1st Quarter Results

RNS Number : 7421Y

TBC Bank Group PLC

13 May 2019

TBC BANK GROUP PLC ("TBC Bank")

1Q 2019 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

Forward-Looking Statements

This document contains forward-looking statements; such forward-looking statements contain known and unknown risks, uncertainties and other important factors, which may cause the actual results, performance or achievements of TBC Bank Group PLC ("the Bank" or the "Group") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on numerous assumptions regarding the Bank's present and future business strategies and the environment in which the Bank will operate in the future. Important factors that, in the view of the Bank, could cause actual results to differ materially from those discussed in the forward-looking statements include, among others, the achievement of anticipated levels of profitability, growth, cost and recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Georgian economic, political and legal environment, financial risk management and the impact of general business and global economic conditions.

None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects are based are accurate or exhaustive or, in the case of the assumptions, entirely covered in the document. These forward-looking statements speak only as of the date they are made, and subject to compliance with applicable law and regulation the Bank expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in the document to reflect actual results, changes in assumptions or changes in factors affecting those statements.

Certain financial information contained in this presentation, which is prepared on the basis of the Group's accounting policies applied consistently from year to year, has been extracted from the Group's unaudited management's accounts and financial statements. The areas in which the management's accounts might differ from the International Financial Reporting Standards and/or U.S. generally accepted accounting principles could be significant; you should consult your own professional advisors and/or conduct your own due diligence for a complete and detailed understanding of such differences and any implications they might have on the relevant financial information contained in this presentation. Some numerical figures included in this report have been subjected to rounding adjustments. Accordingly, numerical figures shown as totals in certain tables might not be an arithmetic aggregation of the figures that preceded them.

First Quarter 2019 Unaudited Consolidated Financial Results

TBC Bank Group PLC ("TBC PLC") will release its first quarter 2019 unaudited consolidated financial results on Monday, 13 May 2019 at 7.00 am BST (10.00 am GET).

On the same day at 14.00 (BST) / 15.00 (CEST) / 9.00 (EDT), Vakhtang Butskhrikidze, CEO, and Giorgi Shagidze, CFO, will host a conference call to discuss the results.

Please dial-in approximately five minutes before the start of the call quoting the password "TBC":

Password:	TBC
UK Toll Free:	0808 109 0700
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USA Toll Free:	1 866 966 5335
New York New York:	+1 212 999 6659
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Moscow:	+7 (8) 495 249 9843

Replay Numbers
Replay Passcode:	9490274
UK Toll Free:	0800 633 8453
Standard International Access:	+44 (0) 20 8196 1998
USA Toll Free:	1 866 583 1035
Russia Toll Free:	8 10 8002 4832044
Moscow:	+7 (8) 495 249 9840

Contacts

Zoltan Szalai

Director of International Media and Investor Relations

E-mail: ZSzalai@Tbcbank.com.ge

Tel: +44 (0) 7908 242128

Web: www.tbcbankgroup.com

Address: 68 Lombard St, London EC3V 9LJ, United Kingdom

Anna Romelashvili

Head of Investor Relations

E-mail: IR@tbcbank.com.ge

Tel: +(995 32) 227 27 27

Web: www.tbcbankgroup.com

Address: 7 Marjanishvili St. Tbilisi, Georgia 0102

Investor Relations Department

E-mail: IR@tbcbank.com.ge

Tel: +(995 32) 227 27 27

Web: www.tbcbankgroup.com

Address: 7 Marjanishvili St. Tbilisi, Georgia 0102

Table of Contents

1Q 2019 Results Announcement

TBC Bank - Background

Financial Highlights

Recent Developments

Development of Customer Focused Ecosystems

Letter from the Chief Executive Officer

Economic Overview

Unaudited Consolidated Financial Results Overview for 1Q 2019

Additional Disclosures

TBC BANK Group PLC ("TBC Bank")

1Q 2019 Consolidated Financial Results:

Net Profit for 1Q 2019 up by 36.7% YoY to GEL 133.3 million

European Union Market Abuse Regulation EU 596/2014 requires TBC Bank Group PLC to disclose that this announcement contains Inside Information, as defined in that Regulation.

TBC Bank - Background

TBC Bank is the largest banking group in Georgia, where 99.8% of its business is concentrated, with a 37.4% market share by total assets. It offers retail, corporate, and MSME banking nationwide.

These unaudited financial results are presented for TBC Bank Group PLC ("TBC Bank" or "the Group"), which was incorporated on 26 February 2016 as the ultimate holding company for JSC TBC Bank Georgia. TBC Bank became the parent company of JSC TBC Bank Georgia on 10 August 2016, following the Group's restructuring. As this was a common ownership transaction, the results have been presented as if the Group existed at the earliest comparative date as allowed under the International Financial Reporting Standards ("IFRS"), as adopted by the European Union. TBC Bank successfully listed on the London Stock Exchange's premium listing segment on 10 August 2016.

Financial Highlights

1Q 2019 P&L Highlights

§ Net profit amounted to GEL 133.3 million (1Q 2018: GEL 97.5 million; 4Q 2018: GEL 130.1 million)

§ Return on equity (ROE) amounted to 23.8% (1Q 2018 : 21.0%; 4Q 2018: 24.3%)

§ Return on assets (ROA) amounted to 3.6 % (1Q 2018: 3.2%; 4Q 2018: 3.5%)

§ Total operating income amounted to GEL 271.9 million (1Q 2018: GEL 238.7 million; 4Q 2018: GEL 312.3 million)

§ Cost to income was 37.7% (1Q 2018: 38.1%; 4Q 2018: 39.7%)

§ Cost of risk stood at 1.4% (1Q 2018: 1.3%; 4Q 2018: 1.4%)

§ FX adjusted cost of risk stood at 1.4% (1Q 2018: 1.7%; 4Q 2018: 1.3%)

§ Net interest margin (NIM) stood at 6.1% (1Q 2018: 6.9%; 4Q 2018: 6.7%)

§ Risk adjusted net interest margin (NIM) stood at 4.7% (1Q 2018: 5.2%; 4Q 2018: 5.4%)

Balance Sheet Highlights as of 31 March 2019

§ Total assets amounted to GEL 15,172.3 million as of 31 March 2019, up by 22.3% YoY and down by 2.1% QoQ

§ Gross loans and advances to customers stood at GEL 10,366.9 million as of 31 March 2019, up by 22.9% YoY and down by 0.1% QoQ

§ Net loans to deposits + IFI funding stood at 90.5% and Net Stable Funding Ratio (NSFR) stood at 123.8%[1]

§ NPLs were 3.3%, up by 0.2 pp YoY and QoQ

§ NPLs coverage ratios stood at 100.1%, or 210.8% with collateral, on 31 March 2019 compared, to 114.6% or 225.8% with collateral, as of 31 March 2018 and 102.7%, or 216.4% with collateral on 31 December 2018

§ Total customer deposits amounted to GEL 9,166.8 million as of 31 March 2019, up by 20.4% YoY and down by 2.0% QoQ

§ As of 31 March 2019, the Bank's Basel III tier 1 and total capital adequacy ratios per NBG methodology stood at 13.8% and 19.1% respectively, while minimum requirements amounted to 11.9% and 16.9%

Market Shares[2]

§ Market share by total assets reached 37.4% as of 31 March 2019, up by 2.1pp YoY and down by 0.8pp QoQ

§ Market share by total loans was 38.4% as of 31 March 2019, up by 0.6pp YoY and down by 0.4pp QoQ

§ In terms of individual loans, TBC Bank had a market share of 39.3% as of 31 March 2019, down by 0.3pp YoY and by 0.7pp QoQ. The market share for legal entity loans was 37.4%, up by 1.8pp YoY and stable on QoQ basis

§ Market share of total deposits reached 40.4% as of 31 March 2019, up by 1.5pp YoY and down by 0.8pp QoQ

§ Market share of individual deposits stood at to 39.5%, down by 1.1pp YoY and by 1.7pp on QoQ. In terms of legal entity deposits, TBC Bank holds a market share of 41.4%, up by 4.4pp YoY and up by 0.2pp QoQ.

Recent Developments

Payme - Expansion in Uzbekistan

TBC Bank has acquired 51% stake of LLC Inspired, a leading payment platform in Uzbekistan trading under the Payme brand.

Payme is a leading profitable payment service provider in Uzbekistan supplying high-quality payment solutions to its 1.3 million customers, including a marketplace platform for loans from certain Uzbek banks.

The company has grown rapidly in recent years, increasing its number of clients by around 70% during 2018, while its revenue and net income grew by 41.9% and 24.5% respectively year-on-year. The steady growth also continued in the first quarter 2019 with revenue and net profit growing by 21.9% and 73.0% quarter-on-quarter respectively.

The acquisition of Payme is another important step in our planned expansion into Uzbekistan. It will enable us to gain immediate access to a large customer base in the country and use our core digital strengths in Georgia to innovate the Uzbekistani market. With Payme joining our effort, we intend to further develop the payment business and also use it as a platform to develop new ecosystems in the country.

Awards

§ The Best Bank in Georgia 2019 - For the eighth consecutive year, TBC Bank has been awarded the Best Bank in Georgia 2019 by the prestigious Global Finance magazine, underlining our ongoing commitment to offering the very best banking services to our customers.

§ Special Award for Responsible Capitalism in Adversity - TBC Bank's CEO Vakhtang Butskhrikidze has won the Special Award for Responsible Capitalism in Adversity from the prestigious FIRST organisation - a multidisciplinary international affairs organization, which aims to enhance dialogue between leaders in industry, finance and government.

§ FMO - In October 2018, TBC Bank signed a loan agreement in the amount of GEL 103 million with FMO, the Dutch Development Bank. The local currency funding was obtained by FMO through a public placement of bonds on the Georgian Stock Exchange. This transaction was selected by EMEA Finance as the Best Local Currency Loan of 2018.

Development of Customer Focused Ecosystems

In order to integrate better with our customers, we started to develop customer focused ecosystems, which are closely linked with our financial products and services and enable us to create synergies with our core banking offerings.

E-commerce

§ In August 2018 we purchased Swoop, Georgia's well-known online discount and sales company for USD 70,000.

§ We have started developing an e-commerce market place in Georgia through building an innovative digital trading platform, Vendoo.

§ Our estimated investment for the next two years will be around USD 2-3 million.

Progress since acquisition:

§ Assembled a team of experienced professionals in digital business.

§ Designed a brand new cloud technology platform based on open source.

§ Beta version of the platform is already launched with electronics and personal care products on the following web-page: www.vendoo.ge. The launch of the full version is scheduled in May.

Real Estate

§ In January 2019, we acquired 90% shares of the real estate platform Allproperty.ge for USD 225,000.

§ Started developing digital real estate ecosystem, that will offer our customers a wide range of products and services, including finding the suitable real estate, comparing different properties, getting financing, buying furniture, and many more.

§ Our estimated investment for the next two years is set at around USD 2 million.

Progress since acquisition:

§ Strengthened the management team.

§ Designed target agile operating model.

§ Started rebranding through new brand name Livo and developing new platform www.livo.ge.

§ Data mining and lead generation practices have been implemented.

Additional Information Disclosure

Additional historical information for certain P&L, balance sheet and capital items, and on asset quality is disclosed on our Investor Relations website on http://tbcbankgroup.com/ under the Financial Highlights section.

Letter from the Chief Executive Officer

I am pleased to present the financial results for the first quarter 2019 and update you on our operating performance as well as provide an overview of the recent macroeconomic developments in Georgia.

Our consolidated net profit for the first quarter of 2019 reached GEL 133.3 million, up by 36.7% year-on-year, while our return on equity was 23.8% and our return on assets stood at 3.6%. Our robust profitability was supported by strong growth in net fee and commission income of 19.7% and other operating income of 16.9% year-on-year, as well as positive operating jaws leading to the reduction of the cost to income ratio by 0.4 percentage points to 37.7%. Over the same period, cost of risk remained at 1.4%.

As anticipated, our net interest margin decreased in the first quarter of 2019 mainly due to the new regulation limiting the banks' ability to lend money to higher-yield retail customers. The requirement came into force at the beginning of the year leading to the contraction in net interest margin by 0.5 percentage points. A further decrease of 0.1 percentage points was related to our higher than usual liquidity levels resulting in a net interest margin of 6.1% in the reporting period. Over the same period, our effective interest rate on loans decreased by 0.7 percentage points quarter-on-quarter and stood at 11.5% in first quarter 2019 driven by new regulation as well as decrease in NBG refinance rate.

In terms of balance sheet, our loan book expanded by 22.9% year-on-year, supported by growth across all business segments, which resulted in a market share of 38.4%, up by 0.6 percentage points year-on-year. Over the same period, deposits increased by 20.4%, expanding our deposit market share to 40.4%, up by 1.5 percentage points year-on-year.

