REG - TBC Bank Group PLC - 4Q and FY 2023 Results Report
16/02/2024 07:00
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RNS Number : 4185D TBC Bank Group PLC 16 February 2024
TBC BANK GROUP PLC ("TBC Bank")
4Q AND FY 2023 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
generally accepted U.S. 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 2023 Consolidated Financial Results Conference Call Details
TBC Bank Group PLC ("TBC PLC") will publish its preliminary unaudited
consolidated financial results for the fourth quarter and full year 2023 on
Friday, 16 February 2024 at 7.00 AM GMT. On the same day, the management team
will host a conference call at 2.00 PM GMT.
To participate in the conference call live video webinar, please register
using the following link:
https://www.netroadshow.com/events/login?show=cbfcd3a8&confId=60444
(https://www.netroadshow.com/events/login?show=cbfcd3a8&confId=60444)
You will receive access details via email.
Contacts
Andrew Keeley Anna Investor Relations Department
Romelashvili
Director of Investor Relations
Head of Investor Relations
E-mail: AKeeley@tbcbank.com.ge
E-mail: IR@tbcbank.com.ge
E-mail: IR@tbcbank.com.ge
Tel: +44 (0) 7791 569834
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/)
Web: www.tbcbankgroup.com (https://www.tbcbankgroup.com/)
Table of Contents
4Q and FY 2023 Preliminary Unaudited Consolidated Financial Results
Announcement
Interim Management Report
Financial Highlights (#_Toc158821918) (#_Toc158821918)
Operational Highlights (#_Toc158821919) (#_Toc158821919)
Letter from the Chief Executive Officer (#_Toc158821920) (#_Toc158821920)
Economic Overview (#_Toc158821921) (#_Toc158821921)
Unaudited Consolidated Financial Results Overview for 4Q 2023 (#_Toc158821922)
(#_Toc158821922)
Preliminary Unaudited Consolidated Financial Results Overview for FY 2023
(#_Toc158821923) (#_Toc158821923)
Additional Disclosures (#_Toc158821924) (#_Toc158821924)
1) (#_Toc158821925) (#_Toc158821925) (#_Toc158821925) TBC
Bank - Background (#_Toc158821925) (#_Toc158821925)
2) (#_Toc158821926) (#_Toc158821926) (#_Toc158821926)
Consolidated Financial Statements and Key Ratios 4Q 2023 (#_Toc158821926)
(#_Toc158821926)
3) (#_Toc158821927) (#_Toc158821927) (#_Toc158821927)
Consolidated Financial Statements and Key Ratios FY 2023 (#_Toc158821927)
(#_Toc158821927)
4) (#_Toc158821928) (#_Toc158821928) (#_Toc158821928)
Business Line Definition (#_Toc158821928) (#_Toc158821928)
5) (#_Toc158821929) (#_Toc158821929) (#_Toc158821929)
Financial Disclosures by Business Lines (#_Toc158821929) (#_Toc158821929)
6) (#_Toc158821930) (#_Toc158821930) (#_Toc158821930)
Market shares in Georgia (#_Toc158821930) (#_Toc158821930)
7) (#_Toc158821931) (#_Toc158821931) (#_Toc158821931)
Subsidiaries of TBC Bank Group PLC (#_Toc158821931) (#_Toc158821931)
8) (#_Toc158821932) (#_Toc158821932) (#_Toc158821932)
Replacement of IFRS 4 with IFRS 17 (#_Toc158821932) (#_Toc158821932)
9) (#_Toc158821933) (#_Toc158821933) (#_Toc158821933) Legal
and regulatory matters (#_Toc158821933) (#_Toc158821933)
10)Loan Book Breakdown by Stages According IFRS 9 (#_Toc158821934)
(#_Toc158821934)
11)Glossary (#_Toc158821935) (#_Toc158821935)
12)Ratio Definitions and Exchange Rates (#_Toc158821936) (#_Toc158821936)
4Q and FY 2023 Preliminary Unaudited Consolidated Financial Results
4Q 2023 profit of GEL 291 million, up by 30% YoY, with ROE at 25.2%.
FY 2023 profit of GEL 1,140 million, up by 14% YoY, with ROE at 26.5%.
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 for the years ended 31 December 2023 and 31 December 2022
within the meaning of section 435 of the Companies Act 2006 (the Act), but is
derived from those accounts. The statutory accounts for the year ended 31
December 2023 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
auditor's report on those accounts is expected to be unqualified. The
statutory accounts for the year ended 31 December 2022 have been filed with
the Registrar of Companies, and the auditors' report 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.
Financial Highlights
Income statement
in thousands of GEL 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ FY'23 FY'22 Change YoY
Net interest income 441,735 427,934 357,446 23.6% 3.2% 1,635,798 1,290,052 26.8%
Net fee and commission income 110,099 104,152 95,332 15.5% 5.7% 412,325 322,666 27.8%
Other non-interest income 87,442 83,133 151,454 -42.3% 5.2% 325,377 458,046 -29.0%
Total operating income 639,276 615,219 604,232 5.8% 3.9% 2,373,500 2,070,764 14.6%
Total credit loss allowance (47,479) (46,159) (33,054) 43.6% 2.9% (180,740) (132,900) 36.0%
Operating expenses (254,500) (218,087) (200,495) 26.9% 16.7% (858,927) (691,320) 24.2%
Profit before tax 337,297 350,973 370,683 -9.0% -3.9% 1,333,833 1,246,544 7.0%
Income tax expense (45,856) (50,485) (146,909) -68.8% -9.2% (193,858) (243,205) -20.3%
Profit for the period 291,441 300,488 223,774 30.2% -3.0% 1,139,975 1,003,339 13.6%
Balance sheet
in thousands of GEL Dec'23 Sep'23 Dec'22 Change YoY Change QoQ
Total Assets 32,964,827 29,956,393 28,988,141 13.7% 10.0%
Gross Loans 22,073,679 20,365,135 18,204,971 21.3% 8.4%
Customer Deposits 20,375,498 18,722,415 18,036,533 13.0% 8.8%
Total Equity 4,820,182 4,473,400 3,966,414 21.5% 7.8%
CET 1 Capital (Basel III) 4,235,033 3,966,901 n/a n/a 6.8%
Tier 1 Capital (Basel III) 4,772,913 4,502,561 n/a n/a 6.0%
Total Capital (Basel III) 5,374,301 5,058,696 n/a n/a 6.2%
Risk Weighted Assets (Basel III) 24,336,690 22,668,335 n/a n/a 7.4%
Number of shares 55,393,664 55,140,216 55,102,766 0.5% 0.5%
Key Ratios
4Q'23 3Q'23 4Q'22 Change YoY Change QoQ FY'23 FY'22 Change YoY
ROE 25.2% 27.6% 22.3% 2.9 pp -2.4 pp 26.5% 27.0% -0.5 pp
ROE - Georgia FS 24.7% 26.4% 21.0% 3.7 pp -1.7 pp 25.5% 26.0% -0.5 pp
ROA 3.7% 4.1% 3.1% 0.6 pp -0.4 pp 3.9% 3.8% 0.1 pp
ROA - Georgia FS 3.8% 4.2% 3.3% 0.5 pp -0.4 pp 4.0% 4.1% -0.1 pp
NIM 6.7% 6.9% 6.3% 0.4 pp -0.2 pp 6.7% 6.0% 0.7 pp
Cost to income 39.8% 35.4% 33.2% 6.6 pp 4.4 pp 36.2% 33.4% 2.8 pp
Cost to income - Georgia FS 35.4% 31.5% 29.7% 5.7 pp 3.9 pp 31.9% 28.9% 3.0 pp
Cost of risk 0.8% 0.9% 0.6% 0.2 pp -0.1 pp 0.8% 0.7% 0.1 pp
NPL to gross loans 2.0% 2.0% 2.2% -0.2 pp 0.0 pp 2.0% 2.2% -0.2 pp
NPL provision coverage ratio 79.8% 87.6% 93.7% -13.9 pp -7.8 pp 79.8% 93.7% -13.9 pp
Total NPL coverage ratio 146.3% 151.6% 155.6% -9.3 pp -5.3 pp 146.3% 155.6% -9.3 pp
CET 1 CAR (Basel III) 17.4% 17.5% n/a n/a -0.1 pp 17.4% n/a n/a
Tier 1 CAR (Basel III) 19.6% 19.9% n/a n/a -0.3 pp 19.6% n/a n/a
Total CAR (Basel III) 22.1% 22.3% n/a n/a -0.2 pp 22.1% n/a n/a
Leverage (Times) 6.8x 6.7x 7.3x -0.5x 0.1x 6.8x 7.3x -0.5x
EPS (GEL) 5.31 5.54 3.98 33.4% -4.2% 20.74 15.44 34.3%
Diluted EPS (GEL) 5.26 5.45 3.91 34.5% -3.5% 20.58 15.22 35.2%
BVPS (GEL) 86.32 80.81 71.27 21.1% 6.8% 86.32 71.27 21.1%
Georgia FS refers to Georgian financial services.
For the ratio definitions please refer to appendix 12.
Operational Highlights
Customer base
In millions Dec'23 Sep'23 Dec'22 Change YoY Change QoQ
Total number of registered users 19.0 17.3 13.6 40% 10%
Georgia 3.3 3.2 3.0 10% 3%
Uzbekistan 15.7 14.1 10.6 48% 11%
Total monthly active customers 5.9 5.3 4.4 34% 11%
Georgia 1.6 1.6 1.5 7% 0%
Uzbekistan 4.3 3.7 2.9 48% 16%
Digital customers
In thousands Dec'23 Sep'23 Dec'22 Change YoY Change QoQ
Digital DAU Georgia 421 384 384 10% 10%
Digital MAU Georgia 921 874 801 15% 5%
Digital DAU/MAU Georgia 46% 44% 48% -2 pp 2 pp
Digital DAU Group 1,718 1,436 1,389 24% 20%
Digital MAU Group 5,207 4,519 3,776 38% 15%
Digital DAU/MAU Group 33% 32% 37% -4 pp 1 pp
Uzbekistan - key highlights
In thousands of GEL Dec'23 Sep'23 Dec'22 Change YoY Change QoQ
Gross loans 796,930 632,013 347,695 129.2% 26.1%
Customer accounts 581,483 515,586 330,976 75.7% 12.8%
4Q'23 3Q'23 Change QoQ FY'23
Profit for the period (GEL, thousands) 20,433 13,684 49.3% 59,329
ROE 29.7% 23.4% 6.3 pp 26.0%
TNET - digital lifestyle platform in Georgia
In millions 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ FY'23 FY'22 Change YoY
Gross merchandise value (GMV, GEL) 36.4 44.8 31.8 14.5% -18.8% 164.4 103.2 59.3%
Number of transactions 4.1 3.7 3.0 36.7% 10.8% 15.4 11.8 30.5%
Letter from the Chief Executive Officer 1 (#_ftn1)
I am delighted to report that the fourth quarter of 2023 marked another
successful quarter for TBC, rounding off what has been an excellent full-year
performance. In 4Q, our profit of GEL 291 million was up 30% year-on-year,
with 25.2% ROE (or down by 14% year-on-year adjusted for the one-off tax
charge in 4Q 2022). For FY 2023, our profit reached a record GEL 1,140
million, a 14% year-on-year increase (or 2% year-on-year on an adjusted
basis), with a corresponding ROE of 26.5%.
