Tbc Bank Group Plc · LSE:TBCG
Tbc Bank — Investor Day (November 2022)
157 slides from Tbc Bank's investor day presentation, Nov 4, 2022
Slide 1: Capital Markets Day 2022
2022 CAPITAL MARKETS DAY Uzbekistan, 4 November 2022 TBC BANK GROUP PLC IS LISTED ON THE PREMIUM SEGMENT OF THE LONDON STOCK EXCHANGE AND IS A FTSE 250 CONSTITUENT.
Slide 2: Disclaimer
DISCLAIMER By attending the meeting where this presentation is made, or by reading this document, to any forward-looking statements contained in the Presentation to reflect actual results, you agree to be bound by the conditions set our below. The information, statements and changes in assumptions o
Slide 3: Agenda for Capital Markets Day 2022
AGENDA FOR CAPITAL MARKETS DAY 2022 Registration Governor of the National Bank of Georgia CEO Deputy CEO, Head of International Business Deputy CEO, CFO CIO CEO of TNET Deputy CEO, Retail and MSME Banking, Payments Deputy CEO, CIB & Wealth Management Deputy CEO, CRO Chief Economist 1 CAPITAL MARKETS
Slide 4: Introduction of the presenting team
INTRODUCTION OF THE PRESENTING TEAM Governor of the National Bank CEO Deputy CEO, Head of Deputy CEO, CFO CIO of Georgia International Business CEO of TNET Deputy CEO, Retail and MSME Deputy CEO, CIB & Wealth Deputy CEO, CRO Chief Economist Banking, Payments Management CAPITAL MARKETS DAY 2022 4
Slide 5: TBC at a glance and strategy overview
TBC at a glance 2022 and strategy overview Vakhtang Butskhrikidze CEO CAPITAL MARKETS DAY 2022
Slide 6: TBC at a glance
TBC ata glance ((
Slide 7: Who we are
WHO WE ARE Our mission: Make Life Easier The largest digital ecosystem in Georgia-TNET T with huge datahub capabilities E K K Z with innovative digital banking proposition T Strong corporate culture and best-in-class governance CAPITAL MARKETS DAY 2022 7
Slide 8: Our high growth potential
OUR HIGH GROWTH POTENTIAL 38.3 31-Dec-2018 | Georgia 30-Sep-2022 | Georgia & Uzbekistan 3.7 3.9 1.3 M CAPITAL MARKETS DAY 2022 8
Slide 9: Strong digital footprint across the Group
STRONG DIGITAL FOOTPRINT ACROSS THE GROUP 1 % DIGITAL DAILY ACTIVE DIGITAL MONTHLY DIGITAL DAU/MAU % % 99% CONSUMER LOANS DEPOSITS OFFLOADING RETAIL TRANSACTION OFFLOADING IN DIGITAL CHANNELS OFFLOADING RATIO IN DIGITAL CHANNELS CAPITAL MARKETS DAY 2022 9
Slide 10: Around 70% of our technology costs are allocated to customer satisfaction and growth
AROUND 70% OF OUR TECHNOLOGY COSTS ARE ALLOCATED TO CUSTOMER SATISFACTION AND GROWTH 12% 21% % % CAPITAL MARKETS DAY 2022 10
Slide 11: Our leadership position in Georgia
OUR LEADERSHIP POSITION IN GEORGIA The leading Top choice The largest and A leading TBC Insurance TBC leasing - TBC Capital – TNET – retail bank for most trusted payments – number one the largest a leading the largest franchise MSMEs strategic partner provider retail leasing company investment and t
Slide 12: • Generate net fee and commission income • Create leads for loans • Strengthen
visitors 100 Annualized GMV Market shares² % % • Generate net fee and commission income • Create leads for loans • Strengthen customer loyalty • Increase customer engagement % % (1) Based on internal estimates. (2) Source: Similarweb, market shares are calculated based on number of unique visitors a
Slide 13: Our two fintech businesses in Uzbekistan
OUR TWO FINTECH BUSINESSES IN UZBEKISTAN UZBEKISTAN PAYME K Number of users Monthly active users Number of users Monthly active users % App rating Market share in total volume Deposit portfolio Loan portfolio of payments¹ (1) Based on internal estimates as of as of 30-Sep-2022. 13
Slide 14: Our proven track record of growth and profitability
OUR PROVEN TRACK RECORD OF GROWTH AND PROFITABILITY Loan portfolio (GEL bln) Number of users and monthly active users (MAU) (mln) Number of users Monthly active users 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 Return on equity (ROE) Cost to income
Slide 15: We keep our promises
WE KEEP OUR PROMISES 2019 2020 2021 9M 2022 10 2019 2020 2021 9M 2022 % % 9% % 19% 20 ROE % % % % % ratio % % % % No dividend was paid due to uncertainties related to COVID-19 outbreak and the funds per share % ratio were retained to comply with NBG’s restrictions. % interim dividend (1) Growth rate
Slide 16: Engaged and happy employees are key to our development
ENGAGED AND HAPPY EMPLOYEES ARE KEY TO OUR SUCCESSFUL AND SUSTAINABLE DEVELOPMENT % 20% % All the numbers are given for the Bank's employees only. (1) Employee Net Promoter Score was measured in October 2021 by independent consultant. CAPITAL MARKETS DAY 2022 16
Slide 17: Excellent corporate governance standards
EXCELLENT CORPORATE GOVERNANCE STANDARDS All 7 Non-executive Directors are independent both under UK and Georgian Code. Our Board structure is fully in line with the diversity and (Annual General Meeting) inclusion targets set by the Hampton-Alexander Review and the Parker Review¹. TBC held #8 posit
Slide 18: Strategy overview
Strategy overview (
Slide 19: Our strategy
OUR STRATEGY Our mission: MAKE LIFE EASIER Further grow our Utilize the high Harness the Explore new Bring customer Further STRATEGIC PRIORITIES Georgian banking potential of our huge growth international experience to strengthen business digital ecosystem potential of the opportunities the next lev
Slide 20: Expand Georgian operations
EXPAND GEORGIAN OPERATIONS 1 2 3 4 5 CAPITAL MARKETS DAY 2022 20
Slide 21: Utilize the high potential of our digital ecosystem
UTILIZE THE HIGH POTENTIAL OF OUR DIGITAL ECOSYSTEM LIFESTYLE HOUSING GMV - GEL 1 bln Net income - GEL 50 mln AUTO Leads - GEL 1 bln I Georgia & Uzbekistan CAPITAL MARKETS DAY 2022 21
Slide 22: Harness the huge potential of the Uzbek market
HARNESS THE HUGE POTENTIAL OF THE UZBEK MARKET % % 2019 2020 IN TH E M ID TER M CAPITAL MARKETS DAY 2022 22
Slide 23: Mid-term targets: monthly active users, income share, loan growth
MONTHLY ACTIVE USERS UZBEK BUSINESS SHARE IN NET INCOME % ANNUAL LOAN BOOK GROWTH % ROE 20% COST TO INCOME % 2022 CAPITAL MARKETS DAY DIVIDEND PAYOUT RATIO % 23
Slide 24: Thank You
Thank You
Slide 25: International expansion in Uzbekistan
International expansion in Uzbekistan 2022 Nikoloz Kurdiani Deputy CEO, head of international business CAPITAL MARKETS DAY 2022
Slide 26: Why Uzbekistan?