We continue to operate with solid capital and liquidity levels. As of 31 March 2019, our tier 1 and total capital adequacy ratios (CAR) per Basel III guidelines were 13.8% and 19.1%, respectively, compared to 12.8% and 17.9% as of year-end and well above the corresponding minimum requirements of 11.9% and 16.9%. The increase in capital ratios were mainly related to the net profit generated in the quarter and the optimization of the credit risk weighted assets, as well as decrease in the market risk. As of 31 March 2019, our net loans to deposits + IFI funding ratio stood at 90.5% and the net stable funding ratio (NSFR) was 123.8%[3].

I am also pleased with the results of our insurance subsidiary, TBC Insurance, which continues to generate strong growth and strengthen its position as a leading player in the market. In the first quarter of 2019, its P&C and life insurance market share increased by 3.3 percentage points year-on-year and stood at 22.8%[4], while over the same period its market share in the retail segment amounted to 39.8%^[4].

Regarding Georgia's macro environment, in the first quarter 2019 real GDP growth averaged 4.7% year-on-year, per initial estimates of GeoStat. Over the same period, the growth of exports, tourism and remittance inflows moderated and stood at 9.1% year-on-year. This reflects a slower growth in Georgia's trading partners and continued economic difficulties in Turkey. The total banking loan portfolio growth continues to moderate, primarily reflecting the regulations on retail lending, and, as of 31 March 2019, it had increased by 14.0% year-on-year, excluding FX effect^{^[5]}. From the segments perspective corporate, MSME and retail loans grew respectively by 12.9%, 21.8% and 11.2% year-on-year. It should be also noted, that in April 2019, the international rating company Standard&Poor's (S&P) improved Georgia's sovereign rating from stable to positive and confirmed the rating at "BB". The positive outlook primarily reflects the S&P's position that Georgia's economic and external performance has the potential to outperform its current forecast over the next 12 months. It also reflects the country's continued compliance with the conditions of the existing funded IMF arrangement.

Finally, I would like to update you on our progress towards our strategic priorities:

· Digitalization. In the first quarter of 2019, our offloading ratio in the retail segment reached 91.9%[6], up by 2.9 percentage points year-on-year, while sales conducted through digital channels amounted to 44.7%. Furthermore, our mobile banking penetration increased by 5.7 percentage points year-on-year and amounted to 36.7%, while the mobile or internet banking penetration ratio grew by 3.9 percentage pionts to reach 41.9%.

· Agile transformation. We have also successfully completed the first wave of our agile transformation and established the new organisation structure for our back office operations, which we believe will lead to faster time-to-market, improved productivity and higher employee engagement.

· Ecosystems. We continue to actively develop our e-commerce platform, Vendoo by deploying a brand new cloud technology based on open source. The launch of the marketplace is scheduled in May 2019 with electronics and personal care products. In relation to our real estate platform, we have designed a target agile operating model, implemented data mining and lead generation practices and started the rebranding process.

· International expansion:

o Uzbekistan. In April 2019, we acquired a 51% stake in Payme, a leading payment platform in Uzbekistan, for a consideration of USD 5.5 million. Payme supplies high-quality payment solutions to its 1.3 million customers through facilitating utility payments, P2P transfers, loan repayments, mPOS for QR-based payments and e-commerce purchases. It also provides a marketplace platform for loans from selected Uzbek banks. Payme has grown rapidly in recent years, increasing the number of clients by around 70% during 2018, while during the same period its revenue and net profit grew by 41.9% and 24.5% respectively. The steady growth also continued in the first quarter 2019 with revenue and net profit growing by 21.9% and 73.0% quarter-on-quarter respectively. The acquisition of Payme is another important step in our planned expansion into Uzbekistan. It will enable us to gain immediate access to a large customer base in the country and use our core digital strengths in Georgia to innovate in the Uzbek market. With Payme joining our effort, we intend to further develop the payment business and also use it as a platform to develop new ecosystems in the country.

o Azerbaijan. I am proud to report that our joint efforts with Nikoil Bank's management continue to pay off. The bank has generated a net profit of USD 1.8 million in the first quarter 2019 on the back of improved income generation and cost efficiency.

Overall, I am delighted with our first quarter financial and operating results and I feel confident that we are well-positioned to achieve sustainable growth and to deliver high returns to our shareholders. Therefore, we would like to reiterate our medium-term targets: ROE of above 20%, cost to income ratio below 35%, dividend pay-out ratio of 25-35% and loan book growth of 10-15%.

Economic Overview[7]

Economic growth

Economic growth remained strong in 2018, despite the higher volatility in Georgia's economic partners and the contractionary fiscal stance domestically GDP increased by 4.7% the 4.8% of 2017. The growth was broad-based across almost all sectors, with trade and repairs (+5.9% YoY), transport and communications (+8.2% YoY), real estate (+12.1% YoY), and manufacturing (+3.4% YoY), as major drivers in 2018. Almost all other sectors posted growth rates. Construction declined by 3.1% YoY mostly due to the finalisation of the BP's SCPX project and underperformance in the public infrastructure spending, while the development of residential and non-residential buildings maintained solid growth. In 1Q 2019 real GDP growth averaged 4.7% YoY, per initial estimates of GeoStat.

Positive tendency of the CA balance improvement continued in 4Q 2018 as well with CA deficit to GDP ratio at 7.7% in 2018 compared to 8.8% in 2017. This is mostly due to the robust growth of tourism, exports and remittance inflows as well as the narrower income account deficit for 2018. FDI inflows, representing a major source of financing for the CA deficit, declined by 34.9% YoY and came in at still solid 7.9% of GDP in 2018 - this is a normalised level following the above trend inflows over 2014-17. The reduction mostly reflected the finalisation of the BP's SCPX project and the change of ownership of non-resident companies to residents as well as repayment of some FDI related debt.

Growth of exports, tourism and remittance inflows moderated and stood at 9.1% YoY in 1Q 2019, reflecting the normalisation of growth in Georgia's economic partners and continued economic difficulties in Turkey. Also, the effect of stronger USD should be considered as when measured in EUR and GEL, better reflecting the underlying value of assets in the country, growth of inflows stood at 18.1% and 17.2% YoY, respectively.

Imports of goods further declined by 4.7% YoY, due to the retail lending regulations, lower oil prices, high base effect in the previous year reflecting some one-off imports in 1Q 2018 and a stronger USD. As a result, balance of trade in goods improved by a solid 14.2% YoY.

The National Bank of Georgia continued to refill reserves and purchased sizeable USD 186 million - an estimated 7% of 1Q 2019 GDP. As of the end of March, the NBG's gross international reserves stood at USD 3.5 billion, up by 15.2% YoY. The estimated net international reserves exceeded the lower threshold for June 2019 as defined at USD 1.456 billion for June 2019 as defined in the agreement with the IMF by around USD 200 million.

Growth of bank loan portfolio continues to moderate, primarily reflecting regulations on retail lending. As of 1Q 2019 the total bank loan portfolio increased by 14.0% YoY, excluding the FX effect[8]. From a segment perspective, corporate, MSME and retail loans increased by 12.9%, 21.8% and 11.2% YoY, respectively. Excluding one-offs in corporate segment, total loan portfolio growth would have stood at an estimated 15.3% YoY with corporate segment up by 17.0%. Overall, even taking into account one-offs, slower growth of the loan portfolio is still evident driven by retail lending regulations on the one hand and normalizing growth rates in business credit following cyclical pick up in 2018 on the other. Bank loans-to-GDP ratio stood at 64.7% in 2018, up by 5.8 pp from end 2017, driven by the higher credit growth and the exchange rate weakening. When measured in constant currency terms, the bank loans-to-GDP ratio remains close to its long-term trend, indicating that there are no signs of excessive lending growth.

Following the contractionary stance in 2018, budget spending accelerated since the beginning of 2019. In Q1 2019 the total government spending went up by 15.5% YoY. The budget deficit stood at an estimated 0.2% of GDP, compared to surplus of 1.9% over the same period last year. Stronger fiscal spending, coupled with sizeable advance payments by the end of 2018, is expected to provide significant growth stimulus in the coming months.

Annual inflation stood at 3.7% as of March 2019, mostly driven by an higher excise tax on tobacco, increased prices on travel and a low base effect. Excluding the one-off impact of excise taxes, CPI inflation remained somewhat below the NBG's 3% target. Low inflation, relatively lower risks to inflation stemming from the external sector, and likely weak demand side pressures on prices, led the NBG to cut the policy rate twice, from 7% at the end of 2018 to 6.5%. During their latest meeting on the 1^st of May monetary policy committee left the policy rate unchanged at 6.5%.

As of the end of March 2019, the USD/GEL exchange rate depreciated by 11.5% YoY, while the EUR/GEL exchange rate depreciated by a more modest 1.5% YoY. Over the same period, the GEL real effective exchange rate was almost unchanged, depreciating by only 0.1% YoY.

Resilience of Georgia's economy have been confirmed by the S&P as the agency improved the outlook to Georgia's credit rating from stable to positive. According to the rating commentary, demonstrated economic resilience amid turbulent region over 2014-18, efforts to widen the exports and foreign investment geography along with the continued investments in infrastructure, country's its strong institutional framework compared to region economies in the wider region, stable public debt levels and prudent policymaking all remain supportive to the country's credit rating.

Going forward

Georgia continues to position itself as an attractive business environment with structural reforms and high GDP growth potential. According to the IMF's recently published World Economic Outlook[9], Georgian economy is projected to increase at 4.6% in 2019 and 5.0% in 2020. Thereafter, over 2021-2024 the economy is expected to expand at 5.2%.

More information on the Georgian economy and financial sector can be found at www.tbcresearch.ge

Unaudited Consolidated Financial Results Overview for 1Q 2019

This statement provides a summary of the unaudited business and financial trends for 1Q 2019 for TBC Bank Group plc and its subsidiaries. The quarterly financial information and trends are unaudited.

TBC Bank Group PLC financial results are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and the Companies Act 2006 applicable to companies reporting under IFRS. Starting from 1 January 2019, TBC Bank adopted IFRS 16. Therefore, the comparative information for 2018 is not comparable to the information presented for 2019.

Please note, that there might be slight differences in previous periods' figures due to rounding.

Income Statement Highlights
in thousands of GEL	1Q'19	4Q'18	1Q'19	Change YoY	Change QoQ
Net interest income	196,958	214,803	175,403	12.3%	-8.3%
Net fee and commission income	41,807	44,064	34,919	19.7%	-5.1%
Other operating non-interest income	33,181	53,395	28,377	16.9%	-37.9%
Credit loss allowance	(33,095)	(44,036)	(39,463)	-16.1%	-24.8%
Operating income after credit loss allowance	238,851	268,226	199,236	19.9%	-11.0%
Operating expenses	(102,514)	(123,904)	(90,932)	12.7%	-17.3%
Profit before tax	136,337	144,322	108,304	25.9%	-5.5%
Income tax expense	(3,015)	(14,235)	(10,778)	-72.0%	-78.8%
Profit for the period	133,322	130,087	97,526	36.7%	2.5%

Balance Sheet and Capital Highlights

	Mar-19		Dec-18			Change QoQ	Mar-18		Change YoY
In thousands of GEL	GEL	USD	GEL	USD			GEL	USD
Total Assets	15,172,306	5,637,329	15,497,993		5,790,179	-2.1%	12,401,047	5,136,285	22.3%
Gross Loans	10,366,915	3,851,867	10,372,582		3,875,283	-0.1%	8,432,916	3,492,758	22.9%
Customer Deposits	9,166,789	3,405,956	9,352,142		3,494,038	-2.0%	7,610,804	3,152,255	20.4%
Total Equity	2,347,756	872,318	2,205,968		824,168	6.4%	1,930,404	799,538	21.6%
Regulatory Tier I Capital (Basel III)	1,746,745	649,010	1,678,716		627,182	4.1%	1,517,250	628,417	15.1%
Regulatory Total Capital (Basel III)	2,421,461	899,703	2,351,269		878,454	3.0%	1,943,425	804,931	24.6%
Regulatory Risk Weighted Assets (Basel III)	12,689,740	4,714,922	13,154,872		4,914,769	-3.5%	10,999,578	4,555,823	15.4%

Key Ratios	1Q'19	4Q'18	1Q'18	Change YoY	Change QoQ
ROE	23.8%	24.3%	21.0%	2.8 pp	-0.5 pp
ROA	3.6%	3.5%	3.2%	0.4 pp	0.1 pp
NIM	6.1%	6.7%	6.9%	-0.8 pp	-0.6 pp
Cost to income	37.7%	39.7%	38.1%	-0.4 pp	-2.0 pp
Cost of risk	1.4%	1.4%	1.3%	0.1 pp	0.0 pp
FX adjusted Cost of Risk	1.4%	1.3%	1.7%	-0.3 pp	0.1 pp
NPL to gross loans	3.3%	3.1%	3.1%	0.2 pp	0.2 pp
Regulatory tier 1 CAR (Basel III)	13.8%	12.8%	13.8%	0.0 pp	1.0 pp
Regulatory total CAR (Basel III)	19.1%	17.9%	17.7%	1.4 pp	1.2 pp
Leverage (times)	6.5x	7.0x	6.4x	0.1x	-0.5x

Income Statement Discussion

Net Interest Income

In thousands of GEL	1Q'19	4Q'18	1Q'18	Change YoY	Change QoQ
Loans and advances to customers	292,055	309,106	256,053	14.1%	-5.5%
Investment securities measured at fair value through other comprehensive income	19,934	16,612	13,168	51.4%	20.0%
Due from other banks	5,866	6,261	4,919	19.3%	-6.3%
Bonds carried at amortised cost	9,429	11,752	8,037	17.3%	-19.8%
Investment in leases	10,631	11,812	7,672	38.6%	-10.0%
Interest income	337,915	355,543	289,849	16.6%	-5.0%
Customer accounts	75,133	70,288	62,922	19.4%	6.9%
Due to credit institutions	49,246	58,247	41,477	18.7%	-15.5%
Subordinated debt	15,672	11,939	9,640	62.6%	31.3%
Finance Lease	637	-	-	NMF	NMF
Debt securities in issue	269	266	407	-33.9%	1.1%
Interest expense	140,957	140,740	114,446	23.2%	0.2%
Net interest income	196,958	214,803	175,403	12.3%	-8.3%

Net interest margin	6.1%	6.7%	6.9%	-0.8 pp	-0.6 pp

NMF - no meaningful figures

1Q 2019 to 1Q 2018 Comparison

Net interest income increased by GEL 21.6 million, or 12.3%, to GEL 197.0 million, compared to 1Q 2018, driven by a GEL 48.1 million, or 16.6%, higher interest income and a GEL 26.5 million, or 23.2%, higher interest expense.