As a result, I am very pleased to report that the Board has recommended a
final dividend per share of GEL 4.67, which brings the full year dividend per
share to GEL 7.22, an increase of 32% year-on-year. This represents a dividend
payout ratio for 2023 of 35%, up from 30% in 2022. This dividend reflects that
as a business we strive to invest in new value accretive growth opportunities
whilst also returning capital to our shareholders.
While the geopolitical backdrop has remained difficult, the final quarter
brought some very positive news for Georgia, with the EU's decision in
mid-December to grant candidate status. Much work remains to be done, but this
represents a massive step for Georgia in its long-term aim of closer
integration with the EU. All Georgians can be rightly proud to have achieved
this recognition.
Economic growth remains robust
On the economic front, 2023 was a year of normalisation in Georgia, with real
GDP growth of 7.5% on the back of still strong net FX inflows. The GEL has
stabilised and is now more aligned with its long-term trend, while inflation
is already undershooting the NBG's target, enabling a gradual easing cycle
towards a neutral monetary policy stance. Importantly, substantial
international reserves and fiscal buffers have been accumulated, strengthening
the economic foundations in case of any unwanted shocks.
Economic activity was also strong in Uzbekistan with 6.5% real GDP growth in
the fourth quarter and 6.0% in 2023. Moreover, inflation has slowed to 8.8%,
down from 12.3% a year ago. As inflation declines, this may prove supportive
for UZS exchange rate dynamics going forward.
Strong financial and operating performance continued in 4Q 2023
Turning to our operating performance, the final quarter saw a continuation of
the strong revenue trends we have seen throughout the year. In 4Q 2023, our
operating income reached GEL 639 million, up 6% year-on-year, despite the
abnormally high FX revenues we received in 4Q 2022. Net interest income rose
by 24% year-on-year, supported by net interest margin increasing by 40 bps
year-on-year to 6.7% in 4Q 2023. Additionally, net fee and commission income
increased by 16% year-on-year. Our costs rose by 27% year-on-year in 4Q 2023
primarily due to robust growth of the business in the final quarter and
performance-related remuneration in recognition of the year's strong operating
performance.
Our customer base continues to increase, with our digital MAU reaching 5.2
million at the Group level by end 2023, up by 1.4 million customers in the
past 12 months. Our DAU/MAU ratio stood at 33% as more of our customers engage
with us on a daily basis, while the Georgian business digital DAU/MAU ratio
stood at 46%.
Credit growth remains robust. Our Group's gross loan book increased by 21%
year-on-year as of 31 December 2023 on a constant currency basis, while our
asset quality remained healthy in 4Q 2023, translating into 0.8% cost of risk,
up by 20bps year-on-year, with the share of NPLs just 2.0%. On the funding
side, our Group's customer deposits increased by 13% year-on-year on a
constant currency basis.
Our financial strength in terms of liquidity and capital positions remains
very strong. As of 31 December 2023, our CET1, Tier 1 and Total Capital ratios
for the Georgian bank stood at 17.4%, 19.6% and 22.1%, respectively, and
remained comfortably above the minimum regulatory requirements by 3.1 pp, 3.0
pp and 2.3 pp, respectively. At the same time, we continue to operate with a
high liquidity buffer, with our net stable funding (NSFR)(2) and liquidity
coverage (LCR)(2) ratios standing at 120% and 115%, respectively.
Above 25% ROE in Georgia in 2023 combined with dynamic growth in Uzbekistan
As for the core elements of our business, Georgia continues to deliver
excellent profitability, with 24.7% ROE in 4Q 2023 and 25.5% for FY 2023. On
the balance sheet side, gross loans increased by 19% year-on-year on a
constant currency basis.
I am also pleased to announce that our digital financial services businesses
in Uzbekistan delivered another quarter of dynamic growth and improving
profitability. Profit in 4Q 2023 amounted to GEL 20 million, while the profit
for the full year totalled GEL 59 million, or 5% of the Group's total profit,
with 26.0% ROE. As of the end of 2023, TBC UZ's retail loans amounted to GEL
797 million, up by 129% year-on-year, giving us an unsecured consumer / micro
loan market share 2 (#_ftn2) of 14%, and accounting for 10% of the Group's
total retail loans. At the same time, retail deposits reached GEL 581 million,
up by 76% year-on-year, accounting for 3.0% retail deposit market share(2).
In 2023, our digital lifestyle ecosystem, TNET, continued to deliver good
growth, with GEL 164 million gross merchandise value (GMV) for the full year,
up by 59% year-on-year, driven by strong progress in the lifestyle and
e-commerce verticals.
Finally, I would like to express my gratitude to all our shareholders for
their ongoing support as we work towards achieving our strategic goals in the
coming years. We have much to be proud of for our achievements in 2023, but we
are already working hard to make 2024 an even more successful year for TBC and
its stakeholders.
Economic Overview
Georgia
Economic growth remains robust
Even as growth normalises, Georgia's economic activity remained strong in 4Q
2023 with 6.8% real GDP growth YoY bringing the full year 2023 growth to 7.5%.
External sector - normalisation of inflows
The negative impact of lower international commodity prices on both exports
and imports noticeably affected external sector activity in 4Q and full year
2023. Specifically, exports and imports denominated in US dollars decreased by
-0.3% and -2.7% YoY in 4Q which caused their growth for the full year to
moderate to 9.1% and 14.0%, respectively. Importantly, these commodity price
dynamics particularly affected domestic commodity exports, while re-exports
performed strongly. At the same time, the notable increase of the share of IT
services in Georgian exports continued, with a major driver being the arrival
of migrants in 2022.
Given the high base effect caused by elevated immigration in 2022, tourism
inflows decreased by 12.6% YoY in 4Q 2023 as migrants are gradually being
counted as residents by the NBG and hence being excluded from the tourism
sector, while growth for the full year was 17.3%. At the same time, the share
of conventional tourism in total inflows has increased recently as spending
excluding visitors from Russia, Belarus and Ukraine increased by 38.2% YoY.
Therefore, while the migration peak has likely passed, conventional tourism
inflows have at least had a balancing impact. Also, despite decreasing notably
in 4Q, remittances also maintained a positive momentum throughout the year
after adjustment for Russia, increasing by 27.9% 3 (#_ftn3) YoY. A high base
effect combined with a significant decline in debt instruments and lower
reinvestments drove a 22.3% annual reduction in FDIs to Georgia in 9M 2023.
Neverthless, taking the record high level in 2022 into account, foreign direct
investments in 2023 also appear solid.
Fiscal consolidation under way
It is important to highlight that the strong recent economic growth is not a
result of fiscal stimulus. In fact, fiscal consolidation is under way. After
hitting 9.2% of GDP in 2020 and a lower, but still large, level of 6.0% in
2021, the budget deficit 4 (#_ftn4) stood at 3.0% in 2022 and 2.8% in 2023.
Credit growth has accelerated
As of December 2023, bank credit increased by 17.0% YoY, against 14.8% growth
at the end of 3Q 2023 and 12.1% in December 2022, at constant exchange
rates 5 (#_ftn5) . At the same time, as inflation remained stably low, the
YoY growth in real credit increased from 14.1% in September to 16.5% in
December 2023.
Low inflation enables monetary policy easing
As a result of a broadly stable GEL and sustained disinflationary pass-through
from international markets, CPI inflation stabilised well below the NBG target
of 3%, standing at 0.4% YoY in December. Domestic and service inflation
measures also normalised around the target. Due to low inflation, the NBG
delivered the year's fourth rate cut of 50 basis points in December, reducing
the monetary policy rate (MPR) to 9.5% (and it has since been cut by a further
50 bps to 9.0% in January 2024).
Despite low inflation, a reduced MPR and seasonal depreciation expectations,
improved net inflows alongside NBG interventions helped the GEL to remain
stable relative to the USD throughout the fourth quarter, after some
volatility during the previous quarters, driven by the normalisation of
foreign currency inflows. Throughout the year, NBG purchased USD 1,449 million
and sold USD 169 million. The USD/GEL stood at 2.69 at the end of December,
almost unchanged from 2.68 USD in September 2023 and 2.7 USD at the end of
December 2022.
Uzbekistan
Uzbekistan also demonstrated robust economic activity with 6.5% 6 (#_ftn6)
growth in the fourth quarter and 6.0% for the full year 2023. External trade
was strong as exports of goods increased by 28.7% and imports by 33.3% YoY in
4Q, and by 25.4% and 26.3%(6) for the full year 2023, respectively. Retail
loan growth was 47.2% YoY in 2023, with mortgage credit expanding by 25.2% and
non-mortgage by 66.0% 7 (#_ftn7) . Annual inflation decreased slightly from
9.2% in September to 8.8% in December, with a more pronounced deceleration
evident when compared to 12.3% in December 2022(7). The CBU kept its monetary
policy rate unchanged at 14.0% in the fourth quarter, delivering only one, 100
basis point rate cut throughout 2023 in March. The UZS stood at 12,339
relative to the USD at the end of December 2023(7), depreciating by 10%
compared to December 2022, while the REER (real effective exchange rate)
remained broadly stable.
Economic outlook remains supportive
After two successive years of double-digit growth in Georgia, economic
activity moderated somewhat but remained strong in 2023 at 7.5%. Further
normalisation is expected with Georgia's real GDP increasing by 5.6% in 2024
and 5.4% in 2025, according to TBC Capital projections, while the baseline for
Uzbekistan stands at around 5.5% for the next couple of years.
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 2023
This statement provides a summary of the business and financial trends for 4Q
2023 for TBC Bank Group plc and its subsidiaries. The financial information
and trends are unaudited.
Total assets and total liabilities for 31-Dec-2022 were restated due to
replacement of IFRS 4 with IFRS 17. For more details, please refer to appendix
8.
Please note that there might be slight differences in previous periods'
figures due to rounding.
Net Interest Income
In 4Q 2023, net interest income amounted to GEL 441.7 million, up by 23.6% and
3.2% on a YoY and QoQ basis, respectively.
The YoY rise in interest income of GEL 165.4 million, or 25.7%, was mostly
attributable to an increase in interest income from loans related to a rise in
the respective yield by 0.6 pp, as well as an increase in the loan portfolio
of GEL 3,868.7 million, or 21.3%.
