TIDMTBCG
RNS Number : 6527P
TBC Bank Group PLC
19 February 2021
TBC BANK GROUP PLC ("TBC Bank")
4Q 2020 UNAUDITED CONSOLIDATED FINANCIAL RESULTS AND FY 2020
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 necessary regulatory approvals and
licenses, the impact of developments in the Georgian economic, 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 regulation 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's accounts and financial statements.
The areas in which the management's 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 2020 Unaudited Consolidated Financial Results and
Full Year 2020 Preliminary Unaudited Consolidated Financial Results
Conference Call
TBC Bank Group PLC ("TBC PLC") publishes its unaudited
consolidated financial results for the fourth quarter 2020 and
preliminary consolidated financial results for the full year 2020
on Friday, 19 February 2021 at 7.00 am GMT (11.00 am GET). T he
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/91410249875?pwd=NlJhSkR3L1FyUjdpYWNMUHZwVjg5UT09
Webinar ID: 914 1024 9875
Password: 169900
Or, use the following dial-ins:
-- 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 0 800 031 5717 (Toll Free)
-- US: 833 548 0282 (Toll Free) or 877 853 5257 (Toll Free) or
888 475 4499 (Toll Free) or 833 548 0276 (Toll Free)
-- Russian Federation: 8800 301 7427 (Toll Free) or 8800 100 6938 (Toll Free)
Webinar ID 914 1024 9875# , please dial the ID number slowly.
Other international numbers available at:
https://tbc.zoom.us/u/abi201nLxM
The call will be held in two parts. The first part will be
comprised of presentations and during the second part of the call,
you will have the opportunity to ask questions. All participants
will be muted throughout the webinar.
Webinar Instructions:
For those participants who will be joining through the webinar,
in order to ask questions, please use the "hand icon" that you will
see at the bottom of the screen. The host will unmute those
participants who have raised hands one after another. After the
question is asked, the participant will be muted again.
Call Instructions:
For those participants who will be using the dial in number to
join the webinar, please dial *9 to raise your hand.
Contacts
Zoltan Szalai Anna Romelashvili Investor Relations Department
Director of International Head of Investor Relations
Media and Investor Relations
E-mail: ZSzalai@Tbcbank.com.ge E-mail: IR@tbcbank.com.ge E-mail: IR@tbcbank.com.ge
Tel: +44 (0) 7908 242128 Tel: +(995 32) 227 27 Tel: +(995 32) 227 27
Web: www.tbcbankgroup.com 27 27
Address: 68 Lombard Web: www.tbcbankgroup.com Web: www.tbcbankgroup.com
St, London EC3V 9LJ, Address: 7 Marjanishvili Address: 7 Marjanishvili
United Kingdom St. Tbilisi, Georgia St. Tbilisi, Georgia
0102 0102
Table of Contents
4Q and FY 2020 Results Announcement
TBC Bank --
Background.......................................................................................................................................5
Financial
Highlights...............................................................................................................................................5
Letter from the Chief Executive
Officer................................................................................................................8
Economic
Overview............................................................................................................................................
11
Unaudited Consolidated Financial Results Overview for 4Q
2020.....................................................................13
Unaudited Consolidated Financial Results Overview for FY
2020.....................................................................25
Additional
Disclosures.........................................................................................................................................37
1) Subsidiaries of TBC Bank Group
PLC............................................................................................................37
2) TBC
Insurance.................................................................................................................................................38
3) Loan book breakdown by stages according IFRS 9.
.......................................................................................
39
4) Reconciliation of Return on equity (ROE) with ROE before
expected credit loss allowances. ..................... 40
TBC Bank Group PLC ("TBC Bank")
TBC Bank Announces Unaudited Preliminary 4Q and FY 2020
Consolidated Financial Results
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.
TBC Bank - Background
TBC Bank is the largest banking group in Georgia, where 99.5% of
its business is concentrated, with a 38.2% market share by total
assets. It offers retail, corporate, 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 European Union. TBC Bank successfully listed on the
London Stock Exchange's premium listing segment on 10 August 2016.
TBC Bank is a constituent of the FTSE 250 Index and MSCI United
Kingdom Small Cap Index. It is also a member of the FTSE4Good Index
Series.
TBC Bank Group PLC's financial results are prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and international
financial reporting standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union.
Changes in accounting policies, IAS 16
In 2Q 2020, the accounting policy in relation to subsequent
measurement of land, buildings and construction in progress was
changed from the revaluation model to the cost model. This led to
the restatement of appropriate balance sheet amounts in 2019, while
no material impact was recorded in the income statement.
Financial Highlights
4Q 2020 P&L Highlights
o Profit for the period amounted to GEL 100.7 million (4Q 2019:
GEL 160.0 million)
o Return on average equity (ROE) stood at 13.7% (4Q 2019: 25.2%
[1] )
o ROE before expected credit loss allowances [2] stood at 24.6%
(4Q 2019: 25.2% (1) )
o Return on average assets (ROA) stood at 1.8 % (4Q 2019:
3.5%(1) )
o Cost to income of TBC Bank Group PLC stood at 39.7% (4Q 2019:
41.8%)
o Standalone cost to income ratio of the Bank [3] was 34.1% (4Q
2019: 36.2%)
o Cost of risk stood at 2.0% (4Q 2019: -0.2%)
o Net interest margin (NIM) stood at 4.8% (4Q 2019: 5.3%)
o Basic earnings per share stood at GEL 1.83 (4Q 2019: GEL
2.92)
o Diluted earnings per share stood at GEL 1.79 (4Q 2019: GEL
2.91)
FY 2020 P&L Highlights
o Profit for the period amounted to GEL 322.5 million (FY 2019:
GEL 540.3 million)
o Return on average equity (ROE) stood at 11.7% (FY 2019: 22.9%
[4] )
o ROE before expected credit loss allowances [5] stood at 24.7%
(FY 2019: 26.8% (4) )
o Return on average assets (ROA) stood at 1.6% (FY 2019: 3.2%
(4) )
o Cost to income of TBC Bank Group PLC stood at 38.4% (FY 2019:
39.9%)
o Standalone cost to income ratio of the Bank [6] was 32.9% (FY
2019: 35.9%)
o Cost of risk stood at 2.4% (FY 2019: 0.7%)
o Net interest margin (NIM) stood at 4.7% (FY 2019: 5.6%)
o Basic earnings per share stood at GEL 5.84 (FY 2019: GEL
9.83)
o Diluted earnings per share stood at GEL 5.76 (FY 2019: GEL
9.76)
Balance Sheet Highlights as of 31 December 2020
o Total assets amounted to GEL 22,557.8 million, up by 23.0%
YoY
o Gross loans and advances to customers stood at GEL 15,200.5
million , up by 20.0 % YoY or at 8.7% on a constant currency
basis
o Net loans to deposits + IFI [7] funding stood at 101.2%, down
by 3.6 pp YoY, and Regulatory Net Stable Funding Ratio (NSFR),
effective from 30 September 2019, stood at 126.0%
o NPLs were 4.7%, up by 2.0 pp YoY
o NPLs coverage ratios stood at 85.6%, or 189.1% with
collateral, on 31 December 2020 compared to 91.1% or 194.2% with
collateral, as of 31 December 2019
o Total customer deposits amounted to GEL 12,572.7 million, up
by 25.1% YoY or at 13.8% on constant currency basis
o The Bank's Basel III CET 1, Tier 1 and Total Capital Adequacy
Ratios per NBG methodology stood at 10.4% , 13.0% , and 17.1% ,
respectively, while minimum eased regulatory requirements amounted
to of 7.4%, 9.2%, and 13.7%, respectively
Market Shares as of December 2020 ([8])
o Market share by total assets reached 38.2%, remaining the same YoY
o Market share by total loans was 39.0%, down by 0.5 pp YoY
o Market share of total deposits reached 37.2%, down by 1.8 pp
YoY
4Q 2020 Operating Highlights
o The number of affluent customers reached 98.0 thousand as of
31 December 2020, up by 15% YoY
o 96% of all transactions were conducted through digital
channels [9] (4Q 2019: 93 %)
o The penetration ratio for internet and mobile banking [10]
stood at 50% for 4Q 2020 (4Q 2019: 48%)
o The penetration ratio for mobile banking [11] stood at 48% for
4Q 2020 (4Q 2019: 44%)
Income
Statement
Highlights
---------------- --- ---------- ------------------- ----------------------- ------ ----------
in thousands 4Q'20 4Q'19 Change YoY FY'20 FY'19 Change
of GEL YoY
--------------- ---------------- ------------------- ----------- ---------- ------ -------
Net interest
income 231,325 209,318 10.5% 835,433 801,539 4.2%
----------------- -------------- ---------- ------- ----------- ------------------ -------
Net fee and
commission
income 52,199 54,844 -4.8% 182,767 187,290 -2.4%
----------------- -------------- ---------- ------- ----------- ------------------ -------
Other operating
non-interest
income [12] 38,573 40,075 -3.7% 137,391 139,414 -1.5%
----------------- -------------- ---------- ------- ----------- ------------------ -------
Credit loss
allowance (79,370) 224 NMF (351,847) (91,992) NMF
----------------- -------------- ---------- ------- ----------- ------------------ -------
Operating profit
after expected
credit losses 242,727 304,461 -20.3% 803,744 1,036,251 -22.4%
----------------- -------------- ---------- ------- ----------- ------------------ -------
Losses from
modifications
of financial
instrument (5,082) - NMF (41,015) - NMF
----------------- -------------- ---------- ------- ----------- ------------------ -------
Operating
expenses (127,950) (127,124) 0.6% (443,623) (450,726) -1.6%
----------------- -------------- ---------- ------- ----------- ------------------ -------
Profit before
tax 109,695 177,337 -38.1% 319,106 585,525 -45.5%
----------------- -------------- ---------- ------- ----------- ------------------ -------
Income tax
expense (8,994) (17,313) -48.1% 3,383 (45,184) NMF
----------------- -------------- ---------- ------- ----------- ------------------ -------
Profit for the
period 100,701 160,024 -37.1% 322,489 540,341 -40.3%
----------------- -------------- ---------- ------- ----------- ------------------ -------
Dec-20 Dec-19 Change
Balance Sheet and Capital Highlights YoY
------------ ------------ --------
in thousands of GEL
----------------------------------------------------- ------------ ------------ --------
Total Assets 22,557,80 5 18,359,266* 23. 0 %
Gross Loans 15,200,520 12,661,955 20.0%
Customer Deposits 12,572,728 10,049,324 25.1%
Total Equity 2,935,934 2,599,090* 13.0%
Regulatory Common Equity Tier I Capital (Basel III) 1,911,233 1,871,892 2.1%
Regulatory Tier I Capital (Basel III) 2,385,181 2,281,706 4.5%
Regulatory Total Capital (Basel III) 3,137,912 2,974,029 5.5%
Regulatory Risk Weighted Assets (Basel III) 18,301,477 15,593,925 17.4%
----------------------------------------------------- ------------ ------------ --------
* Certain amounts do not correspond to the 2019 consolidated
financial statement as they reflect the change in accounting policy
for PPE (property, plant and equipment) from the revaluation model
to the cost method in 2Q 2020
Key Ratios 4Q'20 4Q'19 Change YoY FY'20 FY'19 Change YoY
-------------------------------------------- ------- -------- ----------- ------ -------- -----------
ROE 13.7% 25.2%* -11.5 pp 11.7% 22.9%* -11.2 pp
ROE before expected credit loss allowances 24.6% 25.2% * -0.6 pp 24.7% 26.8% * -2.1 pp
ROA 1.8% 3.5%* -1.7 pp 1.6% 3.2%* -1.6 pp
NIM 4.8% 5.3% -0.5 pp 4.7% 5.6% -0.9 pp
Cost to income 39.7% 41.8% -2.1 pp 38.4% 39.9% -1.5 pp
Standalone cost to income of the Bank [13] 34.1% 36.2% -2.1 pp 32.9% 35.9% -3.0 pp
Cost of risk 2.0% -0.2% 2.2 pp 2.4% 0.7% 1.7 pp
NPL to gross loans 4.7% 2.7% 2.0 pp 4.7% 2.7% 2.0 pp
NPLs coverage ratio exc. collateral 85.6% 91.1% -5.5 pp 85.6% 91.1% -5.5 pp
CET 1 CAR (Basel III) 10.4% 12.0% -1.6 pp 10.4% 12.0% -1.6 pp
Regulatory Tier 1 CAR (Basel III) 13.0% 14.6% -1.6 pp 13.0% 14.6% -1.6 pp
Regulatory Total CAR (Basel III) 17.1% 19.1% -2.0 pp 17.1% 19.1% -2.0 pp
Leverage (Times) 7.7x 7.1x** 0.6x 7.7x 7.1x** 0.6x
--------------------------------------------- ------ -------- ----------- ------ -------- -----------
* Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
ROE stood at 24.7% and 22.4% for 4Q 2019 and FY 2019, respectively,
while ROE before expected credit loss allowances stood at 24.7% and
26.3% and ROA remained unchanged for both periods
** Prior to the change in PPE (property, plant and equipment)
accounting policy from revaluation model to cost method, leverage
stood at 7.0x for 4Q 2019 and FY 2019
Letter from the Chief Executive Officer
I would like to present our financial and operating results for
2020 and update you on recent economic developments in the
country.
Summary of the year
Looking back at 2020, three words come to my mind: support,
agility and digitalization.
From the very early days of pandemic outbreak in March, we
promptly mobilized all our efforts to support our employees and
customers and stood firmly by their side throughout the year. We
were one of the first Georgian companies to implement remote
working practices for our back-office employees and equip our front
offices with all the necessary protective measures to ensure full
safety for our customers and employees. In addition, senior
management conducted regular online meetings with our colleagues in
order to address any concerns that employees might have and to
provide assurance about our financial stability. We also made the
commitment to retain all our staff during 2020 despite the slowdown
in business activities. We pride ourselves on having maintained
high employee motivation and engagement levels during the year,
with our Employee Net Promoter score amounting to 68% ([14]) and
our Engagement Index reaching as high as 91% ([15]) . In addition,
this year we measured the Employee Happiness Index for the whole
organization for the first time, which yielded a very satisfying
result: 85% ([16]) of our employees felt happy and satisfied with
their jobs.
Equally important was extending support to our customers and
demonstrating through our actions what customer centricity actually
means to us. First and foremost, we offered eligible customers two
major three-month grace periods, conducted loan restructurings
where appropriate, continued to provide funding and actively
participated in various government support programmes.
