3rd Quarter Results
TBC BANK GROUP PLC ("TBC Bank")
9M 2016 and 3Q 2016 Financial Results
Important note: TBC Bank Group PLC is a holding company of JSC TBC Bank from 10th of August 2016. Results before 10th of August are given for JSC TBC Bank
Forward-Looking Statements
TBC BANK Group PLC ("TBC Bank")
TBC Bank Announces 9M 2016 and 3Q 2016 unaudited IFRS Consolidated Results;
Net Profit for 9M up by 38.5% YoY to GEL 210.2 million
The 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
Financial Highlights
3Q 2016 P&L Highlights
§ Net Profit for 3Q 2016 up by 40.3% YoY to GEL 71.0 million and up by 12.9% QoQ without one-off effects in 2Q, delivering return on equity (ROE) of 20.6% and return on assets (ROA) of 4.0%.
§ Total operating income in 3Q 2016 up by 12.9% YoY and by 3.8% QoQ to GEL 161.8 million.
§ Cost to income ratio stood at 40.5%, compared to 43.3% in 3Q 2015 and 45.1% in 2Q 2016.
§ Cost of risk on loans stood at 1.1%, down by 0.9pp YoY and unchanged on QoQ basis.
§ Net interest margin (NIM) stood at 8.3% (8.0% without one-off effects) in 3Q 2016, compared to 7.9% in 2Q 2016 and 7.9% in 3Q 2015.
9M 2016 P&L Highlights
§ Net Profit for 9M 2016 up by 38.5% YoY to GEL 210.2 million, delivering ROE of 21.8% and ROA of 4.1%.
§ Total operating income for the period up by 10.2% YoY to GEL 462.8 million.
§ Cost to income ratio stood at 43.3% (40.6% without one-off effects), compared to 41.8% in 9M 2015.
§ Cost of risk on loans stood at 1.1%, down by 1.1pp YoY.
§ Net interest margin (NIM) stood at 7.9% in 9M 2016, same as in 9M 2015.
Balance Sheet Highlights 30 September 2016
§ Total assets reached GEL 7,583.7 million as of 30 September 2016, up by 9.3% YoY and up by 12.0% QoQ.
§ Gross loans and advances to customers increased to GEL 5,003.6 million as of 30 September 2016, up by 9.7% YoY and by 6.2% QoQ.
§ Net loans to deposits + IFI funding stood at 93.8% and Net Stable Funding Ratio (NSFR) at 114.1% as of 30 September 2016.
§ NPLs stood at 4.6%, down by 0.3pp YoY and down 0.1pp QoQ.
§ NPLs coverage stood at 84.3%, (205.0% with collateral), compared to 85.6% as of 30 June 2016.
§ Total customer deposits stood at GEL 4,593.2 million as of 30 September 2016, up by 7.2% YoY and up by 7.6% QoQ.
§ Tier I and Total Capital Adequacy Ratios per Basel II/III stood at 13.3% and 16.2% respectively.
§ Tier I and Total Capital Adequacy Ratios per Basel I stood at 25.6% and 31.5% respectively.
Market Shares1
§ TBC Bank's market share in total assets increased by 1.4pp YoY and by 2.5pp QoQ, reaching 28.4% (35.1% with Bank Republic's total assets) as of 30 September 2016.
§ TBC Bank's market share in total loans was 29.7% (37.2% with Bank Republic's total loans) as of 30 September 2016, up by 1.4pp YoY and by 1.5pp QoQ.
§ In terms of individual loans, the Bank had a market share of 32.3% (43.0% with Bank Republic's total individual loans) as of 30 September 2016, up by 0.8pp YoY and QoQ. The market share for legal entity loans was 27.3% (31.4% with Bank Republic's total legal entity loans), up by 1.7pp YoY and by 2.1pp QoQ.
§ TBC Bank's market share of total deposits stood at 30.6% (35.5% with Bank Republic's total deposits) as of 30 September 2016, down by 0.1pp YoY and up by 1.4pp QoQ.
§ The Bank maintains its longstanding leadership in individual deposits with a market share of 35.5% (39.3% with Bank Republic's total individual deposits), up by 0.9pp YoY and up by 1.0pp QoQ. In terms of legal entity deposits, TBC Bank holds a market share of 25.1% (31.1% with Bank Republic's legal entity deposits), down by 1.5pp YoY and up by 1.8pp QoQ. The Bank uses corporate deposits mainly for liquidity management purposes.
Recent Developments
Bank Republic Acquisition Completed
Bank Republic acquisition completed on 20 October. The confirmatory due diligence was completed with no adjustments to the consideration. EBRD stake was acquired on essentially the same key commercial terms. The full integration will be completed in the third quarter 2017. Key highlights are:
§ Bank Republic is a large and financially sound institution, having maintained RoAE of over 18% since 2013 and exceeding 21% in 2015
§ The merger makes TBC the largest bank in Georgia and indisputable leader in retail banking
§ Bank Republic reinforces TBC Bank's position in key operating segments, including consumer and mortgage lending
§ Attractive synergy potential and earnings accretion from the first year post closing, with total expected run-rate synergies post recurring costs of over GEL 20 mln
§ Transaction structure minimizes shareholder dilution while providing a potential increase in the future free float
§ Acquisition price to book value multiple, based on 2016 year end estimated book value, is c.1.1x, price to earnings multiple based on 2016 estimated earnings is c. 5.9 x
Acquisition of Insurance Company Kopenbur
On 24 October, TBC Bank Group PLC has signed an agreement to acquired Insurance Company Kopenbur for USD 1.4 m in cash. This transaction is in line with TBC PLC's strategy to enhance its product offering to its customers.
Changes in Supervisory Board
Irina Schmidt, (who was originally appointed as a representative of DEG on the Board), left the Board after her term expired in September 2016. Her role as Chairman of the Remuneration Committee has been assumed by Stefano Marsaglia.
§ Stephan Wilcke, previously appointed on the Board of Directors of TBC Bank Group PLC in June 2016, was also appointed as the new Independent Non-Executive Director of the JSC Board in September 2016, he joins the Audit, Nomination and the Risk and Ethics Committees of the Board.
§ Stephan is currently chairman of consumer lender Amigo Loans in the UK, a board member of the Jersey Financial Services Regulator JFSC and chairman of the audit and risk committee at emerging market fintec insurance operator Bima (Milvik). He has previously served as Executive Chairman of OneSavings Bank Plc (FTSE 250) and CEO of the UK Government's Asset Protection Agency dealing with RBS's troubled assets in the financial crisis of 2009-2011.
§ To make the PLC and JSC boards more aligned, CEO and CFO also became the members of the JSC TBC Bank Board.
§ TBC Bank JSC has the Board of nine members, with majority of independent members (for more information please see the "Corporate Governance" section of our website at www.tbcbankgroup.com.
TBC Bank Wins Multiple Awards for its Private Banking Lines
TBC Bank was named "Best Private Bank in Georgia 2016" by The Banker and Professional Wealth Management (PWM) magazines and "Best Private Bank in Georgia for 2017" by Global Finance magazine.
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 Financial Highlights section.
Letter from the Chief Executive Officer
"I am delighted to present another strong set of financial results for the third quarter of 2016 and to comment on recent economic developments as well as our recent acquisition of Bank Republic. The merger creates the largest bank in Georgia in terms of all key metrics, including total assets, total loans and total deposits, with market shares of 35.1%, 37.2% and 35.5% respectively as of 30 September 2016. It also strengthens our position across all strategic segments, including retail as well as affluent customers. We have actively started the integration process and we plan to complete the merger in the third quarter of 2017. Our main focus in the coming year would be to fully utilize the synergies and cross-selling opportunities as well as to further develop the relationship with our new and existing clients.
Over the first nine months of this year, the economy grew by an estimated 2.6%. The growth rate in the third quarter was 2.2%, slightly lower than in the previous quarters. Additionally, in September, we experienced another stable election process, with the ruling party remaining in office. This will allow consistency in the government policy. In parallel, analysts report positive growth for next year - the International Monetary Fund has recently revised upwards its outlook for 2017 to 5.2%, the highest in the region.
Inflation has continued to decline, with an annualized rate of 0.9% in 3Q. The National Bank of Georgia has further reduced the monetary policy rate over the last quarter by 0.5% to 6.5% and it has announced an additional cut by 0.5pp over the coming two quarters. This policy should strengthen the credit growth and create opportunities for the partial de-dollarization of the loan portfolio. The number of visitors continues to increase, confirming tourism as one Georgia's fast-growing sectors - in the third quarter it grew by 21% year-on-year. Remittances also demonstrated robust growth and increased by 16% year-on-year over the same period. We also observed a positive trend in exports of goods, which expanded by 8.3% year-on-year in September, mainly driven by exports to EU countries.
In terms of our financial results, I am very pleased to report that we continue to deliver robust profitability and returns. In the third quarter our Return on Equity was 20.6%, compared with 18.2% in 3Q 2015. Return on Assets stood at 4.0%, compared to 3.1% in the same period of last year. Net income was GEL 71.0 million, up by 40.3% from the third quarter of 2015. This was supported by strong interest income, with the net interest margin at 8.3% up by 0.4 pp year-on-year and up by 0.3 pp quarter on quarter. Our performance on cost continues to be consistent with our guidance, with a cost to income ratio at 40.5% versus 43.3% a year ago.
During the last quarter our loan book grew by 9.7% year over year, outperforming the total market growth by 4.1% and reaching a market share of 29.7%. Year-on-year growth was mainly supported by an expansion in the retail segment. In the third quarter our deposit portfolio grew by 7.2% primarily due to an increase in the retail portfolio and our market share stood at 30.6% as of 30 September 2016.
Our Non-Performing Loan Ratio improved by 0.1pp quarter-on-quarter and stood at 4.6% as of 30 September 2016, while our NPL coverage ratio remained broadly stable at 84% or 205% with collateral.
Our balance sheet structure remains strong with a financial leverage ratio of 5.4x, while our total capital adequacy ratio (CAR) per Basel II/III regulation stood at 16.2%, against the minimum requirement of 10.5% and Tier I Ratio per Basel II/III at 13.3% against the minimum requirement of 8.5% (for the Bank Republic's Acquisition impact see page 22). Our liquidity position also remains strong with net loans to deposits + IFI funding at 94% and the net stable funding ratio (NSFR) at 114%.
I would also like to highlight changes in the JSC TBC Bank Board Structure. Originally appointed as a representative of DEG, Irina Schmidt's term as the Non-Executive Director of the Supervisory Board of JSC TBC Bank expired in September 2016. We would like to thank Irina for her years of service and wish her success in her future endeavors. Stephan Wilcke, previously appointed on the Board of Directors of TBC Bank Group PLC, joined the JSC Board as a new Independent Non-Executive Director. Stephan has very valuable experience in financial industry, currently serving as the chairman of consumer lender Amigo Loans in the UK, as a Board member of the Jersey Financial Services Regulator JFSC and as the Chairman of the Audit and Risk Committee at emerging market fintec insurance operator Bima (Milvik). Among many roles in the past, he has also served as the executive chairman of OneSavings Bank during the bank's successful IPO on the LSE. To make the two boards more aligned, I and Giorgi Shagidze, our CFO, have also become members of the JSC Board. The Board now has 9 members in total, the majority of whom are independent directors with relevant valuable experience in financial services around the world.
We also recently acquired the Georgian insurance company Kopenbur for USD 1.4 million. This acquisition is in line with our strategy to widen the range of products that we offer to our customers. After the acquisition, Kopenbur will become the main Bancassurance partner of TBC Bank and its product portfolio will include Motor, Travel, Personal Accident, Credit Life, Individual and Group Life, Business Property and Liability Insurance services.
Finally, I am also pleased to announce that that TBC Bank has been named the "Best Private Bank in Georgia 2016" by The Banker and Professional Wealth Management (PWM) magazines and the "Best Private Bank in Georgia for 2017" by Global Finance magazine. These prestigious awards recognize our outstanding track record in delivering the best private banking experience in the Georgian market.
Outlook
Going forward, we will focus on realizing synergies and cross-selling opportunities and on further developing the relationship with both our new and existing clients. As a result, we have revised upward our ROE forecast over the medium term to 20% plus. At the same time, we have changed our medium term growth target to 15-20%. We will continue to further strengthen our leading position in the market by differentiating our business and to deliver superior customer experience as well as the best multichannel capabilities. With all these factors considered, I am confident that we are in a strong position to continue deliver superior returns.
THIRD QUARTER 2016 FINANCIAL RESULTS CONFERENCE CALL
TBC Bank Group PLC ("TBC PLC") will release its third quarter 2016 financial results on Friday, 11 November 2016 at 7am GMT (11am GET).
On that day, Vakhtang Butskhrikidze, CEO, and Giorgi Shagidze, CFO, will host a conference call to discuss the results.
