Page 35 - GEORptApr20

Georgia’s TBC Bank boasts 15% stronger net earnings in 2019
TBC Bank Group, which operates one of Georgia’s two major banks, has reported a 15% rise in annual profit for 2019. The LSE-listed lender's loan book saw strong growth of 22% with a sharp 47% rise in corporate lending.
The net interest margin, however, slipped to 5.6% from 6.9%.
For 2019, TBC recorded Georgian lari (GEL) 585.5mn in pretax profit, equivalent to around $200mn (+15% y/y).
TBC ended the year with a gross loan book of GEL12.66bn (+22% y/y), or $4.3bn. The bank’s retail loan book expanded 7.5% y/y. The micro, small, and medium sized enterprises (MSME) loan book was widened by 18%.
Customer deposits totalled GEL10.05bn, up 7.5% from the same point the year before.
TBC chief executive Vakhtang Butskhrikidze said that "in 2019, we recorded strong financial results and made significant progress against our strategic priorities, including the development of customer focused ecosystems and international expansion in Uzbekistan.
“This lays a solid foundation for further development of these initiatives and I am very excited about our ambitious plans for 2020. Our leading digital capabilities, outstanding customer experience and advanced data analytical capabilities, coupled with our strong team spirit, make me confident that we are well positioned to achieve sustainable growth and to deliver superior results for our shareholders.”
TBC reiterated its medium-term targets of a return on equity above 20%, cost-to-income below 35% and loan book growth of around 10% to 15%.
8.2 ​Central Bank policy rate
Gerogia’s NBG on March 18 kept its refinancing rate at 9%
Georgian expects hawkish monetary policy to pay dividends by year-end
To decrease the pressure of the depreciating exchange rate on inflation, the national lender increased its refinancing rate by 0.5pp to 7.5% on September 25 and by 1pp to 8.5% on October 23. It then upped the rate by 0.5pp to 9% on December 11. ​On March 18, the monetary authority opted to maintain the refinancing rate at 9%.
“Georgia is currently experiencing a balance of payments shock [caused by the coronavirus pandemic]. There will be no income from tourism, no income from services, remittances will be reduced," said NBG president Koba Gvenetadze.
He added that in many sectors of the economy there would be a decrease in income amid the virus outbreak. At the same time, demand for Georgian exports and remittances would decrease. With respect to the current challenging situation, the government and the central bank were in talks with international financial institutions to secure assistance.
Georgia’s central bank at its January 29 board meeting maintained its refinancing rate at 9% and said that monetary policy would remain tight until medium-term inflation expectations declined to the 3% target. ​The hawkish monetary policy might be kept in place for some time, the central bank implied in a press release issued along with the rates decision.
The National Bank of Georgia (NBG) argued that although the nominal effective exchange rate strengthened slightly in December, reducing pressure on inflation, the Georgian lari remained undervalued and if economic growth and lending, both of which have remained robust recently, created additional
35​ GEORGIA Country Report ​April 2020 ​ ​www.intellinews.com