Why Uzbekistan?
Slide 27: Why Uzbekistan?
WHY UZBEKISTAN? „Uzbekistan embarked on an ambitious reform path in 2017, starting to liberalize its economy after years of state control.“ – IMF, 2022. promising agenda. The country of 35 mln population and growing 2% per annum since 2018. Average age of population 29 in 2018. smartphones and Inter
Slide 28: Why Uzbekistan? A growing digitalized population
WHY UZBEKISTAN? A growing population with good level of digitalization and payment penetration mln mln mln mln mln Cellular Total Internet Social media Bank cards mobile population1 users2 users2 in circulation3 connections2 YoY of total of total rural population population YoY YoY population 29 ave
Slide 29: TBC Group in Uzbekistan
TBC GROUP IN UZBEKISTAN Established in 2020 In 2019 TBC PLC acquired 51% 2 2 2 REGISTERED REGISTERED CUSTOMERS CUSTOMERS q CAPITAL MARKETS DAY 2022 29
Slide 30: TBC Group in Uzbekistan
TBC GROUP IN UZBEKISTAN Massive customer acquisition exercise powered by very strong digital marketing capabilities Launch of fully digital onboarding 1 and EBRD became shareholders of , in exchange Launch of for 20% equity interest Auto loan in each Uzbekistan Beta launch of banking Launched cash L
Slide 31: TBC Group in Uzbekistan as an employer
TBC GROUP IN UZBEKISTAN AS AN EMPLOYER Happy, young, and diverse team full of energy and drive TBC Bank Uzbekistan % ENPS1 % Payme ENPS2 2 Average age3 Women in middle % managerial positions3 (1) Measured internally in October 2022. 31 (2) Measured internally in April 2022. (3) As of September 2022,
Slide 32: TBC Group in Uzbekistan
TBC GROUP IN UZBEKISTAN was one of the The main goal of the sponsors of the Central Asian project is to increase the level Social project of aimed at hackathon Tumaris. Hack for female developers from the population of Uzbekistan. creating a fully-fledged Uzbekistan, Kazakhstan, As part of this proj
Slide 33: TBC Group in Uzbekistan
TBC GROUP IN UZBEKISTAN Uzbek Business breaking even in the 3rd year of presence on the market 33
Slide 34: Our achievements in banking business
Our achievements in banking business
Slide 35: Space digital banking platform
SPACE DIGITAL BANKING PLATFORM Space is an inhouse digital banking platform that is used for our international expansion by building a UZS ROE Transactions Transfers Payment % TBC Bank Uzbekistan CAPITAL MARKETS DAY 2022 35
Slide 36: TBC Group in Uzbekistan: market share in banking
TBC GROUP IN UZBEKISTAN Market share in banking business Retail loans market share1 Cards in circulation market share 1 16% 10% 9% 5% 6% 4% 2% 2% 2% 1% 3% 2% 2% 2% 1% 0.2% Retail deposits market share1 Top of mind2 17% 10% 6% 7% 5% 5% 5% 5% 4% 3% 3% 2% 3% 3% 1% 0.5% CAPITAL MARKETS DAY 2022 36
Slide 37: Downloads and registered clients
1.3 153 68 % Registered Downloads Cards in App Loans Deposits NPS1 clients (1) NPS is given of September 2022, measured internally. CAPITAL MARKETS DAY 2022 37
Slide 38: Fully digital onboarding
FULLY DIGITAL ONBOARDING Registered users (‘000) 20 MAU1 1 1 99 11 0 DAU2 02 9 31-Mar-2021 30-Jun-2021 30-Sep-2021 31-Dec-2021 31-Mar-2022 30-Jun-2022 30-Sep-2022 DAU/MAU Number of cards (‘000) Attached to App Issued by TBC 10 2 852 11 695 550 386 192 328 451 29 126 315 377 66 225 31 117 31-Mar-2021
Slide 39: Client acquisition cost
CLIENT ACQUISITION COST Kept stable even at the larger scale of customer base 2,058 1,758 1,499 1,140 667 302 98 - 0.0 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Cost per regisetered client (USD) Registered clients ('000) CAPITAL MARKETS DAY 2022 39
Slide 40: Loan portfolio
LOAN PORTFOLIO 1 112 99 12 2 1 1 1 1 2 9 0 2 -50.0 31-Mar-2021 30-Jun-2021 30-Sep-2021 31-Dec-2021 31-Mar-2022 30-Jun-2022 30-Sep-2022 Gross loan portfolio (GEL mln) Number of loans ('000) CAPITAL MARKETS DAY 2022 40
Slide 41: Deposit portfolio
DEPOSIT PORTFOLIO Strong focus on brand top of mind and trust resulting in customer attention 2 2 0 1 2 20 1 9 1 92 - (5 0) 31-Mar-2021 30-Jun-2021 30-Sep-2021 31-Dec-2021 31-Mar-2022 30-Jun-2022 30-Sep-2022 0 Deposits portfolio (GEL mln) Number of depositors ('000) CAPITAL MARKETS DAY 2022 41
Slide 42: Distribution platforms resulting in strong brand recognition
DISTRIBUTION PLATFORMS RESULTING IN STRONG BRAND RECOGNITION owroo 10 sh regionms in 8 s l in 42 ia els 14 n r % an c C egio ch So AP ns s Embedded banking 209 POS % points in g & S M ban ag ter % E i ki ss e n er ll nt c ng ne a t C me P al m o b e rs o n kin g il e b a n CAPITAL MARKETS DAY 2022 4
Slide 43: Our achievements in payments business
Our achievements in payments business
Slide 44: Registered retail customers
7.4 55 Registered Active Active retail P2P users Merchants service users customers CAPITAL MARKETS DAY 2022 44
Slide 45: 35% of adult Uzbek population are Payme's registered users
