TBC Bank Closed Last Week In A Negative Trend on LSE, While Bank of Georgia In – Positive

"The appointment of the President of the National Bank of Georgia and the filling of the vacancies on the Board of the National Bank of Georgia are a welcome first step. The National Bank should now focus on amending the Organic Law on the National Bank of Georgia: ensuring the presence of a majority of non-executive members on the Board, limiting the possibility of discretionary financial transfers to the government, clarifying and further strengthening the criteria for the transfer of authority in the National Bank (the framework for the transfer of governance) and the qualification criteria for Board members. It is also recommended to change the decision-making model of the National Bank: moving from a presidential decision-making model to a collegial model," the mission's conclusion states.At a briefing at the National Bank, the head of the mission stated that his goal is to restore Article 4 of the IMF. In addition, Hashdenberg emphasized Georgia's high economic indicators and low budget deficit, which ensure the country's economic sustainability. He positively assessed the work of the National Bank. The Head of Mission also spoke about global risks and noted that all of these are both challenges and opportunities for Georgia.Regarding poverty, he noted that it has been reduced, but it still remains a challenge.Hajdenberg also spoke about the need for investments in infrastructure and improved land resource management.Regarding risks arising from lending, he stated that monitoring should continue in the consumer lending segment.

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In 1Q2025, large businesses generated 70.6 percent of total turnover, while medium size businesses generated 13.5 percent, and 15.9% was generated by small business.A distribution was different in case of total production value: 48.6% was on large businesses, 23.1% — on medium, and 28.3% — on small businesses.In 1Q2025, total purchases of goods and services carried out by enterprises equaled 28.8 billion GEL (year-on-year 11.9% more), while the purchase of goods and services for resale amounted to 17.2 billion GEL (year-on-year 7.9% more).In 1Q2025, the average number of persons employed in business sector equaled 771 thousand, which is year-on-year 2.9% more. Out of the total number of persons employed, 43.9% were female and 56.1% were male.Large businesses employed 43.7% of total number of persons, while 20.7% were employed by medium, and 35.5% — by small businesses.The total number of employees amounted to 718.9 thousands (year-on-year 2.2 percent more).The total personnel costs of enterprises equaled 4,7 billion GEL (year-on-year 11.9 percent more).In 1Q2025, average monthly remuneration of employed persons equaled 2 169.6 GEL(184.2 GEL increase year-on-year) while remuneration of employed women specifically was 1 711 GEL (152.3 GEL increase year-on-year). Average monthly remuneration of employed persons by size of enterprises is as follows:• Large business — 2,311 GEL• Medium business — 2,559 GEL• Small business — 1,675 GELIn 1Q2025, the arts, entertainment and recreation has the highest share (35.9%) in the total turnover in business sector, followed by trade sector (including repair of motor vehicles and motorcycles) with 32.7% share, manufacturing - with 7.1%, construction - with 5%, Information and communication – with 4.7%, transportation and storage - with 4.4%, and other sectors - with 10.2% share.In 1Q2025, manufacturing (18.1%), trade (17.1%), construction (15.1%), Information and communication (12.6%) and transportation and storage (9.1%) held the top five places in business sector by production value. The rest of the sectors had 28% share combined.In 1Q2025, trade (wholesale and retail trade, repair of motor vehicles and motorcycles), manufacturing, and human health and social work activities led business sector by number of employees (accordingly with 29.1%, 11.7% and 9.7% share).Enterprises engaged in transportation and storage (8%), construction activities (7.7%), information and communication (6.1%), and accommodation and food service activities (5.3%) also had a significant share though.

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According to the minister, the part of fiscal risk insurance is important, for which a strong financial supervision framework has been prepared.As of Khutsishvili, the reforms include many components and the IMF has expressed its readiness to cooperate in this direction, however, so far there is only a verbal agreement and the minister is confident that a formal agreement will be reached.According to Khutsishvili, the reform process is long-term.On Wednesday, National Bank President Natia Turnava, Finance Minister Lasha Khutsishvili, and IMF Mission Chief Alejandro Hajdenberg held a joint briefing at the NBG, dedicated to the conclusions of the 2025 Article IV mission of the International Monetary Fund.

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According to Papuashvili, parliamentary procedures to elect the new Auditor General will now commence.“Yesterday, Tsotne Kavlashvili informed me of his resignation from the position of Auditor General. He is returning to his previous role as Deputy Minister of Finance, a position he held from 2015 to 2022. Additionally, from 2013 to 2022, he served as Head of the State Treasury. I would like to nominate Giorgi Gabitashvili for the role of Auditor General,” Papuashvili stated.He emphasized the importance of the State Audit Office as a constitutional body responsible for ensuring the legality, purposefulness, and efficiency of public spending.“Effective budget management and minimizing corruption risks are among the priorities of the Parliament and the Government of Georgia. Currently, Georgia ranks among the countries with the lowest corruption indicators, even when compared to EU member states. However, our goal is for Georgia to be a global leader in this area by 2030, aiming to be in the top three. The State Audit Office plays a crucial role in establishing a system that prevents ineffective or illegal use of public funds,” Papuashvili stated.He continued: “After consulting with the teams and Mr. Gabitashvili, the decision was made to nominate him for the position. Gabitashvili has extensive experience within Georgia’s investigative system, having worked for the Prosecutor’s Office and the Ministry of Finance. Since 2013, he has served as Deputy Prosecutor General, and as of 2024, he holds the position of Prosecutor General.”Papuashvili expressed confidence that Gabitashvili’s election as Auditor General would significantly strengthen the State Audit Office and help achieve the goals set forth to the Georgian people before the elections—goals that garnered the public’s mandate.“The upcoming week will see the parliamentary procedures culminate in a vote during the plenary session,” Papuashvili added.

