Page 42 - GEORptDec21

According to the official classification in Georgia, "non-performing loans" are loans of "non-standard, doubtful and loss category".
8.1.4 Bank news
TBC Bank releases unaudited Q3 and 9M results
Fitch revises outlook on EBRD’s long-term IDR to stable from negative on reduced downside risks
Georgia’s TBC Bank Q3 net profit amounted to GEL207.1mn, a 35.8% increase y/y. Its 9M profit was GEL610.5mn (nearly a 200% growth y/y). Its ROE for Q3 and 9M stood at 24.1% and 25.3%, respectively.
CET1, Tier 1 and total capital ratios stood at 13.4%, 15.4% and 19.3%, respectively, comfortably above the prudent respective minimum regulatory requirements of 11.3%, 13.5% and 17.9%.
The strong capital generation over the quarter fully offset the interim dividend payment of GEL81.8mn in September 2021.
TBC’s loan book increased by 12.6% year-on-year in constant currency terms, which translated into a 38.4% market share.
Over the same period, the bank’s deposits increased by 20.0% in constant currency terms across the board. As a result, its market share in total deposits amounted to 40.1% as of September 30.
Fitch Ratings has revised the Outlook on the European Bank for Reconstruction and Development Bank's (EBRD’s) Long-Term Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDR at 'AAA'.
In a November 30 statement on the decision, the ratings agency said: “The revision of the Outlook to Stable from Negative reflects reduced downside risks to EBRD's solvency profile. The bank's capitalisation and risk metrics have been more resilient to the coronavirus pandemic than we anticipated at the previous rating review. Fitch now expects the bank to continue to maintain 'excellent' capitalisation levels over the medium term. Given the bank's expansion in 'high risk' countries in recent years, Fitch forecasts EBRD will operate with a higher level of non-performing loans (NPLs) relative to the historical trend over the medium term.”
The solvency assessment of EBRD balances the bank's 'excellent' capitalisation and 'low' risk profile, Fitch said, adding: “The bank's capitalisation ratios have improved since 2020 given the strong profitability recorded year-to-date in 2021 and moderate growth in banking exposures. As of end-September 2021, the bank reported a record EUR 1,986 million in net profit, boosted by positive revaluation of its equity portfolio and reversal of provisions owing to lower expected credit losses.
The EBRD responded to the coronavirus pandemic by redirecting its lending envelope in 2020 and 2021 to support trade and provide liquidity to its borrowers. The bank also extended temporary payment deferrals to borrowers that accounted for 2.8% of total loans at its peak. The majority of borrowers with payment deferrals have resumed principal repayments to the bank and only a limited portion have become impaired, noted Fitch.
The Covid-19 crisis has negatively affected the performance of EBRD's loan book, the ratings agency also said, adding: “The bank's reported NPL ratio improved to 5.4% at end-June 2021 from 6.1% a year prior but remains above the pre-pandemic five-year average of 4.9%.
42 GEORGIA Country Report December 2021 www.intellinews.com