London-listed TBC Georgian Bank has initiated a share repurchase program following the release of another solid quarterly report.
The Georgian bank announced that it had authorized the purchase of up to 75 million Georgian lari (about £22.8 million) of its stock, with a portion of the funds to be transferred to an employee benefit trust for future share awards.
By mid-October, the remaining two-thirds will begin to be purchased to lower the group’s share capital.
TBC also announced a two-thirds increase in its interim dividend to 2.5 lari per share as part of its second-quarter results, which demonstrated a 22% increase in operating income from the previous year.
The majority of the gain was attributable to net interest income increased by a quarter as a result of a portfolio expansion and central banks’ increasing interest rates in response to growing inflation.
Simultaneously, non-interest income was boosted by an increase in clients using the group’s payment cards in Georgia and Uzbekistan.
However, total earnings decreased by 6.3% to 234.6 million lari as a result of an increase in credit loss allowances and the company’s expenditure of considerable sums to hire additional personnel to build its Uzbek business.
TBC, based in Tbilisi, was able to report a positive outcome despite a far more uncertain economic and political environment as a result of Russia’s recent invasion of Ukraine.
It informed investors on Friday: ‘Despite the tough geopolitical climate, the Georgian economy has proved its resilience once again.
While the recovery of tourism has lagged following the Russian invasion of Ukraine, the negative impact has been offset by an increase in migration into the nation.
Moreover, despite a rise in oil prices, Georgia’s trade balance is stable and remittance inflows are high.
In the medium term, the corporation aims for a return on equity greater than 20% and loan growth between 10% and 15%, in addition to a cost-to-income ratio of less than 35%.
TBC was founded 30 years ago shortly after the fall of the Soviet Union by two businessmen with an initial capital of $500. It is today Georgia’s largest bank by deposits and loans.
It joined the main market of the London Stock Exchange in 2014, raising approximately $300 million in its initial public offering despite investor worries over the annexation of Crimea by Russia.
The recent escalation of the Ukraine conflict has also unnerved investors, although the bank expects the Georgian economy to expand by more than 10% this year, after rebounding by 10.4% in 2021.
In the previous two years, TBC Bank Group shares have increased in value by more than 88%, as their price increased by 4.9% to £16.22 on Friday afternoon.