Date & time: Friday, 11 November at 14.00 (GMT) / 15.00 (CET) / 9.00 (EST)
Please dial-in approximately 5 minutes before the start of the call quoting the password "TBC Bank":
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Password: |
TBC Bank |
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UK Toll Free: |
0808 109 0700 |
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Standard International Access: |
+44 (0) 20 3003 2666 |
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USA Toll Free: |
1 866 966 5335 |
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New York New York: |
+1 212 999 6659 |
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Russia Toll Free: |
8 10 8002 4902044 |
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Moscow: |
+7 (8) 495 249 9843 |
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Replay Numbers |
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Replay Passcode: |
9482570 |
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UK Toll Free: |
0800 633 8453 |
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Standard International Access: |
+44 (0) 20 8196 1998 |
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USA Toll Free: |
1 866 583 1035 |
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Russia Toll Free: |
8 10 8002 4832044 |
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Moscow: |
+7 (8) 495 249 9840 |
Contacts
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Sean Wade Director of International Media and IR
E-mail: SWade@Tbcbank.com.ge Web: www.tbcgroupbank.com Tel: +44 (0) 7464 609025 Address: 68 Lombard St, London EC3V 9LJ, United Kingdom |
Anna Romelashvili Head of Investor Relations
E-mail: ARomelashvili@Tbcbank.com.ge Web: www.tbcgroupbank.com Tel: +(995 32) 227 27 27 Address: 7 Marjanishvili St. Tbilisi, Georgia 0102
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Investor Relations Department
E-mail: ir@tbcbank.com.ge Web: www.tbcgroupbank.com Tel: +(995 32) 227 27 27 Address: 7 Marjanishvili St. Tbilisi, Georgia 0102
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Economic Overview
In the first half of 2016, Georgia's GDP growth averaged 2.8% YoY driven by construction (+18.2% YoY), real estate (+6.1% YoY), hotels and restaurants (+11.2% YoY). The manufacturing sector expanded by 5.3% YoY in 1H 2016 contributing 0.6pp out of 2.8% growth in 1H. Transport and communications (-2.1% YoY) and trade sector (-0.6% YoY) held back growth, reflecting the deceleration in regional trade turnover in the first case and low consumer activity in the second.
Per initial estimates, GDP expanded by 2.2% YoY in 3Q 2016, implying a 2.6% YoY in real growth in the first nine months of the year. However, stable and transparent parliamentary elections at the beginning of October, resulting in the ruling party remaining in office, is likely to boost consumer and investment confidence and accelerate economic growth by the end of 2016. IMF recently revised its growth forecast for 2016 to 3.4%, 0.9pp above the previous forecast of 2.5%.
Inflation decelerated significantly. In 3Q 2016 annual inflation stood at 0.9% due to still sluggish demand and low commodity prices. It is expected to remain below the NBG target of 4% in the first half of 2017 to reach the target in the second half. The easing of the monetary policy, which, started in 1Q 2016, has already had a significant impact on GEL lending rates. As of 30 September,2016 interest rates on GEL loans declined by 3.4pp YoY, gradually translating into the higher lending in domestic currency and subsequent acceleration of consumer and investment activity. According to the NBG's statement following the latest monetary policy committee meeting, refinancing rate is expected to decline by additional 0.5pp from the current 6.5% over the coming two quarters, which should strengthen credit growth and de-dollarization of the loan portfolio.
Major components of the current account balance show positive trends along with the stabilizing economic situation in the region. Exports of goods started to bottom out after two years of continued declines. In September, 2016 exports increased by 8.3% YoY, while in 3Q they remained unchanged compared to the same period of 2015. Over this period exports of copper concentrates (+68% YoY) was a major contributor to the overall export growth. Traditional export goods, such as wines (+9.3% YoY), mineral waters (+15.4% YoY), nuts (+16.0% YoY) and gold (+20.8% YoY) also showed an upward growth trend. Lower prices on metals and chemicals held back the growth of other major export goods such as ferro-alloys (-5% YoY) and fertilizers (-69.4% YoY).
In 3Q, imports of goods2 increased by 4%, driven by an increase in imports of capital and intermediate goods (+8.7%), transportation (+32.2%) and consumer goods (+6.7%). One-off imports of train and municipal transport were behind the sharp hike for transportation. The rise in tourism inflows also contributed to increased imports of consumer goods in 3Q 2016. Georgia continued to save on the imports of petroleum products: in the 3Q petroleum imports dropped by 26% YoY or by USD 190 million in absolute terms. The trade balance improved slightly (+1% YoY) in the first nine months of 2016.
In 3Q 2016 remittances showed a robust rise (+16% YoY) supported by increasing money transfers from the EU (+44% YoY) and other countries while transfers from the CIS continued to fall, but at a significantly lesser rate (-7.2% YoY) compared to previous periods.
Tourism inflows continued to grow in 3Q with the number of visitors staying more than a day hiking by a solid 21% YoY. Additional cheap flights from a number of countries to Georgia, an active promotional campaign and safety issues in the neighboring countries contributed to the solid growth of tourism inflows in the country.
The USD/GEL exchange rate remained stable at around 2.33 during 3Q but reached 2.4 by the end of October. The exchange rate of the Georgian Lari remained consistent with that of Georgia's main trading partners. Real and nominal effective exchange rates of GEL remain around its long term trend, indicating no significant misalignment of GEL exchange rate.
The fiscal policy remains expansionary with the fiscal deficit estimated at 3.4% of GDP in 9M 2016 as opposed to the 2.2% in the same period of the previous year. However, the above 3% fiscal deficit does not create risks of public debt sustainability given the still significant fiscal space that government has. As of Q3 2016 public debt stood at 40.8% of GDP3 0.4pp lower YoY. Over the same period, the domestic public debt remained unchanged at 9.2% of GDP while external public debt dropped by 0.4pp to 31.6%.
Georgia remains committed to its structural reforms, aimed at boosting the economy's potential growth rate. The World Bank's report "Doing Business 2017" ranks Georgia 16th on ease of doing business globally, up by seven steps compared to the previous ranking. The country is among the world's top improvers in the doing business ranking. The recently signed free trade agreement with China, the DCFTA with EU, and a number of large scale investment and infrastructure projects slated for 2017 are likely to play significant role for Georgia to get back to its potential growth path in 2017. According to the IMF, real GDP is expected to grow by more than 5% in 2017, in line with the expectations of NBG and the Georgian government.
Results Overview 9M 2016 and 3Q 2016
Income Statement Highlights
|
in thousands of GEL |
9M'16 |
9M'15 |
Change in % |
3Q'16 |
2Q'16 |
3Q'15 |
Change YoY |
Change QoQ |
|
Net interest income |
336,764 |
305,655 |
10.2% |
120,227 |
107,654 |
107,419 |
11.9% |
11.7% |
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Net Fee and Commission Income |
61,876 |
52,484 |
17.9% |
22,194 |
21,385 |
17,644 |
25.8% |
3.8% |
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Other operating non-interest income |
64,169 |
61,892 |
3.7% |
19,398 |
26,840 |
18,269 |
6.2% |
-27.7% |
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Provisioning charges |
-43,728 |
-70,673 |
-38.1% |
-15,059 |
-14,329 |
-23,415 |
-35.7% |
5.1% |
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Operating income after provisions for impairment |
419,082 |
349,358 |
20.0% |
146,759 |
141,550 |
119,917 |
22.4% |
3.7% |
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Operating expenses |
-200,204 |
-175,736 |
13.9% |
-65,536 |
-70,369 |
-62,085 |
5.6% |
-6.9% |
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Profit before tax |
218,878 |
173,621 |
26.1% |
81,223 |
71,181 |
57,832 |
40.4% |
14.1% |
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Income tax expense |
-8,653 |
-21,845 |
-60.4% |
-10,235 |
9,359 |
-7,226 |
41.6% |
-209.4% |
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Profit for the period |
210,225 |
151,777 |
38.5% |
70,988 |
80,540 |
50,606 |
40.3% |
-11.9% |
Balance Sheet and Capital Highlights
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|
30-Sep-16 |
30-Jun-16 |
Change |
30-Sep-15 |
Change |
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In millions |
GEL |
USD |
GEL |
USD |
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GEL |
USD |
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Total Assets |
7,584 |
3,255 |
6,772 |
2,891 |
12.0% |
6,936 |
2,913 |
9.3% |
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Gross Loans |
5,004 |
2,148 |
4,711 |
2,011 |
6.2% |
4,560 |
1,915 |
9.7% |
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Customer Deposits |
4,593 |
1,972 |
4,270 |
1,823 |
7.6% |
4,286 |
1,800 |
7.2% |
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Total equity |
1,389 |
596 |
1,315 |
561 |
5.6% |
1,132 |
475 |
22.7% |
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Basel I Tier 1 Capital |
1,322 |
568 |
1,248 |
533 |
6.0% |
1,085 |
456 |
21.9% |
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Basel I Risk weighted assets |
5,162 |
2,216 |
4,751 |
2,028 |
8.7% |
4,630 |
1,944 |
11.5% |
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Basel II/III Tier 1 Capital |
1,125 |
483 |
999 |
427 |
12.6% |
879 |
369 |
27.9% |
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Basel II/III Risk weighted assets |
8,428 |
3,618 |
7,913 |
3,378 |
6.5% |
7,306 |
3,068 |
15.4% |
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Key Ratio
|
9M'16 |
9M'15 |
Change |
3Q'16 |
2Q'16 |
3Q'15 |
Change |
Change |
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ROAE |
21.8% |
19.0% |
2.8% |
20.6% |
25.5% |
18.2% |
2.4% |
-4.9% |
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ROAA |
4.1% |
3.3% |
0.8% |
4.0% |
4.9% |
3.1% |
0.9% |
-0.9% |
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Pre-provision ROAE |
26.4% |
27.9% |
-1.5% |
25.1% |
30.0% |
26.7% |
-1.6% |
-4.9% |
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Cost: Income |
43.3% |
41.8% |
1.5% |
40.5% |
45.1% |
43.3% |
-2.8% |
-4.6% |
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Cost of Risk |
1.1% |
2.3% |
-1.1% |
1.1% |
1.1% |
2.0% |
-0.9% |
0.0% |
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NPL to Gross Loans |
4.6% |
4.9% |
-0.3% |
4.6% |
4.7% |
4.9% |
-0.3% |
-0.1% |
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Basel I Total CAR |
31.5% |
28.6% |
2.9% |
31.5% |
32.5% |
28.6% |
2.9% |
-0.9% |
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Basel II/III Total CAR |
16.2% |
14.8% |
1.4% |
16.2% |
15.7% |
14.8% |
1.4% |
0.5% |
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Leverage (times) |
5.4 |
6.1 |
-0.7 |
5.4 |
5.2 |
6.1 |
-0.7 |
0.2 |
Income Statement Discussion
Net Interest Income
|
in thousands of GEL |
9M'16 |
9M'15 |
Change in % |
3Q'16 |
2Q'16 |
3Q'15 |
Change YoY |
Change QoQ |
|
Loans and advances to customers |
466,608 |
427,035 |
9.3% |
164,235 |
147,908 |
150,634 |
9.0% |
11.0% |
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Investment securities available for sale |
17,860 |
15,065 |
18.6% |
5,679 |
5,127 |
3,905 |
45.4% |
10.8% |
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Due from other banks |
3,591 |
6,214 |
-42.2% |
1,055 |
1,281 |
1,395 |
-24.4% |
-17.6% |
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Bonds carried at amortized cost |
23,254 |
15,147 |
53.5% |
7,039 |
8,335 |
7,779 |
-9.5% |
-15.6% |
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Investments in leases |
11,671 |
11,426 |
2.1% |
3,950 |
3,516 |
4,298 |
-8.1% |
12.3% |
|
Other |
98 |
- |
NMF |
98 |
- |
- |
NMF |
NMF |
|
Interest income |
523,082 |
474,887 |
10.1% |
182,056 |
166,167 |
168,011 |
8.4% |
9.6% |
|
Customer accounts |
106,954 |
101,334 |
5.5% |
36,501 |
34,674 |
34,855 |
4.7% |
5.3% |
|
Due to credit institutions |
55,504 |
47,352 |
17.2% |
17,040 |
16,266 |
18,472 |
-7.8% |
4.8% |
|
Subordinated debt |
22,563 |
18,925 |
19.2% |
7,847 |
7,206 |
6,737 |
16.5% |
8.9% |
|
Debt Securities in issue |
1,297 |
1,555 |
-16.6% |
442 |
366 |
529 |
-16.4% |
20.7% |
|
Other |
- |
66 |
-100.0% |
- |
- |
- |
-100.0% |
NMF |
|
Interest expense |
186,318 |
169,232 |
10.1% |
61,830 |
58,512 |
60,593 |
2.0% |
5.7% |
|
Net interest income |
336,764 |
305,655 |
10.2% |
120,227 |
107,654 |
107,418 |
11.9% |
11.7% |
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
7.9% |
7.9% |
0.0% |
8.3% |
7.9% |
7.9% |
0.4% |
0.3% |
9M 2016 to 9M 2015 Comparison
In 9M 2016, net interest income grew by 10.2% YoY to GEL 336.8 million, resulting from a 10.1% higher interest income and 10.1% higher interest expense.
