REG - TBC Bank Group PLC - 4Q and FY 2022 Results Report
22/02/2023 07:00
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RNS Number : 6313Q TBC Bank Group PLC 22 February 2023
TBC BANK GROUP PLC ("TBC Bank")
4Q 2022 AND FY 2022 PRELIMINARY 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") 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 COVID-19; 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 presentation, 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 and/or U.S.
generally accepted accounting principles 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.
4Q and FY 2022 Consolidated Financial Results Conference Call Details
TBC Bank Group PLC ("TBC PLC") published its preliminary unaudited
consolidated financial results for the fourth quarter and full year of 2022 on
Wednesday, 22 Feb 2023 at 7.00 am GMT. The management team will host a
conference call on the day at 2.00 pm GMT to discuss the results.
Please click the link below to join the webinar:
https://tbc.zoom.us/j/92779489959?pwd=TXpjRE83MTQyaUtSWU4rSDE2Y2VkZz09 (https://tbc.zoom.us/j/92779489959?pwd=TXpjRE83MTQyaUtSWU4rSDE2Y2VkZz09)
Webinar ID: 927 7948 9959
Passcode: 087272
Other international numbers are available at: https://tbc.zoom.us/u/aFmVIWTds
(https://tbc.zoom.us/u/aFmVIWTds)
The call will be held in two parts: the first part will comprise
presentations, while participants will have the opportunity to ask questions
during the second part. All participants will be muted throughout the webinar.
Webinar Instructions:
In order to ask questions, participants joining the webinar should use the
"hand icon" visible at the bottom of the screen. The host will unmute those
participants who have raised hands one after the other. Once the question is
asked, the participant will be muted again.
Call Instructions:
Participants who use the dial-in number to join the webinar should dial *9 to
raise their hand.
In addition, the management team will provide a live presentation at 1.00 pm
GMT on Thursday, 23 February 2023 via the Investor Meet Company platform. The
presentation is open to all existing and potential shareholders. Questions can
be submitted pre-event via your Investor Meet Company dashboard up until 9.00
am GMT the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet TBC
Bank Group PLC via:
https://www.investormeetcompany.com/tbc-bank-group-plc/register-investor
(https://www.investormeetcompany.com/tbc-bank-group-plc/register-investor)
Investors who already follow TBC Bank Group PLC on the Investor Meet Company
platform will automatically be invited.
Contacts
Andrew Keeley Anna Investor Relations Department
Romelashvili
Director of Investor Relations and International Media
Head of Investor Relations
E-mail: AKeeley@tbcbank.com.ge
Tel: +44 (0) 7791 569834
E-mail: IR@tbcbank.com.ge
E-mail: IR@tbcbank.com.ge
Web: www.tbcbankgroup.com (https://www.tbcbankgroup.com/)
Tel: +(995 32) 227 27 27
Tel: +(995 32) 227 27 27
Web: www.tbcbankgroup.com (https://www.tbcbankgroup.com/)
Web: www.tbcbankgroup.com (https://www.tbcbankgroup.com/)
Table of Contents
4Q and FY 2022 Preliminary Unaudited Consolidated Financial Results
Announcement
Financial highlights (#_Toc127536141) (#_Toc127536141)
Operational highlights (#_Toc127536142) (#_Toc127536142)
Recent regulatory changes (#_Toc127536143) (#_Toc127536143)
Impact of changed accounting treatment for option contract (#_Toc127536144) s
(#_Toc127536144) (#_Toc127536144)
Letter from the Chief Executive Officer (#_Toc127536145) (#_Toc127536145)
Economic Overview (#_Toc127536146) (#_Toc127536146)
Unaudited Consolidated Financial Results Overview for 4Q 2022 (#_Toc127536147)
(#_Toc127536147)
Preliminary Unaudited Consolidated Financial Results Overview for FY 2022
(#_Toc127536148) (#_Toc127536148)
Additional Disclosures (#_Toc127536149) (#_Toc127536149)
1) (#_Toc127536150) (#_Toc127536150) (#_Toc127536150) TBC
Bank - Background (#_Toc127536150) (#_Toc127536150)
2) (#_Toc127536151) (#_Toc127536151) (#_Toc127536151)
Consolidated Financial Statements and Key Ratios 4Q 2022 (#_Toc127536151)
(#_Toc127536151)
3) (#_Toc127536152) (#_Toc127536152) (#_Toc127536152)
Consolidated Financial Statements and Key Ratios FY 2022 (#_Toc127536152)
(#_Toc127536152)
4) (#_Toc127536153) (#_Toc127536153) (#_Toc127536153)
Segment Definitions (#_Toc127536153) (#_Toc127536153)
5) (#_Toc127536154) (#_Toc127536154) (#_Toc127536154)
Segments Profitability 4Q 2022 (#_Toc127536154) (#_Toc127536154)
6) (#_Toc127536155) (#_Toc127536155) (#_Toc127536155)
Segments Profitability FY 2022 (#_Toc127536155) (#_Toc127536155)
7) (#_Toc127536156) (#_Toc127536156) (#_Toc127536156)
Subsidiaries of TBC Bank Group PLC (#_Toc127536156) (#_Toc127536156)
8) (#_Toc127536157) (#_Toc127536157) (#_Toc127536157) TBC
Insurance (#_Toc127536157) (#_Toc127536157)
9) (#_Toc127536158) (#_Toc127536158) (#_Toc127536158) Fast
Growing Digital Bank in Uzbekistan (#_Toc127536158) (#_Toc127536158)
10)Expanding Our Payments Business in Uzbekistan (#_Toc127536159)
(#_Toc127536159)
11)Uzbek Financials (#_Toc127536160) (#_Toc127536160)
12)Loan Book Breakdown by Stages According IFRS 9 (#_Toc127536161)
(#_Toc127536161)
13)Summary of the Share Buyback Programme (#_Toc127536162) (#_Toc127536162)
14)Impact of Changed Accounting Treatment for Option Contracts
(#_Toc127536163) (#_Toc127536163)
15)Glossary (#_Toc127536164) (#_Toc127536164)
4Q and FY 2022 Preliminary Unaudited Consolidated Financial Results
Record high profitability with FY 2022 net profit reaching GEL 1,003 million,
up by 24% YoY
while ROE amounted to 27.0%, including GEL 113 million one-off tax charges
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.
The financial information contained in this document does not constitute
statutory accounts within the meaning of section 435 of the Companies Act 2006
(the Act). The statutory accounts for the year ended 31 December 2022 will be
published on the Group's website and will be delivered to the Registrar of
Companies in accordance with section 441 of the Act. The report of the auditor
on those accounts was unqualified, did not draw attention to any matters by
way of emphasis and did not include a statement under sections 498(2) or
498(3) of the Act. The statutory accounts for the year ended 31 December 2021
have been filed with the Registrar of Companies.
Financial highlights 1 (#_ftn1)
Key profit & loss highlights
4Q 2022
Robust profitability - In 4Q 2022, our net profit totalled GEL 224 million, up
by 13% year-on-year (YoY), and our ROE stood at 22.3%, despite accounting for
one-off tax charge of GEL 113 million. Without one-off tax charges, our
underlying net profit and ROE would have been GEL 337 million and 33.6%,
respectively.
Strong income generation - In 4Q 2022, our operating profit amounted to GEL
604 million, up by 56% YoY. The drivers were strong net interest income and
net fee and commission income, as well as a substantial contribution from FX
operations. In 4Q 2022, our net interest margin (NIM) stood at 6.3%, up by 0.9
pp YoY.
Efficient cost management - In 4Q 2022, our cost to income ratio improved by
7.2 pp YoY and stood at 33.2%.
Strong asset quality - In 4Q 2022, our cost of risk stood at 0.6%.
Uzbek operations generated positive returns -- During 4Q 2022, Payme generated
GEL 18 million and GEL 13 million in operating income and net profit,
respectively with 69% and 80% YoY growth. Including TBC UZ Bank, the operating
income of our Uzbek operations amounted to GEL 36 million, while net profit
reached GEL 12 million for the fourth quarter of 2022. Over the same period,
our ROE for Uzbek businesses stood at 27.0%. For more details, please refer to
additional disclosures section on page 36.
FY 2022
Robust profitability - For FY 2022, our net profit amounted to GEL 1,003
million, up by 24% YoY and our ROE stood at 27.0%, despite accounting for
one-off tax charge of GEL 113 million. Without one-off tax charges, our
underlying net profit and ROE would have been GEL 1,116 million and 29.9%,
respectively.
Strong income generation - FY 2022, our operating income grew by 43% and stood
at GEL 2,071 million on the back of strong net interest income and net fee and
commission income, as well as a substantial contribution from FX operations.
NIM for the full year amounted to 6.0%, up by 0.9 pp compared to 2021.
Efficient cost management - Our cost to income ratio for the full year of 2022
improved by 4.2 pp and stood at 33.4%.
Strong asset quality - Our cost of risk for the full year started to normalise
and stood at 0.7%.
Uzbek operations generated positive returns - During 2022, Payme generated GEL
51 million and GEL 33 million in operating income and net profit, respectively
with 77% and 85% YoY growth. Including TBC UZ Bank, the operating income of
our Uzbek operations amounted to GEL 97 million, while net profit reached GEL
8 million for the full year 2022. Over the same period, our ROE for Uzbek
businesses stood at 6.5%. For more details, please refer to additional
disclosures section on page 36.
Key balance sheet highlights
Strong asset quality - As of 31 December 2022, our NPL to gross loans stood at
2.2%, while NPL provision and total coverage ratios stood at 94% and 156%,
respectively.
Prudent capital and liquidity levels - As of 31 December 2022, our CET1, Tier
1, and Total Capital ratios stood at 15.5%, 18.0% and 21.0%, respectively, and
remained comfortably above the minimum regulatory requirements by 3.7%, 3.9%
and 3.4%, accordingly. As of 31 December 2022, our net stable funding (NSFR)
and liquidity coverage (LCR) ratios stood at 135% and 147%, respectively,
comfortably above the regulatory minimum of 100%.
Strong growth in Georgia - We continue to be the market leader in both total
loans and deposits. As of 31 December 2022, our loan book increased by 16% YoY
in constant currency terms, which translated into a 39.5% market share, up by
0.7 pp over the year. Over the same period, our deposit base increased by 31%
in constant currency terms and our market share in total deposits amounted to
40.3% as of 31 December 2022, down by 0.1 pp YoY.
Fast expansion of our Uzbek banking operations - By the end of December 2022,
TBC UZ Bank's retail loans and deposits amounted to GEL 348 million and GEL
331 million, compared to GEL 93 million and GEL 208 million a year ago. As a
result, the retail and deposit market shares reached 2.2% and 1.5% at the end
of 2022.
Operational highlights
Fast growing customer base
million 31-Dec-2022 31-Dec-2021 Change YoY
Total Number of registered users 13.6 9.1 49%
Total MAU 4.4 3.3 33%
MAU Georgia 1.5 1.4 7%
MAU Uzbekistan 2.9 1.9 53%
Expanding digital footprint across the Group
thousands 31-Dec-2022 31-Dec-2021 Change YoY
Digital DAU Georgia 384 285 35%
Digital MAU Georgia 801 644 24%
Digital DAU/MAU Georgia 48% 44% 4 pp
Digital DAU Group 1,389 861 61%
Digital MAU Group 3,776 2,545 48%
Digital DAU/MAU Group 37% 34% 3 pp
Solid growth of our Georgian and Uzbek Payments businesses
In billions of GEL FY 2022 FY 2021 Change YoY
POS transactions volume in Georgia 5.6 4.1 37%
Volume of transactions with TBC cards in Georgia 23.9 18.3 31%
Payments volume of Payme 7.4 4.7 57%
Recent regulatory changes
One-off tax charges of GEL 112.9 million, as a result of changes to the
corporate taxation model for financial institutions in Georgia
As already announced on 28 December 2022 via Regulatory News Service (RNS
#1249L
(https://otp.tools.investis.com/clients/uk/tbc_bank/rns/regulatory-story.aspx?cid=2168&newsid=1655662)
), close to the end of 2022, the Government of Georgia has approved changes to
the current corporate tax model applicable for financial institutions in
Georgia from 2023.