Conducting business as usual and serving our customers without
any disruption via our distribution network was another priority
for us. Our market-leading digital channels proved to be essential,
enabling our customers to conduct most of their banking
transactions remotely. Moreover, our call center worked with
increased capacity during the early days of the pandemic in order
to address our customers' concerns in a timely manner. We are
delighted that our efforts were acknowledged by our customers and
TBC was once again regarded as the best service provider in the
country in 2020, based on a customer satisfaction survey conducted
by IPM, an independent research company, in December.
Macro overview
Following a 5.6% drop in the third quarter, real GDP decreased
by 6.5 % year-on-year in the last quarter of 2020 due to the
reintroduction of a partial lockdown in late November. For the full
year 2020, the drop in GDP was 6. 1 %. Since the beginning of the
pandemic, tourism inflows have remained close to zero, although
non-tourism inflows have displayed resilience. During the year,
exports decreased by 12.0% in USD terms (or increased by 3.5%
without re-exports), while imports dropped by 15.9% over the same
period. As a result, the trade balance improved by around one
billion USD, or by 18.8%, compared to 2019. In addition, remittance
inflows increased by 8.8% ([17]) in 2020, including a strong 15.7%
year-on-year growth in the fourth quarter.
Alongside fiscal stimulus, credit also supported economic
activity. During the year, the total banking loan portfolio
expanded by 9.1%, excluding the exchange rate effect, mainly driven
by the retail segment on the back of the state mortgage subsidy
programme. The two three-month long loan repayment grace periods
introduced during the year also contributed to the increase in loan
balances.
Based on TBC Capital's latest estimates, the economy is expected
to recover by 4.2% in 2021. According to the World Bank's latest
projections, ([18]) the Georgian economy will grow by 4.0% and 6.0%
in 2021 and 2022, respectively.
Resilient financial performance
In 2020, our operating income amounted to GEL 1,556 million, up
by 2.4% year-on-year basis driven by increase in net interest
income. Over the same period, our income generation was supported
by effective cost management. During the year, we also recorded a
net modification loss of financial instruments in the amount of GEL
41.0 million to reflect the decrease in the present value of cash
flows resulting from the loan repayment grace periods granted to
borrowers. As a result, our ROE before expected credit loss
allowances amounted to 24.7% compared to 26.8% a year ago. For the
full year 2020, our net interest margin was 4.7%, while the cost to
income ratio for the group amounted to 38.4%, an improvement of
1.5pp year-on-year, and 32.9% for the standalone bank. In 2020, our
provision charges increased significantly to cover the potential
impact of the COVID-19 pandemic on our borrowers, which resulted in
a total cost of risk for the full year of 2.4% compared to 0.7% in
2019. As a result, we recorded consolidated net profit of GEL 322.5
million for 2020, while our return on equity and return on assets
stood at 11.7% and 1.6%, respectively.
Our loan book increased by 8.7% year-on-year in constant
currency terms, which translated into a 39.0% market share. Over
the same period, our deposits increased by 13.8% on constant
currency terms. As a result, our market share in total deposits
amounted to 37.2% as of 31 December 2020.
Our liquidity and capital positions remain strong. As of 31
December 2020, our net stable funding (NSFR) and liquidity coverage
ratios (LCR) stood at 126.0% and 134.2%, respectively. Our capital
ratios improved quarter-on-quarter as a result of net profit
generation (no extra COVID-19 related provisions were booked in the
fourth quarter, per NBG provisioning rules). Our CET1, Tier 1 and
Total Capital ratios stood at 10.4%, 13.0% and 17.1%, respectively,
and remained comfortably above the eased minimum regulatory
requirements by 3.0%, 3.8% and 3.4%, accordingly.
Business update
As digital offerings became a true necessity during the
pandemic, we further increased our digital focus and introduced new
products and services, including a fully digital onboarding process
via our internet and mobile banking, digital lending platforms for
retail customers, a mobile app for businesses and a digital
platform for factoring. Our offloading ratio in the retail segment
([19]) remained high at 96% in the fourth quarter 2020, while the
number of digital users ([20]) over the same period reached around
692,000, up by 8.7% year-on-year.
In 2020, we maintained our leading position in the payments
business, both in terms of payments acceptance and retail
transactions. The total volume of transactions performed by our
retail banking customers stood at GEL 76.2 billion, down by 6.3%
year-on-year, while our payments acceptance business processed GEL
14.3 billion transactions, up by 8.3% year-on-year, served around
14,750 merchants and kept our market share in e-commerce & POS
of 58% ([21]) by volume of transactions. Our subsidiary, TBC Pay
increased its presence in the self-service terminal market to 3,905
terminals and maintained its leading position among peers. During
2020, we focused on further strengthening the seamlessness of our
payment services, introducing innovative payment solutions and
strengthening our risk management practices. For retail customers
we introduced subscription services and digital cards, and we also
entered the Tbilisi transportation payment network. For businesses,
we further streamlined the onboarding processes and introduced a
digital plug-and-play checkout solution for ecommerce payments.
Last year was a significant milestone in terms of our
international expansion. In April, we received our banking licence
in Uzbekistan, and in October, we launched our services for the
wider public under the TBC UZ brand. At the center of our services
is our digital banking platform, Space . By the end of January, we
attracted 26,520 users, delivered 12,002 debit cards, gained 1,857
deposit customers and managed to launch our initial lending value
proposition. We already operate around 20 outlets, which are used
for customer onboarding and assisted service support. At present,
we are only serving the retail segment, and we plan to extend our
offering to MSMEs at a later stage. TBC UZ is run by an experienced
management team, comprised of both Uzbek and Georgian
professionals. I am also impressed by the results of our Uzbek
payments subsidiary, Payme, which grew significantly during the
year, despite COVID-19, and is the second largest payments provider
in the country with its 2.9 million users. Its revenue increased by
94.7% and amounted to GEL 16.6 million, while net profit grew by
89.1% and reached GEL 8.3 million.
I would also like to update you on our Azerbaijan venture. The
shareholder agreement with Yelo Bank expired at the end of 2020
before the merger between TBC Kredit and Yelo Bank could be
implemented. Our Azeri subsidiary, TBC Kredit, will continue its
operations as previously, and our international expansion efforts
will be focused on Uzbekistan market.
I would like to inform you regarding our recent ESG achievement.
We became the first bank in Georgia to successfully complete ISO
14001:2015 certification audit remotely and receive the ISO
14001:2015 certification for environmental management system. The
certification serves as testament to our environmental management
system's full compliance with international standards.
Further important news for our shareholders was the inclusion of
TBC Bank Group PLC into the MSCI United Kingdom Small Cap Index
from December 1, 2020.
Outlook
2020 was a transformational year, significantly changing the way
people lead their daily lives and interact with each other. We did
our best to embrace the change and turn challenges into new
opportunities. Remote working practices have given our employees
more flexibility in finding the right work-life balance, online
meetings have proved very effective, while further digitalization
of our processes and offerings have helped our customers to save
more time. Going forward, we will continue to strengthen our
digital and analytical capabilities across all levels of the group
in line with our vision of making life easier for our customers as
well as other stakeholders.
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 loan book annual growth of around 10-15%.
Economic Overview
Economic growth
Georgia's real GDP decreased by 6.1% in 2020 due to COVID-19
related lock-down and restrictions throughout the year. However,
real GDP is expected to increase by 4.2% in 2021, followed by a
solid 7.4% YoY growth in 2022 according to TBC Capital
estimates.
External sector
While the tourism sector was hit hard with an 84.0% ([22])
decline in inflows in USD terms on an annual basis in 2020, other
inflows demonstrated much more resilience. In 2020, exports in
goods only declined by 12.0% in USD terms, but, without re-exports,
they increased by 3.5%. It is important to highlight that the
Georgian economy produces very few, if any, investment goods, the
demand for which will be more subdued compared to the demand for
essentials. In addition, remittance inflows have shown positive
dynamics, with money transfers up by 8.8% ([23]) year-on-year.
Regarding tourism, it is important to consider Georgia's favourable
tourism structure: the share of business and long-haul trips in
tourism inflows is relatively small; the majority of visitors
arrive by car and Georgia enjoys an abundance of open-air tourism
facilities. This, coupled with the roughly 20% growth in tourism
inflows before the pandemic, despite the 2019 Russian flight ban,
enables us to argue that, alongside progress in vaccinations and
medical treatment, the tourism industry in Georgia will gradually
get back on track: in the baseline scenario we assume a recovery of
30.0% in tourism inflows in 2021 compared to the 2019 level,
followed by a 90.0% recovery in 2022 .
As domestic demand deteriorated further due to the
re-introduction of the partial lockdown, the decline in imports of
goods dipped to 17.2% year-on-year in the fourth quarter, compared
to a 11.3% decrease in the third quarter. For 2020 as a whole,
imports dropped by 15.9% compared to 2019. The decline was
partially offset by more resilient food and beverages (-4.6% YoY)
and industrial supplies (-6.7% YoY). On the other hand, all other
broad categories suffered from sharp declines: consumer goods
(-16.3% YoY), capital goods (-22.1% YoY), transport equipment
(-25.0%), and fuels (-27.5% YoY). As exports were stronger than
imports, the balance of trade in goods improved by 1.075 billion
USD, or by 18.8% year-on-year in 2020. However, the CA balance
still likely worsened for the full year, as the above-mentioned
effects will be outweighed by the deteriorating balance of trade in
services due to the close-to-zero tourism inflows.
Fiscal stimulus
Fiscal stimulus strongly supported the economy throughout the
year. Fiscal spending, predominantly financed externally, stood at
around 9.1% of GDP in 2020. According to TBC Capital estimates, out
of the external funding raised by the government in 2020,
approximately USD 300 million is to be utilized in 2021. Therefore,
this buffer, coupled with additional attracted borrowings amounting
to around USD 774 million, is expected to be available in 2021.
Credit growth
Bank credit growth weakened to 9.1% YoY in FX adjusted terms by
the end of Q4 2020, compared to a 12.0% year-on-year growth by the
end of 3Q 2020. In terms of segments, corporate lending slowed to
6.9%. Similarly, MSME loan book growth slowed to 10.5% YoY,
compared to 15.3% by the end of Q3 2020. On the other hand, retail
lending continued its strong performance, with 9.9% YoY growth by
the end of Q4 2020, following a 9.3% YoY increase by the end of Q3
2020. Retail lending was supported by strong mortgage demand on the
back of the government mortgage subsidy programme. As for the
non-mortgage segment, growth strengthened on the back of the low
base effect in 2019, due to the NBG's responsible lending
regulations. At the same time, the grace periods on loan repayments
also contributed to higher credit balances in 2020.
Inflation, monetary policy and the exchange rate
Although the GEL exchange rate depreciation remained an
additional challenge in 2020, the response of the central bank has
been appropriate, compensating for the external shock through
active interventions on the FX market, selling a total of USD 873.2
million. On the other hand, the NBG remained prudent, easing the
monetary policy rate gradually from 9.0% before pandemic to 8.0% as
of the end of December 2020. By the end of 2020, the USD/GEL
exchange rate stabilized at 3.28, down by 0.3% from the previous
quarter. The monthly dynamics of prices indicate some moderation of
inflation by the end of 2020, as prices only went up by 2.4%,
mostly explained by the government subsidy programme for household
utilities. According to the baseline scenario, given the delays in
the exchange rate pass-through to inflation, increased utility
bills, and higher production costs, the inflation rate is first
expected to rise in 2021, before gradually retreating to its target
level, which is only likely in 2022. Amid the declining inflation
expectations, the refinance rate is assumed to be reduced to
7.50-7.75% in 2021.
Going forward
According to the World Bank's latest Global Economic Prospects
([24]) , the Georgian economy is expected to recover by 4.0% and
6.0% in 2021 and in 2022, respectively. The projection is broadly
in line with TBC Capital's baseline scenario, with a 4.2% increase
in 2022 and a higher 7.4% rebound in the following year.
More information on the Georgian economy and financial sector
can be found at www.tbccapital.ge .
Unaudited Consolidated Financial Results Overview for 4Q
2020
This statement provides a summary of the unaudited business and
financial trends for 4Q 2020 for TBC Bank Group plc and its
subsidiaries. The quarterly financial information and trends are
unaudited.
TBC Bank Group PLC's financial results are prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and international
financial reporting standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union.
Please note, that there might be slight differences in previous
periods' figures due to rounding.
Changes in accounting policies, IAS 16
In 2Q 2020, the accounting policy in relation to subsequent
measurement of land, buildings and construction in progress was
changed from the revaluation model to the cost model. This led to
the restatement of appropriate balance sheet amounts, in 2019,
while no material impact was recorded in the income statement.
Net Interest Income
In 4Q 2020, net interest income amounted to GEL 231.3 million,
up by 10.5% YoY and 9.2% on a QoQ basis.
The YoY increase in interest income by GEL 61.7 million, or
15.7%, was primarily related to an increase in interest income from
loans, which was driven by an increase in the gross loan portfolio
of GEL 2,538.6 million, or 20.0%. This was partially offset by a
0.7pp drop in loan yields on the back of decrease in the average
Libor and refinance rate, currency depreciation, as well as segment
mix change. Furthermore, the increase in interest income was driven
by the growth in interest income from investment securities,
related to an increase in the respective portfolio by GEL 613.3
million, or 30.5%, as well as an increase in the respective yields
by 1.3pp. The latter was driven by the increased share of new
securities acquired in 2020 with higher interest rates, due to an
increasing trend in the refinance rate.
Over the same period, interest expense increased by GEL 35.9
million, or 18.7%, mainly driven by an increase in interest expense
from deposits, which was related to a growth in the respective
portfolio of GEL 2,523.4 million, or 25.1% YoY, mainly driven by
the corporate and retail segments. In addition, the increase in
interest expense from deposits was driven by an increase in the
cost of corporate deposits by 0.6pp, due to an increase in the
Ministry of Finance (MOF) placements; without the latter, corporate
yield would have been 0.1pp lower due to a decrease in the average
refinance rate. Another driver was the increase in interest expense
from other borrowed funds due to an increase in the respective
portfolio by GEL 918.7 million, or 26.8%, driven by an increase in
the average balance of the NBG loan. This increase was partially
offset by the drop in the respective yield by 0.9pp, mainly driven
by FC yield on the back of the decrease in Libor.
The increase in interest income on a QoQ basis of GEL 27.6
million, or 6.5%, was mainly driven by an increase in interest
income from loans to customers, which was related to an increase in
the respective portfolio of GEL 609.7 million, or 4.2%, as well as
an increase in loan yields of 0.2pp, due to currency mix change
with increased share of GEL loans.
The increase in interest expense of GEL 10.2 million, or 4.7% on
a QoQ basis, was mainly driven by an increase in interest expense
from deposits and other borrowed funds. The former increase was
related to growth in the respective portfolio by GEL 229.3 million,
or 1.9% QoQ. This effect was partially offset by the decrease in
the cost of retail deposits of 0.1pp on the back of high liquidity.