The increase in interest income of GEL 48.2 million was mainly driven by the rise in interest income from loans to customers by GEL 39.6 million, or 9.3%, which is primarily related to the 9.7% gross loan portfolio increase. Loan yields declined slightly over the same period from 13.6% to 13.5%, mainly due to a decrease in rates on FC-denominated loans that more than offset the increase in yields on GEL-denominated loans. The rise in interest income was also supported by the increase in interest income from investment securities (comprising both investment securities available for sale and bonds carried at amortized cost) by GEL 10.9 million, or 36.1%. This was primarily due to the increase in yields on such securities from 6.9% to 8.9% over the same period related to a higher refinance rate in the country in 9M 2016 compared to 9M 2015 (on 27 April 2016, NBG started to gradually cut the refinance rate, though it was still high at 6.5% as of 30 September 2016). The Bank's yield on average interest earning assets remained unchanged on a YoY basis at 12.3% during 9M 2016.
In the reporting period, interest expense increased by GEL 17.1 million, or 10.1% YoY, mainly due to a higher interest expense on due to credit institutions by GEL 8.2 million, or 17.2% and customer accounts by GEL 5.6 million, or 5.5%. The rise in interest expense on due to credit institutions resulted mainly from the increased cost of borrowing from 6.7% to 7.5% as of 30 September 2016. This in turn was due to higher cost of Lari-denominated borrowings at 9.9% compared to 6.9% in 9M 2015. This was mainly related to the refinancing rate increase, which more than offset the lower foreign currency denominated borrowing's rate which fell from 6.6% to 5.9%. The increase in interest expense on customer accounts was primarily driven by the 7.2% rise in the respective portfolio, which more than offset the 0.2pp decrease in the cost of client deposits to 3.4% in 9M 2016. As a result, the cost of funding ratio remained the same at 4.5% in 9M 2016.
Consequently, NIM was 7.9% in 9M 2016, unchanged from 9M 2015.
3Q 2016 to 3Q 2015 Comparison
In 3Q 2016, net interest income increased by GEL 12.8 million, or 11.9% YoY to GEL 120.2 million, as a result of a GEL 14.0 million, or 8.4%, increase in interest income and a GEL 1.2 million, or 2.0%, increase in interest expense, compared to 3Q 2015.
The hike in interest income mainly resulted from a GEL 13.6 million, or 9.0%, increase in interest income from loans, which in turn was due to the 9.7% rise in the gross loan portfolio as well as one-off interest income related to the one corporate customer amounting to GEL 4.2 million. This was partially offset by the decrease in loan yields from 13.6% to 13.5%, which resulted from the decrease in FC rates and more than offset the increase in GEL rate. The rise in interest income also resulted by the growth in interest income from investment securities (comprising both investment securities available for sale and bonds carried at amortized cost) by GEL 1.0 million, or 8.9%, which was mainly driven by a 0.8pp increase in yields on such securities to 8.3%. The rise in yields on securities more than offset decrease in loan yield and, as a result, yields on average interest earning assets increased to 12.5%, compared to 12.3% in 3Q 2015.
The increase in interest expense by GEL 1.2 million, or 2.0%, YoY, was primarily attributable to the increased interest expense on customer accounts by GEL 1.6 million, or 4.7% and subordinated debt by GEL 1.1 million, or 16.5%. The rise in interest expense on customer deposits resulted from the 7.2% increase in the respective portfolio, which was partially offset by the decrease in deposits rates of 0.1pp to 3.3%. The increase in interest expense on subordinated debt was due to the 13.2% growth in the respective portfolio, which more than offset the decline in the cost of subordinated debt by 0.1 pp to 11.0%. The increase in total interest expenses was partially offset by a decrease in expense on due to credit institutions by GEL 1.4 million, or by 7.8%, primarily related to the decrease in the respective average portfolio in the third quarter as well as due to the decrease in cost of borrowings by 0.1pp to 6.9%. As a result, the cost of funds dropped to 4.3%, compared to 4.5% in 3Q 2015.
Consequently, NIM increased from 7.9% to 8.3% (8.0% without one-off effect related to one large corporate customer as per above) on a YoY basis.
3Q 2016 to 2Q 2016 Comparison
On a QoQ basis, the net interest income increased by GEL 12.6 million, or 11.7%, as a result of a GEL 15.9 million, or 9.6%, higher interest income and GEL 3.3 million, or 5.7%, higher interest expense.
The increase in interest income mainly resulted from the rise in interest income on loans by GEL 16.3 million, or 11.0%, which in turn was due to the 6.2% increase in loan portfolio, as well as one-off interest income related to the one corporate customer with the amount of GEL 4.2 million and 0.2pp increase in loan yield. The rise in interest income was partially offset by a drop in interest income from investment securities by GEL 0.7 million, or 5.5%, which was driven by a 4.7% decrease in respective portfolio and reduced yields on securities by 0.8pp to 8.3%. This in turn was mainly a result of the gradual decrease of the refinancing rate in the country by 0.5pp over the last quarter. The increase in loan yields more than offset the decline in yields on securities - as a result, yields on average interest earning assets grew to 12.5%, compared to 12.2% in 2Q 2016.
The gain in interest expense primarily resulted from the increase in the interest expense on customer accounts by GEL 1.8 million, 5.3% in the respective period. This was primarily caused by the increase in customer accounts' portfolio by GEL 323.5 million or 7.6% which more than offset the decline in cost of deposit by 0.1pp to 3.3% in 3Q. Interest expense also grew following the increased interest expense on due to credit institutions by GEL 0.8 million, or 4.8%, driven by the GEL 404.1 million or 51.1% increase in the respective portfolio. This more than offset the effect of decreased cost of borrowed funds from financial institutions, from 8.0% to 6.9%. The additional GEL 0.6 million, or 8.9%, QoQ increment in interest expense on subordinated debt was due to the increase in respective portfolio as well as in the cost of subordinate debt from 10.3% to 11.0%. As a result, the cost of funds dropped to 4.3%, compared to 4.5% in 2Q 2016.
Consequently, on a QoQ basis, NIM grew by 0.3pp to 8.3% (8.0% without one-off effect related to one large corporate customer).
Fee and Commission Income
|
in thousands of GEL |
|
9M'16 |
9M'15 |
Change in % |
3Q'16 |
2Q'16 |
3Q'15 |
Change YoY |
Change QoQ |
|
Card operations |
|
42,282 |
35,460 |
19.2% |
15,434 |
13,566 |
12,821 |
20.4% |
13.8% |
|
Settlement transactions |
|
28,844 |
21,992 |
31.2% |
10,730 |
9,615 |
7,968 |
34.7% |
11.6% |
|
Guarantees issued |
|
8,391 |
6,338 |
32.4% |
2,259 |
3,812 |
2,037 |
10.9% |
-40.7% |
|
Issuance of letters of credit |
|
3,906 |
4,463 |
-12.5% |
1,353 |
1,074 |
1,321 |
2.5% |
26.0% |
|
Cash transactions |
|
9,083 |
7,809 |
16.3% |
3,594 |
3,134 |
2,810 |
27.9% |
14.7% |
|
Foreign exchange operations |
|
793 |
1,104 |
-28.2% |
239 |
209 |
277 |
-13.8% |
14.2% |
|
Other |
|
4,040 |
4,104 |
-1.6% |
1,502 |
1,271 |
1,512 |
-0.6% |
18.2% |
|
Fee and commission income |
|
97,340 |
81,270 |
19.8% |
35,112 |
32,681 |
28,745 |
22.1% |
7.4% |
|
Card operations |
|
23,766 |
18,390 |
29.2% |
8,856 |
7,322 |
6,990 |
26.7% |
21.0% |
|
Settlement transactions |
|
4,074 |
2,631 |
54.8% |
1,476 |
1,358 |
1,123 |
31.4% |
8.7% |
|
Guarantees received |
|
476 |
771 |
-38.2% |
210 |
126 |
366 |
-42.7% |
66.2% |
|
Letters of credit |
|
1,327 |
1,675 |
-20.8% |
424 |
423 |
593 |
-28.6% |
0.1% |
|
Cash transactions |
|
1,883 |
2,145 |
-12.2% |
614 |
710 |
858 |
-28.5% |
-13.6% |
|
Foreign exchange operations |
|
67 |
4 |
NMF |
0 |
-1 |
1 |
-93.8% |
NMF |
|
Other |
|
3,871 |
3,169 |
22.1% |
1,339 |
1,358 |
1,169 |
14.5% |
-1.4% |
|
Fee and commission expense |
|
35,464 |
28,786 |
23.2% |
12,918 |
11,296 |
11,101 |
16.4% |
14.4% |
|
Net Fee and Commission Income |
|
61,876 |
52,484 |
17.9% |
22,194 |
21,385 |
17,644 |
25.8% |
3.8% |
9M 2016 to 9M 2015 Comparison
In 9M 2016, net fee and commission income amounted to GEL 61.9 million, up by GEL 9.4 million, or 17.9%, compared to 9M 2015. This hike resulted mainly from a GEL 5.4 million increase in net fee and commission income from settlement transactions, a GEL 2.3 million rise from guarantees issued and a GEL 1.5 million increment from cash transactions, which were mainly driven by the increased scale of operations. The rise increase was slightly offset by a drop in other net fee and commission income by GEL 0.8 million.
3Q 2016 to 3Q 2015 Comparison
In 3Q 2016, net fee and commission income advanced to GEL 22.2 million, up by GEL 4.6 million, or 25.8%, compared to 3Q 2015. This resulted mainly from a GEL 2.4 million rise in net fee and commission income from settlement transactions, from a GEL 1.0 million increment in net cash transactions and from a GEL 0.7 million increase in card operations - the latter was mainly driven by the expanded scale of operations. The rise was slightly offset by a decrease in other net fee and commission income by GEL 0.2 million.
3Q 2016 to 2Q 2016 Comparison
On a QoQ basis, net fee and commission income increased by GEL 0.8 million, or 3.8%, compared to 2Q 2016, primarily driven by a GEL 1.0 million rise in net fee and commission income from settlement transactions, by a GEL 0.6 million increment in cash transactions, and by GEL 0.3 million increase in card operations. The gain was partially offset by a GEL 1.6 million drop in fee income from net guarantees received, which was mainly caused by the decline in guarantees portfolio.
Other Operating Non-Interest Income
|
in thousands of GEL |
9M'16 |
9M'15 |
Change in % |
3Q'16 |
2Q'16 |
3Q'15 |
Change YoY |
Change QoQ |
|
Gains less losses from trading in foreign currencies and foreign exchange translations |
44,810 |
48,773 |
-8.1% |
16,724 |
13,459 |
13,712 |
22.0% |
24.3% |
|
Gains less losses/(losses less gains) from derivative financial instruments |
-299 |
-852 |
-64.9% |
173 |
-109 |
-362 |
-147.8% |
-258.2% |
|
(Losses less gains) / gains less losses from disposal of investment securities available for sale |
8,795 |
- |
NMF |
- |
8,795 |
- |
NMF |
-100.0% |
|
Revenues from cash-in terminal services |
800 |
540 |
48.2% |
292 |
276 |
173 |
68.2% |
5.5% |
|
Revenues from operational leasing |
4,614 |
6,949 |
-33.6% |
1,086 |
1,718 |
2,349 |
-53.8% |
-36.8% |
|
Gain from sale of investment properties |
230 |
381 |
-39.5% |
0 |
15 |
194 |
-100.0% |
-100.0% |
|
Gain from sale of inventories of repossessed collateral |
1,391 |
1,465 |
-5.1% |
222 |
947 |
530 |
-58.2% |
-76.6% |
|
Administrative fee income from international financial institutions |
505 |
550 |
-8.2% |
147 |
147 |
216 |
-32.1% |
-0.2% |
|
Revenues from non-credit related fines |
447 |
68 |
NMF |
46 |
267 |
14 |
229.4% |
-82.6% |
|
Gain on disposal of premises and equipment |
99 |
99 |
0.1% |
3 |
30 |
75 |
-96.0% |
-90.1% |
|
Other |
2,778 |
3,919 |
-29.1% |
706 |
1,295 |
1,367 |
-48.4% |
-45.5% |
|
Other operating income |
10,864 |
13,971 |
-22.2% |
2,501 |
4,695 |
4,919 |
-49.2% |
-46.7% |
|
Other operating non-interest income |
64,169 |
61,892 |
3.7% |
19,398 |
26,840 |
18,269 |
6.2% |
-27.7% |
9M 2016 to 9M 2015 Comparison
In 9M 2016 the total other operating non-interest income increased by GEL 2.3 million, or by 3.7% YoY, to GEL 64.2 million. The rise was mainly driven by a GEL 8.8 million one-off gain on the sale of an investment security. It was partially offset by a GEL 4.0 million, or by 8.1% decline in gains from trading in foreign currencies and foreign exchange translations. This was mainly caused by elevated income from FX operations in 2015, broadly related to the depreciation, volatility and related increased margins of the currency rate during 2015, as well as due to a one-off FX gain in 2Q 2015. The rise was also balanced out by the drop in other operating income by GEL 3.1 million or 22.2%, mainly resulting from the decline in revenues from operating leasing by GEL 2.3 million.
