TBC Bank Group PLC

Good afternoon, ladies and gentlemen, and welcome to the TBC Bank Group PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I would like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to the executive management team from TBC Bank Group PLC. Vaktan, good afternoon, sir.

Good afternoon and thank you. Dear all, thank you for joining our call to review our fourth quarter and 2022 full year results. Despite regional challenges, it has been an exceptionally successful year for our group and I'd like to walk you through our main achievements. I'll start the presentation from the slide number three, which summarizes our key achievements for the year. Last year, the group generated an excellent return of equity of 26.5%, despite a high of tech charge in the fourth quarter related to changes in the tax model. Without the one-off charge, our return of equity would be 30%. Our set-water ratio also remained very strong at 15.2%, which is our 3.5 percentage point above the minimum required level. We also continued with the most well-capitalized system in Banking Georgia. At the same time, our balance sheet growth was impressive, with loans increasing by 16% and deposit rising 31%, both on a constant currency basis. I'm also delighted with the performance of our Uzbek operations. We generated positive returns on the back of the high growth. Their net profit amounted 8 million lari last year. It is important to highlight that return of equity for our Uzbek operations reached 27% in the seasonally strong fourth quarter, while it stood at 6.5% for a full year 2022. For this year, we expect it to be around 20%, which would make great year-on-year progress. Also, share of 3BC UZ loans in our total retail non-mortgage loan book already reached 12%. This gives us a great platform to build from this year and beyond. Meanwhile, our digital user space continues to grow, with digital daily active users reaching 1.4 million by the end and digital monthly active users 3.8 million. Before I review our performance in more details, let me provide you with a brief update on the recent macro developments in Georgia. Last year, GDP growth reached double digits in Georgia, despite the adverse effects of the war in Ukraine. Also, inflation started moderating in the second half of the year, dropping below 10% by year-end. At the same time, the larry appreciated by almost 15%, again the dollar making it one of the world's best performing currencies throughout the last year. And finally, last year we saw an accumulation of central bank reserves and improved fiscal position. On the next slide, Farsa shows Georgia's solid economic fundamentals. In contrast to sluggish growth in the region, the Georgian economy had grown over 10% in 2022, and for this year, we expect the modest slowdown to 5%. It is also important to know that there has been further improvements in the net balance of trading goods, as well as increased inflows from the tourists and remittances. These inflows remain well diversified across different regions, with the European Union being the largest contributor. The next slide shows how Georgia's robust economic performance has been reinforced by easing inflation and growing monetary and fiscal buffers. As already mentioned, inflation ended the year below 10% and we expect it to fall further in this year. Last year, we also see a strengthening of our international reserves and positive dynamics in both fiscal deficit and public debt to GDP ratio. The former narrowed to 2.8% in 2022, while public debt to GDP ratio fell to 40%.

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