REG - TBC Bank Group PLC - Final Results
18/02/2022 07:15
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RNS Number : 0654C TBC Bank Group PLC 18 February 2022
TBC BANK GROUP PLC ("TBC Bank")
4Q 2021 UNAUDITED CONSOLIDATED FINANCIAL RESULTS AND FY 2021 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 economy; 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.
Fourth Quarter and Full Year 2021 Consolidated Financial Results Conference
Call
TBC Bank Group PLC ("TBC PLC") publishes its unaudited consolidated financial
results for the fourth quarter 2021 and preliminary consolidated financial
results for the full year 2021 on Friday, 18 February 2022 at 7.00 am GMT
(11.00 am GET). The results call will be held at 14.00 (GMT) / 15.00 (CET) /
9.00 (EST).
Please click the link below to join the webinar:
https://tbc.zoom.us/j/94960387119?pwd=ejRmMC93dnlFQTRNNm94VDhsMTN4QT09
(https://tbc.zoom.us/j/94960387119?pwd=ejRmMC93dnlFQTRNNm94VDhsMTN4QT09)
Webinar ID: 949 6038 7119
Passcode: 419677
Or, use the following dial-ins:
· US: 833 548 0282 (Toll Free) or 877 853 5257 (Toll Free) or 888
475 4499 (Toll Free) or 833 548 0276 (Toll Free)
· Georgia: +995 7067 77954 or +995 3224 73988 or 800 100 293 (Toll
Free)
· United Kingdom: 0 800 260 5801 (Toll Free) or 0 800 358 2817
(Toll Free) or 0 800 456 1369 (Toll Free) or 0 800 031 5717 (Toll Free)
· Russia: 8800 301 7427 (Toll Free) or 8800 100 6938 (Toll Free)
Webinar ID 949 6038 7119#, please dial the ID number slowly.
Other international numbers available at: https://tbc.zoom.us/u/aef0FWxaD4
(https://tbc.zoom.us/u/aef0FWxaD4)
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 who will be joining through the
webinar should use the "hand icon" that will be visible at the bottom of the
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after another. After the question is asked, the participant will be muted
again.
Call Instructions:
Participants who will be using the dial in number to join the webinar should
dial *9 to raise their hand.
Contacts
Zoltan Szalai Anna Investor Relations Department
Romelashvili
Director of International Media and Investor Relations
Head of Investor Relations
E-mail: ZSzalai@Tbcbank.com.ge
Tel: +44 (0) 7908 242128
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 2021 Results Announcement
Key Highlights
Letter from the Chief Executive Officer
Economic Overview
Unaudited Consolidated Financial Results Overview for 4Q 2021
Unaudited Consolidated Financial Results Overview for FY 2021
Additional Disclosures
1)TBC Bank - Background
2)Subsidiaries of TBC Bank Group PLC
3)TBC Insurance
4)Fast growing digital bank in Uzbekistan
5)Loan book breakdown by stages according IFRS 9
TBC Bank announces unaudited 4Q & preliminary unaudited FY 2021
Consolidated Financial Results
Continued delivery of robust profitability and steady growth, supported by
solid capital
Strong progress in exploiting our international growth potential
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.
Key Highlights
The economic recovery continued in 4Q
Starting in the second quarter of 2021, the Georgian economy has rebounded
from the pandemic at a remarkable speed, with real GDP increasing by 28.9% and
9.1% in the second and third quarters of 2021, respectively. According to the
initial estimates of the National Statistics Office of Georgia, the recovery
of economic activity continued in the last quarter of the year with 9.5%
year-on-year real GDP growth. The Georgian economy is expected to have
expanded by 10.6% during 2021, surpassing the 2019 level by 3.1%.
The group generated record high levels of profitability in 2021 … - Our net
profit amounted to GEL 198.5 million (almost doubling year-on-year) and GEL
809.0 million (increasing by more than 2.5 times year-on-year), respectively,
in 4Q 21and FY 2021. This growth was driven by strong income generation across
all categories, as well as strong improvement in asset quality. As a result,
our ROE for the fourth quarter and the full year stood at 22.1% and 24.4%,
respectively.
.... coupled with prudent management of our capital and liquidity levels - As
of 31 December 2021, CET1, Tier 1 and Total Capital ratios stood at 13.7%,
16.7% and 20.3%, respectively, and remained comfortably above the minimum
regulatory requirements by 2.0%, 2.7% and 1.9%, respectively. As of 31
December 2021, our net stable funding (NSFR) and liquidity coverage (LCR)
ratios stood at 127.3% and 115.8%, respectively, comfortably above the
regulatory minimum of 100%.
Our Georgian banking franchise maintained its leadership position… - We
continue to be market leaders in total loans and deposits. In 2021, our loan
book increased by 18.0% year-on-year in constant currency terms, in line with
the overall growth of the banking sector, which translated into a 38.8% market
share. Over the same period, our deposit base increased by 25.1% in constant
currency terms, significantly outpacing market growth. As a result, our market
share in total deposits amounted to 40.4% as of 31 December 2021, up by 3.2 pp
year-on-year.
…while our Uzbek business continued to expand - As of 31 December 2021, TBC
UZ was present in all major regions of Uzbekistan, reaching more than 97% of
the population, while the number of registered and monthly active users 1 of
our digital banking app reached 1.1 million and 141,000 respectively. At the
end of December 2021, the Bank's retail deposit portfolio amounted to GEL
207.5 million, while the retail loan book stood at GEL 92.8 million.
In parallel, we continued to expand our Uzbek payments business, Payme, by
introducing new products and services as well as increasing our network. As a
result, the number of registered users reached 5.2 million, while the number
of monthly active users 2 amounted to 1.1 million by the end of 2021. Over
the same period net profit was GEL 18.0 million, up by 111.7% year-on-year.
Increasing our digital footprint- In December 2021, the monthly active digital
users 3 increased by 16.0% year-on-year, while average daily active digital
users 4 increased by 23.9% over the same period. This resulted in 44.2%
DAU/MAU, 5 up by 2.7 pp year-on-year.
Letter from the Chief Executive Officer
2021 was a year of strong recovery for TBC, coupled with remarkable progress
in Uzbekistan. Having successfully adjusted to the post-COVID reality, we
concentrated our efforts on increasing and diversifying our income streams in
Georgia, while continuing to invest in our Uzbek banking operations to support
future growth. The macroeconomic environment was also supportive throughout
the year. As a result, our net income amounted to GEL 809 million and we
delivered a record high return on equity of 24.4% in 2021.
The economic recovery continued into the fourth quarter
The Georgian economy continued its firm recovery in the fourth quarter of
2021. For the full year, real GDP growth reached 10.6% 6 , which was an
exceptional performance. Importantly, this growth was broad-based and was
reflected in almost all sources of inflows as well as in domestic demand, only
FDI lagged behind, as investment demand takes longer to recover. Domestic
demand was fueled by the normalization of saving levels after pandemic related
highs and by low USD deposit rates, while the appreciation of the GEL in the
second half of the year led to improved consumer and business sentiment.
Furthermore, the 18.3% expansion in bank lending also provided much needed
support to the economic recovery. Going forward, we expect a significant
decrease in fiscal stimulus, although it should be more than compensated by
continued strong exports, remittance inflows and the forecast recovery in
tourism and FDI.
Strong financial results across the board backed by the solid capital
In 2021, our operating income amounted to GEL 1,452 million, up by 25.7%
year-on-year, driven by an increase in both net interest income and
non-interest income. The increase in the former was related to a higher net
interest margin of 5.1%, compared to 4.7% in 2020, as well as 12.2%
year-on-year growth in our loan book. Over the same period, net fee and
commission income grew by an impressive 35.7%. The increase was broad-based
and demonstrated the strength of our business model. In addition, other
operating income 7 grew by 46.5% and made a meaningful contribution to the
overall profitability, mainly driven by FX operations and the sale of
investment property. Our robust income streams were further supported by
strong performance on the asset side across all segments, with the cost of
risk standing at minus 0.3% (ie. net recoveries) in 2021. This allowed us to
continue investing in our Uzbek business, while keeping our cost to income
ratio at 37.6% in 2021, slightly below the 2020 level of 37.9%. As a result,
we recorded a return on equity of 24.4% and return on assets of 3.4% for the
full year 2021.
Strong income generation, coupled with prudent management of our capital,
allowed us to maintain strong capital positions. Our CET1, Tier 1 and Total
Capital ratios stood at 13.7%, 16.7% and 20.3%, respectively, and remained
comfortably above the minimum regulatory requirements by 2.0%, 2.7% and 1.9%,
respectively. At the same time, we continued to operate at high liquidity with
the net stable funding (NSFR) and liquidity coverage (LCR) ratios standing at
127.3% and 115.8%, respectively, as of 31 December 2021.
A steady progress in our core banking business in Georgia
We continue to be market leaders in total loans and deposits. In 2021, our
loan book increased by 18.0% year-on-year in constant currency terms, in line
with the overall growth of the banking sector, which translated into a 38.8%
market share. Importantly, the quality of our loan book improved, with the
non-performing loan ratio decreasing to 2.4% by the end of 2021, compared to
4.7% at the end of 2020. Over the same period, our deposit growth
significantly outpaced market growth and increased by 25.1% in constant
currency terms. As a result, our market share in total deposits amounted to
40.4% as of 31 December 2021, up by 3.2 pp year-on-year.
I am also delighted to report that our digitalization levels continue to
increase. In the fourth quarter of 2021, the number of active retail digital
users 8 increased by 8.1% year-on-year and reached 744,000. In addition, we
made significant progress in expanding the number of monthly and daily active
digital users 9 , which reached 644,000 (up by 16.0% year-on-year) and 285,000
(up by 23.9% year-on-year) respectively in December 2021. The proportion of
digital sales of our consumer loans amounted to 45%, while the deposit sales
offloading ratio stood at 73%.
Furthermore, to ensure the maximum safety of our customers and employees, we
ran a wide-scale campaign to encourage our staff to get vaccinated. As a
result, around 85% of all our employees were vaccinated, or were scheduled to
receive a vaccine, by the end of 2021.
Strengthening our position on the Uzbek market
I am very pleased with the progress that our fully digital Uzbek bank, TBC UZ,
achieved in its first year of operations. Since launching our operations from
scratch in Tashkent in October 2020, we have been steadily expanding our
presence. By the end of 2021, we covered all major regions, representing
around 97% of the country's population, through our 35 customer acquisition
points and 10 showrooms, while the number of registered and monthly active
users 10 of our digital banking app reached 1.1 million and 141,000,
respectively. By the end of the year, our customer proposition in Uzbekistan
expanded to unsecured consumer loans, current accounts and savings deposits as
well as various payment solutions such as P2P transfers, bill payments, debit
cards and the ability to attach other banks' cards to our mobile app. In
addition, we launched auto loans in a friends and family mode in December 2021
and introduced term deposits and virtual cards to a wider public. In 2021,
our retail loan and deposit books grew at a fast pace and reached GEL 92.8
million and GEL 207.5 million, respectively, as of 31 December 2021, which
translated into retail market shares 11 of 0.5% and 2.0% accordingly. I am
also delighted that TBC UZ has been named "the Best Digital Bank in Uzbekistan
2021" by Global Economics.