35% OF ADULT UZBEK POPULATION ARE PAYME'S REGISTERED USERS Number of registered retail clients (‘000) Number of registered merchants 191 2 99 19 1 02 1 11 29 9 2 229 9 1 210 02 - - 31-Dec-2016 31-Dec-2017 31-Dec-2018 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 31-Dec-2016 31-Dec-2017 31-Dec-2018
Slide 46: Steady growth in transactions
STEADY GROWTH IN TRANSACTIONS Number of transactions (mln) 122 111 - 1 2 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 Volume of transactions (GEL mln) 4,00 0 12 2 2 2 10 - FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 CAPITAL MARKETS DAY 2022 46
Slide 47: Payme's financial achievements
PAYME’S FINANCIAL ACHIEVEMENTS +89% Net F&C income (GEL mln) 29 1 1 - FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 Net income (GEL mln) +81% 1 20 9 11 - FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 CAPITAL MARKETS DAY 2022 47
Slide 48: Our strategy going forward
Our strategy going forward ¢
Slide 49: Ecosystem synergies and network effect
ts iscoun Cash D BN vel PL ra ice rv P2P Se yment T pa Sa t Cobranded rke vin Re collaboration Ma gs rewa lty mi rd SYNERGIES Loya ttan Insurance Classo ed ces NETWORK EFFECT G o ve ices serv DATA M rn m rds PF Au s loa en Ca FINANCIAL VERTICAL to t n U p a tilit y a nt s s h s M ercount an es ym X
Slide 50: MAU, share in Group's net income, ROE
MAU Share in Group's net income ROE CAPITAL MARKETS DAY 2022 50
Slide 51: Thank You
Thank You
Slide 52: Financial overview
Financial overview 2022 Giorgi Megrelishvili CFO CAPITAL MARKETS DAY 2022
Slide 53: Track record of robust profitability
TRACK RECORD OF ROBUST PROFITABILITY 1% % % % % 9% 22 9% % 1% % FY 2019 FY 2020 FY 2021 9M 2022 Q3 2022 FY 2019 FY 2020 FY 2021 9M 2022 Q3 2022 9% 9% % % 29 9% 2 % 0 0% 0 FY 2019 FY 2020 FY 2021 9M 2022 Q3 2022 FY 2019 FY 2020 FY 2021 9M 2022 Q3 2022 % CAPITAL MARKETS DAY 2022 53
Slide 54: A strong set of financial results in Q3 and 9M 2022
A STRONG SET OF FINANCIAL RESULTS IN Q3 AND 9M 2022 (GEL mln) +28% +55% +1.3pp +7.0pp +37% +7.0pp 9M 2021 9M 2022 Q3 2021 Q2 2022 Q3 2022 9M 2021 9M 2022 Q3 2021 Q2 2022 Q3 2022 ROE Bank’s standalone ROE1 Source: IFRS Group Data (1) For the ratio calculation all relevant group recurring costs are al
Slide 55: Growing operating income based on diversified earning streams
GROWING OPERATING INCOME BASED ON DIVERSIFIED EARNING STREAMS (GEL mln) (GEL mln) +28% +31% +59% +121% +12% +55% 9M 2021 9M 2022 Q3 2021 Q2 2022 Q3 2022 9M 2021 9M 2022 Q3 2021 Q2 2022 Q3 2022 Total net interest income NIM Net F&C income FX gain/losses Other 55 Source: IFRS Group Data CAPITAL MARKET
Slide 56: Investing for the future while maintaining high efficiency
INVESTING FOR THE FUTURE WHILE MAINTAINING HIGH EFFICIENCY (GEL mln) +26% +34% -3.0pp -5.5pp +8% -5.4pp 109 222 9M 2021 9M 2022 Q3 2021 Q2 2022 Q3 2022 9M 2021 9M 2022 Q3 2021 Q2 2022 Q3 2022 Staff costs Administrative & other expenses Depreciation Bank’s standalone1 cost to income ratio Group’s cos
Slide 57: Strong asset quality
STRONG ASSET QUALITY +1.0pp +1.1pp +0.1pp 100% 100% 30-Sep-2021 30-Jun-2021 30-Sep-2022 9M 2021 9M 2022 Q3 2021 Q2 2022 Q3 2022 Provision coverage Collateral coverage NPLs to gross loans Source: IFRS Group Data CAPITAL MARKETS DAY 2022 57
Slide 58: Maintaining market leadership in both loans and deposits
MAINTAINING MARKET LEADERSHIP IN BOTH LOANS AND DEPOSITS (GEL bln) (GEL bln) +9%/+19%1 +20%/+29%1 -1%/+2%1 +8%/+12%1 9% 10% 10% 30-Sep-21 30-Jun-22 30-Sep-22 30-Sep-21 30-Jun-22 30-Sep-22 Retail CIB MSME Market Share2 (%) Retail CIB MSME Other3 (%) Market Share2 (%) Source: IFRS Group Data 58 (1) Gr
Slide 59: Solid capital position
SOLID CAPITAL POSITION June Net income FX effect Dividend Portfolio Other Other September CET 1 CAR Tier 1 CAR Total CAR 2022 generation RWA credit risk changes 2022 change Min. requirements Above min. requirements by Min. requirements CAPITAL MARKETS DAY 2022 59
Slide 60: Strong liquidity and diversified funding base
STRONG LIQUIDITY AND DIVERSIFIED FUNDING BASE 1 as of 30 September 2022 Customer deposits 121% Other liabilities !'%$ Debt securities in issue 100% !"#$ !"#$100% !%%$ 100% !!&$ !"!$ Due to credit institutions Subordinated debt 30-Sep-21 30-Jun-21 30-Sep-22 NSFR NBG LCR Net loans to deposits and IFI
Slide 61: Uzbek business turns positive in Q3
UZBEK BUSINESS TURNS POSITIVE IN Q3 2022 T GEL mln Operating 16.7 12.0 28.7 income Total provision (4.3) - (4.3) charges Operating expenses and (18.2) (4.5) (22.7) income tax Net pro t/(loss) (5.8) 7.51 1.71 Source: IFRS Group Data CAPITAL MARKETS DAY 2022 61
Slide 62: Efficient capital allocation
EFFICIENT CAPITAL ALLOCATION CAPITAL MARKETS DAY 2022 62
Slide 63: Thank You
Thank You
Slide 64: Tech focus
2022 Tech focus Bidzina Matsaberidze CIO CAPITAL MARKETS DAY 2022
Slide 65: The outstanding international tech team
The outstanding international tech team of Georgia Uzbekistan Ukraine Croatia India Azerbaijan Portugal Macedonia Armenia Romania We hire experienced software engineers from around the globe. We raise new tech talents in and increasing. and other areas. CAPITAL MARKETS DAY 2022 65