The QoQ increase in interest income of GEL 56.8 million, or 7.5%, was mainly
related to an increase in interest income from loans on the back of growth in
the loan portfolio of GEL 1,708.5 million, or 8.4%, as well as slight growth
in loan yields by 0.1 pp.
Interest expense increased by GEL 81.2 million, or 28.2%, on a YoY basis,
mainly related to an increase in the deposit portfolio of GEL 2,339.0 million,
or 13.0%, and a 0.8 pp growth in deposit costs.
On a QoQ basis, interest expense increased by GEL 43.0 million, or 13.2%,
primarily driven by an increase in the deposit portfolio of GEL 1,653.1
million, or 8.8%, and a 0.2 pp growth in deposit rates.
In 4Q 2023, our NIM stood at 6.7%, up by 0.4 pp and down by 0.2 pp on a YoY
and QoQ basis, respectively.
In thousands of GEL 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Interest income 810,428 753,658 644,981 25.7% 7.5%
Interest expense* (368,693) (325,724) (287,535) 28.2% 13.2%
Net interest income 441,735 427,934 357,446 23.6% 3.2%
NIM 6.7% 6.9% 6.3% 0.4 pp -0.2 pp
* Interest expense includes net interest gains from currency swaps
Non-Interest Income
In 4Q 2023, our net fee and commission income increased by 15.5% YoY and
increased by 5.7% on a QoQ basis. The YoY increase was mainly related to
increased payments transactions. In 4Q 2023, our Uzbek business contributed
19% to the Group's net fee & commission income.
In 4Q 2023, net gains from currency operations were down by 50.8% on a YoY
basis, due to abnormally high FX revenues in 4Q 2022, while they increased by
1.9% on a QoQ basis.
In thousands of GEL 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Non-interest income
Net fee and commission income 110,099 104,152 95,332 15.5% 5.7%
Net gains from currency derivatives, foreign currency operations and 68,228 66,968 138,777 -50.8% 1.9%
translation
Net insurance income 9,090 9,798 8,218 10.6% -7.2%
Other operating income 10,124 6,367 4,459 NMF 59.0%
Total non-interest income 197,541 187,285 246,786 -20.0% 5.5%
Credit Loss Allowance
Credit loss allowance for loans in 4Q 2023 amounted to GEL 40.6 million, while
cost of risk stood at 0.8%. The increase in credit loss allowance for loans
was mainly driven by strong loan book growth as well as normalisation of CoR.
In thousands of GEL 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Credit loss allowance for loans to customers (40,640) (42,595) (27,002) 50.5% -4.6%
Credit loss allowance for other transactions (6,839) (3,564) (6,052) 13.0% 91.9%
Total credit loss allowance (47,479) (46,159) (33,054) 43.6% 2.9%
Operating income after expected credit losses and non-financial asset 591,797 569,060 571,178 3.6% 4.0%
impairment losses
Cost of risk 0.8% 0.9% 0.6% 0.2 pp -0.1 pp
Operating Expenses
In 4Q 2023, our operating expenses rose by 26.9% and 16.7% on a YoY and QoQ
basis, respectively. The YoY increase was mainly driven by overall business
growth, while the QoQ increase was related to the seasonally high costs in the
fourth quarter of 2023.
In thousands of GEL 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Operating expenses
Staff costs (139,766) (121,056) (103,764) 34.7% 15.5%
Allowance of provision for liabilities and charges - (34) (140) NMF NMF
Depreciation and amortisation (28,741) (29,286) (27,181) 5.7% -1.9%
Administrative and other operating expenses (85,993) (67,711) (69,410) 23.9% 27.0%
Total operating expenses (254,500) (218,087) (200,495) 26.9% 16.7%
Cost to income 39.8% 35.4% 33.2% 6.6 pp 4.4 pp
Georgian financial services' cost to income 35.4% 31.5% 29.7% 5.7 pp 3.9 pp
For the definition of the Georgian financial services, please refer to
appendix 4.
Profit
Our profit increased by 30.2% and decreased by 3.0% on a YoY and QoQ basis,
respectively, and amounted to GEL 291.4 million. During the quarter, our Uzbek
operations contributed GEL 20.4 million or 7% of the Group's profit.
Income tax expense decreased on a YoY basis, driven by the one-off tax charge
in 4Q 2022, due to changes in the Georgian taxation model.
As a result, in 4Q 2023 our ROE stood at 25.2%, while our ROA reached 3.7%.
In thousands of GEL 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Profit before tax 337,297 350,973 370,683 -9.0% -3.9%
Income tax expense (45,856) (50,485) (146,909) -68.8% -9.2%
Profit for the period 291,441 300,488 223,774 30.2% -3.0%
ROE 25.2% 27.6% 22.3% 2.9 pp -2.4 pp
Georgian financial services' ROE 24.7% 26.4% 21.0% 3.7 pp -1.7 pp
ROA 3.7% 4.1% 3.1% 0.6 pp -0.4 pp
Georgian financial services' ROA 3.8% 4.2% 3.3% 0.5 pp -0.4 pp
Funding and Liquidity
As of 31 December 2023, the total liquidity coverage ratio (LCR), as defined
by the NBG, was 115.3%, above the 100% limit, while the LCR in GEL and foreign
currency (FC) stood at 109.8% and 120.1%, accordingly, above the respective
limits of 75% and 100%.
Over the same period, the net stable funding ratio (NSFR), as defined by the
NBG, stood at 119.9%, compared to the regulatory limit of 100%.
Dec'23 Sep'23 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 119.9% 124.1% -4.2 pp
Net loans to deposits + IFI funding 96.1% 96.9% -0.8 pp
Leverage (Times) 6.8x 6.7x 0.1x
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 115.3% 114.1% 1.2 pp
LCR in GEL, as defined by the NBG 109.8% 105.7% 4.1 pp
LCR in FC, as defined by the NBG 120.1% 121.0% -0.9 pp
Regulatory Capital for Georgian Bank
As of 31 December 2023, our capital ratios remained at a strong level and as a
result, our CET1, Tier 1 and Total Capital ratios stood at 17.4%, 19.6% and
22.1%, respectively, above the minimum regulatory requirements by 3.1 pp, 3.0
pp and 2.3 pp, accordingly.
The QoQ decreases in all CET1, Tier 1 and Total capital adequacy ratios were
largely driven by high portfolio growth and annual operational RWA growth.
In thousands of GEL Dec'23 Sep'23 Change QoQ
CET 1 Capital 4,235,033 3,966,901 6.8%
Tier 1 Capital 4,772,913 4,502,561 6.0%
Total Capital 5,374,301 5,058,696 6.2%
Total Risk-weighted Assets 24,336,690 22,668,335 7.4%
Minimum CET 1 ratio 14.3% 14.4% -0.1 pp
CET 1 Capital adequacy ratio 17.4% 17.5% -0.1 pp
Minimum Tier 1 ratio 16.6% 16.8% -0.2 pp
Tier 1 Capital adequacy ratio 19.6% 19.9% -0.3 pp
Minimum total capital adequacy ratio 19.8% 19.9% -0.1 pp
Total Capital adequacy ratio 22.1% 22.3% -0.2 pp
Loan Portfolio
As of 31 December 2023, the gross loan portfolio reached GEL 22,073.7 million,
up by 8.4% QoQ, or by 7.4% on a constant currency basis.
In 4Q 2023, our Georgian financial services loan portfolio increased by 7.8%
on a QoQ basis and reached GEL 21,257.7 million, with 6.8% growth on a
constant currency basis. Over the same period, our Uzbek portfolio increased
by 26.1% and stood at GEL 796.9 million, which translated into growth of 27.3%
on a constant currency basis.
In thousands of GEL Dec'23 Sep'23 Change QoQ
Gross loans and advances to customers
Georgian financial services (Georgia FS)* 21,257,692 19,715,795 7.8%
Retail Georgia 7,513,229 7,131,727 5.3%
GEL 5,000,607 4,716,516 6.0%
FC 2,512,622 2,415,211 4.0%
CIB Georgia 8,283,723 7,385,494 12.2%
GEL 3,061,811 2,598,832 17.8%
FC 5,221,912 4,786,662 9.1%
MSME Georgia 5,480,822 5,203,680 5.3%
GEL 2,868,942 2,747,953 4.4%
FC 2,611,880 2,455,727 6.4%
Uzbekistan 796,930 632,013 26.1%
UZS 796,930 632,013 26.1%
Total gross loans and advances to customers** 22,073,679 20,365,135 8.4%
* Georgian FS includes sub-segment eliminations
** Total gross loans and advances to customers include Azerbaijan loan
portfolio
4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Loan yields 12.7% 12.6% 12.1% 0.6 pp 0.1 pp
GEL 14.6% 14.8% 15.1% -0.5 pp -0.2 pp
FC 8.7% 8.6% 7.7% 1.0 pp 0.1 pp
UZS 41.7% 41.9% 42.6% -0.9 pp -0.2 pp
Georgia FS 11.7% 11.7% 11.6% 0.1 pp 0.0 pp
GEL 14.6% 14.8% 15.1% -0.5 pp -0.2 pp
FC 8.7% 8.5% 7.7% 1.0 pp 0.2 pp
Uzbekistan 41.7% 41.9% 42.6% -0.9 pp -0.2 pp
UZS 41.7% 41.9% 42.6% -0.9 pp -0.2 pp
Total loan yields* 12.7% 12.6% 12.1% 0.6 pp 0.1 pp
* Total loans yields include Azerbaijan
Loan Portfolio Quality
Our PAR 90 to gross loans ratios improved for both our Georgian and Uzbekistan
in 4Q 2023. The decrease in PAR ratio was mainly driven by an overall
improvement in portfolio quality. Over the same period, our NPL ratio remained
stable.