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750,000 million is 250,000 away from the newly increased limit for foreign currency lending of up to a million.The banking sector expects lending to be activated. According to investment bankers' analysis, the dangerous regulation will work the opposite way, it will revive the market more, including with the development sector slowing down and the transition to a waiting mode, businesses & clients who intend to take out a loan but are in no hurry are rushing to make it to August 1, before the limit is raised.In every research publication, including the monetary policy document, the National Bank of Georgia constantly notes that it monitors the market and makes decisions based on this, whether to tighten or ease regulation or increase or decrease the monetary policy rate. Accordingly, the market's agitated behavior was not absent before each increase in the limit.December was the peak of foreign currency loan issuance, why? Because the limit was raised from January. Well, December is already an active month, especially in terms of activating the real estate market, although the limit also had an effect. In December (2024), the equivalent of 2.4 billion GEL was issued in foreign currency loans. In the previous and subsequent months (November, January), respectively, 1.5 billion GEL and 1.13 billion GEL were issued in USD and EUR, respectively. Disbursements for the period 04/2024-04/2025 (13 months) are 20.5 billion GEL (equivalent in foreign currency). Monthly disbursements are within the range of -1.4 – 1.7 billion GEL, if we exclude the peak December, by 2.4 billion.The new limit should reduce foreign currency lending by $150 million. The regulator’s previous move (increasing to $500,000) was designed to reduce annual lending by more than $100 million, while the previous one (to $400,000) was designed to reduce it by $180 million.Davit Rusia, analytical director of the Banking Association, avoided spoiling the festive mood of the 30th anniversary of the lari for the public. During his visit to 1TV. GE, he did not say that the regulation would also apply to lari loans, which is usually expressed in an increase in lending rates. He suggested that we wait longer for a pleasant change.“Let's hope for the best. Let's observe the summer period. What financial inflows will be, how will it affect the purchasing power of the lari,” - Rusia drew attention to the 42/43% dollarization ratio of loans, which has stubbornly maintained its position for a long time and is having a hard time getting down to 41%.According to his expectations, if the banks do not find a new source of long-term lari, it will be difficult for the ratio to move from its place for a long time.According to him, only the National Bank of Georgia and the Ministry of Finance can create a new source. And there is another source that is not unlimited, but is both voluminous and long-term. Rusia means the funds of the pension fund by accumulation, the money that potential borrowers must lend to banks so that banks lend to us at the optimal rate. If we follow the pension criteria, the fund should lend at least 14%, because the fund is also profit-oriented. When investing in lari bonds, it looked at the 13% limit and chose to buy loan bonds based on this.Considering that banks manage to attract currency from the international capital market at 4-5% (in US dollars) and 3-3.5% (in EUR, lari still turns out to be more expensive. The Banking Association of Georgia sees the possibility of balancing in co-financing the interest. The financier should be either the National Bank or the Ministry of Finance, or both.

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Given that TBC Bank Georgia, the main subsidiary of TBC PLC, accounts for the majority of TBC PLC’s assets and revenues, and that their financial metrics are broadly aligned, TBC PLC’s Ba3 long-term issuer rating reflects the standalone creditworthiness of TBC Bank Georgia.The rating is positioned one notch below TBC Bank’s ba2 Baseline Credit Assessment (BCA) and Adjusted BCA. The one-notch difference between the holding company and its principal operating subsidiary is primarily driven by the structural subordination of TBC PLC’s senior unsecured creditors to those of TBC Bank Georgia.This rating distinction is consistent with Moody’s credit rating methodology and is a common practice for bank holding company structures.

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Buyback and cancellation programme which was announced on 25 February 2025 as an extension of the GEL 73.4 million share buyback and cancellation programme announced on 22 August 2024 (the "Buyback Programme").The total number of shares cancelled since the launch of the Buyback Programme in August 2024 is 831,167. Number of ordinary shares held in treasury cancelled - 94,892.Total number of ordinary shares held in treasury following the cancellation - 10,000.At the time of cancellation (May 29), there were 10,000 shares in the treasury, and since then 5,000-5,000 shares have been redeemed in two installments, and as of today, 20,000 common shares are placed in the treasury.

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As of the document, the annual inflation rate was mainly influenced by price changes for the following groups:Food and non-alcoholic beverages: the prices in the group increased by 8.3 percent, contributing 2.82 percentage points to the overall annual inflation rate. Within the group the prices increased for the following subgroups: oils and fats (22.5 percent), vegetables (17.6 percent), coffee, tea and cocoa (15.4 percent), mineral waters, soft drinks, fruit and vegetable juices (10.6 percent), sugar, jam, honey, chocolate and confectionery (9.5 percent), bread and cereals (8.4 percent), fish (6.9 percent), milk, cheese and eggs (6.9 percent), meat (2.2 percent). At the same time, prices decreased for fruit and grapes (-4.7 percent);Health: the prices increased by 9.0 percent, contributing 0.75 percentage points to the overall index. The prices were higher for the following subgroups: out-patient services (10.2 percent), medical products, appliances and equipment (8.3 percent), hospital services (7.6 percent);Miscellaneous goods and services: the prices for the group increased by 5.9 percent, contributing 0.29 percentage points to the overall index. Within the group, the prices were higher mainly for the following subgroups: personal effects n.e.c. (20.7 percent), insurance (8.7 percent), financial services n.e.c. (5.4 percent), personal care (2.7 percent);Transport: the prices for the group decreased by 4.5 percent, contributing -0.54 percentage points to the overall index. Within the group the prices decreased for operation of personal transport equipment (-7.4 percent). At the same time, the prices increased for purchase of vehicles (0.9 percent) and transport services (0.7 percent).

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