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Introduction & Market Context
TBC Bank Group PLC (LSE:TBCG) reported a 5% year-over-year increase in net profit for Q2 2025, reaching GEL 346 million, according to the bank’s latest investor presentation. Despite these positive results, the stock has experienced significant volatility, dropping 8.22% to GEL 4,653 as of August 8, 2025.
The Georgian banking group continues to execute its dual-market strategy across Georgia and Uzbekistan, with both economies showing robust growth. Georgia’s economy expanded by 7.1% in Q2 2025, while Uzbekistan grew at 7.5% during the same period, providing favorable macroeconomic conditions for the bank’s operations.
Quarterly Performance Highlights
TBC Bank maintained strong profitability metrics in Q2 2025, with return on equity (ROE) at 24.3% and loan growth of 16% year-over-year. The bank also announced a quarterly dividend of GEL 1.75 per share and a GEL 75 million share buyback program, demonstrating its commitment to shareholder returns.
As shown in the following chart of TBC’s quarterly performance:
The bank’s Georgian operations generated GEL 332 million in net profit (+3% YoY), while Uzbekistan operations contributed GEL 32 million (+36% YoY), highlighting the growing importance of the bank’s expansion market. Digital monthly active users reached 6.8 million across both markets, underscoring TBC’s focus on digital transformation.
Georgian Operations
TBC Bank maintained its dominant position in the Georgian market with 38% market share in both loans and deposits. The bank’s Georgian franchise continues to deliver consistently high profitability, with an average ROE of 25.2% and average ROA of 3.8%.
The following chart illustrates TBC’s consistent profitability in Georgia:
The bank’s Georgian loan portfolio reached GEL 26.0 billion, growing 11% year-over-year, while customer deposits increased to GEL 22.0 billion, up 10% from the previous year. TBC also maintained its leadership in new business acquisition, with 71% of newly registered businesses choosing the bank.
The breakdown of TBC’s market leadership position is shown below:
Uzbekistan Expansion
TBC’s expansion in Uzbekistan continues to gain momentum, with the loan book exceeding USD 900 million and net profit growing 36% year-over-year in Q2 2025. The Uzbekistan operation now contributes 9% to the group’s net profit and 20% to operating income, highlighting its growing significance to TBC’s overall performance.
The economic environment in Uzbekistan remains favorable for growth, as illustrated in the following chart:
The bank’s Uzbekistan operations delivered record operating income, which doubled in the first half of 2025 compared to the same period last year. This growth was driven by strong loan book expansion and increasing digital engagement.
As shown in the following performance metrics for TBC Uzbekistan:
However, this rapid expansion has come with increased risk costs, as the Cost of Risk in Uzbekistan rose by 0.6 percentage points quarter-over-quarter to 9.9%. This contrasts with Georgia’s stable Cost of Risk at 0.8%, suggesting that the bank is accepting higher risk as part of its growth strategy in Uzbekistan.
Digital Banking Strategy
TBC Bank continues to advance its digital transformation, with digital monthly active user (MAU) penetration reaching 66%, an increase of 8 percentage points year-over-year. The bank has also seen significant growth in fully digital transactions, with a 13 percentage point increase in digitally issued consumer loans and a 10 percentage point increase in digitally issued retail deposits.
The following chart demonstrates TBC’s increasing digital engagement:
In Uzbekistan, the bank has expanded its digital ecosystem with several new products, including Salom debit cards (516,000 issued), Osmon credit cards (69,000 issued), and fully digital insurance offerings with over 180,000 policies issued. These initiatives support TBC’s strategy of building a comprehensive digital financial services platform across its markets.
The key developments in TBC’s digital ecosystem are illustrated below:
Financial Analysis
TBC Bank’s operating income increased by 23% year-over-year in Q2 2025, driven by strong core revenue growth. This performance builds on the 25% growth in operating income reported in Q1 2025, demonstrating consistent revenue momentum throughout the first half of the year.
The following chart shows TBC’s operating income growth:
Net interest margin (NIM) increased during the quarter, driven by an uptick in Georgia and the rising contribution from the higher-margin Uzbekistan business. This trend is illustrated in the following chart:
The bank maintained its efficiency while investing in future growth, with operating expenses increasing in line with business expansion. Strong balance sheet growth continued, with both loans and deposits showing double-digit growth rates year-over-year.
Outlook & Challenges
While TBC Bank’s presentation highlights its strong performance and growth trajectory, it’s worth noting that the bank’s stock has experienced significant volatility. Following Q1 2025 results, the stock dropped 10.19% despite a 7% increase in net profit, and has continued to decline after Q2 results.
This market reaction may be partially attributed to concerns not directly addressed in the presentation. According to previous earnings reports, investors have expressed concerns about a fraud incident in Uzbekistan and regulatory changes affecting the microloan portfolio, particularly in Uzbekistan where regulations now limit microloans to 25% of the portfolio.
Despite these challenges, TBC Bank presents a compelling investment case based on its dominant market position, digital capabilities, and consistent financial performance. The bank’s 5-year net profit CAGR of 19% and average ROE of 23% demonstrate its ability to deliver strong returns to shareholders over time.
As TBC continues to execute its dual-market strategy, balancing growth in Uzbekistan with stability in Georgia will be crucial for maintaining investor confidence and delivering on its long-term financial targets.
Full presentation:
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