Interest income grew by GEL 48.1 million, or 16.6%, YoY to GEL 337.9 million, mainly due to an increase in interest income from loans and advances to customers of GEL 36.0 million, or 14.1%. This is primarily related to an increase in net loan portfolio of GEL 1,892.5 million, or 23.3%, YoY. This effect was partially offset by a 0.8 pp drop in loan yields, driven by a decrease in rates on both LC and FC-denominated loans. The gain in interest income was also driven by increased interest income from investment securities (comprising of investment securities measured at fair value through other comprehensive income and bonds carried at amortized cost) by GEL 8.2 million, or 38.5%, which resulted from a significant increase in the respective net portfolios by GEL 540.1 million, or 53.4%. This effect was partially offset by a 0.6 pp decline in respective yield, related to the declining refinance rate. The yield on interest earning assets decreased by 1.0 pp to 10.5%, compared to 1Q 2018.

The GEL 26.5 million, or 23.2%, YoY growth in interest expense to GEL 141.0 million in 1Q 2019 was mainly due to GEL 12.2 million, or 19.4%, increase in interest expense on customer accounts and a GEL 7.8 million, or 18.7%, increase in interest expense on amounts due to credit institutions. The rise in interest expense on customer accounts was attributable to a GEL 1,556.0 million, or 20.4%, increase in the respective portfolio and the expenses of the mandatory deposit insurance, which was reclassified to interest expense from administrative and other operating costs starting from January 1st 2019. Without this expense, the growth of interest expense on customer account would have been GEL 10.9 million, or 17.3%. Cost of deposits remained stable on a YoY basis. The higher interest expense on amounts due to credit institutions was attributable to a GEL 422.5 million, or 18.6%, growth in the respective portfolio. This effect was further magnified by a 0.1 pp increase in the respective yield to 7.1%. The cost of funding increased by 0.1 pp and stood at 4.5%.

Consequently, NIM stood at 6.1% in 1Q 2019, compared to 6.9% in 1Q 2018, while the risk adjusted NIM was 4.7%, compared to 5.2% in 1Q 2018.

1Q 2019 to 4Q 2018 Comparison

On a QoQ basis, net interest income declined by GEL 17.8 million, or 8.3% as a result of a GEL 17.6 million, or 5.0% decrease in interest income and a GEL 0.2 million, or 0.2% higher interest expense.

The decrease in interest income by GEL 17.6 million, or 5.0%, QoQ mainly resulted from the drop in interest income on loans by GEL 17.1 million, or 5.5%. This in turn was due to a decline in loan yields by 0.7 pp, which was attributable to a decrease in rates on both LC and FC-denominated loans. The net loan portfolio remained broadly stable on a QoQ basis. The decrease in interest income was also magnified by a decline in interest income from investment in leases by GEL 1.2 million, or 10.0%, due to decrease in the respective yield by 3.1 pp to 20.8%. This effect was partially offset by a GEL 4.4 million or 2.2% increase in portfolio of investment in leases. The yield on interest earning assets decreased by 0.6 pp from 11.1%, compared to 4Q 2018.

The increase in interest expense by GEL 0.2 million, or 0.2%, QoQ was primarily due to a GEL 4.8 million, or 6.9%, rise in interest expense on customer accounts. The main driver was a rise in the respective effective rate by 0.2 pp, to 3.3%, related to an increase in effective rate on LC-denominated deposits by 0.6 pp, to 5.9%. This effect was partially offset by a 0.1 pp drop in effective rate on FC-denominated deposit, to 1.9% and a decrease in customer accounts by GEL 185.4 million, or 2.0% on a QoQ basis. Another contributor to the rise in interest expense was the GEL 3.7 million, or 31.3% higher interest expense on subordinated loans. This resulted from a 0.2 pp rise in respective yield to 9.7%, which was further magnified by a GEL 13.4 million, or 2.1%, increase in the respective portfolio. The increase was offset by a drop in interest expense on amounts due to credit institutions by GEL 9.0 million, or 15.5%. This decline was primarily attributable to decrease in effective rate by 0.5 pp, to 7.1% and a decline in respective portfolio by GEL 338.9 million, or 11.2%, related to decreased borrowing from NBG. The cost of funding increased by 0.1 pp and stood at 4.5%.

Consequently, on a QoQ basis, NIM decreased by 0.6 pp and stood at 6.1%. Meanwhile risk adjusted NIM was down by 0.7 pp and stood at 4.7%.

Fee and Commission Income
In thousands of GEL	1Q'19	4Q'18	1Q'18	Change YoY	Change QoQ
Card operations	28,486	30,830	21,736	31.1%	-7.6%
Settlement transactions	17,617	19,319	16,239	8.5%	-8.8%
Guarantees issued	5,857	6,084	4,220	38.8%	-3.7%
Issuance of letters of credit	1,040	2,081	1,072	-3.0%	-50.0%
Cash transactions	3,169	4,209	4,445	-28.7%	-24.7%
Foreign currency exchange transactions	757	805	490	54.5%	-6.0%
Other	3,976	3,721	2,632	51.1%	6.9%
Fee and commission income	60,902	67,049	50,834	19.8%	-9.2%
Card operations	14,350	17,720	10,467	37.1%	-19.0%
Settlement transactions	2,749	2,347	2,142	28.3%	17.1%
Guarantees issued	402	415	306	31.4%	-3.1%
Letters of credit	389	382	260	49.6%	1.8%
Cash transactions	1,017	1,297	1,117	-9.0%	-21.6%
Foreign currency exchange transactions	28	2	2	NMF	NMF
Other	160	822	1,621	-90.1%	-80.5%
Fee and commission expense	19,095	22,985	15,915	20.0%	-16.9%
Card operations	14,136	13,110	11,269	25.4%	7.8%
Settlement transactions	14,868	16,972	14,097	5.5%	-12.4%
Guarantees	5,455	5,669	3,914	39.4%	-3.8%
Letters of credit	651	1,699	812	-19.8%	-61.7%
Cash transactions	2,152	2,912	3,328	-35.3%	-26.1%
Foreign currency exchange transactions	729	803	488	49.4%	-9.2%
Other	3,816	2,899	1,011	NMF	31.6%
Net fee and commission income	41,807	44,064	34,919	19.7%	-5.1%

NMF - no meaningful figures

1Q 2019 to 1Q 2018 Comparison

In 1Q 2019, net fee and commission income totalled GEL 41.8 million, up by GEL 6.9 million, or 19.7%, compared to 1Q 2018. This mainly resulted from an increase in net fee and commission income from card operations of GEL 2.9 million, or 25.4% and an increase in other net fee and commission income of GEL 2.8 million.

The rise in net fee and commission income from card operations is related to the increased number of active cards and POS terminals by 12.1% and 20.5% respectively. The increase in other net fee and commission income was mainly driven by corporate and investment banking segment performance.

1Q 2019 to 4Q 2018 Comparison

On a QoQ basis, net fee and commission income fell by GEL 2.3 million, or 5.1%, compared to 4Q 2018. This was primarily driven by a decline in net fee and commission income from settlement transactions of GEL 2.1 million, or 12.4% and a GEL 0.8 million decrease in net fee and commission income from cash transaction. This effect was partially offset by a GEL 1.0 million, or 7.8% increase in net fee and commission income from card operations.

The drop is explained by a seasonal high number of transactions, volumes and related fee and commission income in the fourth quarter.

Other Operating Non-Interest Income and Gross Insurance Profit
In thousands of GEL	1Q'19	4Q'18	1Q'18	Change YoY	Change QoQ
Net income from foreign currency operations	25,214	33,029	19,553	29.0%	-23.7%
Share of profit of associates	169	212	307	-45.0%	-20.3%
Gains less losses/(losses less gains) from derivative financial instruments	(158)	(184)	17	NMF	-14.1%
Gains less losses from disposal of investment securities measured at fair value through OCI	68	-	-	NMF	NMF
Revenues from sale of cash-in terminals	214	225	1,026	-79.1%	-4.9%
Revenues from operational leasing	863	1,731	1,575	-45.2%	-50.1%
Gain from sale of investment properties	148	7,392	1,041	-85.8%	-98.0%
Gain from sale of inventories of repossessed collateral	260	1,504	105	NMF	-82.7%
Revenues from non-credit related fines	68	367	142	-52.1%	-81.5%
Gain on disposal of premises and equipment	1,231	117	45	NMF	NMF
Other	1,375	5,149	2,520	-45.4%	-73.3%
Other operating income	4,159	16,485	6,454	-35.6%	-74.8%
Gross insurance profit[10]	3,729	3,853	2,046	82.3%	-3.2%
Other operating non-interest income and gross insurance profit	33,181	53,395	28,377	16.9%	-37.9%
NMF - no meaningful figures

1Q 2019 to 1Q 2018 Comparison

Total other operating non-interest income and gross insurance profit grew by GEL 4.8 million, or 16.9%, to GEL 33.2 million in 1Q 2019. This primarily resulted from the growth in net income from foreign currency operations by GEL 5.7 million, or 29.0% and the increase in gross insurance profit of GEL 1.7 million. This increase was partially offset by a GEL 2.3 million, or 35.6% decrease in other operating income. Higher net income from foreign currency operations resulted from an increased number and volume of FX transactions, broadly consistent with the growth of the scale of business.

Higher gross insurance profit mainly resulted from increased cross-selling of various insurance products. More information about TBC insurance can be found in Annex 23 on pages 33-34.

1Q 2019 to 4Q 2018 Comparison

On a QoQ basis, total other operating non-interest income and gross insurance profit decreased by GEL 20.2 million, or by 37.9%. This mainly resulted from the decline in net income from foreign currency operations by GEL 7.8 million, or 23.7%, a fall in gains from sale of investment property by GEL 7.2 million and a GEL 3.8 million, or 45.4% decrease in other operating income, mainly related to the recognition of an option to buy equity shares of one large corporate client in 4Q 2018. The decrease in net income from foreign currency was mainly driven by seasonal decrease in economic activity in the first quarter as compared to the most active fourth quarter.

Credit Loss Allowance
In thousands of GEL	1Q'19	4Q'18	1Q'18	Change YoY	Change QoQ
Credit loss allowance for loan to customers	(36,416)	(34,398)	(27,999)	30.1%	5.9%
Credit loss allowance for investments in finance lease	(41)	(779)	(240)	-82.9%	-94.7%
Credit loss allowance for performance guarantees and credit related commitments	432	(1,532)	(3,875)	NMF	NMF
Credit loss allowance for other financial assets	2,969	(7,305)	(7,326)	NMF	NMF
Credit loss allowance for financial assets measured at fair value through other comprehensive income	(39)	(22)	(23)	69.6%	77.3%
Total credit loss allowance	(33,095)	(44,036)	(39,463)	-16.1%	-24.8%
Operating income after credit loss allowance	238,851	268,226	199,236	19.9%	-11.0%

Cost of risk	1.4%	1.4%	1.3%	0.1 pp	0.0 pp
NMF - no meaningful figures

1Q 2019 to 1Q 2018 Comparison

In 1Q 2019, total credit loss allowance declined by GEL 6.4 million to GEL 33.1 million compared to 1Q 2018.