PAR 90 Dec'23 Sep'23 Change QoQ
Georgia FS* 1.1% 1.2% -0.1 pp
Retail Georgia 0.8% 0.9% -0.1 pp
CIB Georgia 0.7% 0.5% 0.2 pp
MSME Georgia 2.2% 2.5% -0.3 pp
Uzbekistan 1.9% 2.1% -0.2 pp
Total PAR 90** 1.1% 1.2% -0.1 pp
* Georgian FS includes sub-segment eliminations
** Total PAR 90 includes Azerbaijan
In thousands of GEL Dec'23 Sep'23 Change QoQ
Non-performing Loans (NPL)
Georgia FS* 425,061 399,230 6.5%
Retail Georgia 127,102 129,162 -1.6%
CIB Georgia 114,130 94,940 20.2%
MSME Georgia 183,829 175,128 5.0%
Uzbekistan 15,006 13,584 10.5%
Total non-performing loans** 440,750 413,520 6.6%
* Georgian FS includes sub-segment eliminations
** Total non-performing loans include Azerbaijan NPLs
NPL to gross loans Dec'23 Sep'23 Change QoQ
Georgia FS* 2.0% 2.0% 0.0 pp
Retail Georgia 1.7% 1.8% -0.1 pp
CIB Georgia 1.4% 1.3% 0.1 pp
MSME Georgia 3.4% 3.4% 0.0 pp
Uzbekistan 1.9% 2.1% -0.2 pp
Total NPL to gross loans** 2.0% 2.0% 0.0 pp
* Georgian FS includes sub-segment eliminations
** Total NPL to gross loans include Azerbaijan NPLs
Dec'23 Sep'23
NPL Coverage Provision Coverage Total Coverage*** Provision Coverage Total Coverage***
Georgia FS* 73.4% 142.2% 82.5% 148.6%
Retail Georgia 120.4% 179.5% 136.0% 189.2%
CIB Georgia 46.9% 110.6% 52.0% 111.4%
MSME Georgia 57.5% 136.0% 59.5% 138.8%
Uzbekistan 222.3% 222.3% 199.9% 199.9%
Total NPL coverage** 79.8% 146.3% 87.6% 151.6%
* Georgian FS includes sub-segment eliminations
** Total NPL coverage include Azerbaijan loans coverage
** Total NPL coverage ratio includes provision and collateral coverage
Cost of Risk
Given strong asset quality trends, in 4Q 2023 our cost of risk (CoR) remained
within the expected range and stood at 0.8%.
In 4Q 2023, due to strong asset quality dynamics, the CoR for our Georgia FS
remained broadly stable on both a YoY and QoQ basis and amounted to 0.6%. Over
the same period, CoR for our Uzbek business decreased by 2.7 pp and 2.4 pp on
YoY and QoQ basis, respectively and amounted to 4.9%. The decrease in
Uzbekistan was mainly driven by improved portfolio quality.
Cost of risk (CoR) 4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Georgia FS* 0.6% 0.7% 0.5% 0.1 pp -0.1 pp
Retail Georgia 0.1% 1.1% 0.5% -0.4 pp -1.0 pp
CIB Georgia 0.3% 0.0% 0.1% 0.2 pp 0.3 pp
MSME Georgia 1.8% 0.9% 0.9% 0.9 pp 0.9 pp
Uzbekistan 4.9% 7.3% 7.6% -2.7 pp -2.4 pp
Total cost of risk** 0.8% 0.9% 0.6% 0.2 pp -0.1 pp
* Georgian FS includes sub-segment eliminations
** Total cost of risk includes Azerbaijan CoR
Deposit Portfolio
As of the end of December 2023, the total deposit portfolio amounted to GEL
20,375.5 million, up by 8.8% QoQ or by 8.2% on a constant currency basis.
In 4Q 2023, the Georgian financial services deposit portfolio increased by
8.7% on a QoQ basis and reached GEL 19,900.3 million, up by 8.1% on a constant
currency basis. Over the same period, our Uzbek deposit portfolio increased by
12.8% and stood at GEL 581.5 million, which translated into growth of 13.9% on
a constant currency basis.
In thousands of GEL Dec'23 Sep'23 Change QoQ
Customer accounts
Georgia FS* 19,900,342 18,300,484 8.7%
Retail Georgia 7,469,587 7,097,710 5.2%
GEL 2,532,317 2,224,730 13.8%
FC 4,937,270 4,872,980 1.3%
CIB Georgia 10,200,321 8,973,868 13.7%
GEL 6,105,284 5,015,787 21.7%
FC 4,095,037 3,958,081 3.5%
MSME Georgia 1,900,459 1,733,864 9.6%
GEL 1,052,675 943,887 11.5%
FC 847,784 789,977 7.3%
MOF 515,079 611,017 -15.7%
GEL 515,079 611,017 -15.7%
Uzbekistan 581,483 515,586 12.8%
FC 1,864 1,640 13.7%
UZS 579,619 513,946 12.8%
Total customer accounts** 20,375,498 18,722,415 8.8%
* Georgian FS includes sub-segment eliminations
** Total customer accounts are adjusted for eliminations
4Q'23 3Q'23 4Q'22 Change YoY Change QoQ
Deposit rates 5.1% 4.9% 4.3% 0.8 pp 0.2 pp
GEL 8.1% 8.2% 7.9% 0.2 pp -0.1 pp
FC 1.1% 0.9% 0.8% 0.3 pp 0.2 pp
UZS 25.0% 24.4% 26.9% -1.9 pp 0.6 pp
Georgian financial services 4.5% 4.4% 3.9% 0.6 pp 0.1 pp
GEL 8.1% 8.2% 7.9% 0.2 pp -0.1 pp
FC 1.1% 0.9% 0.8% 0.3 pp 0.2 pp
Uzbek business 24.9% 24.4% 26.9% -2.0 pp 0.5 pp
FC 3.8% 4.1% 0.0% 3.8 pp -0.3 pp
UZS 25.0% 24.4% 26.9% -1.9 pp 0.6 pp
Total deposit rates* 5.1% 4.9% 4.3% 0.8 pp 0.2 pp
* Total deposits rates include MOF deposits
Preliminary Unaudited Consolidated Financial Results Overview for FY 2023
This statement provides a summary of the business and financial trends for FY
2023 for TBC Bank Group plc and its subsidiaries. The financial information
and trends are unaudited.
Total assets and total liabilities for 31-Dec-2022 were restated due to
replacement of IFRS 4 with IFRS 17. For more details, please refer to appendix
8.
Please also note that there might be slight differences in previous periods'
figures due to rounding.
Net Interest Income
In FY 2023, net interest income amounted to GEL 1,635.8 million, up by 26.8%
on a YoY basis.
The YoY rise in interest income by GEL 617.2 million, or 26.5%, was mostly
attributable to an increase in interest income from loans related to a GEL
3,868.7 million, or 21.3%, increase in the respective portfolio, as well as a
1.0 pp rise in the respective yield.
YoY interest expense increased by GEL 271.5 million, or 26.1%, mainly related
to an increase in the deposit portfolio of GEL 2,339.0 million, or 13.0%, and
a 1.1 pp growth in deposit cost.
In FY 2023, our NIM stood at 6.7%, up by 0.7 pp on a YoY basis.
In thousands of GEL FY'23 FY'22 Change YoY
Interest income 2,948,056 2,330,838 26.5%
Interest expense* (1,312,258) (1,040,786) 26.1%
Net interest income 1,635,798 1,290,052 26.8%
NIM 6.7% 6.0% 0.7 pp
* Interest expense includes net interest gains from currency swaps
Non-Interest Income
Total non-interest income amounted to GEL 737.7 million in FY 2023, decreasing
by 5.5% YoY, primarily due to a normalisation of FX revenues, offset by
significant growth in fee and commission income.
In 2023 our net fee and commission income increased by 27.8% on a YoY basis,
related to increased payments transactions in both Georgia and Uzbekistan. Our
Uzbek business contributed 18% of the Group's net fee and commission income.
In thousands of GEL FY'23 FY'22 Change YoY
Non-interest income
Net fee and commission income 412,325 322,666 27.8%
Net gains from currency derivatives, foreign currency operations and 256,924 398,866 -35.6%
translation
Net insurance income 31,290 29,203 7.1%
Other operating income 37,163 29,977 24.0%
Total non-interest income 737,702 780,712 -5.5%
Credit Loss Allowance
Credit loss allowance for loans in FY 2023 amounted to GEL 162.7 million,
which translated into 0.8% cost of risk. The increase in credit loss allowance
for loans was mainly driven by strong loan book growth as well as
normalisation of CoR.
In thousands of GEL FY'23 FY'22 Change YoY
Credit loss allowance for loans to customers (162,659) (118,943) 36.8%
Credit loss allowance for other transactions (18,081) (13,957) 29.5%
Total credit loss allowance (180,740) (132,900) 36.0%
Operating income after expected credit and non-financial asset impairment 2,192,760 1,937,864 13.2%
losses
Cost of risk 0.8% 0.7% 0.1 pp
Operating Expenses
In FY 2023, our operating expenses rose by 24.2% on a YoY basis. This growth
was mainly driven by overall business growth, both in Georgia and Uzbekistan.
In thousands of GEL FY'23 FY'22 Change YoY
Operating expenses
Staff costs (472,972) (374,816) 26.2%
Allowance of provision for liabilities and charges (155) (2,200) -93.0%
Depreciation and amortisation (115,975) (101,197) 14.6%
Administrative and other operating expenses (269,825) (213,107) 26.6%
Total operating expenses (858,927) (691,320) 24.2%
Cost to income 36.2% 33.4% 2.8 pp
Georgian financial services' cost to income 31.9% 28.9% 3.0 pp
Profit
In FY 2023, we delivered strong profitability and generated GEL 1,140.0
million in profit, up by 13.6% YoY, driven by strong core revenue growth and
asset quality trends. Our Uzbek operations contributed GEL 59.3 million or 5%
of the Group's 2023 profit.
The YoY decrease in income tax expense is mainly driven by a one-off tax
charge in 2022, due to changes in the Georgian taxation model.
As a result, our ROE and ROA for full year 2023 were 26.5% and 3.9%,
respectively.
In thousands of GEL FY'23 FY'22 Change YoY
Profit before tax 1,333,833 1,246,544 7.0%
Income tax expense (193,858) (243,205) -20.3%
Profit for the period 1,139,975 1,003,339 13.6%
ROE 26.5% 27.0% -0.5 pp
Georgian financial services' ROE 25.5% 26.0% -0.5 pp
ROA 3.9% 3.8% 0.1 pp
Georgian financial services' ROA 4.0% 4.1% -0.1 pp
Loan Portfolio
As of 31 December 2023, the gross loan portfolio reached GEL 22,073.7 million,
up by 21.3% YoY or 21.2% on a constant currency basis.
By the end of December 2023, the Georgian financial services' loan portfolio
increased by 19.2% on a YoY basis and reached GEL 21,257.7 million, with 18.6%
growth on a constant currency basis. Over the same period, our Uzbek loan
portfolio more than doubled, reaching GEL 796.9 million.
