TBC Bank Group Stock

Hello, and welcome, everyone, to today's TBC Second Quarter and First Half 2026 IFRS Results Call. My name is Seb, and I'll be the operator for your call today.

[Operator Instructions]

I will now hand you over to Andrew Keeley, Director of Investor Relations, to begin. Please go ahead.

Thanks very much, Seb, and hello, and welcome, everyone, to our second quarter results call.

As usual, I'm joined on today's call by our Group CEO, Vakhtang Butskhrikidze. And I'm also joined by our new Group CFO, Guy Stevens. So welcome, Guy. As usual, the call will begin with a presentation, and then we'll move into Q&A.

So with that, I'll hand over to Vakhtang. Thank you.

Thank you, Andrew, and hello, everyone. Thank you for joining us today. As Andrew mentioned, today's call is also an opportunity to welcome our new group CFO, Guy Stevens. We are delighted to have Guy joining the team and wish him every success in his new role.

Now let's turn to our second quarter results. I'm pleased to present another strong quarter for TBC. Our profitability remains consistently high. In the second quarter, group's net profit reached GEL 386 million, up by 12% year-on-year with a strong return of equity of 23.6%. This is driven by a good momentum in revenues as total operating income increased by 10% year-on-year, while our focus on managing our cost base helped us to reduce the cost-to-income ratio by almost 2 percentage points quarter-on-quarter to 38.8%. Lending volumes remained robust with the loan portfolio growing by 12% year-on-year with Georgia in particular posting strong 14% year-on-year growth, while our Uzbekistan portfolio stabilized in the second quarter and is starting to return to growth.

The continuous improvements we are making in our mobile banking services is bringing in more customers, particularly in Georgia, where we added over 50,000 digital MAU in the second quarter. In total, as a group, we now have 7.2 million digital MAU, a 6% decrease year-on-year. Our strong financial performance and the solid capital position have enabled us to declare a second quarter dividend of GEL 1.75 per share, bringing the total dividend for the first half of this year to GEL 3.5 per share.

On the next slide, you can see the contributions made to the group by our different businesses with our Georgian core currently contributing the majority share both in terms of balance sheet and the profits.

Now turning to Georgia. Georgia's economy continues to post excellent growth with real GDP growth accelerating to 7.9% in the first half of this year. While the conflict in the Middle East has made a minimal impact on the Georgian economy as a whole, it does continue to impact inflation, which increased to 5.8% in June. We expect inflation to remain at this level for the rest of the year, which suggests the National Bank of Georgia would keep interest rates on hold. Our real GDP growth outlook remains unchanged at 7.4%. We continue to strengthen our market-leading franchise in Georgia. Our gross loan portfolio grew by 14% year-on-year with particularly strong momentum in unsecured consumer loans, which have increased by 36% year-on-year, bringing us further gains in market shares.

We are continuously refining our digital customer experience and product offerings in retail with cash secured loans and overdrafts launching our mobile application in the first half of this year, which will help us to support the strong growth in the coming quarters. And as you know, we remain the dominant banking the market in a number of key market segments. In affluent retail, we have over 50% market share in loans and customers with the number of concept customers breaking through 200,000 in the second quarter, up by 30% year-on-year. Meanwhile, in CIB, we are the leader with 44% market share in loans.

On the next slide, you can see how our focus on the best-in-class digital financial services is bringing more customers to our platform. Digital MAU is up 19% and our DAU/MAU ratio has hit 50% as more customers interact with us on a daily basis. Evidence of the progress we have made can be seen as TBC being recognized by Euromoney as the Best Digital Bank in Georgia for 2026. We are also strengthening our retail banking team, and I'm delighted to welcome Sandro Rtveladze as the Deputy CEO, who will head up retail banking in Georgia. Sandro brings over a decade of leadership experience across retail and digital banking, including as Chairman of OTP Ipoteka Bank and previously CEO of TBC Uzbekistan. It's great to have him on the Board.

I'd also like to point out that we are also receiving industry recognition for the AI initiatives that are part of our natural business development. We won several awards within not only in Georgia but also in CEE region. Our in-app chatbot, for example, now handles more than 6,500 customer calls a day, 60% of which are result without being based on to our center. While we are using AI across a wide range of business functions from mortgage property valuation, email, KYC checks to invoicing and contract workflows.

Now let's look on at Uzbekistan. As in the case in Georgia, Uzbekistan economy continues to deliver remarkable growth with real GDP growth expanding by 8.5% in the first half of this year. Importantly, inflation has been declining over the past couple of years, reaching 6.4% in June and is expected to remain broadly stable in the second part of this year. Lower inflation supports the local currency, which is important as all of our businesses in Uzbek soon.