According to the announced changes, the financial sector will no longer switch
to the Estonian tax model, which was expected to exempt banks from paying
corporate taxes on retained earnings and only required a payment of 15%
corporate tax rate on distributed earnings.
The change to the corporate taxation model has an immediate impact on deferred
tax balances and a corresponding income tax expense, attributable to temporary
differences between financial and tax accounting balances, arising from prior
periods. In addition to above changes, tax authorities require the banks to
reimburse the tax reliefs obtained through previous provisioning calculation
differences caused by differences in tax and IFRS bases. On the other hand,
the effects of the equalizing of tax and IFRS bases for interest income and
expense items are still under consideration by tax authorities. In total, the
effect of potential reimbursement for provisions and interest amounted to GEL
64.1 million, while the remaining effect is attributable to remeasurement of
deferred tax attributable to temporary differences arising of financial
statement line items.
As a result of these changes, in 4Q 2022 the Group has recognized net deferred
tax liabilities and corresponding deferred tax expense in the amount of GEL
112.9 million in the statement of profit and loss.
In addition, with the effect from 2023, the existing corporate tax rate for
banks will be increased from 15% to 20%, while dividends will no longer be
taxed with 5% dividend tax. As a result of these changes, the Group's
effective tax rate is expected to be around 14-16% in 2023.
Transition to IFRS for capital adequacy calculation purposes, has a positive
impact on CET 1 Capital
Starting from 1 January 2023, the National Bank of Georgia (NBG) adopted
amendments to the regulations relating to capital adequacy requirements.
According to the new amendments, commercial banks are required to comply with
supervisory regulations based on IFRS 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 imposed
on CET 1 capital. The table below shows the changes to the minimum regulatory
capital requirements and TBC capital ratios as of 31 December 2022. The
transition positively impacted CET and T1 Capital, while reduced Total
Capital. The bank remains well above of the regulatory requirements for all
tiers.
Under local accounting standards Under IFRS 2 (#_ftn2)
Minimum CET 1 ratio 11.8% 14.0%
TBC CET 1 Capital adequacy ratio 15.5% 18.1%
Excess 3.7 pp 4.1 pp
Minimum Tier 1 ratio 14.1% 16.2%
TBC Tier 1 Capital adequacy ratio 18.0% 20.6%
Excess 3.9 pp 4.4 pp
Minimum total capital adequacy ratio 17.6% 19.6%
TBC Total Capital adequacy ratio 21.0% 22.5%
Excess 3.4 pp 2.9 pp
Impact of changed accounting treatment for option contracts
As previously disclosed, TBC Bank Group entered into put/call arrangements in
April 2019 for the remaining 49% of Payme (RNS #7827V
(https://otp.tools.investis.com/clients/uk/tbc_bank/rns/regulatory-story.aspx?cid=2168&newsid=1246890)
) and in September 2021 for the EBRD/IFCs 40% stake in TBC UZ Bank (RNS #5753N
(https://otp.tools.investis.com/clients/uk/tbc_bank/rns/regulatory-story.aspx?cid=2168&newsid=1513163)
). The exercise prices are dependent on a set of commercial and financial
parameters. Subsequently, there has been strong growth in the Group's Uzbek
business.
The Group has re-assessed the accounting treatment for these options. Per IAS
32 requirements, in each case the present value of the put option exercise
price should have been recognised as a redemption liability, even if the put
option is out of the money and not expected to be exercised, with a
corresponding effect on equity from when the option was entered into - not
only at a potential option exercise date. Such requirement arises given the
put option agreement had been signed with holders of the non-controlling
interest (NCI) of subsidiary entity.
The Group has therefore re-stated previous year balances by recognising a
redemption liability for put options and the equal and opposite effect on
other reserves in equity. Should the Group consequently purchase the shares of
the NCI shareholders the additional impact on equity should be limited to any
potential subsequent remeasurement of redemption liability, as far as, other
reserves in equity have already been recognised. Moreover, the recognition of
the redemption liability has no direct effect on the profit and loss statement
or regulatory capital ratios of TBC Bank.
In Q4 2022, the Group has recognised GEL 477 million as a redemption liability
and the equal and opposite effect on other reserves in equity.
For more details, please refer to additional disclosures section on page 38.
Letter from the Chief Executive Officer(( 3 (#_ftn3) ))
2022 was a year of major instability across the region following the outbreak
of the devastating war in Ukraine, which has taken the lives of so many
innocent people. I would like to honour the bravery of the Ukrainian people.
We will continue to stand by Ukraine by offering our support to those who have
suffered from the hardships of the war, through our various programmes and
fundraisers.
The war has had an adverse impact on the global economy, leading to an energy
crisis and rising inflation. Even in these difficult times, the Georgian
economy has proved its resilience, recording strong growth of 10.1% 4
(#_ftn4) in 2022. We remain mindful, however, of the challenging geopolitical
situation and continue to monitor and analyse the war's effects closely.
Major highlights of the year
For TBC, 2022 was a highly successful year with our core banking business in
Georgia generating outstanding results and our Uzbek operations maintaining
the strong momentum that has been driving the business forward.
In terms of headline numbers:
· Financials - our net profit reached a record GEL 1,003 million,
up by 24% year-on-year, while our return on equity was 27.0%, despite one-off
tax charges in the amount of GEL 113 million, based on the strong growth
backed by solid capital position. Without one-off tax charges, our underlying
net profit and ROE would have been GEL 1,116 million and 29.9%, respectively.
· User base - by the end of 2022, the number of registered users of
our services in Georgia and Uzbekistan reached 13.6 million, out of whom 4.4
million were monthly active users (MAU). This compares to a total addressable
market of around 39 million in both Georgia and Uzbekistan, providing further
significant growth potential.
· Digital engagement across the Group - digital MAU saw a major
acceleration during the year, reaching 3.8 million in December 2022, up by
almost 50% year-on-year, while average digital daily active users (DAU)
amounted to 1.4 million, an increase of more than 60% over the same period.
Record profitability and prudent capital levels
In 2022, our operating income amounted to GEL 2,071 million and grew by 43%
year-on-year. This growth was broad based and driven by:
· a strong increase in net interest income, on the back of
combination of robust loan book growth and a higher net interest margin, which
amounted to 6.0%, up by 0.9 pp year-on-year;
· outstanding results in FX income, related to strong business
volumes and increased margins;
· a 30% growth in net fee and commission income, primarily driven
by our payment operations both in Georgia and Uzbekistan.
Against a positive economic backdrop, our asset quality trends were positive,
with 0.7% cost of risk and NPLs falling to 2.2%. Meanwhile, our strong focus
on digitalisation and data analytics capabilities allowed us to manage our
business efficiently. As a result, our cost to income ratio decreased by 4.2
pp year-on-year to 33.4%, despite our continued investments for the
expansion of our Uzbek operations. Our capital position has remained solid,
supported by robust income generation and the positive effect of a
strengthening local currency. At the end of 2022, our CET1 ratio stood at
15.5%, comfortably above the minimum regulatory requirements by 3.7 5
(#_ftn5) pp.
Strong growth in Georgia and Uzbekistan
This year, we reinforced our leadership position in Georgia with strong growth
in both loans and deposits, maintaining our market shares of around 40%
respectively. Our loan book increased by around 16% year-on-year on a constant
currency basis, largely due to consumer and micro loans, in line with our
strategy to refocus growth towards higher-yielding loans in local currency. At
the same time, our asset quality remained high thanks to prudent credit risk
management. Over the same period, our deposit portfolio increased by about 31%
year-on-year on a constant currency basis, primarily driven by local currency
deposit inflows. As a result, the larisation levels of our loan and deposit
portfolios increased throughout the year, in line with our strategy.
I am delighted with the performance of our Uzbek operations. TBC UZ, our fully
digital consumer bank, maintained its steady growth as it continued to attract
more customers. By the end of 2022, the number of registered users reached 2.4
million, while MAU amounted to 0.4 million. In terms of balance sheet growth,
the retail loan book amounted to GEL 348 million and the retail deposits
portfolio reached GEL 331 million with respective retail market shares
standing at 2.2% and 1.4%. As for the Group's contribution, Uzbek loans
accounted for around 12% of our retail non-mortgage loan book, while Uzbek
deposits represented about 5% of retail deposits. Meanwhile, Payme, our
leading payments provider in Uzbekistan, also significantly grew its
operations across the country, with the number of monthly active users
increasing in 2022 by around 1.6 times year-on-year to 2.5 million. Going
forward, we plan to increase operational coordination to utilize synergies
between TBC UZ Bank and Payme, which will allow us to unlock even more
potential for the two businesses.
Significantly, our Uzbek operations began to generate positive returns
starting from the third quarter of 2022, with their net income amounting to
GEL 8 million for the full year 2022.
Looking ahead
Our strategy for the next year is to continue to build on our leading position
in the Georgian financial services sector, combined with our dominant position
in digital ecosystem, allowing us to generate steady growth and solid
profitability, as well as further pursue our international ambitions through
our Uzbek subsidiaries, by leveraging our superior customer experience, strong
data analytics and best-in-class digital solutions.
Finally, I would like to reiterate our medium-term targets: ROE of above 20%,
a cost to income ratio below 35%, a dividend pay-out ratio of 25-35%, and
annual loan growth of around 10-15%. We also aim for our Uzbek operations to
contribute 10-15% of the Group's net income and to achieve 7 million active
monthly users at the Group level in the medium-term.
Economic Overview
Economic growth
After reaching 10.6% real GDP growth YoY in the first half of 2022 and 9.8% in
Q3, the Georgian economy maintained its strong growth momentum in Q4,
expanding by 10.1% according to Geostat's preliminary estimates.
External sector
External sector activity remained strong in 4Q 2022. Specifically, exports
grew by 18.6% in Q4 YoY and by 31.8% for the full year 2022. Imports were
estimated to grow by 27.3% in Q4 and by 33.2% for the full year. Surging
prices once again were the major driver of the increase in exports in Q4,
especially for re-exports, while domestic exports decreased YoY in nominal
terms. Investment goods constituted a high share of imports, indicating
positive investment sentiment. The terms of trade remained broadly stable,
supporting economic growth and the GEL.
The recovery in tourism continued and remittance inflows reached record highs.
Including the migration effect, tourism inflows in Q4 amounted to 145.7% of
2019 levels, while the total tourism spending for the full year 2022 also
surpassed the 2019 level by 7.6%. Remittance inflows also rose further,
increasing by 40.7% in the fourth quarter YoY and adding up to 28.1% 6
(#_ftn6) throughout the year. FDIs also grew strongly, with a 99.3% YoY
increase in Q3 and 101.7% growth in the first 9 months of the year.
Importantly, higher FDI levels not only arose on the back of reinvested
earnings, but were also due to much stronger additional equity
investments.
Fiscal stimulus
The fiscal stimulus, although still sizable, negatively affected growth in
2021 as the deficit amounted to around 6.3% of GDP, after an expansionary 9.3%
of GDP in 2020. In 2022, the deficit is expected to be even lower, at around
3.1%. According to the Ministry of Finance, fiscal consolidation is expected
to take place in the coming years with deficit-to-GDP ratios of 2.8% and 2.3%
in 2023 and 2024, respectively.