In thousands of GEL Dec'23 Dec'22 Change YoY
Gross loans and advances to customers
Georgian financial services (Georgia FS)* 21,257,692 17,839,697 19.2%
Retail Georgia 7,513,229 6,753,242 11.3%
GEL 5,000,607 4,374,224 14.3%
FC 2,512,622 2,379,018 5.6%
CIB Georgia 8,283,723 6,301,961 31.4%
GEL 3,061,811 2,455,229 24.7%
FC 5,221,912 3,846,732 35.7%
MSME Georgia 5,480,822 4,803,986 14.1%
GEL 2,868,942 2,627,760 9.2%
FC 2,611,880 2,176,226 20.0%
Uzbekistan 796,930 347,695 NMF
UZS 796,930 347,695 NMF
Total gross loans and advances to customers** 22,073,679 18,204,971 21.3%
* Georgian FS includes sub-segment eliminations
** Total gross loans and advances to customers include Azerbaijan loan
portfolio
FY'23 FY'22 Change YoY
Loan yields 12.6% 11.6% 1.0 pp
GEL 14.9% 15.5% -0.6 pp
FC 8.5% 7.0% 1.5 pp
UZS 42.3% 42.7% -0.4 pp
Georgia FS 11.8% 11.2% 0.6 pp
GEL 14.9% 15.5% -0.6 pp
FC 8.5% 7.0% 1.5 pp
Uzbekistan 42.3% 42.7% -0.4 pp
UZS 42.3% 42.7% -0.4 pp
Total loan yields* 12.6% 11.6% 1.0 pp
* Total loans yields include Azerbaijan
Loan Portfolio Quality
As of 31 December 2023, our asset quality metrics remained strong with NPL to
gross loans at 2.0%, driven by strong portfolio performance in both Georgia
and Uzbekistan. Over the same period our PAR 90 remained broadly stable for
both Georgia and Uzbekistan.
Par 90 Dec'23 Dec'22 Change YoY
Georgia FS* 1.1% 1.2% -0.1 pp
Retail Georgia 0.8% 1.2% -0.4 pp
CIB Georgia 0.7% 0.4% 0.3 pp
MSME Georgia 2.2% 2.2% 0.0 pp
Uzbekistan 1.9% 2.0% -0.1 pp
Total PAR 90** 1.1% 1.2% -0.1 pp
* Georgian FS includes sub-segment eliminations
** Total PAR 90 includes Azerbaijan
In thousands of GEL Dec'23 Dec'22 Change YoY
Non-performing Loans (NPL)
Georgia FS* 425,061 388,585 9.4%
Retail Georgia 127,102 146,167 -13.0%
CIB Georgia 114,130 80,307 42.1%
MSME Georgia 183,829 162,111 13.4%
Uzbekistan 15,006 6,794 120.9%
Total non-performing loans** 440,750 397,444 10.9%
* Georgian FS includes sub-segment eliminations
** Total non-performing loans include Azerbaijan NPLs
NPL to gross loans Dec'23 Dec'22 Change YoY
Georgia FS* 2.0% 2.2% -0.2 pp
Retail Georgia 1.7% 2.2% -0.5 pp
CIB Georgia 1.4% 1.3% 0.1 pp
MSME Georgia 3.4% 3.4% 0.0 pp
Uzbekistan 1.9% 2.0% -0.1 pp
Total NPL to gross loans** 2.0% 2.2% -0.2 pp
* Georgian FS includes sub-segment eliminations
** Total NPL to gross loans include Azerbaijan NPLs
Dec'23 Dec'22
NPL Coverage Provision Coverage Total Coverage*** Provision Coverage Total Coverage***
Georgia FS* 73.4% 142.2% 91.0% 153.2%
Retail Georgia 120.4% 179.5% 146.6% 190.3%
CIB Georgia 46.9% 110.6% 57.9% 119.9%
MSME Georgia 57.5% 136.0% 57.3% 136.2%
Uzbekistan 222.3% 222.3% 184.0% 184.0%
Total NPL coverage** 79.8% 146.3% 93.7% 155.6%
* Georgian FS includes sub-segment eliminations
** Total NPL coverage include Azerbaijan loans coverage
*** Total NPL coverage ratio includes provision and collateral coverage
Cost of Risk
In FY 2023, our cost of risk (CoR) was within the expected range at 0.8%.
The CoR for our Georgian financial services remained stable YoY and stood at
0.7%, while CoR for our Uzbek business amounted to 6.0%, down by 0.8 pp on YoY
basis, driven by improved portfolio quality.
Cost of risk (CoR) FY'23 FY'22 Change YoY
Georgia FS* 0.7% 0.6% 0.1 pp
Retail Georgia 0.8% 1.4% -0.6 pp
CIB Georgia 0.1% 0.0% 0.1 pp
MSME Georgia 1.4% 0.5% 0.9 pp
Uzbekistan 6.0% 6.8% -0.8 pp
Total cost of risk** 0.8% 0.7% 0.1 pp
* Georgian FS includes sub-segment eliminations
** Total cost of risk includes Azerbaijan CoR
Deposit Portfolio
The total deposit portfolio amounted to GEL 20,375.5 million as of end 2023,
increasing by 13.0% YoY or 13.2% on a constant currency basis.
As of 31 December 2023, the Georgian financial services' portfolio increased
by 11.8% on a YoY basis to GEL 19,900.3 million, with 11.7% growth on a
constant currency basis. Over the same period, our Uzbek portfolio almost
doubled and stood at GEL 581.5 million.
In thousands of GEL Dec'23 Dec'22 Change YoY
Customer accounts
Georgia FS* 19,900,342 17,799,899 11.8%
Retail Georgia 7,469,587 6,536,649 14.3%
GEL 2,532,317 1,905,377 32.9%
FC 4,937,270 4,631,272 6.6%
CIB Georgia 10,200,321 9,249,232 10.3%
GEL 6,105,284 5,136,442 18.9%
FC 4,095,037 4,112,790 -0.4%
MSME Georgia 1,900,459 1,761,342 7.9%
GEL 1,052,675 908,024 15.9%
FC 847,784 853,318 -0.6%
MOF 515,079 412,442 24.9%
GEL 515,079 412,442 24.9%
Uzbekistan 581,483 330,976 75.7%
FC 1,864 1,160 60.7%
UZS 579,619 329,816 75.7%
Total customer accounts** 20,375,498 18,036,533 13.0%
* Georgian FS includes sub-segment eliminations
** Total customer accounts are adjusted for eliminations
FY'23 FY'22 Change YoY
Deposit rates 5.0% 3.9% 1.1 pp
GEL 8.3% 7.7% 0.6 pp
FC 0.9% 0.9% 0.0 pp
UZS 24.9% 24.1% 0.8 pp
Georgian financial services 4.5% 3.6% 0.9 pp
GEL 8.4% 7.7% 0.7 pp
FC 0.9% 0.9% 0.0 pp
Uzbek business 24.9% 24.1% 0.8 pp
FC 4.2% 0.0% 4.2 pp
UZS 24.9% 24.1% 0.8 pp
Total deposit rates* 5.0% 3.9% 1.1 pp
* Total deposit rates include MOF deposits
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. TBC PLC also offers non-financial services via TNET, the largest
digital ecosystem in Georgia. Since 2019, TBC PLC has expanded its operations
into Uzbekistan by operating fast growing retail digital financial services in
the country. 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, together with its subsidiaries, is a leading universal banking group
in Georgia, with a total market share of 39.3% of customer loans and 40.1% of
customer deposits as of 31 December 2023, according to data published by the
National Bank of Georgia on the analytical tool Tableau.
2) Consolidated Financial Statements and Key Ratios 4Q 2023
Consolidated Statement of Financial Position
In thousands of GEL Dec'23 Sep'23
ASSETS
Cash and cash equivalents 3,764,087 2,648,469
Due from other banks 47,941 38,954
Mandatory cash balances with National Bank of Georgia and the Central Bank of 1,577,074 1,904,010
Uzbekistan
Loans and advances to customers 21,722,107 20,003,021
Investment securities measured at fair value through other comprehensive 3,475,461 3,071,046
income
Bonds carried at amortised cost 73,963 65,289
Finance lease receivables 400,411 364,077
Investment properties 15,235 20,629
Investments in associates 4,204 3,940
Current income tax prepayment 435 16,062
Deferred income tax asset 7,400 10,721
Other financial assets 280,268 259,771
Other assets 431,477 449,322
Premises and equipment 513,340 481,867
Right of use assets 120,077 116,262
Intangible assets 471,383 442,989
Goodwill 59,964 59,964
TOTAL ASSETS 32,964,827 29,956,393
LIABILITIES
Due to credit institutions 4,395,182 3,330,925
Customer accounts 20,375,498 18,722,415
Other financial liabilities 358,522 515,000
Current income tax liability 67,945 17,958
Deferred income tax liability 50,957 109,854
Debt Securities in issue 1,426,174 1,432,393
Provision for liabilities and charges 21,060 20,384
Other liabilities 123,218 93,184
Lease liabilities 91,879 88,893
Subordinated debt 868,730 788,116
Redemption liability 365,480 363,871
TOTAL LIABILITIES 28,144,645 25,482,993
EQUITY
Share capital 1,690 1,682
Shares held by trust (75,609) (75,470)
Share premium 295,605 272,930
Retained earnings 4,433,496 4,145,795
Merger reserve 402,862 402,862
Share based payment reserve 23,677 12,672
Fair value reserve for investment securities measured at fair value through 12,345 10,855
other comprehensive income
Cumulative currency translation reserve (44,824) (42,759)
Other reserve (365,513) (363,869)
Equity attributable to owners of the parent 4,683,729 4,364,698
Non-controlling interest 136,453 108,702
TOTAL EQUITY 4,820,182 4,473,400
TOTAL LIABILITIES AND EQUITY 32,964,827 29,956,393
Consolidated Income Statement and Other Comprehensive Income
In thousands of GEL 4Q'23 3Q'23 4Q'22
Interest income 810,428 753,658 644,981
Interest expense (368,693) (325,724) (287,535)
Net interest income 441,735 427,934 357,446
Fee and commission income 192,341 170,479 166,042
Fee and commission expense (82,242) (66,327) (70,710)
Net fee and commission income 110,099 104,152 95,332
Insurance contract revenue 33,665 35,056 29,852
Reinsurance service result 1,161 (3,245) (2,564)
Insurance service claims and expenses incurred (25,736) (22,013) (19,070)
Net insurance income 9,090 9,798 8,218
Net gains from currency derivatives, foreign currency operations and 68,228 66,968 138,777
translation
Net gains from disposal of investment securities measured at fair value 8 1,553 926
through other comprehensive income
Other operating income 10,372 4,443 3,388
Share of profit of associates (256) 371 145
Other operating non-interest income 78,352 73,335 143,236
Credit loss allowance for loans to customers (40,640) (42,595) (27,002)
Credit loss recovery/(allowance) for finance lease receivable 1,129 (3,035) 558
Credit loss (allowance)/recovery for performance guarantees and credit related (612) 644 (1,217)
commitments
Credit loss allowance for other financial assets (4,890) (963) (4,416)
Credit loss allowance for financial assets measured at fair value through (407) (497) (521)
other comprehensive income
Net (impairment)/recovery of non-financial assets (2,059) 287 (456)
Operating income after expected credit and non-financial asset impairment 591,797 569,060 571,178
losses
Staff costs (139,766) (121,056) (103,764)
Depreciation and amortisation (28,741) (29,286) (27,181)
Allowance of provision for liabilities and charges - (34) (140)
Administrative and other operating expenses (85,993) (67,711) (69,410)
Operating expenses (254,500) (218,087) (200,495)
Profit before tax 337,297 350,973 370,683
Income tax expense (45,856) (50,485) (146,909)
Profit for the period 291,441 300,488 223,774
Other comprehensive income, net of tax:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve, net of tax 1,491 (5,607) 12,147
Exchange differences on translation to presentation currency (2,065) (5,955) (17,919)
Net other movements (33) - -
Other comprehensive expense for the period, net of tax (607) (11,562) (5,772)
Total comprehensive income for the period 290,834 288,926 218,002
Profit attributable to:
- Shareholders of TBCG 287,699 299,022 217,756
- Non-controlling interest 3,742 1,466 6,018
Profit for the period 291,441 300,488 223,774
Total comprehensive income is attributable to:
- Shareholders of TBCG 287,092 287,460 211,984
- Non-controlling interest 3,742 1,466 6,018
Total comprehensive income for the period 290,834 288,926 218,002
* Interest expense includes net interest gains from currency swaps
Key Ratios 4Q'23
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'23 3Q'23 4Q'22
Profitability ratios:
ROE(1) 25.2% 27.6% 22.3%
ROA(2) 3.7% 4.1% 3.1%
Cost to income(3) 39.8% 35.4% 33.2%
NIM(4) 6.7% 6.9% 6.3%
Loan yields(5) 12.7% 12.6% 12.1%
Deposit rates(6) 5.1% 4.9% 4.3%
Cost of funding(7) 5.7% 5.4% 5.0%
Asset quality & portfolio concentration:
Cost of risk(9) 0.8% 0.9% 0.6%
PAR 90 to Gross Loans(9) 1.1% 1.2% 1.2%
NPLs to Gross Loans(10) 2.0% 2.0% 2.2%
NPL provision coverage(11) 79.8% 87.6% 93.7%
Total NPL coverage(12) 146.3% 151.6% 155.6%
Credit loss level to Gross Loans(13) 1.6% 1.8% 2.0%
Related Party Loans to Gross Loans(14) 0.1% 0.1% 0.1%
Top 10 Borrowers to Total Portfolio(15) 6.1% 6.0% 5.3%
Top 20 Borrowers to Total Portfolio(16) 9.1% 8.9% 8.3%
Capital & liquidity positions:
Net Loans to Deposits plus IFI Funding(17) 96.1% 96.9% 88.5%
Net Stable Funding Ratio(18) 119.9% 124.1% n/a
Liquidity Coverage Ratio(19) 115.3% 114.1% n/a
Leverage(20) 6.8x 6.7x 7.3x
CET 1 CAR (Basel III)(21) 17.4% 17.5% n/a
Tier 1 CAR (Basel III)(22) 19.6% 19.9% n/a
Total 1 CAR (Basel III)(23) 22.1% 22.3% n/a
For the ratio definitions and exchange rates, please refer to appendix 12.
