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Georgia's largest retail lender TBC Bank posts rise in 2018 profit

(Reuters) - Georgia’s biggest retail bank TBC Bank Group Plc reported a 21.5 percent jump in full-year earnings on Thursday, as lending remained healthy amid a stronger economy in the former Soviet republic.

TBC, which offers retail, corporate and small and medium-sized enterprise (SME) banking across the country, said profit rose to 437.4 million laris (126.8 million pounds) in the 12 months ended Dec. 31 from 359.9 million laris, a year earlier.

In a separate statement, the lender’s unit, TBC Bank JSC, said it would pay about 1 million laris to Georgia’s central bank for an earlier disclosed investigation into certain transactions.

Several days ago, the country’s central bank had asked TBC’s chairman and vice-chairman to step down from the board of the unit in relation to the investigation.

TBC Bank JSC also said on Thursday that it would restructure its supervisory board and that the founding shareholders will not be represented at the supervisory board.

TBC Bank Group said net interest margin - the main indicator of a bank’s financial strength - expanded to 6.9 percent for the year from 6.5 percent.

The Tbilisi-based lender’s market share in total loans inched higher by 1.8 percentage points to 38.8 percent as of Dec. 31, while gross loans and advances to customers surged 19.7 percent to 10.37 billion laris at the end of 2018.

The Georgian banking industry is dominated by TBC and its main competitor, Bank of Georgia , which last week warned that growth of unsecured consumer loans would moderate on the back of some newer rules.

While TBC also flagged a sharp slowdown in non-mortgage retail lending following the introduction of the new regulation, it stuck to its medium-term goals that target loan book growth in the range of 10-15 percent.

Lending growth of both banks are buoyed by a strong Georgian economy. The former Soviet republic, home to pipelines that carry oil and gas from the Caspian region to Europe, saw its economy expand by 4.8 percent in 2018.

Reporting by Muvija M in Bengaluru; Editing by Bernard Orr

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