3Q 2016 to 3Q 2015 Comparison
In 3Q 2016 total other operating non-interest income expanded by GEL 1.1 million, or by 6.2% YoY, to GEL 19.4 million. This rise was mainly driven by the GEL 3.0 million, or 22.0%, rise in net gains from trading in foreign currencies and foreign exchange translations, which was due to increased demand for foreign currency transactions as well as slightly increased margins. The increment was partially offset by a decline in other operating income by GEL 2.4 million, mainly due to a drop in revenues from operating leasing by GEL 1.3 million.
3Q 2016 to 2Q 2016 Comparison
On a QoQ basis, other operating non-interest income declined by GEL 7.4 million, or by 27.7%, primarily reflecting the GEL 8.8 million one-off gain which occurred in the previous quarter. Without that one-off benefit, total non-interest income expanded by 7.5% QoQ, mainly due to the GEL 3.3 million increase in gains from trading in foreign currencies and foreign exchange translations. This resulted from the increased demand for foreign currency transactions as well as slightly increased margins. The decrease in other operating income by GEL 2.2 million was mainly related to the decline in dividend income as well as the drop in gain from the sale of inventories of repossessed collateral.
Provision for Impairment
|
In thousands of GEL |
9M'16 |
9M'15 |
Change in % |
3Q'16 |
2Q'16 |
3Q'15 |
Change YoY |
Change QoQ |
|
Provision for loan impairment |
-38,796 |
-70,736 |
-45.2% |
-13,518 |
-12,211 |
-22,012 |
-38.6% |
10.7% |
|
Provision for impairment of investments in finance lease |
-236 |
-623 |
-62.1% |
-126 |
74 |
-260 |
-51.8% |
-269.7% |
|
Provision for/ (recovery of provision) performance guarantees and credit related commitments |
-3,557 |
3,062 |
-216.2% |
-1,481 |
-1,047 |
3 |
NMF |
41.5% |
|
Provision for impairment of other financial assets |
-1,128 |
-2,377 |
-52.5% |
66 |
-1,145 |
-1,145 |
-105,7% |
-105.7% |
|
Impairment of investment securities available for sale |
-11 |
- |
NMF |
- |
- |
- |
NMF |
-100% |
|
Total provision charges for impairment |
-43,728 |
-70,673 |
-38.1% |
-15,059 |
-14,329 |
-23,415 |
-35.7% |
5.1% |
|
Operating income after provisions for impairment |
419,082 |
349,358 |
20.0% |
146,759 |
141,550 |
119,916 |
22.4% |
3.7% |
|
|
|
|
|
|
|
|
|
|
|
Cost of Risk |
1.1% |
2.3% |
-1.1% |
1.1% |
1.1% |
2.0% |
-0.9% |
0.0% |
9M 2016 to 9M 2015 Comparison
In 9M 2016, total provision charges declined by GEL 26.9 million to GEL 43.7 million, compared to 9M 2015, mainly driven by decreased charges on loans by GEL 31.9 million. The contraction was driven by the elevated provision charges in 9M 2015, which were mainly caused by the technical rise in provisions related to the local currency depreciation. The drop was offset by the GEL 6.6 million increase in provision charges on performance guarantees and credit related commitments, which resulted from recoveries in 9M 2015.
In 9M 2016, the cost of risk on loans stood at 1.1%, compared to 2.3% (1.4% without the currency rate effect) in 9M 2015.
3Q 2016 to 3Q 2015 Comparison
In 3Q 2016, total provision charges decreased by GEL 8.4 million, out of which GEL 8.5 million is attributable to loan book. The decline is driven by increased charges in 3Q 2015 due to the depreciation of the Georgian Lari. Without the FX effect provision charges would have been stable. Provision for performance guarantees and credit related commitments increased by the GEL 1.5 million and provision for impairment of other financial assets dropped by the GEL 1.2 million.
In 3Q 2016, the cost of risk on loans was 1.1%, compared to 2.0% (1.3% without the currency rate effect) in 3Q 2015.
3Q 2016 to 2Q 2016 Comparison
On a QoQ basis, total provision charges remained stable. The cost of risk on loans stood at 1.1%, unchanged from 2Q 2016.
Further details on asset quality can be found on page 19.
Operating Expenses
|
in thousands of GEL |
9M'16 |
9M'15 |
Change in % |
3Q'16 |
2Q'16 |
3Q'15 |
Change YoY |
Change QoQ |
|
Staff costs |
109,677 |
100,332 |
9.3% |
40,205 |
35,301 |
35,025 |
14.8% |
13.9% |
|
Depreciation and amortization |
20,647 |
18,939 |
9.0% |
7,037 |
7,042 |
6,638 |
6.0% |
-0.1% |
|
Professional services |
18,951 |
4,954 |
282.5% |
2,143 |
10,106 |
1,137 |
88.5% |
-78.8% |
|
Advertising and marketing services |
7,528 |
7,824 |
-3.8% |
2,682 |
2,923 |
2,991 |
-10.3% |
-8.2% |
|
Rent |
12,654 |
12,148 |
4.2% |
4,257 |
4,056 |
4,276 |
-0.4% |
5.0% |
|
Utility services |
3,634 |
3,239 |
12.2% |
1,212 |
1,102 |
1,145 |
5.8% |
10.0% |
|
Intangible asset enhancement |
5,605 |
4,176 |
34.2% |
1,905 |
1,821 |
1,436 |
32.7% |
4.6% |
|
Taxes other than on income |
3,677 |
3,395 |
8.3% |
1,185 |
1,329 |
1,013 |
17.0% |
-10.8% |
|
Communications and supply |
2,246 |
2,594 |
-13.4% |
742 |
750 |
801 |
-7.4% |
-1.0% |
|
Stationary and other office expenses |
2,406 |
2,296 |
4.8% |
773 |
790 |
809 |
-4.4% |
-2.1% |
|
Insurance |
1,954 |
1,919 |
1.8% |
684 |
665 |
600 |
14.1% |
2.9% |
|
Security services |
1,323 |
1,208 |
9.6% |
442 |
481 |
411 |
7.7% |
-8.1% |
|
Premises and equipment maintenance |
1,940 |
1,986 |
-2.3% |
671 |
682 |
628 |
6.9% |
-1.7% |
|
Business trip expenses |
1,226 |
1,172 |
4.6% |
350 |
523 |
464 |
-24.5% |
-33.1% |
|
Transportation and vehicles maintenance |
961 |
969 |
-0.8% |
319 |
328 |
362 |
-11.8% |
-2.8% |
|
Charity |
699 |
789 |
-11.3% |
214 |
215 |
248 |
-13.9% |
-0.6% |
|
Personnel training and recruitment |
768 |
768 |
0.1% |
259 |
275 |
282 |
-7.8% |
-5.7% |
|
Write-down of current assets to fair value less costs to sell |
-1,645 |
-475 |
NMF |
-1,697 |
122 |
-24 |
NMF |
NMF |
|
Loss on disposal of Inventory |
652 |
64 |
NMF |
115 |
252 |
50 |
128.1% |
-54.4% |
|
Loss on disposal of investment properties |
0 |
3 |
-100.0% |
- |
- |
- |
- |
- |
|
Loss on disposal of premises and equipment |
333 |
1 |
NMF |
259 |
34 |
- |
NMF |
NMF |
|
Impairment of intangible assets |
19 |
2,120 |
-99.1% |
- |
- |
1,794 |
-100.0% |
- |
|
Other |
4,947 |
5,318 |
-7.0% |
1,776 |
1,571 |
2,000 |
-11.2% |
13.1% |
|
Administrative and other operating expenses |
69,880 |
56,464 |
23.8% |
18,294 |
28,026 |
20,423 |
-10.4% |
-34.7% |
|
Operating expenses |
200,204 |
175,736 |
13.9% |
65,536 |
70,369 |
62,085 |
5.6% |
-6.9% |
|
Profit before tax |
218,878 |
173,621 |
26.1% |
81,223 |
71,181 |
57,831 |
40.4% |
14.1% |
|
Income tax expense |
-8,653 |
-21,845 |
-60.4% |
-10,235 |
9,359 |
-7,226 |
41.6% |
-209.4% |
|
Profit for the period |
210,225 |
151,777 |
38.5% |
70,998 |
80,540 |
50,606 |
40.3% |
-11.9% |
|
|
|
|
|
|
|
|
|
|
|
Cost to income ratio |
43.3% |
41.8% |
1.5% |
40.5% |
45.1% |
43.3% |
-2.8% |
-4.6% |
|
ROAE |
21.8% |
19.0% |
2.8% |
20.6% |
25.5% |
18.2% |
2.4% |
-4.9% |
|
ROAA |
4.1% |
3.3% |
0.8% |
4.0% |
4.9% |
3.1% |
0.9% |
-0.9% |
9M 2016 to 9M 2015 Comparison
In 9M 2016, total operating expenses grew to GEL 200.2 million, up by GEL 24.5 million, or by 13.9%, YoY. The increase was primarily due to one-off expenses related to the Premium Listing that amounted to GEL 16.0 million. Without the effect of one-off expenses, operating costs would have increased by GEL 8.5 million, or by 4.8% YoY. The growth resulted mainly from increased staff cost, which grew by GEL 9.3 million, broadly following the Bank's increased scale of business.
As a result, the cost to income ratio was 43.3% (or 40.6% without one-off effects) in 9M 2016, compared to 41.8% in 9M 2015.
3Q 2016 to 3Q 2015 Comparison
In 3Q 2016, total operating expenses declined to GEL 65.5 million, up by GEL 3.5 million, or by 5.6%YoY. The rise was primarily due to an increase in staff cost expenses by GEL 5.2 million or 14.8%, broadly depending on the expanded scale of the business. This was partially offset by a decline in other administrative expenses of GEL 2.1 million or 10.4%. This was mainly related to the drop in the impairment of intangible assets and reversal of previously written-down repossessed assets.
As a result, the cost to income ratio stood at 40.5% in 3Q 2016, compared to 43.3% in 3Q 2015.
3Q 2016 to 2Q 2016 Comparison
On a QoQ basis, operating expenses decreased by GEL 4.8 million, or 6.9%, compared to 2Q 2016. The decline was mainly due to GEL 8.0 million drop in professional services which were primarily associated with Premium Listing expenses. The decrease was partially offset by the increment in staff costs of GEL 4.9 million or 13.9% compared to 2Q 2016. This was mainly related to the seasonality of performance and the accrual method, whereby the bonuses in 2H are generally higher than in 1H.
As a result, the cost to income ratio stood at 40.5%, down by 4.6pp (or down by 1.1% without one-off effects in either quarter).
Net Income
In 3Q net income hiked by 40.3% to GEL 71.0 million YoY and up by 12.9% QoQ without one-off effects in 2Q. ROE stood at 20.6%, up by 2.4pp YoY and up by 0.9pp QoQ without one-off effects in the second quarter. ROA stood at 4.0%, up by 1.0pp YoY and up by 0.2 pp QoQ, without one-off effects in the second quarter
Net income for 9M 2016 stood at GEL 210.2 million, up by 38.5% YoY. ROE stood at 21.8%, up by 2.8pp YoY. ROA stood at 4.1%, up by 0.8pp YoY.
