU
representative.
2. The Group is exposed to legal risk.
Risk description
Legal risk refers to the potential for loss, whether financial or
reputational, resulting from penalties, damages, fines, or other forms of
financial detriment, which impacts or could impact one or more entities of the
Group and/or its employees, business lines, operations, products and/or its
services, and results from the failure of the Group to meet its legal
obligations, including regulatory, contractual or non-contractual
requirements.
Risk mitigation
The legal function as a second line of defence is an independent function
hierarchically integrated with all the Group's legal teams. The Group's
businesses and lines have responsibility for identifying and escalating legal
risk in their area to the legal function.
The legal function is entrusted with the responsibility of (a) managing
(including prevention) legal risks; and (b) interpreting the laws and
regulations applicable to the Group's activities and providing legal advice
and guidance to the Group. The management of the legal risks includes defining
the relevant legal risk policies, developing Group-wide risk appetite for
legal risk, and oversight of the implementation of controls to manage and
escalate legal risk. The advisory responsibility of the legal function is to
provide legal advice to Executive Officers and the Board of Directors in a
manner that meets the highest standards.
The senior management of the legal function oversees, challenges and monitors
the legal risk profile and effectiveness of the legal risk control environment
across the Group. The legal risk profile and control environment are reviewed
by management through business risk committees and control committees. The
Group Risk Committee is the most senior executive body responsible for
reviewing and monitoring the effectiveness of legal risk management across the
Group.
3. The Group's operational complexity generates operational risk that could in
turn adversely impact profitability and reputation.
Risk description
One of the main risks that the Group faces is operational risk, which is the
risk of loss resulting from internal and external fraud events, inadequate
processes or products, business disruptions and systems failures, human error
or damages to assets. Operational risk also implies losses driven by legal,
compliance, or cybersecurity risks.
The Group is exposed to many types of operational risk, including: fraudulent
and other internal and external criminal activities; breakdowns in processes,
controls or procedures; and system failures or cyber-attacks from an external
party with the intention of making the Group's services or supporting
infrastructure unavailable to its intended users, which in turn may jeopardise
sensitive information and the financial transactions of the Group, its
clients, counterparties, or customers.
Moreover, the Group is subject to risks that cause disruption to systems
performing critical functions or business disruption arising from events
wholly or partially beyond its control, such as natural disasters, transport
or utility failures, etc., which may result in losses or reductions in service
to customers and/or economic losses to the Group.
The operational risks discussed above are also applicable where the Group
relies on outsourcing services from third parties. Considering the dynamic
environment and sophistication of both banking services and possible
fraudsters, the importance of constantly improving processes, controls,
procedures and systems is heightened to ensure risk prevention and reduce the
risk of loss to the Group.
The increased complexity and diversification of operations, coupled with the
digitalisation of the banking sector, mean that fraud risks are evolving.
External fraud events may arise from the actions of third parties against the
Group, most frequently involving events related to banking cards, loans, and
client phishing. Internal fraud events arise from actions committed by the
Group's employees, although such events happen less frequently. During the
reporting period, the Group faced several instances of fraud, none of which
had a material impact on the Group's profit and loss statement. The rapid
growth in digital crime has exacerbated the threat of fraud, with fraudsters
adopting new techniques and approaches to obtain funds illegally. Therefore,
unless properly monitored and managed, the potential impact could become
substantial.
Risk mitigation
To oversee and mitigate operational risk, the Group maintains an Operational
Risk Management Framework, which is an overarching document that outlines the
general principles for effective operational risk management and defines the
roles and responsibilities of the various parties involved in the process.
Policies and procedures enabling the effective management of operational risks
complement the framework. The Management Board ensures a strong internal
control culture within the Group, where control activities are an integral
part of operations. The Board sets the operational risk appetite, while
compliance with the established risk appetite limits is monitored regularly by
the Board's Risk Committee.
The Group utilises the three lines of defence principle, where the Operational
and Investment Risk Management Department serves as a second line of defence,
responsible for implementing the framework and appropriate policies and
methodologies to enable the Group to manage operational risks.
The Group actively monitors, detects, and prevents risks arising from
operational risk events and has permanent monitoring processes in place to
detect unusual activities or process weaknesses in a timely manner. The Risk
and Control Self-Assessment exercise (RCSA) focuses on identifying residual
risks in key processes, subject to the respective corrective actions. Through
our continuous efforts to monitor and mitigate operational risks, coupled with
the high level of sophistication of our internal processes, the Group ensures
the timely identification and control of operational risk-related activities.
Various policies, processes, and procedures are in place to control and
mitigate operational risks, including, but not limited to:
· The Group's Risk Assessment Policy, which enables thorough risk
evaluation prior to the adoption of new products, services, or procedures;
· The Group's Outsourcing Risk Management Policy, which enables the
Group to control outsourcing (vendor) risk arising from adverse events and
risk concentrations due to failures in vendor selection, insufficient controls
and oversight over a vendor and/or services provided by a vendor, and other
impacts on the vendor;
· The Risk and Control Self-Assessment (RCSA) Policy, which enables
the Group to continuously evaluate existing and potential risks, establish
risk mitigation strategies and systematically monitor the progress of risk
mitigation plans. The completion of these plans is also part of the respective
managers' key performance indicators;
· The Group's Operational Risk Event Identification Policy, which
enables the Group to promptly report on operational risk events, perform
systematic root-cause analysis of such events, and take corrective measures to
prevent the recurrence of significant losses. A unified operational loss
database enhances further quantitative and qualitative analysis. The
Operational Risk Event Identification Policy also oversees the occurrence of
IT incidents and the respective activities targeted at solving the identified
problems;
· The Group's Operational Risk Awareness Programme, which provides
regular trainings to the Group's employees and strengthens the Group's
internal risk culture;
· The Group also utilises risk transfer strategies, including
obtaining various insurance policies to transfer the risks of critical
operational losses.
The Operational and Investment Risk Management Department has reinforced its
risk assessment teams and methodologies to further fine-tune the existing
control environment. The same applies to the set of actions aimed at
homogenising operational risk management processes throughout the Group's
member companies.
During the reporting period, one of the key operational risk management focus
areas was the RCSA exercise, which reviewed the Group's top priority processes
and identified areas of improvement.
Moreover, to further mitigate operational risks driven by fraudulent
activities, the Group has introduced a sophisticated digital fraud prevention
system, which analyses client behaviour to further minimise external fraud
threats.
The Operational Risk Management Framework and its complementary policies were
updated to ensure effective execution of the operational risk management
programme.
4. The Group's digitally oriented operational footprint faces a growing and
evolving threat of cyber-attacks.
Risk description
The Group's rising dependency on digital systems increases its exposure to
potential cyber-attacks. Given their increasing sophistication, potential
cyber-attacks may lead to significant security breaches. Such risks change
rapidly and require continued focus and investment. Due to the dynamics and
complexity of the current environment, the Group is continuously monitoring
the security threat landscape.
In the past three years, the Bank has not experienced any material
cybersecurity breaches, and there have been no significant third-party
cybersecurity incidents in 1H 2025.
Risk mitigation
The Group has in place a comprehensive information and cyber security
management systems to mitigate the risk of cyber-attacks, as described below.
Threat landscape
In order to adequately address the challenges posed by cyberattacks, we are
continuously analysing the Group's cyber threat landscape and assessing all
relevant threat scenarios and actors, considering their intentions and
capabilities, as well as the tactics, techniques, and procedures they are
using or may use during their campaigns. Our focus is to be prepared against
Advanced Persistent Threats. Among the many different threat vectors we are
covering and monitoring, the top six are below:
· Attacks against internet facing applications and infrastructure;
· Software supply chain attacks;
· Phishing and other social engineering attacks against our
customers;
· Phishing and other social engineering attacks against our
employees;
· Insider threats;
· Ransomware and extortion-based cyber threats.
Our vision and strategic objectives
Information and cyber security are an integral part of the Group's governance
practices and strategic development. The Group's cyber security vision and
strategy are fully aligned with its business vision and strategy and address
all the challenges identified during the threat landscape analysis.
Our vision is to strengthen our security in depth approach, enable secure and
innovative businesses, and maintain a continuous improvement cycle. Our
strategic objectives are:
· To enhance our defence in depth approach by strengthening the
team and implementing cutting-edge technologies, in order to maintain
resilience against Advanced Persistent Threats, which may come from
state-sponsored actors or organised cybercriminals;
· To maintain compliance with industry leading information and
cyber security standards, sustain a continuous improvement cycle for our
information and business continuity management systems, and be one step ahead
of regulatory requirements; and
· To optimise and automate security processes, and provide security
services seamlessly to the Group's business (where possible);
· Foster a security-first culture by embedding cybersecurity
awareness across the organisation, ensuring employees and stakeholders are
actively engaged in reducing risk.
Our security in depth approach and cyber-resilience programme
In order to follow our vision and achieve our strategic objectives, we run
effective information and cyber security programmes, functions and systems, as
follows:
· Layered preventive controls are in place, covering all relevant
logical and physical segments and layers of the organisation and
infrastructure in order to minimise the likelihood of successful initial
access:
- Data security controls
- Identity and access controls
- Endpoint security controls
- Infrastructure security controls
- Cloud security controls
- Application security controls
- Internal and perimeter network security control
- Physical security controls
· A professional team is in charge of effectively implementing,
assuring the effectiveness of, maintaining and fine-tuning the preventive
controls mentioned above. The number and level of expertise of the team
members is significant. Our team members hold industry leading certificates
and work on a daily basis to strengthen and extend their professional skill
sets.
· Layers of preventive controls in conjunction with a comprehensive
awareness programme provide the best combination in order to minimise the
likelihood of successful attacks. Our robust awareness programme helps
employees and customers to improve their cyber hygiene, understand the risks
associated with their actions, identify any cyberattacks they might face
during day-to-day operations, and improve the overall risk culture. Our
awareness programme provides relevant materials to all key roles, from the
Management Board to IT engineers and developers. It covers annual trainings
and attestations for all employees, newcomer trainings and attestations,
social engineering simulations, security tips and notifications for all
employees, security awareness raising campaigns for customers, and more.
· Since we believe that 100% prevention is not achievable, the
Group has threat hunting capabilities and a security operations centre in
place to monitor every possible anomaly in near real-time that is identified
across the organisation's network in order to detect potential incidents and
respond in a timely and effective manner to minimise the negative impact of
possible attacks. To be up-to-date and track the techniques and tactics of our
adversaries, we are elaborating cyber threat intelligence procedures according
to industry best practices and following the MITRE ATTACK framework.
· Information security governance and effective risk management
processes, which covers third-party and supply chain risks as well, ensure
that the Bank has the correct guidance, makes risk-informed decisions in
compliance with its risk appetite, complies with regulatory requirements, and
achieves a continuous improvement cycle. The Information Security Committee,
which is chaired by the CEO, has the ultimate responsibility to assure that an
appropriate level of security is maintained and a continuous improvement cycle
of management processes is achieved. The Bank is in compliance with the NIST
Cyber Security Management Framework and its Information Security Management
System is ISO/IEC 27001:2022 certified.
· In addition, the Bank further strengthens its cyber resilience
through an effective Business Continuity Management System and Cyber Insurance
Policy, in order to manage contingencies and recover from serious disruptions
with minimum possible impact.
How we measure and assure an acceptable level of security
To assess and assure an acceptable level of information and cyber security, we
rely on external/internal audit reports, red teaming exercise reports, and the
results of continuous penetration tests, which are conducted by our highly
professional internal team and reputable external third-party partners.
· On an annual basis we conduct:
· An external audit of the SWIFT Customer Protection Framework;
o An external audit of the NBG's Cyber Security Framework, which is based on
the NIST Cyber Security Management Framework;
o Independent internal IT audit team is assessing effectiveness of critical
components of information security management system;
o External surveillance audits of ISO 27001;
o Penetration tests against internet facing applications and critical
infrastructure with the help of our highly reputable partners.
· Our internal team is in charge of continuous penetration tests of
internal and external applications and infrastructure.
· We conduct regular red and purple teaming exercises and assess
our security capabilities against real world advanced threat actors
The abovementioned external audits did not identify any material findings. If
such findings do arise, they are addressed as part of the continuous
improvement process.
5. The Group identifies risk in its growing dependence on data.
Risk description
In the domain of data management and data governance within the Group, the
most prominent risk continues to center on data quality. This is a cornerstone
of sound decision-making, regulatory compliance, and overall risk management.
The challenge stems from diverse sources, including errors during data entry,
lack of standardized formats, and inconsistencies across data sources. The
ramifications of compromised data quality include financial losses,
operational inefficiencies, regulatory non-compliance, and reputational
damage. The complexity is further heightened in dynamic market environments,
necessitating robust mechanisms for data validation and cleansing.
In addition to this, a new and increasingly significant risk arises from the
adoption and deployment of artificial intelligence (AI) technologies across
the Group. The use of AI brings opportunities for automation, enhanced
insight, and predictive capabilities; however, it also introduces potential
risks relating to model accuracy, biased decision-making, data privacy
breaches, and ethical considerations. Poorly governed AI solutions could
expose the Group to new regulatory scrutiny and reputational risks, as well as
operational inefficiencies if they fail to perform as intended or scale
properly.
Risk mitigation
Mitigating data quality risks require a holistic and strategic approach. To
address this challenge, the Group continues to implement advanced data quality
management systems, rigorous data governance policies, and data profiling
techniques. Strategic investments in automation, machine learning, and
artificial intelligence can further support proactive detection and correction
of data anomalies, ensuring accuracy and consistency. Cultivating a
data-driven culture, with robust data lineage and documentation practices,
also enhances transparency and traceability.
To manage AI-related risks, the Group is putting in place a strong AI
governance framework that emphasizes ethics, fairness, and transparency. This
includes thorough validation of AI models before deployment, continuous
monitoring of model performance and output, and ensuring adherence to
applicable regulatory and legal requirements. The Group is also investing in
upskilling teams to understand AI systems and their risks, as well as engaging
cross-functional expertise-from data scientists and compliance officers to IT
security-to establish clear accountability and oversight. These measures will
enable the Group to leverage AI's potential safely and responsibly while
protecting its data assets and stakeholders.
6. The Group is exposed to Model Risk.
Risk description
In accordance with regulatory guidance and industry best practices, the Group
has developed model identification standards, which clearly define what
constitutes a model and provide objective criteria for model identification.
The Group increasingly relies on statistical, machine learning, and artificial
intelligence models to enhance important decision-making processes, enabled by
access to diverse data sources and the adoption of big data technologies.
Increasing reliance on models requires a robust model risk management
framework to prevent adverse consequences related to mistakes made during
model development, implementation, or usage. With the expanding adoption of
Generative AI (GenAI) models, the Group is actively developing model risk
management frameworks specifically tailored to address the unique risks and
characteristics of GenAI. The Group defines model risk as a risk of potential
financial losses, poor business decisions, and reputational damage that may
arise from such model-related deficiencies.
Risk mitigation
The Group manages model risk through its Model Risk Management (MRM) function,
which operates as the second line of defence to identify, measure, and monitor
model risk across the Group. MRM is structured around two pillars: governance
and validation.
The governance pillar establishes and maintains the Group's model risk
management framework through policies, standards, and risk appetite limits.
This framework defines key stakeholder roles and responsibilities throughout
the model lifecycle. The governance pillar also maintains the model inventory
and oversees adherence to model risk appetite limits.
The validation pillar provides independent assessment of models through
conceptual and technical validations, evaluating model design, methodology,
and performance in accordance with established policies and standards.
The MRM function uses model tiering to drive its risk-based validation
approach, systematically identifying and assessing model risks through initial
and ongoing validations. Model tiering, along with the nature and severity of
identified risks, determines appropriate mitigation measures, which range from
increased validation frequency and enhanced testing to model recalibration or
redevelopment. All mitigation actions aim to maintain model risk within the
Group's defined risk appetite, with heightened scrutiny applied to
higher-tiered models.
7. The Group remains exposed to reputational risk.
Risk description
There are reputational risks to which the Group may be exposed, such as
country risks and compliance risks, related to the challenging geopolitical
environment in the region, international sanctions regimes, as well as
domestic turbulences due to disputed elections and ongoing protests. Banks are
easy targets for anti-banking narratives in mainstream and social media
platforms. These narratives intensify in the run-up to elections. There are
also risks related to phishing and other cybercrimes that come with the
increased digitalization of products and services provided by the Group.
Cyber risks could turn into reputational risk if they impact negatively on
the Group's reputation as a provider of the best digital services and products
to customers. It should be noted that most of these risks are not unique to
the Group, but apply to the entire banking sector.
Risk mitigation
To prevent or mitigate reputational risks, the Group works continuously to
maintain strong brand recognition among its stakeholders and engages with them
on a constant basis, particularly with the customers, employees, media,
regulators, business associations, IFIs, and the diplomatic community among
others.
The Group has put a Task Force in place at the senior management level
comprised of the CEO, the CRO, the marketing and brand lead, the strategic
communications lead and the general counselor to address and manage
reputational risks. Additionally, and in close cooperation with international
consultants, the Task Force has developed an overall strategy including
communications plans, contingencies, and tools to mitigate, prevent and
respond to any risks.
The Group complies with all relevant external and internal policies and
protocol mechanisms to prevent or minimise the impact of direct and indirect
reputational risks. Dedicated internal and external marketing teams monitor
the brand value through public opinion polls and studies and by receiving
feedback from stakeholders on an ongoing basis. Communications teams actively
monitor mainstream media and social media on a daily basis, identifying early
warning signs of potential reputational or brand damage to mitigate and,
whenever necessary, elevate potential risks to the attention of the Task Force
or the Supervisory Board before they escalate.
Communications and cyber security teams conduct extensive awareness-raising
campaigns on cyber security and financial literacy. The teams also brief the
media so that it is aware of potential risks impacting the sector. TBC also
has an inhouse financial education platform Edufin which is aimed at raising
awareness about cyber threats and phishing.
8. The Group faces the risk that its strategic initiatives do not translate
into long-term sustainable value for its stakeholders.
Risk description
The Group may face the risk of falling short in developing and executing a
business strategy that ensures sustained value creation while adapting to
evolving customer needs, increasing competition, and changing regulatory
requirements.
Additionally, uncertainties from economic and social disruptions in the region
may hinder the Group's timely execution of its strategy, potentially
compromising its capacity for long-term value creation.
Risk mitigation
To mitigate the combined risks from a local and international perspective, the
Group employs a multifaceted approach.
The formation of our strategic portfolio is primarily driven by the Group's
strategy to broaden and diversify our business revenue streams. Thorough
curation is conducted in the execution of strategy involving the Board, the
executive management, and middle management. These sessions serve as crucial
checkpoints to ensure alignment with the Group's strategic long-term
objectives and guiding principles.
Moreover, monitoring the performance of strategic projects extends to
quarterly analyses and tracking of metrics used to measure strategy execution.
In case of significant deviations, corrective or mitigation actions are
promptly implemented.
9. The Group is exposed to risks related to its ability to attract and retain
highly qualified employees.
Risk description
As the Group becomes increasingly digitally focused, it requires more IT
professionals in its various departments. This shift accentuates the risk of
potentially losing key personnel. In the highly competitive tech job market,
this challenge extends not only to retaining these valuable employees but also
to attracting, developing, and keeping new skilled workers. Ensuring these
employees align with the Group's objectives is vital. The situation calls for
strategic planning in human resources to effectively manage this risk while
supporting the Group's digital evolution.
Risk mitigation
The aim of the Group is to adapt to the rapidly changing business environment,
increase leadership capabilities, achieve a high level of engagement among
employees, and equip them with the necessary skills. Our proactive approach
encompasses rigorous monitoring of labour market dynamics not only in Georgia
but also in Uzbekistan and beyond. To realise this ambition, we are dedicated
to cultivating a world-class talent acquisition and development ecosystem.
We create a robust international talent pipeline by regularly engaging with
potential candidates, including passive job seekers with diverse profiles. We
work on building an attractive international hiring brand. The Group treats
all employees equally and fairly, supporting and coaching them to succeed.
We equip our people with the tools and frameworks for continuous learning,
supported by a constant feedback loop. We give our staff an opportunity to
grow and expand internationally. We have developed a Succession Planning
Framework for senior positions in order to ensure a smooth transition and to
offer promotion opportunities to employees. In addition, we have launched a
Talent Management Framework, ensuring the constant identification of talented
staff and monitoring their development within the Group.
We monitor human capital risks and measure efficiency using the following
metrics: Employee turnover and retention, Quality of hire, Mobility rate,
Employee Net Promoter Score (ENPS), Employee Pulse surveys, Key employee
metrics, Performance management and Individual Development Plans (IDPs), and
Customer Net Promoter Score (NPS). In terms of compensation, we conduct
multiple salary market studies to ensure we provide competitive conditions for
our employees.
The Group reviews and updates its organisational policies to ensure they are
inclusive and equitable. This includes flexible work arrangements,
accommodations for diverse needs, and inclusive benefits packages.
Our internal IT Academy has been a hub for tech education, offering courses in
front-end, back-end development, DevOps, and more. These courses are
accessible at no cost to both our employees and potential candidates. Under
the guidance of experienced staff and industry professionals, the Academy has
successfully trained over 2,100 individuals from outside the organisation and
2,400 within it. This initiative has resulted in the recruitment of 500
skilled professionals to TBC Group, thereby enhancing the overall IT ecosystem
in the country. The TBC IT Academy is currently conducting the selection
process for five specialized courses: Frontend Development, Backend
Development, DevOps, iOS, and Android Development. Each course group will
consist of 30 carefully selected participants, with the most outstanding
students being offered employment opportunities within the TBC Group upon
successful completion of the program.
Furthermore, both TBC Bank Uzbekistan and Payme have made significant strides
in advancing their IT Academy initiatives in Uzbekistan. In 2024, new courses
in Data Analytics, Backend Development, Quality Assurance, and Test Automation
were introduced in partnership with leading technology universities,
contributing to the development of local technological expertise and talent.