Credit growth in Georgia
As of December 2022, bank credit increased by 12.1% YoY at constant exchange
rates. Corporate loan growth stood at 5.3% YoY at the end of 2022, while MSME
and retail lending grew by 16.8% and 14.7% YoY, respectively.
Inflation, monetary policy, and the exchange rate
The GEL continued to strengthen in Q4 against the USD, appreciating to 2.69 at
the end of December 2022 from 2.85 by the end of September 2022 and 3.10 end
of December 2021, supported by strong inflows and tight monetary policy.
As a result of a stronger GEL and disinflationary pass-through from
international markets, CPI inflation moderated from 11.5% in September to 9.8%
by the end of the year. Notably, monthly inflation rates have retreated to a
larger extent, with 0.3% deflation in December. Nevertheless, in the absence
of more pronounced evidence of the easing of inflationary pressures, the NBG
kept its monetary policy rate at 11% throughout the final quarter.
Going forward
After double-digit growth for two years in a row, the consensus projection
appears to be that growth will normalize in 2023 with the IMF, the World Bank
and the NBG projecting 4% real GDP growth and the Georgian government, 5%.
According to TBC Capital's projections, the economy is expected to growth by
around 5% in 2023.
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 4Q 2022
This statement provides a summary of the unaudited business and financial
trends for 4Q 2022 for TBC Bank Group plc and its subsidiaries. The quarterly
financial information and trends are unaudited.
TBC Bank Group PLC's financial results have been prepared in accordance with
UK-adopted International Accounting Standard (IAS) 34 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of
the Financial Conduct Authority (FCA).
As explained in the highlights section, total equity and total liabilities
were restated for 31-Sep-2022 and 31-Dec-2021 due to change in accounting of
option contracts. As a result, ROE and leverage ratios were restated for 3Q
2022 and 4Q 2021. Please also note that there might be slight differences in
previous periods' figures due to rounding.
Financial Highlights
Income Statement Highlights
in thousands of GEL 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Net interest income 357,446 340,415 275,445 29.8% 5.0%
Net fee and commission income 95,332 85,872 71,068 34.1% 11.0%
Other operating non-interest income 151,454 163,344 42,159 NMF -7.3%
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Operating profit 604,232 589,631 388,672 55.5% 2.5%
Total credit loss allowance (33,054) (48,256) (6,040) NMF -31.5%
Losses from modifications of financial instruments - - (31) NMF NMF
Operating expenses (200,495) (176,240) (157,213) 27.5% 13.8%
Profit before tax 370,683 365,135 225,388 64.5% 1.5%
Income tax expense (146,909) (44,115) (26,915) NMF NMF
Profit for the period 223,774 321,020 198,473 12.7% -30.3%
Balance Sheet and Capital Highlights
in thousands of GEL Dec-22 Sep-22 Dec-21 Change YoY Change QoQ
Total Assets 29,032,176 27,676,309 24,508,561 18.5% 4.9%
Gross Loans 18,204,971 17,365,894 17,047,391 6.8% 4.8%
Customer Deposits 18,036,533 17,115,022 15,038,172 19.9% 5.4%
Total Equity 3,965,950 3,879,211 3,453,774 14.8% 2.2%
CET 1 Capital (Basel III) 3,333,039 3,126,561 2,759,894 20.8% 6.6%
Tier 1 Capital (Basel III) 3,873,439 3,693,601 3,379,414 14.6% 4.9%
Total Capital (Basel III) 4,516,525 4,378,258 4,102,927 10.1% 3.2%
Risk Weighted Assets (Basel III) 21,508,072 20,487,074 20,217,629 6.4% 5.0%
Key Ratios 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
ROE 22.3% 33.6% 22.8% -0.5 pp -11.3 pp
Bank's standalone ROE 19.6% 31.9% 23.2% -3.6 pp -12.3 pp
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ROA 3.1% 4.8% 3.3% -0.2 pp -1.7 pp
Bank's standalone ROA(8) 3.0% 4.9% 3.4% -0.4 pp -1.9 pp
NIM 6.3% 6.3% 5.4% 0.9 pp 0.0 pp
Cost to income 33.2% 29.9% 40.4% -7.2 pp 3.3 pp
Bank's standalone cost to income(8) 28.5% 24.1% 32.2% -3.7 pp 4.4 pp
Cost of risk 0.6% 1.0% -0.1% 0.7 pp -0.4 pp
NPL to gross loans 2.2% 2.3% 2.4% -0.2 pp -0.1 pp
NPL provision coverage ratio 93.7% 99.6% 99.9% -6.2 pp -5.9 pp
Total NPL coverage ratio 155.6% 164.2% 175.3% -19.7 pp -8.6 pp
CET 1 CAR (Basel III) 15.5% 15.3% 13.7% 1.8 pp 0.2 pp
Tier 1 CAR (Basel III) 18.0% 18.0% 16.7% 1.3 pp 0.0 pp
Total CAR (Basel III) 21.0% 21.4% 20.3% 0.7 pp -0.4 pp
Leverage (Times) 7.3x 7.1x 7.1x 0.2x 0.2x
Net Interest Income
In 4Q 2022, net interest income amounted to GEL 357.4 million, up by 29.8% YoY
and by 5.0% on a QoQ basis.
The YoY rise in interest income of GEL 134.9 million, or 26.5%, was mostly
attributable to an increase in interest income from loans related to an
increase in the respective portfolio of GEL 1,157.6 million, or 6.8%, leading
to a 1.4 pp rise in the respective yield.
The QoQ increase in interest income of GEL 39.6 million, or 6.5%, was mainly
related to an increase in interest income from loans related to an increase in
the loan portfolio of GEL 839.1 million, or 4.8%, leading to a 0.2 pp rise in
the respective loan yield. In addition, the growth in interest income is
related to the increased portfolio of investment securities together with
high-yield GEL denominated bonds.
Interest expense increased by GEL 52.9 million, or 22.6%, on a YoY basis,
mainly related to an increase in the deposit portfolio of GEL 2,998.4 million,
or 19.9%, and a 0.9 pp growth in deposit costs.
On a QoQ basis, interest expense increased by GEL 22.6 million, or 8.5%,
primarily driven by an increase in the deposit portfolio of GEL 921.5 million,
up by 5.4%, while the cost of deposits went up by 0.4 pp.
In 4Q 2022, our NIM stood at 6.3%, up by 0.9 pp on YoY and remaining stable on
a QoQ basis.
In thousands of GEL 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Interest income 644,981 605,395 510,035 26.5% 6.5%
Interest expense* (287,535) (264,980) (234,590) 22.6% 8.5%
Net interest income 357,446 340,415 275,445 29.8% 5.0%
NIM 6.3% 6.3% 5.4% 0.9 pp 0.0 pp
* Interest expense includes net interest gains from currency swaps
Non-Interest Income
Total non-interest income increased more than two times in 4Q 2022 on a YoY
basis and decreased by 1.0% on a QoQ basis, amounting to GEL 246.8 million.
Net fee and commission income increased by 34.1% YoY and 11.0% on a QoQ basis.
The increase was mainly related to increased payments transactions both in
Georgia and Uzbekistan.
Net gains from FX operations once again demonstrated strong results in 4Q
2022, mainly related to the high volume of transactions and wider spreads.
The decrease in net insurance profit in 4Q 2022 was driven by decreased net
earned premium on seasonal agricultural products, while net insurance premium
on a YoY basis increased due to business growth.
In thousands of GEL 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Non-interest income
Net fee and commission income 95,332 85,872 71,068 34.1% 11.0%
Net gains from currency derivatives, foreign currency operations and 138,777 145,712 27,984 NMF -4.8%
translation
Net insurance premium earned after claims and acquisition costs 9 (#_ftn9) 8,218 10,020 7,654 7.4% -18.0%
Other operating income 4,459 7,612 6,521 -31.6% -41.4%
Total other non-interest income 246,786 249,216 113,227 NMF -1.0%
Credit Loss Allowance
Credit loss allowance for loans in 4Q 2022 amounted to GEL 27.0 million, which
translated into a cost of risk of 0.6% on an annualised basis.
In thousands of GEL 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Credit loss (allowance)/recovery for loans to customers (27,002) (41,419) 3,171 NMF -34.8%
Credit loss allowance for other transactions (6,052) (6,837) (9,211) -34.3% -11.5%
Total credit loss allowance (33,054) (48,256) (6,040) NMF -31.5%
Operating profit after expected credit losses and non-financial asset 571,178 541,375 382,632 49.3% 5.5%
impairment losses
Cost of risk 0.6% 1.0% -0.1% 0.7 pp -0.4 pp
Operating Expenses
In 4Q 2022, our operating expenses expanded by 27.5% YoY and 13.8% on a QoQ
basis.
The YoY increase in staff costs was driven by the expansion of our business,
both locally and internationally, as well as high performance costs, while the
growth in the administrative and other operating expenses was mainly related
to investments in our IT capabilities and business development.
The increase on a QoQ basis was due to seasonally high costs in the fourth
quarter.
Our cost to income ratio amounted to 33.2%, while the Bank's standalone cost
to income stood at 28.5%.
In thousands of GEL 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Operating expenses
Staff costs (103,764) (94,561) (86,589) 19.8% 9.7%
(Allowance)/recovery of provision for liabilities and charges (140) (2,000) 90 NMF -93.0%
Depreciation and amortization (27,181) (26,684) (23,203) 17.1% 1.9%
Administrative and other operating expenses (69,410) (52,995) (47,511) 46.1% 31.0%
Total operating expenses (200,495) (176,240) (157,213) 27.5% 13.8%
Cost to income 33.2% 29.9% 40.4% -7.2 pp 3.3 pp
Bank's standalone cost to income 10 (#_ftn10) 28.5% 24.1% 32.2% -3.7 pp 4.4 pp
Net Income
In 4Q 2022, we generated GEL 223.8 million in net profit, up by 12.7% YoY and
down by 30.3% on a QoQ basis. The increase was supported by strong income
generation across the board, with a substantial contribution from non-interest
income, while the decrease was driven by increased income tax expense in 4Q
2022. As a result, our ROE for 4Q stood at 22.3%.
Our income tax expenses in 4Q 2022 increased on a YoY and QoQ basis and
amounted to GEL 146.9 million. The increase was related to changes in the
taxation model in Georgia. The model change had an impact of GEL 112.9 million
on income tax expenses in 4Q 2022. For more information, please refer to the
highlights section on page 6.
Without one-off tax charges, our underlying net profit and ROE would have been
GEL 336.7 million and 33.6%, respectively.
In thousands of GEL 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Losses from modifications of financial instruments - - (31) NMF NMF
Profit before tax 370,683 365,135 225,388 64.5% 1.5%
Income tax expense (146,909) (44,115) (26,915) NMF NMF
Profit for the period 223,774 321,020 198,473 12.7% -30.3%
ROE 22.3% 33.6% 22.8% -0.5 pp -11.3 pp
Bank's standalone ROE(10) 19.6% 31.9% 23.2% -3.6 pp -12.3 pp
ROA 3.1% 4.8% 3.3% -0.2 pp -1.7 pp
Bank's standalone ROA(10) 3.0% 4.9% 3.4% -0.4 pp -1.9 pp
Funding and Liquidity
As of 31 December 2022, the total liquidity coverage ratio (LCR), as defined
by the NBG, was 146.6%, above the 100% limit, while the LCR in GEL and FC
stood at 164.2% and 135.9%, accordingly, above the respective limits of 75%
and 100%.
Over the same period, the net stable funding ratio (NSFR) stood at 135.3%,
compared to the regulatory limit of 100%.