Turning to our business. We are seeing strong dynamics across our core verticals. Our daily banking products continue to scale rapidly with salom card issuance more than doubling year-on-year to exceed 1.2 million, while Osmon credit card issuance has surpassed 210,000 and now credit cards accounted for 10% of our loan book, up from just 4% a year ago. At the same time, payment activity remains very strong. In the first half of this year, total payment volume reached GEL 3.2 billion, up by 54% year-on-year, supported by [ payments ] continued leadership position in the market. The growth of our payment franchise is feeding into the renewed growth in our fee and commission income, which rose 15% quarter-on-quarter in the second quarter.

Now let's move on Slide 13. Our Uzbekistan loan book stabilized in the second quarter and is starting to return to growth. An increase in business, credit cards and POS lending now more than offset the decline in unsecured cash loans. Our deposit portfolio declined by 7% quarter-on-quarter as we optimized our liquidity position and decided to cut deposit costs. While we work starting to turn the corner in loan growth, we recognize that we will still face challenges in asset quality. NPLs and risk costs remain high as we continue to provision all the loan vintages as well as start to adapt the changes being introduced to the auto collection system.

We continue to expand our product offerings in Uzbekistan. In the second quarter, we launched auto loans and secured SME lending, both important launches for our ambitious future growth. And I'm also pleased to announce that in late July, we completed the acquisition of OLX, the leading classified platform in Uzbekistan. This transaction further extend the reach of our digital ecosystem and creates a new opportunity to deepen customer engagement as TBC Uzbekistan plans to offer financial and payment services through OLX. I firmly believe that we are building a great long-term business in Uzbekistan and the strength of our digital platform has been recognized as the best digital bank in both Uzbekistan and the Central Asia by Euromoney.

Thank you for your attention, and I will now hand over to Guy. Guy, please.

Thank you, Vakhtang, and thank you all for joining the call today. As new Group CFO, it's a real privilege to be presenting the group's results for the very first time. I'm very much looking forward to meeting our shareholders and the research community in the coming weeks and months.

Turning now to our financial performance. The group delivered another solid set of results in the second quarter and first half of 2026. Starting with profitability. I'm pleased to report that in the second quarter, we continued to generate strong profitability. We achieved a net profit of GEL 386 million in the second quarter, up 12% year-on-year. This brought first half net profit of GEL 751 million, up 13% year-on-year. In Georgia, net profit was up 14% year-on-year for the quarter. Return on equity remains strong at 23.6% in the quarter and 23.5% in the first half, in line with our target of 23% plus 2026 to 2028. This is the 14th consecutive quarter where the group's ROE has exceeded 23%.

Now let's deep dive into our profitability drivers. Revenues grew well in the second quarter. Total operating income increased by 10% year-on-year with first half operating income growing at a similar rate. This growth has primarily been driven by net interest income, which increased by 13% year-on-year in the quarter. I'm also pleased to report that we are seeing fee and commission income recovering in both Georgia and Uzbekistan with 14% quarter-on-quarter growth, driven by general business expansion in Georgia and strong payments growth in Uzbekistan.

As you can see on the right-hand side, our margins remained resilient in the second quarter with our group net interest margin at 7.1%, slightly higher than in the first quarter. Georgia saw a second consecutive quarter of margin improvement, helped by growth in our unsecured retail loan book, the higher rate environment in Georgia and putting our strong liquidity position to work. Overall, net interest income in Georgia was up 19% year-on-year for the quarter. Meanwhile, in Uzbekistan, the NIM appears to have turned the corner, and we expect to improve gradually as the loan book returns to growth.

Turning now to costs. On the cost side, our focus on efficiency is bearing fruit. Cost to income ratio fell by almost 2% in the quarter to 38.3%, which demonstrates the evidence of good cost control in both Georgia and Uzbekistan.

Turning now to asset quality. As you can see on the right-hand side of the page, group cost of risk was 1.6% in the second quarter and 1.5% for the first half. This is consistent with our performance in 2025. Asset quality remains largely stable and robust in Georgia as reflected by a 70 bps cost of risk in the second quarter. However, on the left-hand side, the level of NPLs increased by 0.3% in the quarter to 3.3% at the group level. This was driven by an increase in the level of NPLs in Uzbekistan. This reflects three things. Number one is an extension of the write-off period that we have applied in Uzbekistan from 270 days to 360 days, given we are seeing material recoveries beyond the previous cutoff point of 270 days. Secondly, there is some ongoing deterioration in credit quality for all vintages. And thirdly, the contraction of the loan portfolio over the past year. This, of course, reduces the denominator of the ratio. I would note that our NPL coverage ratio, provision ratio in Uzbekistan remains solid at 114%.