10. The Group is exposed to conduct risk.
Risk description
Conduct risk is defined as the risk of failing to achieve fair outcomes for
customers and other stakeholders. The Bank recognises that effective
management of conduct risk is essential to maintaining customer trust,
protecting its reputation, and delivering long-term value.
The Bank's Code of Ethics serves as a moral compass for all staff and sets
high ethical standards that each employee is required to uphold. Employees are
required to carry out their responsibilities with honesty, integrity, and
professionalism. They are critical to maintaining trust and confidence in its
operations and upholding important values of trust, loyalty, prudence and
care.
Additionally, the Bank's management understands that it bears responsibility
for a diversified group of domestic and international investors, and needs to
embrace the Bank's rules and mechanisms to protect customers and maintain the
confidence of investors and financial markets. The Group's directors strive to
establish the "tone from the top", which sets out the messages describing and
illustrating the core components of good conduct.
Risk mitigation
In managing conduct risk, the Bank takes a coordinated approach, assigning
responsibility to various divisions and departments to identify, mitigate, and
eliminate conduct-related risks across all client and stakeholder
interactions.
The Compliance, Human Capital, and Operational Risk functions work
collaboratively to develop and maintain a unified Conduct Risk Management
Framework. This framework supports business lines and operational units
through the following key processes:
Policy and Procedure Development:
Establishing and regularly updating policies and procedures to ensure that all
employees comply with relevant regulatory requirements, industry best
practices, and the Bank's Code of Conduct and Code of Ethics.
Department Oversight and Complaint Management:
Maintaining a close working relationship with the Compliance Division to
administer conduct-related policies, and investigating complaints regarding
the conduct of the staff.
Client Communication Standards:
Ensuring that front-line staff provide clear, complete, and accurate product
information-both orally and in writing-regardless of a client's financial
knowledge or experience, thereby promoting fair treatment and transparency.
Recordkeeping and Monitoring:
Maintaining comprehensive records of client interactions and communications,
particularly those involving sensitive topics or complex product offerings, to
support transparency and accountability.
Employee Training:
Delivering regular, targeted training to all employees on conduct expectations
and evolving compliance standards, with a strong focus on onboarding new hires
and maintaining awareness of ethical standards across the Bank.
Culture and Incentives:
Promoting a culture of openness and accountability where employees feel
empowered to raise concerns without fear of retaliation. The Bank actively
prevents conflicts of interest and supports this with values-based incentive
and disciplinary policies, moral incentive programmes, and risk-adjusted bonus
schemes.
EMERGING RISKS
The Group recognises its exposure to risks arising from climate change.
Risk description
The risks associated with climate change have both a physical impact, arising
from more frequent and severe weather changes, and a transitional impact that
may entail extensive policy, legal, and technological changes to reduce the
ecological footprint of households and businesses. For the Group, both risks
could materialise through impaired asset values and the deteriorating
creditworthiness of our customers, which could result in a reduction of the
Group's profitability. The Group may also become exposed to reputational risks
because of its lending to, or other business operations with, customers deemed
to be contributing to climate change.
Risk mitigation
The Group has in place an Environmental and Climate Change Policy. The policy
governs its Environmental Management System ("EMS") and ensures that the
Group's operations adhere to the applicable environmental, health, safety, and
labour regulations and practices. We take all reasonable steps to support our
customers in fulfilling their environmental and social responsibilities. The
management of environmental and social risks is embedded in the Group's
lending process through the application of the EMS. The Group has developed
risk management procedures to identify, assess, manage, and monitor
environmental and social risks. These procedures are fully integrated in the
Group's credit risk management process. To identify, assess, and manage risks
associated with climate change, the Group introduced an overall climate risk
assessment and conducted a general analysis to understand the maturity level
of the climate-related framework. This general analysis covered assessment of
existing policies and procedures, identification of areas for further
development, and gap analysis. Following this analysis, the main focus areas
were identified and reflected in the climate action strategy, in line with the
Group's business strategy. Furthermore, our Environmental and Climate Change
Policy is fully compliant with local environmental legislation and follows
international best practices (the full policy is available at
www.tbcbankgroup.com (http://www.tbcbankgroup.com) ).
In order to increase our understanding of climate-related risks to the Bank's
loan portfolio, the Bank performed a high- level sectoral risk assessment,
since different sectors might be vulnerable to different climate-related risks
over different time horizons. In 2024, we further developed our TCFD framework
and measured the Group's indirect performance against the Paris Agreement
targets for the reduction of GHG emissions. The results have been reflected in
the Group's long-term transition plan. Furthermore, we implemented the climate
stress-testing approach developed by the National Bank of Georgia. For more
details, please find the section "Climate-related Financial Disclosures 2024".
The Bank aims to increase its understanding of climate-related risks and their
longer-term impacts over the coming years, which will enable it to further
develop its approach to mitigation. Furthermore, the Group's portfolio has
strong collateral coverage, with around 68.3% of the loan book collateralised
with cash, real estate, or gold. Since the collateral evaluation procedure
includes monitoring, any need to change collateral values arises from our
regular collateral monitoring process.
In May 2025, the Group released its full-scale sustainability report for the
year 2024 in accordance with the Global Reporting Initiative (GRI) standards.
The Global Reporting Initiative (GRI) helps the private sector to understand
and realise its role and influence on sustainable development issues such as
climate change, human rights, and governance.
The report is designed for all interested parties and groups in Georgia and
abroad and aims to give them clear, fact-based information about the social,
economic, and environmental impact of our activities in 2024. It presents our
endeavours to create value for our employees, clients, suppliers, partners,
and society as a whole. The Sustainability Report 2024 is available at
www.tbcbankgroup.com (http://www.tbcbankgroup.com) .
At the executive level, responsibility for ESG and climate-related matters is
assigned to the ESG Steering Committee, which was established by the
Management Board in March 2021 and is responsible for implementing the ESG
and climate action strategy and approving detailed annual and other action
plans for key projects. The ESG Committee meets on a quarterly basis.
In January 2022, the Group established an Environmental, Social and Governance
(ESG) and Ethics Committee at the Board level, as well as at the Supervisory
Board level in line with the Company's "mirror boards" structure. This
reflects the importance of sustainability in TBC's corporate governance and
allows Board members to dedicate more time and focus to ESG topics. The
Committee provides strategic guidance on climate-related matters and reports
to the Board, which has overall oversight. For more details about the
management of ESG matters, please find the section "ESG Strategy".
SELECTED REGULATIONS ON FINANCIAL RISKS
CAPITAL ADEQUACY
The Group's objectives in terms of capital management are to maintain
appropriate levels of capital to support the business strategy, meet
regulatory and stress testing-related requirements, and safeguard the Group's
ability to continue as a going concern.
The Group complied with all its internally and externally imposed capital
requirements throughout the first half of 2025.
Georgian subsidiary - JSC TBC Bank
In December 2017, the NBG adopted amendments to the regulations relating to
capital adequacy requirements. These changes include amendments to the
regulation on capital adequacy requirements for commercial banks, and the
introduction of new requirements (i) on additional capital buffer requirements
for commercial banks within Pillar 2; (ii) on the determination of the
countercyclical buffer rate; and (iii) on the identification of systematically
important banks and determination of systemic buffer requirements. The purpose
of these amendments is to improve the quality of banks' regulatory capital and
achieve better compliance with the Basel III framework.
The NBG developed the requirements for the transition process to International
Financial Reporting Standards (IFRS) in 2020 - 2022. In January 2023, the NBG
adopted amendments to the regulations relating to capital adequacy
requirements, compelling commercial banks to comply with supervisory
regulations that use IFRS-based numbers and approaches. Under the IFRS
transition process, the NBG introduced a credit risk adjustment (CRA) buffer.
The CRA buffer was implemented as a Pillar 2 requirement and was fully set on
CET 1 capital.
In March 2023, the Financial Stability Committee of the NBG decided to set the
neutral (base) rate of the countercyclical buffer at 1%. Banks are required to
accumulate a countercyclical capital buffer according to a predetermined
schedule: 0.25% by March 2024, 0.50% by March 2025, 0.75% by March 2026 and
fully phased-in 1% by March 2027. The countercyclical buffer could be
increased at times of strong credit activity and suspended during periods of
stress.
In May 2023, the NBG introduced a new requirement on Minimum Requirements for
Own Funds and Eligible Liabilities (MREL) under the Bank Recovery and
Resolution Framework. According to the new requirements, commercial banks must
hold specific amounts of equity, subordinated debt, and of qualifying
non-deposit senior debt that could be subject to bail-in in the event of bank
failure. However, this should not affect risks for existing senior creditors
because the bank resolution legislation in Georgia already provides a credible
mechanism for the bail-in of senior obligations. MREL implementation will be
phased in gradually, starting from 10% of Total Liabilities and Own Funds
(TLOF) on 1 January 2024, before increasing to 15% at end-2025, and 20% at
end-2027. MREL-eligible instruments will include regulatory capital and
senior, unsecured non-deposit obligations with maturities of at least one
year, subject to the NBG's approval.
In November 2023, the NBG introduced the concept of a foreseeable dividend,
which should be deducted from retained earnings. According to the regulation,
a foreseeable dividend is considered to be the amount of a dividend approved
or submitted for approval by the relevant entity defined by the charter of the
commercial bank (Supervisory Board).
As another pillar of the NBG's de-dollarisation-oriented policy, in November
2024, the Monetary Policy Committee of the NBG increased the reserve
requirement on foreign currency liabilities by 5pps from 20% to 25%.
In December 2024, the NBG also made amendments to the systemic risk buffer
calculation methodology. According to the new methodology, the current
systemic risk buffer for JSC TBC Bank amounts 2.5% and can be increased by
0.5% if the bank's share of non-bank deposits in the total non-bank deposits
of commercial banks and microbanks equals or exceeds 40%, based on the average
of the previous three consecutive months. Additionally, for every further
2-percentage-point increase (in multiples of two), the buffer will be raised
by an additional 0.5%. The Bank must comply with the increased requirement in
a 12-month period. If the bank's share of non-bank deposits over the past 12
consecutive months decreases by any multiple of 2% or falls below 40%, the
buffer will be reduced by 0.5% for each such decrease. The upper limit for the
systemic buffer is set at 5%.
The following table presents the capital adequacy ratios and minimum
requirements:
Jun'25 Mar'25 Jun'24
CET 1 capital 4,917,529 4,814,010 4,344,472
Tier 1 capital 5,938,879 5,851,748 5,749,522
Tier 2 capital 935,895 935,144 922,217
Total regulatory capital 6,874,774 6,786,892 6,671,739
Risk-weighted exposures:
Credit Risk-weighted exposures 25,985,507 25,259,747 22,459,700
Risk-weighted exposures for Market Risk 159,393 283,430 83,580
Risk-weighted exposures for Operational Risk 3,794,626 3,794,626 3,248,365
Total Risk-weighted exposures 29,939,526 29,337,803 25,791,645
Minimum CET 1 ratio 14.66% 14.6% 14.6%
CET 1 capital adequacy ratio 16.42% 16.4% 16.8%
Minimum Tier 1 ratio 16.92% 16.9% 16.9%
Tier 1 capital adequacy ratio 19.84% 19.9% 22.3%
Minimum total capital adequacy ratio 19.92% 19.9% 20.0%
Total capital adequacy ratio 22.96% 23.1% 25.9%
GEL volatility has been and remains a significant risk to the Bank's capital
adequacy. A 10% GEL depreciation would translate into a 0.8 pp, 0.7 pp and 0.6
pp drop in the Bank's excess CET 1, Tier 1 and Total regulatory capital,
respectively.
Uzbek subsidiary - JSC TBC Bank UZ
In June 2025, the Central Bank of Uzbekistan implemented targeted updates to
the capital adequacy framework and reduced risk weight to 75% for specific
loans issued to self-employed individuals and small businesses. This applies
to loans of up to 300 million soums to self-employed individuals with
verifiable income or stable bank turnover over the past six months and a debt
burden of 50% or less, as well as to total loans to small businesses within
0.2% of the bank's regulatory capital or up to 15 billion soums, whichever is
lower. These changes apply to loans disbursed after June 1, 2025 and
positively impact the Bank's capital adequacy position.
As of 30 June 2025, the Bank met the requirements for regulatory capital set
by Regulation On the Requirements for the Adequacy of the Capital of
Commercial Banks No. 2693 dated July 6, 2015.
The following table presents the capital adequacy ratios and minimum
requirements:
Jun'25 Mar'25 Jun'24
Minimum CET 1 ratio 8.0% 8.0% 8.0%
CET 1 capital adequacy ratio 18.5% 19.4% 12.6%
Minimum Tier 1 capital 10.0% 10.0% 10.0%
Tier 1 capital adequacy ratio 18.5% 19.4% 12.6%
Minimum total capital adequacy ratio 13.0% 13.0% 13.0%
Total capital adequacy ratio 20.0% 20.3% 16.4%
LIQUIDITY
The Group's objectives in terms of liquidity management are to maintain
appropriate levels of liquidity to support the business strategy, meet
regulatory and stress testing-related requirements, and safeguard the Group's
ability to continue as a going concern.
The Group complied with all its internally and externally imposed liquidity
requirements half year 2025.
Georgian subsidiary - JSC TBC Bank
The Bank assesses LCR and NSFR per NBG guidelines, whereby the ratios
implemented by the NBG have more conservative approaches than those set by
Basel III standards. The LCR enhances short-term resilience. In addition to
the total LCR limit set at 100%, the NBG defines limits per currency for the
GEL and foreign currencies (FC). To promote larisation in Georgia, the NBG set
a lower limit to GEL LCR than to FC LCR. FC Mandatory Reserves are wholly
considered in HQLA (High Qualified Liquid Assets) for LCR purposes.
The NSFR is used for long-term liquidity risk management to promote resilience
over a longer time horizon by creating additional incentives for JSC TBC Bank
to rely on more stable sources of funding on a continuing basis. The
regulatory limit is set at 100%.
As of 30 June 2025, the ratios were well above the prudential limits set by
the NBG, as follows:
Funding & Liquidity Jun'25 Mar'25 Jun'24
Minimum net stable funding ratio, as defined by the NBG 100.0% 100.0% 100.0%
Net stable funding ratio as defined by the NBG 124.4% 125.6% 118.2%
Minimum total liquidity coverage ratio, as defined by the NBG 100.0% 100.0% 100.0%
Minimum LCR in GEL, as defined by the NBG 75% 75.0% 75%
Minimum LCR in FC, as defined by the NBG 100.0% 100.0% 100.0%
Total liquidity coverage ratio, as defined by the NBG 116.3% 119.0% 118.1%
LCR in GEL, as defined by the NBG 115.7% 118.9% 100.0%
LCR in FC, as defined by the NBG 116.6% 119.1% 129.5%
Uzbek subsidiary - JSC TBC Bank UZ
The regulatory framework established by the Central Bank of Uzbekistan (CBU)
mandates specific liquidity ratios for financial institutions to uphold
financial stability and mitigate potential risks. In compliance with these
regulations, financial institutions are required to maintain a High-Quality
Liquid Assets/Total Assets ratio of 10%, ensuring a sufficient buffer of
liquid assets to cover a proportion of their total assets.
Moreover, institutions are obligated to maintain a 25% Instant Liquidity
Ratio, ensuring prompt liquidity availability for unforeseen financial
obligations. Further reinforcing risk resilience, a Liquidity Coverage Ratio
(LCR) of ≥100% is mandated, requiring sufficient high-quality liquid assets
to offset potential liquidity shortfalls during stress periods.
In addition to these measures, financial entities must sustain a Net Stable
Funding Ratio (NSFR) of ≥100%, highlighting the need for a stable funding
structure over an extended time horizon to mitigate liquidity risks
effectively. As of 30 June 2025, the Bank met the requirements set by the
Regulator.
MARKET RISK
The Group's objectives in terms of market risk management are to support the
business strategy, meet regulatory and stress testing-related requirements and
safeguard the Group's ability to continue as a going concern.
The Group complied with all its internally and externally imposed market risk
requirements half year 2025.
FX risk
JSC TBC Bank (Georgia) and TBC Bank Uzbekistan are required to maintain open
currency positions in line with the NBG's and CBU's limits respectively.
· The NBG requires the Bank to monitor both balance sheet and total
aggregate (including off-balance sheet) open currency positions and to
maintain the latter within 20% of the Bank's regulatory capital.
· CBU limits are set separately for aggregate OCP and for each
foreign currency position at 15% and 10% of UZ TBC's regulatory capital
respectively.
Interest rate risk
JSC TBC Bank (Georgia) assesses interest rate risk from both the Net Interest
Income (NII) and Economic Value of Equity (EVE) perspectives. As per the
regulatory requirements, the Bank assesses the impact of interest rate shock
scenarios on EVE and NII. According to NBG guidelines, NII sensitivity under
parallel shifts of interest rate scenarios is maintained for monitoring
purposes, while EVE sensitivity is calculated under six predefined stress
scenarios of interest rate changes, with the limit applied to the result of
the worst-case scenario. As of 30 June 2025, TBC Bank's EVE ratio stood at
8.68%, comfortably below the regulatory limit (15%).
Statement of Directors' Responsibilities
The Directors are required to prepare the condensed consolidated financial
statements on a going concern basis unless it is not appropriate. They are
satisfied that the Group has the resources to continue in business for the
foreseeable future and that the financial statements continue to be prepared
on a going concern basis.
The Directors confirm that to the best of their knowledge:
· the financial statements have been prepared in accordance with
IAS 34 'Interim Financial Reporting' as adopted by the UK, and the Disclosure
Guidance and Transparency Rules ('DTR') sourcebook of the UK's Financial
Conduct Authority;
· this Interim Report 2025 gives a true, fair, balanced and
understandable view of the assets, liabilities, financial position and profit
or loss of the Company; and
· this Interim Report 2025 includes a fair review of the
information required by:
o DTR 4.2.7R, being an indication of: important events that have occurred
during the first six months of the financial year ending 31 December 2025 and
their impact on the condensed set of financial statements; and a description
of the principal risks and uncertainties for the remaining six months of the
financial year; and
o DTR 4.2.8R, being: related party transactions that have taken place in the
first six months of the financial year ending 31 December 2025, which have
materially affected the financial position or performance of TBC Bank during
that period; and any changes in the related parties transactions described in
the Annual Report and Accounts 2024 that could materially affect the financial
position or performance of TBC Bank during the first six months of the
financial year ending 31 December 2025.
Signed on behalf of the Board by:
Vakhtang Butskhrikidze
CEO
7 August 2025
TBC Bank Group PLC Board of Directors:
Chairman
Arne Berggren
Executive Directors Non-executive Directors
Vakhtang Butskhrikidze (CEO) Eran Klein
Tsira Kemularia
Janet Heckman
Per Anders Fasth
Thymios Kyriakopoulos
Nino Suknidze
Rajeev Sawhney
TBC BANK GROUP PLC
Condensed Consolidated Interim Financial
Statements (Unaudited)
30 June 2025
Table of contents
Independent Auditor's Report
......................................................................................................................................
53
Condensed Consolidated Interim Statement of Financial Position
..............................................................................
55
Condensed Consolidated Interim Statement of Profit or Loss and Other
Comprehensive Income.............................. 56
Condensed Consolidated Interim Statement of Changes in
Equity...............................................................................
57
Condensed Consolidated Interim Statement of Cash
Flows..........................................................................................
58
Notes to the condensed consolidated interim financial statements:
1. Introduction
2. Material Accounting Policy Information
3. Sources Of Estimation Uncertainty And Judgements In Applying Accounting
Policies
4. Cash And Cash Equivalents
5. Due From Other Banks
6. Mandatory Cash Balances With NBG And CBU
7. Loans And Advances To Customers
8. Premises, Equipment And Intangible Assets
9. Due To Credit Institutions
10.Customer Accounts
11.Debt Securities In Issue
12.Subordinated Debt
13.Additional Tier 1 Capital Subordinated Notes
14.Equity
15.Share Based Payments
16.Earnings Per Share
17.Segment Analysis
18.Interest Income And Expense
19.Fee and Commission Income And Expense
20.Net Gains From Derivatives, Foreign Currency Operations and Translation
21.Income Taxes
22.Financial And Other Risk Management
23.Contingencies And Commitments
24.Fair Value Disclosures
25.Related Party Transactions
26.Events After Reporting Period
Independent review report to TBC Bank Group Plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed TBC Bank Group Plc's condensed consolidated interim financial
statements (the "interim financial statements") in the 2Q and 1H 2025
Financial Results of TBC Bank Group Plc for the 6-month period ended
30 June 2025 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed Consolidated Interim Statement of Financial Position as
at 30 June 2025;
· the Condensed Consolidated Interim Statement of Profit or Loss and
Other Comprehensive Income for the period then ended;
· the Condensed Consolidated Interim Statement of Cash Flows for the
period then ended;
· the Condensed Consolidated Interim Statement of Changes in Equity for
the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the 2Q and 1H 2025 Financial
Results of TBC Bank Group Plc have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting' and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the 2Q and 1H 2025 Financial
Results and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The 2Q and 1H 2025 Financial Results, including the interim financial
statements, is the responsibility of, and has been approved by the directors.