Slide 66: Empowered and happy team
EMPOWERED AND HAPPY TEAM Empowered and Tech employee net promoter score (ENPS)1 We have flat (matrix-type) organizational structure, autonomous where each product is owned by a cross-functional agile teams proven technologies and architecture. % Environment of Tech employee happiness Index² continuo
Slide 67: Superior customer experience
E continuously updated based on customer needs and feedback Superior customer T E K experience Always available K Z and protected with the best cybersecurity T T practices Easy to navigate and use, intuitive and easier enjoyable UX DDIT T FI I V Georgia – Digital platforms and systems for our physic
Slide 68: Strategic priorities
STRATEGIC PRIORITIES 4 per day 8 per day 40 per day 25 hours = c.1 day of (partial) No more than c.8 hours downtime during whole year of downtime during year 2018 2021 2025 NOW 2025 2020 NOW 2024 CAPITAL MARKETS DAY 2022 68
Slide 69: Strategic priorities: data and analytics
STRATEGIC PRIORITIES Data and Analytics are key competitive advantages of TBC Group. Leveraging and in decision making in Data governance Data architecture Next best product to buy; generating Credit fraud detection; Data analytics Consumer loan pricing optimization; GEL mln Data science Credit scor
Slide 70: Tech enablement of business development
TECH ENABLEMENT OF BUSINESS DEVELOPMENT Technology modernization - not a transformation project, but lifestyle Tech budget is % of 1/ of tech budget for modernization of systems using total budget1 of TBC Group 2/ for business development > 90% modern technologies R&D teams continuously Platform tea
Slide 71: Technology investments
TECHNOLOGY INVESTMENTS Our budgeted technology investments across the Group clearly show our priorities: 12% 21% % % CAPITAL MARKETS DAY 2022 71
Slide 72: Technology pillars & principles
TECHNOLOGY PILLARS & PRINCIPLES Using only proven Independent teams Building once and Automatically Building cloud-ready modern developing modules reusing in different scaling up and down systems, compatible technologies with (micro-services) systems, teams and systems’ throughput, with on-premises
Slide 73: Our recent international recognition
OUR RECENT INTERNATIONAL RECOGNITION World’s Best Mobile The World’s Best The Best Integrated World’s Best Online The Best Bill Payment Bank Corporate/Institutional Corporate Banking Site Portal/User Experience and Presentment in Online Portal (Corporate/Institutional) Central and Eastern Europe (Co
Slide 74: Thank You
Thank You
Slide 75: Digital ecosystem - TNET
Digital ecosystem - 2022 TNET Giorgi Chumashvili CEO of TNET CAPITAL MARKETS DAY 2022
Slide 76: Who we are
WHO WE ARE ● TNET is the largest technology company in Georgia operating ● unique users per year in four verticals and combining 8 platforms. ● unique users per month ● page views per year ● Campaign management for companies ● leads per month ● 8% leads conversion average rate (1) Based on internal
Slide 77: Our market positions
OUR MARKET POSITIONS % 100% % 100% 80% 80% TNET TNET 60% 60% 40% 22% 40% Independent % 20% companies 20% Independent companies 0% 0% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 100% % 100% 80% TNET 80% % % 60% 60% Independent 21% TNET 40% 40% companies 10% Independent 20% companies 20% 1% 0% Dir
Slide 78: Strategy 4x10
STRATEGY 4X10 Our mission is to make people’s lives easier with the help of technology (GEL mln)¹ Goal (GEL mln) Goal 120 mln 6 mln in mid-term in mid-term 100 mln 100 5 mln 4.5x GEL 1 bln 10X GEL 50 mln 80 mln 4 mln 60 mln 3 mln 40 mln 22 2 mln 20 mln 1 mln 0 mln 0 mln 2021 2022 Annualized 2021 202
Slide 79: Key enablers and initiatives
KEY ENABLERS AND INITIATIVES Technology People Data capabilities Campaign Super App management business to marketplace CAPITAL MARKETS DAY 2022 79
Slide 80: People
The technologies and frameworks that TNET uses are advanced & diverse. We are committed to the practice of cloud computing, thereby improving the scalability of internet-based database capabilities while reducing costs and risks. Our approach is to break down a large monolithic architecture into mic
Slide 81: Data hub
DATA HUB Unlimited data collection points Data exchange Data analytics Data science / AI modeling time and distance between the product & the customer. ⦁ Ensure monetization through Tracking the behavior of of the country's adult net fee and commission income population. Out of which, 35% have given
Slide 82: Shift from classified business to marketplace
SHIFT FROM CLASSIFIED BUSINESS TO MARKETPLACE from GEL (2021) to We have already started the process and the result is a surge in GMV, GEL (2022 annualized). In last two years we have introduced a number of services that are highly relevant and convenient for TNET's customers: ⦁ C2C ⦁ Property valua
Slide 83: Campaign management