Balance Sheet Discussion
|
In millions of GEL |
30-Sep-16 |
30-Jun-16 |
30-Sep-15 |
Change QoQ |
Change YoY |
|
Cash, due from banks and mandatory cash balances with NBG |
1,533 |
981 |
1,397 |
56.2% |
9.7% |
|
Loans and advances to customers (Net) |
4,810 |
4,521 |
4,351 |
6.4% |
10.5% |
|
Financial securities |
606 |
636 |
629 |
-4.7% |
-3.7% |
|
Fixed and intangible assets & investment property |
375 |
367 |
331 |
2.3% |
13.2% |
|
Other assets |
261 |
268 |
228 |
-2.7% |
14.3% |
|
Total assets |
7,584 |
6,772 |
6,936 |
12.0% |
9.3% |
|
Due to credit institutions |
1,195 |
791 |
1,124 |
51.1% |
6.3% |
|
Customer accounts |
4,593 |
4,270 |
4,286 |
7.6% |
7.2% |
|
Debt Securities in issue |
24 |
17 |
24 |
47.2% |
1.2% |
|
Subordinated Debt |
284 |
283 |
251 |
0.3% |
13.2% |
|
Other liabilities |
99 |
97 |
120 |
1.7% |
-17.5% |
|
Total Liabilities |
6,195 |
5,457 |
5,805 |
13.5% |
6.7% |
|
Total equity |
1,389 |
1,315 |
1,132 |
5.6% |
22.7% |
Assets
As of 30 September 2016, TBC Bank's total assets amounted to GEL 7,583.7 million, up by GEL 647.3 million, or 9.3%, YoY. This increase resulted mainly from the GEL 458.8 million, or 10.5%, rise in net loans to customers, due to a GEL 104.8 million or 5.3% increase in Liquid Assets (cash, due from banks and mandatory cash balances with NBG) and a GEL 43.7 million, or 13.2%, increase in fixed and intangible assets and investment property compared to 30 September 2015. The rise was partially offset by a GEL 23.6 million, or 3.7%, decline in financial securities.
On a QoQ basis, total assets expanded by GEL 811.5 million, or 12.0%. The rise was mainly due to a GEL 506.8 million, or by 32.3%, hike in Liquid Assets (cash, due from banks and mandatory cash balances with NBG). Another factor to the growth in total assets was a GEL 288.5 million or 6.4% rise in net loans to customers.
The liquid assets to liability ratio stood at 33.5%, compared to 34.0% as of 30 September 2015 and 28.8% as of 30 June 2016.
As of 30 September 2016, the gross loan portfolio amounted to GEL 5,003.6 million, up by 9.7% YoY and by 6.2% QoQ. Gross loans denominated in foreign currency accounted for 63.4% of total gross loans, compared to 65.4% as of 30 September 2015 and 66.2% as of 30 June 2016. As of 30 September 2016, NPLs stood at 4.6%, compared to 4.9% and 4.7% as of 30 September 2015 and 30 June 2016, respectively. The NPLs provision coverage ratio stood at 84.3% (205% including the collateral), compared to 93.0% as of 30 September 2015 and 85.6% as of 30 June 2016.
Asset Quality
Foreign Currency Income Linked Borrowers
|
|
30-Sep-16 |
30-Jun-16 |
||
|
Segments |
FC share |
FC linked borrowers share |
FC share |
FC linked borrowers share |
|
Retail |
58.2% |
32.9% |
59.2% |
34.2% |
|
Consumer |
25.1% |
21.1% |
25.8% |
20.4% |
|
Mortgage |
89.5% |
24.4% |
89.6% |
24.3% |
|
Pawn |
66.5% |
93.7% |
70.5% |
95.6% |
|
Corporate |
75.2% |
60.6%* |
82.3% |
52.7%** |
|
SME |
80.8% |
25.3% |
84.2% |
24.2% |
|
Micro |
33.1% |
4.0% |
31.1% |
5.0% |
|
Total Loan Portfolio |
63.4% |
39.6% |
66.2% |
38.0% |
PAR 30 by Segments and Currencies
|
Par 30 |
30-Sep-16 |
30-Jun-16 |
30-Sep-15 |
||||||
|
|
GEL |
FC |
Total |
GEL |
FC |
Total |
GEL |
FC |
Total |
|
Corporate |
0.1% |
1.0% |
0.8% |
0.0% |
1.3% |
1.1% |
0.2% |
2.8% |
2.2% |
|
Retail |
2.3% |
2.8% |
2.6% |
2.4% |
2.8% |
2.7% |
2.7% |
2.8% |
2.8% |
|
SME |
1.2% |
3.9% |
3.4% |
1.2% |
3.9% |
3.5% |
1.8% |
3.8% |
3.4% |
|
Micro |
3.7% |
4.3% |
3.9% |
3.5% |
5.5% |
4.1% |
2.1% |
4.8% |
2.9% |
|
Total |
2.1% |
2.4% |
2.3% |
2.2% |
2.6% |
2.4% |
2.0% |
3.1% |
2.7% |
Total
The QoQ decrease in PAR 30 by 0.1pp was driven by improved credit quality across all segments. On a YoY basis, the decrease in PAR 30 by 0.4pp resulted mainly by the improvements in the corporate and retail segments.
Retail Segment
Retail segment PAR 30 decreased by 0.1pp and by 0.2pp respectively on QoQ and YoY. The decline was driven by GEL denominated loans. PAR 30 of FC denominated loans remained stable.
Corporate
Corporate segment PAR 30 declined by 0.3pp and 1.5pp on QoQ and YoY basis due to the better performance of the book, both in foreign currency and GEL.
SME
The SME segment PAR 30 decreased by 0.1pp QoQ, and remains stable on YoY basis. In Q3 2016 both FC and GEL denominated loans shows stable trend.
Micro
The Micro segment PAR 30 declined by 0.2pp QoQ and increased by 1.0pp YoY. The YoY increase was mainly driven by the macro developments in 2015.
NPLs
|
NPLs |
30-Sep-16 |
30-Jun -16 |
30-Sep-15 |
||||||
|
|
GEL |
FC |
Total |
GEL |
FC |
Total |
GEL |
FC |
Total |
|
Corporate |
1.1% |
9.1% |
7.1% |
1.7% |
8.3% |
7.1% |
0.3% |
10.2% |
7.9% |
|
Retail |
1.7% |
3.6% |
2.8% |
1.6% |
3.6% |
2.8% |
1.9% |
3.4% |
2.8% |
|
SME |
1.7% |
6.7% |
5.7% |
1.8% |
7.0% |
6.2% |
5.0% |
4.9% |
4.9% |
|
Micro |
3.0% |
6.2% |
4.1% |
2.8% |
7.1% |
4.1% |
2.3% |
7.4% |
3.8% |
|
Total |
1.9% |
6.2% |
4.6% |
1.9% |
6.1% |
4.7% |
1.8% |
6.6% |
4.9% |
Total
NPLs stood at 4.6%, down by 0.1pp QoQ and by 0.3pp YoY. The decline on a YoY basis was driven by improvement in the corporate book performance, whereas on QoQ basis the 2016 performance across all segments has been stable.
Retail
The NPL ratio in the retail segment was 2.8% as of 30 September 2016, stable on both QoQ and YoY basis, reflecting the stabilized macro environment. In the FC-denominated portfolio NPLs stood at 3.6%, driven by increased restructuring of FC denominated mortgage and consumer loans throughout 2015, whereas for GEL loans level of NPLs is relatively small, standing at 1.7%.
Corporate
The NPL ratio remained unchanged from 2Q and declined by 0.8pp YoY, due to the improved quality of the portfolio with no new borrowers revealing major financial difficulties. QoQ NPLs in FC increased by 0.8 pp mainly due to decrease in corporate FC portfolio.
SME
The NPL ratio declined by 0.5pp QoQ and increased by 0.8pp YoY basis. The QoQ drop was driven by the stabilized performance of both stand-alone and TBC Kredit's portfolios. The YoY increase resulted by the local currency depreciation in 2015 and macro developments in Azerbaijan.
Micro
As of 30 September 2016 the NPL ratio stood at 4.1%, stable on a QoQ basis and up by 0.3pp YoY. The latter was mainly due to the macro developments in 2015.
NPLs Coverage
|
NPLs coverage |
30-Sep-16 |
30-Jun-16 |
30-Sep-15 |
|
||
|
|
excl. collateral |
incl. collateral |
excl. collateral |
incl. collateral |
excl. collateral |
|
|
Corporate |
79.6% |
223.5% |
86.3% |
230.8% |
90.9% |
|
|
Retail |
106.2% |
200.9% |
106.2% |
194.4% |
127.0% |
|
|
SME |
47.5% |
164.3% |
42.8% |
164.0% |
35.5% |
|
|
Micro |
106.0% |
200.3% |
99.3% |
187.5% |
98.8% |
|
|
Total |
84.3% |
205.0% |
85.6% |
205.3% |
93.0% |
|
As of September 2016 the NPLs provision coverage ratio stood at 84.3%, compared to 85.6% as of 30 June 2016 and 93.0% as of 30 September 2015.
Liabilities
As of 30 September 2016, TBC Bank's total liabilities amounted to GEL 6,195.1 million, up by 6.7% YoY and by 13.5% QoQ. The YoY growth of GEL 390.5 million was primarily due to a GEL 307.1 million, or 7.2%, increase in customer deposits which mainly resulted from the increment in retail deposits. The increase in liabilities was also a result of a rise in due to credit institutions by GEL 71.2 million.
On a QoQ basis, liabilities grew by GEL 737.8 million, or 13.5%, primarily due to the GEL 323.5 million, or 7.6%, increase in customer deposits, which mainly resulted from the growth in retail and SME deposits. In addition, liabilities due to credit institutions grew by GEL 404.1 million or 51.1% on a QoQ basis, mainly due to an increase in NBG loan.
Liquidity
The Bank's average liquidity ratio, as defined by the central bank, stood at 34.9% as of 30 September 2016, compared to 33.6% and 33.3% as of 30 September 2015 and 30 June 2016 respectively.
Total Equity
As of 30 September 2016, TBC's total equity amounted to GEL 1,388.6 million, up from GEL 1,131.9 million as of 30 September 2015 and from GEL 1,314.9 million as of 30 June 2016. The QoQ growth was primarily driven by the increased net income attributable to the Bank's owners.
Regulatory Capital
As of 30 September 2016, the Bank's Basel II/III4 tier 1 and total capital adequacy ratios (CAR) stood at 13.3% and 16.2%, respectively, compared to 12.0% and 14.8% as of 30 September 2015, and 12.6% and 15.7% as of 30 June 2016. The minimum capital requirements set by the NBG for Basel II/III tier 1 and total capital ratios are 8.5% and 10.5%, respectively. The Bank's Basel II/III tier 1 capital amounted to GEL 1,124.6 million, compared to GEL 879.1 million as of 30 September 2015 and GEL 999.2 million as of 30 June 2016. Risk weighted assets were GEL 8,427.8 million as of 30 September 2016, up by GEL 1,121.9 million YoY and up by GEL 515.2 million QoQ.
As of 30 September 2016 the Bank's Basel I tier 1 capital ratio was 25.6%. Tier 1 capital reached GEL 1,322.3 million, compared to 1,085.1 million and 1,247.6 million as of 30 September 2015 and 30 June 2016, respectively. Risk weighted assets stood at GEL 5162.3 million as of 30 September 2016, up by GEL 532.1 million YoY and by GEL 411.2 million QoQ.
Bank Republic
Transaction Details
Bank Republic acquisition completed on 20 October. The confirmatory due diligence was completed with no adjustments to the consideration. The EBRD stake was acquired on essentially the same key commercial terms. The full integration will be completed in Q3 2017. The other important details are as follows:
|
Cash consideration |
239 million |
|
Number of newly issued shares |
2,998,305 |
|
% in TBC Bank Group PLC |
5.7% |
|
Share price (mid-point) as of 20 October 2016 |
37.44 |
|
Value of share consideration as of 20 October 2016 (closing)5 |
112 million |
|
Expected Book Value as of YE 2016/Tangible Book Value as of YE 2016 |
315/305 million |
|
Expected Net income as of YE 2016 |
60 million |
|
Acquisition price to book multiple (book value estimated for YE 2016) |
1.1x |
|
Acquisition price to earnings multiple (earnings estimated for 2016) |
5.9x |
Capital Impact
• Transaction Structure: at completion of Bank Republic transaction, 70% of the consideration paid in cash from JSC TBC Bank and remaining 30% in TBC Bank Group PLC shares. After completion, the 30% of Bank Republic was sold by TBC Bank Group PLC to JSC TBC Bank. As a result, TBC Bank Group PLC received funds of 112 million, which will be used for paying dividends according to our distribution policy, or is committed back to the capital of the JSC TBC Bank if needed.
• The following table represents capital impact calculation both for the acquisition and for the merger. After the acquisition, Tier 1 Capital is decreased to 11.0% with TBC Bank Group PLC funds included. The position does not change if immediate merger is assumed. Total Capital Adequacy ratio after the acquisition is decreased to 15.0% with TBC Bank Group PLC cash included.
|
GEL mln |
TBC Bank 30 September 2016 |
Acquisition impact if applied to September6 |
Merger impact if applied to September7 |
||
|
Tier 1 capital |
1,125 |
830 |
1,047 |
||
|
Total capital7 |
1,369 |
1,175 |
1,392 |
||
|
Risk weighted assets |
8,428 |
8,568 |
10,577 |
||
|
Tier 1 ratio without PLC cash committed to capital |
13.3% |
9.7% |
9.9% |
||
|
Tier 1 ratio with PLC committed capital |
11.0% |
11.0% |
|||
|
Total Capital without PLC cash committed to capital |
16.2% |
13.7% |
13.2% |
||
|
Total Capital with PLC committed capital |
15.0% |
14.2% |
|||
Funding
|
|
|
|
Goodwill
Estimated goodwill number is 20 - 35 million Georgian Lari.
