TBC Bank Q1 2025 slides: 7% profit growth as Uzbekistan operations gain momentum

Introduction & Market Context

TBC Bank Group PLC (LSE:TBCG) reported solid first-quarter 2025 results on May 8, showcasing continued profitability and strategic expansion. The Georgian banking leader posted a 7% year-over-year increase in net profit to GEL 319 million, or GEL 339 million when adjusted for non-recurring items, representing a 14% adjusted growth.

The bank’s shares have shown strong performance recently, with the stock price at GEL 4,860 as of May 7, 2025, representing a 1.04% daily gain and positioning near its 52-week high of GEL 4,900. This reflects investor confidence in TBC’s expansion strategy and financial performance.

As shown in the following overview of Q1 2025 performance metrics, TBC delivered strong results across both its Georgian home market and rapidly growing Uzbekistan operations:

Quarterly Performance Highlights

TBC Bank maintained robust profitability with a return on equity (ROE) of 23.2% (24.2% adjusted) in Q1 2025. The bank’s loan portfolio expanded by 18% year-over-year, while total operating income increased by 25% to GEL 774 million compared to Q1 2024.

Georgia’s economy provided a favorable backdrop for TBC’s operations, with real GDP growth of 9.3% in Q1 2025, significantly outpacing the IMF and World Bank projections of 6.0% for the full year. This economic strength supported TBC’s dominant market position in Georgia, where it holds 38% of the total loan market and 37% of deposits.

The following chart illustrates Georgia’s economic performance, which continues to provide a solid foundation for TBC’s core business:

TBC Bank has successfully capitalized on this economic growth, as demonstrated by its market share and portfolio composition:

Strategic Initiatives

Digital transformation remains a key strategic focus for TBC, with digital monthly active users (MAU) reaching 7.2 million across the Group. In Georgia, digital MAU penetration increased to 64%, up 6 percentage points year-over-year, while the share of fully digitally issued consumer loans and retail deposits reached 68%, representing increases of 10 and 12 percentage points respectively.

A notable success has been the rapid growth in TBC Card issuance, which increased 2.9 times year-over-year in Q1 2025, with 266,000 cards issued compared to 92,000 in Q1 2024. The bank achieved a 69% digitalization rate for card issuance, highlighting its progress in digital banking adoption.

Uzbekistan Expansion Accelerating

TBC’s expansion in Uzbekistan has emerged as a significant growth driver for the Group. Operating in a market with strong economic fundamentals (6.8% GDP growth in Q1 2025), TBC Uzbekistan has rapidly scaled its operations and market presence.

The following chart demonstrates the impressive growth trajectory of TBC Uzbekistan across key metrics:

TBC Uzbekistan’s loan book more than doubled year-over-year, while its operating income showed similar growth. The operation’s adjusted net profit reached GEL 42 million in Q1 2025, representing a 129% increase from Q1 2024. On an underlying basis (excluding a non-recurring credit impairment charge), TBC Uzbekistan achieved an impressive ROE of 26.6%.

The Uzbekistan operation is increasingly becoming a material contributor to the Group’s overall performance:

TBC has also successfully launched new products in the Uzbekistan market, including Salom debit cards (228,000 issued by March 2025) and Osmon credit cards (48,000 issued), while also introducing MSME lending to complement its established consumer lending business.

Detailed Financial Analysis

TBC Group has maintained consistent profitability, with net profit showing steady growth over recent quarters:

The Group’s operating income increased by 25% year-over-year to GEL 774 million in Q1 2025, with non-interest income growing by 38% to GEL 241 million. This diversification of revenue streams demonstrates TBC’s success in expanding fee-generating activities alongside its traditional lending business.

While maintaining strong growth, TBC has kept its cost-to-income ratio stable at 37.2% in Q1 2025, unchanged from Q1 2024 despite a 25% increase in operating expenses to GEL 288 million. This reflects the bank’s ability to generate revenue growth that matches its investments in expansion and digital transformation.

Asset quality metrics showed a slight deterioration, with non-performing loans (NPLs) increasing to 2.5% as of March 31, 2025, compared to 2.2% a year earlier. The cost of risk also rose to 1.4% in Q1 2025 from 0.8% in Q1 2024, primarily due to a non-recurring credit impairment charge related to data integrity issues in Uzbekistan. Management emphasized that underlying credit quality remains strong.

Forward-Looking Statements

TBC Bank has introduced quarterly dividends starting in Q1 2025, with a payment of GEL 1.50 per share. This represents part of a consistent dividend growth strategy that has delivered a 30% CAGR from 2021 to Q1 2025:

Looking ahead, TBC remains confident in achieving its 2025 strategic targets, with Q1 performance showing progress across key metrics:

The bank is targeting a full-year 2025 net profit of GEL 1.5 billion with 15%+ CAGR, while maintaining an ROE above 23%. For Uzbekistan specifically, TBC aims to achieve a net profit of GEL 200 million+ with loan growth exceeding 80% CAGR.

TBC Bank’s strong capital position provides a solid foundation for these growth ambitions, with CET1 ratios of 16.4% in Georgia and 19.4% in Uzbekistan, both well above regulatory requirements.

The combination of dominant market position in Georgia, rapid expansion in Uzbekistan, and successful digital transformation positions TBC Bank for continued growth through 2025, though management will need to carefully manage the higher risk costs observed in Q1 and ensure that expansion initiatives deliver the projected returns.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.