Dec-22 Sep-22 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 135.3% 133.1% 2.2 pp
Net loans to deposits + IFI funding 88.5% 89.1% -0.6 pp
Leverage (Times) 7.3x 7.1x 0.2x
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 146.6% 142.8% 3.8 pp
LCR in GEL, as defined by the NBG 164.2% 135.9% 28.3 pp
LCR in FC, as defined by the NBG 135.9% 145.0% -9.1 pp
Regulatory Capital
As of 31 December 2022, our CET1, Tier 1 and Total Capital ratios stood at
15.5%, 18.0% and 21.0%, respectively, and remained above the minimum
regulatory requirements by 3.7%, 3.9% and 3.4%, accordingly.
As of 31 December 2022, the Bank's CET1 capital adequacy ratio increased by
0.2 pp, compared to 30 September 2022 driven by net income generation.
In thousands of GEL Dec-22 Sep-22 Change QoQ
CET 1 Capital 3,333,039 3,126,561 6.6%
Tier 1 Capital 3,873,439 3,693,601 4.9%
Total Capital 4,516,525 4,378,258 3.2%
Total Risk-weighted Exposures 21,508,072 20,487,074 5.0%
Minimum CET 1 ratio 11.8% 11.8% 0.0 pp
CET 1 Capital adequacy ratio 15.5% 15.3% 0.2 pp
Minimum Tier 1 ratio 14.1% 14.1% 0.0 pp
Tier 1 Capital adequacy ratio 18.0% 18.0% 0.0 pp
Minimum total capital adequacy ratio 17.6% 17.7% -0.1 pp
Total Capital adequacy ratio 21.0% 21.4% -0.4 pp
Loan Portfolio
As of 31 December 2022, the gross loan portfolio reached GEL 18,205.0 million,
up by 4.8% QoQ or up by 5.4% on a constant currency basis.
The proportion of gross loans denominated in foreign currency decreased by 0.7
pp on a QoQ basis and accounted for 48.2% of total loans. On a constant
currency basis, the proportion of gross loans denominated in foreign currency
decreased by 0.5 pp QoQ and stood at 48.4%.
As of 31 December 2022, our market share in total loans stood at 39.5%, up by
0.7 pp on a QoQ basis. Our loan market share in legal entities was 40.8%, up
by 1.7 pp on a QoQ basis. Our loan market share in individuals decreased by
0.1 pp on a QoQ basis and stood at 38.4%.
In thousands of GEL Dec-22 Sep-22 Change QoQ
Loans and advances to customers
Retail 7,113,087 6,871,351 3.5%
Retail loans GEL 4,374,224 4,230,472 3.4%
Retail loans FC 2,738,863 2,640,879 3.7%
CIB 6,282,469 5,918,394 6.2%
CIB loans GEL 2,435,737 2,096,791 16.2%
CIB loans FC 3,846,732 3,821,603 0.7%
MSME 4,809,415 4,576,149 5.1%
MSME loans GEL 2,627,760 2,544,976 3.3%
MSME loans FC 2,181,655 2,031,173 7.4%
Total loans and advances to customers 18,204,971 17,365,894 4.8%
4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Loan yields 12.1% 11.9% 10.7% 1.4 pp 0.2 pp
Loan yields GEL 15.1% 15.6% 15.4% -0.3 pp -0.5 pp
Loan yields FC 9.0% 8.2% 6.7% 2.3 pp 0.8 pp
Retail Loan Yields 14.0% 13.9% 12.2% 1.8 pp 0.1 pp
Retail loan yields GEL 15.8% 16.5% 16.4% -0.6 pp -0.7 pp
Retail loan yields FC 11.1% 9.9% 6.9% 4.2 pp 1.2 pp
CIB Loan Yields 10.6% 10.2% 9.2% 1.4 pp 0.4 pp
CIB loan yields GEL 14.0% 14.3% 14.2% -0.2 pp -0.3 pp
CIB loan yields FC 8.6% 8.1% 6.8% 1.8 pp 0.5 pp
MSME Loan Yields 11.4% 11.2% 10.6% 0.8 pp 0.2 pp
MSME loan yields GEL 15.0% 15.2% 15.1% -0.1 pp -0.2 pp
MSME loan yields FC 7.0% 6.4% 6.0% 1.0 pp 0.6 pp
Loan Portfolio Quality
On a QoQ basis, total Par 30 and non-performing loans (NPL) improved by 0.3 pp
and 0.1 pp, respectively.
The 0.5 pp improvement in Par 30 for the MSME segment was mainly driven by the
SME sub-segment, while the retail Par 30 ratio decreased by 0.2 pp due to an
unsecured consumer loan portfolio. Par 30 for the CIB segment remained broadly
stable.
Par 30 Dec-22 Sep-22 Change QoQ
Retail 2.6% 2.8% -0.2 pp
CIB 0.5% 0.6% -0.1 pp
MSME 3.1% 3.6% -0.5 pp
Total Loans 2.0% 2.3% -0.3 pp
Non-performing Loans Dec-22 Sep-22 Change QoQ
Retail 2.2% 2.3% -0.1 pp
CIB 1.3% 1.4% -0.1 pp
MSME 3.4% 3.6% -0.2 pp
Total Loans 2.2% 2.3% -0.1 pp
NPL Coverage Dec-22 Sep-22
Provision Coverage Total Coverage Provision Coverage Total Coverage
Retail 149.4% 191.8% 162.7% 206.9%
CIB 57.9% 119.9% 56.6% 121.8%
MSME 58.8% 139.2% 58.6% 143.0%
Total 93.7% 155.6% 99.6% 164.2%
Cost of Risk
In 4Q, the cost of risk decreased to 0.6%, compared to 1.0% in 3Q.
In 4Q 2022, the cost of risk in the retail segment amounted to 0.9%, mainly
driven by changes in macroeconomic assumptions and continued the normalization
trend from the previous quarter. Over the same period, the cost of risk for
the CIB segment amounted to 0.1%, attributable to the strong overall
performance of the portfolio. In the fourth quarter of 2022, the cost of risk
for MSMEs continued to normalise, amounting to 0.9%.
Cost of risk 4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Retail 0.9% 2.1% 1.2% -0.3 pp -1.2 pp
CIB 0.1% 0.0% -1.5% 1.6 pp 0.1 pp
MSME 0.9% 0.5% 0.1% 0.8 pp 0.4 pp
Total 0.6% 1.0% -0.1% 0.7 pp -0.4 pp
Deposits Portfolio
By the end of 2022, the total deposits portfolio amounted to GEL 18,036.5
million, increasing by 5.4% QoQ or 7.2% on a constant currency basis.
The proportion of deposits denominated in a foreign currency decreased by 1.8
pp on a QoQ basis and stood at 54.8% of total deposits. On a constant currency
basis, the proportion of deposits denominated in a foreign currency decreased
by 1.0 pp QoQ and accounted for 55.6% of total deposits.
As of 31 December 2022, our market share in deposits amounted to 40.3%, up by
0.3 pp on a QoQ basis, while our market share in deposits to legal entities
stood at 42.9%, up by 1.3 pp QoQ. Our market share in deposits to individuals
stood at 38.1%, down by 0.6 pp QoQ.
In thousands of GEL Dec-22 Sep-22 Change QoQ
Customer Accounts
Retail 6,866,003 6,345,634 8.2%
Retail deposits GEL 1,905,377 1,661,392 14.7%
Retail deposits FC 4,960,626 4,684,242 5.9%
CIB 9,001,120 7,817,418 15.1%
CIB deposits GEL 4,931,741 3,683,976 33.9%
CIB deposits FC 4,069,379 4,133,442 -1.5%
MSME 1,756,968 1,640,701 7.1%
MSME deposits GEL 902,611 770,924 17.1%
MSME deposits FC 854,357 869,777 -1.8%
Total Customer Accounts* 18,036,533 17,115,022 5.4%
* Total deposit portfolio includes Ministry of Finance deposits in the amount
of GEL 412 million and GEL 1,311 million as of 31 Dec 2022 and 30 Sep 2022,
respectively.
4Q'22 3Q'22 4Q'21 Change YoY Change QoQ
Deposit rates 4.3% 3.9% 3.4% 0.9 pp 0.4 pp
Deposit rates GEL 7.9% 7.4% 6.8% 1.1 pp 0.5 pp
Deposit rates FC 1.6% 1.5% 1.5% 0.1 pp 0.1 pp
Retail Deposit Yields 3.3% 3.0% 2.4% 0.9 pp 0.3 pp
Retail deposit rates GEL 5.7% 5.6% 4.9% 0.8 pp 0.1 pp
Retail deposit rates FC 2.4% 2.0% 1.6% 0.8 pp 0.4 pp
CIB Deposit Yields 5.2% 4.8% 4.8% 0.4 pp 0.4 pp
CIB deposit rates GEL 9.6% 9.3% 8.9% 0.7 pp 0.3 pp
CIB deposit rates FC 1.0% 1.2% 1.6% -0.6 pp -0.2 pp
MSME Deposit Yields 0.7% 0.7% 0.6% 0.1 pp 0.0 pp
MSME deposit rates GEL 1.2% 1.3% 1.1% 0.1 pp -0.1 pp
MSME deposit rates FC 0.2% 0.2% 0.2% 0.0 pp 0.0 pp
Preliminary Unaudited Consolidated Financial Results Overview for FY 2022
This statement provides a summary of the unaudited business and financial
trends for FY 2022 for TBC Bank Group plc and its subsidiaries. The financial
information and trends are unaudited.
TBC Bank Group PLC's financial results have been prepared in accordance with
UK-adopted International Accounting Standard (IAS) 34 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of
the Financial Conduct Authority (FCA).
As explained in the highlights section, total equity and total liabilities
were restated for 31-Dec-2021 due to change in accounting of option contracts.
As a result, ROE and leverage ratios were restated for FY 2021. Please also
note that there might be slight differences in previous periods' figures due
to rounding.
Financial Highlights
Income Statement Highlights
in thousands of GEL FY'22 FY'21 Change YoY
Net interest income 1,290,052 1,002,732 28.7%
Net fee and commission income 322,666 248,000 30.1%
Other operating non-interest income 458,046 201,288 NMF
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Operating profit 2,070,764 1,452,020 42.6%
Total credit loss (allowance)/recovery (132,900) 16,900 NMF
Losses from modifications of financial instruments - (1,726) NMF
Operating expenses (691,320) (545,834) 26.7%
Profit before tax 1,246,544 921,360 35.3%
Income tax expense (243,205) (112,361) NMF
Profit for the period 1,003,339 808,999 24.0%
Balance Sheet and Capital Highlights
in thousands of GEL Dec-22 Dec-21 Change YoY
Total Assets 29,032,176 24,508,561 18.5%
Gross Loans 18,204,971 17,047,391 6.8%
Customer Deposits 18,036,533 15,038,172 19.9%
Total Equity 3,965,950 3,453,774 14.8%
CET 1 Capital (Basel III) 3,333,039 2,759,894 20.8%
Tier 1 Capital (Basel III) 3,873,439 3,379,414 14.6%
Total Capital (Basel III) 4,516,525 4,102,927 10.1%
Risk Weighted Assets (Basel III) 21,508,072 20,217,629 6.4%
Key Ratios FY'22 FY'21 Change YoY
ROE 27.0% 24.9% 2.1 pp
Bank's standalone ROE 25.5% 27.7% -2.2 pp
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ROA 3.8% 3.4% 0.4 pp
Bank's standalone ROA(10) 3.9% 3.8% 0.1 pp
NIM 6.0% 5.1% 0.9 pp
Cost to income 33.4% 37.6% -4.2 pp
Bank's standalone cost to income(10) 27.1% 29.7% -2.6 pp
Cost of risk 0.7% -0.3% 1.0 pp
NPL to gross loans 2.2% 2.4% -0.2 pp
NPL provision coverage ratio 93.7% 99.9% -6.2 pp
Total NPL coverage ratio 155.6% 175.3% -19.7 pp
CET 1 CAR (Basel III) 15.5% 13.7% 1.8 pp
Tier 1 CAR (Basel III) 18.0% 16.7% 1.3 pp
Total CAR (Basel III) 21.0% 20.3% 0.7 pp
Leverage (Times) 7.3x 7.1x 0.2x
Net Interest Income
In 2022, net interest income amounted to GEL 1,290.1 million, up by 28.7% on a
YoY basis.