The increase in interest expense from other borrowed funds was due
to an increase in the respective portfolio of GEL 444.2 million, or
11.4%, driven by an increase in the average balance of the NBG
loan. This increase was further supported by an increase in the
respective yield of 0.2pp, driven by FC yields due to the
pre-payment of one large borrowed fund.
In 4Q 2020, our net gains from currency swaps decreased by 42.2%
Y oY and was up by 64.1% on a QoQ basis. The YoY decrease was
driven by the decline in interest rate spread on the international
markets, due to a decline in the federal funds rate, while the QoQ
increase was mainly attributable to an increase in currency swap
operations.
In 4Q 2020, our NIM stood at 4.8%, down by 0.5 pp YoY and up 0.2
pp on a QoQ basis.
In thousands of GEL 4Q'20 3Q'20 4Q'19 Change YoY Change QoQ
------------------------------- ---------- ---------- ---------- ----------- -----------
Interest income 453,874 426,232 392,154 15.7% 6.5%
------------------------------- ---------- ---------- ---------- ----------- -----------
Interest expense (227,786) (217,639) (191,891) 18.7% 4.7%
------------------------------- ---------- ---------- ---------- ----------- -----------
Net gains from currency swaps 5,237 3,191 9,055 -42.2% 64.1%
------------------------------- ---------- ---------- ---------- ----------- -----------
Net interest income 231,325 211,784 209,318 10.5% 9.2%
------------------------------- ---------- ---------- ---------- ----------- -----------
NIM 4.8% 4.6% 5.3% -0.5 pp 0.2 pp
------------------------------- ---------- ---------- ---------- ----------- -----------
Net fee and commission income
In 4Q 2020, net fee and commission income totaled GEL 52.2
million, down by 4.8% YoY, and up by 9.9% QoQ.
The YoY decrease was mainly driven by card operations due to the
slow-down in economic activities related to the COVID-19 pandemic.
This was slightly offset by an increase in net fee income from
guarantees and letters of credit, attributable to an increase in
the respective portfolio.
The increase on a QoQ basis was spread across all major
categories, with the largest contribution coming from settlement
transactions, on the back of increased transfer operations and
seasonality, which were more than offset by the negative effects of
the restrictive measures in 4Q 2020.
In thousands of GEL 4Q'20 3Q'20 4Q'19 Change YoY Change QoQ
----------------------------------------- ------- ------- ------- ----------- -----------
Net fee and commission income
----------------------------------------- ------- ------- ------- ----------- -----------
Card operations 10,326 11,318 16,649 -38.0% -8.8%
Settlement transactions 25,736 22,535 24,887 3.4% 14.2%
Guarantees issued and letters of credit 10,366 9,624 8,831 17.4% 7.7%
Other 5,771 4,022 4,477 28.9% 43.5%
----------------------------------------- ------- ------- ------- ----------- -----------
Total net fee and commission income 52,199 47,499 54,844 -4.8% 9.9%
----------------------------------------- ------- ------- ------- ----------- -----------
Other Non-Interest Income
Total other non-interest income decreased by 3.7% YoY and
increased by 13.7% QoQ, amounting to GEL 38.6 million in 4Q
2020.
The YoY decrease was related to a decline in net insurance
premium earned after claims and acquisition costs, which was mainly
driven by the following factors: increased claims on health
insurance business, as well as increased motor claims due to
government restrictive measures on public transportation, which led
to higher usage of private automobiles.
The QoQ increase was mainly due to growth in FX operations,
driven by an increased number and volume of transactions across all
segments as well as higher margins and increased demand for FX
derivative products.
In thousands of GEL 4Q'20 3Q'20 4Q'19 Change YoY Change QoQ
----------------------------------------------------------------- ------- ------- ------- ----------- -----------
Other non-interest income
----------------------------------------------------------------- ------- ------- ------- ----------- -----------
Net income from foreign currency operations 28,100 22,131 28,006 0.3% 27.0%
Net insurance premium earned after claims and acquisition costs
[25] 3,263 5,941 5,659 -42.3% -45.1%
Other operating income 7,210 5,841 6,410 12.5% 23.4%
----------------------------------------------------------------- ------- ------- ------- ----------- -----------
Total other non-interest income 38,573 33,913 40,075 -3.7% 13.7%
----------------------------------------------------------------- ------- ------- ------- ----------- -----------
Credit Loss Allowance
Credit loss allowance for loans in 4Q 2020 amounted to GEL 79.4
million, which translated into a 2.0% cost of risk.
Both the YoY and QoQ increases were mainly driven by
deteriorated macro expectations, as a result of the partial
lockdown related to COVID-19 in 4Q 2020.
In thousands of GEL 4Q'20 3Q'20 4Q'19 Change Change
YoY QoQ
--------------------------------- --------- --------- -------- ------- -------
Credit loss allowance for
loan to customers (75,711) (5,884) 5,148 NMF NMF
Credit loss allowance for
other transactions (3,659) (7,542) (4,924) -25.7% -51.5%
--------- --------- -------- ------- -------
Total credit loss allowance (79,370) (13,426) 224.0 NMF NMF
--------------------------------- --------- --------- -------- ------- -------
Operating profit after expected
credit losses 242,727 279,770 304,461 -20.3% -13.2%
--------------------------------- --------- --------- -------- ------- -------
Cost of risk 2.0% 0.2% -0.2% 2.2 pp 1.8 pp
--------------------------------- --------- --------- -------- ------- -------
Operating Expenses
In 4Q 2020, our operating expenses remained broadly stable YoY
and increased by 12.7% QoQ.
The QoQ increase was mainly driven by an increase in staff and
administrative &other expenses attributable to seasonally high
costs in 4Q, while operating costs remained broadly stable YoY due
to effective cost control measures.
As a result, in 4Q 2020, our cost to income ratio stood at
39.7%, down by 2.1pp YoY and up by 1.0pp on a QoQ basis, while our
standalone cost to income stood at 34.1% , down by 2.1 pp YoY and
up by 0.6 pp on a QoQ basis.
In thousands of GEL 4Q'20 3Q'20 4Q'19 Change YoY Change QoQ
------------------------------------------- ---------- ---------- ---------- ----------- -----------
Operating expenses
------------------------------------------- ---------- ---------- ---------- ----------- -----------
Staff costs (67,782) (62,255) (68,934) -1.7% 8.9%
Provisions for liabilities and charges (724) (2,059) (2,632) -72.5% -64.8%
Depreciation and amortization (18,838) (17,339) (9,921) 89.9% 8.6%
Administrative & other operating expenses (40,606) (31,860) (45,637) -11.0% 27.5%
------------------------------------------- ---------- ---------- ---------- ----------- -----------
Total operating expenses (127,950) (113,513) (127,124) 0.6% 12.7%
------------------------------------------- ---------- ---------- ---------- ----------- -----------
Cost to income 39.7% 38.7% 41.8% -2.1 pp 1.0 pp
------------------------------------------- ---------- ---------- ---------- ----------- -----------
Standalone cost to income* 34.1% 33.5% 36.2% -2.1 pp 0.6 pp
------------------------------------------- ---------- ---------- ---------- ----------- -----------
* For the ratio calculation all relevant group recurring costs
are allocated to the bank
NMF - no meaningful figures
Net Income
In 4Q 2020, we generated GEL 100.7 million in net profit, down
by 37.1% YoY, or 34.0% QoQ. Both the YoY and QoQ decreases were
primarily due to the second wave of governmental COVID-19 related
restrictive measures, which resulted in increased provision
expense.
As a result, our ROE stood at 13.7%, down by 11.5pp YoY, while
ROE before expected credit loss allowances stood at 24.6%, down by
0.6pp YoY.
In thousands of GEL 4Q'20 3Q'20 4Q'19 Change YoY Change QoQ
---------------------------------------------------- -------- --------- --------- ----------- -----------
Losses from modifications of financial instruments (5,082) (1,763) - NMF NMF
---------------------------------------------------- -------- --------- --------- ----------- -----------
Profit before tax 109,695 164,494 177,337 -38.1% -33.3%
---------------------------------------------------- -------- --------- --------- ----------- -----------
Income tax expense (8,994) (11,906) (17,313) -48.1% -24.5%
---------------------------------------------------- -------- --------- --------- ----------- -----------
Profit for the period 100,701 152,588 160,024 -37.1% -34.0%
---------------------------------------------------- -------- --------- --------- ----------- -----------
ROE 13.7% 22.0% 25.2%* -11.5pp -8.3 pp
---------------------------------------------------- -------- --------- --------- ----------- -----------
ROE before expected credit loss allowances 24.6% 23.9% 25.2%* -0.6pp 0.7 pp
---------------------------------------------------- -------- --------- --------- ----------- -----------
ROA 1.8% 2.9% 3.5%* -1.7pp -1.1 pp
---------------------------------------------------- -------- --------- --------- ----------- -----------
*Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
ROE stood at 24.7%, while ROE before expected credit loss
allowances stood at 24.7% and ROA remained unchanged in 4Q 2019
Funding and Liquidity
As of 31 December 2020, the total liquidity coverage ratio, as
defined by the NBG, was 134.2 % , above the 100% limit, while the
LCR in GEL and FC stood at 132.2% and 134.9% respectively, above
the respective limits of 75% and 100%.
However, in light of the COVID-19 pandemic, starting from May
2020 the NBG removed the minimum requirement on GEL LCR of 75%, for
a one-year period. Despite the ease of requirement, we continue to
operate with high liquidity buffers.
As of 31 December 2020, NSFR stood at 126.0%, compared to the
regulatory limit of 100%, effective from September 2019.
31-Dec-20 30-Sep-20 Change QoQ
--------------------------------------------------------------- ---------- ---------- -----------
Minimum net stable funding ratio, as defined by the NBG 100% 100% 0.0 pp
Net stable funding ratio as defined by the NBG 126.0% 127.0% -1.0 pp
Net loans to deposits + IFI funding 101.2% 97.5% -3.7 pp
Leverage (Times) 7.7x 7.7x 0.0x
Minimum liquidity ratio, as defined by the NBG 30.0% 30.0% 0.0 pp
Liquidity ratio, as defined by the NBG 33.3% 33.8% -0.5 pp
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 n/a n/a NMF
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 134.2% 123.6% 10.6 pp
LCR in GEL, as defined by the NBG 132.2% 118.0% 14.2 pp
LCR in FC, as defined by the NBG 134.9% 126.4% 8.5 pp
--------------------------------------------------------------- ---------- ---------- -----------
Regulatory Capital
As of 31 December 2020, CET1, Tier1 and Total Capital increased
QoQ by 9.9%, 7.9% and 5.1% respectively, mainly due to net income
generation. The increase in risk weighted assets was mainly related
to growth of the loan book.
No extra COVID-19 related provisions were booked in the fourth
quarter per NBG provisioning rules.
Over the same period, our CET1, Tier 1 and Total Capital ratios
stood at 10.4%, 13.0% and 17.1%, respectively, and remained
comfortably above the eased minimum regulatory requirements by
3.0%, 3.8% and 3.4% accordingly.
In thousands of GEL 31-Dec-20 30-Sep-20 Change QoQ
------------------------------- ----------- ----------- -----------
CET 1 Capital 1,911,233 1,738,739 9.9%
Tier 1 Capital 2,385,181 2,211,178 7.9%
Total Capital 3,137,912 2,984,109 5.1%
Total Risk-weighted Exposures 18,301,477 17,478,610 4.7%
------------------------------- ----------- ----------- -----------
Minimum CET 1 ratio 7.4% 6.9% 0.5 pp
CET 1 Capital adequacy ratio 10.4% 9.9% 0.5 pp
Minimum Tier 1 ratio 9.2% 8.7% 0.5 pp
Tier 1 Capital adequacy ratio 13.0% 12.7% 0.3 pp
Minimum total capital adequacy ratio 13.7% 13.2% 0.5 pp
Total Capital adequacy ratio 17.1% 17.1% 0.0 pp
-------------------------------------- ------ ------ -------
Loan Portfolio
As of 31 December 2020, the gross loan portfolio reached GEL
15,200.5 million, up by 4.2% QoQ or up by 3.0% on a constant
currency basis. The limited growth was related to the second wave
of pandemic-related restrictions in 4Q. The proportion of gross
loans denominated in foreign currency increased by 2.0pp QoQ and
accounted for 59.4% of total loans, while on a constant currency
basis the proportion of gross loans denominated in foreign currency
decreased by 2.4pp QoQ and stood at 59.0%.
As of 31 December 2020, our market share in total loans stood at
39.0%, down by 0.3pp QoQ. Our loan market share in legal entities
was 38.6%, down by 0.2pp over the same period, and our loan market
share in individuals stood at 39.4%, down by 0.4pp QoQ.
In thousands of GEL 31-Dec-20 30-Sep-20 Change QoQ
--------------------------------------- ----------- ----------- -----------
Loans and advances to customers
--------------------------------------- ----------- ----------- -----------
Retail 5,953,687 5,795,824 2.7%
Retail loans GEL 2,996,854 2,793,475 7.3%
Retail loans FC 2,956,833 3,002,349 -1.5%
Corporate 5,690,749 5,324,007 6.9%
Corporate loans GEL 1,576,778 1,293,618 21.9%
Corporate loans FC 4,113,971 4,030,389 2.1%
MSME 3,556,084 3,470,946 2.5%
MSME loans GEL 1,592,836 1,540,558 3.4%
MSME loans FC 1,963,248 1,930,388 1.7%
--------------------------------------- ----------- ----------- -----------
Total loans and advances to customers 15,200,520 14,590,777 4.2%
--------------------------------------- ----------- ----------- -----------
4Q'20 3Q'20 4Q'19 Change YoY Change QoQ
------------------------------- ------ ------ ------ ----------- -----------
Loan yields 10.2% 10.0% 10.9% -0.7 pp 0.2 pp
Loan yields GEL 15.3% 15.3% 15.7% -0.4 pp 0.0 pp
Loan yields FC 6.8% 6.6% 7.6% -0.8 pp 0.2 pp
Retail Loan Yields 11.8% 11.3% 11.8% 0.0 pp 0.5 pp
Retail loan yields GEL 16.7% 16.5% 17.1% -0.4 pp 0.2 pp
Retail loan yields FC 7.1% 6.5% 7.1% 0.0 pp 0.6 pp
Corporate Loan Yields 8.5% 8.6% 9.7% -1.2 pp -0.1 pp
Corporate loan yields GEL 13.1% 13.3% 13.3% -0.2 pp -0.2 pp
Corporate loan yields FC 6.9% 7.0% 8.2% -1.3 pp -0.1 pp
MSME Loan Yields 10.1% 10.1% 11.3% -1.2 pp 0.0 pp
MSME loan yields GEL 14.8% 14.9% 15.7% -0.9 pp -0.1 pp
MSME loan yields FC 6.3% 6.1% 7.2% -0.9 pp 0.2 pp
------------------------------- ------ ------ ------ ----------- -----------
Loan Portfolio Quality
Total PAR 30 increased by 0.9pp on a QoQ basis and stood at
2.6%. The increase was driven by retail and MSME segments due to
the low base in 3Q, related to payment holidays offered to our
customers. The slight decrease in corporate PAR 30 was due to
growth in the respective loan portfolio.