As for the outlook for the third quarter, we expect some upward pressure on the cost of risk in Uzbekistan, in part due to ongoing changes being implemented to the auto collection system for overdue loans. However, we expect to see a more positive trajectory from the fourth quarter of the year.

Turning now to our balance sheet dynamics. Growth remained robust during the second quarter. Gross loans increased 12% year-on-year on a constant currency basis, led by a strong performance in Georgia, where loans increased by 14% year-on-year. And as Vakhtang mentioned earlier, the loan portfolio in Uzbekistan stabilized and is now showing signs of growth. Customer deposits increased strongly, rising by 15% year-on-year on a constant currency basis. The growth was broad-based across retail and CIB segments in Georgia and is supported by the strong customer acquisition outlined earlier by Vakhtang in Georgia.

Turning now to our capital position. We continue to maintain robust levels of capital in both Georgia and Uzbekistan, comfortably above regulatory requirements. We have previously indicated a new regulatory framework was going to come into effect from the 1st of July for consumer loans in Uzbekistan. Today, we have learned that this has actually been paused and is not currently being implemented. We will keep investors informed as we learn of developments. But has the previously communicated change in the risk weight framework for consumer loans in Uzbekistan being implemented, we still would have maintained material buffers above the regulatory minimums for our capital position in Uzbekistan, which brings me to capital returns. The group's strong profitability and capital generation continue to support attractive shareholder returns. As Vakhtang mentioned earlier, the Board has declared a quarterly dividend of GEL 1.75 per share for the second quarter. This brings total first half dividends to GEL 3.5 per share, which is up 8% year-on-year.

Finally, I'd like to close today's presentation by summing up the key takeaways for the first half of 2026. TBC maintained strong growth and profitability in the first half of the year with a 23.5% return on equity. This sets us up well for the second half of the year and keeps us on track for our financial targets. In Georgia, strong customer acquisition and engagement is helping drive mid-teen loan and deposit growth. In Uzbekistan, we are delivering on the recalibration of our business. We're seeing signs that the loan portfolio has stabilized and is beginning to return to growth, while momentum across payments, cards and the ecosystem remains strong, although we do recognize the ongoing challenges on asset quality. And then finally, our strong capital position continues to support both future growth of the business and attractive returns for our shareholders.

Thank you for your attention. And at this point, we will now be happy to take your questions.

[Operator Instructions] We have a few questions with raised hands at the moment. So let's go ahead with the first one from Dmitry Vlasov.

My first one would be on NIM in Uzbekistan. So what level of NIM expansion do you basically expect in Uzbekistan, given that you gradually diversify away from higher-margin cash loans? That's the first question. And the second question is on Georgia fees and commission. So if this interchange fees cap would be implemented at some point, what sort of impact would you expect to have on your fees and commission income? Yes, that's it for now. And maybe I'll ask follow-up.

Thank you, Dmitry. So first of all, on our Uzbekistan NIM, as I said, I mean, we're seeing signs that the NIM has turned the corner. Given what has happened on the asset side of the balance sheet and the contraction of the portfolio, we have had an excess liquidity position. And that's something that we have focused on. Now that the portfolio is returning to growth, we expect to see that's going to help in terms of our NIM going forward. So we are more optimistic on the outlook for our NIM.

I think in terms of the situation in Georgia, and I'll let Vakhtang to expand on this. I think at the current time, there is no kind of certainty that there is going to be a change to the interchange fees, but I'll let Vakhtang expand on that.

Thank you, Dmitry. And to answer the question about the commission income for Georgia. So there are some kind of discussions going on, but I want to remember there was such a case two years ago, three years ago. So I think we are ready for any kind of scenario. But for us, the base scenario that next year, we are planning to have a growth in fee and commission income. If the situation will go worse on the base scenario, probably will be growth, but digital numbers. But otherwise, we are forecasting growth to be around.

Next up is Rae from Peel Hunt.

Thanks for the additional detail you provided around the increase in provisions in the Uzbekistan business. Can you give a bit more detail about how you see the asset quality evolving here into H2 and beyond? And then secondly, on Georgian NIM, to see the expansion in Q2, obviously helped by the increase in base rates. But again, how do you see the NIM in Georgia evolving from here into the second half and beyond?

