TBILISI

TBC Bank, Georgia’s biggest bank by assets, signed a loan agreement in the amount of $50 million with Proparco, the private sector financing arm of Agence Française de Développement Group, to finance investments and the working capital needs of Georgian small and medium-sized businesses (SMEs).

“This transaction reflects both institutions’ strong commitment to support, small and medium-sized enterprises (SMEs) in Georgia, one the most important contributors to economic growth and job creation in the country,” Vakhtang Butskhrikidze, TBC Bank’s CEO, said n a statement.

“This is our second co-operation and we look forward to working with Propacro on many more successful deals in the future.”

Proparco has been promoting sustainable economic, social and environmental development for over 40 years. It provides funding and support to both businesses and financial institutions in Africa, Asia, Latin America and the Middle East. Its action focuses on the key development sectors: infrastructure, mainly for renewable energies, agribusiness, financial institutions, health and education.

TBC Bank is one of Georgia’s two biggest commercial banks and is listed on the London Stock Exchange.

It tripled its net profit to 610.5 million lari ($197 million) in the first nine months of the last year from 221.8 million lari in the same period in 2020 as restrictions to curb the spread of the COVID-19 had been eased.

The bank’s operating income amounted to 1.063 billion lari as of September 30, up from 833.5 million lari in the same period in 2020, while operating expenses amounted to 388.6 million lari, up from 314.3 million lari. Total assets rose 8.4 percent year-on-year to 23.7 million lari as of September 30. Total gross loans and advances to customers rose 9.4 percent year-on-year to 15.964 million lari, total customer deposits rose 16.2 percent year-on-year to 14.339 million lari. Total equity rose 22 percent to 3.448 million lari. NPLs were 3.1 percent, down by 0.4 percentage points year-on-year.

In November 2021, the European Bank for Reconstruction and Development provided a 25 million euro loan to TBC Bank for on-lending to local firms, with at least 70 percent of that aimed at financing investments in green technologies. The EU has complemented the loan with grants and free technical assistance for borrowers under its EU4Business initiative.

In March, Fitch Ratings revised the outlook on TBC Bank to “stable” from “negative”, while affirming its long-term Issuer Default Ratings (IDRs). The agency said that the revision of the outlook to “stable” reflected “reduced pressure on the bank’s credit profile from the pandemic and contraction of the Georgian economy.”

Fitch said that the funding and liquidity profile of TBC had been stable as the bank was largely funded by customer deposits (66 percent of liabilities) and there had been no material outflows at times of market turbulence in 2020.

The agency added that it expected that TBC’s pre-impairment profit was sufficient to absorb any additional credit losses from the pandemic without jeopardising its financial profile.