CAMPAIGN MANAGEMENT TNET allows its partners to effectively run marketing campaigns and helps them deliver tailored offers to their customers. ⦁ TNET already serves 100+ companies for campaign management purposes and has generated 760 mln views / impressions in 9M 2022. ⦁ Conversion rates for TNET's
Slide 84: Super App
SUPER APP Commercial banks Super App - yet another important initiative! Why do we need it and what kind of upsides will the ecosystem receive after developing a super app? ● Super App provides a close connection with the ● Customer journey is more user-friendly in Super App, journe much better than
Slide 85: Thank You
Thank You
Slide 86: Retail & MSME and payments
Retail & MSME and payments 2022 Tornike Gogichaishvili Deputy CEO, retail and MSME banking, payments CAPITAL MARKETS DAY 2022
Slide 87: Leading bank for retail and MSME in Georgia
LEADING BANK FOR RETAIL AND MSME IN GEORGIA Mass retail NPS² NPS² Affluent retail NPS² Of newly registered legal entities are TBC’s clients3 Market share¹ in loans Market share¹ in deposits Market share1 in loans Transaction offloading Projects completed over YoY growth leading to the past 3 years P
Slide 88: Our international recognition
OUR INTERNATIONAL RECOGNITION Market leader and Best Best Institutional Online Best Institutional Best SME Bank Service Provider in Portal in Central Banking Site in Central in Central & Eastern Trade Finance in & Eastern Europe & Eastern Europe Europe Georgia 2019 2020 2021 2020 2021 2023 2021 Best
Slide 89: Retail banking
Retail banking ¢
Slide 90: Expanding our customer base & penetration coupled with high NPS
EXPANDING OUR CUSTOMER BASE & PENETRATION COUPLED WITH HIGH NPS Number of active customers (‘000) CAGR +3% +7% 101 99 92 Affluent Mass % ² % 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2021 30-Sep-2022 Raising penetration & customer experience Mass NPS³ Cash loan remote sales Payroll penetration Yout
Slide 91: Market share and portfolio CAGR
share CAGR (2019-2021) CAGR (2019-2021) +12% +19% CAGR (2019-2021) +13% CAGR (2019-2021) +9% 91 Market shares are based on data published by the National Bank of Georgia as of 30-Sep-2022. In this context retail refers to individual customers. CAPITAL MARKETS DAY 2022
Slide 92: Maintaining robust balance sheet dynamics and structure
MAINTAINING ROBUST BALANCE SHEET DYNAMICS AND STRUCTURE CAGR +12%2 +23%² CAGR +19%² +25%² 6.9 5.8 6.4 6.0 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2021 30-Sep-2022 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2021 30-Sep-2022 Non-Mortgage Mortgage Term & CD Current & Saving Non-mortgage portfolio as
Slide 93: With increasing focus on cash loans
WITH INCREASING FOCUS ON CASH LOANS¹ Cash loan portfolio as of 30 Sep > 90% Cash loan market share² for fast cash loan of GEL 1.2 bln % +c.5pp growth from 2019 High yield GEL Fee & commission Client acquisition lending income (1) Cash loan is unsecured consumer loan up to GEL 80K, with loan tenor up
Slide 94: Increasing customer engagement
INCREASING CUSTOMER ENGAGEMENT T ET V % 119% % CAPITAL MARKETS DAY 2022 94
Slide 95: Being number one choice for affluent customers
BEING NUMBER ONE CHOICE FOR AFFLUENT CUSTOMERS SHARE OF RETAIL SHARE OF RETAIL Loan portfolio Deposit portfolio CAGR (2019-2021) +14% CAGR (2019-2021) +19% 105K GEL 228 Total clients Revenue per customer Our Concept clients’ favorite spot with 80% +6pp YoY 93K Total clients lifestyle and 20% banking
Slide 96: Good room for growth ahead
GOOD ROOM FOR GROWTH AHEAD % % % % % CAPITAL MARKETS DAY 2022 96
Slide 97: MSME banking
MSME banking (
Slide 98: Number one choice for MSMEs in Georgia
NUMBER ONE CHOICE FOR MSMES IN GEORGIA ² ² CAGR (2019-2021) +5pp YoY +7pp YoY % Legal customers Individual customers (1) Market shares are based on data published by the National Bank of Georgia as of 30-Sep-2022. CAPITAL MARKETS DAY 2022 98
Slide 99: Underpinned by robust portfolio growth
UNDERPINNED BY ROBUST PORTFOLIO GROWTH CAGR +17%¹ +28%¹ CAGR +12%¹ +24%¹ 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2021 30-Sep-2022 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2021 30-Sep-2022 SME Micro Micro portfolio as of 30-Sep-2022 is growth driver as of 30-Sep-2022 and exceeds SME loan book SM
Slide 100: Increasing customer engagement
INCREASING CUSTOMER ENGAGEMENT T ET V % % % CAPITAL MARKETS DAY 2022 100
Slide 101: Our enablers
Our enablers
Slide 102: Clients' favorite retail digital channels
CLIENTS’ FAVORITE RETAIL DIGITAL CHANNELS 4.9 Our best-in-class mobile and internet banking are increasing client activity while remaining their favorite banking applications % YoY K YoY 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2021 30-Sep-2022 (1) Figures given for bank only. CAPITAL MARKETS DAY
Slide 103: While traditional channels more efficient than ever
WHILE TRADITIONAL CHANNELS MORE EFFICIENT THAN EVER model which is a balance of physical and digital services CAPITAL MARKETS DAY 2022 103
Slide 104: Providing full spectrum of payment services