As expected, the NPL ratio increased at the end of 2020, as the
COVID-19 impact continued to materialize and amounted to 4.7%
compared to 3.5% at the end of September. The 2.3pp increase in the
retail segment was mainly due to the COVID-19 related
restructurings offered to our customers on an individual basis,
while the 1.4pp growth in the MSME segment came on the back of the
negative impact of COVID-19 on several SME borrowers, which were
classified as NPLs after the monitoring process of the vulnerable
borrowers. This effect was slightly offset by a 0.1pp decline in
the corporate segment, driven by an increase in that portfolio.
31-Dec-20 30-Sep-20 Change QoQ
Par 30
------------- ---------- ----------- -----------
Retail 3.4% 1.5% 1.9 pp
Corporate 1.1% 1.3% -0.2 pp
MSME 3.8% 2.9% 0.9 pp
------------- ---------- ----------- -----------
Total Loans 2.6% 1.7% 0.9 pp
------------- ---------- ----------- -----------
Non-performing Loans 31-Dec-20 30-Sep-20 Change QoQ
---------------------- ---------- --------------- -----------
Retail 5.6% 3.3% 2.3 pp
Corporate 2.5% 2.6% -0.1 pp
MSME 6.6% 5.2% 1.4 pp
---------------------- ---------- --------------- -----------
Total Loans 4.7% 3.5% 1.2 pp
---------------------- ---------- --------------- -----------
NPL Coverage Dec-20 Sep-20
Exc. Collateral Incl. Collateral Exc. Collateral Incl. Collateral
-------------- ---------------- ----------------- ---------------- -----------------
Retail 101.3% 178.5% 155.9% 236.6%
Corporate 76.4% 230.1% 75.4% 224.5%
MSME 68.6% 179.2% 71.9% 186.4%
-------------- ---------------- ----------------- ---------------- -----------------
Total 85.6% 189.1% 104.6% 215.8%
-------------- ---------------- ----------------- ---------------- -----------------
Cost of risk
In 4Q, total cost of risk amounted to 2.0%. Both the YoY and QoQ
increases in credit loss allowances were mainly driven by
deteriorated macro expectations, as a result of the recent partial
lockdown related to COVID-19.
Cost of Risk 4Q'20 3Q'20 4Q'19 Change YoY Change
QoQ
-------------- ---------------- ------ ------ ----------- -------
Retail 2.6% 0.2% 0.3% 2.3 pp 2.4 pp
Corporate 0.2% 0.0% -0.2% 0.4 pp 0.2 pp
MSME 4.0% 0.4% -1.0% 5.0 pp 3.6 pp
-------------- ---------------- ------ ------ ----------- -------
Total 2.0% 0.2% -0.2% 2.2 pp 1.8 pp
-------------- ---------------- ------ ------ ----------- -------
Deposit Portfolio
The total deposits portfolio increased by 1.9% QoQ and amounted
to GEL 12,572.7 million, while on a constant currency basis, the
deposit portfolio increased by 1.6%. The proportion of deposits
denominated in a foreign currency decreased by 2.7pp QoQ and
accounted for 66.3 % of total deposits, while on a constant
currency basis the proportion of deposits denominated in foreign
currency decreased by 4.7pp QoQ and stood at 61.7%.
As of 31 December 2020, our market share in deposits amounted to
37.2%, down by 1.1pp QoQ, while our market share in deposits to
legal entities stood at 34.5%, down by 3.7pp over the same period.
Our market share in deposits to individuals stood at 39.5%, up by
1.2pp QoQ.
In thousands of GEL 31-Dec-20 30-Sep-20 Change QoQ
---------------------------- ----------- ----------- -----------
Customer Accounts
---------------------------- ----------- ----------- -----------
Retail 7,255,020 6,699,866 8.3%
Retail deposits GEL 1,330,942 1,255,575 6.0%
Retail deposits FC 5,924,078 5,444,291 8.8%
Corporate 3,939,501 4,330,403 -9.0%
Corporate deposits GEL 2,240,287 2,627,043 -14.7%
Corporate deposits FC 1,699,214 1,703,360 -0.2%
MSME 1,378,207 1,313,145 5.0%
MSME deposits GEL 671,658 612,991 9.6%
MSME deposits FC 706,549 700,154 0.9%
---------------------------- ----------- ----------- -----------
Total Customer Accounts 12,572,728 12,343,414 1.9%
---------------------------- ----------- ----------- -----------
4Q'20 3Q'20 4Q'19 Change Change
YoY QoQ
------------------------------ ------ ------ ------ ------- --------
Deposit rates 3.6% 3.7% 3.4% 0.2 pp -0.1 pp
Deposit rates GEL 6.6% 6.7% 6.0% 0.6 pp -0.1 pp
Deposit rates FC 2.0% 2.0% 2.0% 0.0 pp 0.0 pp
Retail Deposit Yields 2.9% 3.0% 2.9% 0.0 pp -0.1 pp
Retail deposit rates GEL 5.4% 5.8% 5.1% 0.3 pp -0.4 pp
Retail deposit rates FC 2.3% 2.3% 2.3% 0.0 pp 0.0 pp
Corporate Deposit Yields 5.7% 5.7% 5.1% 0.6 pp 0.0 pp
Corporate deposit rates
GEL 8.4% 8.3% 7.9% 0.5 pp 0.1 pp
Corporate deposit rates
FC 1.6% 1.5% 1.5% 0.1 pp 0.1 pp
MSME Deposit Yields 1.0% 1.0% 0.9% 0.1 pp 0.0 pp
MSME deposit rates GEL 1.7% 1.7% 1.5% 0.2 pp 0.0 pp
MSME deposit rates FC 0.3% 0.4% 0.3% 0.0 pp -0.1 pp
------------------------------ ------ ------ ------ ------- --------
Segment definition and PL
Business Segments
The segment definitions are as follows:
-- Corporate - a legal entity/group of affiliated entities with
an annual revenue exceeding GEL 12.0 million or which have been
granted facilities with more than GEL 5.0 million. Some other
business customers may also be assigned to the corporate segment or
transferred to the MSME segment on a discretionary basis;
-- Retail - non-business individual customers; all individual
customers are included in retail deposits;
-- MSME - business customers who are not included in the
corporate segment; or legal entities which have been granted a pawn
shop loan; or individual customers of the fully-digital bank,
Space; and
-- 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'20 Retail MSME Corporate Corp.Centre Total
------------------------------------ --------- --------- ---------- ------------ ----------
Interest income 173,931 88,538 121,660 69,745 453,874
Interest expense (50,119) (3,407) (59,681) (114,579) (227,786)
Net gains from currency swaps - - - 5,237 5,237
Net transfer pricing (13,074) (31,073) 14,944 29,203 -
Net interest income 110,738 54,058 76,923 (10,394) 231,325
------------------------------------ --------- --------- ---------- ------------ ----------
Fee and commission income 57,326 7,985 17,041 5,396 87,748
Fee and commission expense (29,490) (2,801) (2,432) (826) (35,549)
Net fee and commission income 27,836 5,184 14,609 4,570 52,199
------------------------------------ --------- --------- ---------- ------------ ----------
Net insurance premium earned
after claims and acquisition
costs - - - 3,263 3,263
Net gains from derivatives,
foreign currency operations ( 1,204
and translation 7,521 7,554 14,214 ) 28,085
Gains less Losses from Disposal
of Investment Securities Measured
at Fair Value through Other
Comprehensive Income - - - 578 578
Other operating income 2,858 81 429 3,522 6,890
Share of profit of associates - - - (243) (243)
Other operating non-interest
income and insurance profit 10,379 7,635 14,643 5,916 38,573
------------------------------------ --------- --------- ---------- ------------ ----------
Credit loss allowance for
loans to customers (38,335) (34,896) (2,480) - (75,711)
Credit loss allowance for
performance guarantees and
credit related commitments (192) 345 1,914 - 2,067
Credit loss allowance for
investments in finance lease - - - (1,459) (1,459)
Credit loss allowance for
other financial assets 226 - (2,035) (1,555) (3,364)
Credit loss allowance for
financial assets measured
at fair value through other
comprehensive income - - (609) (294) (903)
Profit/(loss) before G&A expenses
and income taxes 110,652 32,326 102,965 (3,216) 242,727
------------------------------------ --------- --------- ---------- ------------ ----------
Losses from modifications
of financial instruments (1,099) (54) (1,997) (1,932) (5,082)
------------------------------------ --------- --------- ---------- ------------ ----------
Staff costs (28,530) (13,427) (10,695) (15,130) (67,782)
Depreciation and amortization (12,082) (2,973) (1,177) (2,606) (18,838)
Provision for liabilities
and charges (200) - (400) (124) (724)
Administrative and other operating
expenses (21,850) (6,511) (4,367) (7,878) (40,606)
Operating expenses (62,662) (22,911) (16,639) (25,738) (127,950)
------------------------------------ --------- --------- ---------- ------------ ----------
Profit/(loss) before tax 46,891 9,361 84,329 (30,886) 109,695
------------------------------------ --------- --------- ---------- ------------ ----------
Income tax expense (943) 545 (3,491) (5,105) (8,994)
------------------------------------ --------- --------- ---------- ------------ ----------
Profit/(loss) for the year 45,948 9,906 80,838 (35,991) 100,701
------------------------------------ --------- --------- ---------- ------------ ----------
Consolidated Financial Statements of TBC Bank Group PLC
Consolidated Balance Sheet
-------------------------
In thousands of GEL Dec-20 Sep-20
--------------------------------------------------------------------------------- ------------ -----------
Cash and cash equivalents 1,635,405 1,454,973
Due from other banks 50,805 39,941
Mandatory cash balances with National Bank of Georgia 2,098,506 2,024,080
Loans and advances to customers 14,594,274 14,055,807
Investment securities measured at fair value through other comprehensive income 1,527,268 1,346,770
Bonds carried at amortized cost 1,089,801 1,322,203
Investments in finance leases 271,660 268,430
Investment properties 68,689 83,458
Current income tax prepayment 69,889 58,721
Deferred income tax asset 2,787 602
Other financial assets [26] 171,301 263,979
Other assets 266,960 259,736
Premises and equipment 372,956 359,001
Right of use assets 53,927 59,040
Intangible assets 239,523 207,670
Goodwill 59,964 60,296
Investments in associates 4,090 2,265
TOTAL ASSETS 22,577,805 21,866,972
--------------------------------------------------------------------------------- ------------ -----------
LIABILITIES
Due to credit institutions 4,486,373 4,127,175
Customer accounts 12,572,728 12,343,414
Lease liabilities 58,983 67,131
Other financial liabilities (26) 227,432 183,376
Current income tax liability 853 565
Debt Securities in issue 1,496,497 1,527,318
Deferred income tax liability 13,088 4,370
Provisions for liabilities and charges 25,335 25,417
Other liabilities 87,842 79,171
Subordinated debt 672,740 682,648
TOTAL LIABILITIES 19,641,871 19,040,585
--------------------------------------------------------------------------------- ------------ -----------
EQUITY
Share capital 1,682 1,682
Shares held by trust (33,413) (34,451)
Share premium 848,459 848,459
Retained earnings 2,281,428 2,180,291
Group re-organisation reserve (162,167) (162,167)
Share based payment reserve (20,568) (25,222)
Fair value reserve 11,158 7,994
Cumulative currency translation reserve (2,124) (931)
Net assets attributable to owners 2,924,455 2,815,655
--------------------------------------------------------------------------------- ------------ -----------
Non-controlling interest 11,479 10,732
------------ -----------
TOTAL EQUITY 2,935,934 2,826,387
--------------------------------------------------------------------------------- ------------ -----------
TOTAL LIABILITIES AND EQUITY 22,577,805 21,866,972
--------------------------------------------------------------------------------- ------------ -----------
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
In thousands of GEL 4Q'20 3Q'20 4Q'19
------------------------------------------------------------------------------ ---------- ------------ ------------
Interest income 453,874 426,232 392,154
Interest expense (227,786) (217,639) (191,891)
Net gains from currency swaps 5,237 3,191 9,055
Net interest income 231,325 211,784 209,318
------------------------------------------------------------------------------ ---------- ------------ ------------
Fee and commission income 87,748 87,677 86,751
Fee and commission expense (35,549) (40,178) (31,907)
Net fee and commission income 52,199 47,499 54,844
------------------------------------------------------------------------------ ---------- ------------ ------------
Net insurance premiums earned 12,542 14,199 12,386
Net insurance claims incurred and agents' commissions (9,279) (8,258) (6,727)
------------------------------------------------------------------------------ ---------- ------------ ------------
Net insurance premium earned after claims and acquisition costs 3,263 5,941 5,659
------------------------------------------------------------------------------ ---------- ------------ ------------
Net gains from derivatives, foreign currency operations and translation 28,085 22,174 28,002
Gains less losses from disposal of investment securities measured at fair
value through other
comprehensive income 578 - 20
Other operating income 6,890 5,645 6,276
Share of profit of associates (243) 153 118
Other operating non-interest income 35,310 27,972 34,416
------------------------------------------------------------------------------ ---------- ------------ ------------
Credit loss allowance for loans to customers (75,711) (5,884) 5,148
Credit loss allowance for investments in finance lease (1,459) (2,661) 615
Credit loss allowance for performance guarantees and credit related
commitments 2,067 1,968 (290)
Credit loss allowance for other financial assets (3,364) (6,481) (5,165)
Credit loss allowance for financial assets measured at fair value through
other comprehensive
income (903) (368) (84)
Operating profit after expected credit losses 242,727 279,770 304,461
------------------------------------------------------------------------------ ---------- ------------ ------------
Losses from modifications of financial instruments (5,082) (1,763) -
------------------------------------------------------------------------------ ---------- ------------ ------------
Staff costs (67,782) (62,255) (68,934)
Depreciation and amortization (18,838) (17,339) (9,921)
(Provision for)/ recovery of liabilities and charges (724) (2,059) (2,632)
Administrative and other operating expenses (40,606) (31,860) (45,637)
Operating expenses (127,950) (113,513) (127,124)
------------------------------------------------------------------------------ ---------- ------------ ------------
Profit/(loss) before tax 109,695 164,494 177,337
------------------------------------------------------------------------------ ---------- ------------ ------------
Income tax expense (8,994) (11,906) (17,313)
---------- ------------ ------------
Profit/(loss) for the period 100,701 152,588 160,024
------------------------------------------------------------------------------ ---------- ------------ ------------
Other comprehensive income:
------------------------------------------------------------------------------ ---------- ------------ ------------
Items that may be reclassified subsequently to profit or loss:
------------------------------------------------------------------------------ ---------- ------------ ------------
Movement in fair value reserve 3,163 9,486 (13,828)
------------------------------------------------------------------------------ ---------- ------------ ------------
Exchange differences on translation to presentation currency (1,211) 4,753 (483)
------------------------------------------------------------------------------ ---------- ------------ ------------
Other comprehensive income for the period 1,952 14,239 (14,311)
------------------------------------------------------------------------------ ---------- ------------ ------------
Total comprehensive income for the period 102,653 166,827 145,713
------------------------------------------------------------------------------ ---------- ------------ ------------
Profit/(loss) attributable to:
------------------------------------------------------------------------------ ---------- ------------ ------------
- Shareholders of TBCG 99,371 150,756 159,416
------------------------------------------------------------------------------ ---------- ------------ ------------
- Non-controlling interest 1,330 1,832 608
