TBC Capital writes about 3 main factors that are beneficial for the GEL

Article 81 of the Company sets out a limit on the maximum total remuneration payable to directors. The limit may only be changed by resolution of the shareholders.At the 2024 Annual General Meeting held in London today, shareholders were presented with a revised remuneration policy, which sets out the maximum total remuneration cap for directors at $1,750,000 (the “Cap”).According to the resolution, the shareholders were proposed to increase the cap to $2,500,000, taking into account the expected appointment of additional directors to the management in 2025, as described in the annual report. Accordingly, it is necessary to increase the cap for remuneration to accommodate the financial effect of this change. The said policy and cap were approved by the shareholders.As a result of the vote, the issue of increasing the maximum total remuneration payable to directors was supported by 100% of the shareholders participating in the vote (38,442,500 shares). 68.39% of the issued share capital of the company participated in the vote.The remuneration policy, approved at the 2024 Annual General Meeting and reflected in the 2024 Annual Report, remains unchanged in all other respects.

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After a long wait, the 100,000 GEL loan limit has been removed (from 16.05.2025), which also limits the long-term partnership of the financier with the business client, because with the expansion of the business, the 100,000 GEL limit can no longer meet the increased needs and is losing customers.Since May 16, along with the increase in the loan limit, the lending opportunities have also increased. However, at the same time, the regulation has also been tightened. The sector will have to increase capital. Loans exceeding 100,000 GEL in the MFO portfolio should not exceed 50% of the regulatory capital.With the new norms (which the NBG introduced to the sector last week), MFOs will have to improve corporate and operational risk management. Compliance with the new standards will require additional resources and, accordingly, increase costs. So, MFOs will not be able to reduce lending rates until they reach equilibrium. But in the future, when they improve management; reduce costs arising from risks; gain greater trust from consumers and investors, there will be an opportunity to make loans cheaper.Earlier, as MBC (Microbank, former MFO) Risk Director Nino Devdariani noted on 1TV.ge, “At the initial stage, regulation is an additional cost, its implementation. The organization has more upfront costs than revenues.”The Chairman of the Board of the Microfinance Association expects the increase in the business portfolio by increasing the limit, as pawnshops and consumer loans are sold with a smaller volume. At the moment, pawnshops prevail.As of Q1/2025, 29 MFOs are represented on the market with a retail portfolio of more than 1.5 billion GEL (791,481 loans), where up to 730,000 loans worth up to 1.2 billion GEL are pawnshops. The quarterly (Q1/2025) net profit of the MFO sector is 29.06 million GEL.

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As of April 2025, the number of transactions of residential flats in Batumi has decreased by 6.7% to 1,178 units. The market size has increased by 2.2% standing at USD 67 millions.In April 2025 the weighted average price of newly-built flats in Batumi increased by 9.1% equaling USD 1,201 per sq m.As of March 2025, the number of transactions of residential flats in Batumi has increased by 5.7% to 1,233 units. The market size has increased by 4.9% standing at USD 64 millions.

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The growth is mostly driven by the primary market, where weighted average price increased by 13.8% citywide (some primary transactions are registered late, resulting in a price growth trend that does not reflect reality.) In the secondary market of newly built apartments, the weighted average price across the city increased by 5.5%.In April 2025, the number of transactions in new projects in Tbilisi increased by 5%, driven by growth in the primary market. It should be noted that some transactions in new projects within the primary market are recorded later by developers, which could potentially distort the data and fail to present an accurate picture of the primary market. The declining trend in old projects has persisted - the figure for old flats features a 21.3% decrease compared to April 2024.As of April 2025 in Tbilisi the weighted average price of old flats has increased by 7.5% in the suburbs compared to April 2024, in the city centre 4.4% growth was witnessed, while in the wide centre the weighted average price decreased by 1.5%.In April 2025, in Tbilisi the number of transactions of residential flats amounted to 3,256 units, reflecting only 2.6% YoY decrease. Market size increased by 6.6% standing at USD 244 millions.As of March 2025 the weighted average price of newly-built flats in Tbilisi has increased by 27.7% in the wide centre compared to March 2024, 21% growth was observed in the city centre , while in the suburbs 7.3% increase was witnessed. The significant growth is mostly driven by the primary market, where transactions are registered late, resulting in a price growth trend that does not reflect reality. In the secondary market of newly built apartments, the weighted average price across the city increased by 11.6%.

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Ameriabank’s standalone profit for the same period was GEL 113.9 million, up 35.2% year-on-year.This difference is due to the fact that Ameriabank’s standalone figures exclude certain adjustments and group expenses that AFS’s consolidated financial statements include.According to Ameriabank’s standalone results, the bank’s operating income increased by 30.3% (y.y.) to GEL 248.2 million, mainly driven by a 37.9% increase in net interest income. Return On Equity (ROE) was 24.7%, compared to AFS of 21.1% (29.4% 4Q24 / AFS – 25.3%).Quarterly, operating income decreased by 8.6% — mainly due to one-off, high commission income and foreign exchange gains in the previous quarter. However, net interest income increased again by 5.8%.Operating expenses decreased by 6% - mainly due to lower personnel and administrative expenses, which were related to seasonal expenses in the previous quarter.The loan portfolio remained stable - the credit risk ratio was only 0.2%.

