TIDMTBCG
RNS Number : 7634I
TBC Bank Group PLC
03 April 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
Further update on COVID-19
Key points:
-- Operations successfully adapted to new operating environment
-- Georgian economy expected to contract in 2020
-- Additional loan loss provisions of 3.0-3.3% of loan book
agreed with NBG as of 31 March 2020 (in accordance with local
standards)
-- Resulting capital adequacy ratios remain well above minimum requirements
-- Q1 2020 IFRS consolidated financial results due in mid-May 2020
The measures implemented by TBC Bank Group Plc ("TBC PLC") in
the last three weeks have allowed the bank to alter its day-to-day
operations in order to adapt to the current unprecedented operating
environment, while maintaining the health, safety and well-being of
our staff and customers as the number one priority. Today, 95% of
our head office and back office staff (including those in our call
center) are working from home and our market-leading digital
banking platform allows our customers to continue with almost all
of their banking transactions from the safety of their own
homes.
The global and thus Georgian economic environment is difficult
and uncertain. Our economists' latest analysis forecasts the
Georgian economy to contract in 2020, which will have a negative
impact on many businesses and individuals in the country.
Therefore, in close co-ordination with the National Bank of Georgia
("NBG"), we have decided to create an extra loan loss provision
buffer to prepare for the potential impact of the COVID-19 pandemic
on the Georgian economy. As of 31 March 2020, TBC Bank decided to
book additional provisions in accordance with local standards, at
3.0 -3. 3% of the loan book and resulting in an estimated up to
2.44% decrease in the CET1 capital adequacy ratio.
NBG is implementing countercyclical measures to support
financial stability of the banking system and to ensure provision
of financial support to sectors of the economy affected by the
current turmoil.
In relation to capital adequacy requirements:
- Postponing the phasing in of additional capital requirements
planned in March 2020, with an 0.44 pp effect on TBC's CET 1
- Allowing banks to use the conservation buffer (currently at
2.5pp on CET1) and 2/3 of CICR buffer resulted in the release of
1.0-2.0% of capital across our CET1, Tier 1 and Total CAR
- Leaving open the possibility of releasing all pillar 2 buffers
(remaining 1/3 CICR, HHI and Net Grape buffers) in the range of
1.0-4.0% of capital across our CET1, Tier 1 and Total CAR
In relation to liquidity requirements, if necessary:
- Decreasing LCR limits
- Decreasing FX mandatory reserve requirements
- Updating criteria for security or repo pledging to support GEL liquidity
As a result of the provision made and also the significant
depreciation of the Georgian Lari during the course of March 2020,
TBC Bank's CET1, Tier 1 and Total CAR as at 31 March 2020 are
estimated at 8.7%, 11.5% and 16.1%, respectively. The final numbers
will be published on 30 April 2020. These ratios remain well above
the NBG's revised estimated minimum requirements of 7.0%, 8.8% and
13.4%, respectively, which allow for the utilisation of the full
conservation buffer and 2/3 of the currency induced credit risk
buffer.
Our estimated liquidity coverage ratio of 109% and net stable
funding ratio of 125% also remain above the minimum requirements as
of 31 March 2020. Only in the last week, TBC Bank has attracted USD
133 million in new borrowings from international financial
organisations which has further increased our liquidity.
We are currently in the process of preparing our IFRS financial
statements for the first quarter of 2020 and expect to publish them
in mid May 2020, in line with previous years. Loan loss provisions
are calculated in our IFRS financial statements differently from
the methodology used by the NBG. Based on information available to
us today, the provision to be set aside as of 31 March 2020 in our
IFRS financial statements for the first quarter 2020 is expected to
be approximately 2.0% of the loan book.
We are focusing on optimising our cost structure, re-arranging
many processes and prioritising expenses, and are targeting TBC
Bank's cost to income ratio for the full year ending 31 December
2020 to be broadly that achieved during 2019.
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
and is a constituent of FTSE 250 Index.
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.
LEI number: 213800T6NS9N2WQ3B328
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of TBC PLC is Zoltan Szalai .
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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statements. All statements other than statements of historical fact
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such as 'may,' 'intends,' 'plan,' 'will,' 'should,' 'potential,'
'reasonably possible' or 'anticipates' or the negative thereof or
similar expressions, or by discussions of strategy. These
forward-looking statements include statements relating to the
impact of the COVID-19 outbreak on the global markets generally and
on TBC Bank Group PLC and its subsidiaries (together, the 'TBC Bank
Group') in particular. TBC Bank Group PLC has based the
forward-looking statements on current expectations and projections
about future events. These forward-looking statements are subject
to risks, uncertainties and assumptions about us. TBC Bank Group
PLC undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed herein might
not occur. Investors are cautioned not to place undue reliance on
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dates.
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END
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April 03, 2020 07:02 ET (11:02 GMT)
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