In parallel, we continued to expand our Uzbek payments business, Payme, by
introducing new products and services as well as increasing our network. In
the fourth quarter of 2021, we launched a virtual Visa card and added payments
capabilities for railway and plane tickets. In addition, we signed partnership
agreements with large international retailers such as Carrefour and Magnum
enabling QR payments with the Payme app in these stores. As a result, the
number of registered users reached 5.2 million, while the number of monthly
active digital users 12 amounted to 1.1 million by the end of 2021. In 2021,
the number and volume of transactions increased by 66.4% and 79.6%,
respectively, year-on-year. In terms of financial results, revenues increased
by 91% year-on-year and amounted to GEL 28.8 million, while net profit was GEL
18.0 million, up by 111.7% year-on-year.
Outlook
Our outstanding results for 2021 provide me with much confidence that we are
on the right track and that our strategy is working. While our Georgian
banking business will remain core to our strategy, the Uzbek market should
give us a competitive edge by providing a material contribution to our growth
and diversification over the years to come.
Finally, I would also like to re-iterate our medium-term guidance: 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%.
Thank you
I would like to close my letter by thanking our colleagues for their hard work
and dedication and recognizing their individual contributions to our success.
We have an exciting journey ahead of us and I am eagerly looking forward to
it.
Economic Overview
Economic growth
Starting from the second quarter of 2021, the Georgian economy has rebounded
from the pandemic at a remarkable speed - real GDP increased by 28.9% and 9.1%
in the second and third quarters of 2021, respectively. According to the
initial estimates of the National Statistics Office of Georgia, the recovery
of economic activity continued in the last quarter of the year with 9.5%
year-on-year real GDP growth. According to initial estimates, the Georgian
economy expanded by 10.6% year-on-year in 2021, surpassing the 2019 level by
3.1%
External sector
The external sector continued its strong performance in 4Q 2021, with exports
growing by 34.2% year-on-year and by 18.6% compared to 4Q 2019. Notably,
despite re-exports having a lower base effect from a year ago, domestic
exports still led the recovery with the share of domestic value-added exports
in total exports increasing significantly, from 61.3% in 4Q 2019 to 76.2% in
4Q 2021. Despite the slower recovery in tourism-related imports and
re-exports, imports of goods also went up by 31.6% YoY in 4Q 2021 and by 10.1%
when compared to the same period in 2019. Importantly, the rebound in the
trade in goods was broad-based, reflecting increased overall external as well
as domestic demand.
Remittance inflows remained strong, increasing by 16.7% year-on-year in 4Q
2021 and by 35.0% when compared to the same period in 2019. Although part of
the rebound compared to 2019 can be attributed to border closures and the
greater transfer of cash remittances through digital channels, overall growth
is still substantial given that the share of cash inflows is only likely to be
around 10.0%-15.0%, according to NBG estimates.
The recovery in tourism inflows continued with an eightfold year-on-year
increase in 4Q 2021, equaling 55.3% of such inflows in the same period in
2019. Notably, this growth was primarily led by the return of tourists from
higher-spending countries. Total tourism inflows during 2021 amounted to 38.1%
of their 2019 level.
FDI inflows are taking longer to recover. While in 3Q, the latest period for
which data is available, there was an increase of 1.4% YoY, this was on the
back of higher reinvested earnings as equity and debt financing declined
sharply.
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. Importantly, the major source of deficit financing in
2020-2021 was external, largely compensating for the pandemic-related drop in
net inflows. According to the Ministry of Finance, fiscal consolidation is
expected to take place in the coming years with deficit-to-GDP ratios of 4.4%,
3.0% and 2.7% in 2022, 2023 and 2024, respectively. At the same time,
government debt, which reached its mandated ceiling of 60% of GDP in 2020, is
already normalized at an estimated 51.1% of GDP by the end of 2021. Going
forward, amid fiscal consolidation, the debt-to-GDP ratio is expected to
decline gradually to 49.0% by the end of 2024.
Credit growth
By the end of 2021, bank credit growth increased to 18.3% year-on-year,
compared to 15.8% year-on-year growth by the end of 3Q 2021. In terms of
segments, retail lending growth accelerated the most, increasing from 13.2% at
the end of 3Q 2021 to 18.0% year-on-year growth at the end of 4Q 2021, mostly
on the back of stronger non-mortgage credit. MSME lending also increased
from 20.6% at the end of 3Q 2021 to 22.4%. Corporate lending growth remained
largely unchanged, increasingby 0.2 pp from 3Q 2021 to 4Q 2021 and amounted to
15.6% year-on-year. Higher expansion in the retail segment was highly
pronounced, moving from 4.8 pp in the previous quarter to.
Inflation, monetary policy and the exchange rate
Despite challenges such as the unprecedented weakening of the TRY, the GEL
remained stable throughout Q4 2021. During the quarter, the GEL appreciated
slightly against the USD from 3.12 to 3.10, whereas the real effective
exchange rate appreciated by 6.8%.
At the end of 2021, annual inflation remained elevated at 13.9%, although
monthly inflation dynamics are already around their target level. In December
2021, the NBG increased its policy rate by 0.5 percentage points from 10.0% to
10.5%.
Assuming moderating inflation, a continued recovery in tourism inflows and a
stable exchange rate, we expect the NBG to start cutting rates in 2022,
although such plans may be put on hold if significantly increased geopolitical
risks and the continued uncertainty related to the pandemic put the GEL under
renewed pressure.
Going forward
According to TBC Capital expectations, GDP growth is likely to be around 6.0%
in 2022. This is based on assumption that tourism inflows will reach 80.0% of
2019 inflows in USD terms (after only reaching 38.1% in 2021). Thereafter, the
economy will gradually normalize, expanding by 5.5% in 2023 and by 5.0% in
2024 - close to its trend rate of around 5.2%.
According to the World Bank's latest projections 13 , the Georgian economy is
forecast to grow by 5.5% and 5.0% in 2022 and 2023, respectively.
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 2021
This statement provides a summary of the unaudited business and financial
trends for 4Q 2021 for TBC Bank Group plc and its subsidiaries. The quarterly
financial information and trends are unaudited.
TBC Bank Group PLC's financial results has 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).
Please note that there might be slight differences in previous periods'
figures due to rounding.
Financial Highlights
Income Statement Highlights
in thousands of GEL 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
Net interest income 275,445 259,390 231,325 19.1% 6.2%
Net fee and commission income 71,068 68,631 52,199 36.1% 3.6%
Other operating non-interest income 14 42,159 43,952 38,573 9.3% -4.1%
Total credit loss allowance* (6,040) (5,106) (84,186) -92.8% 18.3%
Operating profit after expected credit losses* 382,632 366,867 237,911 60.8% 4.3%
Operating expenses* (157,213) (131,695) (123,134) 27.7% 19.4%
Losses from modifications of financial instrument (31) (104) (5,082) -99.4% -70.2%
Profit before tax 225,388 235,068 109,695 NMF -4.1%
Income tax expense (26,915) (27,921) (8,994) NMF -3.6%
Profit for the period 198,473 207,147 100,701 97.1% -4.2%
* Certain amounts do not correspond to 4Q 2020 operating expense figures and
operating income after expected credit losses as they reflect the
reclassifications made by the management between net impairment of
non-financial assets and administrative and other operating expenses.
Balance Sheet and Capital Highlights
in thousands of GEL Dec-21 Sep-21 Dec-20 Change YoY Change QoQ
Total Assets 24,508,561 23,701,241 22,577,805 8.6% 3.4%
Gross Loans 17,047,391 15,963,520 15,200,520 12.2% 6.8%
Customer Deposits 15,038,172 14,338,537 12,572,728 19.6% 4.9%
Total Equity 3,692,229 3,448,193 2,935,934 25.8% 7.1%
CET 1 Capital (Basel III) 2,759,894 2,565,560 1,911,233 44.4% 7.6%
Tier 1 Capital (Basel III) 3,379,414 2,955,910 2,385,181 41.7% 14.3%
Total Capital (Basel III) 4,102,927 3,693,637 3,137,912 30.8% 11.1%
Risk Weighted Assets (Basel III) 20,217,629 19,143,450 18,301,477 10.5% 5.6%
Key Ratios 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
ROE 22.1% 24.1% 13.7% 8.4 pp -2.0 pp
Bank's standalone ROE 15 23.2% 30.9% 15.4% 7.8 pp -7.7 pp
ROA 3.3% 3.6% 1.8% 1.5 pp -0.3 pp
Bank's standalone ROA(15) 3.4% 4.5% 1.9% 1.5 pp -1.1 pp
NIM 5.4% 5.3% 4.8% 0.6 pp 0.1 pp
Cost to income 40.4% 35.4% 38.2% 2.2 pp 5.0 pp
Bank's standalone cost to income(15) 32.2% 25.8% 33.4% -1.2 pp 6.4 pp
Cost of risk -0.1% -0.1% 2.0% -2.1 pp 0.0 pp
NPL to gross loans 2.4% 3.1% 4.7% -2.3 pp -0.7 pp
NPL provision coverage ratio 99.9% 94.3% 85.6% 14.3 pp 5.6 pp
Total NPL coverage ratio 175.3% 169.3% 159.4% 15.9 pp 6.0 pp
CET 1 CAR (Basel III) 13.7% 13.4% 10.4% 3.3 pp 0.3 pp
Tier 1 CAR (Basel III) 16.7% 15.4% 13.0% 3.7 pp 1.3 pp
Total CAR (Basel III) 20.3% 19.3% 17.1% 3.2 pp 1.0 pp
Leverage (Times) 6.7x 6.9x 7.7x -1.0x -0.2x
Net Interest Income
In 4Q 2021, net interest income amounted to GEL 275.4 million, up by 19.1% YoY
and 6.2% on a QoQ basis.
The YoY rise in interest income by GEL 56.2 million, or 12.4%, was mostly
attributable to an increase in interest income from loans related to an
increase in the respective portfolio of GEL 1,846.9 million, or 12.2%,
together with a rise in the respective yield by 0.5 pp. This rise was related
to a hike in the refinance rate and a shift of the portfolio composition
towards GEL loans.
On a YoY basis, interest expense increased by GEL 12.0 million, or 5.3%,
mainly driven by an increase in interest expense from deposits. This increase
was related to growth in the respective portfolio of GEL 2,465.4 million, or
19.6% YoY, which was partially offset by a decrease in the cost of deposits by
0.2 pp on the back of a sharp drop in the rates of FX deposits. Over the
same period, the share of the deposits portfolio in total liabilities went up
to 72%, compared to 64% a year ago.
The increase in interest income on a QoQ basis of GEL 33.4 million, or 7.0%,
was mainly driven by an increase in interest income from loans to customers,
related both to an increase in the loan portfolio by GEL 1,083.9 million, or
6.8%, and to a 0.2 pp rise in loan effective rates. The higher yields in 4Q
were attributable to the shift of the portfolio composition towards high-yield
GEL loans.
The interest expense increased by GEL 17.3 million, or 5.7% on a QoQ basis.
This growth was driven by an increase in interest expense from bonds issued in
November 2021, as well as a rise in interest expense from NBG loans due to an
increase in the refinance rate. Another driver was a rise in interest expense
from deposits related to the growth in the respective portfolio by 4.9% YoY,
although this effect was partially offset by a 0.1 pp lower cost of deposit in
4Q.
In 4Q 2021, our NIM stood at 5.4%, up by 0.6 pp YoY and 0.1 pp on a QoQ basis.
In thousands of GEL 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
Interest income 510,035 476,636 453,874 12.4% 7.0%
Interest expense (239,839) (226,991) (227,786) 5.3% 5.7%
Net gains from currency swaps 5,249 9,745 5,237 0.2% -46.1%
Net interest income 275,445 259,390 231,325 19.1% 6.2%
NIM 5.4% 5.3% 4.8% 0.6 pp 0.1 pp
Non-Interest Income
Total other non-interest income amounted to GEL 113.2 million in 4Q 2021 and
increased by 24.7% YoY, remaining stable on a QoQ basis.
