TBC Bank Group PLC (LON: TBCG) have seen strong profit gains in their most recent quarterly update, however shares have crashed.
Shares of TBC Bank have crashed 4.6% on Thursday to 1,328p. 14/11/19 11:43BST.
The Georgian focused lender said that increases in fee and commission income had compensated for a decline in net interest income.
The FTSE250 (INDEXFTSE: MCX) listed bank said its net profit for the three months to September 30 increased 18% to GEL126.8 million from GEL107.4 million in the same period a year ago. Additionally, pretax profit rose 13% to GEL142.3 million.
The figures posted by TBC are impressive considering the global state of the banking industry.
Big time competitors such as HSBC (LON: HSBA) and Lloyd’s (LON: LLOY) have seen quarterly slumps in profit which have alerted shareholders.
Additionally, the current crisis at Deutsche Bank (ETR: DBK) will keep TBC shareholders optimistic in cut throat market conditions.
Third quarter net interest income fell 6.7% to GEL186.2 million, while fee & commission income rallied 20% to GEL47.1 million.
Other operating non-interest income increased 19% to GEL46.4 million.
Net interest margin for the third quarter fell to 5.0% from 6.9%. Year-to-date margin fell 1.5 percentage point to 5.5%.
TBC has backed their medium-term target of return on equity of above 20%, cost to income ratio below 35%, dividend payout ratio of 25% to 35% and loan book growth of 10% to 15%.
In the third quarter, the company’s return on equity fell to 20.4% from 21.2% and cost to income ratio increased to 39.9% from 37.4%.
Shareholders will be further pleased as an app offshoot of TBC Bank, Space have agreed a partnernship with Visa (NYSE: V)
Nikoloz Kurdiani, deputy CEO of TBC Bank says: “When we launched Space, we wanted to move beyond the traditional banking approach and outdated technology to create a new type of bank in Georgia that would be better at responding to modern customers’ needs. Now, we are ready to go global.”
Visa says it will share knowledge, best practices and its network of technological partners with Space to help it achieve its aims.
Yevgen Lisnyak, senior director and head of strategic partnerships, fintech & ventures (Visa, CISSEE), says: “We are witnessing a rapid transformation of the financial banking sector, where new players are playing a significant role. Neobanks are agile, consumer-centric, flexible and innovative, offering modern consumers completely new financial solutions and digital banking experience. We are excited to be able to support fintechs to navigate the payments landscape in the Caucasus region to achieve their business growth and international expansion ambitions”