This was primarily attributable to a recovery of credit loss allowance for other financial assets driven by a single corporate debtor. The recovery was partially offset by a GEL 8.4 million increase in credit loss allowance for loans to customers. GEL appreciation in 1Q 2018 had a positive effect on credit loss allowance for loans to customers.

In 1Q 2019, the cost of risk stood at 1.4% (1.4% without the FX effect), compared to 1.3% (1.7% without the FX effect) in 1Q 2018.

1Q 2019 to 4Q 2018 Comparison

On a QoQ basis, total credit loss allowance declined by GEL 10.9 million to GEL 33.1 million.

This was attributable to a recovery of credit loss allowance for other financial assets due to a single corporate debtor.

In 1Q 2019, the cost of risk stood at 1.4% (1.4% without the FX effect), compared to 1.4% (1.3% without the FX effect) in 4Q 2018.

Operating Expenses

In thousands of GEL	1Q'19	4Q'18	1Q'18	Change YoY	Change QoQ
Staff costs	57,753	63,213	52,116	10.8%	-8.6%
Provisions for liabilities and charges	(200)	-	-	NMF	NMF
Depreciation and amortization	16,169	12,333	10,470	54.4%	31.1%
Professional services	3,526	5,385	2,962	19.0%	-34.5%
Advertising and marketing services	4,478	10,738	4,527	-1.1%	-58.3%
Expenses related to lease contracts[11]	2,630	-	-	NMF	NMF
Rent	-	6,666	5,864	NMF	NMF
Utility services	1,947	1,602	1,735	12.2%	21.5%
Intangible asset enhancement	2,741	3,672	2,494	9.9%	-25.4%
Taxes other than on income	1,817	1,356	1,656	9.7%	34.0%
Communications and supply	1,435	1,422	1,034	38.8%	0.9%
Stationary and other office expenses	1,119	1,312	1,184	-5.5%	-14.7%
Insurance	229	2,558	485	-52.8%	-91.0%
Security services	504	522	496	1.6%	-3.4%
Premises and equipment maintenance	2,035	1,767	1,035	96.6%	15.2%
Business trip expenses	409	706	320	27.8%	-42.1%
Transportation and vehicles maintenance	410	549	378	8.5%	-25.3%
Charity	1,004	332	280	NMF	NMF
Personnel training and recruitment	291	1,006	176	65.3%	-71.1%
Write-down of current assets to fair value less costs to sell	-	(19)	(3)	-100.0%	-100.0%
Loss on disposal of Inventory	14	1	20	-30.0%	NMF
Loss on disposal of investment properties	-	36	31	-100.0%	-100.0%
Loss on disposal of premises and equipment	233	425	278	-16.2%	-45.2%
Impairment of intangible assets	-	1	-	NMF	-100.0%
Other	3,970	8,321	3,394	17.0%	-52.3%
Administrative & other operating expenses	28,792	48,358	28,346	1.6%	-40.5%
Operating expenses	102,514	123,904	90,932	12.7%	-17.3%
Profit before tax	136,337	144,322	108,304	25.9%	-5.5%
Income tax expense	(3,015)	(14,235)	(10,778)	-72.0%	-78.8%
Profit for the period	133,322	130,087	97,526	36.7%	2.5%

Cost to income	37.7%	39.7%	38.1%	-0.4 pp	-2.0 pp
ROE	23.8%	24.3%	21.0%	2.8 pp	-0.5 pp
ROA	3.6%	3.5%	3.2%	0.4 pp	0.1 pp

NMF - no meaningful figures

1Q 2019 to 1Q 2018 Comparison

In 1Q 2019, total operating expenses expanded by GEL 11.6 million, or 12.7% YoY to GEL 102.5 million, primarily due to an increase in staff costs of GEL 5.6 million, or 10.8% YoY and a rise in depreciation and amortization, of GEL 5.7 million, or 54.4%. The growth in staff cost was mainly driven by a higher scale and performance, while increase in depreciation and amortization was primarily related to IFRS 16.

We have continued to deliver positive operational JAWS ratio[12], leading to a decrease in cost to income ratio by 0.4 pp to 37.7% in 1Q 2019.

1Q 2019 to 4Q 2018 Comparison

On a QoQ basis, total operating expenses decreased by GEL 21.4 million, or 17.3%. This was primarily attributable to a GEL 19.6 million, or 40.5% decline in administrative & other operating expenses and a GEL 5.5 million, or 8.6% drop in staff cost. The decrease in operating expenses was related to seasonally high costs across various categories of expenses in 4Q.

Our cost to income ratio improved by 2.0 pp from 39.7%, compared to 4Q 2018.

Net Income

Net income for the first quarter increased by GEL 3.2 million, or 2.5%, QoQ and by GEL 35.8 million, or 36.7%, YoY and amounted to GEL 133.3 million.

As a result, ROE stood at 23.8%, up by 2.8 pp YoY and down by 0.5 pp QoQ, while ROA stood at 3.6%, up by 0.4 pp YoY and down by 0.1 pp QoQ.

Balance Sheet Discussion
In thousands of GEL	Mar-19	Dec-18	Change QoQ	Mar-18	Change YoY
Cash, due from banks and mandatory cash balances with NBG	2,373,893	2,637,036	-10.0%	2,246,989	5.6%
Loans and advances to customers (Net)	10,029,320	10,038,452	-0.1%	8,136,820	23.3%
Financial securities	1,550,767	1,659,442	-6.5%	1,010,659	53.4%
Fixed and intangible assets & investment property	570,047	561,020	1.6%	531,297	7.3%
Right of use assets	60,951	-	NMF	-	NMF
Other assets	587,328	602,043	-2.4%	475,282	23.6%
Total assets	15,172,306	15,497,993	-2.1%	12,401,047	22.3%
Due to credit institutions	2,692,585	3,031,503	-11.2%	2,270,119	18.6%
Customer accounts	9,166,789	9,352,142	-2.0%	7,610,804	20.4%
Debt securities in issue	13,415	13,343	0.5%	19,371	-30.7%
Subordinated debt	664,330	650,919	2.1%	402,058	65.2%
Other liabilities	287,431	244,118	17.7%	168,291	70.8%
Total liabilities	12,824,550	13,292,025	-3.5%	10,470,643	22.5%
Total equity	2,347,756	2,205,968	6.4%	1,930,404	21.6%

NMF - no meaningful figures

Assets

As of 31 March 2019, the Group's total assets amounted to GEL 15,172.3 million, up by GEL 2,771.3 million, or by 22.3% YoY. The increase was mainly due to the rise in net loans to customers by GEL 1,892.5 million, or by 23.3% YoY. The YoY increase in total assets also resulted from a GEL 540.1 million, or 53.4%, rise in financial securities compared to 31 March 2018.

On a QoQ basis, total assets dropped by GEL 325.7 million, or 2.1%, mainly due to a GEL 263.1 million, or 10.0%, decline in liquid assets (comprising cash, due from banks and mandatory cash balances with the NBG) and a GEL 108.7 million or 6.5% decrease in financial securities. The decline was slightly offset by an increase in fixed and intangible assets & investment property by GEL 70.0 million, or 12.5%.

As of 31 March 2019, the gross loan portfolio reached GEL 10,366.9 million, up by 22.9% YoY and down by 0.1% QoQ. At the same time, gross loans denominated in foreign currency accounted for 59.6% of total loans, compared to 58.2% and 60.1% as of 31 March 2018 and 31 December 2018 respectively.

Asset Quality

Borrowers with FX income

	31-Mar-19		31-Dec-18		31-Mar-18
Segments	% of FX loans	of which borrowers with FX income**	% of FX loans	of which borrowers with FX income**	% of FX loans	of which borrowers with FX income**
Retail	56.0%	28.7%	56.1%	28.5%	49.4%	25.4%
Non-mortgage	19.9%	23.6%	19.9%	24.1%	18.0%	24.5%
Mortgage	81.1%	29.6%	82.7%	29.3%	80.1%	25.6%
Corporate	70.0%	51.4%*	71.5%	51.4%*	75.6%	53.1%*
MSME	52.2%	14.3%	53.1%	15.2%	53.2%	14.9%
Total loan portfolio	59.6%	34.4%	60.1%	34.0%	58.2%	34.0%

(Based on internal estimates)

* Pure exports account for 6.4%, 7.0% and 7.0% of total corporate FX denominated loans as at 31 March 2019, 31 December 2018 and 31 March 2018, respectively.

** FX income implies both direct and indirect income.

PAR 30 by Segments and Currencies	Mar-19			Dec-18			Mar-18
	GEL	FC	Total	GEL	FC	Total	GEL	FC	Total
Corporate	1.1%	1.2%	1.2%	0.7%	0.3%	0.4%	0.0%	1.1%	0.9%
Retail	4.4%	1.8%	2.9%	4.0%	1.5%	2.6%	2.9%	1.7%	2.3%
MSME	2.7%	3.5%	3.1%	2.4%	3.2%	2.8%	1.9%	3.5%	2.7%
Total	3.2%	1.9%	2.4%	2.8%	1.4%	2.0%	2.2%	1.9%	2.0%
Loans overdue by more than 30 days to gross loans

Total

Total PAR 30 increased by 0.4 pp on QoQ basis as well as on YoY basis, standing at 2.4%, which was driven by increase of PAR 30 in all segments.

Retail Segment

The retail segment's PAR 30 amounted to 2.9%, up by 0.3 pp QoQ and by 0.6pp YoY. The increase was mainly attributable to higher yield products such as credit cards and unsecured consumer loans, which have been substantially reduced by new regulations this year.

Corporate

The corporate segment's PAR 30 amounted to 1.2%, up by 0.8 pp QoQ and by 0.3 pp YoY. This was driven by two mid-sized corporate clients.

MSME

The MSME segment's PAR 30 increased by 0.3 pp QoQ and by 0.4 pp YoY and stood at 3.1% as of 31 March 2019. This was mainly driven by SME sub-segment.

NPLs	Mar-19			Dec-18			Mar-18
	GEL	FC	Total	GEL	FC	Total	GEL	FC	Total
Corporate	1.7%	3.0%	2.6%	1.6%	3.1%	2.7%	0.9%	3.0%	2.5%
Retail	4.3%	2.3%	3.2%	3.7%	2.3%	2.9%	2.4%	3.0%	2.7%
MSME	3.0%	5.6%	4.4%	2.6%	5.5%	4.2%	2.6%	6.2%	4.5%
Total	3.3%	3.2%	3.3%	2.9%	3.3%	3.1%	2.2%	3.7%	3.1%

Total

Total NPLs rose by 0.2 pp on QoQ and YoY basis and stood at 3.3%. The increase was mainly driven by consumer loans.

Retail Segment

The retail segment's NPLs remained increased by 0.3 pp QoQ and by 0.5 pp YoY and stood at 3.2%, driven by consumer loans.

Corporate

On both QoQ and YoY basis, the corporate segment's NPLs ratio remained broadly stable.

MSME

The MSME segment's NPLs increased by 0.2 pp QoQ and was broadly stable on YoY basis. QoQ increase was due to both SME and micro sub-segments.

NPLs Coverage	Mar-19		Dec-18		Mar-18
	Exc. Collateral	Incl. Collateral	Exc. Collateral	Incl. Collateral	Exc. Collateral	Incl. Collateral
Corporate	95.4%	288.7%	96.4%	286.9%	103.8%	275.5%
Retail	123.8%	190.0%	132.4%	204.4%	157.6%	235.6%
MSME	71.4%	175.2%	68.4%	174.0%	70.2%	179.2%
Total	100.1%	210.8%	102.7%	216.4%	114.6%	225.8%

Liabilities

As of 31 March 2019, TBC Bank's total liabilities amounted to GEL 12,824.6 million, up by GEL 2,353.9 million, or by 22.5% YoY. This primarily resulted from a GEL 1,556.0 million, or 20.4%, increase in customer accounts and GEL 422.5 million or 18.6% increase in amounts due to credit institutions.

On a QoQ basis, total liabilities dropped by GEL 467.5 million, or 3.5%. The decrease was mainly driven by decline in amounts due to credit institutions by GEL 338.9 million, or 11.2% and in customer accounts by GEL 185.4 million, or 2.0%. The decrease in customer accounts on a QoQ basis was related to seasonality, reduction in loan growth due to new regulation and retail deposit reduction mostly in January before the settlement of the dispute with NBG (for further details please refer to our website: www.tbcbankgroup.com).

Liquidity

As of 31 March 2019 the Bank's liquidity ratio, as defined by the NBG, stood at 35.9%, compared to 33.3% and 30.8% as of 31 December 2018 and 31 March 2018 respectively, above the NBG limit of 30%. As of 31 March 2019, the total liquidity coverage ratio (LCR), as defined by the NBG, was 117.5%, above the 100.0% limit. The LCR in GEL and FC stood at 111.9% and 122.2% respectively, above the respective limits of 75% and 100%.