The directors are responsible for preparing the 2Q and 1H 2025 Financial
Results in accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. In preparing
the 2Q and 1H 2025 Financial Results, including the interim financial
statements, the directors are responsible for assessing the group's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease operations, or have
no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the 2Q and 1H 2025 Financial Results based on our review. Our
conclusion, including our Conclusions relating to going concern, is based on
procedures that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
complying with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
7 August 2025
In thousands of GEL Note 30 June 2025 31 December 2024
ASSETS
Cash and cash equivalents 4 3,548,840 3,047,401
Due from other banks 5 111,130 45,498
Mandatory cash balances with NBG and CBU 6 2,408,487 2,576,731
Loans and advances to customers 7 27,198,728 25,683,798
Investment securities 5,260,446 5,538,476
Repurchase receivables - 140,058
Finance lease receivables 710,040 612,320
Investment properties 11,569 9,752
Current income tax prepayment 11,546 60,422
Deferred income tax asset 4,254 3,150
Other financial assets 436,784 436,574
Other assets 752,095 604,911
Premises and equipment 8 657,580 621,662
Right of use assets 128,618 130,682
Intangible assets 8 662,919 589,067
Goodwill 59,964 59,964
TOTAL ASSETS 41,963,000 40,160,466
LIABILITIES
Due to credit institutions 9 7,181,100 7,630,850
Customer accounts 10 23,921,726 22,863,833
Other financial liabilities 1,138,603 476,143
Current income tax liability 23,416 1,227
Deferred income tax liability 51,774 50,220
Debt securities in issue 11 829,613 448,064
Other liabilities 102,300 159,136
Lease liabilities 110,032 107,963
Subordinated debt 12 1,151,490 1,148,374
Additional Tier 1 capital subordinated notes 13 1,031,408 1,062,119
Redemption liability 14 545,400 473,528
TOTAL LIABILITIES 36,086,862 34,421,457
EQUITY
Share capital 14 1,719 1,722
Share premium 14 411,088 411,088
Shares held by trust (49,862) (66,982)
Merger reserve 402,862 402,862
Share based payment reserve 15 (6,439) (1,886)
Other reserves (619,230) (478,042)
Retained earnings 14 5,590,920 5,286,738
Equity attributable to the owners of TBCG 5,731,058 5,555,500
Non-controlling interest 145,080 183,509
TOTAL EQUITY 5,876,138 5,739,009
TOTAL LIABILITIES AND EQUITY 41,963,000 40,160,466
The condensed consolidated interim financial statements on pages 55 to 99 were
approved for issue by the Board of Directors on 7 August 2025 and signed on
its behalf by:
______________________________
Vakhtang
Butskhrikidze
Chief Executive Officer
Six months ended
In thousands of GEL Note 30 June 2025 30 June 2024*
Interest income 18 2,216,674 1,718,903
Interest income calculated using effective interest rate method 18 2,115,575 1,665,109
Other interest income 18 101,099 53,794
Interest expense 18 (1,105,264) (856,705)
Net interest on currency swaps 18 3,602 38,757
Net interest income 1,115,012 900,955
Fee and commission income 19 490,517 380,362
Fee and commission expense 19 (186,886) (152,661)
Net fee and commission income 303,631 227,701
Insurance contract revenue 97,185 75,802
Reinsurance service result (3,341) (2,908)
Insurance service claims and expenses incurred (71,070) (55,991)
Insurance profit 22,774 16,903
Net gains from derivatives, foreign currency operations and translation 20 155,932 147,116
Other operating income* 11,051 3,631
Share of profit of associates 439 105
Other operating non-interest income 167,422 150,852
Credit loss allowance for loans to customers 7 (211,722) (71,565)
Credit loss allowance for finance lease receivables (13,875) (4,131)
Credit loss allowance for other financial assets and other assets* (8,009) (971)
Net impairment of non-financial assets (3,470) (29)
Operating income after expected credit and non-financial asset impairment 1,371,763 1,219,715
losses
Staff costs (307,891) (262,216)
Depreciation and amortisation 8 (79,574) (69,722)
Administrative and other operating expenses* (214,233) (154,310)
Operating expenses (601,698) (486,248)
Profit before tax 770,065 733,467
Income tax expense 21 (105,284) (107,698)
Profit for the period 664,781 625,769
Other comprehensive income/ (expense) for the period
Items that may be reclassified subsequently to profit or loss, net of tax:
Net gains reclassified to profit or loss upon disposal of investment (6,004) (284)
securities
Movement in fair value reserve for investment securities measured at fair (55,949) (36,888)
value through other comprehensive income
Exchange differences on translation to presentation currency (7,193) 2,893
Net other movements 1,061 115
Other comprehensive expense for the period, net of tax (68,085) (34,164)
Total comprehensive income for the period 596,696 591,605
Profit is attributable to:
- Shareholders of TBCG 657,414 617,400
- Non-controlling interest 7,367 8,369
Profit for the period 664,781 625,769
Total comprehensive income is attributable to:
- Shareholders of TBCG 591,869 583,236
- Non-controlling interest 4,827 8,369
Total comprehensive income for the period 596,696 591,605
Earnings per share for profit attributable to the owners of the Group:
- Basic earnings per share (in GEL) 16 11.85 11.33
- Diluted earnings per share (in GEL) 16 11.74 11.28
*To improve the quality and understandability of the consolidated statement of
profit or loss and other comprehensive income, the Group has revisited
presentation of these line items. Further details are disclosed in the annual
consolidated financial statements of the Group for the period ended 31
December 2024.
In thousands of GEL Note Share capital Share premium Treasury shares Shares held by trust Merger reserve Share based payments reserve Other reserves Retained earnings Total equity excluding non-controlling interest Non-controlling interest Total equity
Balance as of 1 January 2024 1,690 295,605 - (75,609) 402,862 23,677 (397,992) 4,433,496 4,683,729 136,453 4,820,182
Profit for the six months period ended 30 June 2024 - - - - - - - 617,400 617,400 8,369 625,769
Other comprehensive expense for the six months ended 30 June 2024: - - - - - - (34,164) - (34,164) - (34,164)
Total comprehensive income/(expense) for the six months ended 30 June 2024 - - - - - - (34,164) 617,400 583,236 8,369 591,605
Share based payment expense 15 - - - - - 9,150 - - 9,150 - 9,150
Dividends declared 14 - - - - - - - (254,885) (254,885) - (254,885)
Delivery of SBP shares to employees - - - 34,999 - (50,719) - - (15,720) - (15,720)
Shares cancelled (1) (2,871) 2,872 - - - - - - - -
Share buy-back - - (2,872) (26,372) - - - - (29,244) - (29,244)
Capital injection from NCI shareholders - - - - - - - - - 13,080 13,080
Remeasurement of redemption liability 14 - - - - - - (54,448) - (54,448) - (54,448)
Other movements - - - - - - - 40 40 - 40
Balance as of 30 June 2024 1,689 292,734 - (66,982) 402,862 (17,892) (486,604) 4,796,051 4,921,858 157,902 5,079,760
Balance as of 1 January 2025 1,722 411,088 - (66,982) 402,862 (1,886) (478,042) 5,286,738 5,555,500 183,509 5,739,009
Profit for the six months period ended 30 June 2025 - - - - - - - 657,414 657,414 7,367 664,781
Other comprehensive income for the six months period ended 30 June 2025 - - - - - - (65,545) - (65,545) (2,540) (68,085)
Total comprehensive income/(expense) for the six months ended 30 June 2025 - - - - - - (65,545) 657,414 591,869 4,827 596,696
Share based payment expense 15 - - - - - 22,155 - - 22,155 - 22,155
Delivery of SBP shares to employees 14 - - - 17,120 - (26,708) - - (9,588) - (9,588)
Shares cancelled (3) - 8,351 - - - 3 (8,351) - - -
Share buy-back - - (8,351) - - - - - (8,351) - (8,351)
Dividends declared - - - - - - - (391,719) (391,719) - (391,719)
Capital injection from NCI shareholders - - - - - - - - - 8 8
Remeasurement of redemption liability 14 - - - - - - (7,768) - (7,768) - (7,768)
Reorganization effect - - - - - - (67,878) 46,831 (21,047) (43,264) (64,311)
Other movements - - - - - - - 7 7 - 7
Balance as of 30 June 2025 1,719 411,088 - (49,862) 402,862 (6,439) (619,230) 5,590,920 5,731,058 145,080 5,876,138
Six months ended
In thousands of GEL Note 30 June 2025 30 June 2024*
Cash flows from operating activities
Interest received 2,151,606 1,613,229
Interest received on currency swaps 18 3,602 38,757
Interest paid (1,108,658) (828,471)
Fees and commissions received 505,256 388,633
Fees and commissions paid (168,266) (181,307)
Insurance premiums received 89,427 85,391
Insurance claims paid (51,989) (45,309)
Cash received from trading in foreign currencies 169,802 89,130
Other operating income received 6,695 4,419
Staff costs paid (368,108) (290,974)
Administrative and other operating expenses paid (231,009) (183,598)
Income tax paid (32,542) (164,019)
Cash flows from operating activities before changes in operating assets and 965,816 525,881
liabilities
Net change in operating assets
Due from other banks and mandatory cash balances with NBG and CBU 86,586 153,560
Loans and advances to customers (1,643,465) (1,700,303)
Finance lease receivables (104,420) (46,705)
Other financial assets (136,552) (567)
Other assets (56,566) (9,464)
Net change in operating liabilities
Due to other banks (200,372) 182,975
Customer accounts 1,249,067 668,609
Other financial liabilities 19,527 38,100
Other liabilities and provision for liabilities and charges (12,625) 12,397
Net cash flows from / (used in) operating activities 166,996 (175,517)
Cash flows used in investing activities
Acquisition of investment securities* (2,504,058) (2,232,997)
Proceeds from disposal of investment securities* 1,287,120 1,515,077
Proceeds from redemption at maturity of investment securities* 1,581,450 78,408
Acquisition of premises, equipment and intangible assets 8 (119,909) (146,441)
Proceeds from disposal of premises, equipment and intangible assets 8 2,336 890
Proceeds from disposal of investment properties 4,333 6,993
Dividend received 754 802
Net cash flows from / (used in) investing activities 252,026 (777,268)
Cash flows from financing activities
Proceeds from other borrowed funds 3,396,515 494,733
Redemption of other borrowed funds (3,669,020) (250,093)
Repayment of principal of lease liabilities (12,222) (14,683)
Proceeds from subordinated debt - 231,038
Cash paid for share buy-back (8,984) (28,203)
Capital injection from NCI shareholders 8 13,080
Proceeds from debt securities in issue and AT1* 382,478 1,053,596
Redemption of debt securities in issue and AT1* - (737,285)
Net cash from financing activities 88,775 762,183
Effect of exchange rate changes on cash and cash equivalents (6,358) 114,881
Net increase / (decrease) in cash and cash equivalents 501,439 (75,721)
Cash and cash equivalents at the beginning of the period 4 3,047,401 3,764,087
Cash and cash equivalents at the end of the period 4 3,548,840 3,688,366
*To improve the quality and understandability of the consolidated statement of
cash flow, the Group has revisited presentation of these line items. Further
details are disclosed in the annual consolidated financial statements of the
Group for the period ended 31 December 2024.
- 1. INTRODUCTION
Principal activities. TBC Bank Group PLC (hereafter the "Company") is a public
limited by shares company, incorporated in the United Kingdom. TBC Bank Group
PLC held 99.88% of the share capital of JSC TBC Bank (hereafter the "Bank") as
at 30 June 2025 (31 December 2024: 99.88%), thus representing the Bank's
ultimate parent company. The Bank is the parent of a group of companies
incorporated mainly in Georgia and Uzbekistan, their primary business
activities include providing banking, leasing, insurance, brokerage and card
processing services to corporate and individual customers. TBC Bank Group PLC
and its subsidiaries is referred as "TBCG" or the "Group". The Group's list
of subsidiaries is provided below.
The shares of TBC Bank Group PLC were admitted to the Equity Shares
(Commercial Companies) ("ESCC") category of the Official List of the UK
Listing Authority and admitted to trading on the London Stock Exchange PLC's
Main Market for listed securities effective on 10 August 2016 (the
"Admission"). The Group's registered legal address is 100 Bishopsgate, C/O Law
Debenture, London, England, EC2N 4AG. Registered number of TBC Bank Group PLC
is 10029943. The Bank is the Group's main operating unit and it accounts for
most of the Group's activities.
JSC TBC Bank was incorporated on 17 December 1992 and is domiciled in Georgia.
The Bank is a joint stock company limited by shares and was set up in
accordance with Georgian regulations. The Bank's registered address and place
of business is 7 Marjanishvili Street, 0102 Tbilisi, Georgia.
The Bank's principal business activity is universal banking operations that
include corporate, small and medium enterprises, retail and micro-operations
within Georgia. The Bank has been operating since 20 January 1993 under a
general banking license issued by the National Bank of Georgia ("NBG"). In
2020, TBC Bank Group PLC established JSCB TBC Bank, which is operating through
the digital banking platform of Groups subsidiary Space JSC.
The Bank had 122 branches within Georgia as at 30 June 2025 (As at 30 June
2024: 126 branches).
JSCB TBC Bank (hereafter the "UZ Bank") was incorporated and is domiciled in
the Republic of Uzbekistan. It is a joint stock commercial bank limited by
shares and was set up in accordance with regulations of the Republic of
Uzbekistan.
The UZ Bank's principal business activity is retail and microfinance
operations within the Republic of Uzbekistan, primarily serving individuals.
The UZ Bank operates under a general banking license issued by the Central
Bank of Uzbekistan ("CBU") on 11 April 2020, which was renewed by the UZ Bank
on 17 March 2022.
As at 30 June 2025 and 31 December 2024 the following shareholders directly
owned more than 3% of the total outstanding shares of the Group. Other
shareholders individually owned less than 3% of the outstanding shares. As at
30 June 2025 and 31 December 2024 the Group had no ultimate controlling party.
% Of ownership interest held as of
Shareholders 30 June 2025 31 December 2024
BlackRock 6.41% 4.60%
Dunross & Co. 5.99% 6.84%
Vanguard Group 5.14% 4.24%
Fidelity International 5.03% 2.47%
JPMorgan Asset Management 3.75% 3.75%
Mamuka Khazaradze and Badri Japaridze 15.23% 15.40%
Other* 58.45% 62.70%
Total 100.00% 100.00%
* Other includes individual as well as corporate shareholders.
1. INTRODUCTION (CONTINUED)
Subsidiaries and associates. The condensed consolidated interim financial
statements include the following principal subsidiaries:
Subsidiary name Proportion of voting rights and ordinary share capital Principal place of business or Year of incorporation Functional Currency Principal activities
incorporation
30 June 2025 31 December 2024
TBC Bank JSC 99.88% 99.88% Tbilisi, Georgia 1992 GEL Banking
United Financial Corporation JSC 99.53% 99.53% Tbilisi, Georgia 2001 GEL Card processing
TBC Capital LLC 100.00% 100.00% Tbilisi, Georgia 1999 GEL Brokerage
TBC Leasing JSC 100.00% 100.00% Tbilisi, Georgia 2003 GEL Leasing
TBC Kredit LLC 100.00% 100.00% Baku, Azerbaijan 1999 AZN Non-banking credit institution
TBC Pay LLC 100.00% 100.00% Tbilisi, Georgia 2008 GEL Payment processing
TBC Invest-Georgia LLC 100.00% 100.00% Ramat Gan, Israel 2011 ILS Financial services
TBC Asset Management LLC 100.00% 100.00% Tbilisi, Georgia 2021 GEL Asset management
TBC Insurance JSC 100.00% 100.00% Tbilisi, Georgia 2014 GEL Insurance
Redmed LLC 100.00% 100.00% Tbilisi, Georgia 2019 GEL Healthcare e-commerce
TNET LLC 100.00% 100.00% Tbilisi, Georgia 2019 GEL Ecosystem
Index LLC 100.00% 100.00% Tbilisi, Georgia 2009 GEL Public register Business and real estate services
Art Area.ge LLC 100.00% 100.00% Tbilisi, Georgia 2012 GEL PR and marketing
Saba LLC 85.00% 85.00% Tbilisi, Georgia 2012 GEL Education
TBC Art Gallery LLC(1) 100.00% 100.00% Tbilisi, Georgia 2012 GEL PR and marketing
Marjanishvili 7 LLC 100.00% 100.00% Tbilisi, Georgia 2020 GEL Customer experience servicing
TBC Digital JSC 79.69% 100.00% Tashkent, Uzbekistan 2019 UZS Investment
JSCB TBC Bank 100.00% 100.00%* Tashkent, Uzbekistan 2020 UZS Banking
TBC Fin Service LLC 100.00% 100.00% Tashkent, Uzbekistan 2019 UZS Leasing
MFO TBC Credit LLC(2) 100.00% 100.00% Tashkent, Uzbekistan 2024 UZS Microlending
TBC Sug'Urta JSC 100.00% 100.00% Tashkent, Uzbekistan 2024 UZS Insurance
Payme JSC 100.00% 100.00%* Tashkent, Uzbekistan 2011 UZS Payment processing
TBC Group Support LLC 100.00% 100.00% Tbilisi, Georgia 2020 GEL Group risk and knowledge centre
Space JSC 100.00% 100.00% Tbilisi, Georgia 2021 GEL Software services
Space International JSC 100.00% 100.00% Tbilisi, Georgia 2021 GEL Digital banking platform
TBC International Holdings Limited 100.00% 100.00% London, United Kingdom 2023 GEL Financial services
Tpay LLC 100.00% 100.00% Tbilisi, Georgia 2023 GEL Payment processing
Fondy Payments Limited 100.00% 100.00% Drogheda, Ireland 2019 EUR Payment processing
* The Group reorganised the structure of Uzbekistan operations. For more
details refer to note 14.
The Group has investments in the following associates:
Associate name Proportion of voting rights and ordinary share capital Principal place of business or Year of incorporation Principal activities
incorporation
30 June 2025 31 December 2024
Credit Information Bureau Creditinfo Georgia JSC 21.08% 21.08% Tbilisi, Georgia 2005 Financial intermediation
Tbilisi Stock Exchange JSC 28.79% 28.87% Tbilisi, Georgia 2015 Stock Exchange
Georgian Central Securities Depository JSC 22.87% 22.87% Tbilisi, Georgia 1999 Securities Depository
Georgian Stock Exchange JSC³ 17.33% 17.33% Tbilisi, Georgia 1999 Stock Exchange
Kavkasreestri JSC³ 10.03% 10.03% Tbilisi, Georgia 1998 Securities Depository
The country of incorporation is also the principal area of operation of each
of the above subsidiaries and associates.
1 Dormant.
2 In 2025 MFO Barakala microfinance changed its name to MFO TBC Credit LLC.
3 The Group has a significant influence on Georgian Stock Exchange JSC and
Kavkasreestri JSC with representatives in management board.
1. INTRODUCTION (CONTINUED)
The Group's corporate structure consists of a number of related undertakings,
comprising subsidiaries and associates, which are not consolidated or equity
accounted due to immateriality. A full list of these undertakings, the country
of incorporation and the ownership of each share class is set out below.
Company name Proportion of voting rights and ordinary share capital Principal place of business or Year of incorporation Principal activities
incorporation
30 June 2025 31 December 2024
TBC Invest International LLC* 100.00% 100.00% Tbilisi, Georgia 2016 Investment Vehicle
University Development Fund* 33.33% 33.33% Tbilisi, Georgia 2007 Education
Natural Products of Georgia LLC* 25.00% 25.00% Tbilisi, Georgia 2001 Trade, Service
TBC Trade LLC* 100.00% 100.00% Tbilisi, Georgia 2008 Trade, Service
Diversified Credit Portfolio JSC 100.00% 100.00% Tbilisi, Georgia 2021 Investment Fund
Globally Diversified bond fund JSC 100.00% 100.00% Tbilisi, Georgia 2023 Investment Fund
Freeshop.ge LLC* 100.00% 100.00% Tbilisi, Georgia 2010 Retail Trade
The.ge LLC* 100.00% 100.00% Tbilisi, Georgia 2012 Retail Trade
Mypost LLC* 100.00% 100.00% Tbilisi, Georgia 2019 Postal Service
Billing Solutions LLC* 51.00% 51.00% Tbilisi, Georgia 2019 Software Services
Vendoo LLC (Geo)* 100.00% 100.00% Tbilisi, Georgia 2018 Retail Leasing
F Solutions LLC* 100.00% 100.00% Tbilisi, Georgia 2016 Software Services
Diversified Credit Portfolio JSC 2 100.00% 100.00% Tbilisi, Georgia 2024 Investment Fund
Diversified Credit Portfolio JSC 3 100.00% 100.00% Tbilisi, Georgia 2024 Investment Fund
DWH CO 100.00% 100.00% Tbilisi, Georgia 2024 Data Analytics
Space Int LLC (Uz) 100.00% 100.00% Tashkent, Uzbekistan 2024 Computer Programming
* Dormant
Climate Impact
The Group has reviewed its exposure to climate-related risks, but has not
identified any risks that could significantly impact the financial performance
or position of the Group as at 30 June 2025. See more details outlined in risk
management disclosures in note 22.
2. MATERIAL ACCOUNTING POLICY INFORMATION
Basis of preparation. These condensed consolidated interim financial
statements for six months ended 30 June 2025 for the Group has been prepared
in accordance with the Disclosure Guidance and Transparency Rules sourcebook
of the Financial Conduct Authority (FCA), and in accordance with UK-adopted
International Accounting Standard (IAS) 34 'Interim Financial Reporting'.
These condensed consolidated interim financial statements do not include all
the notes, normally included in annual consolidated financial statements.
Accordingly, this report is to be read in conjunction with the annual
consolidated financial statements for the year ended 31 December 2024, which
were prepared in accordance with UK-adopted International Accounting Standards
and with the requirements of the Companies Act 2006 and, for the group, in
accordance with, international financial reporting standards adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European Union.
Going concern. The Board has fully reviewed the available information
pertaining to the principal existing and emerging risks, strategy, financial
health, profitability of operations, liquidity and solvency of the Group, and
determined that the Group's business remains a going concern. The Directors
have not identified any material uncertainties that could threaten the going
concern assumption and have a reasonable expectation that the Group has
adequate resources to remain operational and solvent for the foreseeable
future (which is, for this purpose, a period of 12 months from the date of
approval of these financial statements).