------------------------------------------------------------------------------ ---------- ------------ ------------
Profit/(loss) for the period 100,701 152,588 160,024
------------------------------------------------------------------------------ ---------- ------------ ------------
Total comprehensive income is attributable to:
------------------------------------------------------------------------------ ---------- ------------ ------------
- Shareholders of TBCG 101,297 165,002 145,122
------------------------------------------------------------------------------ ---------- ------------ ------------
- Non-controlling interest 1,356 1,825 591
------------------------------------------------------------------------------ ---------- ------------ ------------
Total comprehensive income for the period 102,653 166,827 145,713
------------------------------------------------------------------------------ ---------- ------------ ------------
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'20 3Q'20 4Q'19
------------------------------------------------------ ------- ------- -------
Profitability ratios:
ROE(1) 13.7% 22.0% 25.2%*
ROA(2) 1.8% 2.9% 3.5%*
ROE before expected credit loss allowances(3) 24.6% 23.9% 25.2%*
Cost to income(4) 39.7% 38.7% 41.8%
NIM(5) 4.8% 4.6% 5.3%
Loan yields(6) 10.2% 10.0% 10.9%
Deposit rates(7) 3.6% 3.7% 3.4%
Yields on interest earning assets(8) 9.5% 9.4% 9.9%
Cost of funding(9) 4.8% 4.9% 4.9%
Spread(10) 4.7% 4.5% 5.0%
------------------------------------------------------ ------- ------- -------
Asset quality and portfolio concentration:
Cost of risk(11) 2.0% 0.2% -0.2%
PAR 90 to Gross Loans(12) 1.5% 1.3% 1.1%
NPLs to Gross Loans(13) 4.7% 3.5% 2.7%
NPLs coverage(14) 85.6% 104.6% 91.1%
NPLs coverage with collateral(15) 189.1% 215.8% 194.2%
Credit loss level to Gross Loans(16) 4.0% 3.7% 2.5%
Related Party Loans to Gross Loans(17) 0.0% 0.1% 0.1%
Top 10 Borrowers to Total Portfolio(18) 7.9% 7.9% 8.3%
Top 20 Borrowers to Total Portfolio(19) 12.1% 12.0% 12.3%
------------------------------------------------------ ------- ------- -------
Capital optimisation:
Net Loans to Deposits plus IFI Funding(20) 101.2% 97.5% 104.8%
Net Stable Funding Ratio(21) 126.0% 127.0% 126.7%
Liquidity Coverage Ratio(22) 134.2% 123.6% 110.1%
Leverage(23) 7.7x 7.7x 7.1x**
CET 1 CAR (Basel III)(24) 10.4% 9.9% 12.0%
Regulatory Tier 1 CAR (Basel III)(25) 13.0% 12.7% 14.6%
Regulatory Total 1 CAR (Basel III)(26) 17.1% 17.1% 19.1%
------------------------------------------------------ ------- ------- -------
* Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
ROE stood at 24.7%, while ROE before expected credit loss
allowances stood at 24.7% and ROA remained unchanged in 4Q 2019
** Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
Leverage as of 31 December 2019 stood at 7.0x
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. Return on average total equity (ROE) before expected credit
loss allowances equals net income attributable to owners excluding
all credit loss allowance, but after net modification losses
divided by the monthly average of total shareholders' equity
attributable to the PLC's equity holders for the same period.
4. 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).
5. 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 corporate shares, net investment in finance lease, net
loans, and amounts due from credit institutions. The latter
excludes all items from cash and cash equivalents, excludes EUR
mandatory reserves with NBG that currently have negative interest,
and includes other earning items from due from banks.
6. Loan yields equal interest income on loans and advances to
customers divided by monthly average gross loans and advances to
customers; annualised where applicable.
7. Deposit rates equal interest expense on customer accounts
divided by monthly average total customer deposits; annualised
where applicable.
8. Yields on interest earning assets equal total interest income
divided by monthly average interest earning assets; annualised
where applicable.
9. Cost of funding equals total interest expense divided by
monthly average interest bearing liabilities; annualised where
applicable.
10. Spread equals difference between yields on interest earning
assets (including but not limited to yields on loans, securities
and due from banks) and cost of funding (including but not limited
to cost of deposits, cost on borrowings and due to banks).
11. Cost of risk equals credit loss allowance for loans to
customers divided by monthly average gross loans and advances to
customers; annualised where applicable.
12. 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.
13. 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.
14. NPLs coverage ratio equals total credit loss allowance for
loans to customers calculated per IFRS 9 divided by the NPL
loans.
15. NPLs coverage with collateral ratio equals credit loss
allowance for loans to customers per IFRS 9 plus the total
collateral amount of NPL loans (excluding third party guarantees)
discounted at 30-50% depending on segment type divided by the NPL
loans.
16. Credit loss level to gross loans equals credit loss
allowance for loans to customers divided by the gross loan
portfolio for the same period.
17. Related party loans to total loans equals related party
loans divided by the gross loan portfolio.
18. Top 10 borrowers to total portfolio equals the total loan
amount of the top 10 borrowers divided by the gross loan
portfolio.
19. Top 20 borrowers to total portfolio equals the total loan
amount of the top 20 borrowers divided by the gross loan
portfolio.
20. Net loans to deposits plus IFI funding ratio equals net
loans divided by total deposits plus borrowings received from
international financial institutions.
21. 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.
22. Liquidity coverage ratio equals high-quality liquid assets
divided by the total net cash outflow amount as defined by the
NBG.
23. Leverage equals total assets to total equity.
24. Regulatory CET 1 CAR equals CET 1 capital divided by total
risk weighted assets, both calculated in accordance with the Pillar
1 requirements of the NBG Basel III standards. The reporting
started from the end of 2017. Calculations are made for TBC Bank
stand-alone, based on local standards.
25. Regulatory tier 1 CAR equals tier I capital divided by total
risk weighted assets, both calculated in accordance with the Pillar
1 requirements of the NBG Basel III standards. The reporting
started from the end of 2017. Calculations are made for TBC Bank
stand-alone, based on local standards.
26. Regulatory total CAR equals total capital divided by total
risk weighted assets, both calculated in accordance with the Pillar
1 requirements of the NBG Basel III standards. The reporting
started from the end of 2017. 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 3.2878 as of 30 September 2020. As of 31 December 2020 the
USD/GEL exchange rate equaled 3.2766. For P&L items growth
calculations without currency effect, we used the average USD/GEL
exchange rate for the following periods: 4Q 2020 of 3.2705, 3Q 2020
of 3.1021, 4Q 2019 of 2.9458.
Unaudited Consolidated Financial Results Overview for FY
2020
This statement provides a summary of the unaudited business and
financial trends for FY 2020 for TBC Bank Group plc and its
subsidiaries. The quarterly financial information and trends are
unaudited.
TBC Bank Group PLC's financial results are prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and international
financial reporting standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union.
Changes in accounting policies, IAS 16
In 2Q 2020, the accounting policy in relation to subsequent
measurement of land, buildings and construction in progress was
changed from the revaluation model to the cost model. This led to
the restatement of appropriate balance sheet amounts in 2019, while
no material impact was recorded in the income statement.
Net Interest Income
In FY 2020, we generated GEL 835.4 million net interest income,
up by 4.2% YoY.
The YoY increase in interest income of GEL 231.2 million, or
16.1%, was mainly supported by an increase in interest income from
loans, which was driven by an increase in the respective portfolio
by GEL 2,538.6 million, or 20.0%. This effect was partially offset
by a 0.9pp drop in loan yields across all segments, mainly related
to a decrease in the Libor rate, currency devaluation, a change in
the segment mix towards corporate, as well as the slowdown of
lending activities due to the pandemic. Furthermore, growth was
supported by interest income from investment securities, on the
back of an increase in the respective portfolio of 613.3 million,
or 30.5%, as well as by the increased share of new securities
acquired in 2020 with higher interest rates due to the increased
average refinance rate.
Our interest expense increased by GEL 189.7 million, or 28.6%,
which was mainly related to an increase in interest expense from
deposits and other borrowed funds. The former increase was
attributable to a growth in the respective portfolio of GEL 2,523.4
million, or 25.1%, which was further supported by an increase in
yields due to an increase in the average refinance rate, as well as
currency depreciation. The latter increase was mainly driven by
growth in the NBG loan balances, which further supported the growth
in the respective yield by 0.1pp (the GEL yield went up by 0.9pp on
the back of the higher average refinance rate, while the FC yield
declined by 1.3pp due to the decrease in the Libor rate). Another
contributor was the growth in debt securities in issue related to
an increase in interest expense from the Senior and AT1 Bonds
issued in June and July 2019, respectively, in the amount of US$
425 million.
In FY 2020, our NIM stood at 4.7%, down by 0.9pp YoY.
In thousands of GEL FY'20 FY'19 Change YoY
------------------------------- ---------- ---------- -----------
Interest income 1,667,999 1,436,843 16.1%
------------------------------- ---------- ---------- -----------
Interest expense (853,516) (663,860) 28.6%
------------------------------- ---------- ---------- -----------
Net gains from currency swaps 20,950 28,556 -26.6%
------------------------------- ---------- ---------- -----------
Net interest income 835,433 801,539 4.2%
------------------------------- ---------- ---------- -----------
NIM 4.7% 5.6% -0.9 pp
------------------------------- ---------- ---------- -----------
Net fee and commission income
In FY 2020, net fee and commission income totalled GEL 182.8
million, down by 2.4% YoY.
The slight decrease on a YoY basis is caused by card operations
and other fee and commission income on the back of reduced economic
activity due to the COVID-19 pandemic. This effect was positively
impacted by an increase in fees from guarantees issued and
settlement transactions. The former increase was driven by the
increase in the respective portfolio, while the latter growth was
related to the fee income from the payments transactions of our
Uzbek subsidiary Payme (Inspired LLC), which was acquired in
mid-2019.
In thousands of GEL FY'20 FY'19 Change YoY
----------------------------------------- -------- -------- ---------------
Net fee and commission income
----------------------------------------- -------- -------- ---------------
Card operations 45,147 56,037 * 19.4%
Settlement transactions 86,284 73,228 17.8%
Guarantees issued and letters of credit 37,909 30,289 25.2%
Other 13,427 27,736 * 51.6%
----------------------------------------- -------- -------- -------------
Total net fee and commission income 182,767 187,290 * 2.4%
----------------------------------------- -------- -------- -------------
Other Non-Interest Income
Total other non-interest income decreased slightly YoY and
amounted to GEL 137.4 million in FY 2020. The decline of GEL
2,023.0, or 1.5%, was mainly driven by the reduction in foreign
currency operations on the back of slower economic activity in 2020
compared to the previous period, because of the COVID-19
pandemic.
In thousands of GEL FY'20 FY'19 Change YoY
---------------------------------------------------------------------- -------- -------- -----------
Other non-interest income
---------------------------------------------------------------------- -------- -------- -----------
Net income from foreign currency operations 98,010 101,467 -3.4%
Net insurance premium earned after claims and acquisition costs [27] 19,485 18,510 5.3%
Other operating income 19,896 19,437 2.4%
---------------------------------------------------------------------- -------- -------- -----------
Total other non-interest income 137,391 139,414 -1.5%
---------------------------------------------------------------------- -------- -------- -----------
Credit Loss Allowance
Total credit loss allowance in 2020 amounted to GEL 351.8
million. This year, we booked additional COVID-19 related
provisions, which resulted in significant growth in provision
charges. As a result, our CoR for the full year 2020 stood at
2.4%.
FY'20 FY'19 Change
In thousands of GEL YoY
---------------------------------------------- ---------- ---------- -------
Credit loss allowance for loan to customers (330,811) (82,030) NMF
Credit loss allowance for other transactions (21,036) (9,962) NMF
---------------------------------------------- ---------- ---------- -------
Total credit loss allowance (351,847) (91,992) NMF
---------------------------------------------- ---------- ---------- -------
Operating profit after expected credit
losses 803,744 1,036,251 -22.4%
---------------------------------------------- ---------- ---------- -------
Cost of risk 2.4% 0.7% 1.7 pp
---------------------------------------------- ---------- ---------- -------
NMF - no meaningful figures
Operating Expenses
In FY 2020, our total operating expenses decreased by 1.6% YoY,
thanks to our effective cost control measures.
The decrease in administrative & other operating expenses
was driven by a reduction in consultation services and business
trip expenses, as well as the impact of renegotiated rent expenses
per IFRS 16 in the amount of GEL 4.2 million.
Thus, in FY 2020 our cost to income ratio stood at 38.4%, down
by 1.5pp YoY, while our standalone cost to income was 32.9%, down
by 3.0pp over the same period.
In thousands of GEL FY'20 FY'19 Change YoY
------------------------------------------- ---------- ---------- -----------
Operating expenses
------------------------------------------- ---------- ---------- -----------
Staff costs (244,043) (247,803) -1.5%
Provisions for liabilities and charges (2,706) (1,264) NMF
Depreciation and amortization (68,392) (59,478) 15.0%
Administrative & other operating expenses (128,482) (142,181) -9.6%
------------------------------------------- ---------- ---------- -----------
Total operating expenses (443,623) (450,726) -1.6%
------------------------------------------- ---------- ---------- -----------
Cost to income 38.4% 39.9% -1.5 pp
------------------------------------------- ---------- ---------- -----------
Standalone Cost to income* 32.9% 35.9% -3.0 pp
------------------------------------------- ---------- ---------- -----------
* For the ratio calculation all relevant group recurring costs
are allocated to the bank
Net Income
In FY 2020 we managed to maintain resilient profitability,
driven by the increase in net interest income and effective cost
management. Over the same period, we also recorded losses from
modifications of financial instruments, in the amount of GEL 41.0
million to reflect the decrease in the present value of cash-flows
resulting from the loan repayment grace periods granted to the
borrowers. As a result, our ROE before expected credit loss
allowances stood at 24.7%, down by 2.1pp.