PROVIDING FULL SPECTRUM OF PAYMENT SERVICES (traditional terminals - standard pay by card, by int/mob (SME/corp), Cashier (SME), T-pos for android bank username, QR, Android (SME),Integrated (corp) (micro/mini) ertguli, apple pay, micro/mini CAPITAL MARKETS DAY 2022 104
Slide 105: Taking advantage of growth momentum
TAKING ADVANTAGE OF GROWTH MOMENTUM ² 33% 35% 38% 38% 38% POS to Cash Ratio CAGR +24% +42% CAGR +22% +31% FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 ³ CAGR +4% +71% FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 105 (1) Including
Slide 106: Data analysis - creating value
DATA ANALYSIS - CREATING VALUE 25 PROJECTS COMPLETED SINCE 2019, 6 MORE UNDERWAY a ~ e e8e a~ f@r Retaining and Individual r ) increasing product customer base pricing GEL 137.0 min additional profit | A XY S CAPITAL MARKETS DAY 2022 106 Process efficiency @ and automatization Risk reduction e@
Slide 107: Retail, MSME & Payments strategic focus
Retail, MSME & Payments strategic focus
Slide 108: Retail, MSME & Payments strategic targets
Active customers Household loan Active customers MSME market share Active payment users market share % % +10% +1.5pp +33pp +2.6pp +30% Digital penetration Mass NPS Automation level NPS Active merchant (Below USD 100K loans) terminals % +23pp % 100% % +93% +28pp CAPITAL MARKETS DAY 2022 108
Slide 109: Thank You
Thank You
Slide 110: Corporate, investment banking and wealth management
Corporate, investment banking and wealth management 2022 George Tkhelidze Deputy CEO, CIB & Wealth Management CAPITAL MARKETS DAY 2022
Slide 111: Leading CIB and wealth management franchise in Georgia
LEADING CIB AND WEALTH MANAGEMENT FRANCHISE IN GEORGIA The largest and most trusted Strong wealth management TBC Capital - the leading partner for corporates investment bank advisory and brokerage franchise 42.3% 3.2 bln 63% Market share Assets under Market share in DCM in corporate loans 1 GEL mana
Slide 112: Focusing on best talent acquisition and development
FOCUSING ON BEST TALENT ACQUISITION AND DEVELOPMENT Senior staff Leadership positions 280+ Professionals 30% with 10+ years of experience 70% promotions Talent acquisitions Regularly updated Effective Career development Local as well as through graduate talent pool for succession and coaching intern
Slide 113: Corporate banking
Corporate banking ¢
Slide 114: #1 position in corporate lending
#1 POSITION IN CORPORATE LENDING.... Strong performance with increasing share of large and mid-corporate clients and reduced top-10 presence in every sector of Georgian economy GEL bln - "( ! $ , #!" 8.3% + #!" - "& ! $ 7.9% 7.7% 9.9% 8.7% * #!" - "$ ! $ 6.8% 6.0% Hospitality & leisure Real Estate D
Slide 115: Further strengthened by E2E credit process redesign and digitalization
...FURTHER STRENGTHENED BY E2E CREDIT PROCESS REDESIGN AND DIGITALIZATION INITIATIVE Gathering Project Credit Loan information processing and committee disbursement decision making minutes Time reduced by 25% Time reduced by 36% Time reduced by 75% Time reduced by 40% Time to yes to be improved by 3
Slide 116: Strong syndication desk with track record of executed large deals
STRONG SYNDICATION DESK WITH TRACK RECORD OF EXECUTED LARGE DEALS Increasing number of transactions and syndicated portfolio, translated into additional GEL 2.7mln fee income generation and 0.5% ROE on average GEL mln Origination Lead and underwrite large 31 11 26 10 27 complex transactions CAGR +13
Slide 117: Recent growth led by local currency deposits
RECENT GROWTH LED BY LOCAL CURRENCY DEPOSITS, TRANSLATED INTO IMPROVED LARIZATION AND STRONG INCOME GENERATION IN TRANSACTIONAL BUSINESS Double digit growth in deposits1 Solid non-interest income generation GEL bln ' #$ % GEL mln 61.7% CAGR +12% +67% 58.2% "* $ ( # 57.9% 54.1% ( #$ % "* $ ) # 51.0%
Slide 118: Digitalization and new product offerings open up new opportunities
DIGITALIZATION AND NEW PRODUCT OFFERINGS OPEN UP NEW OPPORTUNITIES FOR TRANSACTIONAL EXCELLENCE New bulk cash depository machines FX customer journey redesigned Availability 12x Available in large clients' premises and in all major branches in the country 5min Execution time Journey Seamless deposit
Slide 119: Leading franchise in trade finance and fast growing factoring
LEADING FRANCHISE IN TRADE FINANCE AND FAST GROWING FACTORING BUSINESS THROUGH DIGITAL PLATFORM New factoring platform with improved customer journey 49.1%1 GEL 2.1 bln 3x Market Share Guarantee portfolio Growth in number of transactions since digital proposition Network Membership 10x Large Network
Slide 120: Wealth management & investment banking
Wealth management & investment banking
Slide 121: Strong franchise of wealth management
STRONG FRANCHISE OF WEALTH MANAGEMENT Leveraging on capital light products by broadening What sets us apart alternative investment offerings GEL bln CAGR +25%1 +19%1 Customer Experience Long history of excellence in client service 2.8 2.7 3.2 2.5 +67% 0.5 Relationship 1.8 0.2 0.3 0.3 0.1 +13% 2.3 2.