Accordingly, the accompanying financial statements are prepared in line with
the going concern basis of accounting.
Presentation currency. These condensed consolidated interim financial
statements are presented in thousands of Georgian Lari ("GEL thousands"),
except per-share amounts and unless otherwise indicated.
Accounting policies and relevant changes within. The same accounting policies
and methods of computation were followed in the preparation of this condensed
consolidated interim financial statements as compared with the annual
consolidated financial statements of the Group for the period ended 31
December 2024.
Interim period tax measurement. Interim period income tax expense is accrued
using the effective tax rate that would be applicable to expected total annual
earnings, that is, the estimated weighted average annual effective income tax
rate applied to the pre-tax income of the interim period.
2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Adoption of new or revised standards and interpretations. The Group adopts
every required standard enhancement that becomes effective during the period.
During six months period ended 30 June 2025, there was no effect on the Group
or the effect was immaterial to the Group to disclose from adopting the new
pronouncements effective from 1 January 2025:
Amendments to IAS 21 Lack of Exchangeability (Issued on 15 August 2023 and
effective for annual periods beginning on or after 1 January 2025). In
August 2023, the IASB issued amendments to IAS 21 to help entities assess
exchangeability between two currencies and determine the spot exchange rate,
when exchangeability is lacking. An entity is impacted by the amendments when
it has a transaction or an operation in a foreign currency that is not
exchangeable into another currency at a measurement date for a specified
purpose. The amendments to IAS 21 do not provide detailed requirements on how
to estimate the spot exchange rate. Instead, they set out a framework under
which an entity can determine the spot exchange rate at the measurement date.
When applying the new requirements, it is not permitted to restate comparative
information. It is required to translate the affected amounts at estimated
spot exchange rates at the date of initial application, with an adjustment to
retained earnings or to the reserve for cumulative translation differences.
The amendments do not have, or have immaterial effects on the Group's
financial statements.
Amendments to the Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and IFRS 7 (issued on 30 May 2024 and effective for
annual periods beginning on or after 1 January 2026).
On 30 May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 to:
(a) clarify the date of recognition and derecognition of some financial assets
and liabilities, with a new exception for some financial liabilities settled
through an electronic cash transfer system;
(b) clarify and add further guidance for assessing whether a financial asset
meets the solely payments of principal and interest (SPPI) criterion;
(c) add new disclosures for certain instruments with contractual terms that
can change cash flows (such as some instruments with features linked to the
achievement of environment, social and governance (ESG) targets); and
(d) update the disclosures for equity instruments designated at fair value
through other comprehensive income (FVTOCI).
The Group is currently assessing the impact of the amendments on its financial
statements.
Annual Improvements to IFRS Accounting Standards (Issued in July 2024 and
effective from 1 January 2026). IFRS 1 was clarified that a hedge should be
discontinued upon transition to IFRS Accounting Standards if it does not meet
the 'qualifying criteria', rather than 'conditions' for hedge accounting, in
order to resolve a potential confusion arising from an inconsistency between
the wording in IFRS 1 and the requirements for hedge accounting in IFRS 9.
IFRS 7 requires disclosures about a gain or loss on derecognition relating to
financial assets in which the entity has a continuing involvement, including
whether fair value measurements included 'significant unobservable inputs.
This new phrase replaced reference to 'significant inputs that were not based
on observable market data'. The amendment makes the wording consistent with
IFRS 13. In addition, certain IFRS 7 implementation guidance examples were
clarified and text added that the examples do not necessarily illustrate all
the requirements in the referenced paragraphs of IFRS 7. IFRS 16 was amended
to clarify that when a lessee has determined that a lease liability has been
extinguished in accordance with IFRS 9, the lessee is required to apply IFRS 9
guidance to recognise any resulting gain or loss in profit or loss. This
clarification applies to lease liabilities that are extinguished on or after
the beginning of the annual reporting period in which the entity first applies
that amendment. In order to resolve an inconsistency between IFRS 9 and IFRS
15, trade receivables are now required to be initially
recognised at 'the amount determined by applying IFRS 15' instead of at 'their
transaction price (as defined in IFRS 15)'. IFRS 10 was amended to use less
conclusive language when an entity is a 'de-facto agent' and to clarify that
the relationship described in paragraph B74 of IFRS 10 is just one example of
a circumstance in which judgement is required to determine whether a party is
acting as a de-facto agent. IAS 7 was corrected to delete references to 'cost
method' that was removed from IFRS Accounting Standards in May 2008 when the
IASB issued amendment 'Cost of an Investment in a Subsidiary, Jointly
Controlled Entity or Associate'. The Group is currently assessing the impact
of the amendments on its financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements (Issued on 9 April
2024 and effective for annual periods beginning on or after 1 January 2027).
In April 2024, the IASB has issued IFRS 18, the new standard on presentation
and disclosure in financial statements, with a focus on updates to the
statement of profit or loss. The key new concepts introduced in IFRS 18 relate
to:
- the structure of the statement of profit or loss;
- required disclosures in the financial statements for
certain profit or loss performance measures that are reported outside an
entity's financial statements (that is, management-defined performance
measures); and
- enhanced principles on aggregation and disaggregation
which apply to the primary financial statements and notes in general.
IFRS 18 will replace IAS 1; many of the other existing principles in IAS 1 are
retained, with limited changes. IFRS 18 will not impact the recognition or
measurement of items in the financial statements, but it might change what an
entity reports as its 'operating profit or loss'. IFRS 18 will apply for
reporting periods beginning on or after 1 January 2027 and also applies to
comparative information. The Group is currently assessing the impact of the
amendments on its financial statements.
The Group expects the amendments will have an insignificant effect, when
adopted, or is in the process of assessment of the scale of any potential
impact on the consolidated financial statements of TBC Bank Group PLC.
2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
IFRS 19 Subsidiaries without Public Accountability: Disclosures (Issued on 9
May 2024 and effective for annual periods beginning on or after 1 January
2027). The International Accounting Standard Board (IASB) has issued a new
IFRS Accounting Standard for subsidiaries. IFRS 19 permits eligible
subsidiaries to use IFRS Accounting Standards with reduced disclosures.
Applying IFRS 19 will reduce the costs of preparing subsidiaries' financial
statements while maintaining the usefulness of the information for users of
their financial statements. Subsidiaries using IFRS Accounting Standards for
their own financial statements provide disclosures that may be
disproportionate to the information needs of their users. IFRS 19 will
resolve these challenges by:
- enabling subsidiaries to keep only one set of accounting records -
to meet the needs of both their parent company and the users of their
financial statements;
- reducing disclosure requirements - IFRS 19 permits reduced
disclosure better suited to the needs of the users of their financial
statements.
IFRS 19 will not have impact as the Group is not eligible to apply it.
Contracts Referencing Nature-dependent Electricity Amendments to IFRS 9 and
IFRS 7 (Issued on 18 December 2024 and effective from 1 January 2026). The
IASB has issued amendments to help companies better report the financial
effects of nature-dependent electricity contracts, which are often structured
as power purchase agreements (PPAs). Current accounting requirements may not
adequately capture how these contracts affect a company's performance. To
allow companies to better reflect these contracts in the financial statements,
the IASB has made targeted amendments to IFRS 9, Financial Instruments, and
IFRS 7, Financial Instruments: Disclosures. The amendments include: (a)
clarifying the application of the 'own-use' requirements; (b) relaxing certain
hedge accounting requirements if these contracts are used as hedging
instruments; and (c) adding new disclosure requirements to enable investors to
understand the effect of these contracts on financial performance and cash
flows. The Group is currently assessing the impact of the amendments on its
financial statements.
Amendments to IAS 7 and IFRS 7 to require disclosure about entity's supplier
finance arrangements (SFAs). These amendments require the disclosures of the
entity's supplier finance arrangements that would enable the users of
financial statements to assess the effects of those arrangements on the
entity's liabilities and cash flows and on the entity's exposure to liquidity
risk. The purpose of the additional disclosure requirements is to enhance the
transparency of the supplier finance arrangements. The amendments do not
affect recognition or measurement principles but only disclosure requirements.
The amendment has no material impact on interim accounts and the group is
assessing the impact of amendment on its annual financial statements.
IFRS 14, Regulatory Deferral Accounts (issued on 30 January 2014 and effective
for annual periods beginning on or after 1 January 2016). IFRS 14 permits
first-time adopters to continue to recognise amounts related to rate
regulation in accordance with their previous GAAP requirements when they adopt
IFRS. However, to enhance comparability with entities that already apply IFRS
and do not recognise such amounts, the standard requires that the effect of
rate regulation must be presented separately from other items. An entity that
already presents IFRS financial statements is not eligible to apply the
standard.
Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture - Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and
effective for annual periods beginning on or after a date to be determined by
the IASB). These amendments address an inconsistency between the requirements
in IFRS 10 and those in IAS 28 in dealing with the sale or contribution of
assets between an investor and its associate or joint venture. The main
consequence of the amendments is that a full gain or loss is recognised when a
transaction involves a business. A partial gain or loss is recognised when a
transaction involves assets that do not constitute a business, even if these
assets are held by a subsidiary. In 2015, the IASB decided to postpone the
effective date of these amendments indefinitely. The Group is currently
assessing the impact of the amendments on its financial statements.
3. SOURCES OF ESTIMATION UNCERTAINTY AND JUDGEMENTS IN APPLYING ACCOUNTING
POLICIES
Critical Judgements and Estimates
The Group makes estimates and assumptions that affect the reported amounts of
assets and liabilities. Estimates and judgements are continually evaluated and
are based on the management's experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances. The management also makes certain judgements, apart from those
involving estimations, in the process of applying the accounting policies.
Judgements and estimates that have the most significant effect on the amounts
recognised in the condensed consolidated interim financial statements and
estimates that can cause a significant adjustment to the carrying amount of
assets and liabilities are the following:
Judgements and estimates related to ECL measurement. Measurement of ECLs is a
significant estimate that involves determination of methodology, development
of models and preparation of data inputs. Expert management judgement is also
an essential part of estimating expected credit losses.
Management considers management judgements and estimates in calculating ECL as
follows:
3. SOURCES OF ESTIMATION UNCERTAINTY AND JUDGEMENTS IN APPLYING ACCOUNTING
POLICIES (CONTINUED)
Judgements used to define criteria used in definition of default. The Group
defines default using both quantitative and qualitative criteria. Borrower is
classified as defaulted if:
· any number of contractual repayments is past due more than 90
days; or
· factors indicating the borrower's unlikeliness-to-pay.
Unlikeliness to repay is qualitative and quantitative criteria based on
clients monitoring/financial stability.
In addition, default exit criteria are defined using judgement as well as
whether default should be applied on a borrower or exposure level. For more
details on the methodology please see Note 22.
Judgements used to define criteria for assessing, if there has been a
significant increase in credit risk (SICR) which is defined using both
quantitative and qualitative criteria.
Qualitative factors usually include judgements around delinquency period of
more than 30 days on contractual repayments; exposure is restructured, but is
not defaulted; borrower is classified as "watch".
The Group evaluates the change in the probability of default parameter for
each specific exposure on a quantitative basis, comparing it to a predefined
threshold since its initial recognition. When the absolute change in the
probability of default surpasses the specified threshold, it is considered a
Significant Increase in Credit Risk (SICR), leading to the transfer of the
exposure to Stage 2. The quantitative indicator for SICR is utilized in retail
and micro segments, provided there is a substantial number of observations for
accurate assessment.
Judgements and estimates used for calculation of credit risk parameters namely
probability of default (PD) and loss given default (LGD). The judgements
include:
(i) definition of the segmentation for risk parameters
estimation purposes,
(ii) decision whether simplified or more complex models
can be used,
(iii) time since default date after which no material
recoveries are expected,
(iv) collateral haircuts from market value as well as the
average workout period for collateral discounting.
The table below describes sensitivity of a 10% increase/(decrease) of PD and
LGD estimates. For sensitivity calculation purposes, the staging has been
maintained unchanged:
In thousands of GEL 30 June 2025 31 December 2024
10% increase (decrease) in PD estimates Increase (decrease) credit loss allowance on loans and advances by GEL 18,165 Increase (decrease) credit loss allowance on loans and advances by GEL 16,425
(GEL 17,126). (GEL 15,218).
10% increase (decrease) in LGD estimates Increase (decrease) credit loss allowance on loans and advances by GEL 29,566 Increase (decrease) credit loss allowance on loans and advances by GEL 25,351
(GEL 30,796). (GEL 26,679).
4. CASH AND CASH EQUIVALENTS
In thousands of GEL 30 June 2025 31 December 2024
Cash on hand 888,275 862,343
Cash balances with NBG and CBU (other than mandatory reserve deposits) 453,049 342,199
Correspondent accounts and overnight placements with other banks 1,231,461 652,770
Placements with and receivables from other banks with original maturities of 816,385 1,190,251
less than three months
Reverse sale and repurchase agreements with other banks with original 160,345 -
maturities of less than three months
Total gross amount of cash and cash equivalents 3,549,515 3,047,563
Less: Credit loss allowance (675) (162)
Stage 1 (675) (162)
Total cash and cash equivalents 3,548,840 3,047,401
As of 30 June, 2025, 95% of the correspondent accounts and overnight
placements with other banks was placed with OECD (Organization for Economic
Co-operation and Development) banking institutions (31 December 2024: 86%).
4. CASH AND CASH EQUIVALENTS (CONTINUED)
As of 30 June, 2025, GEL 707,600 thousand was placed on interbank term
deposits with three OECD banks and GEL 38,189 thousand with one non-OECD (as
at 31 December 2024: GEL 960,638 thousand was placed on interbank term
deposits with four OECD banks and none with non-OECD bank).
As at 30 June 2025 there were GEL 156,228 thousand investment securities held
as collateral against reverse sale and repurchase agreements with other banks
with original maturities of less than three months (2024: nil). As at 30 June
2025 credit rating of reverse sale and repurchase agreements amounting to
137,780 with other banks with original maturities of less than three months is
rated at AAA and credit rating of reverse sale and repurchase agreements
amounting to 22,564 with other banks with original maturities of less than
three months is rated at B.
Interest rate analysis of cash and cash equivalents is disclosed in Note 22.
5. DUE FROM OTHER BANKS
The amounts due from other banks include placements with and receivables from
other banks with original maturities of more than three months that are not
collateralised and represent neither past due nor impaired amounts at 30 June
2025 and 31 December 2024.
As at 30 June 2025 the Group had 3 placements, with original maturities of
more than three months and with aggregated amounts above GEL 5,000 thousand
(2024: 2 placements).
The total aggregated number of placements with and receivables from other
banks with original maturities of more than three months was GEL 111,227
thousand (2024: GEL 45,429 thousand) or 99.4% of the total amount due from
other banks (2024: 99.8%).
As at 30 June 2025 GEL 703 thousand (2024: GEL 695 thousand) were kept on
deposits as restricted cash under an arrangement with a credit card company or
credit card related services with other banks. Refer to Note 24 for the
estimated fair value of amounts due from other banks.
For the estimated fair values of due from other bank balances please refer to
Note 24.
For the purpose of ECL measurement due from other banks balances are included
in Stage 1. The ECL for these balances as at 30 June 2025 is GEL 800 thousand
(2024: GEL 627 thousand).
6. MANDATORY CASH BALANCES WITH NBG AND CBU
Mandatory cash balances with the National Bank of Georgia ("NBG") represent
amounts deposited with the NBG. Resident financial institutions are required
to maintain an interest-earning obligatory reserve with the NBG, the amount of
which depends on the level of funds attracted by the financial institutions.
The Bank earned up to 8.00%, 0.70% and 0.30% annual interest in GEL, USD and
EUR, respectively, on mandatory reserve with NBG during the period ended 30
June 2025 (2024: 8.19%, 0% and (0.0%) in GEL, USD and EUR, respectively).
Mandatory cash balances with the Central Bank of Uzbekistan ("CBU") are
carried at AC and represent non-interest-bearing mandatory reserve deposits,
which are not available to finance the Group's Day to day operations. The
amount placed in CBU are denominated in UZS.
In May, 2025, Fitch Ratings has affirmed Georgia's Long-Term Foreign and Local
Currency Issuer Default Rating (IDRs) at 'BB', with a Negative outlook. The
country ceiling is affirmed at 'BBB- ', while short-term foreign and
local-currency IDRs are affirmed at 'B'. In June, 2025, Fitch Ratings has
upgraded Uzbekistan's Long-Term Foreign and Local Currency Issuer Default
Rating (IDR) from 'BB-' to 'BB'. The Outlook is Stable. The country ceiling
was upgraded at 'BB'and the short-term foreign and local-currency IDRs are
affirmed at 'B'.
7. LOANS AND ADVANCES TO CUSTOMERS
In thousands of GEL 30 June 2025 31 December 2024
Corporate loans 10,481,082 9,848,706
Loans to micro, small and medium enterprises 6,087,214 5,948,420
Consumer loans 6,008,772 5,164,603
Mortgage loans 5,151,429 5,126,953
Total gross loans and advances to customers at amortised cost (AC) 27,728,497 26,088,682
Less: credit loss allowance: (529,769) (404,884)
Stage 1 (164,042) (138,293)
Stage 2 (111,764) (81,043)
Stage 3 (253,963) (185,548)
Total loans and advances to customers at amortised cost (AC) 27,198,728 25,683,798
As at 30 June 2025 loans and advances to customers carried at GEL 1,470,030
thousand have been pledged for the borrowings from the National Bank of
Georgia (31 December 2024: GEL 1,118,011 thousand). The loans and advances to
customers are pledged under the monetary policy framework for the borrowings
from the National Bank of Georgia.
No post model overlays have been processed as of 30 June 2025 and 31 December
2024.
The following tables disclose the changes in the credit loss allowance and
gross carrying amount for loans and advances to customers carried at amortised
cost between the beginning and the end of the reporting period. Below main
movements in the table are described:
· Transfers occur between Stage 1, 2 and 3, due to significant
increases (or decreases) of credit risk or exposures becoming defaulted in the
period, and the consequent "step up" (or "step down") between 12-month and
Lifetime ECL. It should be noted, that:
o For loans, which existed at the beginning of the period, opening exposures
are disclosed as transfer amounts;
o For newly issued loans, exposures upon issuance are disclosed as transfer
amounts;
· New originated or purchased gives us information regarding gross
loans issued and corresponding credit loss allowance created during the period
(however, exposures which were issued and repaid during the period and issued
to refinance existing loans are excluded);
· Derecognised during the period refers to the balance of loans and
credit loss allowance at the beginning of the period, which were fully repaid
during the period. Exposures which were issued and not fully repaid during the
period, written off or refinanced by other loans, are excluded;
· Net repayments refer to the net changes in gross carrying
amounts, which is loan disbursements less repayments, excluding loans that
were fully repaid;
· Write-offs refer to write off of loans during the period;
· Foreign exchange movements refer to the translation of assets
denominated in foreign currencies and effect to translation in presentational
currency for foreign subsidiary;
· Net re-measurement due to stage transfers and risk parameters
changes refer to the movements in ECL as a result of transfer of exposure
between stages or changes in risk parameters and forward-looking expectations;
· Modification refers to changes in terms that do not result in
derecognition;
Re-segmentation refers to the transfer of loans from one reporting segment to
another. For presentation purposes, amounts are rounded to the nearest
thousands of GEL, which in certain cases is disclosed as nil.
For details of expected credit loss (ECL) methodology refer to note 22.
7. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
Total loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2025 24,051,415 1,462,901 574,366 26,088,682 138,293 81,043 185,548 404,884
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (1,424,879) 1,443,626 (18,747) - (84,973) 91,342 (6,369) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (24,683) (278,388) 303,071 - (3,771) (71,755) 75,526 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 644,830 (643,042) (1,788) - 49,423 (48,735) (688) -
New originated or purchased 7,646,388 - - 7,646,388 158,029 - - 158,029
Derecognised or fully repaid during the period (3,753,564) (88,769) (42,758) (3,885,091) (31,773) (7,540) (33,889) (73,202)
Net repayments (2,065,710) (72,605) (44,066) (2,182,381) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (61,012) 67,490 152,493 158,971
repayments*
Movements without impact on credit loss allowance charge for the period:
Write-offs - - (120,203) (120,203) - - (120,203) (120,203)
Changes in accrued interest 35,614 13,238 3,886 52,738 - - - -
Modification 337 2 6 345 1 (4) 11 8
Foreign exchange movements 100,753 20,014 7,252 128,019 (175) (77) 1,534 1,282
At 30 June 2025 25,210,501 1,856,977 661,019 27,728,497 164,042 111,764 253,963 529,769
Total loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2024 20,337,024 1,320,300 416,355 22,073,679 104,666 88,065 158,841 351,572
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (1,301,019) 1,323,016 (21,997) - (41,482) 49,301 (7,819) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (10,207) (255,801) 266,008 - (1,476) (49,011) 50,487 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 725,347 (723,296) (2,051) - 49,708 (48,300) (1,408) -
New originated or purchased 6,447,837 - - 6,447,837 107,290 - - 107,290
Derecognised or fully repaid during the period (3,082,228) (75,389) (40,523) (3,198,140) (23,866) (7,329) (12,659) (43,854)
Net repayments (1,404,735) (80,730) (54,849) (1,540,314) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (82,312) 46,927 68,563 33,178
repayments*
Movements without impact on credit loss allowance charge for the period:
Write-offs - - (81,573) (81,573) - - (81,573) (81,573)
Changes in accrued interest 43,716 13,172 5,001 61,889 - - - -
Modification 707 (106) 59 660 - 4 20 24
Foreign exchange movements 334,369 22,780 7,620 364,769 1,637 648 2,034 4,319
At 30 June 2024 22,090,811 1,543,946 494,050 24,128,807 114,165 80,305 176,486 370,956
* Movements with impact on credit loss allowance charge for the period differs
from statement of profit or loss with amount of recoveries and unwinding of
discount of GEL 32,076 thousand in 2025 (30 June 2024: GEL 25,146 thousand).