Total Equity

As of 31 March 2019, TBC's total equity totalled GEL 2,347.8 million, up by GEL 417.4 million from GEL 1,930.4 million as of 31 March 2018. The YoY change in equity was primarily attributable to net profit contribution of GEL 473.2 million during last 12 months, which was partially offset by dividend distribution of GEL 88.9 million in May 2018.

On a QoQ basis TBC's total equity increased by GEL 141.8 million, or 6.4%. The QoQ change in equity was due to increase in net income by GEL 133.3 million.

Regulatory Capital

As of 31 March 2019 the Bank's Basel III tier 1 and total capital adequacy ratios (CAR) stood at 13.8% and 19.1%, respectively, compared to the minimum required levels of 11.9% and 16.9%. In comparison, as of 31 March 2018, the Bank's Basel III tier 1 and total capital adequacy ratios (CAR) stood at 13.8% and 17.7%, respectively, higher than the minimum required levels of 10.2% and 15.0%. As of 31 December 2018 the Bank's Basel III tier 1 and total capital adequacy ratios (CAR) stood at 12.8% and 17.9%, respectively, higher than the minimum required levels of 11.8% and 16.7%. We are exploring the opportunity to further strengthen our capital structure through AT1 security, which could be in the form of an USD denominated AT1 note issuance in 2019.

In 31 March 2019, the Bank's Basel III tier 1 capital amounted to GEL 1,746.7 million, up by GEL 229.5 million, or 15.1%, compared to March 2018, due to an increase in net income. The Bank's Basel III total capital amounted to GEL 2,421.5 million, up by GEL 478.0 million, or 24.6%, YoY. The increase in total capital was attributable to the generated income within the period, as well as attraction of new subordinated loans with total amount GEL 230.5 million. Risk weighted assets stood at GEL 12,689.7 million as of 31 March 2019, up by GEL 1,690.2 million, or 15.4%, compared to March 2018, mainly related to the rise in loan book, as well as growth in risk weighted assets for operational risk.

On a QoQ basis, the Bank's Basel III tier 1 capital amounted increased by GEL 68.0 million, or 4.1%, compared to December 2018, while the Bank's Basel III total capital increased by GEL 70.2 million, or 3.0%, YoY. The increase in tier 1 capital and total capital was attributable to the increase in net income. Risk weighted assets decreased by GEL 465.1 million, or 3.5%, compared to December 2018, mainly related to the optimization of the credit risk weighted assets, as well as decrease in market risk.

Results by segments and subsidiaries

The segment definitions are as follows:

· Corporate - a legal entity/group of affiliated entities with an annual revenue exceeding GEL 12.0 million, or which have been granted facilities of more than GEL 5.0 million. Some other business customers may also be assigned to the corporate segment or transferred to MSME on a discretionary basis;

· MSME (Micro, Small and Medium) - business customers who are not included in either the corporate or the retail segments; or legal entities who have been granted a pawn shop loan; or individual customers of the newly launched, fully digital bank - Space;

· Retail - non-business individual customers or individual business customers who have been granted mortgage loans; all individual customers are included in retail deposits;

· Corporate Centre - comprises the Treasury, other support and back office functions, and the non-banking subsidiaries of the Group;

Business customers are all legal entities or individuals who have been granted a loan for business purposes.

Summary of key changes:

· Some customers were moved to the corporate segment on a discretionary basis considering practical aspects of client account servicing and administration. As a result, the corporate loan portfolio increased by GEL 128 million and the corporate deposit portfolio grew by GEL 70 million.

Income Statement by Segments

1Q'19	Retail	MSME	Corporate	Corp.Centre	Total
Interest income	145,814	69,376	78,904	43,821	337,915
Interest expense	(34,666)	(2,204)	(38,898)	(65,189)	(140,957)
Net transfer pricing	(17,024)	(23,463)	11,585	28,902	-
Net interest income	94,124	43,709	51,591	7,534	196,958
Fee and commission income	44,021	5,255	11,250	376	60,902
Fee and commission expense	(15,727)	(1,666)	(1,603)	(99)	(19,095)
Net fee and commission income	28,294	3,589	9,647	277	41,807
Gross insurance profit	-	-	-	3,729	3,729
Net income from foreign currency operations	6,159	4,446	12,207	(1,225)	21,587
Foreign exchange translation gains less losses/(losses less gains)	-	-	-	3,627	3,627
Net losses from derivative financial instruments	(148)	-	-	(10)	(158)
Gains less losses from disposal of investment securities measured at fair value through OCI	-	-	-	68	68
Other operating income	2,409	460	264	1,026	4,159
Share of profit of associates	-	-	-	169	169
Other operating non-interest income and insurance profit	8,420	4,906	12,471	7,384	33,181
Credit loss allowance for loan to customers	(27,359)	(9,485)	428	-	(36,416)
Credit loss allowance for performance guarantees and credit related commitments	393	183	(144)	-	432
Credit loss allowance for investments in finance lease	-	-	-	(41)	(41)
Credit loss allowance for other financial assets	38	-	3,864	(933)	2,969
Credit loss allowance for financial assets measured at fair value through other comprehensive income	-	-	(39)	-	(39)
Profit before G&A expenses and income taxes	103,910	42,902	77,818	14,221	238,851
Staff costs	(33,134)	(11,368)	(8,164)	(5,087)	(57,753)
Depreciation and amortization	(12,499)	(2,015)	(717)	(938)	(16,169)
Provision for liabilities and charges	-	-	-	200	200
Administrative and other operating expenses	(17,769)	(4,800)	(2,925)	(3,298)	(28,792)
Operating expenses	(63,402)	(18,183)	(11,806)	(9,123)	(102,514)
Profit before tax	40,508	24,719	66,012	5,098	136,337
Income tax expense	(5,217)	(3,750)	(9,871)	15,823	(3,015)
Profit for the year	35,291	20,969	56,141	20,921	133,322

Portfolios by Segments
In thousands of GEL	Mar-19	Dec-18	Mar-18
Loans and advances to customers
Non-mortgage	1,882,816	1,989,516	1,961,411
Mortgage	2,695,457	2,709,183	2,007,914
Retail	4,578,273	4,698,699	3,969,325
Corporate	3,364,911	3,177,289	2,489,516
MSME	2,423,731	2,496,594	1,974,075
Total loans and advances to customers (Gross)	10,366,915	10,372,582	8,432,916
Less: credit loss allowance for loans to customers	(337,595)	(334,130)	(296,096)
Total loans and advances to customers (Net)	10,029,320	10,038,452	8,136,820

Customer accounts
Retail	4,914,927	5,103,971	4,197,277
Corporate	3,316,436	3,230,653	2,474,559
MSME	935,426	1,017,518	938,968
Total Customer accounts	9,166,789	9,352,142	7,610,804

Retail Banking

As of 31 March 2019, retail loans stood at GEL 4,578.3 million, up by GEL 608.9 million, or 15.3%, YoY and they accounted for 39.3% market share of total individual loans. Compared to December 2018, retail loans declined by GEL 120.4 million, or 2.6%. As of March 2019 foreign currency loans represented 56.0% of the total retail loan portfolio.

In the reporting period, retail deposits stood at GEL 4,914.9 million, up by GEL 717.7 million, or 17.1%, YoY and accounted for 39.5% market share of total individual deposits. On a QoQ basis, retail deposits decreased by GEL 189 million, or 3.7%. As of 31 March 2019 term deposits accounted for 54.3% of the total retail deposit portfolio, while foreign currency deposits represented 80.8% of the total.

In 1Q 2019, retail loan yields and deposit rates stood at 12.8% and 2.8%, respectively. The segment's cost of risk on loans was 2.4% . The retail segment contributed 26.5%, or GEL 35.3 million, to the total net income in 1Q 2019.

Corporate Banking

As of 31 March 2019, corporate loans amounted to GEL 3,364.9 million, up by GEL 747.4 million, or 30.0%, YoY and up by GEL 59.7 million, or 1.9% QoQ without re-segmentation effect[13]. Foreign currency loans accounted for 70.0% of the total corporate loan portfolio as of March 2019. The market share of total legal entities loans stood at 37.4%.

As of the same date, corporate deposits totalled GEL 3,316.4 million, up by GEL 771.9 million, or 31.2%, YoY and up by GEL 15.9 million, or 0.5%, QoQ without re-segmentation effect[14]. Foreign currency corporate deposits represented 41.9% of the total corporate deposit portfolio. The market share of total legal entities deposits stood at 41.4%.

In 1Q 2019, corporate loan yields and deposit rates stood at 9.5% and 4.9%, respectively. In the same period, the cost of risk on loans was -0.1%. In terms of profitability, the corporate segment's net profit reached GEL 56.1 million, or 42.1%, of the total net income.

MSME Banking

As of 31 March 2019, MSME loans amounted to GEL 2,423.7 million, up by GEL 577.6 million, or 29.3%, YoY and up by GEL 55.1 million, or 2.2%, QoQ without re-segmentation effect¹. Foreign currency loans accounted for 52.2% of the total MSME portfolio.

As of the same date, MSME deposits stood at GEL 935.4 million, up by GEL 66.4 million, or 7.1%, YoY and down by GEL 12.2 million, or 1.2%, QoQ without re-segmentation effect². Foreign currency MSME deposits represented 46.1% of the total MSME deposit portfolio.

In 1Q 2019, MSME loan yields and deposit rates stood at 11.7% and 0.9% respectively, while the cost of risk on loans was 1.6%. In terms of profitability, net profit for the MSME segment amounted to GEL 21.0 million, or 15.7%, of the total net income.

Consolidated Financial Statements of TBC Bank Group PLC

Consolidated Balance Sheet
In thousands of GEL	Mar-19	Dec-18	Mar-18
Cash and cash equivalents	927,830	1,166,911	1,245,562
Due from other banks	29,981	47,316	23,311
Mandatory cash balances with National Bank of Georgia	1,416,082	1,422,809	978,116
Loans and advances to customers	10,029,320	10,038,452	8,136,820
Investment securities measured at fair value through other comprehensive income	889,137	1,005,239	580,784
Bonds carried at amortised cost	661,630	654,203	429,875
Investments in finance leases	208,243	203,802	145,546
Investment properties	84,055	84,296	76,690
Current income tax prepayment	11,102	2,116	8,454
Deferred income tax asset	1,973	2,097	2,527
Other financial assets	124,093	167,518	127,851
Other assets	207,518	192,792	160,662
Premises and equipment	366,327	367,504	369,610
Right of use assets	60,951	-	-
Intangible assets	119,665	109,220	84,997
Goodwill	31,798	31,286	28,657
Investments in associates	2,601	2,432	1,585
TOTAL ASSETS	15,172,306	15,497,993	12,401,047
LIABILITIES
Due to Credit Institutions	2,692,585	3,031,503	2,270,119
Customer accounts	9,166,789	9,352,142	7,610,804
Other financial liabilities	171,421	98,714	90,499
Current income tax liability	36	63	44
Debt Securities in issue	13,415	13,343	19,371
Deferred income tax liability	19,337	22,237	663
Provisions for liabilities and charges	18,250	18,767	12,467
Other liabilities	78,387	104,337	64,618
Subordinated debt	664,330	650,919	402,058
TOTAL LIABILITIES	12,824,550	13,292,025	10,470,643
EQUITY
Share capital	1,672	1,650	1,626
Share premium	831,773	796,854	753,298
Retained earnings	1,657,330	1,523,879	1,266,299
Group reorganisation reserve	(162,166)	(162,166)	(162,166)
Share based payment reserve	(43,080)	(16,294)	(24,608)
Revaluation reserve for premises	56,701	57,240	70,039
Fair value reserve	9,702	8,680	4,146
Cumulative currency translation reserve	(7,295)	(6,937)	(7,425)
Net assets attributable to owners	2,344,637	2,202,906	1,901,209
Non-controlling interest	3,119	3,062	29,195
TOTAL EQUITY	2,347,756	2,205,968	1,930,404
TOTAL LIABILITIES AND EQUITY	15,172,306	15,497,993	12,401,047