The growth in net fee and commission income was particularly impressive and
was spread across various categories including payments, settlements, and
other operations. Such a strong growth was related to the revival of business
activities, as 4Q 2020 was adversely affected by COVID-19 related restrictive
measures.
In thousands of GEL 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
Non-interest income
Net fee and commission income 71,068 68,631 52,199 36.1% 3.6%
Net income from currency derivatives, foreign currency operations and 27,984 29,102 28,085 -0.4% -3.8%
translation
Net insurance premium earned after claims and acquisition costs 16 7,654 6,019 3,263 NMF 27.2%
Other operating income 6,521 8,831 7,225 -9.7% -26.2%
Total other non-interest income 113,227 112,583 90,772 24.7% 0.6%
Credit Loss Allowance
In 4Q the cost of risk amounted to -0.1%, driven by the strong performance of
the CIB segment, while the higher CoR in 4Q 2020 was driven by COVID-19
related uncertainties.
In thousands of GEL 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
(as restated)
Recovery of/(charges to) credit loss allowance for loan to customers 3,171 4,389 (75,711) NMF -27.8%
Credit loss allowance for other transactions* (9,211) (9,495) (8,475) 8.7% -3.0%
Total credit loss allowance* (6,040) (5,106) (84,186) -92.8% 18.3%
Operating profit after expected credit losses* 382,632 366,867 237,911 60.8% 4.3%
Cost of risk -0.1% -0.1% 2.0% -2.1 pp 0.0 pp
* Certain amounts do not correspond to 4Q 2020 operating expense figures and
operating income after expected credit losses as they reflect the
reclassifications made by the management between net impairment of
non-financial assets and administrative and other operating expenses.
Operating Expenses
In 4Q 2021, our operating expenses expanded by 27.7% YoY and 19.4% on a QoQ
basis.
The YoY increase in our operating expenses was mainly driven by staff annual
bonuses and seasonal increase of administrative expenses, mainly discretionary
costs. The increase on a QoQ basis was due to seasonally high costs in 4Q.
Our cost to income ratio amounted to 40.4%, while the Bank's standalone cost
to income stood at 32.2%.
In thousands of GEL 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
(as restated)
Operating expenses
Staff costs (86,589) (74,643) (67,782) 27.7% 16.0%
Provisions for liabilities and charges 90 (54) (724) NMF NMF
Depreciation and amortization (23,203) (19,988) (18,838) 23.2% 16.1%
Administrative & other operating expenses* (47,511) (37,010) (35,790) 32.7% 28.4%
Total operating expenses* (157,213) (131,695) (123,134) 27.7% 19.4%
Cost to income 40.4% 35.4% 38.2% 2.2 pp 5.0 pp
Bank's standalone cost to income(17) 32.2% 25.8% 33.4% -1.2 pp 6.4 pp
* Certain amounts do not correspond to 4Q 2020 operating expense figures and
operating income after expected credit losses as they reflect the
reclassifications made by the management between net impairment of
non-financial assets and administrative and other operating expenses.
Net Income
In 4Q, we continued to deliver strong profitability and generated GEL 198.5
million in net profit. The YoY increase was attributable to the revival of
business activities, while on a QoQ basis it remained broadly stable.
As a result, our ROE and ROA for the fourth quarter reached 22.1% and 3.3%,
accordingly.
In thousands of GEL 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
Losses from modifications of financial instruments (31) (104) (5,082) -99% -70%
Profit before tax 225,388 235,068 109,695 NMF -4%
Income tax expense (26,915) (27,921) (8,994) NMF -4%
Profit for the period 198,473 207,147 100,701 97.1% -4%
ROE 22.1% 24.1% 13.7% 8.4 pp -2.0 pp
Bank's standalone ROE 17 23.2% 30.9% 15.4% 7.8 pp -7.7 pp
ROA 3.3% 3.6% 1.8% 1.5 pp -0.3 pp
Bank's standalone ROA(17) 3.4% 4.5% 1.9% 1.5 pp -1.1 pp
Funding and Liquidity
As of 31 December 2021, the total liquidity coverage ratio (LCR), as defined
by the NBG, was 115.8%, above the 100% limit, while the LCR in GEL and FC
stood at 107.7% and 120.8% respectively, above the respective limits of 75%
and 100%. Over the same period, NSFR stood at 127.3%, compared to the
regulatory limit of 100%.
Dec-21 Sep-21 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 127.3% 127.1% 0.2 pp
Net loans to deposits + IFI funding 100.9% 97.5% 3.4 pp
Leverage (Times) 6.7x 6.9x -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 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 115.8% 116.5% -0.7 pp
LCR in GEL, as defined by the NBG 107.7% 98.0% 9.7 pp
LCR in FC, as defined by the NBG 120.8% 125.5% -4.7 pp
Regulatory Capital
As of December 2021, our CET1, Tier 1 and Total Capital ratios stood at 13.7%,
16.7% and 20.3%, respectively, and remained comfortably above the minimum
regulatory requirements by 2.0%, 2.7% and 1.9%, accordingly.
The increase on a QoQ basis in CET1 was mainly driven by net income
generation, which was partially offset by growth in the loan book, while the
higher Tier 1 and total capital adequacy ratios were further supported by
issuance of AT1 Bond in the amount of USD 75 million in November 2021 (which
had 1.1% positive effect on both ratios).
In thousands of GEL Dec-21 Sep-21 Change QoQ
CET 1 Capital 2,759,894 2,565,560 7.6%
Tier 1 Capital 3,379,414 2,955,910 14.3%
Total Capital 4,102,927 3,693,637 11.1%
Total Risk-weighted Exposures 20,217,629 19,143,450 5.6%
Minimum CET 1 ratio 11.7% 11.3% 0.4 pp
CET 1 Capital adequacy ratio 13.7% 13.4% 0.3 pp
Minimum Tier 1 ratio 14.0% 13.5% 0.5 pp
Tier 1 Capital adequacy ratio 16.7% 15.4% 1.3 pp
Minimum total capital adequacy ratio 18.4% 17.9% 0.5 pp
Total Capital adequacy ratio 20.3% 19.3% 1.0 pp
Loan Portfolio
As of 31 December 2021, the gross loan portfolio reached GEL 17,047.4 million,
up by 6.8% QoQ, or up by 8.0% on a constant currency basis.
The proportion of gross loans denominated in foreign currency decreased by 1.0
pp QoQ and accounted for 53.9% of total loans, while on a constant currency
basis the proportion of gross loans denominated in foreign currency decreased
by 0.5 pp QoQ and stood at 54.5%.
As of 31 December 2021, our market share in total loans stood at 38.8%, up by
0.4 pp QoQ. Our loan market share in legal entities was 39.1%, up by 0.5 pp
QoQ, and our loan market share in individuals stood at 38.6%, up by 0.4 pp
QoQ.
In thousands of GEL Dec-21 Sep-21 Change QoQ
Loans and advances to customers
Retail 6,358,345 5,950,915 6.8%
Retail loans GEL 3,580,468 3,313,791 8.0%
Retail loans FC 2,777,877 2,637,124 5.3%
CIB 6,547,741 6,136,232 6.7%
CIB loans GEL 2,188,776 1,941,958 12.7%
CIB loans FC 4,358,965 4,194,274 3.9%
MSME 4,141,305 3,876,373 6.8%
MSME loans GEL 2,082,204 1,936,230 7.5%
MSME loans FC 2,059,101 1,940,143 6.1%
Total loans and advances to customers 17,047,391 15,963,520 6.8%
4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
Loan yields 10.7% 10.5% 10.2% 0.5 pp 0.2 pp
Loan yields GEL 15.4% 15.4% 15.3% 0.1 pp 0.0 pp
Loan yields FC 6.7% 6.6% 6.8% -0.1 pp 0.1 pp
Retail Loan Yields 12.2% 12.0% 12.0% 0.2 pp 0.2 pp
Retail loan yields GEL 16.4% 16.3% 16.8% -0.4 pp 0.1 pp
Retail loan yields FC 6.9% 6.6% 7.1% -0.2 pp 0.3 pp
CIB Loan Yields 9.2% 9.1% 8.4% 0.8 pp 0.1 pp
CIB loan yields GEL 14.2% 14.1% 13.0% 1.2 pp 0.1 pp
CIB loan yields FC 6.8% 6.8% 6.9% -0.1 pp 0.0 pp
MSME Loan Yields 10.6% 10.5% 9.9% 0.7 pp 0.1 pp
MSME loan yields GEL 15.1% 15.0% 14.6% 0.5 pp 0.1 pp
MSME loan yields FC 6.0% 6.0% 6.3% -0.3 pp 0.0 pp
Loan Portfolio Quality
Total PAR 30 ratio stood at 2.0%, down by 0.3 pp on a QoQ basis. This decrease
was driven by the Retail and MSME segments.
In 4Q, NPL improved across all segments, mainly driven by resumed repayments
of restructured loans in the Retail and MSME segments.
Our NPLs provision coverage stood at 100% as of 31 December 2021, with an
additional 75% collateral coverage. Only 18% of NPLs were unsecured loans 18
with strong provision coverage of 281%.
Par 30 Dec-21 Sep-21 Change QoQ
Retail 2.2% 2.7% -0.5 pp
CIB 0.6% 0.5% 0.1 pp
MSME 4.0% 4.6% -0.6 pp
Total Loans 2.0% 2.3% -0.3 pp
Non-performing Loans Dec-21 Sep-21 Change QoQ
Retail 2.4% 3.6% -1.2 pp
CIB 1.4% 1.5% -0.1 pp
MSME 4.0% 4.7% -0.7 pp
Total Loans 2.4% 3.1% -0.7 pp
NPL Coverage 19 Dec-21 Sep-21
Provision Coverage Total Coverage Provision Coverage Total Coverage
Retail 158.8% 224.6% 120.7% 189.3%
CIB 56.8% 126.4% 82.5% 151.2%
MSME 68.0% 155.5% 68.7% 154.5%
Total 99.9% 175.3% 94.3% 169.3%
Cost of risk
Our cost of risk improved significantly on a YoY basis and remained the same
QoQ. The YoY decrease was mainly driven by provision recoveries in the CIB
segment, which was attributable to a few stage 3 borrowers and the strong
performance of the CIB segment in 2021.
Cost of risk 4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
Retail 1.2% -0.2% 2.7% -1.5 pp 1.4 pp
CIB -1.5% -0.2% 0.2% -1.7 pp -1.3 pp
MSME 0.1% 0.1% 3.9% -3.8 pp 0.0 pp
Total -0.1% -0.1% 2.0% -2.1 pp 0.0 pp
Deposit Portfolio
The total deposits portfolio increased by 4.9% QoQ, or 5.8% on a constant
currency basis, and amounted to GEL 15,038.2 million.
The proportion of deposits denominated in a foreign currency decreased by 0.2
pp QoQ and accounted for 63.5% of total deposits, while on a constant currency
basis the proportion of deposits denominated in foreign currency increased by
0.1 pp QoQ and stood at 63.8%.
As of 31 December 2021, our market share in deposits amounted to 40.4%, up by
0.3 pp QoQ, while our market share in deposits to legal entities stood at
40.5%, up by 0.5 pp QoQ. Our market share in deposits to individuals stood at
40.3%, up by 0.1 pp QoQ.