3) Consolidated Financial Statements and Key Ratios FY 2023
Consolidated Statement of Financial Position
In thousands of GEL Dec'23 Dec'22
ASSETS
Cash and cash equivalents 3,764,087 3,860,813
Due from other banks 47,941 41,854
Mandatory cash balances with National Bank of Georgia and the Central Bank of 1,577,074 2,049,985
Uzbekistan
Loans and advances to customers 21,722,107 17,832,606
Investment securities measured at fair value through other comprehensive 3,475,461 2,885,088
income
Bonds carried at amortised cost 73,963 37,392
Repurchase receivables - 267,495
Finance lease receivables 400,411 312,334
Investment properties 15,235 22,154
Investments in associates 4,204 3,721
Current income tax prepayment 435 430
Deferred income tax asset 7,400 16,705
Other financial assets 280,268 235,963
Other assets 431,477 422,928
Premises and equipment 513,340 442,886
Right of use assets 120,077 112,625
Intangible assets 471,383 383,198
Goodwill 59,964 59,964
TOTAL ASSETS 32,964,827 28,988,141
LIABILITIES
Due to credit institutions 4,395,182 3,940,660
Customer accounts 20,375,498 18,036,533
Other financial liabilities 358,522 294,546
Current income tax liability 67,945 1,647
Deferred income tax liability 50,957 112,877
Debt Securities in issue 1,426,174 1,361,573
Provision for liabilities and charges 21,060 19,908
Other liabilities 123,218 101,736
Lease liabilities 91,879 84,770
Subordinated debt 868,730 590,148
Redemption liability 365,480 477,329
TOTAL LIABILITIES 28,144,645 25,021,727
EQUITY
Share capital 1,690 1,681
Shares held by trust (75,609) (7,900)
Treasury shares - (25,541)
Share premium 295,605 269,938
Retained earnings 4,433,496 3,745,191
Merger reserve 402,862 402,862
Share based payment reserve 23,677 1,090
Fair value reserve for investment securities measured at fair value through 12,345 5,467
other comprehensive income
Cumulative currency translation reserve (44,824) (35,858)
Other reserves (365,513) (477,329)
Equity attributable to owners of the parent 4,683,729 3,879,601
Non-controlling interest 136,453 86,813
TOTAL EQUITY 4,820,182 3,966,414
TOTAL LIABILITIES AND EQUITY 32,964,827 28,988,141
Consolidated Income Statement and Other Comprehensive Income
In thousands of GEL FY'23 FY'22
Interest income 2,948,056 2,330,838
Interest expense* (1,312,258) (1,040,786)
Net interest income 1,635,798 1,290,052
Fee and commission income 676,350 543,099
Fee and commission expense (264,025) (220,433)
Net fee and commission income 412,325 322,666
Insurance contract revenue 129,798 111,597
Reinsurance service result (6,470) (7,783)
Insurance service claims and expenses incurred (92,038) (74,611)
Net insurance income 31,290 29,203
Net gains from currency derivatives, foreign currency operations and 256,924 398,866
translation
Net gains from disposal of investment securities measured at fair value 5,880 5,811
through other comprehensive income
Other operating income 30,626 23,814
Share of profit of associates 657 352
Other operating non-interest income 294,087 428,843
Credit loss allowance for loans to customers (162,659) (118,943)
Credit loss allowance for finance lease receivable (4,038) (720)
Credit loss allowance for performance guarantees and credit related (904) (2,721)
commitments
Credit loss allowance for other financial assets (9,943) (10,155)
Credit loss (allowance)/recovery for financial assets measured at fair value (1,066) 862
through other comprehensive income
Net impairment of non-financial assets (2,130) (1,223)
Operating income after expected credit and non-financial asset impairment 2,192,760 1,937,864
losses
Staff costs (472,972) (374,816)
Depreciation and amortisation (115,975) (101,197)
Allowance of provision for liabilities and charges (155) (2,200)
Administrative and other operating expenses (269,825) (213,107)
Operating expenses (858,927) (691,320)
Profit before tax 1,333,833 1,246,544
Income tax expense (193,858) (243,205)
Profit for the period 1,139,975 1,003,339
Other comprehensive income, net of tax:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve, net of tax 6,878 16,329
Exchange differences on translation to presentation currency (8,966) (26,355)
Net other movements (33) -
Other comprehensive expense for the period, net of tax (2,121) (10,026)
Total comprehensive income for the period 1,137,854 993,313
Profit attributable to:
- Shareholders of TBCG 1,124,180 995,206
- Non-controlling interest 15,795 8,133
Profit for the period 1,139,975 1,003,339
Total comprehensive income is attributable to:
- Shareholders of TBCG 1,122,059 985,180
- Non-controlling interest 15,795 8,133
Total comprehensive income for the period 1,137,854 993,313
* Interest expense includes net interest gains from currency swaps
Key Ratios FY'23
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'23 FY'22
Profitability ratios:
ROE(1) 26.5% 27.0%
ROA(2) 3.9% 3.8%
Cost to income(3) 36.2% 33.4%
NIM(4) 6.7% 6.0%
Loan yields(5) 12.6% 11.6%
Deposit rates(6) 5.0% 3.9%
Cost of funding(7) 5.6% 4.9%
Asset quality & portfolio concentration:
Cost of risk(9) 0.8% 0.7%
PAR 90 to Gross Loans(9) 1.1% 1.2%
NPLs to Gross Loans(10) 2.0% 2.2%
NPL provision coverage(11) 79.8% 93.7%
Total NPL coverage(12) 146.3% 155.6%
Credit loss level to Gross Loans(13) 1.6% 2.0%
Related Party Loans to Gross Loans(14) 0.1% 0.1%
Top 10 Borrowers to Total Portfolio(15) 6.1% 5.3%
Top 20 Borrowers to Total Portfolio(16) 9.1% 8.3%
Capital & liquidity positions:
Net Loans to Deposits plus IFI Funding(17) 96.1% 88.5%
Net Stable Funding Ratio(18) 119.9% n/a
Liquidity Coverage Ratio(19) 115.3% n/a
Leverage(20) 6.8x 7.3x
CET 1 CAR (Basel III)(21) 17.4% n/a
Tier 1 CAR (Basel III)(22) 19.6% n/a
Total 1 CAR (Basel III)(23) 22.1% n/a
For the ratio definitions and exchange rates, please refer to appendix 12.
4) Business Line Definition
According to the updated segment definition starting from 1 January 2023, the
operating segments are defined as follows:
Georgian financial services include JSC TBC Bank with its Georgian
subsidiaries and JSC TBC Insurance with its subsidiary. The Georgia financial
service segment consists of three major business sub-segments, while the
treasury, leasing and insurance businesses are combined into the corporate and
other sub-segments:
· Corporate and investment banking (CIB) - a legal entity/group of
affiliated entities with an annual revenue exceeding GEL 20.0 million or which
has been granted facilities of more than GEL 7.5 million. Some other business
customers may also be assigned to the CIB sub-segment or transferred to the
MSME sub-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 in assets under management (AUM), as well as on a
discretionary basis;
· Retail - non-business individual customers;
· Micro, small and medium enterprises (MSME) - business customers
who are not included in the CIB sub-segment.
Uzbekistan - TBC Bank Uzbekistan with respective subsidiaries and Payme
(Inspired LLC).
Other - includes non-material or non-financial subsidiaries of the group and
intra-group eliminations.