The YoY rise in interest income by GEL 445.0 million, or 23.6%, was mostly
attributable to an increase in interest income from loans related to the GEL
1,157.6 million, or 6.8%, increase in the respective portfolio, as well as a
1.3 pp rise in the respective yield.
YoY interest expense increased by GEL 157.7 million, or 17.9%, mainly related
to an increase in the deposit portfolio of GEL 2,998.4 million, or 19.9%, and
increased deposit costs by 0.5 pp.
As a result, our NIM for full year 2022, stood at 6.0%, up by 0.9 pp on a YoY
basis.
In thousands of GEL FY'22 FY'21 Change YoY
Interest income 2,330,838 1,885,856 23.6%
Interest expense* (1,040,786) (883,124) 17.9%
Net interest income 1,290,052 1,002,732 28.7%
NIM 6.0% 5.1% 0.9 pp
* Interest expense includes net interest gains from currency swaps
Non-Interest Income
Total non-interest income amounted to GEL 780.7 million during FY 2022,
increasing by 73.8% on a YoY basis.
Net fee and commission income increased by 30.1% on a YoY basis, related to
increased payment transactions both in Georgia and Uzbekistan and increased
business activities through the year.
Net gains from FX operations increased more than three times on a YoY basis,
mainly related to the high volume of transactions and wider spreads.
In 2022, net insurance profit increased by 24.0% and amounted to GEL 29.2
million, mainly related to overall business growth.
The decrease in other operating income was related to a non-recurring gain
from the disposal of our investment property in amount of GEL 26.3 million in
2021.
In thousands of GEL FY'22 FY'21 Change YoY
Other non-interest income
Net fee and commission income 322,666 248,000 30.1%
Net gains from currency derivatives, foreign currency operations and 398,866 117,270 NMF
translation
Net insurance premium earned after claims and acquisition costs 29,203 23,546 24.0%
Other operating income 29,977 60,472 -50.4%
Total other non-interest income 780,712 449,288 73.8%
Credit Loss Allowance
Credit loss allowance for loans during FY 2022 amounted to GEL 118.9 million,
which translated into a 0.7% cost of risk.
In thousands of GEL FY'22 FY'21 Change YoY
Credit loss (allowance)/recovery for loans to customers (118,943) 40,123 NMF
Credit loss allowance for other transactions (13,957) (23,223) -39.9%
Total credit loss (allowance)/recovery (132,900) 16,900 NMF
Operating income after expected credit and non-financial asset impairment 1,937,864 1,468,920 31.9%
losses
Cost of risk 0.7% -0.3% 1.0 pp
Operating Expenses
During FY 2022, our operating expenses increased by 26.7% on a YoY basis.
During FY 2022, the annual increase in operating expenses was mainly driven by
increased staff costs due to the expansion of business locally and
internationally as well as higher performance-related costs. The increase in
administrative and other operating expenses was mainly related to investments
in our IT capabilities and business development.
Our cost to income ratio amounted to 33.4%, down by 4.2 pp on a YoY basis,
while the Bank's standalone cost to income stood at 27.1%, down by 2.6 on a
YoY basis.
In thousands of GEL FY'22 FY'21 Change YoY
Operating expenses
Staff costs (374,816) (309,302) 21.2%
(Allowance)/recovery of provision for liabilities and charges (2,200) 27 NMF
Depreciation and amortization (101,197) (79,891) 26.7%
Administrative and other operating expenses (213,107) (156,668) 36.0%
Total operating expenses (691,320) (545,834) 26.7%
Cost to income 33.4% 37.6% -4.2 pp
Bank's standalone cost to income 13 (#_ftn13) 27.1% 29.7% -2.6 pp
Net Income
In 2022, we delivered robust profitability and generated GEL 1,003.3 million
in net profit, up by 24.0% YoY, driven by robust income generation in both,
interest and non-interest income streams. As a result, our ROE stood at 27.0%,
up by 2.1 pp YoY.
In 2022, our income tax expenses increased and reached GEL 243.2 million by
the end of the year. The increase was related to changes in the taxation model
in Georgia. The model change had an immediate impact of GEL 112.9 million on
income tax expenses. For more information, please refer to the highlights
section on page 6.
Without one-off tax charges, our underlying net profit and ROE would have been
GEL 1,116.2 million and 29.9%, respectively.
In thousands of GEL FY'22 FY'21 Change YoY
Losses from modifications of financial instruments - (1,726) NMF
Profit before tax 1,246,544 921,360 35.3%
Income tax expense (243,205) (112,361) NMF
Profit for the period 1,003,339 808,999 24.0%
ROE 27.0% 24.9% 2.1 pp
Bank's standalone ROE(13) 25.5% 27.7% -2.2 pp
ROA 3.8% 3.4% 0.4 pp
Bank's standalone ROA(13) 3.9% 3.8% 0.1 pp
Funding and Liquidity
As of 31 December 2022, the total liquidity coverage ratio (LCR), as defined
by the NBG, was 146.6%, above the 100% limit, while the LCR in GEL and FC
stood at 164.2% and 135.9%, accordingly, above the respective limits of 75%
and 100%.
Over the same period, NSFR stood at 135.3%, compared to the regulatory limit
of 100%.
Dec-22 Dec-21 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 135.3% 127.3% 8.0 pp
Net loans to deposits + IFI funding 88.5% 100.9% -12.4 pp
Leverage (Times) 7.3x 7.1x 0.2x
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 146.6% 115.8% 30.8 pp
LCR in GEL, as defined by the NBG 164.2% 107.7% 56.5 pp
LCR in FC, as defined by the NBG 135.9% 120.8% 15.1 pp
Regulatory Capital
As of December 2022, our CET1, Tier 1 and Total Capital ratios stood at 15.5%,
18.0% and 21.0%, respectively, and remained comfortably above the minimum
regulatory requirements by 3.7%, 3.9% and 3.4%, accordingly.
The YoY increase in, CET1 Tier 1 and total capital adequacy ratios was mainly
driven by net income generation and the appreciation of the local currency,
which was partially offset by the 2021 final and 2022 interim dividends.
In thousands of GEL Dec-22 Dec-21 Change YoY
CET 1 Capital 3,333,039 2,759,894 20.8%
Tier 1 Capital 3,873,439 3,379,414 14.6%
Total Capital 4,516,525 4,102,927 10.1%
Total Risk-weighted Exposures 21,508,072 20,217,629 6.4%
Minimum CET 1 ratio 11.8% 11.7% 0.1 pp
CET 1 Capital adequacy ratio 15.5% 13.7% 1.8 pp
Minimum Tier 1 ratio 14.1% 14.0% 0.1 pp
Tier 1 Capital adequacy ratio 18.0% 16.7% 1.3 pp
Minimum total capital adequacy ratio 17.6% 18.4% -0.8 pp
Total Capital adequacy ratio 21.0% 20.3% 0.7 pp
Loan Portfolio
As of 31 December 2022, the gross loan portfolio reached GEL 18,205.0 million,
up by 6.8% YoY or 15.8% on a constant currency basis.
The proportion of gross loans denominated in foreign currency decreased by 5.7
pp on a YoY basis and accounted for 48.2% of total loans. On a constant
currency basis, the proportion of gross loans denominated in foreign currency
decreased by 1.7 pp YoY and stood at 52.2%.
As of 31 December 2022, our market share in total loans stood at 39.5%, up by
0.7 pp on a YoY basis. Our loan market share in legal entities was 40.8%, up
by 1.7 pp YoY. Our loan market share in individuals stood at 38.4%, down by
0.2 pp on a YoY basis.
In thousands of GEL Dec-22 Dec-21 Change YoY
Loans and advances to customers
Retail 7,113,087 6,358,345 11.9%
Retail loans GEL 4,374,224 3,580,468 22.2%
Retail loans FC 2,738,863 2,777,877 -1.4%
CIB 6,282,469 6,547,741 -4.1%
CIB loans GEL 2,435,737 2,188,776 11.3%
CIB loans FC 3,846,732 4,358,965 -11.8%
MSME 4,809,415 4,141,305 16.1%
MSME loans GEL 2,627,760 2,082,204 26.2%
MSME loans FC 2,181,655 2,059,101 6.0%
Total loans and advances to customers 18,204,971 17,047,391 6.8%
FY'22 FY'21 Change YoY
Loan yields 11.6% 10.3% 1.3 pp
Loan yields GEL 15.5% 15.1% 0.4 pp
Loan yields FC 7.8% 6.5% 1.3 pp
Retail Loan Yields 13.5% 11.7% 1.8 pp
Retail loan yields GEL 16.3% 16.1% 0.2 pp
Retail loan yields FC 9.2% 6.1% 3.1 pp
CIB Loan Yields 9.8% 9.0% 0.8 pp
CIB loan yields GEL 14.1% 13.7% 0.4 pp
CIB loan yields FC 7.6% 7.0% 0.6 pp
MSME Loan Yields 11.1% 10.2% 0.9 pp
MSME loan yields GEL 15.1% 14.9% 0.2 pp
MSME loan yields FC 6.4% 6.0% 0.4 pp
Loan Portfolio Quality
On a YoY basis, total Par 30 remained stable at level of 2.0%, while total NPL
improved by 0.2 pp and amounted to 2.2%.
The 0.4 pp increase in retail Par 30 was driven by an unsecured consumer
portfolio, while the 0.9 pp improvement in Par 30 for the MSME segment was
mainly attributable to the SME sub-segment. Par 30 for the CIB segment
remained broadly stable.
By the end of the year, total portfolio NPL slightly improved by 0.2 pp,
improvements were observed across all segments.
Par 30 Dec-22 Dec-21 Change YoY
Retail 2.6% 2.2% 0.4 pp
CIB 0.5% 0.6% -0.1 pp
MSME 3.1% 4.0% -0.9 pp
Total Loans 2.0% 2.0% 0.0 pp
Non-performing Loans Dec-22 Dec-21 Change YoY
Retail 2.2% 2.4% -0.2 pp
CIB 1.3% 1.4% -0.1 pp
MSME 3.4% 4.0% -0.6 pp
Total Loans 2.2% 2.4% -0.2 pp
NPL Coverage Dec-22 Dec-21
Provision Coverage Total Coverage Provision Coverage Total Coverage
Retail 149.4% 191.8% 158.8% 224.6%
CIB 57.9% 119.9% 56.8% 126.4%
MSME 58.8% 139.2% 68.0% 155.5%
Total 93.7% 155.6% 99.9% 175.3%
Cost of Risk
In FY 2022, the cost of risk started to normalise, after significant
recoveries in 2021, and amounted to 0.7%.
Cost of risk FY'22 FY'21 Change YoY
Retail 1.5% 0.5% 1.0 pp
CIB 0.0% -1.0% 1.0 pp
MSME 0.4% -0.2% 0.6 pp
Total 0.7% -0.3% 1.0 pp
Deposit Portfolio
The total deposits portfolio amounted to GEL 18,036.5 million, increasing by
19.9% YoY or 30.6% on a constant currency basis.
The proportion of deposits denominated in a foreign currency decreased by 8.7
pp YoY and stood at 54.8% of total deposits. On a constant currency basis, the
proportion of deposits decreased by 5.0 pp YoY and accounted for 58.5% of
total deposits.
As of 31 December 2022, our market share in deposits amounted to 40.3%, down
by 0.1 pp on a YoY basis, while our market share in deposits to legal entities
stood at 42.9%, down by 2.4 pp YoY. Our market share in deposits to
individuals stood at 38.1%, down by 2.2 pp on a YoY basis.