Consolidated Statement of Profit or Loss and Other Comprehensive Income
In thousands of GEL	1Q'19	4Q'18	1Q'18
Interest income	337,915	355,543	289,849
Interest expense	(140,957)	(140,740)	(114,446)
Net interest income	196,958	214,803	175,403
Fee and commission income	60,902	67,049	50,834
Fee and commission expense	(19,095)	(22,985)	(15,915)
Net fee and commission income	41,807	44,064	34,919
Net insurance premiums earned	7,329	7,023	4,435
Net insurance claims incurred and agents' commissions	(3,600)	(3,170)	(2,389)
Insurance profit	3,729	3,853	2,046
Net income from foreign currency operations	21,587	28,258	17,080
Net gain/(losses) from foreign exchange translation	3,627	4,771	2,473
Net gains/(losses) from derivative financial instruments	(158)	(184)	17
Gains less losses from disposal of investment securities measured at fair value through other comprehensive income	68	-	-
Other operating income	4,159	16,485	6,454
Share of profit of associates	169	212	307
Other operating non-interest income	29,452	49,542	26,331
Credit loss allowance for loan to customers	(36,416)	(34,398)	(27,999)
Credit loss allowance for investments in finance lease	(41)	(779)	(240)
Credit loss allowance for performance guarantees and credit related commitments	432	(1,532)	(3,875)
Credit loss allowance for other financial assets	2,969	(7,305)	(7,326)
Credit loss allowance for financial assets measured at fair value through other comprehensive income	(39)	(22)	(23)
Operating income after credit loss allowance for impairment	238,851	268,226	199,236
Staff costs	(57,753)	(63,213)	(52,116)
Depreciation and amortization	(16,169)	(12,333)	(10,470)
(Provision for)/ recovery of liabilities and charges	200	-	-
Administrative and other operating expenses	(28,792)	(48,358)	(28,346)
Operating expenses	(102,514)	(123,904)	(90,932)
Profit before tax	136,337	144,322	108,304
Income tax expense	(3,015)	(14,235)	(10,778)
Profit for the period	133,322	130,087	97,526
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve	1,023	3,757	2,374
Exchange differences on translation to presentation currency	(358)	340	(67)
Items that will not be reclassified to profit or loss:
Revaluation of premises and equipment	(539)	10,749	-
Income tax recorded directly in other comprehensive income	-	2,788	-
Other comprehensive income for the period	126	17,634	2,307
Total comprehensive income for the period	133,448	147,721	99,833
Profit attributable to:
- Shareholders of TBCG	133,237	129,952	95,758
- Non-controlling interest	85	135	1,768
Profit for the period	133,322	130,087	97,526
Total comprehensive income is attributable to:
- Shareholders of TBCG	133,363	147,628	98,031
- Non-controlling interest	85	93	1,802
Total comprehensive income for the period	133,448	147,721	99,833

Consolidated Statements of Cash Flows
In thousands of GEL	31-Mar-19	31-Mar-18
Cash flows from/(used in) operating activities
Interest received	332,214	286,870
Interest paid	(128,621)	(114,810)
Fees and commissions received	61,001	50,177
Fees and commissions paid	(19,076)	(15,988)
Insurance premium received	15,568	10,632
Insurance claims paid	(2,083)	(4,547)
Income received from trading in foreign currencies	21,588	17,080
Other operating income received	(7,403)	(6,747)
Staff costs paid	(68,852)	(81,180)
Administrative and other operating expenses paid	(39,165)	(34,351)
Income tax paid	(15,619)	(113)
Cash flows from operating activities before changes in operating assets and liabilities	149,552	107,023
Net change in operating assets
Due from other banks and mandatory cash balances with the National Bank of Georgia	44,243	24,793
Loans and advances to customers	(14,169)	(254,413)
Investment in finance lease	(9)	(10,397)
Other financial assets	49,780	27,467
Other assets	(6,977)	2,262
Net change in operating liabilities
Due to other banks	159,324	27,601
Customer accounts	(199,925)	142,411
Other financial liabilities	11,798	(10,447)
Financial lease liabilities	(3,202)	-
Other liabilities and provision for liabilities and charges	2,039	406
Net cash from operating activities	192,454	56,706
Cash flows from/(used in) investing activities
Acquisition of investment securities measured at fair value through other comprehensive income	(29,994)	(80,411)
Proceeds from redemption at maturity of investment securities measured at fair value through other comprehensive income	145,921	158,849
Acquisition of bonds carried at amortised cost	(119,747)	(56,429)
Proceeds from redemption of bonds carried at amortised cost	98,613	71,405
Acquisition of premises, equipment and intangible assets	(24,729)	(15,394)
Disposal of premises, equipment and intangible assets	4,965	910
Proceeds from disposal of investment property	1,414	4,192
Acquisition of subsidiaries, net of cash acquired	(596)	-
Net cash used in investing activities	75,847	83,122
Cash flows from/(used in) financing activities
Proceeds from other borrowed funds	267,489	645,260
Redemption of other borrowed funds	(778,163)	(935,698)
Proceeds from subordinated debt	-	-
Redemption of subordinated debt	-	-
Proceeds from debt securities in issue	(14)	75
Redemption of debt securities in issue	-	-
Dividends paid	-	-
Issue of ordinary shares	-	17,397
Net cash flows from financing activities	(510,688)	(272,966)
Effect of exchange rate changes on cash and cash equivalents	3,306	(52,777)
Net increase in cash and cash equivalents	(239,081)	(185,915)
Cash and cash equivalents at the beginning of the year	1,166,911	1,431,477
Cash and cash equivalents at the end of the year	927,830	1,245,562

Key Ratios

Average Balances

The average balances included in this document are calculated as the average of the relevant monthly balances as of each month-end. Balances have been extracted from TBC's unaudited and consolidated management accounts prepared from TBC's accounting records. These were used by the management for monitoring and control purposes.

Key Ratios

Ratios (based on monthly averages, where applicable)	1Q'19	4Q'18	1Q'18
ROE¹	23.8%	24.3%	21.0%
ROA²	3.6%	3.5%	3.2%
ROE before credit loss allowance³	29.7%	32.5%	29.6%
Cost to income⁴	37.7%	39.7%	38.1%
Cost of risk⁵	1.4%	1.4%	1.3%
FX adjusted cost of risk⁶	1.4%	1.3%	1.7%
NIM⁷	6.1%	6.7%	6.9%
Risk adjusted NIM⁸	4.7%	5.4%	5.2%
Loan yields⁹	11.5%	12.2%	12.3%
Risk adjusted loan yields¹⁰	10.1%	10.9%	10.6%
Deposit rates¹¹	3.3%	3.1%	3.3%
Yields on interest earning assets¹²	10.5%	11.1%	11.5%
Cost of funding¹³	4.5%	4.4%	4.4%
Spread¹⁴	6.0%	6.6%	7.1%
PAR 90 to gross loans¹⁵	1.3%	1.2%	1.2%
NPLs to gross loans¹⁶	3.3%	3.1%	3.1%
NPLs coverage¹⁷	100.1%	102.7%	114.6%
NPLs coverage with collateral¹⁸	210.8%	216.4%	225.8%
Credit loss level to gross loans¹⁹	3.3%	3.2%	3.5%
Related party loans to gross loans²⁰	0.1%	0.1%	0.1%
Top 10 borrowers to total portfolio²¹	9.6%	10.1%	9.4%
Top 20 borrowers to total portfolio²²	13.5%	14.2%	13.4%
Net loans to deposits plus IFI Funding²³	90.5%	89.9%	93.2%
Net stable funding ratio*²⁴	123.8%	124.2%	124.5%
Liquidity coverage ratio²⁵	117.5%	113.9%	104.6%
Leverage²⁶	6.5x	7.0x	6.4x
Regulatory tier 1 CAR (Basel III)²⁷	13.8%	12.8%	13.8%
Regulatory total 1 CAR (Basel III)²⁸	19.1%	17.9%	17.7%

(*)Per updated methodology.

Ratio definitions

1. Return on average total equity (ROE) equals net income attributable to owners divided by the monthly average of total shareholders' equity attributable to the PLC's equity holders for the same period; annualised where applicable.

2. Return on average total assets (ROA) equals net income of the period divided by the monthly average total assets for the same period. Annualised where applicable.

3. Return on average total equity (ROE) before credit loss allowance equals net income attributable to owners excluding all credit loss allowance divided by the monthly average of total shareholders 'equity attributable to the PLC's equity holders for the same period.

4. Cost to income ratio equals total operating expenses for the period divided by the total revenue for the same period. (Revenue represents the sum of net interest income, net fee and commission income and other non-interest income).

5. Cost of risk equals credit loss allowance for loans to customers divided by monthly average gross loans and advances to customers; annualised where applicable.

6. FX adjusted cost of risk is calculated based on currency rates of the respective prior periods.

7. Net interest margin (NIM) is net interest income divided by monthly average interest-earning assets; annualised where applicable. Interest-earning assets include investment securities excluding corporate shares, net investment in finance lease, net loans, and amounts due from credit institutions. The latter excludes all items from cash and cash equivalents, excludes EUR mandatory reserves with NBG which currently has negative interest, and includes other earning items from due from banks.

8. Risk Adjusted Net interest margin is NIM minus the cost of risk without one-offs and currency effect.

9. Loan yields equal interest income on loans and advances to customers divided by monthly average gross loans and advances to customers; annualised where applicable.

10. Risk Adjusted Loan yield is loan yield minus the cost of risk without one-offs and currency effect.

11. Deposit rates equal interest expense on customer accounts divided by monthly average total customer deposits; annualised where applicable.

12. Yields on interest earning assets equal total interest income divided by monthly average interest earning assets; annualised where applicable.

13. Cost of funding equals total interest expense divided by monthly average interest bearing liabilities; annualised where applicable.

14. Spread equals difference between yields on interest earning assets (including but not limited to yields on loans, securities and due from banks) and cost of funding (including but not limited to cost of deposits, cost on borrowings and due to banks).

15. PAR 90 to gross loans ratio equals loans for which principal or interest repayment is overdue for more than 90 days divided by the gross loan portfolio for the same period.

16. NPLs to gross loans equals loans with 90 days past due on principal or interest payments, and loans with well-defined weakness, regardless of the existence of any past-due amount or of the number of days past due divided by the gross loan portfolio for the same period.

17. NPLs coverage ratio equals total credit loss allowance for loans to customers calculated per IFRS 9 divided by the NPL loans.

18. NPLs coverage with collateral ratio equals credit loss allowance for loans to customers per IFRS 9 plus total collateral amount of NPL loans (excluding third party guarantees) discounted at 30-50% depending on segment type divided by the NPL loans.

19. Credit loss level to gross loans equals credit loss allowance for loans to customers divided by the gross loan portfolio for the same period.

20. Related party loans to total loans equals related party loans divided by the gross loan portfolio.

21. Top 10 borrowers to total portfolio equals the total loan amount of the top 10 borrowers divided by the gross loan portfolio.

22. Top 20 borrowers to total portfolio equals the total loan amount of the top 20 borrowers divided by the gross loan portfolio.

23. Net loans to deposits plus IFI funding ratio equals net loans divided by total deposits plus borrowings received from international financial institutions.

24. Net stable funding ratio equals the available amount of stable funding divided by the required amount of stable funding as defined in Basel III.

25. Liquidity coverage ratio equals high-quality liquid assets divided by the total net cash outflow amount as defined by the NBG.

26. Leverage equals total assets to total equity.

27. Regulatory tier 1 CAR equals tier I capital divided by total risk weighted assets, both calculated in accordance with the Pillar 1 requirements of the NBG Basel III standards. The reporting started from the end of 2017. Calculations are made for TBC Bank stand-alone, based on local standards.

28. Regulatory total CAR equals total capital divided by total risk weighted assets, both calculated in accordance with the Pillar 1 requirements of the NBG Basel III standards. The reporting started from the end of 2017. Calculations are made for TBC Bank stand-alone, based on local standards.

Exchange Rates

To calculate the QoQ growth of the Balance Sheet items without the currency exchange rate effect, we used the USD/GEL exchange rate of 2.6766 as of 31 December 2018. For the calculations of the YoY growth without the currency exchange rate effect, we used the USD/GEL exchange rate of 2.4144 as of 31 March 2018. As of 31 March 2019 the USD/GEL exchange rate equalled 2.6914. For P&L items growth calculations without currency effect, we used the average USD/GEL exchange rate for the following periods: 1Q 2019 of 2.6680, 4Q 2018 of 2.6752, 1Q 2018 of 2.4854.

