TBC Bank Group PLC

Hello everyone and welcome to today's TBC third quarter and nine month 2025 IFRS results conference call. My name is Sam and I'll be the call moderator today. All participant lines are currently muted. After the prepared remarks, there'll be a question and answer session. If you'd like to register a question throughout the call, please use the raise hand button on your Zoom toolbar. Alternatively, you can submit a question in writing using the Q&A function on Zoom. And if you've dialed into the call today, you may register a question by pressing star followed by one on your telephone keypad. I'd now like to hand you over to today's host, Andrew Keeley, Director of Investor Relations to begin. So, Andrew, please go ahead.

Thank you very much, Sam, and welcome everybody to our third quarter results call. I'm joined on today's call by Vaktan Budskirikidze, our CEO, by Georgi Megrelishvili, our CFO, and by Oliver Hughes, our head of international. As usual, we'll have a presentation and then we'll run through and have a Q&A session afterwards. And with that, I'll hand over to Vaktan. Thank you.

Thank you, Andrew. Hello, everyone, and thank you for joining us today. I am pleased to present another highly profitable quarter with record quarterly earnings. As you can see, our group's net profit in this third quarter is 368 million lari, up by 6% year-on-year, while the return of equity was 24.4%. Our revenue growth was very respectable, 17% year-on-year growth. In Georgia, we had a strong and stable quarter with 24% plus return of equity. 9% growth in our loan book and net interest margin reaching 6%. Over the same period, Uzbekistan's net profit was 41 million lari, up by 30% year-on-year, with return of equity exceeding 23%. While the loan book has almost doubled year-on-year to close to $1 billion. Our digital ecosystem continues to expand its reach, with registered users totaling almost reach 22 million, up by 28% year-on-year. As a result of our strong operating performance and a solid capital base, the board has declared a quarterly dividend of 1.75 lari per share, bringing the total nine months of 2025 dividend to 5 lari. Now turning to Georgia. Georgia's economy continues to perform strongly. Real GDP growth stood at 6.5% in the third quarter, bringing nine-month growth to 7.7%, while our macro team has revised its 2025 GDP growth forecast upwards to 7.3%. The inflation rate reached 4.8% in September, surpassing the National Bank of Georgia's 3% target, but we expect these to ease slightly over the next few months. Next slide highlight the highly consistent performance of our Georgian financial services business as we continue to deliver close to mid-20s return of equity. The reason for this consistency, as you can see, that we continue to be a leading player across most of the key banking segments in Georgia. In the third quarter, our gross loss, we are up by 9% year on year. And I'd like to highlight particularly strong performance in fast consumer lending. A key focus for us, we are our loan book portfolio grow by 42% and we have gained three percentage points of market share over the past year. Meanwhile, our Georgian customer deposit increased by 11% over the same period. We continue to maintain a strong position in both lending and deposits while constantly improving how we serve our retail and business clients. Next slide illustrates the growing digital engagement among our retail customers in Georgia. By the end of September, our digital mass users reached 1.2 million, accounting for two-thirds of our active customers. And our digital mall continues to increase by around 50,000 users per quarter. What's also important is that our digital users are highly engaged with us on a daily basis, as it's reflected in a very impressive 46% DAO to MAO ratio. The increasing take-up of digital banking by our customers is also reflected in the very high levels of digital loans and deposit issuance. Now let's turn to our Uzbekistan business. Starting with the economy, much like Georgia's, the Uzbek economy also remains highly dynamic. with real GDP growth of 8.2% in the third quarter, bringing nine months 2025 growth to 7.6%. What is very encouraging is that inflation is also easing, dropping to 8% in September, and even lower in seasonality-adjusted terms, supported by tight monetary policy, and we have also seen local currency strengthening this year. Next slide provides an overview of the progress that we have made over the past two years across all major metrics. We have almost 22 million unique registered users, out of which almost 6 million are monthly active users. Our loan book continues to almost double year-on-year and now tops $970 million, while our deposits increased by 71%, reaching over $540 million. Our operating income reached a record $70 million in this quarter and increased by 69% year-over-year. In the third quarter, net profit of our Uzbekistan business reached $15 million up by 30% year-on-year. Now let's turn to some of our recent business updates in Uzbekistan. We continue to expand our digital banking in the third quarter. In the third quarter, we announced our planned acquisition of majority stake in OLEX, the country's largest online classified platform. This will unlock powerful synergies with our financial services platform and help increase our share of customer retention. We also saw a great progress in the uptake of salon cards. By the end of September, we issued 700,000 cards, of which 500,000 have been funded, as customers are increasingly choosing TBC for their daily banking needs. In addition, we have been dipping customer engagement in PayMe with PayMe plus subscriptions reaching 300,000 miles. We keep scaling the use of AI throughout our business. As a result, we have reached 90% automation in early stage delinquency calls, and we have conducted over 100,000 sales per month with our AI voice chatbots. Evidence of the popularity of our ecosystem can be seen in it being the top of mind brand in Tashkent and number three in Uzbekistan as a whole. A great achievement in just a few years of operating. Next slide shows our increasing market share and contribution to the group. By the end of the third quarter, market share of our retail loans and deposits stood at 4.9% and 4.2% respectively. In the third quarter, Uzbekistan contributed 11% of the group's net profit, while the contribution in operating income was 21%. Next slide provides an update on the targets we set ourselves for our Uzbekistan business. I think it is worth stepping back for a moment and considering what we have achieved in Uzbekistan over the past six years. During this time, we have built one of the fastest growing digital banking ecosystems globally. Our registered users have increased tenfold to 22 million, and we have built a $1 billion long portfolio. Our digital bank broke even in just two years and is already generating 20% return of equity, despite still being an early stage business. This year, we have scaled up, launched new products and announced highly valued, accurate M&A with Bills and Dollars, and we are a top 10 player in retail banking and even the top of mind bank in Tashkent. But of course, there has been some challenges this year. As you know, we had issues around fraud and asset quality in the first half, while in the second half, we had pivoted our business from microloans to SMU lending more quickly than we had anticipated, in line with the changing regulatory agenda. As a result, we expect to below our 2025 net profit guidance. I firmly believe that we have a flexible and resilient business model and an excellent team that will enable us to adapt quickly to the evolving environment and we remain highly positive on the long-term growth opportunities in the country. Finally, I'd like to provide an update regarding the group's targets. First of all, I'd like to stress that the group's overall performance remains strong and resilient. Our return of equity has consistently been running ahead of the challenging 23% target. And since the start of 2023, we have almost doubled our digital MO to close to 7 million as more customers choose TBC. Over the past three years, we have increased gross profit annually by 10%, despite investing carefully in building our out Uzbekistan. However, given that we are the running below of our profit targets in Uzbekistan, GroupsNet profit will slightly below our 1.5 billion Lari target. As a group, we are well positioned for the future. We combine consistently and proven leadership in Georgia with the dynamic digital ecosystem in Uzbekistan. that is well-placed to capture the huge opportunity available and remain highly positive on the long-term growth opportunities in both markets. With that, I pass over to Gyorgy.