TIDMTBCG
RNS Number : 6223G
TBC Bank Group PLC
18 March 2020
Contingency planning - COVID-19
Key points
-- Implemented actions to protect customers and staff and minimize disruption
-- High digital penetration assists in minimizing visits to branch network
-- Strong February 2020 liquidity and capital buffers
-- Working closely with National Bank of Georgia ("NBG"),
government and other businesses to ensure coordination
-- Granting a 3-month grace period on principal and interest
payments for individual and MSME customers as well as those
corporate customers who are affected by current situation
-- The Board not to recommend dividend
Vakhtang Butskhrikidze, Chief Executive Officer , TBC Bank,
commented:
"During this time of hardship for the whole world, the TBC team
is mobilized to provide full support and guidance to our customers.
We are actively coordinating with all relevant parties in order to
proactively offer all the solutions needed. Our digital support is
very strong, and our customers are able to conduct all banking
transactions online, without any need to visit the branch. The
health and safety of our staff and customers remains our main
priority, and we are confident that together we will get through
these difficult times. "
TBC Bank has implemented a number of actions to protect its
customers and staff members and to minimize disruption to the
Group's operations during the COVID-19 outbreak. In developing our
response, we have looked at best practices from major global
companies as well as organizations like the World Health
Organization. We are also closely coordinating with the Government
of Georgia, NBG and the other banks in the country.
Our first priority is the health, safety and well-being of our
staff and our customers. While for the time being most of our
branches remain open, we have introduced a number of additional
security and infection prevention measures in our branch network.
We have introduced remote working practices for most of our head
office and back office units and divided all our critical service
units into different groups and locations. We have also refreshed
the list of critical roles in the company and ensured their
continuous operational engagement and remote access.
In order to support our customers during the coming difficult
months, in coordination with the Government, NBG and the banking
sector, we have introduced a three-month grace period on principle
and interest payments for all our individual and MSME customers as
well as those corporate customers whose business is the most
exposed in the current situation.
On Monday, 16 March 2020 we held a conference call with more
than 250 of our business customers, representatives of NGOs,
experts as well as NBG and government representatives, where we
shared our economists' outlook on the economy and its key sectors.
We believe such communication will help our customers in planning
their activities and managing their finances in the coming weeks.
You can find the presentation at
www.tbcresearch.ge/en/Research/covid-19-eng .
Our digital penetration is very high, with an offloading ratio
of 92.7% as of the end of 2019, mainly driven by mobile banking
transactions. To ensure continued communication and customer care,
we have activated and enhanced all our channels, launched intensive
communication campaigns to promote cashless transactions (cash is a
potential transmission vector for the virus) and active usage of
our digital channels. For the next three months, we have revised
tariff plans to further incentivize our digital channel usage. The
multichannel promotion campaigns together with the loan repayment
grace period are expected to substantially decrease customer flow
in our branch network and reduce the risk of spreading the
infection. If needed, this will allow us to further optimize branch
network operations and decrease the number of front office staff as
well as to introduce different shifts in branches. In terms of our
IT infrastructure, we have rigorous measures to ensure adequate
capacity and security, and we are closely monitoring the system
with all controls active.
We expect the pandemic to have a negative economic effect as
long as the number of cases is expanding, but we expect a gradual
return of economic strength as the number of cases eases. The
government has come up with a number of initiatives to support
businesses and the economy. The most important ones are as
follows:
-- Income taxes will be deferred by the Government for an
initial four-month period for companies operating in tourism
industry;
-- The Government will subsidize interest payments for six
months, for small and medium sized hotels with less than 50 rooms.
This project will apply to about 2000 hotels operating in the
country;
-- The Government will double the volume of VAT refunds to
companies, with an aim of supplying them with working capital, from
an expected GEL 600 million to an anticipated GEL 1.2 billion this
year;
-- The Government will increase its proposed capital expenditure
by GEL 300 million this year with the aim of providing additional
economic incentives.
As of 29 February 2020 we maintained strong liquidity buffers
with the liquidity coverage ratio at 108.2% and net stable funding
ratio at 126.8%. We operate on capital buffers of 2.43%, 2.91%,
2.34% above minimum requirements for CET1, Tier 1 and total capital
requirements, respectively.
NBG has presented number of initiatives they are
implementing:
In relation to capital adequacy requirements:
-- Postponing the phasing in of additional capital requirements
planned in March with an 0.44 pp effect on CET 1;
-- Allowing banks to use the conservation buffer (currently at
2.5pp on CET1) if necessary. However, in this case, the banks will
not be allowed to distribute any capital (including dividend
payments);
-- Leaving open the possibility of releasing all pillar 2
buffers (CICR, HHI and Net Grape buffers);
In relation to liquidity requirements, if necessary, NBG will
consider the following measures:
-- Decreasing LCR limits;
-- Decreasing FX mandatory reserve requirements;
-- Updating criteria for security or repo pledging to support GEL liquidity.
In addition, NBG will impose no monetary sanctions in case of
the breach of economic normatives and limits driven by external
factors (e.g. currency rate deprecation);
Today, NBG Monetary Policy Committee has left the refinance rate
unchanged at 9.0%. NBG has disclosed they have approached the
International Monetary Fund to increase access to funding in the
near future under its Extended Fund Facility (EFF) program.
Moreover, additional funds will be allocated by other international
donors to mitigate the effects of the coronavirus pandemic. It will
help eliminate the external imbalance and will positively impact
the nominal effective exchange rate and, consequently, the
medium-term inflation dynamics. For the full statement please see
the link
https://www.nbg.gov.ge/index.php?m=340&newsid=3882&lng=eng
.
However, taking into consideration the unprecedented uncertainty
triggered by the COVID-19 outbreak, the Board of Directors has
decided not to recommend a dividend. The decision will be revisited
once there is better visibility on the potential economic impact of
the outbreak, which we do not expect to occur before the end of May
2020.
Obviously, this is an evolving and fast-moving situation; we
expect to update our policies as events warrant, and we will
provide updates as we do.
For further enquiries, please contact:
Director of International Media and Investor Relations
Zoltan Szalai
Or
Head of Investor Relations
Anna Romelashvili
ir@tbcbank.com.ge
About TBC Bank Group PLC ("TBC PLC")
TBC PLC is a public limited company registered in England and
Wales that was incorporated in February 2016. TBC PLC became the
parent company of JSC TBC Bank ("TBC Bank") on 10 August 2016. TBC
PLC is listed on the London Stock Exchange under the symbol
TBCG.
TBC Bank, together with its subsidiaries, is the leading
universal banking group in Georgia, with a total market share of
39.5% of loans and 39.0% of non-banking deposits as of 31 December
2019, according to data published by the National Bank of
Georgia.
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END
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