The half-year reporting season is young, but it’s a safe bet that UK banks aren’t going to post the sort of growth on show at TBC Bank (TBCG). By the end of June, the Georgian lender’s total assets had grown 27 per cent in a year, marginally ahead of growth in both gross loans and advances. Bigger London-listed lenders can but dream of an underlying 22.3 per cent return on equity.
Despite this, neither lending discipline nor cash buffers look eroded. The cost of risk dropped from 1.6 to 1.3 per cent in the period, while the non-performing loan ratio stood at 97.9 per cent (or 206 per cent with collateral). Capital ratios exceed both Basel III Tier and national minimums.
Unfortunately, these results landed just days after chairman Mamuka Khazaradze and deputy Badri Japaridze left the board to defend themselves on money laundering charges relating to dealings with a TBC subsidiary that took place more than a decade ago.
Keen to distance itself from events, the bank corralled reassuring words from several independent bodies including the International Finance Corporation and the European Bank for Reconstruction. An assertion from the National Bank of Georgia that the arrests “will not have any impact on the operations of the bank”, however well-intended, somehow feels premature.
Analysts at Peel Hunt expect adjusted earnings of GEL9.4 a share in the 12 months to December, rising to GEL10.9 in 2020.
| TBC BANK (TBCG) | ||||
| ORD PRICE: | 1,428p | MARKET VALUE: | £788m | |
| TOUCH: | 1,426-1,432p | 12-MONTH HIGH: | 1,778p | LOW: 1,204p |
| DIVIDEND YIELD: | 4.0%* | PE RATIO: | 6 | |
| NET ASSET VALUE: | GEL42.9 | LEVERAGE: | 7.3 | |
| Half-year to 30 Jun | Total operating income (GELm) | Pre-tax profit (GELm) | Earnings per share (GEL) | Dividend per share (p) |
| 2018 | 423 | 240 | 3.63 | nil |
| 2019 | 478 | 266 | 4.60 | nil |
| % change | +13 | +11 | +27 | - |
| Ex-div: | 06 Jun | |||
| Payment: | 12 Jul | |||
| £1=3.59 Georgian Lari (GEL). *Yield, XD and payment dates refer to final dividend. | ||||
