Page 38 - GEORptNov18

Underlying net profit of Georgia’s TBC Bank improves 38.8% y/y in second quarter
Bank of Georgia Group posts 11.2% y/y gain in first-half profit on stronger economic growth
Georgian lender TBC Bank on August 20 reported an underlying net profit of Georgian lari (GEL) 119.9mn, a 38.8% gain on what was recorded a year ago. Its reported net profit amounted to GEL102.4m versus GEL79.9mn in the same period of 2017.
The underlying return on equity (ROE) amounted to 24.9%, against 20.4% in 2Q17. The percentages for the underlying return on assets (ROA) were 3.7% versus 3.2%, TBC added.
Total operating income was GEL 258mn, up by 24.8% y/y. Cost to income was 35.6% against 44.9% 12 months’ back.
As of 30 June, TBC’s total assets amounted to GEL13,584mn, up by 20.4% y/y. Gross loans and advances to customers stood at GEL8,896mn, up by 20.4% y/y.
NPLs coverage ratios stood at 116.1% or 216.1% with collateral as of 30 June compared to 84.3% or 219.3% with collateral as of 30 June 2017.
Total customer deposits stood at GEL7,933mn, a gain of 19.0% y/y.
Also as of 30 June 2018, the Bank’s Tier 1 and Total Capital Adequacy Ratios (CAR) per the new NBG methodology stood at 13.4% and 17.0% respectively, while minimum requirements amounted to 10.2% and 15.6%.
In its overview of market shares, TBC said its market share in total assets reached 37.1% as of 30 June, up by 0.8pp y/y.
Market share in total loans was 38.3%, up by 0.3pp y/y.
Bank of Georgia Group on August 16 recorded an 11.2% y/y improvement in first-half profit. It said profit rose to 257.8mn laris ($100.9mn) from 231.8mn laris a year earlier. Higher lending against a backdrop of stronger economic growth in Georgia helped it to the gain.
Pre-tax profit for Bank of Georgia’s banking division climbed 27.8% to 231.2mn laris in the first half. First-half revenue rose 17.8% to 489.3mn laris, while the net interest margin fell to 7% from 7.3% year on year. Retail Banking saw a 29.5% rise in the net loan book to 5.38bn laris as of June 30.
Bank of Georgia has more than a third of the market share of Georgian banks based on total assets, loans, deposits and shareholder equity. It offers retail, corporate and investment banking, and wealth management.
The lender was formed when BGEO Group demerged into two entities in May.
8.2 Central Bank policy rate
Georgian central bank maintains policy rate at 7.0%
The National Bank of Georgia’s (NBG’) Monetary Policy Committee decided to keep the refinancing rate unchanged at 7.0%. Explaining the decision made at the September 5 meeting, the bank noted that annual inflation has decreased since the beginning of this year, moving around the target rate of 3%. Inflation is expected to continue moving around 3% in the medium term.
“The macroeconomic risks have risen given the regional developments, causing increased volatility on financial markets,” the NBG added.
“However, even in case these risks are realised, the significant deviation of inflation from its target is not expected. According to the NBG estimates, there still is the necessity of gradual exit from tight monetary policy, although how this process will be carried out depends on the magnitude of external risks.”
The bank also observed “quite high” economic activity in the first half of the
38 GEORGIA Country Report November 2018 www.intellinews.com