Over the same period, credit loss allowances increased
significantly to cover the potential impact of the COVID-19
pandemic on our borrowers reducing our ROE to 11.7%.
In thousands of GEL FY'20 FY'19 Change YoY
---------------------------------------------------- --------- --------- -----------
Losses from modifications of financial instruments (41,015) - NMF
---------------------------------------------------- --------- --------- -----------
Profit before tax 319,106 585,525 -45.5%
---------------------------------------------------- --------- --------- -----------
Income tax expense 3,383 (45,184) NMF
---------------------------------------------------- --------- --------- -----------
Profit for the period 322,489 540,341 -40.3%
---------------------------------------------------- --------- --------- -----------
ROE 11.7% 22.9%* -11.2 pp
---------------------------------------------------- --------- --------- -----------
ROE before expected credit loss allowances 24.7% 26.8%* -2.1 pp
---------------------------------------------------- --------- --------- -----------
ROA 1.6% 3.2%* -1.6 pp
---------------------------------------------------- --------- --------- -----------
* Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
ROE stood at 22.4% while ROE before expected credit loss allowances
stood at 26.3% and ROA remained unchanged in FY 2019
Funding and Liquidity
As of 31 December 2020, the total liquidity coverage ratio, as
defined by the NBG, was 134.2 % , above the 100% limit, while the
LCR in GEL and FC stood at 132.2% and 134.9%, respectively, above
the respective limits of 75% and 100%.
However, in light of the COVID-19 pandemic, starting from May
2019, the NBG removed the minimum requirement on GEL LCR of 75%,
for a one-year period. Despite the easing of the requirement, we
continue to operate with high liquidity buffers.
As of 31 December 2020, NSFR stood at 126.0%, compared to the
regulatory limit of 100%, effective from September 2019.
31-Dec-20 31-Dec-19 Change
YoY
--------------------------------------------------------------- ---------- ---------- --------
Minimum net stable funding ratio, as defined by the NBG 100% 100% 0.0 pp
Net stable funding ratio as defined by the NBG 126.0% 126.7% -0.7 pp
Net loans to deposits + IFI funding 101.2% 104.8% -3.6 pp
Leverage (Times) 7.7x 7.1x* 0.6x
Minimum liquidity ratio, as defined by the NBG 30.0% 30.0% 0.0 pp
Liquidity ratio, as defined by the NBG 33.3% 32.2% -1.1 pp
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 n/a 75.0% NMF
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 134.2% 110.1% 24.1 pp
LCR in GEL, as defined by the NBG 132.2% 83.7% 48.5 pp
LCR in FC, as defined by the NBG 134.9% 128.4% 6.5 pp
--------------------------------------------------------------- ---------- ---------- --------
*Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
Leverage stood at 7.0x as of 31 December 2019
Regulatory Capital
As of 31 December 2020, CET1 Capital increased by 2.1% YoY,
mainly due to net income generation, while Tier1 and Total Capital
grew by 4.5% and 5.5% respectively, further supported by an
increase in FX denominated AT1 bonds and subordinated loans due to
GEL depreciation.
The YoY increase in risk-weighted assets was mainly driven by
the GEL depreciation and portfolio growth.
CET1 and Tier 1 CAR ratios decreased by 1.6pp YoY. The decrease
was mainly attributable to the effect of Covid-19 on the Bank`s net
income and the depreciation of GEL on a YoY basis. The total CAR
ratio decreased by 2.0% YoY, which was due to the additional
amortization of sub-debt instruments.
As a result, the Bank's CET1, Tier 1 and Total Capital ratios
stood at 10.4%, 13.0% and 17.1%, respectively, and remained
comfortably above the eased minimum regulatory requirements by
3.0%, 3.8% and 3.4%, accordingly.
In thousands of GEL 31-Dec-20 31-Dec-19 Change YoY
-------------------------------------- ----------- ----------- -----------
CET 1 Capital 1,911,233 1,871,892 2.1%
Tier 1 Capital 2,385,181 2,281,706 4.5%
Total Capital 3,137,912 2,974,029 5.5%
Total Risk-weighted Exposures 18,301,477 15,593,925 17.4%
-------------------------------------- ----------- ----------- -----------
Minimum CET 1 ratio 7.4% 10.4% -3.0 pp
CET 1 Capital adequacy ratio 10.4% 12.0% -1.6 pp
Minimum Tier 1 ratio 9.2% 12.5% -3.3 pp
Tier 1 Capital adequacy ratio 13.0% 14.6% -1.6 pp
Minimum total capital adequacy ratio 13.7% 17.5% -3.8 pp
Total Capital adequacy ratio 17.1% 19.1% -2.0 pp
-------------------------------------- ----------- ----------- -----------
Loan Portfolio
As of 31 December 2020, the gross loan portfolio reached GEL
15,200.5 million, up by 20.0% YoY or up by 8.7% on a constant
currency basis. The YoY increase was spread across all segments.
The proportion of gross loans denominated in foreign currency
increased by 0.7pp YoY and accounted for 59.4% of total loans,
while on a constant currency basis the proportion of gross loans
denominated in foreign currency decreased by 3.5pp and stood at
55.2%.
As of 31 December 2020, our market share in total loans stood at
39.0%, down by 0.5pp YoY, while our loan market share in legal
entities was 38.6%, down by 0.3pp over the same period, and our
loan market share in individuals stood at 39.4%, down by 0.6pp
YoY.
In thousands of GEL 31-Dec-20 31-Dec-19 Change YoY
--------------------------------------- ----------- ----------- -----------
Loans and advances to customers
--------------------------------------- ----------- ----------- -----------
Retail 5,953,687 5,053,203 17.8%
Retail loans GEL 2,996,854 2,386,750 25.6%
Retail loans FC 2,956,833 2,666,453 10.9%
Corporate 5,690,749 4,660,473 22.1%
Corporate loans GEL 1,576,778 1,424,309 10.7%
Corporate loans FC 4,113,971 3,236,164 27.1%
MSME 3,556,084 2,948,279 20.6%
MSME loans GEL 1,592,836 1,419,804 12.2%
MSME loans FC 1,963,248 1,528,475 28.4%
--------------------------------------- ----------- ----------- -----------
Total loans and advances to customers 15,200,520 12,661,955 20.0%
--------------------------------------- ----------- ----------- -----------
FY'20 FY'19 Change YoY
------------------------------- ------ ------ -----------
Loan yields 10.1% 11.0% -0.9 pp
Loan yields GEL 15.3% 15.7% -0.4 pp
Loan yields FC 6.7% 7.8% -1.1 pp
Retail Loan Yields 11.3% 12.1% -0.8 pp
Retail loan yields GEL 16.4% 18.0% -1.6 pp
Retail loan yields FC 6.6% 7.3% -0.7 pp
Corporate Loan Yields 8.7% 9.3% -0.6 pp
Corporate loan yields GEL 13.2% 11.6% 1.6 pp
Corporate loan yields FC 7.1% 8.4% -1.3 pp
MSME Loan Yields 10.3% 11.4% -1.1 pp
MSME loan yields GEL 15.1% 15.4% -0.3 pp
MSME loan yields FC 6.3% 7.7% -1.4 pp
------------------------------- ------ ------ -----------
Loan Portfolio Quality
Total par 30 increased by 0.9pp YoY and stood at 2.6%, driven by
all segments. The increase in the retail and MSME segments was
related to the overall deterioration in the quality of the
respective portfolios due to COVID-19, while the increase in the
corporate segment was mainly due to one corporate borrower.
However, the outlook for that client is positive and the exposure
is expected to be settled in 1Q 2021.
The NPL ratio increased YoY, as the COVID-19 impact began to
materialize and amounted to 4.7% at the end of 2020, compared to
2.7% at the end of 2019. The increase in the retail segment was
mainly due to the COVID-19 related restructurings offered to our
customers on an individual basis, while the increase in the MSME
segment was due to negative impact of COVID-19 on several SME
borrowers, which were classified as NPLs after the monitoring
process of the vulnerable borrowers. In addition, the growth in the
corporate segment was mainly due to one corporate borrower, as
mentioned above.
31-Dec-20 31-Dec-19 Change YoY
Par 30
------------- ---------- ---------- -----------
Retail 3.4% 2.1% 1.3 pp
Corporate 1.1% 0.5% 0.6 pp
MSME 3.8% 2.8% 1.0 pp
------------- ---------- ---------- -----------
Total Loans 2.6% 1.7% 0.9 pp
------------- ---------- ---------- -----------
Non-performing Loans 31-Dec-20 31-Dec-19 Change YoY
---------------------- ---------- ---------- -----------
Retail 5.6% 3.0% 2.6 pp
Corporate 2.5% 1.8% 0.7 pp
MSME 6.6% 3.8% 2.8 pp
---------------------- ---------- ---------- -----------
Total Loans 4.7% 2.7% 2.0 pp
---------------------- ---------- ---------- -----------
NPL Coverage 31-Dec-20 31-Dec-19
Exc. Collateral Incl. Collateral Exc. Collateral Incl. Collateral
-------------- -------------------- --------------------- -------------------- ---------------------
Retail 101.3% 178.5% 97.1% 241.4%
Corporate 76.4% 230.1% 111.1% 182.9%
MSME 68.6% 179.2% 59.7% 173.7%
-------------- -------------------- --------------------- -------------------- ---------------------
Total 85.6% 189.1% 91.1% 194.2%
-------------- -------------------- --------------------- -------------------- ---------------------
Cost of risk
The total cost of risk for FY 2020 stood at 2.4%, up by 1.7pp.
The YoY increase was spread across all segments and was driven by
the extra credit loss allowances booked in 2020 in relation to
COVID-19 expected losses.
Cost of Risk FY'20 FY'19 Change YoY
-------------- ------ ------ ------------------
Retail 3.7% 1.6% 2.1 pp
Corporate 0.6% -0.1% 0.7 pp
MSME 3.1% 0.3% 2.8 pp
-------------- ------ ------ ------------------
Total 2.4% 0.7% 1.7 pp
-------------- ------ ------ ------------------
Deposit Portfolio
The total deposits portfolio increased by 25.1% YoY and amounted
to GEL 12,572.7 million, while on a constant currency basis the
total deposit portfolio increased by 13.8% over the same period.
The proportion of deposits denominated in foreign currency
increased by 0.4pp YoY and accounted for 66.3% of total deposits,
while on a constant currency basis the proportion of deposits
denominated in foreign currency decreased by 3.0pp YoY and stood at
62.9%.
As of 31 December 2020, our market share in deposits amounted to
37.2%, down by 1.8pp YoY, and our market share in deposits to legal
entities stood at 34.5%, down by 6.1pp over the same period. Our
market share in deposits to individuals stood at 39.5%, up by 1.6%
YoY.