The amount of recoveries include recoveries from sale of written off portfolio
in the amount of GEL 3,583 thousand sold in 2025 (30 June 2024: GEL 2,908
thousand).
7. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
Corporate loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2025 9,054,002 638,105 156,599 9,848,706 15,524 1,528 36,862 53,914
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (273,612) 277,614 (4,002) - (638) 638 - -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (2,257) - 2,257 - (108) - 108 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 20,861 (20,861) - - 148 (148) - -
New originated or purchased 2,951,539 - - 2,951,539 16,034 - - 16,034
Derecognised or fully repaid during the period (1,918,997) (11,957) (2,106) (1,933,060) (5,832) (7) (24) (5,863)
Net repayments (580,708) (11,712) (937) (593,357) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (6,472) (927) 11,384 3,985
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation 128,801 - (559) 128,242 672 - (560) 112
Write-offs - - (1,149) (1,149) - - (1,149) (1,149)
Changes in accrued interest 10,295 7,568 3,283 21,146 - - - -
Modification 62 40 (21) 81 - - (11) (11)
Foreign exchange movements 38,781 15,320 4,833 58,934 114 11 1,045 1,170
At 30 June 2025 9,428,767 894,117 158,198 10,481,082 19,442 1,095 47,655 68,192
Corporate loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2024 7,739,101 410,366 114,138 8,263,605 18,454 2,445 32,606 53,505
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (303,230) 306,466 (3,236) - (1,540) 1,540 - -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (1,584) (37,189) 38,773 - (97) (1,613) 1,710 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 36,690 (36,690) - - 100 (100) - -
New originated or purchased 2,136,839 - - 2,136,839 14,034 - - 14,034
Derecognised or fully repaid during the period (1,492,965) (952) (7,625) (1,501,542) (4,820) (12) (603) (5,435)
Net repayments (185,921) (14,617) (6,696) (207,234) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (10,391) 1,285 6,789 (2,317)
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation 153,736 603 - 154,339 883 - - 883
Write-offs - - (695) (695) - - (695) (695)
Changes in accrued interest 21,060 9,045 1,356 31,461 - - - -
Modification 190 (18) 6 178 1 - - 1
Foreign exchange movements 176,078 12,101 1,947 190,126 340 40 459 839
At 30 June 2024 8,279,994 649,115 137,968 9,067,077 16,964 3,585 40,266 60,815
7. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
MSME Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2025 5,423,532 256,764 268,124 5,948,420 28,936 23,893 60,422 113,251
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (373,085) 376,194 (3,109) - (7,532) 8,937 (1,405) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (13,621) (88,998) 102,619 - (1,420) (11,122) 12,542 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 174,664 (174,631) (33) - 12,698 (12,677) (21) -
New originated or purchased 1,126,663 - - 1,126,663 24,866 - - 24,866
Derecognised or fully repaid during the period (374,612) (26,621) (27,046) (428,279) (3,062) (2,476) (6,002) (11,540)
Net repayments (514,768) (27,686) (35,685) (578,139) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (24,825) 16,556 23,556 15,287
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation (29,378) 1,039 615 (27,724) 1,819 275 595 2,689
Write-offs - - (21,157) (21,157) - - (21,157) (21,157)
Changes in accrued interest 21,698 2,194 (491) 23,401 - - - -
Modification 83 5 19 107 1 7 17 25
Foreign exchange movements 40,280 1,999 1,643 43,922 109 29 190 328
At 30 June 2025 5,481,456 320,259 285,499 6,087,214 31,590 23,422 68,737 123,749
MSME Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2024 4,982,978 325,283 178,527 5,486,788 24,158 32,785 51,797 108,740
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (306,746) 313,672 (6,926) - (6,701) 8,907 (2,206) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (3,296) (102,641) 105,937 - (443) (17,675) 18,118 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 183,817 (182,988) (829) - 15,583 (14,532) (1,051) -
New originated or purchased 1,424,234 - - 1,424,234 30,751 - - 30,751
Derecognised or fully repaid during the period (536,078) (24,747) (18,442) (579,267) (3,514) (2,472) (5,852) (11,838)
Net repayments (429,983) (27,891) (23,778) (481,652) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (32,991) 16,322 18,255 1,586
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation (145,162) (685) - (145,847) (837) (12) - (849)
Write-offs - - (23,490) (23,490) - - (23,490) (23,490)
Changes in accrued interest 20,712 3,173 2,555 26,440 - - - -
Modification 115 (143) 35 7 (1) - 7 6
Foreign exchange movements 69,832 4,599 4,168 78,599 141 139 744 1,024
At 30 June 2024 5,260,423 307,632 217,757 5,785,812 26,146 23,462 56,322 105,930
7. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
Consumer loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2025 4,830,615 236,633 97,355 5,164,603 92,249 49,323 68,170 209,742
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (500,876) 504,869 (3,993) - (76,099) 78,523 (2,424) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (6,082) (176,418) 182,500 - (1,909) (59,767) 61,676 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 190,817 (189,781) (1,036) - 33,826 (33,159) (667) -
New originated or purchased 3,031,835 - - 3,031,835 116,556 - - 116,556
Derecognised or fully repaid during the period (1,285,226) (22,764) (6,320) (1,314,310) (22,804) (4,424) (25,785) (53,013)
Net repayments (663,189) (20,633) (3,231) (687,053) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (27,507) 51,370 112,139 136,002
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation (85,922) (993) (2) (86,917) (2,486) (271) (26) (2,783)
Write-offs - - (95,809) (95,809) - - (95,809) (95,809)
Changes in accrued interest 5,060 3,496 1,449 10,005 - - - -
Modification 56 (54) 5 7 - (12) 3 (9)
Foreign exchange movements (12,741) (561) (287) (13,589) (405) (131) (104) (640)
At 30 June 2025 5,504,347 333,794 170,631 6,008,772 111,421 81,452 117,173 310,046
Consumer loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2024 3,296,256 218,195 79,101 3,593,552 60,181 45,289 56,600 162,070
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (328,548) 332,528 (3,980) - (32,496) 34,870 (2,374) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (2,982) (93,539) 96,521 - (678) (28,977) 29,655 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 180,682 (180,153) (529) - 30,585 (30,261) (324) -
New originated or purchased 2,181,612 - - 2,181,612 61,956 - - 61,956
Derecognised or fully repaid during the period (862,080) (25,500) (8,526) (896,106) (15,444) (4,210) (4,385) (24,039)
Net repayments (525,002) (24,548) (19,100) (568,650) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (35,853) 28,860 38,251 31,258
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation 2,175 337 (31) 2,481 (26) 16 (25) (35)
Write-offs - - (54,971) (54,971) - - (54,971) (54,971)
Changes in accrued interest 3,154 1,258 1,370 5,782 - - - -
Modification 111 33 7 151 - 3 5 8
Foreign exchange movements 28,061 1,310 598 29,969 1,135 355 518 2,008
At 30 June 2024 3,973,439 229,921 90,460 4,293,820 69,360 45,945 62,950 178,255
7. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
Mortgage loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2025 4,743,266 331,399 52,288 5,126,953 1,584 6,299 20,094 27,977
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (277,306) 284,949 (7,643) - (704) 3,244 (2,540) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (2,723) (12,972) 15,695 - (334) (866) 1,200 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 258,488 (257,769) (719) - 2,751 (2,751) - -
New originated or purchased 536,351 - - 536,351 573 - - 573
Derecognised or fully repaid during the period (174,729) (27,427) (7,286) (209,442) (75) (633) (2,078) (2,786)
Net repayments (307,045) (12,574) (4,213) (323,832) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (2,208) 491 5,414 3,697
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation (13,501) (46) (54) (13,601) (5) (4) (9) (18)
Write-offs - - (2,088) (2,088) - - (2,088) (2,088)
Changes in accrued interest (1,439) (20) (355) (1,814) - - - -
Modification 136 11 3 150 - 1 2 3
Foreign exchange movements 34,433 3,256 1,063 38,752 7 14 403 424
At 30 June 2025 4,795,931 308,807 46,691 5,151,429 1,589 5,795 20,398 27,782
Mortgage loans Gross carrying amount Total Credit loss allowance Total
in thousands of GEL Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
At 1 January 2024 4,318,689 366,456 44,589 4,729,734 1,873 7,546 17,838 27,257
Movements with impact on credit loss allowance charge for the period:
Transfers:
- to lifetime (from Stage 1 and Stage 3 to Stage 2) (362,495) 370,350 (7,855) - (745) 3,984 (3,239) -
- to defaulted (from Stage 1 and Stage 2 to Stage 3) (2,345) (22,432) 24,777 - (258) (746) 1,004 -
- to 12-months ECL (from Stage 2 and Stage 3 to Stage 1) 324,158 (323,465) (693) - 3,440 (3,407) (33) -
New originated or purchased 705,152 - - 705,152 549 - - 549
Derecognised or fully repaid during the period (191,105) (24,190) (5,930) (221,225) (88) (635) (1,819) (2,542)
Net repayments (263,829) (13,674) (5,275) (282,778) - - - -
Net re-measurement due to stage transfers, changes in risk parameters and - - - - (3,077) 460 5,268 2,651
repayments
Movements without impact on credit loss allowance charge for the period:
Re-segmentation (10,749) (255) 31 (10,973) (20) (4) 25 1
Write-offs - - (2,417) (2,417) - - (2,417) (2,417)
Changes in accrued interest (1,210) (304) (280) (1,794) - - - -
Modification 291 22 11 324 - 1 8 9
Foreign exchange movements 60,398 4,770 907 66,075 21 114 313 448
At 30 June 2024 4,576,955 357,278 47,865 4,982,098 1,695 7,313 16,948 25,956
7. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
The contractual amounts outstanding on loans to customers that have been
written off during the period partially or fully, but are still subject to
enforcement activity was principal amount GEL 42,530 thousand (31 December
2024: GEL 58,220 thousand) and accrued interest GEL 4,728 thousand (31
December 2024: GEL 7,784 thousand).
Economic sector risk concentrations within the customer loan portfolio are as
follows:
30 June 2025 31 December 2024
In thousands of GEL Amount % Amount %
Individual 11,457,948 41% 10,701,680 41%
Real Estate 3,069,816 11% 2,816,094 11%
Trade 1,622,504 6% 1,686,918 6%
Construction 1,599,700 6% 1,578,826 6%
Hospitality, Restaurants & Leisure 1,396,777 5% 1,323,642 5%
Food Industry 1,370,868 5% 1,353,283 5%
Agriculture 1,082,787 4% 1,044,920 4%
Energy & Utilities 907,670 3% 895,637 3%
Services 654,448 2% 590,700 2%
Healthcare 602,846 2% 580,472 2%
Financial Services 529,589 2% 456,224 2%
Transportation 411,891 1% 380,751 1%
Pawn Shops 286,429 1% 245,453 1%
Automotive 286,088 1% 223,788 1%
Metals and Mining 181,045 1% 191,429 1%
Communication 47,300 < 1% 34,004 < 1%
Other 2,220,791 8% 1,984,861 8%
Total gross loans and advances to customers 27,728,497 100% 26,088,682 100%
As of 30 June, 2025, the Group had 10 borrowers (31 December 2024: 9
borrowers) with aggregated gross loan amounts above GEL 100,000 thousand. The
total aggregated amount of these loans was GEL 1,396,319 thousand (31 December
2024: GEL 1,472,144 thousand) or 5.0% of the gross loan portfolio (31 December
2024: 5.6%).
The amount and type of collateral required depend on an assessment of the
credit risk of the counterparty. There are three key types of collateral:
· Real estate;
· Movable property including fixed assets, inventory and precious
metals;
· Financial assets including deposits, shares, and third-party
guarantees;
At the central level a specific unit manages collateral to ensure that they
serve as an adequate mitigation for credit risk management purposes. In line
with the Group's internal policies, collateral provided to loans are evaluated
by the Internal Appraisal Group (external reviewers are used in case of loans
to related parties or specific cases when complex objects are appraised). The
Internal Appraisal Group is part of the collateral management unit and, in
order to ensure adequate and objective appraisal procedures, it is independent
from the loan granting process. Real estate collateral of significant value is
re-evaluated annually by internal appraisers. Statistical methods are used to
monitor the value of real estate collateral that are of non-significant value
and other types of collateral such as movable assets and precious metals.
In some instances, where the discounted recovery from the liquidation of
collateral (adjusted for the liquidity haircut and discounted for the period
of expected selling time) is larger than the estimated exposure at default, no
credit loss allowance is recognised. Collateral values include the contractual
price of third-party guarantees, which, due to their nature, are capped at the
loan's carrying value.
Refer to Note 24 for the estimated fair value of each class of loans and
advances to customers. Interest rate analysis of loans and advances to
customers is disclosed in Note 22. Information on related party balances is
disclosed in Note 25.
8. PREMISES, EQUIPMENT AND INTANGIBLE ASSETS
In thousands of GEL Land, premises and leasehold improvements Office and other equipment* Construction in progress ** Total premises and equipment Intangible assets
At cost
1 January 2024 205,908 388,099 175,342 769,349 705,065
Additions 3,609 27,619 23,260 54,488 91,368
Transfers to investment properties (7,311) - - (7,311) -
Disposals (1,947) (2,938) - (4,885) (6)
Effect of translation to presentation currency 53 672 119 844 2,035
30 June 2024 200,312 413,452 198,721 812,485 798,462
1 January 2025 192,348 460,806 238,163 891,317 894,123
Additions 2,357 20,368 38,716 61,441 116,178
Transfers within premises and equipment - 23,225 (23,225) - -
Transfers to investment property (899) - - (899) -
Disposals (1,076) (4,132) (159) (5,367) (976)
Effect of translation to presentation currency (100) (370) (301) (771) (800)
30 June 2025 192,630 499,897 253,194 945,721 1,008,525
Accumulated depreciation / amortisation
1 January 2024 (47,207) (208,802) - (256,009) (233,682)
Depreciation / amortisation charge (2,267) (16,258) - (18,525) (35,861)
Elimination of depreciation on transfers to investment properties 1,562 - - 1,562 -
Elimination of accumulated depreciation / amortisation on disposals 1,124 1,323 - 2,447 6
Effect of translation to presentation currency (28) (105) - (133) 500
30 June 2024 (46,816) (223,842) - (270,658) (269,037)
1 January 2025 (32,078) (237,577) - (269,655) (305,056)
Depreciation / amortisation charge (3,368) (17,510) - (20,878) (41,111)
Elimination of depreciation on transfers to investment properties 123 - - 123 -
Elimination of accumulated depreciation / amortisation on disposals 483 1,613 - 2,096 584
Effect of translation to presentation currency 34 139 - 173 (23)
30 June 2025 (34,806) (253,335) - (288,141) (345,606)
Carrying amount
30 June 2024 153,496 189,610 198,721 541,827 529,425
30 June 2025 157,824 246,562 253,194 657,580 662,919
*Office and other equipment include furniture and fixtures, computer and
office equipment, motor vehicles as well as other equipment.
**Construction in progress consists of construction and refurbishment of
branch premises and the Bank's new headquarters, that will be transferred to
premises upon completion and other fixed assets in progress.
9. DUE TO CREDIT INSTITUTIONS
In thousands of GEL 30 June 2025 31 December 2024
Due to other banks
Correspondent accounts and overnight placements 152,635 356,722
Deposits from banks 646,529 664,012
Total due to other banks 799,164 1,020,734
Other borrowed funds
Borrowings from foreign banks and international financial institutions 3,576,113 3,225,088
Borrowings from other local banks and financial institutions 96,468 81,108
Borrowings from National Bank of Georgia 2,709,355 3,303,920
Total other borrowed funds 6,381,936 6,610,116
Total amounts due to credit institutions 7,181,100 7,630,850
10. CUSTOMER ACCOUNTS
in thousands of GEL 30 June 2025 31 December 2024
State and public organisations
Current/settlement accounts 1,150,139 1,085,073
Term deposits 745,565 393,531
Other legal entities
Current/settlement accounts 6,175,910 6,034,554
Term deposits 2,942,726 2,985,339
Individuals
Current/settlement accounts 5,693,021 5,832,579
Term deposits 7,214,365 6,532,757
Total customer accounts 23,921,726 22,863,833
State and public organisations include government owned profit orientated
businesses.
Economic sector concentrations within customer accounts are as follows:
30 June 2025 31 December 2024
in thousands of GEL Amount % Amount %
Individuals 12,903,110 54% 12,362,205 54%
Financial services 2,613,432 11% 2,444,638 11%
Trade 1,757,594 7% 1,701,422 7%
Government sector 1,216,127 5% 586,939 3%
Services 908,154 4% 874,992 4%
Energy & utilities 904,014 4% 1,139,221 5%
Transportation 762,814 3% 816,464 4%
Construction 717,736 3% 838,761 4%
Real estate 570,158 2% 575,421 3%
Healthcare 206,401 1% 155,702 < 1%
Hospitality & leisure 164,109 1% 128,893 < 1%
Agriculture 98,822 <1% 68,783 < 1%
Metals and mining 34,729 <1% 23,619 < 1%
Other 1,064,526 4% 1,146,773 5%
Total customer accounts 23,921,726 100% 22,863,833 100%
As of 30 June, 2025, the Group had 197 customers (31 December 2024: 168
customers) with balances above GEL 10,000 thousand. Their aggregate balance
was GEL 8,715,289 thousand (31 December 2024: GEL 8,293,682 thousand) or 36.4%
of total customer accounts (31 December 2024: 36.3%).
10. CUSTOMER ACCOUNTS (CONTINUED)
As of 30 June, 2025, included in customer accounts are deposits of GEL 66,517
thousand and GEL 193,937 thousand (31 December 2024: GEL 80,281 thousand and
GEL 206,934 thousand) held as collateral for irrevocable commitments under
letters of credit and guarantees issued, respectively. The latter is discussed
in Note 23. As of 30 June, 2025, deposits held as collateral for loans to
customers amounted to GEL 589,317 thousand (31 December 2024: GEL 592,328
thousand).
Refer to Note 24 for the disclosure of the fair value of each class of
customer accounts. The information on related party balances is disclosed in
Note 25.21
11. DEBT SECURITIES IN ISSUE
As of 30 June 2025, debt securities in issue comprised of:
Currency Carrying amount as of 30 June 2025 Maturity date Coupon rate Weighted average effective interest rate
USD 312,842 3/20/2026-4/29/2030 7.00%-8.25% 8.2%
GEL 90,009 3/20/2026-6/27/2026 3M TIBR + 2.75% 12.0%
UZS 426,762 11/29/2025-6/05/2028 22.00%-24.00% 23.5%
Total debt securities in issue 829,613
As of 31 December 2024, debt securities in issue comprised of:
Currency Carrying amount as of 31 December 2024 Maturity date Coupon rate Weighted average effective interest rate
USD 321,189 3/20/2026-4/29/2030 7.00%-8.25% 8.2%
GEL 90,058 3/20/2026- 6/27/2026 3M TIBR + 2.75% 13.0%
UZS 36,817 11/29/2025 - 12/25/2026 24.00% 26.5%
Total debt securities in issue 448,064
On June 5 2025, TBC Bank Group PLC issued the USD 140,000,000, 22.00%
synthetic bond due in June 5 2028, denominated in Uzbek sum and settled in
U.S. dollars, that will be redeemed at their principal amount. Interest on the
Notes is payable semi-annually. The issue price is 100% of nominal value.
On February 8 2024, TBC Bank Group PLC issued the USD 30,000,000, 7.25% senior
unsecured Notes due on February 8 2027, that will be redeemed at their
principal amount. Interest on the Notes is payable semi-annually. The issue
price is 100% of nominal value.
On April 18 2024, TBC Bank Group PLC issued the USD 20,000,000, 8.25% senior
unsecured Notes due on April 18 2027, that will be redeemed at their principal
amount. Interest on the Notes is payable semi-annually. The issue price is
100% of nominal value.
On May 13 2024, TBC Bank Group PLC issued the USD 30,000,000, 7.50% senior
unsecured Notes due on May 13 2026, that will
be redeemed at their principal amount. Interest on the Notes is payable
semi-annually. The issue price is 100% of nominal value.
On June 27 2024, TBC Bank Group PLC issued the USD 30,000,000, 7.50% senior
unsecured Notes due on July 27, 2026 that will be redeemed at their principal
amount. Interest on the Notes is payable semi-annually. The issue price is
100% of nominal value.
12. SUBORDINATED DEBT
As of 30 June, 2025, subordinated debt comprised of:
in thousands of GEL
Currency Grant date Maturity date Agreement interest rate Carrying amount
USD 12/18/2015-12/27/2024 12/31/2026-11/30/2033 7.06%-10.53% 792,253
EUR 9/26/2023-4/17/2024 9/26/2033-1/16/2034 8.11%-8.46% 359,237
Total subordinated debt 1,151,490
As of 31 December, 2024, subordinated debt comprised of:
in thousands of GEL
Currency Grant date Maturity date Agreement interest rate Carrying amount
USD 12/18/2015-11/20/2023 12/31/2026-11/30/2033 8.22%-11.23% 816,609
EUR 9/23/2023-4/17/2024 9/26/2033-1/16/2034 9.04%-9.48% 331,765
Total subordinated debt 1,148,374
The debt ranks after all other creditors in case of liquidation, except AT1
Notes listed in note 13.
Refer to Note 24 for the disclosure of the fair value of subordinated debt.
Information on related party balances is disclosed in Note 25.