In thousands of GEL Dec-22 Dec-21 Change YoY
Customer Accounts
Retail 6,866,003 5,837,333 17.6%
Retail deposits GEL 1,905,377 1,492,325 27.7%
Retail deposits FC 4,960,626 4,345,008 14.2%
CIB 9,001,120 7,330,543 22.8%
CIB deposits GEL 4,931,741 2,934,167 68.1%
CIB deposits FC 4,069,379 4,396,376 -7.4%
MSME 1,756,968 1,558,676 12.7%
MSME deposits GEL 902,611 756,135 19.4%
MSME deposits FC 854,357 802,541 6.5%
Total Customer Accounts* 18,036,533 15,038,172 19.9%
* Total deposit portfolio includes Ministry of Finance deposits in the amount
of, GEL 412 million and GEL 311 million as of 31 Dec 2022 and 31 Dec 2021,
respectively.
FY'22 FY'21 Change YoY
Deposit rates 3.9% 3.4% 0.5 pp
Deposit rates GEL 7.7% 6.7% 1.0 pp
Deposit rates FC 1.5% 1.5% 0.0 pp
Retail Deposit Yields 2.9% 2.4% 0.5 pp
Retail deposit rates GEL 5.6% 4.9% 0.7 pp
Retail deposit rates FC 2.0% 1.3% 0.7 pp
CIB Deposit Yields 4.8% 4.3% 0.5 pp
CIB deposit rates GEL 9.4% 8.5% 0.9 pp
CIB deposit rates FC 1.2% 2.0% -0.8 pp
MSME Deposit Yields 0.7% 0.8% -0.1 pp
MSME deposit rates GEL 1.2% 1.4% -0.2 pp
MSME deposit rates FC 0.2% 0.2% 0.0 pp
Additional Disclosures
1) TBC Bank - Background
TBC Bank Group PLC ("TBC PLC") is a public limited company registered in
England and Wales. TBC PLC is the parent company of JSC TBC Bank ("TBC Bank")
and a group of companies that principally operate in Georgia in the financial
sector and other closely related fields. TBC PLC also recently expanded its
operations in Uzbekistan. TBC PLC is listed on the London Stock Exchange under
the symbol TBCG and is a constituent of the FTSE 250 Index. It is also a
member of the FTSE4Good Index Series and the MSCI United Kingdom Small Cap
Index.
TBC Bank is the largest banking group in Georgia, where 97.9% of its business
is concentrated, with a 39.1% market share by total assets. It offers retail,
CIB and MSME banking nationwide.
2) Consolidated Financial Statements and Key Ratios 4Q 2022
As explained in the highlights section, total equity and total liabilities
were restated for 31-Sep-2022 due to change in accounting of option contracts.
As a result, ROE and leverage ratios were restated for 3Q 2022, 4Q 2021.
Please also note that there might be slight differences in previous periods'
figures due to rounding.
Consolidated Balance Sheet
In thousands of GEL Dec-22 Sep-22
Cash and cash equivalents 3,860,813 3,764,435
Due from other banks 41,854 48,623
Mandatory cash balances with National Bank of Georgia and Central Bank of 2,049,985 2,219,506
Uzbekistan
Loans and advances to customers 17,832,606 16,962,397
Investment securities measured at fair value through other comprehensive 2,885,088 2,213,608
income
Bonds carried at amortized cost 37,392 64,030
Repurchase receivables 267,495 278,971
Finance lease receivables 312,334 261,217
Investment properties 22,154 22,930
Current income tax prepayment 430 1,505
Deferred income tax asset 16,705 14,439
Other financial assets 273,805 432,672
Other assets 429,121 443,586
Premises and equipment 442,886 426,129
Right of use assets 112,625 95,625
Intangible assets 383,198 363,096
Goodwill 59,964 59,964
Investments in associates 3,721 3,576
TOTAL ASSETS 29,032,176 27,676,309
LIABILITIES
Due to credit institutions 3,940,660 3,619,566
Customer accounts 18,036,533 17,115,022
Lease liabilities 84,770 76,890
Other financial liabilities 275,781 351,580
Current income tax liability 1,647 14,294
Debt Securities in issue 1,361,573 1,466,022
Deferred income tax liability 112,877 2,157
Provisions for liabilities and charges 34,988 33,550
Other liabilities 149,920 122,534
Redemption liability 477,329 373,605
Subordinated debt 590,148 621,878
TOTAL LIABILITIES 25,066,226 23,797,098
EQUITY
Share capital 1,681 1,693
Shares held by trust (7,900) (7,900)
Treasury shares (25,541) (20,389)
Share premium 269,938 297,923
Retained earnings 3,744,727 3,527,017
Merger reserve 402,862 402,862
Share based payment reserve 1,090 (3,523)
Fair value reserve for investment securities measured at fair value through 5,467 (6,674)
other comprehensive income
Cumulative currency translation reserve (35,858) (19,648)
Other reserve (477,329) (373,605)
Net assets attributable to owners 3,879,137 3,797,756
Non-controlling interest 86,813 81,455
TOTAL EQUITY 3,965,950 3,879,211
TOTAL LIABILITIES AND EQUITY 29,032,176 27,676,309
Consolidated Statement of Profit or Loss and Other Comprehensive Income
In thousands of GEL 4Q'22 3Q'22 4Q'21
Interest income 644,981 605,395 510,035
Interest expense* (287,535) (264,980) (234,590)
Net interest income 357,446 340,415 275,445
Fee and commission income 166,042 136,674 123,893
Fee and commission expense (70,710) (50,802) (52,825)
Net fee and commission income 95,332 85,872 71,068
Net insurance premiums earned 25,088 26,207 18,883
Net insurance claims incurred and agents' commissions (16,870) (16,187) (11,229)
Net insurance premium earned after claims and acquisition costs 8,218 10,020 7,654
Net gains from currency derivatives, foreign currency operations and 138,777 145,712 27,984
translation
Net gains from disposal of investment securities measured at fair value 926 2,660 252
through other comprehensive income
Other operating income 3,388 4,868 6,198
Share of profit of associates 145 84 71
Other operating non-interest income 143,236 153,324 34,505
Credit loss (allowance)/recovery for loans to customers (27,002) (41,419) 3,171
Credit loss recovery/(allowance) for finance lease receivable 558 (716) 2,052
Credit loss (allowance)/recovery for performance guarantees and credit related (1,217) (434) 5,971
commitments
Credit loss allowance for other financial assets (4,416) (5,041) (6,363)
Credit loss (allowance)/recovery for financial assets measured at fair value (521) 115 337
through other comprehensive income
Net impairment of non-financial assets (456) (761) (11,208)
Operating income after expected credit and non-financial asset impairment 571,178 541,375 382,632
losses
Losses from modifications of financial instruments - - (31)
Staff costs (103,764) (94,561) (86,589)
Depreciation and amortization (27,181) (26,684) (23,203)
(Allowance)/recovery of provision for liabilities and charges (140) (2,000) 90
Administrative and other operating expenses (69,410) (52,995) (47,511)
Operating expenses (200,495) (176,240) (157,213)
Profit before tax 370,683 365,135 225,388
Income tax expense (146,909) (44,115) (26,915)
Profit for the period 223,774 321,020 198,473
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve 12,147 18,929 (9,657)
Exchange differences on translation to presentation currency (17,919) 137 (2,385)
Other comprehensive income for the period (5,772) 19,066 (12,042)
Total comprehensive income for the period 218,002 340,086 186,431
Profit attributable to:
- Shareholders of TBCG 217,756 318,985 196,721
- Non-controlling interest 6,018 2,035 1,752
Profit for the period 223,774 321,020 198,473
Total comprehensive income is attributable to:
- Shareholders of TBCG 211,984 338,051 184,659
- Non-controlling interest 6,018 2,035 1,772
Total comprehensive income for the period 218,002 340,086 186,431
* Interest expense includes net interest gains from currency swaps
Key Ratios
Average Balances
The average balances included in this document are calculated as the average
of the relevant monthly balances as of the end of each month. Balances have
been extracted from TBC's unaudited and consolidated management accounts,
which were prepared from TBC's accounting records. These were used by the
management for monitoring and control purposes.
Ratios (based on monthly averages, where applicable) 4Q'22 3Q'22 4Q'21
Profitability ratios:
ROE(1) 22.3% 33.6% 22.8%
ROA(2) 3.1% 4.8% 3.3%
Cost to income(3) 33.2% 29.9% 40.4%
NIM(4) 6.3% 6.3% 5.4%
Loan yields(5) 12.1% 11.9% 10.7%
Deposit rates(6) 4.3% 3.9% 3.4%
Cost of funding(7) 5.0% 4.8% 4.6%
Asset quality & portfolio concentration:
Cost of risk(9) 0.6% 1.0% -0.1%
PAR 90 to Gross Loans(9) 1.2% 1.3% 1.1%
NPLs to Gross Loans(10) 2.2% 2.3% 2.4%
NPL provision coverage(11) 93.7% 99.6% 99.9%
Total NPL coverage(12) 155.6% 164.2% 175.3%
Credit loss level to Gross Loans(13) 2.0% 2.3% 2.4%
Related Party Loans to Gross Loans(14) 0.1% 0.1% 0.1%
Top 10 Borrowers to Total Portfolio(15) 5.3% 6.0% 6.8%
Top 20 Borrowers to Total Portfolio(16) 8.3% 9.0% 10.5%
Capital & liquidity positions:
Net Loans to Deposits plus IFI* Funding(17) 88.5% 89.1% 100.9%
Net Stable Funding Ratio(18) 135.3% 133.1% 127.3%
Liquidity Coverage Ratio(19) 146.6% 142.8% 115.8%
Leverage(20) 7.3x 7.1x 7.1x
CET 1 CAR (Basel III)(21) 15.5% 15.3% 13.7%
Tier 1 CAR (Basel III)(22) 18.0% 18.0% 16.7%
Total 1 CAR (Basel III)(23) 21.0% 21.4% 20.3%
* International Financial Institutions
Ratio definitions
1. Return on average total equity (ROE) equals net income 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 net income 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. 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,
based on local standards.
19. 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, based on local standards.
20. Leverage equals total assets to total equity.
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, based on local standards.
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, based on local
standards.
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, based on local standards.
Exchange Rates
To calculate the QoQ growth of the Balance Sheet items without the currency
exchange rate effect, we used the US$/GEL exchange rate of 2.8352 as of 30
September 2022. As of 31 December 2022, the US$/GEL exchange rate equalled
2.7020. For the P&L items growth calculations without the currency effect,
we used the average US$/GEL exchange rate for the following periods: 4Q 2022
of 2.7329, 3Q 2022 of 2.8254, 4Q 2021 of 3.1253.
3) Consolidated Financial Statements and Key Ratios FY 2022
As explained in the highlights section, total equity and total liabilities
were restated for 31-Dec-2022 due to change in accounting of option contracts.
As a result, ROE and leverage ratios were restated for FY 2021. Please also
note that there might be slight differences in previous periods' figures due
to rounding.