In thousands of GEL Dec-21 Sep-21 Change QoQ
Customer Accounts
Retail 5,837,333 5,593,535 4.4%
Retail deposits GEL 1,492,325 1,353,608 10.2%
Retail deposits FC 4,345,008 4,239,927 2.5%
CIB 7,330,543 6,834,386 7.3%
CIB deposits GEL 2,934,167 2,681,148 9.4%
CIB deposits FC 4,396,376 4,153,238 5.9%
MSME 1,558,676 1,433,603 8.7%
MSME deposits GEL 756,135 688,598 9.8%
MSME deposits FC 802,541 745,005 7.7%
Total Customer Accounts* 15,038,172 14,338,537 4.9%
* Total deposit portfolio includes Ministry of Finacne deposits in the amount
of, GEL 477 million and GEL 312 million as of 30 Sep. and 31 Dec 2021,
respectively.
4Q'21 3Q'21 4Q'20 Change YoY Change QoQ
Deposit rates 3.4% 3.5% 3.6% -0.2 pp -0.1 pp
Deposit rates GEL 6.8% 6.9% 6.6% 0.2 pp -0.1 pp
Deposit rates FC 1.5% 1.6% 2.0% -0.5 pp -0.1 pp
Retail Deposit Yields 2.4% 2.3% 2.6% -0.2 pp 0.1 pp
Retail deposit rates GEL 4.9% 4.8% 5.1% -0.2 pp 0.1 pp
Retail deposit rates FC 1.6% 1.5% 1.8% -0.2 pp 0.1 pp
CIB Deposit Yields 4.8% 4.5% 4.2% 0.6 pp 0.3 pp
CIB deposit rates GEL 8.9% 8.5% 7.8% 1.1 pp 0.4 pp
CIB deposit rates FC 1.6% 1.9% 2.5% -0.9 pp -0.3 pp
MSME Deposit Yields 0.6% 0.9% 1.0% -0.4 pp -0.3 pp
MSME deposit rates GEL 1.1% 1.6% 1.7% -0.6 pp -0.5 pp
MSME deposit rates FC 0.2% 0.2% 0.3% -0.1 pp 0.0 pp
Segment definition and PL
Business Segments
The segment definitions are as follows:
· Corporate and Investment Banking (CIB) - a legal entity/group of
affiliated entities with an annual revenue exceeding GEL 12.0 million or which
has been granted facilities of more than GEL 5.0 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
private banking services to high-net-worth individuals with a threshold of
US$ 250,000 of assets under management (AUM), as well as on a discretionary
basis;
· Retail - non-business individual customers; or individual
customers of the fully digital bank, Space.
· MSME - business customers 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.
Income Statement by Segments
4Q'21 Retail MSME CIB Corp. Centre Total
Interest income 189,455 106,840 150,152 63,588 510,035
Interest expense (35,616) (2,494) (80,581) (121,148) (239,839)
Net gains from currency swaps - - - 5,249 5,249
Net transfer pricing (51,544) (46,096) 24,351 73,289 -
Net interest income 102,295 58,250 93,922 20,978 275,445
Fee and commission income 61,906 15,970 33,328 12,689 123,893
Fee and commission expense (15,939) (9,681) (22,992) (4,213) (52,825)
Net fee and commission income 45,967 6,289 10,336 8,476 71,068
Net insurance premium earned after claims and acquisition costs - - - 7,654 7,654
Net gains/(losses) from currency derivatives, foreign currency operations and 11,102 8,899 18,922 (10,939) 27,984
translation
Gains less losses from disposal of investment securities Measured at fair - - 888 (636) 252
value through other comprehensive income
Other operating income 2,362 170 550 3,116 6,198
Share of profit of associates - - - 71 71
Other operating non-interest income and insurance profit 13,464 9,069 20,360 (734) 42,159
Recovery of/(charges to) credit loss allowance for loans to customers (18,935) (1,473) 23,579 - 3,171
Recovery of/(charges to) credit loss allowance for performance guarantees and (69) 77 5,963 - 5,971
credit related commitments
Recovery of credit loss allowance for net investments in leases - - - 2,052 2,052
Credit loss allowance for other financial assets (15) - (421) (5,927) (6,363)
Recovery of credit loss allowance for financial assets measured at fair value - - 174 163 337
through other comprehensive income
Net impairment of non-financial assets (294) (1,441) (7,976) (1,497) (11,208)
Operating income after expected credit and non-financial asset impairment 142,413 70,771 145,937 23,511 382,632
losses
Staff costs (35,274) (13,459) (17,017) (20,839) (86,589)
Depreciation and amortization (14,604) (3,333) (1,541) (3,725) (23,203)
Provision for liabilities and charges - - - 90 90
Administrative and other operating expenses (19,231) (5,148) (6,749) (16,383) (47,511)
Operating expenses (69,109) (21,940) (25,307) (40,857) (157,213)
Losses from modifications of financial instruments - - (31) - (31)
Profit/(loss) before tax 73,304 48,831 120,599 (17,346) 225,388
Income tax expense (8,694) (6,039) (16,070) 3,888 (26,915)
Profit/(loss) 64,610 42,792 104,529 (13,458) 198,473
Consolidated Financial Statements of TBC Bank Group PLC
Consolidated Balance sheet
In thousands of GEL Dec-21 Sep-21
(as restated)
Cash and cash equivalents 1,722,137 1,960,441
Due from other banks 79,142 64,894
Mandatory cash balances with National Bank of Georgia 2,087,141 2,095,848
Loans and advances to customers 16,637,145 15,504,311
Investment securities measured at fair value through other comprehensive 1,938,196 2,253,510
income
Bonds carried at amortized cost 49,582 1,118
Net investments in leases 262,046 237,557
Investment properties 22,892 32,444
Current income tax prepayment 194 4,856
Deferred income tax asset 12,357 9,216
Other financial assets 20 453,115 383,890
Other assets 397,079 352,191
Premises and equipment 392,506 378,514
Right of use assets 70,513 52,944
Intangible assets 319,963 305,088
Goodwill 59,964 59,964
Investments in associates 4,589 4,455
TOTAL ASSETS 24,508,561 23,701,241
LIABILITIES
Due to credit institutions 2,984,176 3,361,515
Customer accounts 15,038,172 14,338,537
Other financial liabilities(20) 139,811 165,710
Current income tax liability 86,762 16,559
Deferred income tax liability 10,979 7,684
Debt securities in issue 1,710,288 1,507,969
Provision for liabilities and charges 25,358 28,275
Other liabilities 130,972 137,086
Lease Liabilities 66,167 53,627
Subordinated debt 623,647 636,086
TOTAL LIABILITIES 20,816,332 20,253,048
EQUITY
Share capital 1,682 1,682
Shares held by trust (25,489) (25,489)
Share premium* 283,430 283,430
Retained earnings 3,007,132 2,793,033
Merger reserve* 402,862 402,862
Share based payment reserve (5,135) (8,811)
Fair value reserve (10,862) (1,207)
Cumulative currency translation reserve (9,450) (7,065)
Net assets attributable to owners 3,644,170 3,435,849
Non-controlling interest 48,059 9,758
TOTAL EQUITY 3,692,229 3,448,193
TOTAL LIABILITIES AND EQUITY 24,508,561 23,701,241
* Certain amounts do not correspond to September 2021 consolidated statement
of financial position as they reflect the reclassifications made by the
management for merger reserve.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
In thousands of GEL 4Q'21 3Q'21 4Q'20
(as restated) (as restated)
Interest income 510,035 476,636 453,874
Interest expense (239,839) (226,991) (227,786)
Net gains from currency swaps 5,249 9,745 5,237
Net interest income 275,445 259,390 231,325
Fee and commission income* 123,893 110,546 87,748
Fee and commission expense* (52,825) (41,915) (35,549)
Net fee and commission income 71,068 68,631 52,199
Net insurance premiums earned 18,883 16,818 12,542
Net insurance claims incurred and agents' commissions (11,229) (10,799) (9,279)
Net insurance premium earned after claims and acquisition costs 7,654 6,019 3,263
Net gains/(losses) from currency derivatives, foreign currency operations and 27,984 29,102 28,085
translation
Gains less losses from disposal of investment securities measured at fair 252 3,863 578
value through other comprehensive income
Other operating income 6,198 4,798 6,890
Share of profit of associates 71 170 (243)
Other operating non-interest income 34,505 37,933 35,310
Recovery of/(charges to) credit loss allowance for loans to customers 3,171 4,389 (75,711)
Recovery of/(charges to) credit loss allowance for net investments in leases 2,052 142 (1,459)
Recovery of/(charges to) credit loss allowance for performance guarantees and 5,971 (6,697) 2,067
credit related commitments
Credit loss allowance for other financial assets (6,363) (3,037) (3,364)
Recovery of/(charges to) credit loss allowance for financial assets measured 337 424 (903)
at fair value through other comprehensive income
Net impairment of non-financial assets* (11,208) (327) (4,816)
Operating profit after expected credit losses* 382,632 366,867 237,911
Staff costs (86,589) (74,643) (67,782)
Depreciation and amortization (23,203) (19,988) (18,838)
(Provision for)/ recovery of liabilities and charges 90 (54) (724)
Administrative and other operating expenses* (47,511) (37,010) (35,790)
Operating expenses* (157,213) (131,695) (123,134)
Losses from modifications of financial instruments (31) (104) (5,082)
Profit before tax 225,388 235,068 109,695
Income tax expense (26,915) (27,921) (8,994)
Profit 198,473 207,147 100,701
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve (9,657) (1,375) 3,163
Exchange differences on translation to presentation currency (2,385) (1,866) (1,211)
Other comprehensive income for the period (12,042) (3,241) 1,952
Total comprehensive income for the period 186,431 203,906 102,653
Profit attributable to:
- Shareholders of TBCG 196,721 204,892 99,371
- Non-controlling interest 1,752 2,255 1,330
Profit 198,473 207,147 100,701
Total comprehensive income is attributable to:
- Shareholders of TBCG 184,659 201,662 101,297
- Non-controlling interest 1,772 2,244 1,356
Total comprehensive income for the period 186,431 203,906 102,653
* Certain amounts do not correspond to 3Q 2021 and 4Q 2020 Consolidated
Statement of Profit or Loss and Other Comprehensive Income as they reflect the
reclassifications made by the management between a) net impairment of
non-financial assets and administrative and other operating expenses; and b)
commission income and commission expenses.