Additional Disclosures

Subsidiaries of TBC Bank Group PLC[15]

	Ownership / voting % as of 31 March 2019	Country	Year of incorporation	Industry	Total Assets (after elimination)
Subsidiary	Ownership / voting % as of 31 March 2019	Country	Year of incorporation	Industry	Amount GEL'000	% in TBC Group
JSC TBC Bank	99.9%	Georgia	1992	Banking	14,746,354	97.19%
United Financial Corporation JSC	98.7%	Georgia	2001	Card processing	9,393	0.06%
TBC Capital LLC	100.0%	Georgia	1999	Brokerage	6,082	0.04%
TBC Leasing JSC	99.6%	Georgia	2003	Leasing	269,612	1.78%
TBC Kredit LLC	100.0%	Azerbaijan	1999	Non-banking credit institution	30,484	0.20%
Banking System Service Company LLC	100.0%	Georgia	2009	Information services	956	0.01%
TBC Pay LLC	100.0%	Georgia	2008	Processing	32,797	0.22%
Index LLC	100.0%	Georgia	2009	Real estate management	611	0.00%
Real Estate Management Fund JSC*	0.0%	Georgia	2010	Real estate management	21	0.00%
TBC Invest LLC	100.0%	Israel	2011	PR and marketing	156	0.00%
BG LLC*	0.0%	Georgia	2018	Asset management	12,786	0.08%
JSC TBC Insurance	100.0%	Georgia	2014	Insurance	58,607	0.39%
Swoop JSC	100.0%	Georgia	2010	Retail Trade	922	0.01%
All Property LTD	90.0%	Georgia	2013	Real Estate	134	0.00%
GE Commerce LTD	100.0%	Georgia	2018	Retail Trade	1,053	0.01%
(*)The Group has de facto control over these subsidiaries

1) Earnings per Share

In GEL	1Q 2019	4Q 2018	1Q 2018
Earnings per share for profit attributable to the owners of the Group:
- Basic earnings per share	2.45	2.40	1.80
- Diluted earnings per share	2.45	2.37	1.79

Source: IFRS Consolidated

2) Sensitivity Analysis

Sensitivity Analysis	31-Mar-19	10% Currency Devaluation Effect
NIM*		-0.14%
Technical Cost of Risk		+0.11%
Regulatory Total Capital	2,421	2,466
Regulatory Capital adequacy ratios tier 1 and total capital decrease by		0.63% - 0.82%

(*) Linear depreciation is assumed for NIM sensitivity analysis

Source: IFRS statements and Management Figures

3) The share of selected FC denominated P/L Items

Selected P&L Items 1Q 2019	FC % of Respective Totals
Interest Income	40%
Interest Expense	49%
Fee and Commission Income	30%
Fee and Commission Expense	67%
Administrative Expenses	18%

Source: IFRS statements and Management figures

4) Open Interest Rate Position as of 31 March 2019

Open interest rate position in GEL	GEL 662 m		Open interest rate position in FC	GEL 2,610 m
	GEL m	% share in totals		GEL m	% share in totals
Assets	3,361	22%	Assets	4,353	29%
Securities with fixed yield(≤1y)*	391	25%	Nostro**	85	24%
Securities with floating yield	542	35%	NBG Reserves**	1,416	96%
Loans with floating yield	2,272	22%	NBG Deposits	0	0%
Reserves in NBG	137	9%	Libor Loans	2,852	28%
Interbank loans& Deposits & Repo	19	5%	Interest Rate Swap	0	0%
Liabilities	2,699	21%
Current accounts***	788	9%	Liabilities	1,743	14%
Saving accounts***	524	6%	Senior Loans	1,324	56%
Refinancing Loan of NBG & MoF Deposits	808	34%	Subordinated Loans	419	63%
Interbank Loans &Deposits & Repo	63	20%
IFI Borrowings	516	22%

(*) 52% of the less than 1 year securities are maturing in 6 months.

(**) Income on NBG reserves and Nostros are calculated as benchmark minus margin whereby benchmarks are correlated with Libor. From June 2018, according to NBG regulation is it possible to apply negative interest rates on NBG reserves and correspondent accounts. However, negative rate is floored by 0% in case of USD and by (-0.6)% in case of EUR accounts.

(***) The Bank considers that current and saving deposits promptly react to interest rate changes on the market (within 1 month prior notification).

5) Yields and Rates

Yields and Rates	1Q'19	4Q'18	3Q'18	2Q'18	1Q'18
Loan yields	11.5%	12.2%	12.4%	12.5%	12.3%
Retail loan yields GEL	19.6%	20.7%	20.8%	21.3%	20.5%
Retail loan yields FX	7.4%	7.8%	7.9%	8.0%	8.4%
Retail Loan Yields	12.8%	13.6%	14.1%	14.7%	14.6%
Corporate loan yields GEL	10.8%	10.9%	11.0%	11.4%	11.2%
Corporate loan yields FX	9.0%	9.7%	9.1%	8.7%	8.6%
Corporate Loan Yields	9.5%	10.0%	9.6%	9.4%	9.2%
MSME loan yields GEL	15.7%	16.2%	16.6%	15.9%	15.0%
MSME loan yields FX	8.1%	8.6%	8.9%	8.5%	8.9%
MSME Loan Yields	11.7%	12.2%	12.6%	12.0%	11.3%
Deposit rates	3.3%	3.1%	3.3%	3.3%	3.3%
Retail deposit rates GEL	5.4%	4.6%	4.4%	4.3%	4.4%
Retail deposit rates FX	2.2%	2.2%	2.3%	2.4%	2.5%
Retail Deposit Yields	2.8%	2.6%	2.7%	2.7%	2.8%
Corporate deposit rates GEL	7.5%	6.8%	7.5%	7.9%	8.0%
Corporate deposit rates FX	1.6%	1.8%	2.0%	1.9%	2.0%
Corporate Deposit Yields	4.9%	4.5%	4.9%	5.2%	5.2%
MSME deposit rates GEL	1.4%	1.6%	1.7%	1.7%	1.8%
MSME deposit rates FX	0.3%	0.3%	0.4%	0.4%	0.5%
MSME Deposit Yields	0.9%	1.0%	1.0%	1.0%	1.1%
Yields on Securities	7.5%	7.6%	7.8%	7.7%	8.1%

Source: IFRS Consolidated

6) Risk Adjusted Yields & Cost of Risk
Risk-adjusted Yields	1Q'19	4Q'18	3Q'18	2Q'18	1Q'18
Loan yields	10.1%	10.9%	10.9%	10.8%	10.6%
Retail Loan Yields	10.4%	10.6%	11.6%	12.1%	11.6%
Corporate Loan Yields	9.6%	10.1%	9.1%	8.6%	9.3%
MSME Loan Yields	10.1%	12.4%	11.8%	11.1%	9.8%

	1Q'19	4Q'18	3Q'18	2Q'18	1Q'18

Cost of Risk	1.4%	1.4%	1.9%	1.8%	1.3%
Retail	2.4%	2.9%	2.7%	2.6%	2.7%
Corporate	-0.1%	0.1%	1.1%	0.9%	-0.8%
MSME	1.6%	-0.1%	1.2%	1.0%	1.0%

Source: IFRS Consolidated

7) Loan Quality per NBG

Sub-Standard, Doubtful and Loss (SDL) Loans Ratio per NBG

	Mar-19	Dec-18	Sep-18	Jun-18	Mar-18
SDL Loans as % of Gross Loans	3.9%	3.6%	3.8%	3.3%	3.1%

Source: NBG

8) Cross Sell Ratio[16] and Number Active Products

	Mar-19	Sep-18	Mar-18	Sep-17	Mar-17
Cross Sell Ratio	3.75	3.85	3.88	3.78	3.57
Number of Active Products (in million)	4.62	4.58	4.58	4.06	3.16

Source: Management's figures.

9) Diversified Deposit Base

Status: monthly income >=GEL 3,000 or loans/deposits >=GEL 30,000

VIP: deposit >=USD 100,000 as well as on discretionary basis; WM: >=USD 100,000 as well as on discretionary basis

Wealth Management includes UHNW and HNW non-resident clients

31 March 2019	Volume of Deposits	Number of Deposits
MASS	36%	91.4%
STATUS	32%	8.1%
VIP	23%	0.4%
Wealth Management for non-resident clients	9%	0.1%

Source: Management figures.

10) Loan Concentration

	Mar-19	Dec-18	Sep-18	Jun-18	Mar-18
Top 20 Borrowers as % of total portfolio	13.5%	14.2%	14.1%	13.2%	13.4%
Top 10 Borrowers as % of total portfolio	9.6%	10.1%	10.3%	9.2%	9.4%
Related Party Loans as % of total portfolio	0.1%	0.1%	0.1%	0.1%	0.1%

Source: IFRS consolidated.

11) Number of Transactions in Digital Channels (in thousands)

	1Q 19	1Q 18	1Q 17	1Q 16
Internet banking number of transactions	2,499	2,449	2,098	1,669
Mobile banking number of transactions	9,194	5,315	2,622	1,150

Source: Management figures.

12) Penetration Ratios of Digital Channels

	1Q 19	1Q 18	1Q 17	1Q 16
Internet or Mobile Banking Penetration Ratio*	42%	38%	34%	32%
Mobile Banking Penetration Ratio**	37%	31%	25%	17%

Source: Management figures.

* Internet or Mobile Banking penetration equals active clients of Interment or Mobile Banking divided by total active clients.

** Mobile Banking penetration equals active clients of Mobile Banking divided by total active clients.

13) Number of Active Clients (in thousands)

	Mar-19	Mar-18	Mar-17	Mar -16
Internet or mobile banking	529	447	298	220
Mobile banking	411	365	219	121

Source: Management figures.

14) Distribution of Transactions in Digital Channels

	1Q 19
Mobile Banking	29%
Internet Banking	11%
Branches	8%
TBC Pay terminals	21%
ATMs	30%
Other	1%

92% of all transactions are conducted through digital channels

15) Distribution of Sales in Channels

	1Q 19	1Q 18	1Q 17	1Q 16
IB, MB, ATM, Web	45%	30%	24%	27%
Branches & Call Centre	55%	70%	76%	73%

45% of sales are conducted through digital channels*.

* For products being offered through remote channels: pre-approved loans, credit cards, limit increase and opening of accounts.

16) Percentage of Selected Product Sales in Digital Channels

	1Q 19	1Q 18	1Q 17
Deposits	72%	59%	50%
Pre-approved loans	23%*	35%	14%
Debit cards	26%	14%	-

* The decrease is due to new regulations.

17) POS Terminal Transactions

	Mar-19	Dec-18	Sep-18	Jun-18	Mar-18
POS number of transactions (in millions)	26.6	27.4	24.1	22.3	17.9
POS volume of transactions (in mln GEL)	1,017	1,117	986	850	661

* Data includes e-commerce and excludes transactions at POS terminals in TBC Bank's branches.

18) Funding repayment ladder

Subordinated and Senior Loans' Principal Amount Outflow by Year (USD million)

	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028
Senior loans	113.9	182.1	261.1	107.0	89.4	36.8	28.2	10.6	4.6	-
Subordinated loans	6.4	13.9	11.1	11.4	32.2	1.1	39.0	72.9	16.1	37.0

Source: Management figures, revolving non IFI loans from NBG are excluded.

19) NPL Build Up (in GEL million)

NPLs	NPLs as of Dec-18	Real Growth	FX Effect	Write-Offs	Repossessed	NPLs as of Mar-19
Retail	137	43	-	(34)	(2)	144
Corporate	85	4	-	-	(2)	87
MSME	103	12	1	(7)	(3)	106
Total	325	59	1	(41)	(7)	337

20) Net Write-Offs, 1Q 2019
In GEL million	Write-Offs	Recoveries	Net Write-Offs
Retail	(34)	4	(30)
Corporate	-	1	1
MSME	(7)	3	(4)
Total	(41)	8	(33)

Source: IFRS Consolidated.

21) Portfolio Breakdown by Collateral Types as of 31-Mar-19
Cash Cover	2%
Gold	3%
Inventory	9%
Real Estate	67%
Third Party Guarantees	6%
Other	2%
Unsecured	11%

72% of the loans are secured by cash, gold and real estate.

Source: IFRS Consolidated.

22) Loan to Value by Segments as of 31-Mar-19

Retail	Corporate	MSME	Total
56%	49%	47%	51%
Mortgage loan's LTV stood at 51%

23) TBC Insurance

TBC Insurance is a rapidly growing, wholly owned subsidiary of TBC Bank and it is the Bank's main bancassurance partner. The company was acquired by the Group in October 2016 and it has since grown significantly, becoming the second largest player on the P&C and life insurance market and the largest player in the retail segment, holding 22.8% and 39.8% market shares[17] without border motor third party liability (MTPL) insurance, respectively in 1Q 2019[18].

TBC insurance serves both individual and legal entities and it provides a broad range of insurance products covering motor, travel, personal accident, credit life and property, business property, liability, cargo and agro insurance products. The company differentiates itself for its advanced digital channels, which include TBC bank's award winning Internet and mobile banking applications, a wide network of self-service terminals, a web channel, as well as a Georgian-speaking chat-bot B-Bot, which is available through Facebook messenger.

In 1Q 2019, TBC Insurance achieved strong growth results. The gross written premium grew by 39.8% YoY and amounted to GEL 17.5 million driven by strong focus on cross-selling. Over the same period, the net combined ratio^{^[19]} increased by 6.8 pp and stood at 82.8%. This was mainly driven by several new products launched at the end of December 2018 leading to the increase in operating expenses. As a result, the net profit for 1Q 2019 stood at GEL 2.0 million without subsidiaries. At the same time TBC insurance maintains strong capital levels, with solvency ratio above regulatory minimum of 100%, standing at 140.8%.