Consolidated Balance sheet
In thousands of GEL Dec-22 Dec-21
Cash and cash equivalents 3,860,813 1,722,137
Due from other banks 41,854 79,142
Mandatory cash balances with National Bank of Georgia and Central Bank of 2,049,985 2,087,141
Uzbekistan
Loans and advances to customers 17,832,606 16,637,145
Investment securities measured at fair value through other comprehensive 2,885,088 1,938,196
income
Bonds carried at amortized cost 37,392 49,582
Repurchase receivables 267,495 -
Finance lease receivables 312,334 262,046
Investment properties 22,154 22,892
Current income tax prepayment 430 194
Deferred income tax asset 16,705 12,357
Other financial assets 273,805 453,115
Other assets 429,121 397,079
Premises and equipment 442,886 392,506
Right of use assets 112,625 70,513
Intangible assets 383,198 319,963
Goodwill 59,964 59,964
Investments in associates 3,721 4,589
TOTAL ASSETS 29,032,176 24,508,561
LIABILITIES
Due to credit institutions 3,940,660 2,984,176
Customer accounts 18,036,533 15,038,172
Lease liabilities 84,770 66,167
Other financial liabilities 275,781 139,811
Current income tax liability 1,647 86,762
Debt Securities in issue 1,361,573 1,710,288
Deferred income tax liability 112,877 10,979
Provisions for liabilities and charges 34,988 25,358
Other liabilities 149,920 130,972
Redemption liability 477,329 238,455
Subordinated debt 590,148 623,647
TOTAL LIABILITIES 25,066,226 21,054,787
EQUITY
Share capital 1,681 1,682
Shares held by trust (7,900) (25,489)
Treasury shares (25,541) -
Share premium 269,938 283,430
Retained earnings 3,744,727 3,007,132
Merger reserve 402,862 402,862
Share based payment reserve 1,090 (5,135)
Fair value reserve for investment securities measured at fair value through 5,467 (10,862)
other comprehensive income
Cumulative currency translation reserve (35,858) (9,450)
Other reserve (477,329) (238,455)
Net assets attributable to owners 3,879,137 3,405,715
Non-controlling interest 86,813 48,059
TOTAL EQUITY 3,965,950 3,453,774
TOTAL LIABILITIES AND EQUITY 29,032,176 24,508,561
Consolidated Statement of Profit or Loss and Other Comprehensive Income
In thousands of GEL FY'22 FY'21
Interest income 2,330,838 1,885,856
Interest expense* (1,040,786) (883,124)
Net interest income 1,290,052 1,002,732
Fee and commission income 543,099 412,032
Fee and commission expense (220,433) (164,032)
Net fee and commission income 322,666 248,000
Net insurance premiums earned 94,563 65,990
Net insurance claims incurred and agents' commissions (65,360) (42,444)
Net insurance premium earned after claims and acquisition costs 29,203 23,546
Net gains from currency derivatives, foreign currency operations and 398,866 117,270
translation
Net gains from disposal of investment securities measured at fair value 5,811 11,156
through other comprehensive income
Other operating income 23,814 48,479
Share of profit of associates 352 837
Other operating non-interest income 428,843 177,742
Credit loss (allowance)/recovery for loans to customers (118,943) 40,123
Credit loss allowance for net finance leases receivables (720) (321)
Credit loss (allowance)/recovery for performance guarantees and credit related (2,721) 1,204
commitments
Credit loss allowance for other financial assets (10,155) (14,726)
Credit loss recovery for financial assets measured at fair value through other 862 2,602
comprehensive income
Net impairment of non-financial assets (1,223) (11,982)
Operating income after expected credit and non-financial asset impairment 1,937,864 1,468,920
losses
Losses from modifications of financial instruments - (1,726)
Staff costs (374,816) (309,302)
Depreciation and amortization (101,197) (79,891)
(Allowance)/recovery of provision for liabilities and charges (2,200) 27
Administrative and other operating expenses (213,107) (156,668)
Operating expenses (691,320) (545,834)
Profit before tax 1,246,544 921,360
Income tax expense (243,205) (112,361)
Profit for the period 1,003,339 808,999
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve 16,329 (22,020)
Exchange differences on translation to presentation currency (26,355) (7,326)
Other comprehensive income for the period (10,026) (29,346)
Total comprehensive income for the period 993,313 779,653
Profit attributable to:
- Shareholders of TBCG 995,206 800,782
- Non-controlling interest 8,133 8,217
Profit for the period 1,003,339 808,999
Total comprehensive income is attributable to:
- Shareholders of TBCG 985,180 771,436
- Non-controlling interest 8,133 8,217
Total comprehensive income for the period 993,313 779,653
* Interest expense includes net interest gains from currency swaps
Key Ratios
Average Balances
The average balances included in this document are calculated as the average
of the relevant monthly balances as of the end of each month. Balances have
been extracted from TBC's unaudited and consolidated management accounts,
which were prepared from TBC's accounting records. These were used by the
management for monitoring and control purposes.
Ratios (based on monthly averages, where applicable) FY'22 FY'21
Profitability ratios:
ROE(1) 27.0% 24.9%
ROA(2) 3.8% 3.4%
Cost to income(3) 33.4% 37.6%
NIM(4) 6.0% 5.1%
Loan yields(5) 11.6% 10.3%
Deposit rates(6) 3.9% 3.4%
Cost of funding(7) 4.9% 4.5%
Asset quality & portfolio concentration:
Cost of risk(9) 0.7% -0.3%
PAR 90 to Gross Loans(9) 1.2% 1.1%
NPLs to Gross Loans(10) 2.2% 2.4%
NPL provision coverage(11) 93.7% 99.9%
Total NPL coverage(12) 155.6% 175.3%
Credit loss level to Gross Loans(13) 2.0% 2.4%
Related Party Loans to Gross Loans(14) 0.1% 0.1%
Top 10 Borrowers to Total Portfolio(15) 5.3% 6.8%
Top 20 Borrowers to Total Portfolio(16) 8.3% 10.5%
Capital & liquidity positions:
Net Loans to Deposits plus IFI* Funding(17) 88.5% 100.9%
Net Stable Funding Ratio(18) 135.3% 127.3%
Liquidity Coverage Ratio(19) 146.6% 115.8%
Leverage(20) 7.3x 7.1x
CET 1 CAR (Basel III)(21) 15.5% 13.7%
Tier 1 CAR (Basel III)(22) 18.0% 16.7%
Total 1 CAR (Basel III)(23) 21.0% 20.3%
* International Financial Institutions
Ratio definitions
1. Return on average total equity (ROE) equals net income 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 net income 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. 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,
based on local standards.
19. 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, based on local standards.
20. Leverage equals total assets to total equity.
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, based on local standards.
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, based on local
standards.
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, based on local standards.
Exchange Rates
To calculate the YoY growth without the currency exchange rate effect, we used
the US$/GEL exchange rate of 3.0976 as of 31 December 2021. As of 31 December
2022, the US$/GEL exchange rate equalled 2.7329. For the P&L items growth
calculations without the currency effect, we used the average US$/GEL exchange
rate for the following periods: FY 2022 of 2.9099, FY 2021 of 3.2306.
4) Segment Definitions
Business Segments
· Corporate - a legal entity/group of affiliated entities with an
annual revenue exceeding GEL 15.0 million or which has been granted facilities
of more than GEL 6.0 million. Some other business customers may also be
assigned to the CIB segment or transferred to the MSME segment on a
discretionary basis. In addition, CIB includes Wealth Management (WM) private
banking services to high-net-worth individuals with a threshold of US$ 250,000
on assets under management (AUM), as well as on a discretionary basis;
· Retail - Non-business individual customers including the
fully-digital bank, Space. The business is broadly divided into two segments:
o Mass retail; and
o Affluent retail (customers eligible for affluent retail have >3,000 GEL
in monthly income)
Since 2021, individual WM and VIP customers have been managed in the CIB
directory;
· MSME - Business customers (Legal entities and private individual
customers that generate income from business activities), who are not included
in the CIB segment;
· Corporate centre and other operations - comprises the Treasury,
other support and back-office functions, and non-banking subsidiaries of the
Group.
Business customers are all legal entities or individuals who have been granted
a loan for business purposes.
5) Segments Profitability 4Q 2022
Income Statement by Segment
4Q'22 Retail MSME CIB Corp. Centre Total
Interest income 246,381 134,794 162,795 101,011 644,981
Interest expense (54,203) (3,110) (105,506) (124,716) (287,535)
Net transfer pricing (67,740) (67,531) 49,587 85,684 -
Net interest income 124,438 64,153 106,876 61,979 357,446
Fee and commission income 104,271 9,354 27,340 25,077 166,042
Fee and commission expense (51,249) (3,628) (4,571) (11,262) (70,710)
Net fee and commission income 53,022 5,726 22,769 13,815 95,332
Insurance profit - - - 8,218 8,218
Net gains from currency derivatives, foreign currency operations and 31,492 15,650 33,856 57,779 138,777
translation
Net gains from disposal of investment securities measured at fair value - - 1 925 926
through other comprehensive income
Other operating income 2,219 840 365 (36) 3,388
Share of profit of associates - - - 145 145
Other operating non-interest income and insurance profit 33,711 16,490 34,222 67,031 151,454
Credit loss allowance for loans to customers (15,355) (10,588) (1,059) - (27,002)
Credit loss recovery for finance leases receivables - - - 558 558
Credit loss recovery/(allowance) for performance guarantees and credit related 221 (219) (1,219) - (1,217)
commitments
Credit loss recovery/(allowance) for other financial assets 5 - (1,017) (3,404) (4,416)
Credit loss allowance for financial assets measured at fair value through - - (42) (479) (521)
other comprehensive income
Net (impairment)/ recovery of non-financial assets (134) 194 92 (608) (456)
Operating profit after expected credit and non-financial asset impairment 195,908 75,756 160,622 138,892 571,178
losses
Staff costs (47,177) (18,902) (17,938) (19,747) (103,764)
Depreciation and amortization (16,377) (3,889) (1,850) (5,065) (27,181)
Provision for liabilities and charges - - - (140) (140)
Administrative and other operating expenses (33,427) (9,531) (11,206) (15,246) (69,410)
Operating expenses (96,981) (32,322) (30,994) (40,198) (200,495)
Profit before tax 98,927 43,434 129,628 98,694 370,683
Income tax expense (8,253) (4,253) (12,143) (122,260) (146,909)
Profit for the period 90,674 39,181 117,485 (23,566) 223,774
6) Segments Profitability FY 2022
Income Statement by Segments
FY'22 Retail MSME CIB Corp. Centre Total
Interest income 902,968 488,321 626,509 313,040 2,330,838
Interest expense (179,774) (11,395) (361,582) (488,035) (1,040,786)
Net transfer pricing (254,944) (234,065) 140,947 348,062 -
Net interest income 468,250 242,861 405,874 173,067 1,290,052
Fee and commission income 356,829 33,404 86,170 66,696 543,099
Fee and commission expense (175,877) (13,255) (12,280) (19,021) (220,433)
Net fee and commission income 180,952 20,149 73,890 47,675 322,666
Insurance profit - - - 29,203 29,203
Net gains from currency derivatives, foreign currency operations and 91,233 54,674 126,900 126,059 398,866
translation
Net gains from disposal of investment securities measured at fair value - - 3,573 2,238 5,811
through other comprehensive income
Other operating income 6,513 1,412 1,613 14,276 23,814
Share of (loss)/profit of associates - - (232) 584 352
Other operating non-interest income and insurance profit 97,746 56,086 131,854 172,360 458,046
Credit loss (allowance)/recovery for loans to customers (101,850) (19,856) 2,763 - (118,943)
Credit loss allowance for finance leases receivables - - - (720) (720)
Credit loss recovery/(allowance) for performance guarantees and credit related 341 (173) (2,889) - (2,721)
commitments
Credit loss allowance for other financial assets (1,602) (416) (1,423) (6,714) (10,155)
Credit loss recovery for financial assets measured at fair value through other - - 79 783 862
comprehensive income
Net (impairment)/ recovery of non-financial assets (64) 105 432 (1,696) (1,223)
Operating profit after expected credit and non-financial asset impairment 643,773 298,756 610,580 384,755 1,937,864
losses
Staff costs (167,141) (66,766) (61,482) (79,427) (374,816)
Depreciation and amortization (61,698) (14,465) (6,845) (18,189) (101,197)
Provision for liabilities and charges - - - (2,200) (2,200)
Administrative and other operating expenses (102,829) (27,339) (26,103) (56,836) (213,107)
Operating expenses (331,668) (108,570) (94,430) (156,652) (691,320)
Profit before tax 312,105 190,186 516,150 228,103 1,246,544
Income tax expense (31,274) (20,038) (54,289) (137,604) (243,205)
Profit for the period 280,831 170,148 461,861 90,499 1,003,339
In 1Q 2022, the management reclassified net fee and commission income from
acquiring and issuing business, utility payments income as well as fee expense
on self-service and POS terminal transactions to retail segment from other
segments.