Results by Segments and Subsidiaries
Following the merger with Bank Constanta in January 2015, the Bank revised the segment definitions as per below:
· The Corporate segment includes business customers that have annual revenues of GEL 8.0 million or more, or have been granted a loan in an amount equivalent to USD 1.5 million or more. Some other business customers may also be assigned to the Corporate segment on a discretionary basis;
· The Micro segment business customers with loans below USD 70,000, as well as pawn loans, credit cards and cash cover loans granted in TBC Bank Constanta branches, and deposits up to USD 20,000 in urban areas and up to USD 100,000 in rural areas of the customers of TBC Bank Constanta branches. Some other customers may also be assigned to the Micro segment on a discretionary basis;
· The SME segment includes business customers that are not included in either the Corporate or Micro segments. Some other legal entity customers may also be assigned to the SME segment on a discretionary basis;
· The Retail segment includes individuals that are not included in the other categories.
· Corporate Centre and Other Operations comprise the Treasury, other support and back office functions, and non-banking subsidiaries of the Group.
The following table sets out the information on the financial results of TBC Bank's segments for 9M 2016
|
9M 2016 |
Retail |
SME |
Corporate |
Micro |
Corp. Centre |
Total |
|
Interest income |
226,486 |
48,820 |
107,779 |
83,523 |
56,474 |
523,082 |
|
Interest expense |
-71,687 |
-5,787 |
-28,113 |
-1,366 |
-79,364 |
186,318 |
|
Net Transfer pricing |
-20,587 |
-1,728 |
-18,212 |
-29,180 |
69,706 |
- |
|
Net interest income |
134,212 |
41,305 |
61,454 |
52,977 |
46,817 |
336,764 |
|
Fee and commission income |
64,271 |
10,326 |
14,700 |
5,107 |
2,936 |
97,340 |
|
Fee and commission expense |
-27,364 |
-2,659 |
-2,372 |
-2,653 |
-415 |
-35,464 |
|
Net fee and commission income |
36,907 |
7,667 |
12,328 |
2,454 |
2,520 |
61,876 |
|
Gains less losses from trading in foreign currencies |
10,533 |
16,812 |
14,302 |
1,297 |
1,853 |
44,798 |
|
Foreign exchange translation gains less losses/(losses less gains) |
- |
- |
- |
- |
12 |
12 |
|
Net losses from derivative financial instruments |
- |
- |
- |
- |
-299 |
-299 |
|
(Losses less gains) / gains less losses from disposal of investment securities available for sale |
- |
- |
- |
- |
8,795 |
8,795 |
|
Other operating income |
1,602 |
326 |
6,142 |
55 |
2,738 |
10,864 |
|
Other operating non-interest income |
12,135 |
17,138 |
20,444 |
1,352 |
13,099 |
64,169 |
|
Provision for loan impairment |
-31,454 |
-9,061 |
19,896 |
-18,177 |
- |
-38,796 |
|
(Provision) / recovery of provision for liabilities, charges and credit related commitments |
-54 |
-128 |
-3,384 |
9 |
- |
-3,557 |
|
Recovery of provision / (provision) for impairment of investments in finance lease |
- |
- |
- |
- |
-236 |
-236 |
|
(Provision) / recovery of provision for impairment of other financial assets |
-11 |
20 |
-665 |
-56 |
-417 |
-1,128 |
|
Recovery of impairment / (impairment) of investment securities available for sale |
- |
- |
- |
- |
-11 |
-11 |
|
Profit before G&A expenses and income taxes |
151,736 |
56,941 |
110,073 |
38,559 |
61,772 |
419,082 |
|
Staff costs |
-55,345 |
-11,705 |
-14,590 |
-20,017 |
-8,020 |
109,677 |
|
Depreciation and amortisation |
-12,432 |
-1,560 |
-790 |
-4,434 |
-1,431 |
-20,647 |
|
Administrative and other operating expenses |
-34,877 |
-6,457 |
-6,234 |
-11,019 |
-11,293 |
-69,880 |
|
Operating expenses |
102,653 |
-19,722 |
-21,614 |
-35,470 |
-20,744 |
200,204 |
|
Profit before tax |
49,083 |
37,219 |
88,458 |
3,089 |
41,028 |
218,878 |
|
Income tax expense |
-5,466 |
-6,039 |
-13,483 |
-455 |
16,789 |
-8,653 |
|
Profit for the year |
43,617 |
31,181 |
74,975 |
2,635 |
57,817 |
210,225 |
The following table sets out the loans and customer deposits portfolios of TBC Bank's business segments as of 30 September 2016, 30 June 2016 and 30 September 2015.
|
In thousands of GEL |
30-Sep-16 |
30-Jun-16 |
30-Sep-15 |
|
Loans and Advances to Customers |
|
|
|
|
Consumer |
1,025,120 |
941,543 |
816,601 |
|
Mortgage |
1,015,550 |
931,980 |
879,645 |
|
Pawn |
266,889 |
268,433 |
224,648 |
|
Retail |
2,307,559 |
2,141,956 |
1,920,894 |
|
Corporate |
1,471,931 |
1,431,937 |
1,542,511 |
|
SME |
670,248 |
604,350 |
600,644 |
|
Micro |
553,827 |
532,886 |
495,988 |
|
Total loans and advances to customers (gross) |
5,003,564 |
4,711,130 |
4,560,036 |
|
Less: Provision for loan impairment |
-194,035 |
-190,104 |
-209,303 |
|
Total loans and advances to customers (net) |
4,809,530 |
4,521,026 |
4,350,733 |
|
Customer Accounts |
|
|
|
|
Retail deposits |
2,734,133 |
2,573,584 |
2,397,898 |
|
Corporate deposits |
1,006,739 |
982,282 |
1,139,476 |
|
SME deposits |
769,968 |
640,692 |
674,552 |
|
Micro deposits |
82,397 |
73,220 |
74,259 |
|
Total customer accounts |
4,593,237 |
4,269,778 |
4,286,185 |
Retail Banking
As of 30 September 2016, retail loans stood at GEL 2,307.6 million, up by 20.1% YoY and up by 7.7% QoQ, mainly related to an increase in consumer loans of 25.5% YoY and 8.9% QoQ. The acquisition of Progress Bank's portfolio increased the retail portfolio by GEL 12.9 million. TBC Bank's retail loans accounted for a 32.3% market share of total individual loans. As of 30 September 2016, foreign currency loans represented 58.2% of the total retail loan portfolio.
In the same period, retail deposits increased to GEL 2,734.1 million, up by 14.0% YoY and by 6.2% QoQ, and accounted for a 35.5% market share of total individual deposits. The increase in retail deposits was mainly attributable to the increase in current deposits by 25.0% YoY and 7.6% QoQ. The acquisition of Progress Bank increased the retail deposit portfolio by GEL 24 million. Term deposits accounted for 60.3% of the total retail deposit portfolio as of 30 September 2016. Foreign currency deposits accounted for 86.9% of the total retail deposit portfolio.
In 9M 2016, retail loan yields and deposit rates stood at 14.4% and 3.7% respectively, and the segment's cost of risk on loans was 2.0%. The retail segment contributed 20.7%, or GEL 43.6 million, to TBC's total net income in 9M 2016.
Corporate Banking
As of 30 September 2016, corporate loans amounted to GEL 1,471.9 million, down by 4.6% YoY and up by 2.8% QoQ. The acquisition of Progress Bank increased the corporate loan portfolio by GEL 1.3 million. Foreign currency loans accounted for 75.2% of the total corporate loan portfolio.
As of the same date, corporate deposits totaled GEL 1,006.7 million, down by 11.6% YoY and up by 2.5% QoQ. Foreign currency corporate deposits represented 57.8% of the total corporate deposit portfolio. The acquisition of Progress Bank's portfolio increased the corporate deposit portfolio by GEL 28.8 million.
In 9M 2016, corporate loan yields and deposit rates stood at 10.3% and 4.1%, respectively. In the same period, the cost of risk on loans was -1.9%. In terms of profitability, the corporate segment's net profit reached GEL 75.0 million, or 35.7% of the Bank's total net income.
SME Banking
As of 30 September 2016, SME loans amounted to GEL 670.2 million, up by 11.6% YoY and up by 10.9% QoQ. The acquisition of Progress Bank's portfolio increased the SME loan portfolio by GEL 33.4 million. Foreign currency loans accounted for 80.8% of the total SME portfolio.
As of the same date, SME deposits stood at GEL 770.0 million, up by 14.1% YoY and by 20.2% QoQ. The acquisition of Progress Bank's deposit portfolio increased the SME deposit portfolio by GEL 18.2 million. Foreign currency SME deposits accounted for 60.4% of the total SME deposit portfolio.
In 9M 2016, SME loan yields and deposit rates stood at 10.6% and 1.2%, respectively while the cost of risk on loans was 2.0%. In terms of profitability, net profit for the SME segment amounted to GEL 31.2 million, or 14.8%, of TBC's total net income.
Micro Banking
As of 30 September 2016 micro loans totaled GEL 553.8 million, up by 11.7% YoY and up 3.9% QoQ. Foreign currency loans represented 33.1% of the total micro loan portfolio. The acquisition of Progress Bank's portfolio had an immaterial effect in the amount of GEL 1.6 million.
As of the same date, micro customer deposits amounted to GEL 82.4 million, up by 11.0% YoY and up by 12.5% QoQ mainly due to an increase in current accounts. Foreign currency micro deposits represented 59.2% of the total micro deposit portfolio.
In 9M 2016, micro loan yields and deposit rates stood at 21.8% and 2.5%, respectively. In the same period, the cost of risk on loans was 4.7%. In terms of profitability, the micro segment's net profit reached GEL 2.6 million, or 1.3% of TBC's total net income.
