Hits: 10

20 May 2020

TBC Bank – Q1 Results

Share Price 759p

Mkt Cap £419m

Conflict Disclosure: No Holding


  • Results The results headline with a “pre-COVID” profit up 14.3% which doesn’t bode well. Loss before tax was GEL 93.95m. Pre Covid risk adjusted NIM was 4.2% which is after a pre COVID cost of risk of 0.9%.COVID then added 1.7% to this cost of risk. Cost income ratio 36.5%. Leverage is 7.8X and CET 1 ratio 9.1%. Bonuses foregone and no dividend. The outlook reiterates medium term targets of 20% ROE, 35% cost income ratio and 10-15% loan book growth. The state of emergency gets lifted in Georgia on 22 May.


  • Valuation. The NAV is £643m so TBC trades at a 35% discount to NAV.


  • Conclusion With a leveraged balance sheet having obtained the bank license in Uzbekistan which needs funding there is a risk of equity issuance. There is perhaps 100% upside in the event of a seamless recovery but it could be there is a better opportunity in coming months.


20 February 2020

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TBC Bank  – FY Results 

Share Price 1310p

Mkt Cap £722m

Conflict Disclosure: No holding

  • Results Underlying PBT is up 20% to GEL 545m which equates to a ROE of 22.6%. The cost of risk reduced significantly from 1.6% to 0.7% while the cost income ratio was up from 37.8% to 39.5%. NNIM reduced to 5.6% from 6.9%. Tier 1 ratio was 14.6%. The outlook is confident and the medium term targets are reiterated of 20%+ROE, cost income below 35% and loan book growth of 10-15%.
  • Estimates Results are in line with estimates and the 2020 estimate for 10% PBt growth doesn’t correspond with the outllok statement aiming for 10-15% loan book growth and a reducing cost income ratio. Potential for upgrades.
  • Valuation The net asset value is £714m which is close to the current market cap on which a 22% ROE has just been reported. IN PE terms that is 5.2X and the yield is 5%.  Bank of Georgia trades at 6.1X and yields 5.6%.
  • Culture 67% of the staff are female and the glassdoor staff reviews give it a high ranking of 4.1.
  • Conclusion The shares are down 30% over the past 2 years while growth and performance have continued to be strong. This is a time to won this one.

14 November 2019

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TBC Bank – Q3 Update  

Share Price 1392p

Mkt cap £767m

Conflict Disclosure: No Holding

  • Results The story of strong growth, tightening NIM and sharp reduction in cost of risk mirrors the trends that Bank of Georgia reported recently. PBT was up 18% to GEL 126.8m. NIM reduced to 5% from 5.1% while cost of risk fell from 1.9% to 0.7%. The cost income ratio was up form 37.9% to 39.9%. The ROE was 20.4% from 21.2% previously. Tier 1 ratio was 11.9%.  The outlook highlights the bank’s performance in the affluent sub-segment and reiterates the medium term targets of 20% ROE, cost/income below 35%, loan book growth of 10-15% and a payout ratio of 25%-35%
  • Estimates 9 months into the year the company has delivered GEL 380m which is 71% of the GEL 535m forecast which looks about right.
  • Valuation The 20% ROE is valued at 1.4X book value. PER 5.9X Yield 4.7%.
  • Conclusion  For a cheap stock such as this share prices generally follow profits over the medium term. However, in an environment of reducing rates it becomes harder for banks to maintain their ROE and consequently their valuation, which may explain the 25% share price retrenchment over the last 6 months.  It is hard to see any valuation uplift in this environment, but the profits will continue to grow.

15 August 2019

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TBC Bank – H1 Results 

Share Price 1322p

Mkt Cap £727m

Conflict Disclosure: No Holding

  • Results Underlying net profit up 19% to GEL 258m from a loan book up 25.2% year on year to GEL 11.1bn. ROE 22.7% from ROA of 3.3%. NIM was 5.8% and impairments were down (as they were at BGEO) from 1.6% to 1.3% while the cost income ratio was a little higher at 37.9%. Tier 1 ratio was 12.4%, against a requirement of 11.9%. The outlook is positive with accelerating economic growth expected.
  • Estimates Full year estimates anticipate 14% EPS growth which looks undemanding given H1 numbers. Could be scope for upgrades
  • Valuation Dec 19 PER 5.2X Yield 5.5%. Price/Book 1.1X for 22.7% ROE
  • Conclusion The shares are down 23% since June.  Sometimes it pays to be greedy when others are fearful.

29 July 2019

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TBC Bank – H1 Results 

Share Price 1242p

Mkt Cap £689m

Conflict Disclosure: No Holding

  • Results Underlying net profit up 18.8% to GEL 258 which represents an ROE of 22.3%. ROA 3.3% (2018 3.1%). Cost Income 37.9% and cost of risk 1.3% (2018 1.6%). NIM however reduced from 5.3% to 4.6%. Total assets GEL 17.3bn from equity of GEL 2.3bn. Leverage is 7.3X
  • Estimates Forecasts expect 19% PBT growth for the year so this looks in line.
  • Valuation PER 5X Yield 6.2%. 1.1X book value for 22% ROE. Cheap. Bank of Georgia is 1.4X book value and has a lower ROE.
  • Conclusion These shares are extremely cheap.

13 May 2019

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TBC Bank – Q1 Results 

Share Price 275p

Mkt Cap £139m

Disclosure: No holding

  • Results Net profit up 36.7% to GEL 133.3m which is an ROE of 23.8% from a ROA of 3.6%. NIM was 6.1% and cost of risk 1.4% while the cost income ratio declined from 39.7% to 37.7%. The loan book was up 22.9% to GEL 10,367m. Tier 1 ratio was 13.8% against a regulatory requirement of 11.9%.
  • Estimates anticipate 16% PAT growth in the year to Dec 2019.  Even though its only Q1 we may see upgrades today
  • Valuation PER 6.5X Yield 4.4%. Price/Book 1.5X with a 23.8% ROE
  • Conclusion  The valuation id very persuasive for such high returns accompanied by strong growth. The only risk is potentially if the Russians want their Riviera of Georgia back.  That seems unlikely unless Georgia joins NATO.

21 February 2019

TBC Bank – FY Results 

Share Price 1290p

Mkt Cap £700m

  • Results Net profit up 34% to GEL £130m delivering ROE of 24.3%. NIM was 6.7%, cost of risk 1.4% and cost income ratio 39.7%. Tier 1 ratio 12.8%. The new regulation in Georgia causes the company to guide to medium term loan book growth of 10-15% and a decline of 0.3% to 0.5% in NIM.
  • Estimates Going forward estimates look for 16% PBT growth which with a reduced NIM and 10-15% loan book growth may be demanding unless the cost income ratio comes down.
  • Valuation PER 5 X and yield 6.2%. The company trades at a 17% premium to book value for 24% ROE
  • Conclusion This share is extremely cheap and growth looks set fair albeit the regulatory environment is getting harsh in Georgia.  Shareholders should do well