TBC Bank Group PLC

Hello everyone and a warm welcome to TBC Bank's fourth quarter and full year 2024 results conference call. My name is Emily and I'll be coordinating your call today. After the presentation you will have the opportunity to ask any questions which you can either do so by raising your hand or by typing any questions into the Q&A chat box if you have joined us on Zoom. Alternatively if you are dialed into today's call on the telephone lines please press star followed by the number one on your telephone keypad to ask a question. I will now hand over to Andrew Keeley, Director of Investor Relations, to begin. Please go ahead, Andrew.

Thanks very much, Emily, and welcome everybody to TBC's fourth quarter and full year 2024 results call. Thank you very much for joining us today. As usual, I'm joined on the call by Vakhtang Boutskirikidze, our CEO, and Gyorgy Megrilishvili, our CFO. So we'll start off with a presentation and then we'll have time for Q&A. And with that, I'll hand over to Vakhtang. Thank you.

Yeah. Thank you, Andrew. Good afternoon, everyone. And thank you for joining our first quarter and full year financial conference call. Before discussing our results, I'd like to briefly address the current situation in Georgia. As you will hear, protests related to the elections are ongoing. At TBC, we remain fully focused on our business and our customers, and I'd like to emphasize that we have not seen any material impact on our operations. As always, we continue to monitor developments closely and we remain confident in our ability to continue delivering strong results for our shareholders. On a more positive note, I am pleased to share that the Board has recommended the final dividend of 5.55 Lari per share, subject to AGM approval. This brings our total dividend for the year to 8.10 Lari per share, up by 12% from the previous year, with a 35% dividend payout ratio. Adding in our buyback, we have returned 39% of earnings to shareholders in 2024. Turning to our results, slide number four shows some of the key financial and operating highlights for the final quarter. I'm very pleased to announce that we finished the year strongly with a net profit of 335 million lari, up 15% year-on-year. At the same time, return of equity in the final quarter stood at 24.1%, supported by very solid low growth. In Georgia, we maintained a high profitability with an excellent return of equity and very strong capital position. Meanwhile, Uzbekistan saw rapid expansion with record earnings and high loan book growth. In the final quarter, while unique registered users reached 18 million, accounting for almost half of Uzbekistan population. Slide 5 summarizes the key takeaways for the past year as a whole. In 2024 was another year of a strong profitability and growth for the group, with total operating income up by 19%, loan book growth of 18%, and high return of equity of 25.6%. Our Uzbekistan business continued to scaling rapidly and profitably, with total operating income almost doubling and its share in the group's profit reaching 8%. In addition to investing in growth, we were also able to increase capital returns to shareholders, returning 39% of our net income to shareholders through dividends and buybacks. Following on from the previous slide to slide six, this means that we are well on a track to meet our 2025 targets, as can be seen here. Next, I'd like to reiterate how our 2024 results underpin TBC's investment case. We are leading regional financial institution, combining market dominance in Georgia with high growth expansion in Uzbekistan. We are building a world-class digital proposition in Uzbekistan that already has a huge customer reach. In Georgia, we continue to deliver both strong profitability and growth. We have a proven long-term track record of impressive delivery since 2014 IPO. This can be seen in some of the financial outcomes we have been achieving, including 23% average return of equity over the past five years. And in fact, 26% if we strip out the COVID-affected year. 15% annual growth in loans and consistently returning 25% to 35% of earnings to shareholders as dividends. Now moving to Georgia, let's take a look at the broader macroeconomic environment. Economy growth in Georgia remained very strong at 9.5% in 2024, with inflation still low and below the target. The economic outlook for this year looks less certain, and while international organizations such as the World Bank and the Monetary Fund expect around 5.5% to 6% growth, our in-house team at TBC Bank and Capital sees a base case of GDP growth coming in somewhat below that level. However, we know that December GDP growth print came in at a strong 6.7%. Slide 10 highlights how well placed we are to capitalize on a sound economic backdrop given our dominant market share in loans and deposits. And the fact that we remain the top choice for a newly registered businesses. On this slide, we can see our very solid balance sheet growth in Georgia with the total loss increasing by 14% and the total deposit is growing by 8% in 2024. Slide will show the growing digital engagement for our retail customer base. In the first quarter, our digital monthly users in Georgia surpassed 1 million, with the digital monthly active users penetration of 62%. And I'm also pleased to highlight the continuing long-term trend of increasing digitalization within our Georgian business. We can see here that the share of consumer loss issued fully digitally has increased strongly over the past year, which in turn has enabled us to cut average branch transactions by 25%. The next slide gives an overview of some of the main business achievements in Georgia in 2024. On the retail side, our loan growth was driven by fast consumer loans, while the launch of the redesigned TBC card greatly strengthens our payments proposition and has already had excellent take-up. We also enhanced our mobile banking application with new features, incorporated streamlined credit processes, introduced new FX pricing solutions, and hosted the first international Georgian capital market conference. While in MSME, we launched digital MSME pre-approved laws and more than doubled the maximum limit to 500,000 lari for automatically approved laws. Now moving to our Uzbekistan business. The Uzbekistan economy also remains strong and steady with real GDP growth of 6.5% in 2024 and international organizations expecting around 6% growth in 2025. Inflation is high at 9.8% at the end of 2024, and it will take some time to bring this down to the targeted 5% level. Slide 16 shows how exceptionally well our Uzbek business continues to perform. We now have over 18 million unique registered users, with almost 6 million monthly active users, an increase of over 1.5 million in 2024. I also want to highlight that our Uzbekistan mass selective users increased by 1 million in the final quarter, a tremendous achievement that shows how we are now successfully converting more than our 18 million customer base into regular users as we expand the range of products and services that we offer. Our loan book more than doubled the year-on-year to $626 million, while our deposit rose over 80% to $376 million. And crucially, we are scaling up profitability, as both our revenues and profitability showed very strong growth, with net profit of $13 million and total operating income of $15 million in the fourth quarter, both record numbers. 2024 was a year of major progress in Uzbekistan on many different fronts. We continued to build out a world-class and a highly international team with talent made up to 25 nationalities. Strong shareholder confidence drove $75 million in capital injections while we diversified funding with $105 million in wholesale financing and one of Uzbekistan's largest corporate bond issues to date. We also made huge progress in AI, which is now heavily used in collections, and in January we deployed Uzbek language element for sales. We plan to extend its use to customer support and other areas later during the year. We also launched a proprietary processing center and struck partnerships with Visa and Mastercard. On the next slide, you can see some of the core products that we launched in 2024, including our flagship daily banking product, Salon Card, our first revolving credit card, Osmo Card, and Uzbekistan's first fully digital MSME banking proposition. Launching three major products verticals in a single year is an impressive achievement, and we are incredibly proud of it. On this slide 19, you can see how far we have come since 2020. In just four years, we have already become a big player in Uzbekistan in the retail banking space. Slate 20 highlights the growing contribution of Uzbekistan to the group's overall performance. Uzbekistan already accounts for half of the total unsecured consumer loans, 11% of the group's retail deposits portfolio, 15% of the total operating income, and 8% of the net profits for the full year of 2024. And with that, I'd like to hand over to Georgi.