Consolidated Statement of Cash Flows
In thousands of GEL Dec-21 Sep-21
Cash flows from (used in) operating activities
Interest received 1,981,768 1,393,345
Interest received on currency swaps 28,143 22,894
Interest paid (867,209) (658,355)
Fees and commissions received 414,505 284,273
Fees and commissions paid (188,214) (133,149)
Insurance and reinsurance received 96,601 68,437
Insurance claims paid (36,806) (26,354)
Income received from trading in foreign currencies 113,043 58,592
Other operating income received 75,378 53,477
Staff costs paid (307,633) (227,775)
Administrative and other operating expenses paid (195,188) (114,125)
Income tax paid (13,756) (11,893)
Cash flows from operating activities before changes in operating assets and 1,100,632 709,367
liabilities
Net change in operating assets
Due from other banks and mandatory cash balances with the National Bank of 393,174 57,244
Georgia
Loans and advances to customers (3,085,488) (1,650,871)
Net investments in lease (499) 28,358
Other financial assets (213,126) (159,404)
Other assets 5,077 5,740
Net change in operating liabilities
Due to credit institutions 132,826 91,328
Customer accounts 2,821,952 2,287,018
Other financial liabilities (144,867) (115,735)
Other liabilities and provision for liabilities and charges 36,791 23,992
Net cash flows from operating activities 1,046,472 1,277,037
Cash flows from/ (used in) investing activities
Acquisition of investment securities measured at fair value through other (797,285) (598,141)
comprehensive income
Proceeds fromdisposal of investment securities measured at fair value through 1,025,775 929,431
other comprehensive income
Proceeds from redemption at maturity of investment securities measured at fair 412,204 -
value through other comprehensive income
Acquisition of bonds carried at amortised cost (47,784) -
Proceeds from redemption of bonds carried at amortised cost 26,296 28,351
Acquisition of premises, equipment and intangible assets (163,222) (111,148)
Proceeds from disposal of premises, equipment and intangible assets 20,826 13,833
Purchase of additional interest from minority shareholders (17,215) -
Proceeds from sale of investment to NCI 57,039 -
Proceeds from disposal of investment property 23,639 44,464
Net cash flows from investing activities 540,273 306,790
Cash flows from (used in) financing activities
Proceeds from other borrowed funds 1,750,443 1,755,171
Redemption of other borrowed funds (3,338,139) (2,914,700)
Repayment of principal of lease liabilities (12,825) (8,417)
Redemption of subordinated debt (12,562) (12,562)
Proceeds from debt securities in issue 295,457 49,346
Dividends paid (87,723) (84,159)
Net cash used in financing activities (1,405,349) (1,215,321)
Effect of exchange rate changes on cash and cash equivalents (94,664) (43,470)
Net increase in cash and cash equivalents 86,732 325,036
Cash and cash equivalents at the beginning of the year 1,635,405 1,635,404
Cash and cash equivalents at the end of the year 1,722,137 1,960,440
Key Ratios
Average Balances
The average balances included in this document are calculated as the average
of the relevant monthly balances as of each month-end. Balances have been
extracted from TBC's unaudited and consolidated management accounts, which
were prepared from TBC's accounting records. These were used by the management
for monitoring and control purposes.
Key Ratios
Ratios (based on monthly averages, where applicable) 4Q'21 3Q'21 4Q'20
Profitability ratios:
ROE(1) 22.1% 24.1% 13.7%
ROA(2) 3.3% 3.6% 1.8%
Cost to income(3) 40.4% 35.4% 38.2%
NIM(4) 5.4% 5.3% 4.8%
Loan yields(5) 10.7% 10.5% 10.2%
Deposit rates(6) 3.4% 3.5% 3.6%
Cost of funding(7) 4.6% 4.5%* 4.7%*
Asset quality & portfolio concentration:
Cost of risk(9) -0.1% -0.1% 2.0%
PAR 90 to Gross Loans(9) 1.1% 1.3% 1.5%
NPLs to Gross Loans(10) 2.4% 3.1% 4.7%
NPL provision coverage(11) 99.9% 94.3% 85.6%
Total NPL coverage(12) 175.3% 169.3% 159.4%
Credit loss level to Gross Loans(13) 2.4% 2.9% 4.0%
Related Party Loans to Gross Loans(14) 0.1% 0.0% 0.0%
Top 10 Borrowers to Total Portfolio(15) 6.8% 7.7% 7.9%
Top 20 Borrowers to Total Portfolio(16) 10.5% 11.4% 12.1%
Capital & liquidity positions:
Net Loans to Deposits plus IFI** Funding(17) 100.9% 97.5% 101.2%
Net Stable Funding Ratio(18) 127.3% 127.1% 126.0%
Liquidity Coverage Ratio(19) 115.8% 116.5% 134.2%
Leverage(20) 6.7x 6.9x 7.7x
CET 1 CAR (Basel III)(21) 13.7% 13.4% 10.4%
Tier 1 CAR (Basel III)(22) 16.7% 15.4% 13.0%
Total 1 CAR (Basel III)(23) 20.3% 19.3% 17.1%
*The Group enters into swap agreements denominated in foreign currencies with
a view to decrease cost of funding. Respective interest effect is presented
within net interest income, but has not been previously included in the cost
of funding ratio calculation. As the contracts reached significant volume, the
Group revisited the presentation of effects in the cost of funding ratio and
decided to include interest effect from swap agreements in the calculation of
cost of funding. The change was made retrospectively and ratios of previous
periods have also been restated.
** 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; annualized 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 stand-alone,
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 stand-alone, 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 stand-alone, 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 stand-alone, 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 stand-alone, 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 USD/GEL exchange rate of 3.1228 as of 30
September 2021. For the calculations of the YoY growth without the currency
exchange rate effect, we used the USD/GEL exchange rate of 3.2766 as of 31
December 2020. As of 31 December 2021 the USD/GEL exchange rate equaled
3.0976. For P&L items growth calculations without currency effect, we used
the average USD/GEL exchange rate for the following periods: 4Q 2021 of
3.1254, 3Q 2021 of 3.1204, 4Q 2020 of 3.2705.
Unaudited Consolidated Financial Results Overview for FY 2021
This statement provides a summary of the unaudited business and financial
trends for FY 2021 for TBC Bank Group plc and its subsidiaries. The financial
information and trends are unaudited.
TBC Bank Group PLC's financial results has 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).
Financial Highlights
Income Statement Highlights
in thousands of GEL FY'21 FY'20 Change YoY
Net interest income 1,002,732 835,433 20.0%
Net fee and commission income 248,000 182,767 35.7%
Other operating non-interest income 21 (#_ftn21) 201,288 137,391 46.5%
Total credit loss allowance* 16,900 (358,008) NMF
Operating profit after expected credit losses* 1,468,920 797,583 84.2%
Operating expenses* (545,834) (437,462) 24.8%
Losses from modifications of financial instrument (1,726) (41,015) -95.8%
Profit before tax 921,360 319,106 NMF
Income tax expense/(credit) (112,361) 3,383 NMF
Profit for the period 808,999 322,489 NMF
* Certain amounts do not correspond to 2020 Consolidated Statement of Profit
or Loss and Other Comprehensive Income as they reflect the reclassification
made by the management between net impairment of non-financial assets and
administrative and other operating expenses.
Balance Sheet and Capital Highlights
in thousands of GEL Dec-21 Dec-20 Change YoY
Total Assets 24,508,561 22,577,805 8.6%
Gross Loans 17,047,391 15,200,520 12.2%
Customer Deposits 15,038,172 12,572,728 19.6%
Total Equity 3,692,229 2,935,934 25.8%
CET 1 Capital (Basel III) 2,759,894 1,911,233 44.4%
Tier 1 Capital (Basel III) 3,379,414 2,385,181 41.7%
Total Capital (Basel III) 4,102,927 3,137,912 30.8%
Risk Weighted Assets (Basel III) 20,217,629 18,301,477 10.5%
Key Ratios FY'21 FY'20 Change YoY
ROE 24.4% 11.7% 12.7 pp
Bank's standalone ROE 22 27.7% 13.1% 14.6 pp
ROA 3.4% 1.6% 1.8 pp
Bank's standalone ROA(22) 3.8% 1.7% 2.1 pp
NIM 5.1% 4.7% 0.4 pp
Cost to income 37.6% 37.9% -0.3 pp
Bank's standalone cost to income(22) 29.7% 32.7% -3.0 pp
Cost of risk -0.3% 2.4% -2.7 pp
NPL to gross loans 2.4% 4.7% -2.3 pp
NPL provision coverage ratio 99.9% 85.6% 14.3 pp
Total NPL coverage ratio 175.3% 159.4% 15.9 pp
CET 1 CAR (Basel III) 13.7% 10.4% 3.3 pp
Tier 1 CAR (Basel III) 16.7% 13.0% 3.7 pp
Total CAR (Basel III) 20.3% 17.1% 3.2 pp
Leverage (Times) 6.7x 7.7x -1.0x
Net Interest Income
In 2021, net interest income amounted to GEL 1,002.7 million, up by 20.0% YoY,
whereby interest income and interest expense increased by 13.1% and 6.8%,
respectively.
The YoY increase in interest income was primarily related to an increase in
interest income from loans, which was related both an increase in the gross
loan portfolio of GEL 1,846.9 million, or 12.2%, and a rise in loan yield of
0.2 pp. The upper loan rate was due a shift of the portfolio composition
towards GEL loans.
The increase in interest expense was primarily related to an increase in
interest expense from deposits, which was due to an increase in the respective
portfolio of GEL 2,465.4 million, or 19.6%. Over the same period, the cost of
deposits declined by 0.2 pp. In addition, the change in the liability
structure towards deposits (from 64% as of 31 December 2020 to 72% as of 31
December 2021, as mentioned above) had a positive effect on the cost of
funding. As a result, the cost of funding decreased by 0.3 pp YoY and stood at
4.5% in 2021.
In 2021, our NIM stood at 5.1%, up by 0.4 pp YoY.
In thousands of GEL FY'21 FY'20 Change YoY
Interest income 1,885,856 1,667,999 13.1%
Interest expense (911,267) (853,516) 6.8%
Net gains from currency swaps 28,143 20,950 34.3%
Net interest income 1,002,732 835,433 20.0%
NIM 5.1% 4.7% 0.4 pp
Non-Interest Income
Total other non-interest income increased by 40.3% YoY and amounted to GEL
449.3 million in 2021. The YoY growth was driven by a strong rebound across
all categories, further amplified by a gain from sale of one of our investment
properties in 2Q 2021 (the gain from this transaction is included in other
operating income).
In thousands of GEL FY'21 FY'20 Change YoY
Non-interest income
Net fee and commission income 248,000 182,767 35.7%
Net income from currency derivatives, foreign currency operations and 117,270 98,018 19.6%
translation
Net insurance premium earned after claims and acquisition costs 23 23,546 19,485 20.8%
Other operating income 60,472 19,888 NMF
Total other non-interest income 449,288 320,158 40.3%
NMF - no meaningful figures
Credit Loss Allowance
Total credit loss allowance in 2021 amounted to GEL 16.9 million. This
significant decrease on a year-on-year basis was driven by improved
performance across all segments in 2021 and by a high base in 2020, due to the
reflection of COVID-19 impact on the credit loss allowances.
In thousands of GEL FY'21 FY'20 (as restated) Change YoY
Recovery of/(charges to) credit loss allowance for loans to customers 40,123 (330,811) NMF
Credit loss allowance for other transactions* (23,223) (27,197) -14.6%
Total credit loss allowance* 16,900 (358,008) NMF
Operating income after expected credit and non-financial asset impairment 1,468,920 797,583 84.2%
losses *
Cost of risk -0.3% 2.4% -2.7 pp
* Certain amounts do not correspond to 2020 operating income after expected
credit and non-financial asset impairment losses as they reflect the
reclassifications made by the management between net impairment of
non-financial assets and administrative and other operating expenses.
NMF - no meaningful figures
Operating Expenses
In 2021, our total operating expenses expanded by 24.8% YoY.
In 2021, the increase in our operating expenses was mainly driven by staff
costs, due to higher performance related costs, including management's
variable compensation, which was waived in 2020, as well as to the growing
scale of our Uzbek business. At the same time, the increase in administrative
and other expenses across the board was due to low base in 2020 and increased
business activities.
The cost to income ratio stood at 37.6%, down by 0.3 pp YoY, while the Bank's
standalone cost to income was 29.7%, down by 3.0 pp over the same period.
