TBC Bank Group (LON:TBCG) reported second-quarter net profit of GEL 386 million, up 12% year over year, as higher operating income and cost discipline supported a return on equity of 23.6%.
First-half net profit rose 13% from a year earlier to GEL 751 million, while first-half return on equity was 23.5%. Group CFO Guy Stevens, presenting results for the first time after joining the company, said the quarter marked the 14th consecutive period in which the group’s return on equity exceeded 23%.
Revenue growth and lower cost ratio
Total operating income increased 10% year over year in the second quarter, primarily driven by a 13% increase in net interest income. Fee and commission income recovered in both Georgia and Uzbekistan, rising 14% quarter over quarter, according to Stevens.
The group’s net interest margin was 7.1%, slightly above the first-quarter level. In Georgia, net interest income increased 19% year over year, supported by growth in unsecured retail lending, a higher-rate environment and deployment of liquidity, management said.
Cost management also improved efficiency. Stevens said the cost-income ratio fell by almost two percentage points during the quarter to 38.3%, while Chief Executive Officer Vakhtang Butskhrikidze cited a 38.8% ratio in his presentation. Both executives attributed the decline to cost control across Georgia and Uzbekistan.
Management said it expects full-year fee and commission income to be broadly flat year over year, after first-quarter investment in card and loyalty programs in Georgia. It expects growth over the remaining two quarters of the year.
Georgia lending and digital engagement advance
Gross loans grew 12% year over year on a constant-currency basis, led by 14% growth in Georgia. Butskhrikidze said unsecured consumer loans in Georgia rose 36% year over year, while the company aims to accelerate growth in mass retail banking.
Georgia’s economy expanded by 7.9% in the first half, according to the company. TBC maintained its full-year Georgian real GDP growth outlook of 7.4%. Inflation rose to 5.8% in June, and management said it expects inflation to remain near that level for the rest of the year, implying that the National Bank of Georgia could keep rates unchanged.
The company added more than 50,000 digital monthly active users in Georgia during the quarter. Group digital monthly active users reached 7.2 million, up 6% year over year, while Georgian digital MAUs increased 19%. The daily-active-user-to-monthly-active-user ratio reached 50%.
TBC Concept, the group’s affluent retail offering, surpassed 200,000 customers, up 30% year over year. Butskhrikidze said the company holds more than 50% market share in loans and customers within affluent retail, and a 44% loan market share in corporate and investment banking.
The bank also highlighted wider use of artificial intelligence. Its INAP chatbot handles more than 6,500 customer inquiries daily, with 60% resolved without referral to a call center, Butskhrikidze said.
Uzbekistan portfolio stabilizes, but credit costs remain elevated
In Uzbekistan, the loan portfolio stabilized during the second quarter and grew 0.4% sequentially, according to management. Growth in business lending, credit cards and buy-now-pay-later and point-of-sale lending more than offset a planned reduction in unsecured cash loans.
Management expects the Uzbek loan book at year-end to be at least the same size as at the end of 2025, following stronger expected volume growth in the fourth quarter. Credit card issuance surpassed 210,000, and credit cards accounted for 10% of the Uzbek loan book, compared with 4% a year earlier. Salon card issuance more than doubled to exceed 1.2 million.
Total payment value in Uzbekistan reached $3.2 billion in the first half, up 54% year over year. The company said Payme maintained its leadership position in the market, helping drive a 15% quarter-over-quarter rise in Uzbek fee and commission income.
Asset quality remains a key challenge in Uzbekistan. Group nonperforming loans increased 0.3 percentage points sequentially to 3.3%, driven by Uzbekistan. Stevens cited the extension of the write-off period to 360 days from 270 days, deterioration in older loan vintages and the effect of a smaller loan portfolio on the NPL ratio.
Uzbekistan’s NPL coverage ratio stood at 114%. Group cost of risk was 1.6% in the second quarter, while Georgia’s cost of risk was 70 basis points. Management expects Uzbek cost of risk to rise to the low-to-mid teens in the third quarter amid continued seasoning of older vintages and anticipated changes to automatic collections for overdue loans, before a more positive trajectory in the fourth quarter.
OLX acquisition and capital developments
TBC completed its acquisition of OLX, a classified advertising platform in Uzbekistan, in late July. Butskhrikidze said the group intends to retain OLX’s classifieds model rather than convert it into a marketplace. The company plans to use the platform’s more than 6.5 million monthly users to generate leads for retail, micro and small-business customers and to offer financial and payment services.
Management said products offered through OLX could include auto loans and buy-now-pay-later services, although it expects the platform to become material to payments and loan lead generation from the second half of 2027.
Customer deposits grew 15% year over year on a constant-currency basis, supported by broad-based retail and corporate growth in Georgia. In Uzbekistan, deposits declined 7% sequentially as the bank optimized liquidity and reduced deposit costs.
Stevens said the group remains comfortably above regulatory capital requirements in Georgia and Uzbekistan. A previously expected Uzbek regulatory framework affecting risk weights on consumer loans, scheduled to begin July 1, has been paused, the company said. Management added that it would have retained material capital buffers even if the framework had been implemented.
About TBC Bank Group (LON:TBCG)
TBC Bank Group PLC (“TBC PLC”) is a public limited company registered in England and Wales. TBC PLC is the parent company of JSC TBC Bank (“TBC Bank”) and a group of companies that principally operate in Georgia in the financial sector. TBC Bank, together with its subsidiaries, is a leading universal banking group in Georgia. TBC PLC also offers non-financial services via TNET, the largest digital ecosystem in Georgia. Since 2019, TBC PLC has expanded its operations into Uzbekistan by operating fast growing retail digital financial services in the country.