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Lion Finance Group (BGEO LN) shares closed at GBP 63.65/share (- 2.60% w/w and +17.54% m/m). More than 445k shares traded in the range of GBP 60.35 - 67.95/share. Average daily traded volume was 70k in the last 4 weeks. The volume of BGEO shares traded was at 1.00% of its capitalization.TBC Bank Group (TBCG LN) closed the week at GBP 45.40/share (+3.53% w/w and +5.46% m/m). More than 367k shares changed hands in the range of GBP 44.00 - 46.85/share. Average daily traded volume was 104k in the last 4 weeks. The volume of TBCG shares traded was at 0.65% of its capitalization.Georgia Capital (CGEO LN) shares closed at GBP 18.74/share (-2.19% w/w and +35.01% m/m). More than 420k shares traded in the range of GBP 18.00 - 19.58/share. Average daily traded volume was 124k in the last 4 weeks. The volume of CGEO shares traded was at 1.06% of its capitalization. 

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In the I quarter of 2025, compared to the corresponding period of the previous year, the ports and terminals of Georgia received 2.6 times more specialized carriers, 32.2 percent more - general cargo carriers, 12.8 percent less container ships, and 11.5 percent less  -liquid bulk.In the I quarter of 2025, 18.2 percent of the ships arriving at the ports and terminals of Georgia sailed under the flag of Panama, 16.6 percent - under the flag of Turkey, 10.2 percent - under the flag of Malta, 8.4 percent - under the flag of Liberia, and the rest 46.6 percent were distributed among other countries.In the I quarter of 2025, Georgian seaports served 2.1 thousand passengers, which is 16.5% more compared to the corresponding figure of the previous year. Note, the share of passengers departed was higher than the share of passengers entered and stood at 56.8%.In the I quarter of 2025, ports and terminals of Georgia processed 3.7 million tons of cargo, 9.2 percent more compared to the corresponding figure of the previous year. 52.5 percent of freight carried was general cargo, 28.8 percent was liquid bulk, and 18.7 percent - dry bulk.

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In the I quarter of 2025, the share of incoming freight represented 74.1 percent of the railwaytransported freights, while the share of outgoing freight was 25.9 percent.In the I quarter of 2025, the sender country of 51 percent of total incoming rail freight was Russian Federation, 23.2 percent was sent by Azerbaijan. The share of other countries sending cargo was less than ten percent each (25.8 percent combined).In the I quarter of 2025, Russian Federation was the final destination for 12.8 percent of total outgoing freight, for 9.1 percent - Armenia, for 8.0 percent - Kazakhstan.The share of other individual receiving countries was relatively small (70.1 percent combined). The breakdown of the total transit freight1 by the final destination country was as follows: the Turkey - 13.2 percent, Netherlands - 9.7 percent, Ukraine - 5.3 percent, China - 3.8 percent, Romania - 3.3 percent, Italy - 2.5 percent, USA - 0.8 percent, and elsewhere was for the rest. In the same period, Brazil was the sender country of 3.3 percent of the total transit freight, Turkey - 2.3 percent, Greece - 2.2 percent, and other countries sent the rest. In the reporting period, 34.5 percent of the total freight were coke and refined petroleum products, 20.6 percent were chemicals, chemical products, and man-made fibers; rubber and plastic products, and 17.8 percent were metal ores and other mining and quarrying products.The distribution by type of goods was different in case of freights transported domestically in the I quarter of 2025, as the share of metal ores and other mining and quarrying products equaled 55.3 percent of total, and the share of coke and refined petroleum products amounted to 27.1 percent; while the share of transport equipment amounted to 7.4 percent.As for the freights transported internationally, in the reporting period, incoming goods were mainly coke and refined petroleum products (49.3 percent), other nonmetallic mineral products (18.5 percent), basic metals (7.1 percent), metal ores and other mining and quarrying products (6.6 percent), coal and lignite; crude petroleum and natural gas (5.8 percent), products of agriculture, hunting, and forestry (5.1 percent) and chemicals, chemical products, and man-made fibers (3.2 percent); while outgoing goods were mainly chemicals, chemical products, and man-made fibers (42.1 percent), food products, beverages and tobacco (29.1 percent), metal ores and other mining and quarrying products (11.4 percent) and basic metals (6.7 percent).In the I quarter of 2025, three type of goods, namely coke and refined petroleum products (33.8 percent), chemicals, chemical products, and man-made fibers (27.8 percent), and metal ores and other mining and quarrying products (18.2 percent) constituted for 79.8 percent of the total volume of transit freight.

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