In thousands of GEL FY'21 FY'20 (as restated) Change YoY
Operating expenses
Staff costs (309,302) (244,043) 26.7%
Provisions for liabilities and charges 27 (2,706) NMF
Depreciation and amortization (79,891) (68,392) 16.8%
Administrative & other operating expenses* (156,668) (122,321) 28.1%
Total operating expenses* (545,834) (437,462) 24.8%
Cost to income 37.6% 37.9% -0.3 pp
Bank's standalone cost to income(24) 29.7% 32.7% -3.0 pp
* Certain amounts do not correspond to 2020 operating expense figures as they
reflect the reclassifications made by the management between net impairment of
non-financial assets and administrative and other operating expenses.
Net Income
In 2021, our record high profitability was driven by strong income generation
across all categories, as well as by reversals of provision charges.
As a result, our ROE stood at 24.4%, ROA stood at 3.4%.
In thousands of GEL FY'21 FY'20 Change YoY
Losses from modifications of financial instruments (1,726) (41,015) -95.8%
Profit before tax 921,360 319,106 NMF
Income tax expense/(credit) (112,361) 3,383 NMF
Profit for the period 808,999 322,489 NMF
ROE 24.4% 11.7% 12.7 pp
Bank's standalone ROE 24 27.7% 13.1% 14.6 pp
ROA 3.4% 1.6% 1.8 pp
Bank's standalone ROA24 3.8% 1.7% 2.1 pp
Funding and Liquidity
In 2021, we utilized access liquidity generated in 2020 and our liquidity
coverage ratio, as defined by the NBG was 115.8%, above the 100% limit,
while the LCR in GEL and FC stood at 107.7% and 120.8% respectively, above the
respective limits of 75% and 100%.
As of 31 December 2021, NSFR stood at 127.3%, compared to the regulatory limit
of 100%.
Dec-21 Dec-20 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 127.3% 126.0% 1.3 pp
Net loans to deposits + IFI funding 100.9% 101.2% -0.3 pp
Leverage (Times) 6.7x 7.7x -1.0x
Minimum total liquidity coverage ratio, as defined by the NBG 100.00% 100.0% 0.0 pp
Minimum LCR in GEL, as defined by the NBG 75%* n/a NMF
Minimum LCR in FC, as defined by the NBG 100.00% 100.0% 0.0 pp
Total liquidity coverage ratio, as defined by the NBG 115.8% 134.2% -18.4 pp
LCR in GEL, as defined by the NBG 107.7% 132.2% -24.5 pp
LCR in FC, as defined by the NBG 120.8% 134.9% -14.1 pp
* In May 2021, NBG restored the NBG GEL LCR limit, which was temporarily
removed for one year
Regulatory Capital
On a YoY basis, the Bank's CET1, Tier 1 and Total capital adequacy ratios
increased by 3.3 pp, 3.7 pp and 3.2 pp, respectively. This increase was mainly
driven by strong net income generation, the issuance of an AT1 Bond in
November 2021 in the amount of USD 75 million, and by local currency
appreciation, which was partially offset by an increase in the loan book.
In thousands of GEL Dec-21 Dec-20 Change YoY
CET 1 Capital 2,759,894 1,911,233 44.4%
Tier 1 Capital 3,379,414 2,385,181 41.7%
Total Capital 4,102,927 3,137,912 30.8%
Total Risk-weighted Exposures 20,217,629 18,301,477 10.5%
Minimum CET 1 ratio 11.7% 7.4% 4.3 pp
CET 1 Capital adequacy ratio 13.7% 10.4% 3.3 pp
Minimum Tier 1 ratio 14.0% 9.2% 4.8 pp
Tier 1 Capital adequacy ratio 16.7% 13.0% 3.7 pp
Minimum total capital adequacy ratio 18.4% 13.7% 4.7 pp
Total Capital adequacy ratio 20.3% 17.1% 3.2 pp
Loan Portfolio
As of 31 December 2021, the gross loan portfolio reached GEL 17,047.4 million,
up by 12.2% YoY or by 18.0% on a constant currency basis. The proportion of
gross loans denominated in foreign currency decreased by 5.5 pp YoY and
accounted for 53.9% of total loans, while on a constant currency basis the
proportion of gross loans denominated in foreign currency was down by 3.2 pp
YoY and stood at 56.2%.
As of 31 September 2021, our market share in total loans stood at 38.8%, down
by 0.2 pp YoY, while our loan market share in legal entities was 39.1%, up by
0.5 pp over the same period, and our loan market share in individuals stood at
38.6%, down by 0.8 pp QoQ.
In thousands of GEL Dec-21 Dec-20 Change YoY
Loans and advances to customers
Retail 6,358,345 5,846,274 8.8%
Retail loans GEL 3,580,468 3,007,484 19.1%
Retail loans FC 2,777,877 2,838,790 -2.1%
CIB 6,547,741 5,831,871 12.3%
CIB loans GEL 2,188,776 1,599,857 36.8%
CIB loans FC 4,358,965 4,232,014 3.0%
MSME 4,141,305 3,522,375 17.6%
MSME loans GEL 2,082,204 1,559,127 33.5%
MSME loans FC 2,059,101 1,963,248 4.9%
Total loans and advances to customers 17,047,391 15,200,520 12.2%
FY'21 FY'20 Change YoY
Loan yields 10.3% 10.1% 0.2 pp
Loan yields GEL 15.1% 15.3% -0.2 pp
Loan yields FC 6.5% 6.7% -0.2 pp
Retail Loan Yields 11.7% 11.5% 0.2 pp
Retail loan yields GEL 16.1% 16.5% -0.4 pp
Retail loan yields FC 6.1% 6.6% -0.5 pp
CIB Loan Yields 9.0% 8.6% 0.4 pp
CIB loan yields GEL 13.7% 13.2% 0.5 pp
CIB loan yields FC 7.0% 7.0% 0.0 pp
MSME Loan Yields 10.2% 10.2% 0.0 pp
MSME loan yields GEL 14.9% 14.9% 0.0 pp
MSME loan yields FC 6.0% 6.3% -0.3 pp
Loan Portfolio Quality
On a YoY basis, total par 30 improved by 0.6 pp. The decrease was mainly
driven by the Retail segment on the back of write-offs of the unsecured loans
and strong performance of the mortgage portfolio.
Our NPL ratio improved by 2.3 pp YoY and amounted to 2.4%. The recovery was
observed in all segments, mainly driven by resumed repayments on COVID-19
restructured loans.
Dec-21 Dec-20 Change YoY
Par 30
Retail 2.2% 3.5% -1.3 pp
CIB 0.6% 1.0% -0.4 pp
MSME 4.0% 3.7% 0.3 pp
Total Loans 2.0% 2.6% -0.6 pp
Non-performing Loans Dec-21 Dec-20 Change YoY
Retail 2.4% 5.8% -3.4 pp
CIB 1.4% 2.4% -1.0 pp
MSME 4.0% 6.5% -2.5 pp
Total Loans 2.4% 4.7% -2.3 pp
NPL Coverage Dec-21 Dec-20
Provision Coverage Total Coverage Provision Coverage Total Coverage
Retail 158.8% 224.6% 102.4% 170.3%
CIB 56.8% 126.4% 77.1% 148.0%
MSME 68.0% 155.5% 66.4% 150.5%
Total 99.9% 175.3% 85.6% 159.4%
Cost of risk
The total cost of risk for 2021 stood at -0.3%, down by 2.7 pp YoY. This
significant decrease on a year-on-year basis was driven by improved
performance across all segments in 2021 and by a high base in 2020 due to the
reflection of COVID-19 impact on the credit loss allowances.
Cost of Risk FY'21 FY'20 Change YoY
Retail 0.5% 3.8% -3.3 pp
CIB -1.0% 0.6% -1.6 pp
MSME -0.2% 3.0% -3.2 pp
Total -0.3% 2.4% -2.7 pp
Deposit Portfolio
The total deposits portfolio increased by 19.6% YoY across all segments and
amounted to GEL 15,038.2 million, while on a constant currency basis the total
deposit portfolio increased by 25.1% over the same period. The proportion of
deposits denominated in foreign currency was down by 2.8 pp YoY and accounted
for 63.5% of total deposits, while on a constant currency basis the proportion
of deposits denominated in foreign currency increased by 1.2 pp YoY and stood
at 65.1%.
As of 31 December 2021, our market share in deposits amounted to 40.4%, up by
3.2 pp YoY, and our market share in deposits to legal entities stood at 40.5%,
up by 6.0 pp over the same period. Our market share in deposits to individuals
stood at 40.3%, up by 0.8 pp YoY.
In thousands of GEL Dec-21 Dec-20 Change YoY
Customer Accounts
Retail 5,837,333 4,975,661 17.3%
Retail deposits GEL 1,492,325 1,236,594 20.7%
Retail deposits FC 4,345,008 3,739,067 16.2%
CIB 7,330,543 5,717,347 28.2%
CIB deposits GEL 2,934,167 1,833,122 60.1%
CIB deposits FC 4,396,376 3,884,225 13.2%
MSME 1,558,676 1,368,490 13.9%
MSME deposits GEL 756,135 661,941 14.2%
MSME deposits FC 802,541 706,549 13.6%
Total Customer Accounts* 15,038,172 12,572,728 19.6%
* Total deposit portfolio includes Ministry of Finance deposits in the amount
of GEL 511 million and GEL 312 million as of 31 December 2020 and 31 December
2021, respectively.
FY'21 FY'20 Change YoY
Deposit rates 3.4% 3.6% -0.2 pp
Deposit rates GEL 6.7% 6.5% 0.2 pp
Deposit rates FC 1.5% 2.0% -0.5 pp
Retail Deposit Yields 2.4% 2.6% -0.2 pp
Retail deposit rates GEL 4.9% 5.3% -0.4 pp
Retail deposit rates FC 1.3% 1.7% -0.4 pp
CIB Deposit Yields 4.3% 4.4% -0.1 pp
CIB deposit rates GEL 8.5% 8.1% 0.4 pp
CIB deposit rates FC 2.0% 2.5% -0.5 pp
MSME Deposit Yields 0.8% 0.9% -0.1 pp
MSME deposit rates GEL 1.4% 1.6% -0.2 pp
MSME deposit rates FC 0.2% 0.3% -0.1 pp
Segment definition and PL
Business Segments
The segment definitions are as follows:
· Corporate and Investment Banking (CIB) - a legal entity/group of
affiliated entities with an annual revenue exceeding GEL 12.0 million or which
has been granted facilities of more than GEL 5.0 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
private banking services to high-net-worth individuals with a threshold of
US$ 250,000 of assets under management (AUM), as well as on discretionary
basis;
· Retail - non-business individual customers; or individual
customers of the fully digital bank, Space.
· MSME - business customers 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.