Annexes
Subsidiaries of JSC TBC Bank
|
|
Ownership / voting |
Country |
Year of incorporation or acquisition |
Industry |
Total Assets |
|
|
Subsidiary |
Amount GEL'000 |
% in TBC Group |
||||
|
United Financial Corporation JSC |
98.7% |
Georgia |
1997 |
Card processing |
11,251 |
0.15% |
|
TBC Capital LLC |
100.0% |
Georgia |
1999 |
Brokerage |
670 |
0.01% |
|
TBC Leasing JSC |
99.6% |
Georgia |
2003 |
Leasing |
100,071 |
1.32% |
|
TBC Kredit LLC |
75.0% |
Azerbaijan |
2008 |
Non-banking credit institution |
45,804 |
0.60% |
|
Banking System Service Company LLC |
100.0% |
Georgia |
2009 |
Information services |
416 |
0.01% |
|
TBC Pay LLC |
100.0% |
Georgia |
2009 |
Processing |
24,516 |
0.32% |
|
Mali LLC |
100.0% |
Georgia |
2011 |
Real estate management |
211 |
0.00% |
|
Real Estate Management Fund JSC |
100.0% |
Georgia |
2010 |
Real estate management |
1,425 |
0.02% |
|
TBC Invest LLC |
100.0% |
Israel |
2011 |
PR and marketing |
133 |
0.00% |
Consolidated Balance Sheet
|
In thousands of GEL |
30-Sep-16 |
30-Jun-16 |
30-Sep-15 |
|
Cash and cash equivalents |
843,431 |
344,205 |
903,136 |
|
Due from other banks |
12,284 |
12,256 |
25,944 |
|
Mandatory cash balances with National Bank of Georgia |
676,780 |
624,502 |
467,649 |
|
Loans and advances to customers (Net) |
4,809,530 |
4,521,026 |
4,350,733 |
|
Investment securities available for sale |
252,736 |
242,450 |
220,538 |
|
Repurchase receivables |
57,232 |
42,347 |
41,527 |
|
Investment securities held to maturity |
295,901 |
350,885 |
367,401 |
|
Investments in finance leases |
77,496 |
77,043 |
67,077 |
|
Investment properties |
71,122 |
69,984 |
73,742 |
|
Goodwill |
2,726 |
2,726 |
2,726 |
|
Intangible assets |
49,663 |
45,954 |
41,855 |
|
Premises and equipment |
254,214 |
250,654 |
215,689 |
|
Other financial assets |
62,799 |
75,692 |
62,226 |
|
Deferred income tax asset |
2,181 |
2,326 |
434 |
|
Current income tax prepayment |
9,515 |
10,871 |
10,276 |
|
Other assets |
106,103 |
99,304 |
85,457 |
|
TOTAL ASSETS |
7,583,712 |
6,772,226 |
6,936,408 |
|
LIABILITIES |
|
|
|
|
Due to Credit Institutions |
1,195,031 |
790,971 |
1,123,858 |
|
Customer accounts |
4,593,237 |
4,269,778 |
4,286,185 |
|
Current income tax liability |
551 |
406 |
722 |
|
Debt Securities in issue |
24,227 |
16,460 |
23,949 |
|
Deferred income tax liability |
1,822 |
7,323 |
25,478 |
|
Provisions for liabilities and charges |
13,908 |
11,537 |
6,316 |
|
Other financial liabilities |
42,732 |
49,834 |
55,009 |
|
Subordinated debt |
283,637 |
282,815 |
250,612 |
|
Other liabilities |
39,917 |
28,177 |
32,409 |
|
TOTAL LIABILITIES |
6,195,063 |
5,457,302 |
5,804,537 |
|
EQUITY |
|
|
|
|
Share capital |
1,494 |
19,623 |
19,587 |
|
Share premium |
572,780 |
408,649 |
406,058 |
|
Retained earnings |
781,463 |
798,443 |
645,180 |
|
Share based payment reserve |
20,398 |
17,469 |
9,187 |
|
Other reserves |
-18,328 |
64,574 |
44,027 |
|
TOTAL EQUITY |
1,357,808 |
1,308,759 |
1,124,039 |
|
Non-controlling interest |
30,842 |
6,165 |
7,832 |
|
TOTAL EQUITY |
1,388,649 |
1,314,924 |
1,131,871 |
|
TOTAL LIABILITIES AND EQUITY |
7,583,712 |
6,772,226 |
6,936,408 |
Consolidated Income Statement
|
In thousands of GEL |
9M'16 |
9M'15 |
3Q'16 |
2Q'16 |
3Q'15 |
|
Interest income |
523,082 |
474,887 |
182,056 |
166,167 |
168,011 |
|
Interest expense |
-186,318 |
-169,232 |
-61,830 |
-58,512 |
-60,592 |
|
Net interest income |
336,764 |
305,655 |
120,227 |
107,654 |
107,419 |
|
Fee and commission income |
97,340 |
81,270 |
35,112 |
32,681 |
28,745 |
|
Fee and commission expense |
-35,464 |
-28,786 |
-12,918 |
-11,296 |
-11,101 |
|
Net Fee and Commission Income |
61,876 |
52,484 |
22,194 |
21,385 |
17,644 |
|
Gains less losses from trading in foreign currencies |
44,798 |
47,106 |
15,713 |
14,466 |
16,545 |
|
Foreign exchange translation gains less losses |
12 |
1,667 |
1,012 |
-1,007 |
-2,833 |
|
Gains less losses/(losses less gains) from derivative financial instruments |
-299 |
-852 |
173 |
-109 |
-362 |
|
Losses less gains / (gains less losses) from disposal of investment securities available for sale |
8,795 |
- |
- |
8,795 |
- |
|
Other operating income |
10,864 |
13,971 |
2,501 |
4,695 |
4,919 |
|
Other operating non-interest income |
64,169 |
61,892 |
19,398 |
26,840 |
18,269 |
|
Provision for loan impairment |
-38,796 |
-70,736 |
-13,518 |
-12,211 |
-22,012 |
|
Provision for impairment of investments in finance lease |
-236 |
-623 |
-126 |
74 |
-260 |
|
Provision for/ (recovery of provision) performance guarantees and credit related commitments |
-3,557 |
3,062 |
-1,481 |
-1,047 |
3 |
|
Provision for impairment of other financial assets |
-1,128 |
-2,377 |
66 |
-1,145 |
-1,145 |
|
Impairment of investment securities available for sale |
-11 |
- |
- |
- |
- |
|
Operating income after provisions for impairment |
419,082 |
349,358 |
146,759 |
141,550 |
119,917 |
|
Staff costs |
-109,677 |
-100,332 |
-40,205 |
-35,301 |
-35,025 |
|
Depreciation and amortization |
-20,647 |
-18,939 |
-7,037 |
-7,042 |
-6,638 |
|
Provision for liabilities and charges |
- |
- |
- |
- |
- |
|
Administrative and other operating expenses |
-69,880 |
-56,464 |
-18,294 |
-28,026 |
-20,423 |
|
Operating expenses |
-200,204 |
-175,736 |
-65,536 |
-70,369 |
-62,085 |
|
Profit before tax |
218,878 |
173,621 |
81,223 |
71,181 |
57,832 |
|
Income tax expense |
-8,653 |
-21,845 |
-10,235 |
9,359 |
-7,226 |
|
Profit for the period |
210,225 |
151,777 |
70,988 |
80,540 |
50,606 |
|
Profit attributable to owners of the bank |
209,786 |
151,316 |
69,526 |
80,778 |
50,317 |
Key Ratios
Average Balances
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 and used by the Management for monitoring and control purposes.
|
Ratios (based on monthly averages, where applicable) |
9M 2016 |
9M 2015 |
3Q 2016 |
2Q 2016 |
3Q 2015 |
|
ROAE1 |
21.8% |
19.0% |
20.6% |
25.5% |
18.2% |
|
ROAA2 |
4.1% |
3.3% |
4.0% |
4.9% |
3.1% |
|
Pre-provision ROAE |
26.4% |
27.9% |
25.1% |
30.0% |
26.7% |
|
Pre-provision ROAA |
4.9% |
4.8% |
4.8% |
5.8% |
4.5% |
|
Cost: Income3 |
43.3% |
41.8% |
40.5% |
45.1% |
43.3% |
|
Cost of Risk4 |
1.1% |
2.3% |
1.1% |
1.1% |
2.0% |
|
NIM5 |
7.9% |
7.9% |
8.3% |
7.9% |
7.9% |
|
Loan yields6 |
13.5% |
13.6% |
13.5% |
13.3% |
13.6% |
|
Deposit rates7 |
3.4% |
3.6% |
3.3% |
3.4% |
3.4% |
|
Yields on interest earning assets 8 |
12.3% |
12.3% |
12.5% |
12.2% |
12.3% |
|
Cost of Funding9 |
4.5% |
4.5% |
4.3% |
4.5% |
4.5% |
|
Spread10 |
7.8% |
7.8% |
8.2% |
7.7% |
7.8% |
|
PAR 90 to gross loans11 |
1.5% |
1.2% |
1.5% |
1.5% |
1.2% |
|
NPLs to gross loans12 |
4.6% |
4.9% |
4.6% |
4.7% |
4.9% |
|
NPLs coverage13 |
84.3% |
93.0% |
84.3% |
85.6% |
93.0% |
|
Provision Level to Gross Loans14 |
3.9% |
4.6% |
3.9% |
4.0% |
4.6% |
|
BIS Tier 115 |
25.6% |
23.4% |
25.6% |
26.3% |
23.4% |
|
Total BIS CAR16 |
31.5% |
28.6% |
31.5% |
32.5% |
28.6% |
|
NBG Basel II/III Tier 1 CAR17 |
13.3% |
12.0% |
13.3% |
12.6% |
12.0% |
|
NBG Basel II/III Total CAR18 |
16.2% |
14.8% |
16.2% |
15.7% |
14.8% |
Ratio definitions
1. Return on average total equity (ROAE) equals net income attributable to owners divided by monthly average of total shareholders' equity attributable to the PLC's equity holders for the same period; Pre-provision ROAE excludes all provision charges. Annualised where applicable.
2. Return on average total assets (ROAA) equals net income of the period divided by monthly average total assets for the same period. Pre-provision ROAE excludes all provision charges. Annualized where applicable.
3. 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).
4. Cost of risk equals provision for loan impairment divided by monthly average gross loans and advances to customers. Annualised where applicable.
5. Net interest margin (NIM) is net interest income divided by monthly average interest-earning assets. Annualised where applicable.
6. Loan yields equal interest income on loans and advances to customers divided by monthly average gross loans and advances to customers. Annualized where applicable.
7. Deposit rates equal interest expense on customer accounts divided by monthly average total customer deposits. Annualised where applicable.
8. Yields on interest earning assets equals total interest income divided by monthly average interest earning assets. Annualised where applicable.
9. Cost of funding equals total interest expense divided by monthly average interest bearing liabilities. Annualised where applicable.
10. Spread equals difference between yields on interest earning assets and cost of funding.
11. 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.
12. NPLs to gross loans equal 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
13. NPLs coverage ratio equal loan loss provision divided by the NPL loans.
14. Provision Level to Gross Loans equal loan loss provision divided by the gross loan portfolio for the same period.
15. BIS Tier 1 capital adequacy ratio Tier 1 capital over total risk weighted assets, both calculated in accordance with Basel I requirements.
16. Total BIS CAR equals total capital over total risk weighted assets, both calculated in accordance with Basel I requirements.
17. NBG Basel II Tier 1 CAR equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the NBG Basel II requirements. After adoption of NBG Basel II/III requirements, the Bank also calculates its capital requirements and risk weighted assets separately for Pillar 1. Detailed instructions of Pillar 1 calculations are given by NBG. The reporting started from the end of 2012.
18. NBG Basel II Total CAR equals total capital divided by total risk weighted assets, both calculated in accordance with the NBG Basel II requirements. After adoption of NBG Basel II/III requirements, the Bank also calculates its capital requirements and risk weighted assets separately for Pillar 1. Detailed instructions of Pillar 1 calculations are given by NBG. The reporting started from the end of 2012.
Exchange Rates
To calculate the Balance Sheet items' QoQ growth without currency exchange rate effect, we used USD/GEL exchange rate of 2.3479 as of 30 June 2016. For calculations of YoY growth without currency exchange rate effect, we used USD/GEL exchange rate of 2.3816 as of 30 September 2015. The USD/GEL exchange rate as of 30 September 2016 equaled 2.3297. For P&L items growth calculations without currency effect, we used the average USD/GEL exchange rate for the following periods: 9M 2016 of 2.3234, 9M 2015 of 2.2271, 3Q 2016 of 2.3224, 2Q 2016 of 2.2127 and 3Q 2015 of 2.3241.