Slide 122: First credit fund in Georgia managed by TBC Asset Management
FIRST CREDIT FUND IN GEORGIA MANAGED BY TBC ASSET MANAGEMENT Key highlights Fund rationale 2020 2021 2022 Mid-term Additional alternative Fee income generation for for investment The parliament TBC acquires Since launch in Scale up plan: potential of Georgia license April 2022 USD approves from NBG
Slide 123: Financial advisory through personal broker and trading infrastructure
FINANCIAL ADVISORY THROUGH PERSONAL BROKER AND TRADING INFRASTRUCTURE Brokerage assets under management New brokerage platform USD mln CAGR +56% +94% Launched in Q1 2022 supporting trading 368 Concept clients 60+ 194 190 151 Stock exchanges 80 31-Dec-19 31-Dec-20 31-Dec-21 30-Sep -21 30-Sep -22 20 C
Slide 124: TBC Capital is driving the capital market development in Georgia
TBC CAPITAL IS DRIVING THE CAPITAL MARKET DEVELOPMENT IN GEORGIA Corporate debt capital market development ESG bonds2 GEL bln DEBT CAPITAL MARKET GROWTH 238% USD USD 500 000 000 250 000 000 4%, 7 YEAR 7.75%,5 YEAR 37% PUBLIC PLACEMENT PUBLIC PLACEMENT 63%1 Local bonds2 2.3 1.0 9.2 4.0 GEL GEL 35 000
Slide 125: Research coverage and recognition
Continious strong coverage of Georgian economy, National Bank of Georgia recognition plus added international market coverage TBC Capital - The best macro forecaster of 2021 2020 2022 Weekly bulletin from chief economist 26 34 Macro 4 5 Financial Tracking recovery 33 34 Macro Sectoral Markets Real e
Slide 126: Loan market share, investment products, NPS
40%+ 30%+ 75%+ Loan market Investment NPS share products share in AUM CAPITAL MARKETS DAY 2022 126
Slide 127: Thank You
Thank You
Slide 128: Risk management overview
Risk management 2022 overview Nino Masurashvili Deputy CEO, CRO CAPITAL MARKETS DAY 2022
Slide 129: Strong risk profile
STRONG RISK PROFILE STRONG CREDIT RISK MANAGEMENT RESILIENT CAPITAL AND LIQUIDITY Prudent underwriting standards with strong LTV, PTI Major emphasis on stress testing to estimate potential and DSCR ratios, and FX buffers; impacts on capital and/or liquidity; Cost of risk in line with our business st
Slide 130: Four pillars of risk strategy
FOUR PILLARS OF RISK STRATEGY The group’s board of directors sets the tone from the top in risk management, which is reflected in our risk strategy The group’s risk strategy has 4 main components 1 2 3 4 Embed risk Safeguard Digitize processes Become a business management in the the Group to support
Slide 131: Foundations of our risk management framework
FOUNDATIONS OF OUR RISK MANAGEMENT FRAMEWORK Risk Governance and ICAAP1, ILAAP2 Stress Appetite monitoring & Recovery Plan testing People framework Early warning triggers ICAAP and ILAAP Multiple stress tests Human capital trained and system quickly identifying frameworks help maintain conducted ann
Slide 132: Diversified loan portfolio across segments
DIVERSIFIED LOAN PORTFOLIO ACROSS SEGMENTS CAGR +16% 12.7 15.2 17.0 17.4 23% 23% 24% 26% 37% 38% 38% 34% 40% 39% 38% 40% 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 Retail Corporate MSME Total loan portfolio (GEL bln) CAPITAL MARKETS DAY 2022 132
Slide 133: Strong diversification of industries
STRONG DIVERSIFICATION OF INDUSTRIES Limits are set and managed in line with our risk appetite 30-Sep-2022 Agriculture 5% Food Industry 5% Mortgage Other 19% 63% Individuals Non-Mortgage 39% 37% Trade 6% Construction 6% Energy & Real Estate Utilities Hospitality & Leisure 9% 5% 6% CAPITAL MARKETS DA
Slide 134: Keeping large borrower concentration low
KEEPING LARGE BORROWER CONCENTRATION LOW Top 20 Borrowers Top 10 Borrowers 12.3% 12.1% 10.5% 9.0% 8.3% 7.9% 6.8% 6.0% 0 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 CAPITAL MARKETS DAY 2022 134
Slide 135: Decreasing exposure to foreign currency
DECREASING EXPOSURE TO FOREIGN CURRENCY The Bank actively manages risks arising from foreign currency denominated loans through risk appetite framework, underwriting buffers, regular monitoring of the FX portfolio, capital management and stress testing. Share of GEL in total portfolio of loans and d
Slide 136: NPLs and cost of risk, NPL coverage
NPLs and Cost of Risk NPL Coverage 0.7% 2.4% -0.3% 0.7% 194% 159% 175% 164% 103% 73% 75% 64% 2.7% 4.7% 2.4% 2.3% 91% 86% 100% 100% 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 31-Dec-2019 31-Dec-2020 31-Dec-2021 30-Sep-2022 NPL to gross loans Cost of Risk Provision Coverage Collateral Coverage To
Slide 137: High level of collateralization
HIGH LEVEL OF COLLATERALIZATION PORTFOLIO BREAKDOWN BY COLLATERAL TYPES Cash Cover Gold Inventory 2% 1% Collateral remains a key mitigation tool 4% for credit risk management Unsecured 21% Maintaining high levels of collateralization 75% is part of our risk strategy of loan book secured Collateral v
Slide 138: Managing operational risks
TO MANAGE THEM Manage operational risks adequately in changing business environment Continuous update and enhancement of our in-depth security strategy, with multiple Operational preventive and detective controls. Risks security management system obtained. Always prioritize the reputation of No hist
Slide 139: Digitalization and data driven decisions
DIGITALIZATION AND DATA DRIVEN DECISIONS Digitalization is at the core of our risk focus – automated decisions, better customer experience and effectiveness of employees Data driven decisions – models deployed in multiple areas of credit & operation risks, AML with strong model validation system Ris
Slide 140: Impact of the war and consequent sanctions