Income Statement by Segments
FY'21 Retail MSME CIB Corp. Centre Total
Interest income 691,257 384,337 562,055 248,207 1,885,856
Interest expense (131,233) (11,343) (274,093) (494,598) (911,267)
Net gains from currency swaps - - - 28,143 28,143
Net transfer pricing (169,947) (154,827) 71,408 253,366 -
Net interest income 390,077 218,167 359,370 35,118 1,002,732
Fee and commission income 212,867 52,806 111,777 34,582 412,032
Fee and commission expense (38,191) (33,858) (80,717) (11,266) (164,032)
Net fee and commission income 174,676 18,948 31,060 23,316 248,000
Net insurance premium earned after claims and acquisition costs - - - 23,546 23,546
Net gains/(losses) from currency derivatives, foreign currency operations and 35,946 27,496 57,102 (3,274) 117,270
translation
Gains less losses from disposal of investment securities Measured at fair - - 1,412 9,744 11,156
value through other comprehensive income
Other operating income 8,001 877 2,677 36,924 48,479
Share of profit of associates - - - 837 837
Other operating non-interest income and insurance profit 43,947 28,373 61,191 67,777 201,288
Recovery of/(charges to) credit loss allowance for loans to customers (26,795) 7,175 59,743 - 40,123
Recovery of credit loss allowance for performance guarantees and credit 369 199 636 - 1,204
related commitments
Credit loss allowance for net investments in leases - - - (321) (321)
Credit loss allowance for other financial assets (3,307) - (513) (10,906) (14,726)
Recovery of credit loss allowance for financial assets measured at fair value - - 1,104 1,498 2,602
through other comprehensive income
Net impairment of non-financial assets (59) (1,373) (7,954) (2,596) (11,982)
Operating income after expected credit and non-financial asset impairment 578,908 271,489 504,637 113,886 1,468,920
losses
Staff costs (135,918) (53,828) (50,727) (68,829) (309,302)
Depreciation and amortization (51,558) (11,663) (5,339) (11,331) (79,891)
Provision for liabilities and charges - - - 27 27
Administrative and other operating expenses (75,295) (20,221) (18,459) (42,693) (156,668)
Operating expenses (262,771) (85,712) (74,525) (122,826) (545,834)
Losses from modifications of financial instruments (688) (93) (945) - (1,726)
Profit/(loss) before tax 315,449 185,684 429,167 (8,940) 921,360
Income tax expense (32,200) (21,135) (48,857) (10,169) (112,361)
Profit/(loss) 283,249 164,549 380,310 (19,109) 808,999
Consolidated Financial Statements of TBC Bank Group PLC
Consolidated Balance sheet
In thousands of GEL Dec-21 Dec-20
(as restated)
Cash and cash equivalents 1,722,137 1,635,405
Due from other banks 79,142 50,805
Mandatory cash balances with National Bank of Georgia 2,087,141 2,098,506
Loans and advances to customers 16,637,145 14,594,274
Investment securities measured at fair value through other comprehensive 1,938,196 1,527,268
income*
Bonds carried at amortized cost* 49,582 1,089,801
Net investments in leases 262,046 271,660
Investment properties 22,892 68,689
Current income tax prepayment 194 69,888
Deferred income tax asset 12,357 2,787
Other financial assets 25 453,115 171,302
Other assets 397,079 266,960
Premises and equipment 392,506 372,956
Right of use assets 70,513 53,927
Intangible assets 319,963 239,523
Goodwill 59,964 59,964
Investments in associates 4,589 4,090
TOTAL ASSETS 24,508,561 22,577,805
LIABILITIES
Due to credit institutions 2,984,176 4,486,373
Customer accounts 15,038,172 12,572,728
Other financial liabilities(25) 139,811 227,432
Current income tax liability 86,762 853
Deferred income tax liability 10,979 13,088
Debt securities in issue 1,710,288 1,496,497
Provision for liabilities and charges 25,358 25,335
Other liabilities 130,972 87,842
Lease Liabilities 66,167 58,983
Subordinated debt 623,647 672,740
TOTAL LIABILITIES 20,816,332 19,641,871
EQUITY
Share capital 1,682 1,682
Shares held by trust (25,489) (33,413)
Share premium* 283,430 283,430
Retained earnings 3,007,132 2,281,428
Merger reserve* 402,862 402,862
Share based payment reserve (5,135) (20,568)
Fair value reserve* (10,862) 11,158
Cumulative currency translation reserve (9,450) (2,124)
Net assets attributable to owners 3,644,170 2,924,455
Non-controlling interest 48,059 11,479
TOTAL EQUITY 3,692,229 2,935,934
TOTAL LIABILITIES AND EQUITY 24,508,561 22,577,805
* Certain amounts do not correspond to the 2020 consolidated statement of
financial position as they reflect the reclassifications made by the
management: a) between merger reserve and share premium and b) change in
business model for investment securities transferring them from under FVTOCI
classification.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
In thousands of GEL FY'21 FY'20
(as restated)
Interest income 1,885,856 1,667,999
Interest expense (911,267) (853,516)
Net gains from currency swaps 28,143 20,950
Net interest income 1,002,732 835,433
Fee and commission income* 412,032 306,177
Fee and commission expense* (164,032) (123,410)
Net fee and commission income 248,000 182,767
Net insurance premiums earned 65,990 53,359
Net insurance claims incurred and agents' commissions (42,444) (33,874)
Net insurance premium earned after claims and acquisition costs 23,546 19,485
Net gains from currency derivatives, foreign currency operations and 117,270 98,018
translation
Gains less losses from disposal of investment securities measured at fair 11,156 (624)
value through other comprehensive income
Other operating income 48,479 20,512
Share of profit of associates 837 -
Other operating non-interest income 177,742 117,906
Recovery of/(charges to) credit loss allowance for loans to customers 40,123 (330,811)
Credit loss allowance for net investments in leases (321) (8,398)
Recovery of credit loss allowance for performance guarantees and credit 1,204 3,238
related commitments
Credit loss allowance for other financial assets (14,726) (14,067)
Recovery of/(charges to) credit loss allowance for financial assets measured 2,602 (1,809)
at fair value through other comprehensive income
Net impairment of non-financial assets* (11,982) (6,161)
Operating profit after expected credit losses* 1,468,920 797,583
Staff costs (309,302) (244,043)
Depreciation and amortization (79,891) (68,392)
Recovery of liabilities and charges 27 (2,706)
Administrative and other operating expenses* (156,668) (122,321)
Operating expenses* (545,834) (437,462)
Losses from modifications of financial instruments (1,726) (41,015)
Profit before tax 921,360 319,106
Income tax (expense)/credit (112,361) 3,383
Profit 808,999 322,489
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve (22,020) 17,633
Exchange differences on translation to presentation currency (7,326) 4,707
Other comprehensive income for the period (29,346) 22,340
Total comprehensive income for the period 779,653 344,829
Profit attributable to:
- Shareholders of TBCG 800,782 317,752
- Non-controlling interest 8,217 4,737
Profit 808,999 322,489
Total comprehensive income is attributable to:
- Shareholders of TBCG 771,436 340,092
- Non-controlling interest 8,217 4,737
Total comprehensive income for the period 779,653 344,829
* Certain amounts do not correspond to 2020 Consolidated Statement of Profit
or Loss and Other Comprehensive Income as they reflect the reclassifications
made by the management between a) net impairment of non-financial assets and
administrative and other operating expenses; and b) commission income and
commission expenses.
Consolidated Statements of Cash Flows
in thousands of GEL Dec-21 Dec-20
Cash flows from/(used in) operating activities
Interest received 1,981,768 1,462,815
Interest received on currency swaps 28,143 20,950
Interest paid (867,209) (839,258)
Fees and commissions received 414,505 297,024
Fees and commissions paid (188,214) (133,385)
Insurance and reinsurance received 96,601 86,447
Insurance claims paid (36,806) (27,139)
Cash (paid)/received from trading in foreign currencies 113,043 (92,191)
Other operating income received 75,378 48,402
Staff costs paid (307,633) (238,577)
Administrative and other operating expenses paid (195,188) (134,348)
Income tax paid (13,756) (46,268)
Cash flows from operating activities before changes in operating assets and 1,100,632 404,472
liabilities
Net change in operating assets
Due from other banks and mandatory cash balances with the National Bank of 393,174 (353,975)
Georgia
Loans and advances to customers (3,085,488) (1,059,684)
Finance lease receivables (499) (2,902)
Other financial assets (213,126) (41,774)
Other assets 5,077 33,109
Net change in operating liabilities
Due to other banks 132,826 (32,294)
Customer accounts 2,821,952 1,432,051
Other financial liabilities (144,867) 115,370
Other liabilities and provision for liabilities and charges 36,791 (8,153)
Net cash flows from operating activities 1,046,472 486,220
Cash flows from/(used in) investing activities
Acquisition of investment securities measured at fair value through other (797,285) (763,531)
comprehensive income
Proceeds from disposal of investment securities measured at fair value through 1,025,775 287,917
other comprehensive income
Proceeds from redemption at maturity of investment securities measured at fair 412,204 165,632
value through other comprehensive income
Dividend received - 694
Acquisition of bonds carried at amortised cost (47,784) (668,477)
Proceeds from redemption of bonds carried at amortised cost 26,296 413,038
Acquisition of premises, equipment and intangible assets (163,222) (164,379)
Proceeds from disposal of premises, equipment and intangible assets 20,826 3,627
Proceeds from disposal of investment properties 23,639 13,513
Purchase of additional interest from minority shareholders (17,215)
Proceeds from sale of investment to NCI 57,039
Net cash flows from/ (used in) investing activities 540,273 (711,966)
Cash flows from/(used in) financing activities
Proceeds from other borrowed funds 1,750,443 4,036,810
Redemption of other borrowed funds (3,338,139) (3,324,230)
Repayment of principal of lease liabilities (12,825) (13,251)
Redemption of subordinated debt (12,562) -
Cash paid for share buy-back - (25,493)
Proceeds from debt securities in issue 295,457 104,838
Dividends paid (87,723) (1,344)
Net cash (used in)/from financing activities (1,405,349) 777,330
Effect of exchange rate changes on cash and cash equivalents (94,664) 80,238
Net increase in cash and cash equivalents 86,732 631,822
Cash and cash equivalents at the beginning of the year 1,635,405 1,003,583
Cash and cash equivalents at the end of the year 1,722,137 1,635,405
Key Ratios
Average Balances
The average balances included in this document are calculated as the average
of the relevant monthly balances as of each month-end. Balances have been
extracted from TBC's unaudited and consolidated management accounts, which
were prepared from TBC's accounting records. These were used by the management
for monitoring and control purposes.
Key Ratios
Ratios (based on monthly averages, where applicable) FY'21 FY'20
Profitability ratios:
ROE(1) 24.4% 11.7%
ROA(2) 3.4% 1.6%
Cost to income(3) 37.6% 37.9%
NIM(4) 5.1% 4.7%
Loan yields(5) 10.3% 10.1%
Deposit rates(6) 3.4% 3.6%
Cost of funding(7) 4.5% 4.8%*
Asset quality & portfolio concentration:
Cost of risk(9) -0.3% 2.4%
PAR 90 to Gross Loans(9) 1.1% 1.5%
NPLs to Gross Loans(10) 2.4% 4.7%
NPL provision coverage(11) 99.9% 85.6%
Total NPL coverage(12) 175.3% 159.4%
Credit loss level to Gross Loans(13) 2.4% 4.0%
Related Party Loans to Gross Loans(14) 0.1% 0.0%
Top 10 Borrowers to Total Portfolio(15) 6.8% 7.9%
Top 20 Borrowers to Total Portfolio(16) 10.5% 12.1%
Capital & liquidity positions:
Net Loans to Deposits plus IFI** Funding(17) 100.9% 101.2%
Net Stable Funding Ratio(18) 127.3% 126.0%
Liquidity Coverage Ratio(19) 115.8% 134.2%
Leverage(20) 6.7x 7.7x
CET 1 CAR (Basel III)(21) 13.7% 10.4%
Tier 1 CAR (Basel III)(22) 16.7% 13.0%
Total 1 CAR (Basel III)(23) 20.3% 17.1%
*The Group enters into swap agreements denominated in foreign currencies with
a view to decrease cost of funding. Respective interest effect is presented
within net interest income, but has not been previously included in the cost
of funding ratio calculation. As the contracts reached significant volume, the
Group revisited the presentation of effects in the cost of funding ratio and
decided to include interest effect from swap agreements in the calculation of
cost of funding. The change was made retrospectively and ratios of previous
periods have also been restated.