In thousands of GEL	1Q'19	4Q'18	3Q'18	2Q'18	1Q'18
Gross written premium	17,471	17,075	15,833	14,677	12,494
Net earned premium[20]	10,677	10,554	9,841	8,804	6,458
Net profit	2,004	2,556	2,271	1,497	1,260
	1Q'19	4Q'18	3Q'18	2Q'18	1Q'18
Net combined ratio	82.8%	80.7%	78.8%	81.0%	76.0%
Market share	22.8%	23.0%	20.7%	18.5%	19.5%

Figures are provided without subsidiaries of TBC Insurance: Swoop JSC, GE Commerce LTD, All Property LTD.

24) Regulatory Capital

Total capital and tier 1 capital limits

	31-Mar-2019 Actual		31-Dec-2019 F		31-Dec-2020 F		31-Dec-2021 F
	Tier 1	Total	Tier 1	Total	Tier 1	Total	Tier 1	Total
Minimum Requirement	6.0%	8.0%	6.0%	8.0%	6.0%	8.0%	6.0%	8.0%
Conservation Buffer	2.5%	2.5%	2.5%	2.5%	2.5%	2.5%	2.5%	2.5%
Counter-Cyclical Buffer	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Systemic Buffer	1.0%	1.0%	1.5%	1.5%	2.0%	2.0%	2.5%	2.5%
Pillar 1 buffers	9.5%	11.5%	10.0%	12.0%	10.5%	12.5%	11.0%	13.0%
Pillar 2	2.4%	5.4%	2.5%-4.0%	4.0%-5.5%	2.5%-4.0%	4.0%-5.5%	2.5%-4.0%	4.0%-5.5%
Total	11.9%	16.9%	12.5%-14.0%	16.0%-17.5%	13.0%-14.5%	16.5%-18.0%	13.5%-15.0%	17.0%-18.5%

25) NBG Initiatives

The new regulation on responsible lending to individuals:

Starting from January 2019, the National Bank of Georgia has adopted the regulation on responsible lending to individuals, which replaces the former regulation introduced in May 2018. The regulation requires financial institutions to conduct solvency analysis of a borrower before issuing a loan and it also sets new limits on Payment to Income (PTI) and Loan to Value (LTV) for individual loans. The thresholds are different for domestic and foreign currency loans in order to protect a borrower and the financial system against the risks stemming from exchange rate fluctuations.

Maximum Payment to Income Ratios:

Monthly income, net (in GEL)	For non-hedged borrower in case of maximum/contractual maturity	For hedged borrowers in case of maximum/contractual maturity
<1,000	20% / 25%	25% / 35%
>=1,000-2,000<	20% / 25%	35% / 45%
>=2,000-4,000<	25% / 30%	45% / 55%
>=4,000	30% / 35%	50% / 60%

Maximum Loan to Value Ratios:

Maximum loan to value ratio (LTV) for GEL loans	85%
Maximum loan to value ratio (LTV) for foreign currency loans	70%

Maximum tenures:

Mortgage	15 years
Consumer mortgages collateralized by real estate	10 years
Auto Loans	6 years
Other consumer loans	4 years

26) Space - fully digital bank

Date	# of app. downloads	# of registered customers	loans in thousands GEL
30-Jun-2018	99,646	47,657	1,112
30-Sep-2018	186,044	72,447	5,814
31-Dec-2018	258,846	93,994	14,693
31-Mar-2019	292,423	114,675	16,843

27) International strategy: expansion into Azerbaijan market

Main highlights

• TBC Bank and Nikoil Bank agreed on shareholders agreement in late December 2018 and signed it in early January 2019.

• Our shareholding in the joint entity will be 8.34%.

• We will have the right to exercise a call option during the next four years to obtain 50%+1 shareholding in the joint entity.

• The call option is based on a fixed price formula and in most scenarios it is between 1-1.15x of the merged entity's book value (it is closer to the book value when exercised in later years).

• Our additional estimated investment during the next four years will be consistent with our 8.34% shareholding and is estimated to be around USD 3-5 million per year.

Strengthening Management Team

Existing management team of the joint entity
CEO -	Nikoloz Shurghaia
First Deputy CEO, Head of MSME -	Farhad Hajinski
Deputy CEO, Head of Retail -	Fuad Tagiyev

New management team of the joint entity
COO -	Nukri Tetrashvili, former CEO at TBC Kredit
CDM -	Senior Digital Manager with a solid track record at large Georgian bank
CRO -	David Tediashvili, former Head of Retail Credit Risk Department at TBC Bank
CFO -	Emil Dushdurov, former Associate Director, Deal Advisory at KPMG Azerbaijan
CIO -	Avtandil Tabatadze, former strategic projects manager at TBC Bank

Current Developments

	Loans Disbursements (USD '000)	Number of customers
1Q 2018	11,738	61,012
4Q 2018	29,376	61,275
1Q 2019	25,030	66,691

Mid-term vision
In USD millions	1Q 2019 results of Nikoil Bank*	Mid-term targets of joint entity
Loan Portfolio	c. 227	c. 1,400
Equity	c. 36	c. 200
ROE	NMF	20%+
*Based on management accounts.

• Core segments: Retail and MSME (not large SMEs and Corporates);

• Product offerings: A mix of Nikoil Bank and TBC Bank products adapted to the local needs and offered primarily through digital channels, including Space Bank.

28) International strategy: digital greenfield bank in Uzbekistan

This is still in the concept stage and subject to approval (including approval from the authorities), therefore it could change as we progress. The license is expected in 2019.

Why Uzbekistan?

• Large underpenetrated market:

• with a population of more than 33.45 million

• retail loans to GDP stood at 7.2% at the end of 2018

• Similar history as part of the Soviet Union and good cultural links

• Right time given the implementation of reforms, many of which were designed by former Georgian government officials

• Both Uzbekistan and Georgia are included into China's One Belt One Road initiative

• No digital bank operates in Uzbekistan currently

Strategic Positioning

• Build a next generation bank for retail and MSME

• Focus on digital channels and SPACE

• Operate asset light, smart branches

• Establishing the highest standards of corporate governance

• Simple and intuitive products and processes

• Transparent and straightforward commissions structure

• Best customer experience

• Automated decision making system.

Main highlights

• Initial investments from TBC Bank around USD 20-30 million, resulting in 51% shareholding

• Medium to long-term financial targets after license is granted:

• Achieve sustainable ROE up to 25%

• Cost to income ratio below 35%

Our Uzbek and Azerbaijan subsidiaries together will contribute c. 30% to the Group's loan book.

Upcoming Events

· Opening pilot branch in 2019 for a proof of concept

· Core banking implementation with local IT company

· Multichannel development including Space

· Our international partners, EBRD and IFC have expressed their interest to participate in this project subject to completion of their internal procedures and approvals

· We have reached an agreement on main terms with Uzbek-Oman Investment Company (UOIC) to act as our local partner.

29) Payme

Main Highlights

· TBC Bank Group PLC has entered into an agreement to acquire a 51% stake in LLC Inspired, a leading profitable payment platform in Uzbekistan under the Payme brand

· The consideration for the 51% stake is USD 5.5 million, implying a valuation of USD 10.8 million for Payme

· TBC Bank has also entered into a put/call arrangement for the remaining 49% of Payme, which, in normal circumstances, may only be exercised between the fourth and seventh anniversary of the date of completion of the transaction

· The exercise price will depend on a set of parameters including Payme's revenue, EBIT and the number of active customers that Payme achieves.

Strategic Positioning

The transaction is in line with TBC Bank's international strategy to expand its regional operations, giving us the immediate access to a large customer base in the country and use our core digital strengths in Georgia to innovate in the Uzbekistani market.

Management Team

· Founded in 2011 and continues to be managed by the three original founding shareholders;

· The team was strengthened by two other shareholders:

o one acting as Business Development and Research Director;

o the other as the Chief Technology Officer.

The management team will remain with Payme on a long-term basis and will continue to be actively involved in the development and execution of Payme's strategy.

Payme Financial and Operating Highlights

In million USD	1Q 19	Growth QoQ
Revenue	0.6	21.9%
Net profit	0.4	73.0%
Number of customers	1.3	13.6%

Product Types

§ Utility and Top-up	§ E-commerce Acquiring and Payment GW
§ P2P	§ White Label Mobile Banking
§ Loan Repayment	§ Invoicing System
§ mPOS for QR Payments	§ Personal Finance Manager

30) Nikoil Bank Financials

Profit & Loss Statement

In thousands of USD	1Q'19	4Q'18	1Q'18
Interest income	4,610	4,280	3,630
Interest expense	(2,069)	(2,068)	(2,414)
Net interest income	2,541	2,212	1,216
Fee and commission income	551	958	486
Fee and commission expense	(267)	(426)	(221)
Net Fee and Commission Income	284	532	265
Net income from foreign currency operations	176	313	350
Net gain/(losses) from foreign exchange translation	(1)	119	10
Gains less losses/(losses less gains) from derivative financial instruments	-	(28)	-
Other operating non-interest income	175	404	360
Credit loss allowance of loans	2,326	(23,670)	135
Credit loss allowance of other financial assets	44	(8,446)	(68)
Operating income after credit loss allowance	5,370	(28,968)	1,908
Staff costs	(2,036)	(2,276)	(1,544)
Depreciation and amortisation	(321)	(312)	(344)
Administrative and other operating expenses	(1,165)	(1,519)	(996)
Operating expenses	(3,522)	(4,107)	(2,884)
Profit before tax	1,848	(33,075)	(976)
Income tax expense	-	-	0
Profit for the period	1,848	(33,075)	(976)

Balance Sheet

In thousands of USD	31-Mar-19	31-Dec-18	31-Mar-18
Cash and cash equivalents	44,711	29,591	59,728
Due from other banks	36,654	26,833	21,483
Net Loans	135,655	120,704	166,375
Investment securities measured at fair value through other comprehensive income	7,085	46,794	14,517
Current income tax prepayment	4	2	82
Deferred income tax asset	768	768	768
Other financial assets	10,252	545	12,548
Other assets	1,100	7,195	577
Premises and equipment (Net)	5,663	5,571	5,782
Intangible assets (Net)	1,849	1,924	2,008
TOTAL ASSETS	243,741	239,927	283,868
Due to other banks	20,152	20,152	23,708
Customer Accounts	136,900	137,244	150,785
Other borrowed funds	41,112	41,237	33,823
Other financial liabilities	4,998	3,054	5,287
Subordinated debt	5,000	5,000	15,000
TOTAL LIABILITIES	208,162	206,687	228,603
Share capital	204,705	204,705	144,118
Additional paid-in-capital	500	500	500
Retained earnings	(169,626)	(171,965)	(89,353)
TOTAL EQUITY	35,579	33,240	55,265
TOTAL LIABILITIES AND EQUITY	243,741	239,927	283,868

[1]Per updated methodology.

[2]Market share figures are based on data from the National Bank of Georgia (NBG). The NBG includes interbank loans for calculating market share in loans.

[3]Per updated methodology.

[4]The calculation of the market share figure excludes the mandatory third-party liability (MTLP) insurance that foreign vehicles entering Georgia are required to buy at the border. This was introduced in March 2018 and the premium collected is shared evenly between 17 insurance companies, thus reducing our market share. Including the MTPL, our total market shares stood at 21.3% and our retail market share amounted to 32.9% as of 1Q 2019.

^{^[5]}Taking into account loans issued in EUR and USD.

^{^[6]}The number of transactions conducted through remote channels divided by the total number of transactions.

^{^[7]}Latest available information.

[8]Taking into account loans issued in EUR and USD.

[9]IMF WEO April 2019 update.

[10]Gross insurance profit can be reconciled to the standalone net insurance profit (as shown in Annex 23 on pages 33-34) as follows: gross insurance profit minus credit loss allowance, administrative expenses and taxes, plus fee and commission income and net interest income.

[11] As at 1 January 2019, the group adopted IFRS 16, under which short term and low value lease contracts, also contracts that do not qualify for lease arrangements and taxes on lease contracts are expensed under this category of administrative expenses

[12]Total operating income growth minus operating expense growth.

[13]In 1Q 2019, GEL 128 million was transferred from MSME to corporate loans.

[14]In 1Q 2019, GEL 70 million was transferred from MSME to corporate deposits.

[15]TBC Bank Group PLC became the parent company of JSC TBC Bank on 10 August 2016.

[16]Cross-sell ratio is defined as the number of active products divided by the number of active customers.

[17]Or 21.3% and 32.9% respectively, with MTPL insurance. Starting from March 1, 2018 border MTPL was introduced and GWP was divided evenly between 17 insurance companies, therefore it has decreased our market share.

[18]Based on internal estimates.

^{^[19]}Net insurance claims plus acquisition costs and administrative expenses divided net earned premium.

^{^[20]}Net earned premium equals earned premium minus reinsurer's share of earned premium.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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TBC Bank Group (TBCG)

Tuesday, 21st January 2025

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