So I think on asset quality in Uzbekistan, I think it probably makes sense to give a little bit more kind of color to what we saw in the second quarter. So as I mentioned, the increase in NPLs was driven by three factors. One was the change in the write-off policy, and that was driven by us actually recovering material amounts of loans post the 270-day cut I mentioned the impact of the portfolio in terms of the portfolio being 10% lower as at the 30th of June relative to year-end. So that obviously changes the denominator. But to come specifically to your question in terms of how we see the outlook, we did see a deterioration in -- or a seasoning of older vintages, vintage of loans, loans that are originated 12 to 18 months ago. So that had some impact in terms of the cost of risk.

Where does it kind of take us from the third quarter? I think we will continue to see those older vintages come through in terms of seasoning. But we also have the developments around progressive changes in auto collections for overdue loans, which is effectively a sort of kind of similar to sort of a direct debit if someone doesn't pay the loan, you can automatically collect through the card payment system. But those have been well signaled in terms of the potential changes. As of now, there isn't clarity on that, but we have prepared well. We have been working on our collections. But where this all kind of means -- what it all means in terms of where we're heading in terms of the cost of risk for the third quarter, we do expect an increase in the cost of risk in Uzbekistan, taking us to low mid-teens. I think going in then into the fourth quarter of the year, we do see a more positive trajectory. So that's on the asset quality in Uzbekistan.

I think in Georgia, I think in terms of where we've seen the NIM, there has been two consecutive quarters of improvement. Drivers of that, I think I outlined, we've been helped by our liquidity position. You'll see that our net loans as a proportion of assets has increased as we've deployed liquidity, which has helped us. But also in terms of the NIM, we've been helped by the very strong growth of our retail business. As Vakhtang mentioned, our unsecured retail book has grown very, very significantly, 36% up year-on-year. So that has been a positive on NIM.

So I think in terms of the outlook, from where we go from here, I think the NIM is certainly stable. There is potential upside to it. But I think we're kind of pleased with what we have achieved in Georgia and we sort of expect more of the same. But in a sense, the messaging would be that as we continue to see retail grow, we should be seeing that flow through into the NIM.

Next, we have a question from Rahim from Cavendish.

The first was just in terms of the Georgian business. Obviously, delivery continues to go very well there and consistent and credit growth is strong. I was just wondering if you saw any particular areas that are doing particularly well and anything that you'd like to kind of draw out in terms of the focus there? And then on Uzbekistan, congrats for getting the OLX deal completed. Just will be useful to hear your views on where the long-term sources of value are from that transaction and how we should try and monitor the success of that going forward?

I will try to answer this question about Georgia. So as we mentioned in our presentation, we have a very strong growth, 14%, and that growth will be continued in the second part of this year. But key priority for us, as Guy and also I mentioned in the presentation, to increase retail business because we see very comfortable growth in CIB. We have more than 44% market share. We have a comfortable level of market share in SME. And now our priority in Georgia to grow up faster our mass retail and retail business and especially we are doing well. As we mentioned, we increased number of our monthly users by 50,000, and we have much more ambitions to do better in the second part of this year.

On the OLX, that was strategic move from our side. This is very important because as we showed in our presentation, monthly users of OLX today is more than 5 million. It's a good opportunity for us to increase leads for our retail customers in Uzbekistan, plus in addition, as you know, we are growing our business in micro and SME and we believe that is a good opportunity for us for OLX to bring more leads to our TBC Uzbekistan Bank and to grow our loan portfolio and also payments.

Next up, we've got a question from Dan Mikhaylov.

Congratulations on the results. Two quick questions on Uzbekistan. The first one is, we saw a sequential improvement in loans in the second quarter of '26. What kind of loans growth should we expect in Q3 and Q4 to get us to a certain year-end number now that we're back in positive territory? And my second question is a follow-up on the OLX -- the earlier question on OLX. Could you elaborate on what kind of products you expect to be offering through that deal? Just trying to understand better how it classifies business ties into the lending side of your business.

Okay. I will take the first part of that and I'll ask Vakhtang to the second part. So I think in Uzbekistan, I mean, the -- as I said, portfolio down relative to year-end, but we did see growth in the second quarter, 0.4%. We continued as managed to see a contraction in our instant cash loan business as planned. But we did start to see nice growth coming through or continued growth coming through on the business loan side, buy now, pay later, credit cards, and we expect that trend to continue.