5) Financial Disclosures by Business Lines
Consolidated Statement of Financial Position Dec'23
In thousands of GEL Georgia FS Uzbekistan* Payme TBC UZ Other** Group
ASSETS
Cash and cash equivalents 3,687,618 81,171 1,544 79,735 (4,702) 3,764,087
Due from other banks 47,867 1,344 6,929 1,344 (1,270) 47,941
Mandatory cash balances with National Bank of Georgia and the Central Bank of 1,572,506 4,568 - 4,568 - 1,577,074
Uzbekistan
Loans and advances to customers 20,945,584 763,575 - 763,575 12,948 21,722,107
Investment securities measured at fair value through other comprehensive 3,475,461 - - - - 3,475,461
income
Bonds carried at amortised cost 12,271 61,692 - 61,692 - 73,963
Finance lease receivables 363,303 29,616 - 29,616 7,492 400,411
Investment properties 15,235 - - - - 15,235
Investments in associates 18,817 - - - (14,613) 4,204
Current income tax prepayment 16 - - - 419 435
Deferred income tax asset - 7,005 - 7,005 395 7,400
Other financial assets 286,431 11,930 5,411 7,573 (18,093) 280,268
Other assets 411,050 16,454 5,127 11,327 3,973 431,477
Premises and equipment 491,943 15,741 5,860 9,881 5,656 513,340
Right of use assets 112,613 5,576 1,315 4,261 1,888 120,077
Intangible assets 359,476 31,335 5,648 25,687 80,572 471,383
Goodwill 28,197 1,912 - 1,912 29,855 59,964
TOTAL ASSETS 31,828,388 1,031,919 31,834 1,008,176 104,520 32,964,827
LIABILITIES
Due to credit institutions 4,337,726 105,293 - 105,293 (47,837) 4,395,182
Customer accounts 19,900,341 581,483 - 588,520 (106,326) 20,375,498
Other financial liabilities 328,285 21,617 1,824 19,793 8,620 358,522
Current income tax liability 67,800 - - - 145 67,945
Deferred income tax liability 50,932 - - - 25 50,957
Debt Securities in issue 1,257,347 - - - 168,827 1,426,174
Provision for liabilities and charges 21,060 - - - - 21,060
Other liabilities 101,907 8,726 2,190 7,590 12,585 123,218
Lease liabilities 83,891 6,491 1,491 5,000 1,497 91,879
Subordinated debt 868,730 - - - - 868,730
Redemption liability - - - - 365,480 365,480
TOTAL LIABILITIES 27,018,019 723,610 5,505 726,196 403,016 28,144,645
EQUITY
Share capital 29,148 330,622 1,254 329,368 (358,080) 1,690
Shares held by trust - - - - (75,609) (75,609)
Share premium 521,190 35,723 - 35,723 (261,308) 295,605
Retained earnings 4,324,043 (22,146) 30,077 (52,223) 131,599 4,433,496
Merger reserve - 67 67 - 402,795 402,862
Share based payment reserve (76,554) - - - 100,231 23,677
Fair value reserve for investment securities measured at fair value through 12,345 - - - - 12,345
other comprehensive income
Cumulative currency translation reserve - (35,924) (5,069) (30,855) (8,900) (44,824)
Other reserves - (33) - (33) (365,480) (365,513)
Equity attributable to owners of the parent 4,810,172 308,309 26,329 281,980 (434,752) 4,683,729
Non-controlling interest 197 - - - 136,256 136,453
TOTAL EQUITY 4,810,369 308,309 26,329 281,980 (298,496) 4,820,182
TOTAL LIABILITIES AND EQUITY 31,828,388 1,031,919 31,834 1,008,176 104,520 32,964,827
* Includes intra-group eliminations
** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations
Consolidated Income Statement and Other Comprehensive Income 4Q'23
In thousands of GEL Georgia FS Uzbekistan** Payme TBC UZ Other Group
***
Interest income 726,956 81,460 200 81,454 2,012 810,428
Interest expense* (331,535) (37,905) (87) (38,012) 747 (368,693)
Net interest income 395,421 43,555 113 43,442 2,759 441,735
Fee and commission income 160,918 30,768 21,300 21,276 655 192,341
Fee and commission expense (72,030) (10,100) (2,051) (19,779) (112) (82,242)
Net fee and commission income 88,888 20,668 19,249 1,497 543 110,099
Net insurance income 8,858 - - - 232 9,090
Net gains/(losses) from currency derivatives, foreign currency operations and 71,186 (330) (9) (321) (2,628) 68,228
translation
Net gains from disposal of investment securities measured at fair value 8 - - - - 8
through other comprehensive income
Other operating income 8,398 1,160 1,095 65 814 10,372
Share of loss of associates (256) - - - - (256)
Other operating non-interest income 88,194 830 1,086 (256) (1,582) 87,442
Credit loss (allowance)/recovery for loans to customers (32,107) (8,703) - (8,703) 170 (40,640)
Credit loss recovery/(allowance) for finance lease receivable 1,551 (546) - (546) 124 1,129
Credit loss allowance for performance guarantees and credit related (611) - - - (1) (612)
commitments
Credit loss (allowance)/recovery for other financial assets (4,694) (196) (115) (81) - (4,890)
Credit loss allowance for financial assets measured at fair value through (339) (68) - (68) - (407)
other comprehensive income
Net (recovery)/allowance of non-financial assets (2,360) - - - 301 (2,059)
Operating income after expected credit and non-financial asset impairment 533,943 55,540 20,333 35,285 2,314 591,797
losses
Staff costs (115,887) (11,215) (2,645) (8,570) (12,664) (139,766)
Depreciation and amortisation (27,109) (2,489) (379) (2,110) 857 (28,741)
Administrative and other operating expenses (59,497) (18,476) (5,256) (13,298) (8,020) (85,993)
Operating expenses (202,493) (32,180) (8,280) (23,978) (19,827) (254,500)
Profit before tax 331,450 23,360 12,053 11,307 (17,513) 337,297
Income tax expense (42,835) (2,927) (30) (2,897) (94) (45,856)
Profit for the period 288,615 20,433 12,023 8,410 (17,607) 291,441
Profit attributable to:
- Shareholders of TBCG 288,614 20,433 12,023 8,410 (21,348) 287,699
- Non-controlling interest 1 - - - 3,741 3,742
Profit for the period 288,615 20,433 12,023 8,410 (17,607) 291,441
* Interest expense includes net interest gains from currency swaps
** Includes intra-group eliminations
*** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations
Consolidated Income Statement and Other Comprehensive Income FY'23
In thousands of GEL Georgia FS Uzbekistan** Payme TBC UZ Other Group
***
Interest income 2,687,756 253,264 288 253,258 7,036 2,948,056
Interest expense* (1,189,267) (120,650) (337) (120,596) (2,341) (1,312,258)
Net interest income 1,498,489 132,614 (49) 132,662 4,695 1,635,798
Fee and commission income 571,311 101,241 76,631 60,596 3,798 676,350
Fee and commission expense (236,621) (27,112) (6,958) (56,043) (292) (264,025)
Net fee and commission income 334,690 74,129 69,673 4,553 3,506 412,325
Net insurance income 31,557 - - - (267) 31,290
Net gains from currency derivatives, foreign currency operations and 273,443 (191) - (191) (16,328) 256,924
translation
Net gains from disposal of investment securities measured at fair value 5,880 - - - - 5,880
through other comprehensive income
Other operating income 22,804 1,228 1,096 132 6,594 30,626
Share of profit of associates 657 - - - - 657
Other operating non-interest income 334,341 1,037 1,096 (59) (10,001) 325,377
Credit loss (allowance)/recovery for loans to customers (131,532) (32,279) - (32,279) 1,152 (162,659)
Credit loss (allowance)/recovery for finance lease receivable (2,167) (2,042) - (2,042) 171 (4,038)
Credit loss allowance for performance guarantees and credit related (903) - - - (1) (904)
commitments
Credit loss allowance for other financial assets (9,390) (553) (381) (172) - (9,943)
Credit loss allowance for financial assets measured at fair value through (998) (68) - (68) - (1,066)
other comprehensive income
Net impairment of non-financial assets (2,140) - - - 10 (2,130)
Operating income after expected credit and non-financial asset impairment 2,020,390 172,838 70,339 102,595 (468) 2,192,760
losses
Staff costs (395,003) (39,562) (9,918) (29,644) (38,407) (472,972)
Depreciation and amortisation (102,479) (8,974) (1,161) (7,813) (4,522) (115,975)
Allowance of provision for liabilities and charges (155) - - - - (155)
Administrative and other operating expenses (194,844) (59,230) (14,377) (44,949) (15,751) (269,825)
Operating expenses (692,481) (107,766) (25,456) (82,406) (58,680) (858,927)
Profit before tax 1,327,909 65,072 44,883 20,189 (59,148) 1,333,833
Income tax expense (187,968) (5,743) (43) (5,700) (147) (193,858)
Profit for the period 1,139,941 59,329 44,840 14,489 (59,295) 1,139,975
Profit attributable to:
- Shareholders of TBCG 1,139,908 59,329 44,840 14,489 (75,057) 1,124,180
- Non-controlling interest 33 - - - 15,762 15,795
Profit for the period 1,139,941 59,329 44,840 14,489 (59,295) 1,139,975
* Interest expense includes net interest gains from currency swaps
** Includes intra-group eliminations
*** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations
Consolidated Key Ratios by Business Lines
4Q'23 Georgia FS Uzbekistan Group
Profitability ratios:
ROE(1) 24.7% 29.7% 25.2%
ROA(2) 3.8% 8.7% 3.7%
Cost to income(3) 35.4% 49.5% 39.8%
NIM(4) 6.2% 22.6% 6.7%
Loan yields(5) 11.7% 41.7% 12.7%
Deposit rates(6) 4.5% 24.9% 5.1%
Cost of funding(7) 5.3% 24.0% 5.7%
Asset quality & portfolio concentration:
Cost of risk(8) 0.6% 4.9% 0.8%
PAR 90 to Gross Loans(9) 1.1% 1.9% 1.1%
NPLs to Gross Loans(10) 2.0% 1.9% 2.0%
NPL provision coverage(11) 73.4% 222.3% 79.8%
Total NPL coverage(12) 142.2% 222.3% 146.3%
FY'23 Georgia FS Uzbekistan Group
Profitability ratios:
ROE(1) 25.5% 26.0% 26.50%
ROA(2) 4.0% 7.9% 3.9%
Cost to income(3) 31.9% 51.9% 36.2%
NIM(4) 6.3% 22.4% 6.7%
Loan yields(5) 11.8% 42.3% 12.6%
Deposit rates(6) 4.5% 24.9% 5.0%
Cost of funding(7) 5.2% 24.2% 5.6%
Asset quality & portfolio concentration:
Cost of risk(8) 0.7% 6.0% 0.8%
PAR 90 to Gross Loans(9) 1.1% 1.9% 1.1%
NPLs to Gross Loans(10) 2.0% 1.9% 2.0%
NPL provision coverage(11) 73.4% 222.3% 79.8%
Total NPL coverage(12) 142.2% 222.3% 146.3%
For the ratio definitions and exchange rates, please refer to appendix 12.