13. ADDITIONAL TIER 1 CAPITAL SUBORDINATED NOTES
As at 30 June 2025, additional Tier 1 capital subordinated notes, comprised
of:
Currency Carrying amount as of 30 June 2025 Coupon rate Weighted average Effective interest rate
USD 1,031,408 8.9%-10.3% 10.6%
Total additional Tier 1 capital subordinated notes 1,031,408
As at 31 December 2024, additional Tier 1 capital subordinated notes,
comprised of:
Currency Carrying amount as of 31 December 2024 Coupon rate Weighted average Effective interest rate
USD 1,062,119 8.9%-10.3% 10.6%
Total additional Tier 1 capital subordinated notes 1,062,119
On April 23 2024, JSC TBC Bank successfully issued USD 300 million, 10.25%
coupon rate, perpetual subordinated callable additional Tier 1 capital notes.
The Notes were listed on Euronext Dublin's Global Exchange Market and rated B2
by Moody's.
On October 28 2021, the Bank completed the transaction of USD 75 million with
8.894% coupon rate additional Tier 1 capital perpetual subordinated notes
issue ("AT1 Notes"). The AT1 Notes are listed on the regulated market of
Euronext Dublin and are rated B- by Fitch.
On July 3 2019 the Bank completed the transaction of a debut inaugural USD 125
million with 10.75% coupon rate additional Tier 1 capital perpetual
subordinated notes issue. The AT1 Notes are listed on the regulated market of
Euronext Dublin and are rated B- by Fitch. The AT1 Notes have been
simultaneously listed on Georgian Stock Exchange JSC, making it the first
dual-listed international offering of additional Tier 1 capital notes from
Georgia.
14. EQUITY
Share capital
in thousands of GEL, unless otherwise indicated Number of ordinary shares Share Capital
As of 1 January 2024 55,393,664 1,690
Scrip dividend issued 1,331,033 47
Shares cancelled (436,797) (15)
As of 31 December 2024 56,287,900 1,722
Scrip dividend issued - -
Shares cancelled (76,027) (3)
As of 30 June 2025 56,211,873 1,719
As of 30 June, 2025, the total authorised number of ordinary shares was
56,211,873 shares (31 December 2024: 56,287,900 shares). Each share has a
nominal value of one British Penny. All issued ordinary shares are fully paid
and entitled to dividends.
Treasury shares
Treasury shares refer to shares that a Group has repurchased but not reissued.
These shares are not considered outstanding and do not carry voting rights or
dividend entitlements.
Dividends
All dividends are declared in GEL and paid in GBP.
On May 7 2025, TBC Bank Group PLC's Board of directors declared an 1Q 2025
quarterly dividend of GEL 1.5 per share payable by cash. The record date will
be on 15 August 2025 and dividend will be paid on 5 September 2025.
On February 11 2025, TBC Bank Group PLC's Board of directors declared a final
dividend of GEL 5.55 per share payable by cash. The record date was on 6 June
2025 and dividend was paid on July 11 2025.
On August 8 2024, TBC Bank Group PLC's Board of directors declared an interim
dividend of GEL 2.55 per share payable by cash or shares (under TBC Bank Group
PLC's SCRIP dividend program) at the option of the Shareholder. The record
date was on 4 October 2024 and dividend was paid on November 11 2024. As a
result, the company has issued additional 459,096 shares to meet requests of
those shareholders who opted to receive a scrip dividend.
On February 15 2024, TBC Bank Group PLC's Board of directors declared a final
dividend of GEL 4.67 per share payable by cash or shares (under TBC Bank Group
PLC's SCRIP dividend programme) at the option of the Shareholder. The record
date was on June 14 2024 and dividend was paid on July 19 2024. As a result,
the company has issued additional 871,937 shares to meet requests of those
shareholders who opted to receive a scrip dividend.
Shares held by trust
Part of the shares are held by employee benefit trust (EBT) for the purpose of
future employee share based payments plan. The number of shares held by trust
as at 30 June 2025 comprised 645,324 shares (31 December 2024: 868,235
shares). The EBT has waived its rights to receive dividends on such shares.
14. EQUITY (CONTINUED)
Other reserves
Other reserves comprised of:
in thousands of GEL, 30 June 2025 31 December 2024
Reserve for redemption liability (545,400) (473,528)
Fair value reserve for investment securities at FVTOCI (24,149) 37,804
Currency translation reserve (51,563) (42,878)
Capital redemption reserve 18 15
Other reserves 1,864 545
Total other reserves (619,230) (478,042)
Option agreement with minority shareholders of TBC Digital JSC
In May 2025, the Group entered into an agreement that restructured its
operations in Uzbekistan. Under the new arrangement, TBC Digital JSC - a
holding company controlled by the Group (the Group held 79.69% of its total
shares as of June 30, 2025) - became the 100% owner of both JSCB TBC Bank and
Payme JSC. As of December 31, 2024 the Group directly held a 67.92% interest
in JSCB TBC Bank and 100% of Payme JSC, with the remaining interest in JSCB
TBC Bank held by minority shareholders.
As part of the option agreement, the minority shareholders hold a put option
to sell their shares in TBC Digital JSC, exercisable from the fifth
anniversary of the transaction's completion date and remains exercisable for
as long as the option holders retain any shares. The Group holds a call option
to acquire the remaining minority interest, which becomes exercisable from the
eighth anniversary of the transaction's completion date.
At initial recognition, the Group derecognised the redemption liability
related to the previous agreement and recognised a new redemption liability
representing the present value of redemption liability for put option,
recorded through the other reserves within equity.
The redemption liability is carried at amortised cost and interest is unwound
as well as subsequent remeasurement effects on each reporting date are
recorded through other reserves in equity, as allowed by IFRS for transactions
where the non-controlling participants remain exposed to the risks and rewards
associated with the subsidiary's shares.
The redemption liability amounted to GEL 545,400 thousand as at 30 June 2025
(31 December 2024: 473,528).
The Group analysed the terms of put and call options and concluded that the
shares subject to options shall not be accounted for as acquired and
non-controlling interests should be recognised.
15. SHARE BASED PAYMENTS
2024 remuneration scheme - Executive Directors
TBC Bank Group PLC ("TBC PLC") announced a directors' remuneration policy,
which was approved by shareholders at the 2024 AGM and provides the framework
for directors' remuneration for the three-year period from 2024-2026;
In consideration of the evolving strategy, the maturity of the business, and
local market practices, there was a proposal to alter the structure of the
incentive model. The change involved transitioning from separate annual
bonuses delivered in shares and an LTIP scheme to a unified incentive known as
the "Combined Incentive Plan." This new plan integrates short and long-term
performance elements, incorporating a substantial long-term share-based
deferral.
The new arrangement replaced the existing remuneration plan for Executive
Directors starting in 2024. Therefore, the 2024 year has been modified with
the new plan. Modification did not result in acceleration as the terms have
not been worsened for scheme participants.
New plan for Executive Director from 2024 includes following components
regarding share remuneration:
Ø Shares Salary will be subject to a 3-year holding period and will be
released in three equal annual tranches after one, two and three years
respectively at 33%-33%-34% (not subject to any continuing service
requirements, malus or claw back).
Ø Variable Pay - Combined Incentive Plan ("CIP"), which includes a three-step
performance assessment process:
1. Performance Gateway - Eligibility for payments under the Combined
Incentive Plan is subject to passing gateway criteria, measured over the
Annual KPI Performance Period. The Gateway criteria are based on measures of
financial soundness (including capital, liquidity and profitability).
2. Annual KPI performance scorecard - Based on performance against the
Annual KPI targets, the Remuneration Committee will determine an overall
payout percentage of salary. The payout is split between: a "Share Award" -
40% of the total will be paid in shares which must be held for at least three
years (subject to 3-year claw back) and a "Long-Term Share Award" - 60% of the
total will be awarded as a deferred award of shares which will vest after five
years. (Subject to continued employment, malus and a 3-year claw back).
3. TSR shareholder alignment mechanism - The grant value of a Long-Term
Share Award (60%) determined by the stringent performance assessment in
Performance Step 1 and Performance Step 2 may be scaled back by up to 50% if
TBC's Total Shareholder Return ("TSR") is not at least in line with a weighted
TSR index.
Ø Shareholding Requirement - Minimum shareholding requirement of 200% of base
salary.
The participants are entitled to receive dividends on the Share Salary and the
Share Award (40% of variable remuneration).
Upon vesting, dividend equivalents in respect of the Long-Term Share Award
will be payable in cash equal to the dividends paid on the underlying shares
between the date the award was made and the vesting date.
No dividends or dividend equivalents will be paid on any Award (or part
therefore) that lapses on or before vesting.
2022-2023 remuneration scheme
The below section explains only the components that are still expensed based
on the 2022-2023 schemes until vesting. The remuneration system was approved
by shareholders at the TBC Bank Group PLC's Annual General Meeting in June
2021 and came into effect on 1 January 2022. It covers the period 2022-2023.
The Share salary from previous systems have already been vested.
Variable Remuneration
Variable remuneration of the Top Management consisted of the annual bonus
delivered in shares (the "Annual Bonus") and the share awards under the
Long-Term Incentive Plan (the "LTIP Award"). 60% of variable remuneration is
the LTIP Award and the remaining 40% constituted the Annual Bonus.
(a) Annual Bonus under Deferred Share plan 2022-2023 Annual Bonus is
delivered in TBC PLC shares. The Executive Directors received the annual bonus
entirely in TBC PLC shares and it did not comprise any cash component. Annual
Bonus award is subject to a holding period (but not continued employment) over
2 years period with 50% being released after one year and remaining 50% being
released at the end of second year. The Annual Bonus is subject to malus and
claw back provisions as described in the Deferred Share Plan. During the
holding period, participants are entitled to vote at the shareholder meetings
and receive dividends.
(b) Long Term Incentive Plan (LTIP) 2022-2023 The level of LTIP Award grant
was determined pro rata from the LTIP maximum opportunity based on the
assessment of the base i.e., prior year's Annual Bonus corporate KPIs
performance. LTIP Awards granted would then be subject to 3-year LTIP
forward-looking performance conditions and would vest at the end of 5-year
period following the grant. LTIP Award forward-looking KPIs were set at the
beginning of each year in relation to that year's cycle by the Remuneration
Committee. The Participants are not entitled to any dividend or voting rights
until the LTIP Award vests.
15. SHARE BASED PAYMENTS (CONTINUED)
Middle Management
Middle management receives cash bonuses, as well as share-based awards.
According to the scheme, each year, subject to predefined performance
conditions, a certain number of shares are awarded to most of the middle
managers in the Group. The performance features key performance indicators
(KPIs) divided into (i) corporate and (ii) individual. The corporate KPIs are
mainly related to achieving profitability, efficiency, and portfolio quality
metrics set by the Board as well as non-financial indicators regarding to
customers' experience and employees' engagement. The individual performance
indicators are set on an individual basis and are used to calculate the number
of shares to be awarded to each employee. Once awarded, all shares carry
service conditions and, before those conditions are met, are eligible for
dividends; however, they cannot be sold or transferred to third parties.
Service conditions foresee continuous employment until the gradual transfer of
the full title to the scheme participants is complete. Vesting conditions are
33%, 33%, 34% per year for the 3-year period since the award date. Under this
compensation system the total vesting period extends to 4 years since the
grant date. In addition, the variable remuneration structure for other
identified Material Risk Taker ("MRT") employees, below the level of executive
management board members of TBC Bank JSC, is subject to regulatory
requirements and is in line with the NBG CG Code. For MRT employees holding
end date for non-deferred variable remuneration is 6 months after award date.
Currently, 2-year remuneration scheme for 2023-2024 years is being granted.
Tabular information on the schemes is given below:
30 June 2025 31 December 2024
Number of unvested shares at the beginning of the period 1,507,090 1,608,323
Number of shares granted 255,658 285,871
Change in estimates of number of shares expected to vest - (125,630)
Change in number of shares based on actual share price, exchange rate and KPI 94,381 54,090
accomplishment
Number of shares vested (260,857) (315,564)
Number of unvested shares at the end of the period 1,596,272 1,507,090
Expense recognised as staff cost during the period was GEL 21,721 thousand (30
June 2024: GEL 14,049 thousand).
The fair value of the employee services received in exchange for the grant of
the equity instruments is determined by the nature of the award. Currently
there are several types of share-based award schemes as described above. The
deferred share salary and deferred share bonus are the grants of the possible
bonus pool amount, which will be based on the performance conditions. The fair
value of the award is determined by the present value of the amount as at
grant date and probable performance conditions accomplishment. The LTIP and
long-term plan are the awards of potential maximum share numbers also up to
performance conditions. The fair value of the award as of the grant date is
determined by the grant date share price and probable performance conditions
accomplishment. The fair value amount of 2025 performance related grants are
GEL 45,049 thousand. The tax part of the existing variable remuneration system
is accounted for on both equity and cash settled basis. Cash settled part
recognised as liability at the end of 30 June 2025 is GEL 1,117 thousand (31
December 2024: GEL 1,966 thousand). Staff costs related to equity settled part
of the share-based payment schemes are recognised in the income statement on a
pro-rata basis over the vesting period of each relevant scheme tranche and
corresponding entry is credited to share based payment reserve in equity.
The Group operates employee benefit trust (EBT) set up by the Executive Equity
Compensation Trustee - Sanne Fiduciary Services Limited (the "Trustee") which
acts as the trustee of the Group's share-based payments plan. EBT, under the
instruction of the Company, purchases TBC Bank Group PLC's shares from the
open market and holds them before they are awarded to participants. TBC Bank
Group PLC pays cash for the share purchase, and the amount is later reimbursed
by the Bank under a recharge agreement. Decision on the number of shares to be
purchased each year is the remit of the Remuneration Committee of the TBC Bank
Group PLC. The shares are presented under Shares held by trust category in the
Statement of Financial Position until they are awarded to participants. As at
30 June 2025 the share number held by Trustee was 645,324 (31 December 2024:
868,235), which represents 1.1% of total outstanding shares (31 December 2024:
1.5%).
16. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the profit or loss
attributable to the owners of the Group by the weighted average number of
ordinary shares in issue during the period.
Six months ended
in thousands of GEL 30 June 2025 30 June 2024
Profit for the period attributable to the owners of the TBCG 657,414 617,400
Weighted average number of ordinary shares in issue 55,481,172 54,482,692
Basic earnings per ordinary share attributable to the owners of the Group 11.85 11.33
(expressed in GEL per share)
Diluted earnings per share are calculated by dividing the profit or loss
attributable to owners of the Group by the weighted average number of ordinary
shares adjusted for the effects of all dilutive potential ordinary shares
during the period. Ordinary shares with dilutive potential represent those
shares that were granted to the participants of the share-based payments
scheme and are not yet distributed.
Six months ended
in thousands of GEL 30 June 2025 30 June 2024
Profit for the period attributable to the owners of the TBCG 657,414 617,400
Weighted average number of ordinary shares in issue adjusted for the effects 56,006,047 54,722,115
of all dilutive potential ordinary shares during the period
Diluted earnings per ordinary share attributable to the owners of the Group 11.74 11.28
(expressed in GEL per share)
17. SEGMENT ANALYSIS
The Management Board (the "Board") is the chief operating decision maker
(CODM) and it reviews the Group's internal reporting in order to assess the
performance and to allocate resources.
Following the increase in the Group's businesses, the Group has formed two
separate executive committees with different memberships. The separate Group
executive committee (CODM for Group purposes) is responsible for managing
group results, while sub-segmental management is performed by subsidiaries
executive committees. The Georgian financial services segment was presented by
sub-segments in previous reporting periods. The change is in line with Groups
structural development and way the Group is managed. Respectively, segmental
information disclosure for Groups consolidated financial statements starting
from 2024 reflects the same pattern, by concentrating on Group's major
segments. The operating segments are defined as follows:
· Georgian financial services - include TBC Bank JSC with its Georgian
subsidiaries and TBC Insurance JSC, with its subsidiary.
· Uzbekistan operations - TBC Digital JSC with respective subsidiaries;
· Other operations and eliminations - include non-material or
non-financial subsidiaries of the group and intra-group eliminations.
The reportable segments are the same as the operating segments.
No revenue from transactions with a single external customer or counterparty
amounted to 10% or more of the Group's total revenue in the six months period
ended June 2025 and 2024.
Allocation of indirect expenses is performed based on drivers identified for
each type of cost where possible. If there is no identifiable driver for any
type of expense/overhead cost, those expenses are allocated between segments
based on the same logic as applied for the expenses with similar nature (e.g.,
other operating expenses would follow the pattern of closest category of
operating expenses).
The intersegment transfer pricing methodology is an internally developed tool
founded on matched maturity logics. It is used to effectively manage liquidity
and mitigate interest rate risks within the Group. The process entails the
corporate centre borrowing monetary amounts (deposits) from different business
segments. Compensation for each deposit is based on its specific currency,
duration, type, liquidity and capital requirements, ensuring equitable
treatment for each segment. In turn, business segments borrow funds from the
corporate centre to finance loans and other assets. The pricing for each
borrowing transaction is determined based on factors such as the currency,
loan type (fixed, floating, mixed interest rates), loan duration, and capital
requirement.
17. SEGMENT ANALYSIS (CONTINUED)
The table below presents the Group's operating segments income statement for
the six months period ended 30 June 2025:
Georgian financial services Uzbekistan operations Other operations and eliminations* Total
in thousands of GEL
Interest income 1,731,325 483,365 1,984 2,216,674
Interest expense (883,803) (223,200) 1,739 (1,105,264)
Net interest on currency swaps 12,671 (1,644) (7,425) 3,602
Net interest income 860,193 258,521 (3,702) 1,115,012
Fee and commission income 367,981 116,428 6,108 490,517
Fee and commission expense (147,437) (40,354) 905 (186,886)
Net fee and commission income 220,544 76,074 7,013 303,631
Net insurance income 22,772 413 (411) 22,774
Net gains from derivatives, foreign currency operations and translation 165,124 (4,218) (4,974) 155,932
Other operating income 10,469 26 556 11,051
Share of profit of associate 439 - - 439
Other operating non-interest income and net insurance income 198,804 (3,779) (4,829) 190,196
Credit loss allowance for loans to customers (102,947) (108,581) (194) (211,722)
Credit loss allowance for finance lease receivables, other financial and (11,835) (13,057) (462) (25,354)
impairment of non-financial assets
Operating income after expected credit loss allowance and non-financial 1,164,759 209,178 (2,174) 1,371,763
asset impairment losses
Staff costs (229,864) (49,047) (28,980) (307,891)
Depreciation and amortisation (63,592) (10,396) (5,586) (79,574)
Administrative and other operating expenses (123,386) (88,609) (2,238) (214,233)
Operating expenses (416,842) (148,052) (36,804) (601,698)
Profit before tax 747,917 61,126 (38,978) 770,065
Income tax expense (98,174) (7,236) 126 (105,284)
Profit for the period 649,743 53,890 (38,852) 664,781
*The Group has not disclosed eliminations separately considering their
immateriality. Meanwhile other operating income includes intergroup dividends
of GEL 510,123 thousand with respective elimination.
The table below present certain assets and liabilities information regarding
the Group's operating segments as at 30 June 2025:
Georgian financial services Uzbekistan operations Other operations Eliminations Total
in thousands of GEL
Gross loans and advances to customers 25,508,278 2,209,937 520,799 (510,517) 27,728,497
Customer accounts 22,646,812 1,340,365 - (65,451) 23,921,726
Goodwill 28,197 14,077 17,690 - 59,964
Capital expenditures 116,880 49,333 42,404 (30,998) 177,619
Credit related commitments and performance guarantees 3,308,813 116,080 - - 3,424,893
17. SEGMENT ANALYSIS (CONTINUED)
The table below presents the Group's operating segments income statement for
the six months period ended 30 June 2024:
Georgian financial services Uzbekistan operations Other operations and eliminations* Total
in thousands of GEL
Interest income 1,489,504 225,064 4,335 1,718,903
Interest expense (759,250) (98,629) 1,174 (856,705)
Net interest on currency swaps 43,604 (5,128) 281 38,757
Net interest income 773,858 121,307 5,790 900,955
Fee and commission income 312,975 62,934 4,453 380,362
Fee and commission expense (133,811) (18,670) (180) (152,661)
Net fee and commission income 179,164 44,264 4,273 227,701
Net insurance income 17,266 - (363) 16,903
Net gains from derivatives, foreign currency operations and translation 152,799 (456) (5,227) 147,116
Other operating income 3,469 11 151 3,631
Share of profit of associate 105 - - 105
Other operating non-interest income and net insurance income 173,639 (445) (5,439) 167,755
Credit loss allowance for loans to customers (50,928) (25,803) 5,166 (71,565)
Credit loss allowance for finance lease receivables, other financial and (3,382) (1,552) (197) (5,131)
impairment of non-financial assets
Operating income after expected credit loss allowance and non-financial 1,072,351 137,771 9,593 1,219,715
asset impairment losses
Staff costs (207,095) (28,002) (27,119) (262,216)
Depreciation and amortisation (59,278) (5,912) (4,532) (69,722)
Administrative and other operating expenses (96,762) (54,816) (2,732) (154,310)
Operating expenses (363,135) (88,730) (34,383) (486,248)
Profit before tax 709,216 49,041 (24,790) 733,467
Income tax expense (100,870) (6,825) (3) (107,698)
Profit for the period 608,346 42,216 (24,793) 625,769
*The Group has not disclosed eliminations separately considering their
immateriality. Meanwhile other operating income includes intergroup dividends
of GEL 414,169 thousand with respective elimination.