In terms of the outlook for the year, I think given the profile of the business and given what we have seen in the past, we always expect to see volume growth to be strong in the fourth quarter of the year. So I think where we are hoping to land up is when we get to the end of '26, we will see a portfolio that will be of the same size or have increased relative to the end of the year 2025. So strong growth coming through towards the end of the year so that we actually -- when we will reach the end of the year, we won't see the year-on-year contraction in the portfolio in Uzbekistan.

To answer the second question about what kind of products. So this is the standard products such as auto loans, BNPL. As reiterated, we just closed a few weeks ago, and we are in the process to understand how to develop that product and probably that could become material for our operations and the payments and beliefs and the generation of the loans probably from the second part of that.

And next up, it's Simon from Citi.

Yes, a few questions from me. Just wondering if you have a new kind of normalized risk cost idea for Uzbekistan going forward and when you think you'd get there? Because I understand that you think risk costs will rise again next quarter before it starts to normalize. That would be question number one. Also, just interested in the fee outlook for the second half and going forward, you have very nice fee growth in Uzbekistan. Is that expected to be maintained? Also interested in the tax rate in -- or the outlook for tax for Uzbekistan because you had positive tax in the first quarter -- or first half actually, even though you had positive PBT -- and then maybe the same on the cost outlook and the FX income outlook. Sorry, a lot of questions, I know.

Thanks, Simon. So I think, I mean, Uzbekistan, we are in a sort of recalibration transitory mode that we are delivering on. Third quarter, I think the expectation is that we do see the peaking of the cost of risk. And as signaled, we're expecting that to be below mid-teens. As we get into the fourth quarter, hopefully, we've got clarity by then around the progressive changes around auto collections. We will be seeing hopefully, growth coming through in terms of the portfolio as we continue to implement the recalibration. And as I said, we are seeing good growth and a change in the composition as SMEs, loans, buy now, pay later credit cards come through in terms of the growth.

So I think fourth quarter, we're going to be in a different position, hopefully, to the third quarter. But I think it's too early to say kind of what the kind of run rate is going to be thereafter. I think the next two quarters for us are very important in terms of showing that we can execute. But I think post that fourth quarter, we're going to be in a better position to give a view in terms of the normalized cost of risk. But as I said, I think the view is that the third quarter is going to be the peak.

I think in terms of the fee outlook, if you kind of decompose it into two parts, Georgia, we have benefited from very good volume growth from both our retail and CIB business, and that has helped us in terms of our fee and commission growth in the second quarter of the year. And I think as I mentioned, you picked up on it in terms of how our payments business is doing as well in Uzbekistan. That gives us some positivity. So I think for the full year in terms of fee and commission income, we expect to be sort of flattish for the full year. Obviously, first quarter was impacted by investments that we were making in terms of our cards and our loyalty program in Georgia. But I think the message for the full year year-on-year will be flattish. But obviously, we saw growth in the second quarter, and we expect to see growth over the next two quarters.

Tax rate, I think there was also the issue around tax in the first quarter in Uzbekistan. Two aspects to that. One was the ability to utilize the deferred tax assets and the tax credit. I think going into the second quarter, we don't expect to see anything kind of unusual. And I think these should be considered as one-off.

And then the final question, I think, was on one of kind of costs. And as I said, the second quarter was positive in terms of there are -- there is a good focus in terms of cost management, both in Georgia and Uzbekistan. So I think we will continue to see that. I think the first quarter was a sort of one-off in terms of where we were. But I think where we were in the second quarter will probably give a better feel as to where we're heading for the full year.

We don't currently have any -- yes, we have a question. [ Nikolai ], please go ahead.

A couple of questions from me. So on OLX, historically, that has been more of a classified type of business. And I was wondering about your plans for that platform. I know you have a partner there. But is the idea to keep the business model as it is currently? Or you want to migrate it to one that is more of a marketplace that is similar to what Uzum is trying to do?

The second question is on SME lending in Uzbekistan. I was in Uzbekistan about two to three weeks ago. I understand that there's a lot of demand for SME loans in dollars as well. So I was wondering what you see on your side in terms of what the demand is comprised of in terms of currency. And related to the SME question, as you reposition the book, to what extent the SME origination will be new origination versus reprofiled consumer loans?

And then finally, I know that you have an AT1 that is coming up for -- or is becoming callable in November, like a couple of months from now. And I was wondering what your plans are regarding that.

