Shares in TBC Bank soared on Wednesday after the FTSE 250-listed Georgian lender posted a forecast-beating fourth quarter, propelled by growth in its Uzbek business.
TBC, which has enjoyed triple-digit share price returns over the last three years, posted adjusted net profit growth of 18.2 per cent year-on-year to GEL344million (£99million) for the quarter, beating consensus estimates by 6 per cent.
Full-year earnings climbed 15 per cent to around £367million, as the value of its loan book soared 18.8 per cent and customer deposits swelled by 12.2 per cent.
Boss Vakhtang Butskhrikidze said: ‘This marks our third consecutive year of [more than 25 per cent return on equity] and means that we have posted above 20 per cent ROE for nine of the past 10 years (with the Covid-impacted 2020 the only exception).
‘[This] is testament to our consistent and strong delivery for shareholders over the long-term.’
TBC shares were up 11.8 per cent to 4,130p by midafternoon, leading the FTSE 250.
Shares have climbed more than 40 per cent over the last 12 months, allowing the bank to boost dividends by 31 per cent in 2024, and over 200 per cent in the last five years.
TBC shares took a tumble late last year after the Georgian government suspended moves to join the European Union, leading to violent clashes between demonstrators and riot police.
The bank’s domestic business saw net profits climb 13 per cent year-on-year, as its loan book increased by 14.2 per cent and deposits grew by 8.1 per cent on a constant currency basis.
But analysts at Peel Hunt think TBC’s Uzbek business is the bank’s ‘differentiating factor’, which should ‘supercharge the growth and profitability of an already high performing group’.
The Uzbekistan business was launched four years ago, with development financed by TBC together with the European Bank for Reconstruction and Development and International Finance Corporation.
TBC Uzbekistan doubled its loan book last year as net profits soared 86 per cent, accounting for around 8 per cent of total group earnings.
Peel Hunt holds a ‘high-conviction’ buy rating on TBC shares, where it sees ‘significant upside potential’ and a target price of 5,000p.
TBC’s Butskhrikidze said: ‘Over the past year, TBC Uzbekistan has scaled up, with its total users increasing by 37p per cnet per cent to over 18 million and its loan book more than doubling.
‘The foundations for future growth have been laid through investments in key infrastructure, AI initiatives, world-class talent and a suite of new core products.
‘These include Salom Card, our flagship daily banking product, Osmon Card, our first revolving credit card, and TBC Business, Uzbekistan’s first fully digital SME banking service.
‘Many of the pieces are now in place for TBC Uzbekistan to contribute greatly both to the further development of the Uzbekistan banking sector and to our Group overall.’
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