19th Feb 2021 08:54
(Alliance News) - TBC Bank Group PLC on Friday reported a sharp drop in profit in 2020 as the Georgian lender was forced to dramatically increase its credit provisions.
For 2020, the Tbilisi-headquartered lender recorded pretax profit of GEL319.1 million, about USD96.6 million, compared to GEL585.5 million in 2019.
TBC upped its credit loss allowance in 2020 to GEL351.8 million from GEL92.0 million in 2019.
Net interest income, however, improved 4.2% year on year to GEL835.4 million from GEL801.5 million. Net fee & commission income slipped 2.4% to GEL182.8 million from GEL187.3 million.
The Georgian bank's CET1 ratio ended 2020 at 10.4% compared to 12.0% at the same point the year before.
Its loan book rose to GEL15.20 billion from GEL12.66 billion, with customer deposits growing to GEL12.57 billion from GEL10.05 billion. Despite the rise in both its loan book and deposits, the Georgian lender noted its loan market share dipped by 0.5 of a percentage point and customer deposits slipped 1.8 percentage points.
TBC's net interest margin worsened to 4.7% from 5.6%.
Operating expenses lowered to GEL443.6 million from GEL450.7 million, and was able to improve its cost-to-income ratio to 38.4% from 39.9%.
Chief Executive Vakhtang Butskhrikidze said: "2020 was a transformational year, significantly changing the way people lead their daily lives and interact with each other. We did our best to embrace the change and turn challenges into new opportunities. Our income generation was supported by effective cost management.
"Going forward, we will continue to strengthen our digital and analytical capabilities across all levels of the group in line with our vision of making life easier for our customers as well as other stakeholders.
"I would also like to re-iterate our medium term guidance: return on equity of above 20%, a cost to income ratio below 35%, a dividend pay-out ratio of 25% to 35% and loan book annual growth of around 10% to 15%," Butskhrikidze said.
Shares in TBC Bank were 2.0% lower in London on Friday morning at 1,196.00 pence each.
By Paul McGowan; [email protected]
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