The table below present certain assets and liabilities information regarding
the Group's operating segments as at 31 December 2024:
Georgian financial services Uzbekistan operations Other operations Eliminations Total
in thousands of GEL
Gross loans and advances to customers 24,502,727 1,569,093 167,167 (150,305) 26,088,682
Customer accounts 21,890,518 1,055,758 - (82,443) 22,863,833
Goodwill 28,197 14,015 17,752 - 59,964
Capital expenditures 212,818 90,705 78,214 (30,743) 350,994
Credit related commitments and performance guarantees 3,411,522 - - - 3,411,522
18. INTEREST INCOME AND EXPENSE
in thousands of GEL 30 June 2025 30 June 2024
Interest income calculated using effective interest method
Loans and advances to customers 1,835,351 1,425,192
Investment securities 212,179 168,163
Due from other banks 65,881 70,208
Repurchase receivables 244 -
Other financial assets 1,920 1,546
Other interest income
Finance lease receivables 101,099 53,794
Total interest income 2,216,674 1,718,903
Interest expense
Customer accounts (650,691) (546,218)
Due to credit institutions (317,616) (181,813)
Debt securities in issue and AT1 (79,233) (72,739)
Subordinated debt (52,886) (52,689)
Other interest expense
Lease Liabilities (4,838) (3,246)
Total interest expense (1,105,264) (856,705)
Net interest on currency swaps 3,602 38,757
Net interest income 1,115,012 900,955
During six months ended June 2025 interest accrued on defaulted loans amounted
to GEL 17,676 thousand (Six months ended June 2024: 15,339 thousand).
During six months ended 2025 capitalised interest expense in the amount of GEL
2,889 thousand (Six months ended 30 June 2024: GEL 1,926 thousand) was
attributable to the development of the Group's headquarter. The capitalisation
rate used to determine the amount of borrowing costs eligible for
capitalisation is weighted average of interest-bearing liabilities by
currencies: 8.2% in GEL, 3.4% in USD and 2.6% in EUR. (2024: 8.3% in GEL, 2.7%
in USD and 2.9% in EUR). For details of construction in progress please refer
to Note 8.
19. FEE AND COMMISSION INCOME AND EXPENSE
Below tables disclose fee and commission income and expense by segments. For
the definition of the segments refer to Note 17.
Six months ended 30 June 2025 Georgian financial services Uzbekistan operations Other operations and intersegment eliminations* Total
in thousands of GEL
Fee and commission income in respect of financial instruments not at fair
value through profit or loss:
- Card operations 203,819 4,847 (1,289) 207,377
- Settlement transactions 87,000 94,062 (107) 180,955
- Guarantees issued 27,218 - - 27,218
- Cash transactions 9,239 - - 9,239
- Issuance of letters of credit 5,902 - - 5,902
- Foreign exchange operations 9,342 - - 9,342
- Other 25,461 17,519 7,504 50,484
Total fee and commission income 367,981 116,428 6,108 490,517
Fee and commission expense in respect of financial instruments not at fair
value through profit or loss:
- Card operations (108,525) (2,958) 762 (110,721)
- Settlement transactions (8,912) (33,044) (43) (41,999)
- Cash transactions (12,213) - - (12,213)
- Guarantees received (962) - - (962)
- Letters of credit (2,008) - - (2,008)
- Other (14,817) (4,352) 186 (18,983)
Total fee and commission expense (147,437) (40,354) 905 (186,886)
Net fee and commission income 220,544 76,074 7,013 303,631
Six months ended 30 June 2024 Georgian financial services Uzbekistan operations Other operations and intersegment eliminations* Total
in thousands of GEL
Fee and commission income in respect of financial instruments not at fair
value through profit or loss:
- Card operations 175,166 388 (809) 174,745
- Settlement transactions 73,830 58,153 (49) 131,934
- Guarantees issued 25,993 - - 25,993
- Cash transactions 8,620 - - 8,620
- Issuance of letters of credit 3,308 - - 3,308
- Other 26,058 4,393 5,311 35,762
Total fee and commission income 312,975 62,934 4,453 380,362
Fee and commission expense in respect of financial instruments not at fair
value through profit or loss:
- Card operations (100,604) (1,300) 258 (101,646)
- Settlement transactions (8,588) (15,769) (19) (24,376)
- Cash transactions (10,993) - 8 (10,985)
- Guarantees received (850) - - (850)
- Letters of credit (644) - - (644)
- Other (12,132) (1,601) (427) (14,160)
Total fee and commission expense (133,811) (18,670) (180) (152,661)
Net fee and commission income 179,164 44,264 4,273 227,701
*The Group has not disclosed eliminations separately considering their
immateriality.
20. NET GAINS FROM DERIVATIVES, FOREIGN CURRENCY OPERATIONS AND TRANSLATION
Net gains from derivatives, foreign currency operations and translation for
the following periods are as follows:
Six months ended
in thousands of GEL 2025 2024
Net gains from trading in foreign currencies (41,377) 123,466
Net (losses)/gains from foreign exchange translation 197,303 23,630
Net gains/(losses) from derivative financial instruments other than 6 20
derivatives on foreign currency
Total net gains from derivatives, foreign currency operations and translation 155,932 147,116
The Group enters into fixed-for-floating cross-currency interest rate swaps
(CCIRS) to manage exposure to changes in fair value arising from movements in
foreign exchange rates on debt securities issued and measured at amortised
cost. The Group applies fair value hedge accounting, whereby the gains and
losses on the hedging instruments are recognised in the income statement to
offset the fair value adjustment recognised on the hedged item, while the cost
of hedging arising from basis spread is recognised in other comprehensive
income (OCI). As of 30 June 2025, the amount recognised in OCI was GEL 1,864
thousand (31 December 2024: nil).
21. INCOME TAXES
As at 30 June 2025, the weighted average income tax rate is 20% (30 June 2024:
20%), when the income tax rate applicable to the majority of subsidiaries
income ranged from 15% - 20% (2023: 15% - 20%).
In December 2021, the Organisation for Economic Co-operation and Development
(OECD) issued model rules for a new global minimum tax framework (Pillar Two).
The Group is within the scope of the OECD Pillar Two model rules, with
legislation enacted in the UK effective from January 1, 2024. The group is
liable to pay a top-up tax for the difference between its GloBE effective tax
rate per jurisdiction and the 15% minimum rate.
The Group applies the exception on recognizing and disclosing information
about deferred tax assets and liabilities related to Pillar Two income taxes,
as provided in the amendments to IAS 12 issued in May 2023.
With the exception of Space International in Georgia - which benefits from a
preferential 5 % corporate income-tax rate - all other entities in the Group
are subject to statutory tax rates of 15 % or higher, reflecting the various
tax regimes under which they operate. The Group continuously monitors
developments in Pillar Two legislation and, with the support of external tax
specialists, is evaluating any potential impact on its operations and
consolidated financial statements. However, no material impact was identified
in the interim financial statements.
22. FINANCIAL AND OTHER RISK MANAGEMENT
Market risk. Market risk is the risk that the fair value or future cash
flows of financial instruments will fluctuate due to changes in market
variables such as interest rates, foreign exchange rates and equity prices.
Management sets risk appetite limits on the value of risk that may be
accepted, which is monitored on a regular basis. These limits provide buffers
over regulatory limits, ensuring early detection of potential losses in the
event of more significant market movements.
Currency risk. Foreign exchange rate risk arises from the potential change in
foreign currency exchange rates, which can affect the value of a financial
instrument. This risk stems from the open currency positions created due to
mismatches in foreign currency assets and liabilities. The NBG requires the
Bank to monitor both balance sheet and total aggregate (including off-balance
sheet) open currency positions and to maintain the later one within 20% of the
Bank's regulatory capital. The Asset-Liability Management Committee ("ALCO")
has set limits on the level of exposure by currency as well as on aggregate
exposure positions which are more conservative than those set by the NBG. The
Bank's compliance with such limits is monitored daily by the Treasury
department and Financial and Capital Risk Management division.
Currency risk management framework is governed through the Foreign Exchange
Risk Management Policy. The table below summarises the Group's exposure to
foreign currency exchange rate risk at the balance sheet date. While managing
open currency position the Group considers part of the provisions to be
denominated in the USD, Euro and other currencies. Gross amount of currency
swap deposits is included in Derivatives. Therefore, total financial assets
and liabilities below are not traceable with either balance sheet or liquidity
risk management tables, where net amount of gross currency swaps is presented.
22. FINANCIAL AND OTHER RISK MANAGEMENT (CONTINUED)
As of 30 June 2025 Monetary financial assets Monetary financial liabilities Derivatives Net position
in thousands of GEL
GEL 18,997,058 15,627,743 509,362 3,878,677
USD 11,476,303 13,118,645 1,424,975 (217,367)
EUR 5,661,513 3,730,616 (1,954,595) (23,698)
UZS 2,942,578 2,011,716 (110,066) 820,796
Other 597,003 893,431 13,483 (282,945)
Total 39,674,455 35,382,151 (116,841) 4,175,463
As of 31 December 2024 Monetary financial assets Monetary financial liabilities Derivatives Net position
in thousands of GEL
GEL 18,097,799 15,162,913 1,167,218 4,102,104
USD 13,003,588 13,659,391 499,033 (156,770)
EUR 4,831,363 3,326,042 (1,499,194) 6,127
UZS 2,031,195 1,451,272 (103,428) 476,495
Other 116,911 155,590 55,676 16,997
Total 38,080,856 33,755,208 119,305 4,444,953
US Dollar strengthening by 15% (weakening 15%) would decrease Group's profit
or loss and equity in 2025 by GEL 32,605 thousand (increase by GEL 32,605
thousand). Euro strengthening by 15% (weakening 15%) would decrease Group's
profit or loss and equity in 2025 by GEL 3,555 thousand (increase by GEL 3,555
thousand).
US Dollar strengthening by 15% (weakening 15%) would decrease Group's profit
or loss and equity in 2024 by GEL 23,516 thousand (increase by GEL 23,516
thousand). Euro strengthening by 15% (weakening 15%) would decrease Group's
profit or loss and equity in 2024 by GEL 919 thousand (increase by GEL 919
thousand).
Interest rate risk. Interest rate risk arises from potential changes in the
market interest rates that can adversely affect the fair value or future cash
flows of the financial instrument. This risk can arise from maturity
mismatches of assets and liabilities, as well as from the re-pricing
characteristics of such assets and liabilities.
The biggest share of the Bank's deposits, more than half of the borrowings and
part of the loans are at fixed interest rates. In addition, the Bank actively
uses floating and combined(( 4 (#_ftn4) )) interest rate structures in its
loan portfolio. Since these assets and liabilities have different repricing
characteristics by currencies, their corresponding interest margins may
increase or decrease as a result of market interest rate changes potentially
entailing negative effect on net interest income. To minimize interest rate
risk, the Bank regularly monitors interest rate (re-pricing) gaps by
currencies and, in case of need, decides to enter into interest rate
derivatives contracts.
Furthermore, many of the Bank's loans to customers contain a clause allowing
it to adjust the interest rate on the loan in case of adverse interest rate
movements, thereby limiting exposure to interest rate risk. The management
also believes that the Group's interest rate margins provide a reasonable
buffer to mitigate the effect of a possible adverse interest rate movement.
The Group employs an advanced framework for the management of interest rate
risk by establishing appropriate Risk Appetite limits, monitoring compliance
with them and preparing forecasts. From September, 2020 the NBG introduced
regulation on interest rate risk and set the limit for Economic Value of
Equity (EVE) sensitivity at 15% of NBG Tier 1 Capital. The main principles and
assumptions of NBG IRR methodology are in line with Basel standards developed
for IRR management purposes.
According to NBG guidelines the net interest income sensitivity under parallel
shifts of interest rate scenarios is maintained for monitoring purposes, while
EVE sensitivity is calculated under 6 predefined stress scenarios of interest
rate changes and the limit is applied to the worst-case scenario result.
Interest rate risk is managed by the Balance Sheet Management division and is
monitored by the ALCO, which decides on actions that are necessary for
effective interest rate risk management and follows up on their
implementation. Financial and Capital Risk Management division is responsible
for developing procedures, policy document and setting risk appetite for
interest rate risk. The major aspects of interest rate risk management
development and the respective reporting are periodically provided to the
Management Board, the Supervisory Board's Risk Committee.
22. FINANCIAL AND OTHER RISK MANAGEMENT (CONTINUED)
Following main assumptions under NBG IRR Regulation and Basel 2016 guidelines,
at 30 June, 2025, if market interest rates for each currency had been 200
basis points higher, with all other variables held constant, profit would have
been equivalent GEL 5 million lower, mainly as a result of relatively closed
NII gaps and higher balances of mandatory NBG USD reserves, which earn no
interest in upward interest rate scenario (30 June 2024: GEL 11 million
higher). If market interest rates for each currency at 30 June, 2025 had been
200 basis points lower with all other variables held constant, profit for the
year would have been equivalent GEL 0.4 million higher, mainly as a result of
relatively closed NII gaps and higher balances of mandatory NBG USD reserves,
which is not charged in downward interest rate scenario unless interest rates
turn negative (30 June 2024: GEL 11 million lower). Compared to the last year,
in 2025 in both of the scenarios the effects have been muted due to the
relatively closed NII gaps.
At 30 June, 2025, if interest rates had been 200 basis points lower, with all
other variables held constant, other comprehensive income would have been GEL
211 million higher (30 June 2024: GEL 51.8 million), as a result of an
increase in the fair value of fixed rate financial assets measured at fair
value through other comprehensive income and repurchase receivables. If
interest rates at 30 June, 2025 had been 200 basis points higher with all
other variables held constant, Other comprehensive income would have been GEL
211 million lower (30 June 2024: GEL 51.8 million), as a result of decrease in
the fair value of fixed rate financial assets measured at fair value through
other comprehensive income.
Liquidity Risk. The liquidity risk is the risk that the Bank either does not
have sufficient financial resources available to meet all of its obligations
and commitments as they fall due or can access those resources only at a high
cost. The risk is managed by the Balance Sheet Management division and
Treasury Department and is monitored by the ALCO, within their pre-defined
functions. Financial and Capital Risk Management (FRM) division is responsible
for developing procedures, policy document and setting risk appetite on
funding and market liquidity risk management. In addition, FRM performs
liquidity risk assessment and communicates the results to the MB and Risk
Committee of the Supervisory Board on a regular basis.
The principal objectives of the Bank's liquidity risk management policy are
to: (i) ensure the availability of funds in order to meet claims arising from
total liabilities and off-balance sheet commitments, both actual and
contingent, at an economic price; (ii) recognise any structural mismatch
existing within the Bank's statement of financial position and set monitoring
ratios to manage funding in line with well-balanced growth; and (iii) monitor
liquidity and funding on an on-going basis to ensure that approved business
targets are met without compromising the risk profile of the Bank.
The liquidity risk is categorised into two risk types: the funding liquidity
risk and the market liquidity risk.
Funding liquidity risk is the risk that the Bank will not be able to
efficiently meet both expected and unexpected current and future cash flow and
collateral needs without affecting either its daily operations or its
financial condition. To manage funding liquidity risk the Bank uses the
Liquidity Coverage ratio and the Net Stable Funding ratio set, forth under
Basel III, and defined further by the NBG. In addition, the Bank performs
stress tests and "what-if" scenario analysis. For NBG LCR the limits are set
by currency (GEL, FC, Total). TBC monitors compliance with NBG LCR limits on a
daily basis. On a monthly basis the Bank also monitors compliance with the set
limit for NBG NSFR.
The Liquidity Coverage Ratio is used to help manage short-term liquidity
risks. The Bank's liquidity risk management framework is designed to
comprehensively project cash flows arising from assets, liabilities and
off-balance sheet items over certain time buckets and ensure that NBG LCR
limits, are met on a daily basis.
The Net Stable Funding ratio is used for long-term liquidity risk management
to promote resilience over a longer time horizon by creating additional
incentives for the Bank to rely on more stable sources of funding on a
continuous basis. The Bank also monitors deposit concentration for large
deposits and sets the limits for non-Georgian resident's deposits share in
total deposit portfolio.
The Bank relies on relatively stable deposits from Georgia as the main source
of funding. In order to maintain and further enhance the liability structure
the Bank sets the targets for deposits and IFI funding within the Bank's risk
appetite.
The Bank's liquidity position was strong as of 30 June 2025, both LCR and NSFR
ratios above the NBG minimum requirements of 100%.
Climate risk. The Group's largest operations are located in Georgia hence the
climate risk overview is done by the management from a Georgian perspective.
The second largest subsidiary of the group is UZ Bank and constitutes 6.72% of
the Group's assets. Considering that UZ Bank's business activities focus on
retail segment with a very low volume of the average exposure, it is
considered to be immaterial for the Group from the climate-risk perspective.
The Georgia's 2030 Climate Change Strategy and Climate Action Plan lays out
different policy measures on which the Bank based its identification of the
potential impact of the policy measures on different economic sectors. As a
summary of the potential impact of the various transition risks and physical
risks identified, the transitional risks in Georgia are low, considering, that
trade and services dominate the Georgian economy, the policy measures outlined
in the Georgia's 2030 Climate Change Strategy will have overall low impact on
the economic sectors, especially in short and medium term. The Georgia's 2030
Climate Change Strategy takes into consideration that Georgia is a
transitional and growing economy, and therefore the government strategy is not
to impede the growth of the GDP with policy measures and rather to support a
smooth transition where necessary. It is worth noting, that the economic
sectors most affected by transitional risks world-wide such as mining crude
petroleum, natural gas and metal ores, manufacturing coke and refined
petroleum products are present to a very limited extent in Georgia, resulting
in a low overall impact of transitional measures on economic growth, if any.
22. FINANCIAL AND OTHER RISK MANAGEMENT (CONTINUED)
In order to increase the understanding of climate-related risks on its loan
portfolio, the Bank performed a high-level sectoral risk assessment, as
different sectors might be vulnerable to different climate-related risks over
different time horizons; furthermore, the Bank performed climate stress
testing of the credit portfolio. The maturity structure of the loan portfolio
shows that the largest part of assets is distributed in the time horizons that
are much shorter than the impacts of climate change, especially of physical
risks, can be materialized in Georgia. Therefore, the bank has not made any
adjustment to the level of provisions purely related to climate risk. On the
other hand, the understanding of climate related risks, which have longer-term
impacts need to be increased in coming years, therefore, when the bank has a
more definitive analysis, it will further develop the approach, how to
consider climate risks in provisioning. No post model adjustments (PMAs) or
Post model overlays (PMOs) have been posted for 2025 in this regard.
23. CONTINGENCIES AND COMMITMENTS
Legal and regulatory matters. When determining the level of provision to be
set up with regards to such matters, or the amount (not subject to
provisioning) to be disclosed in the financial statements, the management
seeks both internal and external professional advice. The management believes
that the provision recorded in these condensed consolidated interim financial
statements is adequate and the amount (not subject to provisioning) need not
be disclosed as it will not have a material adverse effect on the financial
condition or the results of future operations of the Group.
Tax legislation. Georgian and Uzbekistan tax and customs legislation is
subject to varying interpretations, and changes, which can occur frequently.
Management's interpretation of the legislation as applied to the Group's
transactions and activity may be challenged by the relevant authorities. In
Uzbekistan, the tax review periods for the three preceding calendar years
remain open to review by authorities. In Georgia, the period of limitation for
tax review is three years as well. To respond to the risks, the Group has
engaged external tax specialists to carry out periodic reviews of Group's
taxation policies and tax filings. The Group's management believes that its
interpretation of the relevant legislation is appropriate, and the Group's tax
and customs positions will be substantially sustained.
Compliance with covenants. Compliance with covenants. The Group is subject to
certain financial and non-financial covenants primarily related to its debt.
Non-compliance with such covenants may result in negative consequences for the
Group including mandatory prepayment and declaration of default. The Group was
in compliance with all covenants as of 30 June 2025 and 31 December 2024.
For all financial covenants the group monitors risks related to its potential
breach.
Management of Capital. The Bank manages capital requirements under regulatory
rules. The Bank complied with all its imposed capital requirements for the
period to 30 June 2025 and throughout 2024. Based on information provided
internally to key management personnel, the amount of capital that the Bank
managed (the Bank's total equity adjusted for regulatory corrections) was GEL
4,917,529 thousand as of 30 June 2025 (31 December 2024: GEL 4,843,167
thousand), regulatory Tier 1 capital amounts to GEL 5,938,879 thousand (31
December 2024: GEL 5,895,717 thousand), total regulatory capital amounts to
GEL 6,874,774 thousand (31 December 2024: GEL 6,861,963 thousand).
In the management of capital, UZ Bank has the following objectives: compliance
with capital requirements established by the Central Bank of Uzbekistan (CBU)
and, in particular, the requirements of the deposit insurance system; ensuring
the UZ Bank's ability to function as a going concern and maintaining the
capital base at the level necessary to ensure the compliance of the capital
adequacy ratio with the requirements of the CBU. The compliance with the
capital adequacy ratio established by the CBU is monitored monthly according
to the forecast and actual data containing the relevant calculations, which
are verified and vetted by the UZ Bank's Management.
According to the Uzbekistan Regulation on the Requirements for the Adequacy of
the Capital of Commercial Banks No. 2693 registered by the Ministry of Justice
on 6 July 2015 and its supplement, the following requirements are set for
banks:
· The minimum level of regulatory capital ("K1") is set at 13%;
· Banks are required to ensure a minimum level of Tier 1 capital
("K2") of 10%, taking into account the capital conservation buffer of 3% of
risk-weighted assets.
As at 30 June 2025 and 31 December 2024, the Group met the requirements to
regulatory capital set by the Regulation of the CBU On the Requirements for
the Adequacy of the Capital of Commercial Banks No. 2693 dated July 6, 2015.
On 16 September 2016, ISSSG (Insurance State Supervision Service of Georgia)
issued directives №15 and №16 on the determination of the Regulatory
Solvency Margin ("RSM") and Regulatory Capital, respectively. The laws also
impose the requirements on
23. CONTINGENCIES AND COMMITMENTS (CONTINUED)
maintaining minimum Regulatory Capital benchmarking against RSM. TBC Insurance
JSC was in compliance with capital requirements set by ISSSG during 2024 and
as at 30 June 2025.
