Georgia’s TBC Bank profit jumps on strong lending

TBC Bank Group Plc, Georgia’s largest retail bank, reported a 37.2 percent jump in second-quarter underlying net profit yesterday, as economic growth and a stable currency boosted lending. Net interest margin was 6.8 percent in the quarter, down 1.1 percentage points from a year earlier, said TBC, which became Georgia’s largest bank by loans and deposits after buying JSC Bank Republic from France’s Societe Generale and the European Bank for Reconstruction and Development.

Underlying net profit rose to 86.3 million laris ($36.2 million) in the quarter ended June, from 62.9 million laris a year earlier. “Accelerated economic development and a stable currency rate in 2Q 2017 continue to underpin sound growth in the banking sector,” TBC Bank said.

Last week Rival BGEO Group Plc, which is planning to split its banking and investment businesses, reported a jump in second-quarter pretax profit, driven by its banking and healthcare arms. Georgia’s economy expanded 4.5 percent in the first half of this year, up from 2.9 percent in the same period in 2016, after a rise in exports and remittances from abroad. The government forecasts the growth at 4 percent in 2017.

The economy has a good chance of exceeding the official 4 percent growth projection this year, Economy minister Giorgi Gakharia said in June, thanks to private sector developments and the government spending on infrastructure projects. TBC said second-quarter cost-to-income ratio stood at 44.9 percent, compared to 45.1 percent a year earlier. Gross loans and advances to customers stood at 7.39 billion laris at June end, a rise of 56.8 percent from a year earlier. —Reuters