In thousands of GEL 31-Dec-20 31-Dec-19 Change YoY
---------------------------- ----------- ----------- -----------
Customer Accounts
---------------------------- ----------- ----------- -----------
Retail 7,255,020 5,673,917 27.9%
Retail deposits GEL 1,330,942 1,098,681 21.1%
Retail deposits FC 5,924,078 4,575,236 29.5%
Corporate 3,939,501 3,187,319 23.6%
Corporate deposits GEL 2,240,287 1,735,746 29.1%
Corporate deposits FC 1,699,214 1,451,573 17.1%
MSME 1,378,207 1,188,088 16.0%
MSME deposits GEL 671,658 594,388 13.0%
MSME deposits FC 706,549 593,700 19.0%
---------------------------- ----------- ----------- -----------
Total Customer Accounts 12,572,728 10,049,324 25.1%
---------------------------- ----------- ----------- -----------
FY'20 FY'19 Change YoY
--------------------------------- ------ ------ -----------
Deposit rates 3.6% 3.3% 0.3 pp
Deposit rates GEL 6.5% 5.8% 0.7 pp
Deposit rates FC 2.0% 2.0% 0.0 pp
Retail Deposit Yields 2.9% 2.8% 0.1 pp
Retail deposit rates GEL 5.6% 5.0% 0.6 pp
Retail deposit rates FC 2.3% 2.3% 0.0 pp
Corporate Deposit Yields 5.5% 4.9% 0.6 pp
Corporate deposit rates GEL 8.2% 7.4% 0.8 pp
Corporate deposit rates FC 1.5% 1.7% -0.2 pp
MSME Deposit Yields 1.0% 0.9% 0.1 pp
MSME deposit rates GEL 1.6% 1.5% 0.1 pp
MSME deposit rates FC 0.3% 0.3% 0.0 pp
--------------------------------- ------ ------ -----------
Segment definition and PL
Business Segments
The segment definitions are as follows:
-- Corporate - a legal entity/group of affiliated entities with
an annual revenue exceeding GEL 12.0 million or which have been
granted facilities with more than GEL 5.0 million. Some other
business customers may also be assigned to the corporate segment or
transferred to the MSME segment on a discretionary basis;
-- Retail - non-business individual customers; all individual
customers are included in retail deposits;
-- MSME - business customers who are not included in the
corporate segment; or legal entities which have been granted a pawn
shop loan; or individual customers of the fully-digital bank,
Space; and
-- 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'20 Retail MSME Corporate Corp.Centre Total
------------------------------------ ---------- ---------- ---------- ------------ ----------
Interest income 617,124 335,161 462,383 253,331 1,667,999
Interest expense (184,990) (12,100) (203,390) (453,036) (853,516)
Net gains from currency swaps - - - 20,950 20,950
Net transfer pricing (59,379) (125,599) 34,455 150,523 -
Net interest income 372,755 197,462 293,448 (28,232) 835,433
------------------------------------ ---------- ---------- ---------- ------------ ----------
Fee and commission income 214,377 26,405 57,197 16,198 314,177
Fee and commission expense (109,822) (10,896) (8,575) (2,117) (131,410)
Net fee and commission income 104,555 15,509 48,622 14,081 182,767
------------------------------------ ---------- ---------- ---------- ------------ ----------
Net insurance premium earned
after claims and acquisition
costs - - - 19,485 19,485
Net gains from derivatives,
foreign currency operations
and translation 31,561 27,187 51,443 (12,173) 98,018
Gains less Losses from Disposal
of Investment Securities Measured
at Fair Value through Other
Comprehensive Income - - - (624) (624)
Other operating income 6,901 429 1,856 11,326 20,512
Share of profit of associates - - - - -
Other operating non-interest
income and insurance profit 38,462 27,616 53,299 18,014 137,391
------------------------------------ ---------- ---------- ---------- ------------ ----------
Credit loss allowance for
loans to customers (201,652) (100,070) (29,089) - (330,811)
Credit loss allowance for
performance guarantees and
credit related commitments (241) (67) 3,546 - 3,238
Credit loss allowance for
investments in finance lease - - - (8,398) (8,398)
Credit loss allowance for
other financial assets (1,476) - (5,600) (6,991) (14,067)
Credit loss allowance for
financial assets measured
at fair value through other
comprehensive income - - (875) (934) (1,809)
Profit/(loss) before G&A expenses
and income taxes 312,403 140,450 363,351 (12,460) 803,744
------------------------------------ ---------- ---------- ---------- ------------ ----------
Losses from modifications
of financial instruments (23,633) (7,153) (6,345) (3,884) (41,015)
------------------------------------ ---------- ---------- ---------- ------------ ----------
Staff costs (110,988) (48,631) (35,580) (48,844) (244,043)
Depreciation and amortization (45,256) (11,187) (4,296) (7,653) (68,392)
Provision for liabilities
and charges (2,200) - (400) (106) (2,706)
Administrative and other operating
expenses (66,987) (22,186) (13,649) (25,660) (128,482)
Operating expenses (225,431) (82,004) (53,925) (82,263) (443,623)
------------------------------------ ---------- ---------- ---------- ------------ ----------
Profit/(loss) before tax 63,339 51,293 303,081 (98,607) 319,106
------------------------------------ ---------- ---------- ---------- ------------ ----------
Income tax expense 21,360 3,568 (18,695) (2,850) 3,383
------------------------------------ ---------- ---------- ---------- ------------ ----------
Profit/(loss) for the year 84,699 54,861 284,386 (101,457) 322,489
------------------------------------ ---------- ---------- ---------- ------------ ----------
Consolidated Financial Statements of TBC Bank Group PLC
Consolidated Balance Sheet
-------------------------
In thousands of GEL Dec-20 Dec-19
--------------------------------------------------------------------------------- ----------- ------------
Cash and cash equivalents 1,635,405 1,003,583
Due from other banks 50,805 33,605
Mandatory cash balances with National Bank of Georgia 2,098,506 1,591,829
Loans and advances to customers 14,594,274 12,349,399
Investment securities measured at fair value through other comprehensive income 1,527,268 985,293
Bonds carried at amortized cost 1,089,801 1,022,684
Investments in finance leases 271,660 256,660
Investment properties 68,689 72,667
Current income tax prepayment 69,889 25,695
Deferred income tax asset 2,787 2,173
Other financial assets [28] 171,301 133,736
Other assets 266,960 255,712
Premises and equipment 372,956 334,728*
Right of use assets 53,927 59,693*
Intangible assets 239,523 167,597
Goodwill 59,964 61,558
Investments in associates 4,090 2,654
TOTAL ASSETS 22,577,805 18,359,266*
--------------------------------------------------------------------------------- ----------- ------------
LIABILITIES
Due to credit institutions 4,486,373 3,593,901
Customer accounts 12,572,728 10,049,324
Lease liabilities 58,983 59,898
Other financial liabilities (28) 227,432 113,608
Current income tax liability 853 1,634
Debt Securities in issue 1,496,497 1,213,598
Deferred income tax liability 13,088 18,888*
Provisions for liabilities and charges 25,335 23,128
Other liabilities 87,842 95,162
Subordinated debt 672,740 591,035
TOTAL LIABILITIES 19,641,871 15,760,176
--------------------------------------------------------------------------------- ----------- ------------
EQUITY
Share capital 1,682 1,682
Shares held by trust (33,413) (27,516)
Share premium 848,459 848,459
Retained earnings 2,281,428 1,961,231*
Group re-organisation reserve (162,167) (162,167)
Share based payment reserve (20,568) (17,803)
Fair value reserve 11,158 (6,476)
Cumulative currency translation reserve (2,124) (6,850)
Net assets attributable to owners 2,924,455 2,590,560*
--------------------------------------------------------------------------------- ----------- ------------
Non-controlling interest 11,479 8,530*
----------- ------------
TOTAL EQUITY 2,935,934 2,599,090*
--------------------------------------------------------------------------------- ----------- ------------
TOTAL LIABILITIES AND EQUITY 22,577,805 18,359,266*
--------------------------------------------------------------------------------- ----------- ------------
* Figures calculated due to the changed PPE (property, plant and
equipment) accounting policy from the revaluation model to the cost
method in 2Q 2020
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
In thousands of GEL FY'20 FY'19
---------------------------------------------------------------------------------- ---------------------- ----------
Interest income 1,667,999 1,436,843
Interest expense (853,516) (663,860)
Net gains from currency swaps 20,950 28,556
Net interest income 835,433 801,539
---------------------------------------------------------------------------------- ---------------------- ----------
Fee and commission income 314,177 293,431
Fee and commission expense (131,410) (106,141)
Net fee and commission income 182,767 187,290
---------------------------------------------------------------------------------- ---------------------- ----------
Net insurance premiums earned 53,359 38,199
Net insurance claims incurred and agents' commissions (33,874) (19,689)
---------------------------------------------------------------------------------- ---------------------- ----------
Net insurance premium earned after claims and acquisition costs 19,485 18,510
---------------------------------------------------------------------------------- ---------------------- ----------
Net gains from derivatives, foreign currency operations and translation (98,018) 101,187
Gains less losses from disposal of investment securities measured at fair value
through other
comprehensive income (624) 169
Other operating income 20,512 18,916
Share of profit of associates - 632
Other operating non-interest income 117,906 120,904
---------------------------------------------------------------------------------- ---------------------- ----------
Credit loss allowance for loans to customers (330,811) (82,030)
Credit loss allowance for investments in finance lease (8,398) 582
Credit loss allowance for performance guarantees and credit related commitments 3,238 (2,156)
Credit loss allowance for other financial assets (14,067) (8,098)
Credit loss allowance for financial assets measured at fair value through other
comprehensive
income (1,809) (290)
Operating profit after expected credit losses 803,744 1,036,251
---------------------------------------------------------------------------------- ---------------------- ----------
Losses from modifications of financial instruments (41,015) -
---------------------------------------------------------------------------------- ---------------------- ----------
Staff costs (244,043) (247,803)
Depreciation and amortization (68,392) (59,478)
(Provision for)/ recovery of liabilities and charges (2,706) (1,264)
Administrative and other operating expenses (128,482) (142,181)
Operating expenses (443,623) (450,726)
---------------------------------------------------------------------------------- ---------------------- ----------
Profit/(loss) before tax 319,106 585,525
---------------------------------------------------------------------------------- ---------------------- ----------
Income tax expense 3,383 (45,184)
---------------------- ----------
Profit/(loss) for the period 322,489 540,341
---------------------------------------------------------------------------------- ---------------------- ----------
Other comprehensive income:
---------------------------------------------------------------------------------- ---------------------- ----------
Items that may be reclassified subsequently to profit or loss:
---------------------------------------------------------------------------------- ---------------------- ----------
Movement in fair value reserve 17,633 (15,156)
---------------------------------------------------------------------------------- ---------------------- ----------
Exchange differences on translation to presentation currency 4,707 85
---------------------------------------------------------------------------------- ---------------------- ----------
Other comprehensive income for the period 22,340 (15,071)
---------------------------------------------------------------------------------- ---------------------- ----------
Total comprehensive income for the period 344,829 525,270
---------------------------------------------------------------------------------- ---------------------- ----------
Profit/(loss) attributable to:
---------------------------------------------------------------------------------- ---------------------- ----------
- Shareholders of TBCG 317,752 537,895
---------------------------------------------------------------------------------- ---------------------- ----------
- Non-controlling interest 4,737 2,446
---------------------------------------------------------------------------------- ---------------------- ----------
Profit/(loss) for the period 322,489 540,341
---------------------------------------------------------------------------------- ---------------------- ----------
Total comprehensive income is attributable to:
---------------------------------------------------------------------------------- ---------------------- ----------
- Shareholders of TBCG 340,092 522,843
---------------------------------------------------------------------------------- ---------------------- ----------
- Non-controlling interest 4,737 2,427
---------------------------------------------------------------------------------- ---------------------- ----------
Total comprehensive income for the period 344,829 525,270
---------------------------------------------------------------------------------- ---------------------- ----------
Consolidated Statement of Cash Flows
In thousands of GEL FY'20 FY'19
-------------------------------------------------------- --------------------- ------------
Cash flows from (used in) operating activities
Interest received 1,462,815 1,360,296
Interest received on currency swaps 20,950 28,556
Interest paid (839,258) (647,427)
Fees and commissions received 297,024 282,715
Fees and commissions paid (133,385) (106,526)
Insurance and reinsurance received 86,447 76,101
Insurance claims paid (27,139) (21,787)
Income received from trading in foreign currencies (92,191) 79,287
Other operating income received 48,402 44,248
Staff costs paid (238,577) (216,465)
Administrative and other operating expenses paid (134,348) (169,582)
Income tax paid (46,268) (70,413)
Cash flows from operating activities before changes
in operating assets and liabilities 404,472 639,003
-------------------------------------------------------- --------------------- ------------
Net change in operating assets
Due from other banks and mandatory cash balances
with the National Bank of Georgia (353,975) (22,009)
Loans and advances to customers (1,059,684) (2,013,577)
Net investments in lease (2,902) (43,719)
Other financial assets (67,267) 19,612
Other assets 33,108 1,577
Net change in operating liabilities
Due to other banks (32,294) (1,938)
Customer accounts 1,475,292 272,023
Other financial liabilities 115,370 (8,267)
Other liabilities and provision for liabilities
and charges (8,153) 5,816
Net cash flows (used in)/from operating activities 503,967 (1,151,479)
-------------------------------------------------------- --------------------- ------------
Cash flows from (used in) investing activities
Acquisition of investment securities measured
at fair value through other comprehensive income (763,530) (1,781,816)
Proceeds from disposal of investment securities
measured at fair value through other comprehensive
income 287,917 240,603
Proceeds from redemption at maturity of investment
securities measured at fair value through other
comprehensive income 165,631 1,598,536
Acquisition of subsidiaries, net of cash acquired 694 (39,297)
Acquisition of bonds carried at amortised cost (639,824) (613,383)
Proceeds from redemption of bonds carried at amortised
cost 413,038 216,871
Acquisition of premises, equipment and intangible
assets (164,379) (120,333)
Proceeds from disposal of premises, equipment
and intangible assets 3,627 13,225
Cash acquired from acquired subsidiaries - 2,996
Proceeds from disposal of investment property 13,513 13,338
Net cash used in investing activities (683,313) (469,260)
-------------------------------------------------------- --------------------- ------------
Cash flows from (used in) financing activities
Proceeds from other borrowed funds 4,036,810 1,819,899
Redemption of other borrowed funds (3,324,230) (1,392,897)
Repayment of principal of lease liabilities (13,251) (6,453)
Redemption of subordinated debt - (104,079)
Proceeds from debt securities in issue 31,602 1,176,049
Redemption of debt securities in issue - (14,296)
Dividends paid (0) (91,928)
Net cash flows from financing activities 730,931 1,386,295
-------------------------------------------------------- --------------------- ------------
Effect of exchange rate changes on cash and cash
equivalents 80,237 71,116
-------------------------------------------------------- --------------------- ------------
Net (decrease)/ increase in cash and cash equivalents 631,822 (163,328)
-------------------------------------------------------- --------------------- ------------
Cash and cash equivalents at the beginning of
the year 1,003,583 1,166,911
-------------------------------------------------------- --------------------- ------------
Cash and cash equivalents at the end of the year 1,635,405 1,003,583
-------------------------------------------------------- --------------------- ------------
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'20 FY'19
------------------------------------------------------ ------- -------
Profitability ratios:
ROE(1) 11.7% 22.9%*
ROA(2) 1.6% 3.2%*
ROE before expected credit loss allowances (3) 24.7% 26.8%*
Cost to income(4) 38.4% 39.9%
NIM(5) 4.7% 5.6%
Loan yields(6) 10.1% 11.0%
Deposit rates(7) 3.6% 3.3%
Yields on interest earning assets(8) 9.5% 10.0%
Cost of funding(9) 4.9% 4.7%
Spread(10) 4.6% 5.3%
------------------------------------------------------ ------- -------
Asset quality and portfolio concentration:
Cost of risk(11) 2.4% 0.7%
PAR 90 to Gross Loans(12) 1.5% 1.1%
NPLs to Gross Loans(13) 4.7% 2.7%
NPLs coverage(14) 85.6% 91.1%
NPLs coverage with collateral(15) 189.1% 194.2%
Credit loss level to Gross Loans(16) 4.0% 2.5%
Related Party Loans to Gross Loans(17) 0.0% 0.1%
Top 10 Borrowers to Total Portfolio(18) 7.9% 8.3%
Top 20 Borrowers to Total Portfolio(19) 12.1% 12.3%
------------------------------------------------------ ------- -------
Capital optimisation:
Net Loans to Deposits plus IFI Funding(20) 101.2% 104.8%
Net Stable Funding Ratio(21) 126.0% 126.7%
Liquidity Coverage Ratio(22) 134.2% 110.1%
Leverage(23) 7.7x 7.1x**
CET 1 CAR (Basel III)(24) 10.4% 12.0%
Regulatory Tier 1 CAR (Basel III)(25) 13.0% 14.6%
Regulatory Total 1 CAR (Basel III)(26) 17.1% 19.1%
------------------------------------------------------ ------- -------
* Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method ROE
stood at 22.4%, while ROE before expected credit loss allowances
stood at 26.3% and ROA remained unchanged in FY 2019
** Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
Leverage stood at 7.0x as of 31 December 2019
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. Return on average total equity (ROE) before expected credit
loss allowances equals net income attributable to owners excluding
all credit loss allowance, but after net modification losses
divided by the monthly average of total shareholders 'equity
attributable to the PLC's equity holders for the same period.
4. 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).
5. 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 corporate shares, net investment in finance lease, net
loans, and amounts due from credit institutions. The latter
excludes all items from cash and cash equivalents, excludes EUR
mandatory reserves with NBG that currently have negative interest,
and includes other earning items from due from banks.
6. Loan yields equal interest income on loans and advances to
customers divided by monthly average gross loans and advances to
customers; annualised where applicable.
7. Deposit rates equal interest expense on customer accounts
divided by monthly average total customer deposits; annualised
where applicable.
8. Yields on interest earning assets equal total interest income
divided by monthly average interest earning assets; annualised
where applicable.