** 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; annualized 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 stand-alone,
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 stand-alone, 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 stand-alone, 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 stand-alone, 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 stand-alone, 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 USD/GEL exchange rate of 3.1228 as of 30
September 2021. For the calculations of the YoY growth without the currency
exchange rate effect, we used the USD/GEL exchange rate of 3.2766 as of 31
December 2020. As of 31 December 2021 the USD/GEL exchange rate equaled
3.0976. For P&L items growth calculations without currency effect, we used
the average USD/GEL exchange rate for the following periods: FY 2021 of
3.2306, FY 2020 of 3.1097.
Additional Disclosures
1) TBC Bank - Background
TBC Bank is the largest banking group in Georgia, where 98.7% of its business
is concentrated, with a 38.6% market share by total assets. It offers retail,
CIB, and MSME banking nationwide.
These unaudited financial results are presented for TBC Bank Group PLC ("TBC
Bank" or "the Group"), which was incorporated on 26 February 2016 as the
ultimate holding company for JSC TBC Bank Georgia. TBC Bank became the parent
company of JSC TBC Bank Georgia on 10 August 2016, following the Group's
restructuring. As this was a common ownership transaction, the results have
been presented as if the Group existed at the earliest comparative date as
allowed under the International Financial Reporting Standards ("IFRS"), as
adopted by the United Kingdom. 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 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).
2) Subsidiaries of TBC Bank Group PLC 26
Ownership / voting Country Year of incorporation Industry Total Assets
% as of 31 December 2021
(after elimination)
Subsidiary Amount % in TBC Group
GEL'000
JSC TBC Bank 99.9% Georgia 1992 Banking 23,564,174 96.13%
United Financial Corporation JSC 99.5% Georgia 1997 Card processing 19,886 0.08%
TBC Capital LLC 100.0% Georgia 1999 Brokerage 3,926 0.02%
TBC Leasing JSC 100.0% Georgia 2003 Leasing 351,563 1.43%
TBC Kredit LLC 100.0% Azerbaijan 1999 Non-banking credit institution 22,216 0.09%
TBC Pay LLC 100.0% Georgia 2009 Processing 44,256 0.18%
Index LLC 100.0% Georgia 2011 Real estate management 1,566 0.01%
TBC Invest LLC 100.0% Israel 2011 PR and marketing 312 0.00%
TBC Asset management LLC 100.0% Georgia 2021 Asset Management 0 0.00%
JSC TBC Insurance 100.0% Georgia 2014 Insurance 80,175 0.33%
Redmed LLC 100.0% Georgia 2019 E-commerce 1,498 0.00%
TBC NET LLC* 100.0% Georgia 2019 Asset Management 58,302 0.24%
Swoop JSC** N/A Georgia 2010 Retail Trade 657 0.00%
LLC Online Tickets 55.0% Georgia 2015 Software Services 3,027 0.01%
TKT UZ 75.00% Uzbekistan 2019 Retail Trade 103 0.00%
My.ge LLC** N/A Georgia 2008 E-commerce, Housing and Auto 25,656 0.10%
Vendoo LLC (Geo) 100.0% Georgia 2019 Retail Leasing 3,920 0.02%
Mypost LLC 100.0% Georgia 2019 Postal Service 108 0.00%
Billing Solutions LLC 51.00% Georgia 2019 Software Services 412 0.00%
All property.ge LLC** N/A Georgia 2013 Real estate management 4,578 0.02%
LLC F Solutions 100.0% Georgia 2019 Software Services 11 0.00%
TBC Connect LLC** N/A Georgia 2020 Software Services 4 0.00%
Marjanishvili 7 LLC 100.0% Georgia 2020 Food and Beverage 840 0.00%
Artarea.ge LLC 100.0% Georgia 2021 PR and marketing 63 0.00%
Saba LLC 85.0% Georgia 2012 Education 63 0.00%
TBC Art Gallery LLC 100.0% Georgia 2012 PR and marketing 0 0.00%
Space JSC 100.0% Georgia 2021 Software Services 31,683 0.13%
Space International JSC 100.0% Georgia 2021 Software Services 31,683 0.13%
TBC Group Support LLC 100.0% Georgia 2020 Risk Monitoring 1 0.00%
Inspired LLC 51.0% Uzbekistan 2011 Processing 30,417 0.12%
TBC Bank JSC UZ 60.2% Uzbekistan 2020 Banking 222,039 0.91%
LLC Vendoo (UZ Leasing) 100.00% Uzbekistan 2019 Retail Leasing 3,920 0.02%
* The company was renamed from TBC Ecosystem companies LLC to TBC Net LLC
during 2021.
** The companies were merged with TBC Net LLC during 2021.
3) TBC Insurance
TBC Insurance, a wholly owned subsidiary of TBC Bank, is one of the leading
players on the Georgian non-health insurance market. The company was acquired
by the Group in October 2016 and has since grown significantly, becoming the
second largest player on the property and casualty insurance and life
insurance (non-health) market and the largest player in the retail segment,
holding 26.7% and 40.0% market shares(( 27 )) without border motor third party
liability (MTPL) insurance, respectively, in 4Q 2021 or 21.8% and 37.1% in the
whole of 2021.
TBC Insurance serves both individual and legal entities and provides a broad
range of insurance products covering motor, travel, personal accident, credit
life and property, business property, liability, cargo, agro, and health
insurance products. The company differentiates itself through its advanced
digital channels, which include TBC Bank's award-winning internet and mobile
banking applications, a wide network of self-service terminals, a web channel,
and B-Bot, a Georgian-speaking chat-bot that is available through Facebook
messenger.
In 2019, we entered the health insurance market, with a strategy to target the
premium segment by providing a superior customer experience coupled with the
most innovative approach to products and services. In 2021, as we accumulated
sufficient market knowledge and claims statistics, we expanded our value
proposition to the mid-premium segment.
In 2021, net profit including health insurance increased considerably related
to business growth and non-recurring reinsurance adjustment in 4Q 2021.
Information excluding health insurance 4Q'21 3Q'21 4Q'20 FY'21 FY'20
In thousands of GEL
Gross written premium 25,571 26,125 21,322 95,790 77,652
Net earned premium(( 28 (#_ftn28) )) 20,124 19,238 16,595 74,609 63,954
Net profit 5,704 3,951 2,512 16,062 11,473
Net combined ratio 72.2% 80.2% 87.1% 79.1% 82.5%
Information including health insurance 4Q'21 3Q'21 4Q'20 FY'21 FY'20
In thousands of GEL
Gross written premium 33,039 28,851 23,077 113,819 86,369
Net earned premium 24,497 22,268 18,696 87,435 71,359
Net profit 5,122 3,598 2,299 13,760 10,041
Net combined ratio 80.2% 85.0% 90.1% 85.5% 86.8%
Note: IFRS standalone data
4) Fast growing digital bank in Uzbekistan
in thousands Jan'21 Mar'21 Jun'21 Sep'21 Dec'21
# of total registered users 28 98 302 667 1,140
# of downloads 29 103 391 897 1,548
Retail gross loan portfolio* (GEL) 153 953 25,239 52,493 92,825
Retail deposit portfolio** (GEL) 1,108 2,839 15,543 91,979 207,510
# of total cards issued 8 31 66 117 224
(cumulative figures)
# of other cards attached (cumulative figures) 4 29 126 328 386
Total monthly number of transactions 27 203 563 906 1,739
* Loans in Uzbekistan are disbursed in local currency
** Current, savings and time accounts. Deposits in Uzbekistan are accepted in
local currency.
5) Loan book breakdown by stages according IFRS 9
Total (in million GEL)
31-Dec-21 30-Sep-21 31-Dec-20
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 14,602 0.7% 13,557 0.9% 11,861 1.1%
2 1,935 6.2% 1,737 5.7% 2,448 5.8%
3 510 36.4% 670 34.9% 892 37.4%
Total 17,047 2.4% 15,964 2.9% 15,201 4.0%
CIB (in million GEL)
31-Dec-21 30-Sep-21 31-Dec-20
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 5,743 0.4% 5,285 0.9% 4,701 1.2%
2 713 0.2% 728 0.5% 965 0.9%
3 92 27.3% 124 20.1% 166 28.0%
Total 6,548 0.8% 6,137 1.2% 5,832 1.9%
MSME (in million GEL)
31-Dec-21 30-Sep-21 31-Dec-20
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 3,520 0.6% 3,206 0.7% 2,633 0.8%
2 413 7.8% 445 6.6% 630 7.4%
3 208 29.0% 225 32.3% 260 32.9%
Total 4,141 2.7% 3,876 3.2% 3,523 4.3%
Retail (in million GEL)
31-Dec-21 30-Sep-21 31-Dec-20
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 5,339 1.1% 5,066 1.1% 4,527 1.2%
2 809 10.8% 564 11.8% 853 10.3%
3 210 47.7% 321 42.5% 466 43.2%
Total 6,358 3.9% 5,951 4.4% 5,846 5.9%
* LLP rate is defined as credit loss allowances divided by gross loans
1 Users who conducted at least one transaction during the month.
2 Users who conducted at least one transaction during the month.
3 Users of TBC Bank internet and mobile banking, who logged in to the
system at least once during the month.
4 Users of TBC Bank internet and mobile banking, who logged in to the system
at least once during the day.
5 The average daily active retail digital users divided by the monthly
active retail digital users.
(( 6 )) According to our estimates based on Geostat preliminary data.
(( 7 )) Total non-interest income less net fee and commission income.
8 Users of TBC Bank internet & mobile banking, Space & TBC Pay app,
who logged in to the system at least once in the past 3 months.
(( 9 ))( )Monthly and daily active digital users include only TBC Bank
internet and mobile banking users.
10 Users who conducted at least one transaction during the month.
11 Based on data published by the Central Bank of Uzbekistan.
12 Users who conducted at least one transaction during the month.
13 World Bank, Global Economic Prospects, January 2022
(https://openknowledge.worldbank.org/bitstream/handle/10986/36519/9781464817601.pdf)
14 Other operating non-interest income includes net insurance premium earned
after claims and acquisition costs.
15 For the ratio calculation, all relevant group recurring costs are
allocated to the bank.
16 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.
17 For the ratio calculation, all relevant group recurring costs are
allocated to the bank.
18 Secured loans are those that are secured with cash, gold, real estate and
other PPE
19 In 1Q 2021, we updated the calculation methodology of NPL collateral
coverage; please refer to annex 5 for more details.
20 Other financial assets and liabilities do not contain offset amounts of
omnibus accounts for TBC Capital (nominee accounts, where TBC Capital acts as
a fiduciary on a client's behalf).
21 Other operating non-interest income includes net insurance premium earned
after claims and acquisition costs.
22 For the ratio calculation, all relevant group recurring costs are
allocated to the bank.
23 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.
24 For the ratio calculation, all relevant group recurring costs are
allocated to the bank.
25 Other financial assets and liabilities do not contain offset amounts of
omnibus accounts for TBC Capital (nominee accounts, where TBC Capital acts as
a fiduciary on client's behalf).
26 TBC Bank Group PLC became the parent company of JSC TBC Bank on 10 August
2016.
27 Market shares are based on internal estimates. Source is Insurance State
Supervision Service of Georgia. Total non-health and retail market share in 4Q
2021 including MTPL stood at 25.3% and 35.8% respectively or 20.9% and 33.6%
in total 2021.
(( 28 )) Net earned premium equals earned premium minus the reinsurer's share
of earned premium.
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