6) Market shares 8 (#_ftn8) in Georgia
Market shares Dec'23 Sep'23 Dec'22 Change YoY Change QoQ
Total loans 39.3% 39.1% 39.5% -0.2 pp 0.2 pp
Individual loans 38.1% 38.0% 38.3% -0.2 pp 0.1 pp
Legal entities loans 40.7% 40.5% 40.9% -0.2 pp 0.2 pp
Total deposits 40.1% 37.5% 40.3% -0.2 pp 2.6 pp
Individual deposits 36.0% 36.6% 38.1% -2.1 pp -0.6 pp
Legal entities deposits 44.9% 38.5% 42.9% 2.0 pp 6.4 pp
7) Subsidiaries of TBC Bank Group PLC 9 (#_ftn9)
Ownership / voting Country Year of incorporation Industry
Subsidiary % as of
31-Dec 2023
JSC TBC Bank 99.9% Georgia 1992 Banking
United Financial Corporation JSC 99.5% Georgia 2001 Card processing
TBC Capital LLC 100.0% Georgia 1999 Brokerage
TBC Leasing JSC 100.0% Georgia 2003 Leasing
TBC Kredit LLC 100.0% Azerbaijan 1999 Non-banking credit institution
TBC Pay LLC 100.0% Georgia 2008 Payment Processing
TBC Invest LLC 100.0% Israel 2011 Financial services
TBC Asset management LLC 100.0% Georgia 2021 Asset Management
JSC TBC Insurance 100.0% Georgia 2014 Insurance
Redmed LLC 100.0% Georgia 2019 Healthcare E-commerce
T NET LLC 100.0% Georgia 2019 Ecosystem
Index LLC 100.0% Georgia 2009 Ecosystem
TKT UZ 100.0% Uzbekistan 2019 Retail Trade
Artarea.ge LLC 100.0% Georgia 2012 PR and marketing
Marjanishvili 7 LLC 100.0% Georgia 2020 Customer experience servicing
Space JSC 100.0% Georgia 2021 Software Services
Space International JSC 100.0% Georgia 2021 Digital banking platform
TBC Group Support LLC 100.0% Georgia 2020 Group risk and knowledge centre
Inspired LLC (Payme)* 100.0% Uzbekistan 2011 Payment Processing
TBC Bank JSC UZ 60.2% Uzbekistan 2020 Banking
TBC Fin Service LLC 100.0% Uzbekistan 2019 Retail Leasing
TBC International Holdings Limited** 100.0% Georgia 2023 Financial services
Tpay LLC 100.0% Georgia 2023 Financial services
* In May 2023 TBC Bank Group PLC finalized acquisition of remaining 49%
interest in Inspired LLC
** TBC International Holdings Limited and Tpay LLC were established in 2023.
8) Replacement of IFRS 4 with IFRS 17
The adoption of IFRS 17 has affected the financial reporting processes and
procedures of the Group, as applications of the core principles outlined above
has required additional information to be gathered and processed, as well as
additional judgements to be made by the management. To ensure the smooth and
timely adoption of IFRS 17, the Group launched a separate implementation
project. After the transition to IFRS 17, the Group used a premium allocation
approach for its insurance subsidiary for the following insurance contracts:
motor insurance, border MTPL, property insurance, agro (crop) insurance,
health-related insurance liability and other insurance with product
classification of insurance contract and measurement model of premium
allocation approach.
The Group has applied this approach retrospectively to all of its portfolios
of insurance contracts.
9) Legal and regulatory matters
When determining the level of provision to be set up with regards to such
matters, or the amount (not subject to provisioning) to be disclosed in the
financial statements, the management seeks both internal and external
professional advice. The management believes that the provision recorded in
these 4Q and full year 2023 results report is adequate and the amount (not
subject to provisioning) need not be disclosed as it will not have a material
adverse effect on the financial condition or the results of future operations
of the Group.
10) Loan Book Breakdown by Stages According IFRS 9
In millions of GEL Dec'23 Sep'23 Dec'22
Total loans*
Stage Gross loans Loan loss provisions Gross loans Loan loss provisions Gross loans Loan loss provisions
1 20,337 105 18,674 98 16,395 107
2 1,320 88 1,305 102 1,413 99
3 417 159 386 162 397 166
Total 22,074 352 20,365 362 18,205 372
Georgia FS Retail Dec'23 Sep'23 Dec'22
Stage Gross loans Loan loss provisions Gross loans Loan loss provisions Gross loans Loan loss provisions
1 6,853 45 6,438 46 5,987 56
2 553 44 584 61 625 71
3 107 64 110 68 141 87
Total 7,513 153 7,132 175 6,753 214
Georgia FS CIB Dec'23 Sep'23 Dec'22
Stage Gross loans Loan loss provisions Gross loans Loan loss provisions Gross loans Loan loss provisions
1 7,760 19 6,960 18 5,761 19
2 410 2 330 1 458 1
3 114 33 95 31 83 26
Total 8,284 54 7,385 50 6,302 46
Georgia FS MSME Dec'23 Sep'23 Dec'22
Stage Gross loans Loan loss provisions Gross loans Loan loss provisions Gross loans Loan loss provisions
1 4,981 24 4,680 23 4,324 24
2 321 31 358 31 318 24
3 179 50 166 51 162 45
Total 5,481 105 5,204 105 4,804 93
Uzbekistan Dec'23 Sep'23 Dec'22
Stage Gross loans Loan loss provisions Gross loans Loan loss provisions Gross loans Loan loss provisions
1 755 17 593 10 329 6
2 26 6 25 6 11 2
3 16 10 14 11 8 5
Total 797 33 632 27 348 13
* Total loans include Azerbaijan loan portfolio and intra-group eliminations
11) Glossary
Terminology Definition
BVPS Book value per share.
Digital daily active users (Digital DAU) The number of retail digital users, who logged into our digital channels at
least once per day.
Digital monthly active users The number of retail digital users, who logged into our digital channels at
(Digital MAU) least once a month.
EPS Earnings per share.
Gross merchandise value (GMV) GMV equals the total value of sales over the given period, including auctions
through housing and auto platforms, as well as listing fees.
Monthly active customers For Georgian business, an individual user who has at least one active product
as of the reporting date or performed at least one transaction during the past
month. For Uzbek business, an individual user who logged into the digital
application at least once during the month.
NBG National Bank of Georgia.
12) Ratio Definitions and Exchange Rates
Ratio definitions
1. Return on average total equity (ROE) equals profit attributable to owners
divided by the monthly average of total shareholders' equity attributable to
the PLC's equity holders for the same period; annualised where applicable.
2. Return on average total assets (ROA) equals profit of the period divided by
monthly average total assets for the same period; annualised where applicable.
3. Cost to income ratio equals total operating expenses for the period divided
by the total revenue for the same period. (Revenue represents the sum of net
interest income, net fee and commission income and other non-interest income).
4. Net interest margin (NIM) is net interest income divided by monthly average
interest-earning assets; annualised where applicable. Interest-earning assets
include investment securities (excluding CIB shares), net investment in
finance lease, net loans, and amounts due from credit institutions.
5. Loan yields equal interest income on loans and advances to customers
divided by monthly average gross loans and advances to customers; annualised
where applicable.
6. Deposit rates equal interest expense on customer accounts divided by
monthly average total customer deposits; annualised where applicable.
7. Cost of funding equals sum of the total interest expense and net interest
gains on currency swaps (entered for funding management purposes), divided by
monthly average interest-bearing liabilities; annualised where applicable.
8. Cost of risk equals credit loss allowance for loans to customers divided by
monthly average gross loans and advances to customers; annualised where
applicable.
9. PAR 90 to gross loans ratio equals loans for which principal or interest
repayment is overdue for more than 90 days divided by the gross loan portfolio
for the same period.
10. NPLs to gross loans equals loans with 90 days past due on principal or
interest payments, and loans with a well-defined weakness, regardless of the
existence of any past-due amount or of the number of days past due divided by
the gross loan portfolio for the same period.
11. NPL provision coverage equals total credit loss allowance for loans to
customers divided by the NPL loans.
12. Total NPL coverage equals total credit loss allowance plus the minimum of
collateral amount of the respective NPL loan (after applying haircuts in the
range of 0%-50% for cash, gold, real estate and PPE) and its gross loan
exposure divided by the gross exposure of total NPL loans.
13. Credit loss level to gross loans equals credit loss allowance for loans to
customers divided by the gross loan portfolio for the same period.
14. Related party loans to total loans equals related party loans divided by
the gross loan portfolio.
15. Top 10 borrowers to total portfolio equals the total loan amount of the
top 10 borrowers divided by the gross loan portfolio.
16. Top 20 borrowers to total portfolio equals the total loan amount of the
top 20 borrowers divided by the gross loan portfolio.
17. Net loans to deposits plus IFI funding ratio equals net loans divided by
total deposits plus borrowings received from international financial
institutions.
18. 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.
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.
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.
22. Tier 1 CAR equals tier I capital divided by total risk weighted assets,
both calculated in accordance with the requirements of the NBG Basel III
standards. Calculations are made for TBC Bank standalone.
23. Total CAR equals total capital divided by total risk weighted assets, both
calculated in accordance with the requirements of the NBG Basel III standards.
Calculations are made for TBC Bank standalone.
Exchange Rates
To calculate the QoQ growth of the Balance Sheet items without the currency
exchange rate effect, we used the US$/GEL exchange rate of 2.6783 as of 30
September 2023. To calculate the YoY growth without the currency exchange rate
effect, we used the US$/GEL exchange rate of 2.7020 as of 31 December 2022. As
of 31 December 2023, the US$/GEL exchange rate equalled 2.6894. For P&L
items growth calculations without the currency effect, we used the average
US$/GEL exchange rate for the following periods: 4Q 2023 of 2.6943, 3Q 2023 of
2.6215, 4Q 2022 of 2.7339, FY 2023 of 2.6280, FY 2022 of 2.9156.
1 (#_ftnref1) Note: For better presentation purposes, certain financial
numbers are rounded to the nearest whole number.
2 (#_ftnref2) Based on data published by the Central Bank of Uzbekistan.
3 (#_ftnref3) Remittances from Russia are adjusted for double counting with
tourism inflows and other similar effects, based on TBC Capital estimates.
4 (#_ftnref4) Per IMF program definition.
5 (#_ftnref5) Based on data published by NBG and FX-adjusted by TBC, based
on Dec-2023 end of period exchange rate.
6 (#_ftnref6) Based on data published by Uzstat.
7 (#_ftnref7) Based on data published by Central Bank of Uzbekistan.
8 (#_ftnref8) Based on data published by National Bank of Georgia on the
analytical tool Tableau.
9 (#_ftnref9) TBC Bank Group PLC became the parent company of JSC TBC Bank
on 10 August 2016.
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