7) Subsidiaries of TBC Bank Group PLC 14 (#_ftn14)
Ownership / voting Country Year of incorporation Industry Total Assets
(after elimination)
Subsidiary % as of Amount % in TBC Group
31 Dec 2022
GEL'000
JSC TBC Bank 99.9% Georgia 1992 Banking 27,827,755 95.85%
United Financial Corporation JSC 99.5% Georgia 1997 Card processing 24,988 0.09%
TBC Capital LLC 100.0% Georgia 1999 Brokerage 5,038 0.02%
TBC Leasing JSC 100.0% Georgia 2003 Leasing 363,856 1.25%
TBC Kredit LLC 100.0% Azerbaijan 1999 Non-banking credit institution 23,082 0.08%
TBC Pay LLC 100.0% Georgia 2009 Processing 50,613 0.17%
Index LLC 100.0% Georgia 2011 Real estate management 106 0.00%
TBC Invest LLC 100.0% Israel 2011 PR and marketing 321 0.00%
TBC Asset management LLC 100.0% Georgia 2021 Asset Management 1 0.00%
JSC TBC Insurance 100.0% Georgia 2014 Insurance 107,360 0.37%
Redmed LLC 100.0% Georgia 2019 E-commerce 1,719 0.01%
T NET LLC 100.0% Georgia 2019 Asset Management 34,968 0.12%
Online Tickets LLC 100.0% Georgia 2015 Software Services 6,629 0.02%
TKT UZ 100.0% Uzbekistan 2019 Retail Trade 53 0.00%
Artarea.ge LLC 100.0% Georgia 2021 PR and marketing 56 0.00%
Marjanishvili 7 LLC 100.0% Georgia 2020 Food and Beverage 798 0.00%
Space JSC 100.0% Georgia 2021 Software Services 0 0.00%
Space International JSC 100.0% Georgia 2021 Software Services 50,686 0.17%
TBC Group Support LLC 100.0% Georgia 2020 Risk Monitoring 1 0.00%
Inspired LLC 51.0% Uzbekistan 2011 Processing 40,909 0.14%
TBC Bank JSC UZ 60.2% Uzbekistan 2020 Banking 466,837 1.61%
TBC Fin Service LLC 100.0% Uzbekistan 2019 Retail Leasing 26,399 0.09%
.
8) TBC Insurance
TBC Insurance is a wholly-owned subsidiary of TBC Bank, which was acquired by
the Group in October 2016 and is the main bancassurance partner for the Bank,
with a share of around 30.2% in its total gross written premium (GWP) as of 31
December 2022.
TBC Insurance serves its customers with a highly digitalised approach, which
includes a website and a mobile app for health insurance. The company is
represented in both the non-health and health insurance segments. In 2022, TBC
Insurance was well regarded by its customers with an NPS 15 (#_ftn15) of
73.5% - the best score among its peers.
In 4Q 2022, net profit amounted GEL 4,681 thousand, down by 8.6% YoY, or down
by 30.3% on a QoQ basis. The QoQ decrease in net profit was driven by
decreased net earned premium on seasonal agricultural products, while the YoY
decrease in net profit was mainly driven by the high base of net profit in Q4
2021.
For the FY 2022, net profit increased by 28.4% and amounted to GEL 17.7
million driven by the overall business growth.
4Q'22 3Q'22 4Q'21 FY'22 FY'21
In thousands of GEL
Gross written premium 38,190 35,746 33,039 147,146 113,819
Net earned premium 31,913 32,700 24,497 119,693 87,435
Net profit 4,681 6,719 5,122 17,666 13,760
Net combined ratio 89.6% 81.0% 91.1% 88.7% 88.5%
Note: IFRS standalone data
Market shares 16 (#_ftn16) 4Q'22 3Q'22 4Q'21
Retail non-health segment 38.4% 38.6% 39.6%
Total non-health 24.5% 26.1% 26.4%
Corporate health insurance 11.7% 8.5% 14.9%
9) Fast Growing Digital Bank in Uzbekistan
in thousands Dec'21 Sep'22 Dec'22 YoY QoQ
# of total registered users 1,140 2,058 2,362 107% 15%
Monthly active users (MAU) 311 366 428 38% 17%
Retail gross loan portfolio 17 (#_ftn17) (GEL) 92,825 268,976 347,695 275% 29%
Retail deposit portfolio 18 (#_ftn18) (GEL) 207,510 296,563 330,976 59% 12%
# of total cards issued (cumulative figures) 224 451 676 202% 50%
# of other cards attached (cumulative figures) 386 852 1,043 170% 22%
Total monthly number of transactions 1,739 2,342 3,247 87% 39%
10) Expanding Our Payments Business in Uzbekistan
in thousands Dec'21 Sep'22 Dec'22 YoY QoQ
Monthly active users (MAU) 1,591 2,071 2,548 60% 23%
Active merchants 19 (#_ftn19) 2.9 3.5 3.6 24% 3%
Payments volume 20 (#_ftn20) 1,448 1,913 2,304 59% 20%
11) Uzbek Financials
In millions of GEL
TBC UZ Bank 1Q'22 2Q'22 3Q'22 4Q'22 FY'22
Operating income 2.9 7.5 16.7 18.5 45.6
Net profit (10.3) (7.9) (5.7) (1.1) (25.0)
Payme 1Q'22 2Q'22 3Q'22 4Q'22 FY'22
Operating income 9.5 12.0 12.0 17.6 51.1
Net profit 5.8 7.1 7.5 12.8 33.2
Combined financials for Uzbek businesses 1Q'22 2Q'22 3Q'22 4Q'22 FY'22
Operating income 12.4 19.5 28.7 36.1 96.7
Net profit (4.5) (0.8) 1.8 11.7 8.2
Combined financial metric for Uzbek businesses 4Q'22 FY'22
ROE (%) 27.0% 6.5%
Financial metrics for TBC UZ Bank 4Q'22 FY'22
NIM (%) 17.2% 14.5%
Cost of risk (%) 7.6% 6.8%
Total assets (GEL million) 507
Total equity (GEL million) 143
Note: IFRS Group data. Numbers are provided with intergroup eliminations
12) Loan Book Breakdown by Stages According IFRS 9
Total (GEL million) 31-Dec-22 30-Sep-22 31-Dec-21
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 16,395 0.7% 15,456 0.7% 14,602 0.7%
2 1,413 7.0% 1,487 7.6% 1,935 6.2%
3 397 41.8% 423 42.5% 510 36.4%
Total 18,205 2.0% 17,366 2.3% 17,047 2.4%
CIB (GEL million) 31-Dec-22 30-Sep-22 31-Dec-21
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 5,741 0.3% 5,313 0.4% 5,743 0.4%
2 458 0.2% 525 0.2% 713 0.2%
3 83 31.3% 80 31.4% 92 27.3%
Total 6,282 0.7% 5,918 0.8% 6,548 0.8%
MSME (GEL million) 31-Dec-22 30-Sep-22 31-Dec-21
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 4,328 0.6% 4,087 0.6% 3,520 0.6%
2 318 7.5% 313 6.7% 413 7.8%
3 163 28.7% 176 29.1% 208 29.0%
Total 4,809 2.0% 4,576 2.1% 4,141 2.7%
Retail (GEL million) 31-Dec-22 30-Sep-22 31-Dec-21
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 6,326 1.0% 6,056 1.1% 5,339 1.1%
2 637 11.6% 649 14.1% 809 10.8%
3 150 60.9% 166 62.3% 210 47.7%
Total 7,113 3.2% 6,871 3.8% 6,358 3.9%
* LLP rate is defined as credit loss allowances divided by gross loans
13) Summary of the Share Buyback Programme
Since announcing the share buyback and cancellation programme on 12 August
2022, TBC has repurchased 434,276 shares with a value of GEL c. 25 million,
which were transferred to the treasury (for the company's EBT facility). In
addition, TBC has repurchased 599,693 shares and cancelled 589,645 shares
before the end of 2022. As a result, as of 31 December 2022, TBC Bank Group
PLC's issued share capital consisted of 55,102,766 ordinary shares, of which
434,276 Shares are held in treasury.
The share buyback programme was fully completed as of 10th of February 2023,
after which the number of outstanding shares amounted to 54,991,419, out of
which, 434,276 were treasury shares.
14) Impact of Changed Accounting Treatment for Option Contracts
Restated Reported
30-Sep-22 31-Dec-21 30-Sep-22 31-Dec-21
Redemption liability 373,605 238,455 0 0
Total liabilities 23,797,098 21,054,787 23,423,493 20,816,332
Other reserve -373,605 -238,455 0 0
Total equity 3,879,211 3,453,774 4,252,816 3,692,229
15) Glossary
Terminology Definition
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 (Digital MAU) The number of retail digital users, who logged into our digital channels at
least once a month.
Net combined ratio Net insurance claims plus acquisition costs and administrative expenses
divided by net earned premium.
1 (#_ftnref1) Note: For better presentation purposes, certain financial
numbers are rounded the nearest whole number.
2 (#_ftnref2) Capital adequacy ratios under IFRS are our internal estimates
and are not officially approved by the NBG, since they were not mandatory as
of the 31 Dec 2022.
3 (#_ftnref3) Note: For better presentation purposes, certain financial
numbers are rounded the nearest whole number.
4 (#_ftnref4) According to Geostat preliminary estimates
5 (#_ftnref5) Under existing NBG requirements
6 (#_ftnref6) Remittances from Russia are adjusted for double counting with
tourism inflows and other similar effects, based on TBC Capital estimates.
7 (#_ftnref7) Other operating non-interest income includes net insurance
premium earned after claims and acquisition costs.
8 (#_ftnref8) For the ratio calculation, all relevant group recurring costs
are allocated to the bank.
9 (#_ftnref9) Net insurance premium earned after claims and acquisition
costs can be reconciled to the standalone net insurance profit (as shown in
Annex 3) as follows: net insurance premium earned after claims and acquisition
costs less credit loss allowance, administrative expenses and taxes, plus fee
and commission income and net interest income.
10 (#_ftnref10) For the ratio calculation, all relevant group recurring
costs are allocated to the bank.
11 (#_ftnref11) Other operating non-interest income includes net insurance
premium earned after claims and acquisition costs.
12 (#_ftnref12) For the ratio calculation, all relevant group recurring
costs are allocated to the bank.
13 (#_ftnref13) For the ratio calculation, all relevant group recurring
costs are allocated to the bank.
14 (#_ftnref14) TBC Bank Group PLC became the parent company of JSC TBC Bank
on 10 August 2016.
15 (#_ftnref15) The Net Promoter Score (NPS) was measured in January 2023 by
an independent research company, Darti.
16 (#_ftnref16) Market shares are based on internal estimates, excluding
border motor third party liability (MTPL) insurance. Source is Insurance State
Supervision Service of Georgia.
17 (#_ftnref17) Loans in Uzbekistan are disbursed in local currency.
18 (#_ftnref18) Current, savings and time accounts. Deposits in Uzbekistan
are accepted in local currency.
19 (#_ftnref19) Merchants that have conducted at least one transaction
during the month.
20 (#_ftnref20) 99% of all transactions are fee-generating.
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