18th Mar 2020 12:00
(Alliance News) - TBC Bank Group PLC on Wednesday said it has introduced a grace period on business interest payments, in coordination with the government of Georgia, as part of a response to the Covid-19 pandemic.
Shares in Georgia-based bank TBC were up 6.9% at 955.00 pence in London in late morning trading.
The three-month grace period applies to "principle and interest payments for all our individual and [micro, small, and medium enterprise] customers as well as those corporate customers whose business is the most exposed in the current situation".
The grace period is intended to support business as the virus takes its toll on industry and will take place in coordination both with the government and with National Bank of Georgia.
TBC said that the pandemic will "have a negative economic effect as long as the number of cases is expanding" but forecasts "a gradual return of economic strength as the number of cases eases".
The government of Georgia has put in place a number of initiatives to support the economy during the pandemic, including a fourth-month deferral of income taxes for companies operating in the tourism industry, susidisex interest payments for six months for hotels with under 50 rooms, and the doubling of VAT refunds to companies to GEL1.2 billion or about GBP32 million. Further, the government itself will increase capital expenditure by GEL300 million.
TBC itself is promoting cashless transactions and has revised its tariff plans encourage customers to use digital channels so that fewer people use its branches.
"The multichannel promotion campaigns together with the loan repayment grace period are expected to substantially decrease customer flow in our branch network and reduce the risk of spreading the infection. If needed, this will allow us to further optimise branch network operations and decrease the number of front office staff as well as to introduce different shifts in branches," said TBC.
At the end of February, TBC's liquidity coverage ratio was 108% and its net stable funding ratio was 127%. It operates on capital buffers of 2.45% above minimum requirements for CET1, 2.91% above tier 1, and 2.34% above total capital requirements.
TBC has opted not to recommend a dividend as a result of Covid-19, a decision it will revisit "once there is better visibility on the potential economic impact of the outbreak" - likely not before the end of May.
Chief Executive Vakhtang Butskhrikidze said: "During this time of hardship for the whole world, the TBC team is mobilised to provide full support and guidance to our customers. We are actively coordinating with all relevant parties in order to proactively offer all the solutions needed. Our digital support is very strong, and our customers are able to conduct all banking transactions online, without any need to visit the branch. The health and safety of our staff and customers remains our main priority, and we are confident that together we will get through these difficult times."
By Anna Farley; [email protected]
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