TBC Bank rides Georgian economy through decent third quarter
By Josh White
Date: Thursday 15 Nov 2018
(Sharecast News) - Georgia-focussed banking group TBC Bank issued its third-quarter numbers on Thursday, reporting net profit of GEL 107.4m (£30.87m) in the three months ended 30 September, up from GEL 86.8m at the same time last year.
The FTSE 250 company said its return on equity amounted to 21.2% for the period, growing from 19.8% year-on-year, while its return on assets improved to 3.1 % from 2.9%.
Total operating income amounted to GEL 278.1m, up 34.3% over the same quarter last year and by 7.6% quarter-on-quarter.
Cost-to-income was 37.4%, falling from 40.5%, while cost of risk stood at 1.9%, up from 1.3% year-on-year.
Its foreign exchange-adjusted cost of risk was 1.5%, rising from 1.2%.
The bank's net interest margin was 6.9% at period-end, compared to 6.2% a year ago, while its risk-adjusted net interest margin stood at 5.4%, compared to 5.0%.
Looking at its balance sheet, TBC Bank's total assets amounted to GEL 14.424bn as at 30 September, up 18.8% year-on-year, while its gross loans and advances to customers rose 23.9% to GEL 9.623bn.
Net loans to deposits plus IFI funding stood at 88.0%, and its net stable funding ratio was 118.0%.
Non performing loans were 3.1%, down by 0.4 percentage points year-on-year, and unchanged quarter-on-quarter.
Its non performing loan coverage ratios stood at 113.2%, or 209.0% with collateral, as at 30 September, compared to 80.5% or 206.8% with collateral a year ago.
Total customer deposits amounted to GEL 8.74bn at period end, up by 23.2% year-on-year.
As at 30 September, the bank's Basel III Tier 1 and Total Capital Adequacy Ratios per NBG methodology stood at 12.8% and 16.4% respectively, while minimum requirements amounted to 10.3% and 15.8%.
"We continued to deliver on our promises and achieved a net interest margin at 6.9% during the quarter, within the range of our short-term guidance," said TBC Bank chief executive officer Vakhtang Butskhrikidze.
"Over the same period, our net fee and commission income grew by 23.9% year-on-year, consistent with our annual growth guidance and mainly driven by the increasing number of card and settlement transactions.
"Our cost to income ratio decreased by 3.1 percentage points year-on-year to 37.4%."
Butskhrikidze noted that during the quarter, TBC's loan book grew 23.9% year-on-year, bringing its market share to 38.4%, up by 0.2 percentage points year-on-year.
He also said its capital and liquidity ratios continued to remain "solid".
"I am particularly pleased with the achievements of our digital strategy as the number of transactions and sales volume through digital channels continue to grow.
"As a result, in the third quarter of 2018 our offloading ratio was 90%, while 47% of all sales were completed via digital channels in September 2018.
"In addition, our recently launched, fully-digital bank, Space, continued to rapidly attract new customers and had approximately 186,000 users as of 30 September 2018."
Butskhrikidze added that, following the increase in diversity of TBC Bank's board and its continued efforts to improve corporate governance, including implementation of the new executive compensation system, it expected "substantial improvement" in its governance scores.
"We are very pleased to see ISS upgrading our score to 4 as of 1 November."
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