Additional Disclosures
Sensitivity Scenario
|
Sensitivity Scenario |
30-Sep-16 |
10% Currency Devaluation Effect |
|
NIM* |
|
-0.1% |
|
Technical Cost of Risk |
|
+0.2% |
|
|
|
|
|
Total Capital per Basel II/III |
1,369 |
1,354 |
|
Capital adequacy ratios per both tier 1 and total per Basel II/III and NBG regulation decrease by |
|
0.72% - .81% |
FC details for Selected P/L Items
|
Selected P&L Items 3Q 2016 |
FC % of Respective Totals |
|
Interest Income |
46% |
|
Interest Expense |
64% |
|
Fee and Commission Income |
40% |
|
Fee and Commission Expense |
61% |
|
Administrative Expenses |
25% |
Refinanced and Libor Linked B/S Items 30 September 2016
|
Refinance Rate Gap |
GEL -9 m |
|
Libor Gap |
GEL 997 m |
||
|
|
GEL m |
% share in totals |
|
|
GEL m |
% share in totals |
|
Assets |
768 |
10% |
|
Assets |
1,500 |
20% |
|
Securities with fixed yield(≤1y)* |
281 |
46% |
|
Nostro** |
297 |
69% |
|
Securities with floating yield |
151 |
25% |
|
NBG Reserves** |
677 |
88% |
|
Loans with Floating yield |
282 |
6% |
|
Libor Loans |
518 |
11% |
|
Reserves in NBG |
52 |
7% |
|
Interest Rate Options |
8 |
|
|
Interbank loans& Deposits & Repo |
3 |
1% |
|
|
|
|
|
Liabilities |
777 |
13% |
|
Liabilities |
503 |
7% |
|
Current accounts |
273 |
6% |
|
Senior Loans |
299 |
30% |
|
Saving accounts |
135 |
3% |
|
Subordinated Loans |
204 |
72% |
|
Refinancing Loan of NBG |
135 |
13% |
|
|
|
|
|
Interbank Loans &Deposits & Repo |
78 |
36% |
|
|
|
|
|
IFI Borrowings |
156 |
16% |
|
|
|
|
Yields and Rates
|
Yields and Rates |
9M 2016 |
3Q'16 |
2Q'16 |
1Q'16 |
4Q'15 |
3Q'15 |
|
Loan yields |
13.5% |
13.5% |
13.3% |
13.6% |
13.6% |
13.6% |
|
Retail loan yields GEL |
20.2% |
20.3% |
20.2% |
20.2% |
20.4% |
20.0% |
|
Retail loan yields FX |
10.3% |
9.9% |
10.2% |
10.9% |
11.3% |
11.6% |
|
Retail Loan Yields |
14.4% |
14.2% |
14.3% |
14.6% |
14.9% |
15.0% |
|
Corporate loan yields GEL |
12.8% |
12.4% |
13.7% |
13.2% |
12.5% |
11.1% |
|
Corporate loan yields FX |
9.6% |
10.6% |
8.8% |
9.3% |
8.7% |
9.3% |
|
Corporate Loan Yields |
10.3% |
11.0% |
9.7% |
10.1% |
9.6% |
9.7% |
|
SME loan yields GEL |
13.0% |
12.2% |
13.2% |
14.2% |
13.0% |
12.8% |
|
SME loan yields FX |
10.1% |
9.7% |
10.0% |
10.7% |
10.9% |
11.3% |
|
SME Loan Yields |
10.6% |
10.1% |
10.5% |
11.3% |
11.3% |
11.6% |
|
Micro loan yields GEL |
24.7% |
24.6% |
24.9% |
24.6% |
25.1% |
24.7% |
|
Micro loan yields FX |
15.0% |
13.8% |
14.9% |
16.6% |
17.9% |
18.8% |
|
Micro Loan Yields |
21.8% |
21.1% |
22.0% |
22.3% |
23.0% |
22.8% |
|
Deposit rates |
3.4% |
3.3% |
3.4% |
3.6% |
3.4% |
3.4% |
|
Retail deposit rates GEL |
4.0% |
4.1% |
4.1% |
3.9% |
3.6% |
3.8% |
|
Retail deposit rates FX |
3.7% |
3.5% |
3.7% |
3.9% |
4.0% |
4.2% |
|
Retail Deposit Yields |
3.7% |
3.6% |
3.7% |
3.9% |
4.0% |
4.1% |
|
Corporate deposit rates GEL |
7.2% |
7.3% |
7.5% |
6.7% |
5.3% |
4.6% |
|
Corporate deposit rates FX |
1.5% |
1.5% |
1.3% |
1.7% |
1.8% |
1.7% |
|
Corporate Deposit Yields |
4.1% |
4.2% |
4.0% |
4.1% |
3.4% |
3.1% |
|
SME deposit rates GEL |
2.3% |
2.1% |
2.5% |
2.4% |
2.0% |
1.6% |
|
SME deposit rates FX |
0.5% |
0.4% |
0.4% |
0.7% |
1.4% |
1.5% |
|
SME Deposit Yields |
1.2% |
1.1% |
1.3% |
1.3% |
1.6% |
1.6% |
|
Micro deposit rates GEL |
3.0% |
2.7% |
3.2% |
3.2% |
2.7% |
2.9% |
|
Micro deposit rates FX |
2.2% |
1.9% |
2.1% |
2.5% |
2.7% |
2.9% |
|
Micro Deposit Yields |
2.5% |
2.2% |
2.6% |
2.8% |
2.7% |
2.9% |
|
Yields on Securities |
8.9% |
8.3% |
9.1% |
9.4% |
8.5% |
7.4% |
Loan Quality per NBG
Sub-Standard, Doubtful and Loss (SDL) Loans Ratio per NBG
|
|
Sep-16 |
Jun-16 |
Mar-16 |
Dec-15 |
Sep-15 |
|
SDL Loans as % of Gross Loans |
5.1% |
6.9% |
7.2% |
6.8% |
7.5% |
Cross Sell Ratio/Active Products
|
|
Sep-16 |
Aug-16 |
Jul-16 |
Jun-16 |
|
Cross Sell Ratio |
3.55 |
3.45 |
3.35 |
3.47 |
|
Number of Active Products (in millions) |
2.83 |
2.74 |
2.61 |
2.55 |
Diversified Deposit Base
Status: monthly income >=2,000 GEL or loans/deposits >=20,000 GEL
VIP*: deposit >=100,000 USD; Non-residents: >=50,000 USD
|
30 September 2016 |
Volume Of Deposits |
Number Of Deposits |
|
MASS |
38% |
95% |
|
STATUS |
23% |
3.9% |
|
VIP |
23% |
0.5% |
|
WM |
16% |
0.2% |
Loan Concentration
|
|
Sep-16 |
Jun-16 |
Mar-15 |
Dec-15 |
Sep-15 |
|
Top 20 Borrowers as % of total portfolio |
13.4% |
14.4% |
14.6% |
15.6% |
17.3% |
|
Top 10 Borrowers as % of total portfolio |
8.6% |
9.0% |
9.2% |
9.9% |
11.7% |
|
Related Party Loans as % of total portfolio |
0.1% |
0.1% |
0.2% |
0.1% |
0.1% |
Sales Breakdown (for products offered through Multichannel)
|
|
Sep-16 |
Jun-16 |
Mar-16 |
Dec-15 |
Sep-15 |
|
Digital Channels |
29% |
29% |
31% |
28% |
20% |
|
Call Center |
27% |
27% |
20% |
20% |
9% |
|
Branches |
44% |
44% |
49% |
49% |
71% |
Number of Transactions in Digital Channels ('000)
|
|
Sep-16 |
Jun-16 |
Mar-16 |
Dec-15 |
Sep-15 |
|
IB Number of Transactions |
1,828 |
1,797 |
1,669 |
1,729 |
1,511 |
|
MB Number of Transactions |
1,814 |
1,485 |
1,151 |
1,008 |
780 |
Penetration Ratios of Digital Channels
|
|
Sep-16 |
Jun-16 |
Mar-16 |
Dec-15 |
Sep-15 |
|
IB Penetration Ratio |
29.5% |
29.6% |
28.1% |
30.0% |
24.1% |
|
MB Penetration Ratio |
20.4% |
19.1% |
17.3% |
15.4% |
12.1% |
Selected Financial Data of TBC Bank and Bank Republic
|
Q3 2016, GEL million |
TBC Bank |
Bank Republic |
Pro-forma (w/o synergies) |
|
Net Loans |
4,810 |
1,191 |
6,001 |
|
Total Assets |
7,584 |
1,764 |
9,348 |
|
Total Deposits |
4,593 |
723 |
5,316 |
|
Shareholder's Equity |
1,389 |
300 |
1,689 |
|
Tangible Book Value |
1,336 |
293 |
1,629 |
|
Risk Weighted Assets |
8,428 |
2,149 |
10,577 |
|
Net Interest Income |
120 |
28 |
148 |
|
Net Fee Income |
22 |
3 |
25 |
|
Other Income |
19 |
6 |
25 |
|
Total Operating Income |
162 |
37 |
198 |
|
Operating Expenses |
66 |
16 |
82 |
|
Pre-Provision Income |
86 |
19 |
105 |
|
Loan-Loss Provision |
14 |
2 |
16 |
|
Net Income |
71 |
16 |
87 |
|
ROAE |
20.6% |
23.4% |
21.1% |
|
ROAA |
4.0% |
3.8% |
3.9% |
|
Net Interest Margin |
8.3% |
8.3% |
8.3% |
|
F&C Income/ Operating Income |
13.7% |
8.1% |
12.6% |
|
Cost of Risk |
1.1% |
1.0% |
1.1% |
|
NPL |
4.6% |
4.1% |
4.5% |
|
NPL Coverage |
84% |
97% |
87% |
|
Cost/Income Ratio |
40.5% |
44.0% |
41.4% |
Other Selected Data of TBC Bank and Bank Republic
Gross Loan Segmentation as of Sep-16
|
|
TBC Bank |
Bank Republic |
TBC + Republic |
|
Corporate |
29% |
20% |
28% |
|
Mortgage |
20% |
35% |
23% |
|
Consumer Lending |
26% |
37% |
28% |
|
Micro |
11% |
4% |
10% |
|
SME |
13% |
5% |
12% |
|
Total |
5,003 million |
1,240 million |
6,243 million |
Customer Deposits Segmentation as of Sep-16
|
|
TBC Bank |
Bank Republic |
TBC + Republic |
|
Corporate |
22% |
24% |
22% |
|
Retail |
60% |
53% |
59% |
|
Micro |
2% |
3% |
2% |
|
SME |
17% |
20% |
17% |
|
Total |
4,593 million |
723 million |
5,316 million |
NPLs & Cost of Risk
|
|
2Q 2016 |
3Q 2016 |
||||
|
Bank Republic |
Retail |
Business |
Total |
Retail |
Business |
Total |
|
NPLs |
2.2% |
7.7% |
3.9% |
2.6% |
7.7% |
4.1% |
|
Cost of Risk |
|
1.2% |
-0.4% |
0.4% |
||
|
|
2Q 2016 |
3Q 2016 |
||||
|
TBC Bank |
Retail |
Business |
Total |
Retail |
Business |
Total |
|
NPLs |
2.8% |
6.3% |
4.7% |
2.8% |
6.1% |
4.6% |
|
Cost of Risk |
|
1.8% |
0.5% |
1.1% |
||
|
|
2Q 2016 |
3Q 2016 |
||||
|
Republic + TBC |
Retail |
Business |
Total |
Retail |
Business |
Total |
|
NPLs |
2.8% |
6.3% |
4.7% |
2.8% |
6.1% |
4.6% |
|
Cost of Risk |
|
|
|
1.7% |
0.4% |
1.0% |
|
|
2Q 2016 |
3Q 2016 |
||||
|
Coverage Ratios |
Retail |
Business |
Total |
Retail |
Business |
Total |
|
Bank Republic |
120% |
85% |
99% |
111% |
84% |
97% |
|
TBC Bank |
106% |
78% |
86% |
106% |
76% |
84% |
|
Republic + TBC |
109% |
79% |
88% |
107% |
77% |
87% |
Financial Highlights of Bank Republic
|
GEL million |
2013 |
2014 |
2015 |
9M 2016 |
CAGR 2013-15 |
|
Net loans |
673 |
875 |
1,184 |
1,191 |
32.6% |
|
Total assets |
1,077 |
1,210 |
1,661 |
1,764 |
24.2% |
|
Customer deposits |
514 |
618 |
729 |
723 |
19.1% |
|
Shareholders' equity |
167 |
202 |
257 |
300 |
24.0% |
|
|
|
|
|
|
|
|
Net interest income |
60 |
69 |
93 |
80 |
24.9% |
|
Net F&C income |
7 |
8 |
10 |
8 |
21.0% |
|
Other income |
17 |
19 |
26 |
19 |
23.7% |
|
Operating income |
84 |
96 |
130 |
107 |
24.4% |
|
Operating expenses |
(54) |
(55) |
(58) |
(46) |
3.9% |
|
Pre-Provision income |
30 |
41 |
72 |
61 |
54.0% |
|
Loan loss Provision |
2 |
0 |
(15) |
(10) |
NMF |
|
Profit tax |
(5) |
(8) |
(8) |
(6) |
29.0% |
|
Net income |
28 |
34 |
49 |
44 |
32.6% |
Key Ratios
|
GEL million |
2013 |
2014 |
2015 |
9M 2016 |
|
NPL1 |
8.8% |
4.6% |
4.0% |
4.1% |
|
NPL coverage ratio2 |
70.6% |
90.9% |
97.1% |
96.6% |
|
Tier 1 ratio |
n.a. |
11.4% |
10.5% |
11.6% |
|
Capital Adequacy ratio3 |
n.a. |
13.2% |
12.7% |
13.5% |
|
|
|
|
|
|
|
Net interest margin4 |
9.0% |
8.1% |
8.2% |
7.8% |
|
F&C income/Op. income |
8.5% |
8.8% |
8.1% |
7.5% |
|
Cost/Income ratio |
63.9% |
56.8% |
44.6% |
43.4% |
|
Cost of Funding |
4.0% |
3.2% |
4.1% |
4.2% |
|
Cost of risk5 |
(0.3%) |
0.0% |
1.5% |
1.0% |
|
RoAE |
18.1% |
18.2% |
21.3% |
21.3% |
Source: Bank Republic IFRS for 2013, 2014 and 2015
Note: 9m 2016 metrics are annualized where applicable. 1 NPLs are defined as par90 + individually impaired loans divided by gross loans. 2 NPL coverage ratio is calculated as NPLs divided by allowance for loan loss reserves. 3 Regulatory capital ratio. 4 Net interest margin is calculated as net interest income divided by average interest earning assets. 5 Cost of risk is calculated as loan loss provisions divided by average net loans
|
Selected operating data |
30 Sep 2016 |
|
Number of Clients in Thousands |
342 |
|
Number of Retail Clients in thousands |
340 |
|
Number of Employees |
955 |
|
Number of Branches |
41 |
|
Number of ATMs |
164 |
1 Market share figures are based on data from the National Bank of Georgia (NBG)
2 Import figures exclude imports of C. hep. Medicaments denoted to Georgia
3 Estimates for 3Q nominal GDP
4 The National Bank of Georgia enforced Basel II/III regulation in June 2014.
5 Note: Based on number of shares paid, share price (taken as the mid-point of opening and closing prices on October 20, and GBP/GEL exchange rate of 2.9128 as of 20 October 2016
6 This is calculation of the theoretical impact on the CARs if the acquisition and merger happened in September to give the reader indication of CAR. In reality, acquisition has been completed in October and Merger is planned in the third quarter 2017
|
7 Total Capital also includes ADB USD 50 mln drawdown received in October and deducted the subordinated loan from SG of USD 6.6 mln repaid in October
|
This information is provided by RNS
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