Credit related commitments and financial guarantees. The primary purpose of
these instruments is to ensure that funds are available to a customer as
required. Financial guarantees and standby letters of credit, which represent
the irrevocable assurances that the Group will make payments in the event that
a customer cannot meet its obligations to third parties, carry the same credit
risk as loans. Documentary and commercial letters of credit, that are
underwritten by the Group on behalf of a customer authorising a third party to
draw drafts on the Group up to a stipulated amount under specific terms and
conditions, are collateralised by the underlying shipments of goods to which
they relate or cash deposits and therefore carry less risk than a direct
borrowing.
Commitments to extend credit represent unused portions of authorisations to
prolong credit in the form of loans, guarantees or letters of credit. With
respect to credit risk on commitments to extend credit, the Group is
potentially exposed to a loss in an amount equal to the total unused
commitments. However, the likely amount of loss is lower than the total unused
commitments since most commitments to extend credit are contingent upon
customers maintaining specific credit standards. The Group monitors the term
to
maturity of credit related commitments because longer-term commitments
generally have a greater degree of credit risk than shorter-term ones.
As of 30 June 2025, outstanding credit related commitments presented by stages
are as follows:
in thousands of GEL Stage 1 Stage 2 Stage 3
Undrawn credit lines 626,338 10,292 4,467
Letters of credit issued 168,555 - -
Financial guarantees issued 514,837 3,771 80
Total credit related commitments (before provision) 1,309,730 14,063 4,547
Credit loss allowance for credit related commitments
Undrawn credit lines (801) (112) -
Letters of credit issued (256) - -
Financial guarantees issued (789) - -
Credit loss allowance for credit related commitments (1,846) (112) -
Total credit related commitments 1,307,884 13,951 4,547
As of 31 December 2024, outstanding credit related commitments presented by
stages are as follows:
in thousands of GEL Stage 1 Stage 2 Stage 3
Undrawn credit lines 587,473 22,296 5,422
Letters of credit issued 244,147 - -
Financial guarantees issued 558,990 2,001 73
Total credit related commitments (before provision) 1,390,610 24,297 5,495
Credit loss allowance for credit related commitments
Undrawn credit lines (1,662) (146) -
Letters of credit issued (327) - -
Financial guarantees issued (762) - -
Credit loss allowance for credit related commitments (2,751) (146) -
Total credit related commitments 1,387,859 24,151 5,495
The total outstanding contractual amount of undrawn credit lines, letters of
credit, and guarantees does not necessarily represent future cash
requirements, as these financial instruments may expire or terminate without
being funded. Non-cancellable commitments as of 30 June 2025 were 241,062 GEL
thousand (2024: 241,871 GEL thousand).
Performance guarantees. Performance guarantees are contracts that provide
compensation in case of another party fails to perform a contractual
obligation.
23. CONTINGENCIES AND COMMITMENTS (CONTINUED)
As of 30 June, 2025, outstanding performance guarantees presented by stages
are as follows:
in thousands of GEL Stage 1 Stage 2 Stage 3
Outstanding amount 2,087,892 6,182 2,479
Credit loss allowance (3,142) (9) (2,379)
Total performance guarantees 2,084,750 6,173 100
As of 31 December, 2024, outstanding performance guarantees presented by
stages are as follows:
in thousands of GEL Stage 1 Stage 2 Stage 3
Outstanding amount 1,968,360 18,617 4,143
Credit loss allowance (2,705) (9) (2,389)
Total performance guarantees 1,965,655 18,608 1,754
Fair value of credit related commitments financial guarantees provisions was
GEL 1,958 thousand as at 30 June 2025 (31 December 2024: GEL 2,897 thousand).
Total credit related commitments and performance guarantees are denominated in
currencies as follows:
in thousands of GEL 30 June 2025 31 December 2024
GEL 1,680,031 1,736,716
USD 1,061,639 1,025,856
EUR 466,108 546,678
Other 217,115 102,272
Total 3,424,893 3,411,522
Capital expenditure commitments. As of 30 June, 2025, the Group has
contractual capital expenditure commitments amounting to GEL 138,834 thousand
(31 December 2024: GEL 128,055 thousand). Out of total amount as at 30 June
2025, contractual commitments related to the head office construction amounted
GEL 57,565 thousand (31 December 2024: GEL 50,414 thousand).
24. FAIR VALUE DISCLOSURES
(a) Fair value hierarchy
Fair values of financial instruments are determined to a hierarchy that
reflects the observability of significant market inputs. The three levels of
the fair value hierarchy are defined as following:
Level 1 - Financial instruments if their value is observable in an active
market.
Level 2 - Financial instruments with quoted prices for similar instruments in
active markets valued using models with significant observable inputs are
classified as level 2.
Level 3 - Financial instruments valued using valuation techniques with
significant inputs that are not based on observable market data.
(b) Recurring fair value measurements
Recurring fair value measurements are those that the accounting standards
require or permit in the statement of financial position at the end of each
reporting period. The level in the fair value hierarchy into which the
recurring fair value measurements are categorised as follows:
30 June 2025 31 December 2024
in thousands of GEL Level 1 Level 2 Level 3 Total fair value Level 1 Level 2 Level 3 Total fair value
Assets carried at fair value
Financial assets
Investment securities measured at fair value through other comprehensive
income
- Corporate bonds 53,360 1,855,730 - 1,909,090 68,280 1,247,354 - 1,315,634
- Foreign government treasury bills 326,633 - - 326,633 1,395,638 - - 1,395,638
- Ministry of Finance of Georgia treasury bills - 2,763,231 - 2,763,231 - 2,652,100 - 2,652,100
- Repurchase receivables - - - - 140,058 - - 140,058
- Corporate shares - 926 230 1,156 - 997 255 1,252
Investment securities measured at fair value through profit and loss
- Foreign exchange forwards and swaps, included in other financial assets - 54,234 - 54,234 - 156,598 - 156,598
Total assets recurring fair value measurements 379,993 4,674,121 230 5,054,344 1,603,976 4,057,049 255 5,661,280
Liabilities carried at fair value
Financial liabilities
- Foreign exchange forwards and swaps, included in other financial liabilities - 200,997 - 200,997 - 92,182 - 92,182
Total liabilities recurring fair value measurements - 200,997 - 200,997 - 92,182 - 92,182
24. FAIR VALUE DISCLOSURES (CONTINUED)
(c) Level 3 fair value measurements
(i) Movements in Level 3 financial instruments
There were no transfers between levels 1, 2 and 3 during the period 30 June
2025 (2024: none).
(ii) Significant unobservable inputs to Level 3 financial instruments
The description of the valuation technique and the description of inputs used
in the fair value measurement for level 3 measurements:
Valuation technique Significant unobservable inputs 2025 Range 2024 Range Units
Min Max Min Max
Assets carried at fair value
- Corporate shares Asset-based approach Book value per share 1.00 33.00 1.00 33.00 GEL
There were no changes in the valuation technique for the level 2 and level 3
recurring fair value measurements during the period 30 June 2025 (2024: none).
24. FAIR VALUE DISCLOSURES (CONTINUED)
(d) Assets and liabilities not measured at fair value but for which fair
value is disclosed
Fair values analysed by level in the fair value hierarchy and carrying value
of assets not measured at fair value are as follows:
30 June 2025
in thousands of GEL Level 1 Level 2 Level 3 Total fair value Carrying value
Financial assets
Cash and cash equivalents 888,275 2,660,566 - 3,548,841 3,548,840
Due from other banks - 111,130 - 111,130 111,130
Mandatory cash balances with NBG and CBU - 2,408,487 - 2,408,487 2,408,487
Loans and advances to customers:
- Corporate loans - - 10,516,379 10,516,379 10,412,890
- Consumer loans - - 5,950,535 5,950,535 5,698,726
- Mortgage loans - - 5,140,398 5,140,398 5,123,647
- Loans to micro, small and medium enterprises - - 6,006,646 6,006,646 5,963,465
Bonds carried at amortised cost 9,043 252,187 - 261,230 260,337
Finance lease receivables - - 680,396 680,396 710,040
Other financial assets - 382,550 - 382,550 382,550
Non-financial assets
Investment properties, at cost - - 17,272 17,272 11,569
Total assets (excluding assets with no fair value hierarchy) 897,318 5,814,920 28,311,626 35,023,864 34,631,681
Financial liabilities
Customer accounts - 13,019,193 10,807,483 23,826,676 23,921,726
Debt securities in issue - 829,061 - 829,061 829,613
Due to credit institutions - - 7,180,995 7,180,995 7,181,100
Other financial and lease liabilities - 1,047,638 - 1,047,638 1,047,638
Subordinated debt - - 1,145,710 1,145,710 1,151,490
Additional Tier 1 capital subordinated notes 1,046,174 - - 1,046,174 1,031,408
Total liabilities (excluding liability with no fair value hierarchy) 1,046,174 14,895,892 19,134,188 35,076,254 35,162,975
Performance guarantees - - 5,530 5,530 5,530
Financial guarantees - - 789 789 789
Credit related commitments - - 1,169 1,169 1,169
Total credit related commitments and performance guarantees - - 7,488 7,488 7,488
*Other financial liabilities amount includes lease liabilities and dividend
payable balances.
24. FAIR VALUE DISCLOSURES (CONTINUED)
31 December 2024
in thousands of GEL Level 1 Level 2 Level 3 Total fair value Carrying value
Financial assets
Cash and cash equivalents 862,343 2,185,058 - 3,047,401 3,047,401
Due from other banks - 45,498 - 45,498 45,498
Mandatory cash balances with NBG and CBU - 2,576,731 - 2,576,731 2,576,731
Loans and advances to customers:
- Corporate loans - - 9,691,963 9,691,963 9,794,792
- Consumer loans - - 5,075,473 5,075,473 4,954,861
- Mortgage loans - - 5,005,377 5,005,377 5,098,976
- Loans to micro, small and medium enterprises - - 5,860,017 5,860,017 5,835,169
Bonds carried at amortised cost 14,128 156,291 - 170,419 173,852
Finance lease receivables - - 692,149 692,149 612,320
Other financial assets - 279,976 - 279,976 279,976
Non-financial assets
Investment properties, at cost - - 17,135 17,135 9,752
Total assets (excluding assets with no fair value hierarchy) 876,471 5,243,554 26,342,114 32,462,139 32,429,328
Financial liabilities
Customer accounts - 12,952,215 9,826,927 22,779,142 22,863,833
Debt securities in issue - 447,449 - 447,449 448,064
Due to credit institutions - - 7,630,517 7,630,517 7,630,850
Other financial and lease liabilities - 491,924 - 491,924 491,924
Subordinated debt - - 1,140,070 1,140,070 1,148,374
Additional Tier 1 capital subordinated notes 1,072,019 - - 1,072,019 1,062,119
Total liabilities (excluding liability with no fair value hierarchy) 1,072,019 13,891,588 18,597,514 33,561,121 33,645,164
Performance guarantees - - 5,103 5,103 5,103
Financial guarantees - - 762 762 762
Credit related commitments - - 2,135 2,135 2,135
Total credit related commitments and performance guarantees - - 8,000 8,000 8,000
*Other financial liabilities amount includes lease liabilities and dividend
payable balances.
The carrying amounts of cash and cash equivalents, due from other banks, bonds
carried at amortised cost, other financial assets and liabilities,
subordinated debt, and credit related commitments and performance guarantees
are considered to be a reasonable approximation of fair value as they are
short-term in nature or reprice to current market rates frequently
The fair values in the level 2 and the level 3 of fair value hierarchy were
estimated using the discounted cash flows valuation technique. The fair value
of unquoted fixed interest rate instruments was calculated based on estimated
future cash flows expected to be received discounted at current interest rates
for new instruments with similar credit risk and remaining maturity. The fair
value of investment properties was estimated using market comparatives.
Amounts due to credit institutions were discounted at the Group's own
incremental borrowing rate. Liabilities due on demand were discounted from the
first date that the Group could be required to pay the amount. There were no
changes in the valuation technique for the level 2 and level 3 measurements of
assets and liabilities not measured at fair values during the period 30 June
2025 (2024: none)
25. RELATED PARTY TRANSACTIONS
Pursuant to IAS 24 "Related Party Disclosures", parties are generally
considered to be related if the parties are under common control or one party
has the ability to control the other or it can exercise significant influence
over the other party in taking financial or operational decisions. In
considering each possible related party relationship, attention is directed to
the substance of the relationship, not merely the legal form:
· The key management personnel include members of TBCG's Board of
Directors, the Management Board and Executive committee team of the Bank.
· Related parties not included in key management personnel are
presented in other related parties.
Transactions between TBC Bank Group PLC and its subsidiaries also meet the
definition of related party transactions.
As at 30 June 2025 and 31 December 2024 the Group's outstanding balances with
related parties were as follows:
in thousands of GEL Contractual interest rate Key management personnel Other related parties Associates
30 June 2025
Gross amount of loans and advances to customers 4.8%-33.0%* 617 1,740 -
Credit loss allowance for loans and advances to customers - - - -
Customer accounts 0%-12.2% 14,526 34,805 4,165
31 December 2024
Gross amount of loans and advances to customers 4.8%-36.0%* 826 1,759 -
Credit loss allowance for loans and advances to customers - - - -
Customer accounts 0%-12.2% 14,064 40,185 5,798
*The wide interest rate range reflects differences in loan products,
currencies and collateral types.
The Group's income and expense items with related parties except from key
management compensation for the periods of 6 months ended 30 June 2025 and 30
June 2024 were as follows:
in thousands of GEL Key management personnel Other related parties Associates
Six months ended 30 June 2025
Interest income - loans and advances to customers 21 61 -
Interest expense 377 839 212
Fee and commission income 7 19 2
Administrative and other operating expenses (excluding staff costs) 938 - -
Six months ended 30 June 2024
Interest income - loans and advances to customers 187 51 -
Interest expense 172 377 95
Fee and commission income 7 70 2
Administrative and other operating expenses (excluding staff costs) 446 - -
25. RELATED PARTY TRANSACTIONS (CONTINUED)
The aggregate loan amounts disbursed to and repaid by related parties during
periods of 6 months ended 30 June 2025 and 30 June 2024 were as follows:
in thousands of GEL Key management personnel Other related parties
Six months ended 30 June 2025
Amounts disbursed to related parties during the period 500 1,089
Amounts repaid by related parties during the period (698) (1,142)
Six months ended 30 June 2024
Amounts disbursed to related parties during the period 2,016 969
Amounts repaid by related parties during the period (3,322) (994)
The compensation of the TBCG Board of Directors and the Bank's Management
Board is presented below:
In thousands of GEL 30 June 2025 30 June 2024
Salaries and short-term bonuses 9,583 8,769
Equity-settled share-based compensation 16,767 10,171
Total 26,350 18,940
Included in salaries and bonuses for six months ended 30 June 2025, GEL 2,435
thousand (2024: GEL 1,978 thousand) relates to compensation for TBC Bank Group
PLC's non-executive directors (2025: 8 persons, 2024: 8 persons).
For six months ended 30 June 2025, GEL 1,288 thousand (2024: GEL 1,110
thousand) relates to salary expense of non-executive directors for standalone
TBC Bank Group PLC.
26. EVENTS AFTER REPORTING PERIOD
On August 7, 2025, the Board of Directors of TBC Bank Group PLC declared a
quarterly cash dividend of GEL 1.75 per share for the second quarter of 2025.
The record date is set for October 24, 2025, and the dividend will be paid on
November 21, 2025.
A full list of related undertakings and the country of incorporation is set
out below.
Company Name Country of incorporation
TBC Bank JSC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
United Financial Corporation JSC 154 Agmashenebeli Avenue, 0112, Tbilisi, Georgia
TBC Capital LLC 11 Chavchavadze Avenue, 0179, Tbilisi, Georgia
TBC Leasing JSC 76M Chavchavadze Avenue, 0162, Tbilisi, Georgia
TBC Kredit LLC House 71-77, 28 May Street, AZ1010, Baku, Azerbaijan
TBC Pay LLC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
TBC Invest-Georgia LLC Arik Einstein 3 , Hertzlia , Israel
Index LLC 129a Shalva Nutsubidze str, Tbilisi, Georgia
TBC Insurance JSC 24B, Al. Kazbegi Avenue, 0160, Tbilisi, Georgia
TBC Invest International LLC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
University Development Fund NNLE 1 Chavchavadze Avenue, 0128, Tbilisi, Georgia
Credit Information Bureau Creditinfo Georgia JSC 2 Tarkhnishvili street, 0179, Tbilisi, Georgia
Vendoo LLC 44 Petre Kavtaradze street, 0128, Tbilisi, Georgia
Natural Products of Georgia LLC Georgia, Tbilisi, Vake district, Chavchavadze Avenue
I lane #2, apartment 59
Mobi Plus JSC 45 Vazha Pshavela Street, 0177, Tbilisi, Georgia
Mineral Oil Distribution Corporation JSC 11 Tskalsadeni Street, 0153, Tbilisi, Georgia
Georgian Card JSC 106 Beliashvili Street, 0159, Tbilisi Georgia
Georgian Securities Central Depository JSC Georgia, Tbilisi, Saburtalo district,
Vazha-Pshavela avenue, N 71, office N 7, floor 7,
block 10
The Guivy Zaldastanishvili American Academy in Tbilisi JSC 37 Chavchavadze Avenue, 0162, Tbilisi Georgia
United Clearing Centre JSC 5 Sulkhan Saba Street, 0105, Tbilisi, Georgia
Association Banking and Finance Academy of Georgia 123, Agmashenebeli Avenue, 0112, Tbilisi, Georgia
Tbilisi's City JSC 15 Rustaveli Avenue, 0108, Tbilisi Georgia
TBC Trade LLC 11A Chavchavadze Ave, 0179, Tbilisi, Georgia
Redmed LLC 24B, Al. Kazbegi Avenue, 0160, Tbilisi, Georgia
TNET LLC 129a Shalva Nutsubidze str, Tbilisi, Georgia
TBC Digital JSC 10 B, Fidokor street, Mirabad district, Tashkent, 100015, Uzbekistan
My post LLC 129a Sh. Nutsubidze St. Vake,Tbilisi, Georgia
Billing Solutions LLC 14 Khelovanta St. Isani, Tbilisi, Georgia
F Solutions LLC 36, Kakheti Hwy, Isani-Samgori District, Tbilisi, Georgia
Payme JSC 10 B, Fidokor street, Mirabad district, Tashkent, 100015, Uzbekistan
TBC Fin Service LLC 10 B, Fidokor street, Mirabad district, Tashkent, 100015, Uzbekistan
Marjanishvili 7 LLC 7 Marjanishvili st. Didube-chugureti District, Tbilisi,Georgia
JSCB TBC Bank 10 B, Fidokor street, Mirabad district, Tashkent, 100015, Uzbekistan
TBC Group Support LLC 7 Marjanishvili st. Didube-chugureti District, Tbilisi,Georgia
Tbilisi Stock Exchange JSC floor 2th block 8, 71 Vazha Pshavela Ave, Tbilisi, Georgia
Georgian Stock Exchange JSC 74a chavchavadzis avenue, vake-saburtalo, Tbilisi, Georgia
Kavkasreestri JSC 74a chavchavadzis avenue, vake-saburtalo, Tbilisi, Georgia
Freeshop.ge LLC 74 chavchavadzis avenue, vake-saburtalo, Tbilisi, Georgia
The.ge LLC 20 amaglebis st. old Tbilisi, Georgia
SABA LLC 5, Gabashvili street, vake-saburtalo Tbilisi, Georgia
Artarea.ge LLC 25 Al. Kazbegi Avenue, 0160, Tbilisi, Georgia
TBC Art Gallery LLC 6, Tsimakuridze str, Tbilisi, Georgia
TBC Asset Management LLC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
S.W.I.F.T SCRL 1 Adele Avenue, B-1310, La Hulpe, Belgium
Space International JSC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
Space JSC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
Diversified Credit Portfolio JSC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
TBC International Holdings Limited 100 Bishopsgate, C/O Law Debenture, London, England, EC2N 4AG
Tpay LLC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
Globally Diversified bond fund JSC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
Diversified Credit Portfolio 2 JSC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
Diversified Credit Portfolio 3 JSC 7 Marjanishvili Street, 0102, Tbilisi, Georgia
DWH CO LLC 10 B, Fidokor street, Mirabad district, Tashkent, 100015, Uzbekistan
Fondy Payments LTD 103/104 O'connell Street, Limerick, V94 At85, Ireland
MFO TBC Credit LLC 10 B, Fidokor street, Mirabad district, Tashkent, 100015, Uzbekistan
TBC Sug'urta JSC Abdulla Kadyri 1, Tashkent, Uzbekistan
Space Intl LLC 10 B, Fidokor street, Mirabad district, Tashkent, 100015, Uzbekistan
1 (#_ftnref1) 1Q and 1H 2025 financial results include a non-recurring
credit impairment charge of GEL 24.6 mln (pre-tax) in Uzbekistan
2 (#_ftnref2) Note: For better presentation purposes, certain financial
numbers are rounded to the nearest whole number.
3 (#_ftnref3) 1Q and 1H 2025 financial results include a non-recurring
credit impairment charge of GEL 24.6 mln (pre-tax) in Uzbekistan
4 (#_ftnref4) In case of combined interest rates, interest rate is fixed for
a pre-agreed term, and switches to floating interest rate after the term
passes.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR ZZGGRLNDGKZMRecent news on TBC Bank
See all newsREG - TBC Bank Group PLC - Transaction in Own Shares
AnnouncementREG - TBC Bank Group PLC - Total Voting Rights
AnnouncementREG - TBC Bank Group PLC - Transaction in Own Shares
AnnouncementREG - TBC Bank Group PLC - Transaction in Own Shares
AnnouncementREG - TBC Bank Group PLC - Transaction in Own Shares
Announcement