IMPACT OF THE WAR AND CONSEQUENT SANCTIONS IMPACT OF THE WAR SANCTION MANAGEMENT IS INSIGNIFICANT 9 months into the Russian-Ukrainian war, our UK, US and EU sanction regimes strictly followed; asset quality remains strong, with no need Zero tolerance for sanction evasion; Updated sanctions policy to
Slide 141: End to end digital credit process in Uzbekistan
END TO END DIGITAL CREDIT PROCESS IN UZBEKISTAN 230,000 applications processed per month All customers applying through mobile app for a loan Digital application 35% of accounts processed with no and digital data need for human resources aggregation 1.1% cost of risk saved with Full cycle of overdue
Slide 142: Portfolio quality in line with business strategy in TBC Uzbekistan
PORTFOLIO QUALITY IN LINE WITH BUSINESS STRATEGY IN TBC UZBEKISTAN Gross Loan Book (GEL mln) 269 NPL to Gross Loan 2.7% Cost of Risk (IFRS) 7.4% Gross Loan Book - As of 30-Sep-2022 NPL - Non-performing loans as of 30-Sep-2022 COR - Cost of Risk for Q3 2022 annualized CAPITAL MARKETS DAY 2022 142
Slide 143: Developing a strong ESG framework
DEVELOPING A STRONG ESG FRAMEWORK GOVERNANCE AND CULTURE ESG Governance and culture set up 1. Focus on 2. Employee 3. Green and 4. Impact sustainable diversity, sustainable measurement 2 ESG-related committees – Board Level & Executive Management Level equality funding in line with and products and
Slide 144: Conclusion
CONCLUSION We have the expertise and capacity to identify and manage risks faced by the Group within a well-established risk management framework. Solid asset quality, resilient capital and liquidity levels are the basis for Continuously striving for improvements in risk management, establishing ind
Slide 145: Thank You
Thank You
Slide 146: Georgian and Uzbek macro overview
Georgian and Uzbek macro overview 2022 Otar Nadaraia Chief Economist Task: Insightful, Simple, Unique CAPITAL MARKETS DAY 2022
Slide 147: Georgia and Uzbekistan demonstrate high growth potential and resilience
GEORGIA AND UZBEKISTAN ONCE AGAIN DEMONSTRATE HIGH GROWTH POTENTIAL AND RESILIENCE Real GDP growth (%) 14.9 10.4 10.2 9.7 6.4 7.1 7.3 6.9 7.2 7.4 7.1 6.4 6.0 6.2 Strong record of constant 5.9 5.7 5.8 5.5 3.6 4.4 4.84.4 4.8 5.4 5.0 5.2 3.9 5.2 expansion of industrial diversity 3.0 2.9 1.9 The Georgia
Slide 148: The stable terms of trade is a value picking out both countries
THE STABLE TERMS OF TRADE IS A VALUE PICKING OUT BOTH COUNTRIES Terms of trade, brent oil and gold prices (Jan-2019 = 100) 250 200 150 100 50 0 Feb-19 Jan-20 Mar-20 Sep-19 Jan-21 Jul-19 Mar-21 Mar-22 Dec-19 Jan-22 May-19 Aug-19 Jun-19 Apr-20 Apr-21 Nov-19 Apr-22 Oct-19 Feb-20 Feb-21 Feb-22 Sep-20 Ja
Slide 149: The diversification when operating in both markets
THE DIVERSIFICATION WHEN OPERATING IN BOTH MARKETS Gold and tourism (%) 80 60 40 The gold and tourism, 20 the largest industries for Uzbekistan and Georgia, are not 0 correlated with each -20 other -40 -60 -80 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Go
Slide 150: Uzbekistan is reforming the economy broadly in the way evidenced in Georgia
UZBEKISTAN IS REFORMING THE ECONOMY BROADLY IN THE WAY EVIDENCED IN GEORGIA Investment to GDP in Uzbekistan is one of the highest internationally (% of GDP) „Uzbekistan embarked on an ambitious reform path in 2017, starting to liberalize 45 its economy after years of state control.“ 40 – IMF, 20221
Slide 151: Strong upside for price growth for both markets
STRONG UPSIDE FOR PRICE GROWTH FOR BOTH MARKETS Comparison of real estate prices by cities, USD/sq. m Comparison of rental yields by cities $5,000 12 Rental yields in the city center (%) $4,500 Price in the center (sq. meter) Namangan Vilnius 10 Batumi $4,000 Zagreb Dushanbe Tbilisi Budapest Talin $
Slide 152: The GEL looks fairly valued, while the UZS undervalued
THE GEL LOOKS FAIRLY VALUED, WHILE THE UZS UNDERVALUED 140 120 Both countries, to larger extent Georgia, have stronger per-capita GDP growth as 100 compared with their trade-weighted country average 80 USD/GEL 2.85 This implies long-term appreciation of real 60 effective exchange rate (REER) 40 USD/
Slide 153: Inflation and local currency rates to decline in both markets
INFLATION AND LOCAL CURRENCY RATES TO DECLINE IN BOTH MARKETS Inflation and monetary policy rate in Uzbekistan, % Inflation and monetary policy rate in Georgia, % 16 25 14 20 12 11.0 10 9.4 15 15 8.5 13 8 7.5 10.5 12.2 10 10.6 9 6 9.5 7.0 4 3.0 3.0 3.0 5 5 3.0 2 2.4 0 0 Nov-21 Jul-21 Nov-22 Mar-21 J
Slide 154: Dollarization is a challenge
DOLLARIZATION IS A CHALLENGE, HOWEVER, LOCAL CURRENCY PORTFOLIO SHARE SHOULD NOT BE 100% Loan portfolio by currencies of Georgia Loan portfolio by currencies of Uzbekistan (constant exchange rate as of 31-Jul-2022) (constant exchange rate as of 31-Dec-2021) Inflows - Georgia Inflows - Uzbekistan (%
Slide 155: Credit to GDP gap implies financial deepening is sustainable
CREDIT TO GDP GAP IMPLIES THAT THE ONGOING FINANCIAL DEEPENING IS SUSTAINABLE Credit to GDP gap at constant (average) exchange rate in Georgia (%) Domestic credit to GDP gap at constant (average) exchange rate in Uzbekistan (%) 80 2025, 12.6 2027, 12.2 40 2027, 16.6 2025, 18.9 70 2023, 13.4 35 2023,
Slide 156: Even stronger upside in retail credit
EVEN STRONGER UPSIDE IN RETAIL CREDIT Household debt to household disposable income, 2021 Mortgage to non-mortgage and GDP (PPP) per capita, 2021 14 Netherlands 250 Denmark 12 200 Estonia 150 10 Mortgage to Non-mortgage % Belgium 100 8 50 6 Ireland Latvia Lithuania France Sweden 0 Austria Greece Rus
Slide 157: Thank You
Thank You Find more at www.tbccapital.ge THE BEST MACRO FORECASTER ACCORDING TO THE NATIONAL BANK OF GEORGIA IN 2021