9. Cost of funding equals total interest expense divided by
monthly average interest bearing liabilities; annualised where
applicable.
10. Spread equals difference between yields on interest earning
assets (including but not limited to yields on loans, securities
and due from banks) and cost of funding (including but not limited
to cost of deposits, cost on borrowings and due to banks).
11. Cost of risk equals credit loss allowance for loans to
customers divided by monthly average gross loans and advances to
customers; annualised where applicable.
12. 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.
13. 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.
14. NPLs coverage ratio equals total credit loss allowance for
loans to customers calculated per IFRS 9 divided by the NPL
loans.
15. NPLs coverage with collateral ratio equals credit loss
allowance for loans to customers per IFRS 9 plus the total
collateral amount of NPL loans (excluding third party guarantees)
discounted at 30-50% depending on segment type divided by the NPL
loans.
16. Credit loss level to gross loans equals credit loss
allowance for loans to customers divided by the gross loan
portfolio for the same period.
17. Related party loans to total loans equals related party
loans divided by the gross loan portfolio.
18. Top 10 borrowers to total portfolio equals the total loan
amount of the top 10 borrowers divided by the gross loan
portfolio.
19. Top 20 borrowers to total portfolio equals the total loan
amount of the top 20 borrowers divided by the gross loan
portfolio.
20. Net loans to deposits plus IFI funding ratio equals net
loans divided by total deposits plus borrowings received from
international financial institutions.
21. 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.
22. Liquidity coverage ratio equals high-quality liquid assets
divided by the total net cash outflow amount as defined by the
NBG.
23. Leverage equals total assets to total equity.
24. Regulatory CET 1 CAR equals CET 1 capital divided by total
risk weighted assets, both calculated in accordance with the Pillar
1 requirements of the NBG Basel III standards. The reporting
started from the end of 2017. Calculations are made for TBC Bank
stand-alone, based on local standards.
25. Regulatory tier 1 CAR equals tier I capital divided by total
risk weighted assets, both calculated in accordance with the Pillar
1 requirements of the NBG Basel III standards. The reporting
started from the end of 2017. Calculations are made for TBC Bank
stand-alone, based on local standards.
26. Regulatory total CAR equals total capital divided by total
risk weighted assets, both calculated in accordance with the Pillar
1 requirements of the NBG Basel III standards. The reporting
started from the end of 2017. Calculations are made for TBC Bank
stand-alone, based on local standards.
Exchange Rates
To calculate the YoY growth without the currency exchange rate
effect, we used the USD/GEL exchange rate of 2.8677 as of 31
December 2019. As of 31 December 2020, the USD/GEL exchange rate
equalled 3.2766. For P&L items growth calculations without
currency effect, we used the average USD/GEL exchange rate for the
following periods: FY 2020 3.1097, FY 2019 2.8192.
Additional Disclosures
1) Subsidiaries of TBC Bank Group PLC [29]
Ownership Country Year Industry Total Assets
/ voting of incorporation (after elimination)
% as of
31 December
2020
------------- ---------- ------------------
Subsidiary Amount % in
GEL'000 TBC Group
------------- ---------- ------------------
JSC TBC Bank 99.9% Georgia 1992 Banking 21,943,826 97.19%
United Financial
Corporation
JSC 99.5% Georgia 1997 Card processing 15,582 0.07%
TBC Capital
LLC 100.0% Georgia 1999 Brokerage 2,465 0.01%
TBC Leasing
JSC 100.0% Georgia 2003 Leasing 360,921 1.60%
TBC Kredit Non-banking
LLC 100.0% Azerbaijan 1999 credit institution 17,965 0.08%
TBC Pay LLC 100.0% Georgia 2009 Processing 38,250 0.17%
Real estate
Index LLC 100.0% Georgia 2011 management 1,201 0.01%
TBC Invest
LLC 100.0% Israel 2011 PR and marketing 393 0.00%
68,
JSC TBC Insurance 100.0% Georgia 2014 Insurance 169 0.31%
Redmed LLC 100.0% Georgia 2019 E-commerce 939 0.00%
TBC Ecosystem
Companies 100.0% Georgia 2019 Asset management 344 0.00%
Swoop JSC 100.0% Georgia 2010 Retail Trade 723 0.00%
LLC Online
Tickets 55.0% Georgia 2015 Software Services 1, 651 0.01%
TKT UZ 75.00% Uzbekistan 2019 Retail Trade 136 0.00%
E-commerce,
Housing and
My.ge LLC 65.0% Georgia 2008 Auto 7,869 0.03%
LLC Vendoo
(Geo) 100.0% Georgia 2019 Retail Leasing 3,503 0.02%
LLC Mypost 100.0% Georgia 2019 Postal Service 492 0.00%
LLC Billing
Solutions 51.00% Georgia 2019 Software Services 408 0.00%
All property.ge Real estate
LLC 90.0% Georgia 2013 management 2, 377 0.01%
LLC F Solutions 100.00% Georgia 2019 Software Services 10 0.00%
TBC Connect
LLC 100.00% Georgia 2020 Software Services - 0.00%
TBC Concept 100.0% Georgia 2020 Banking 50 0.00%
TBC Group Support
LLC 100.0% Georgia 2020 Risk management - 0.00%
Inspired LLC 51.0% Uzbekistan 2011 Processing 10,544 0.05%
TBC Bank JSCB 100.0% Uzbekistan 2020 Banking 69,915 0.29%
LLC Vendoo (UZ
Leasing) 100.00% Uzbekistan 2019 Consumer financing 1,579 0.01%
2) 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
P&C and life insurance market and the largest player in retail
segment, holding 21.0% and 37.2% market shares [30] without border
motor third party liability (MTPL) insurance, respectively in FY
2020.
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 2Q 2019, TBC Insurance entered the health insurance market
with a focus on the premium segment. Our strategy is to focus on
affluent individuals and capture the affluent market by leveraging
our strong brand name, leading digital capabilities and
cross-selling opportunities with payroll customers. As of 31
December 2020, TBC Insurance's health business line served more
than 15,000 clients.
In 4Q 2020, the QoQ decrease in net profit was mainly due to
increased claims on the life insurance business, as well as
increased motor claims due to restrictive governmental measures on
public transportation, which led to higher usage of private
automobiles. YoY, net profit increased by 6.1% due to an increase
in the scale of the business.
For the full year 2020, the strong increase in net earned
premium compared to 2019 is due to reinsurance system structural
changes. Starting from July 2019, we stopped re-insuring the motor
portfolio, which led to decrease in re-insurance costs. On the
other hand, this change led to an increase in net claims. Overall,
the impact on the net profit was marginally positive due to our
well-diversified portfolio and prudent risk management.
Over the same period, profit increased by 33.4% YoY due to an
increase in net interest income, as well as a reduction in net
claims due to the lock-down in 1H 2020.
Information excluding health 4Q'20 3Q' 20 4Q'19 FY'20 FY'19
insurance
In thousands of GEL
Gross written premium 21,322 19,186 19,496 77,652 75,523
Net earned premium ([31]) 16,595 15,821 15,603 63,954 51,910
Net profit 2,864 4,187 2,973 12,816 9,792
Net combined ratio 87.1% 77.0% 81.9% 82.5% 79.1%
Information including health 4Q'20 3Q' 4Q'19 FY'20 FY'19
insurance 20
In thousands of GEL
Gross written premium 23,077 21,557 21,808 86,369 79,031
Net earned premium 18,696 18,015 16,367 71,359 52,882
Net profit 2,651 3,697 2,499 11,384 8,533
Net combined ratio 90.1% 83.0% 86.5% 86.8% 82.8%
IFRS standalone data; figures are provided without subsidiary of TBC Insurance Redmed
3) Loan book breakdown by stages according IFRS 9
Total (in million GEL)
31-Dec-20 30- Sep-20 31-Dec-19
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 11,861 1.1% 11,814 1.5% 11,552 0.8%
2 2,448 5.8% 2,303 8.2% 757 11.0%
3 892 37.4% 474 34.7% 353 38.0%
Total 15,201 4.0% 14,591 3.7% 12,662 2.5%
Corporate (in million GEL)
31-Dec-20 30- Sep-20 31-Dec-19
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 4,574 1.2% 4,314 1.1% 4,435 0.9%
2 956 0.9% 851 1.1% 104 1.9%
3 161 28.2% 159 30.8% 122 32.8%
Total 5,691 1.9% 5,324 2.0% 4,661 1.7%
MSME (in million GEL)
31-Dec-20 30- Sep-20 31-Dec-19
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 2,662 0.9% 2,841 1.4% 2,650 0.7%
2 631 7.4% 480 9.1% 205 9.3%
3 263 33.7% 150 30.8% 93 31.2%
Total 3,556 4.5% 3,471 3.7% 2,948 2.2%
Consumer (in million GEL)
31-Dec-20 30- Sep-20 31-Dec-19
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 1,557 3.1% 1,653 5.3% 1,593 2.3%
2 267 24.8% 330 30.4% 217 24.0%
3 188 67.7% 60 59.4% 74 60.8%
Total 2,012 12.0% 2,043 10.9% 1,884 7.1%
Mortgage (in million GEL)
31-Dec-20 30- Sep-20 31-Dec-19
Stage Gross LLP rate* Gross LLP rate* Gross LLP rate*
1 3,068 0.1% 3,006 0.3% 2,874 0.1%
2 594 3.6% 642 5.5% 231 4.3%
3 280 25.7% 105 32.2% 64 32.8%
Total 3,942 2.5% 3,753 2.1% 3,169 1.0%
* LLP rate is defined as credit loss allowances divided by gross
loans
4) Reconciliation of Return on equity (ROE) with ROE before expected credit loss allowances
# Income Statement Highlights
1. in thousands of GEL 4Q'20 3Q'20 4Q'19 FY'20 FY'19
2. Net interest income 231,325 211,784 209,318 835,433 801,539
Net fee and commission
3. income 52,199 47,499 54,844 182,767 187,290
Other operating non-interest
4. income 38,573 33,913 40,075 137,391 139,414
5. Credit loss allowance -79,370 -13,426 224 -351,847 -91,992
Operating profit after
6. expected credit losses 242,727 279,770 304,461 803,744 1,036,251
Losses from modifications
7. of financial instrument -5,082 -1,763 - -41,015 -
8. Operating expenses -127,950 -113,513 -127,124 -443,623 -450,726
9. Profit before tax 109,695 164,494 177,337 319,106 585,525
10. Income tax expense -8,994 -11,906 -17,313 3,383 -45,184
11. Profit for the period 100,701 152,588 160,024 322,489 540,341
Profit for the period
less Non-controlling
12. interest 99,371 150,755 159,416 317,752 537,895
Profit before Credit
loss allowances less
Non-controlling interest
13. (12 - 5) 178,741 164,181 159,192 669,599 629,887
# in thousands of GEL 4Q'20 3Q'20 4Q'19 FY'20 FY'19
Average equity attributable
to the PLC's equity
14. holders 2,888,145 2,731,868 2,507,930 2,713,030 2,348,165
Return on equity (ROE)
15. (12÷14)* 13.7% 22.0% 25.2% 11.7% 22.9%
Return on equity (ROE)
before expected credit
16. loss allowances (13÷14)* 24.6% 23.9% 25.2% 24.7% 26.8%
*annualised where applicable
([1]) Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
both ROE and ROE before expected credit loss allowances stood at
24.7%, while ROA remained unchanged in 4Q 2019.
([2]) Return on average total equity (ROE) before expected
credit loss allowances equals net income attributable to owners
excluding all credit loss allowance, but after net modification
losses divided by the monthly average of total shareholders 'equity
attributable to the PLC's equity holders for the same period, for
more information please refer to Annex 4 on page 40.
[3] For the ratio calculation, all relevant group recurring costs are allocated to the Bank.
[4] Prior to the change in PPE (property, plant and equipment)
accounting policy from the revaluation model to the cost method,
ROE stood at 22.4%, while ROE before expected credit loss
allowances stood at 26.3% and ROA remained unchanged in for the FY
2019.
[5] Return on average total equity (ROE) before expected credit
loss allowances equals net income attributable to owners excluding
all credit loss allowance, but after net modification losses
divided by the monthly average of total shareholders 'equity
attributable to the PLC's equity holders for the same period, for
more information please refer to Annex 4 on page 40.
[6] For the ratio calculation, all relevant group recurring
costs are allocated to the Bank.
[7] International Financial Institutions
[8] Market share figures are based on data from the National
Bank of Georgia (NBG). The NBG includes interbank loans for
calculating market share in loans.
[9] Including Space
[10] Internet and Mobile Banking penetration equals the number
of active clients of Internet or Mobile Banking divided by the
total number of active clients. Data includes Space figures.
[11] Mobile Banking penetration equals the number of active
clients of Mobile Banking divided by the number of total active
clients. Data includes Space figures.
[12] Other operating non-interest income includes net insurance
premium earned after claims and acquisition costs.
[13] For the ratio calculation, all relevant group recurring costs are allocated to the Bank.
[14] Our Employee Net Promoter Score was measured in October
2020 by an independent consultant for the Bank's employees.
[15] Our Engagement Index was measured in October 2020 by an
independent consultant for the Bank's employees and measures how
much employees feel involved in and committed to TBC Bank.
[16] Our Employee Happiness Index was assessed internally based
on a comprehensive survey prepared with the assistance of the
world's leading consulting firm and measures whether employees feel
happy and satisfied with their jobs. The index was measured in July
2020 for the Bank's employees.
[17] Some of the increase was due to the reduced cash inflows
and increased digital transfers as a result of the closed borders.
Adjusted for this component, the remittance inflows increased by an
estimated 5.0% in 2020
[18] World Bank, Global Economic Prospects, January 2021
[19] Including Space
[20] Retail internet and mobile banking active users, including
Space
([21]) Based on NBG data
[22] From the beginning of the pandemic, the decline in tourism
inflows amounted to 95.0% year-on-year.
[23] Some of the increase was due to reduced cash inflows and
increased digital transfers as a result of the closed borders.
Adjusted for this component, the inflows stood at around 5.0%
year-on-year.
[24] World Bank, Global Economic Prospects, January 2021
[25] Net insurance premium earned after claims and acquisition
costs can be reconciled to the standalone net insurance profit (as
shown in Annex 2 on page 38) 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.
[26] 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).
[27] Net insurance premium earned after claims and acquisition
costs can be reconciled to the standalone net insurance profit (as
shown in Annex 2 on page 38) 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.
[28] 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).
[29] TBC Bank Group PLC became the parent company of JSC TBC
Bank on 10 August 2016.
[30] Based on internal estimates
([31]) Net earned premium equals earned premium minus the
reinsurer's share of earned premium.
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