I will try to answer the first question and afterwards, Guy will continue. So on the OLX side, our strategy to continue to be there as a classified business, not to go to the marketplace because we believe that being the classified and the brand has a very good knowledge in the market will create value for operation there to increase number of the retail and micro and SME customers. So our answer is that we keep the business as it is today.

And then I think on the SME side, the business line is a separate business line. There is, I think, perhaps a less clear distinction in terms of what is kind of an SME in Uzbekistan versus a retail customer in any jurisdictions. But I think from our perspective, what we're seeing is that this is a new kind of customer segment, new profile of customers. So it's not a question of kind of substituting one classification for another classification. This is a different profile of customer. But as of today, the demand is largely in local currency.

I think in terms of the AT1, I'm not going to get into specifics around that at the moment. But obviously, in the context of our capital, we have our capital stacks. We have our minimums, we have our buffers. So we are mindful of the AT1, and we obviously have plans to ensure that we continue to have a comfortable level of AT1. So I think as and when we're in a position to make announcements on that, we will.

I don't think we have any other questions on the Zoom line. Seb, do we have any on the phones?

Yes. So on the phone, we have Piers Brown with Investec.

I've got a couple of questions on Uzbekistan. If you could just confirm, I think you mentioned that the risk weighting changes aren't going ahead. If you could just confirm that I understood that correctly. And sort of allied to that, could you just describe what is the regulatory decision-making process in Uzbekistan? It seems like some of these decisions are coming a little bit out of the blue. So if you could just help us to understand how much visibility you're getting on rule changes? And at which agency are the decisions actually being made? Is it the Central Bank or the Finance Ministry? Or are they coming at Presidential level? And how much consultation there is in that whole process with the banks? So that's the first question.

And then the second question, just on the potential changes to auto collection. So you're saying low mid-teens cost of risk in Q3. Is that including potential changes to order collection? Or if those don't come about, would that guidance potentially be lower? Just to understand that. Thanks.

So why don't I take the first and third part and I'll ask Vakhtang to take the second part in terms of the kind of engagement with the regulator. So in terms of the framework for the -- what was proposed as the new framework for consumer loan risk weightings, that has been very kind of clearly indicated as coming into effect on the 1st of July. It was news to us today, we were communicated along to -- with the other banks in Uzbekistan that, that framework is not going to be applied at the current time. This is fresh for us. I think it's obviously a positive. But in practice, we still would have been very, very well comfortably capitalized in Uzbekistan. So at the moment, we don't have any kind of update as to if and when it will be implemented. The messaging to us has been that at the current time, it is not being implemented. So we consider this as a potential pause. But as and when we have more information, we obviously will let you know on that.

In terms of the kind of auto collection process, it has been -- again, it's something that's been very well signaled over a period of time. There have been in anticipation of this coming into effect progressive changes that have been implemented by the card company's card infrastructure in Uzbekistan that we have responded to in terms of how we've looked at the cost of risk, we've responded as well in terms of what we're doing on the collection side. So I think in terms of -- we don't anticipate any sort of negative surprise because we have planned very, very well for that. However, clearly, if there wasn't a change, if there was a sort of back tracking in terms of the discussion around auto collections, that might have some impact. But at the moment, our assumption is that these changes will go into effect. There is an ongoing process in terms of consultation with the regulator in terms of what the changes would be. And so again, I think we have a pretty clear view as to what could happen, and that is factored into our guidance in terms of the cost of risk for the third quarter.

In terms of kind of interaction with the regulator and relationship, maybe back then, you could say a few words on that.

Yes. I think we have built a very good relationship with the regulator personally meeting the governor of the National Bank. But on the management level, there is a weekly or monthly meetings and good sign is that last one year, we have seen that also regulators before introducing any regulations are in discussions not only with us but also with commercial banks.

Currently, we have no further questions on the phone line.

Okay. We don't have any other questions. Just to say thank you, everybody, for joining our call. As ever, we are open to meeting you whenever works for you and look forward to continuing to engage in dialogue with you. And we will see you at the third quarter numbers in November. So thank you very much, and have a good day. Bye-bye.

Thank you. Bye.

This concludes today's call. Thank you, everyone, very much for joining, and you may now disconnect.

Welcome, everyone, to the TBC Group First Quarter 2026 IFRS Results Conference Call. My name is Lucy, and I'll be your moderator today. [Operator Instructions] It is now my pleasure to hand over to Andrew Keeley, Director of Investor Relations, to begin. Please go ahead.

Thanks very much, Lucy, and thank you, everybody, for joining our first quarter results call today. As usual, I'm joined on the call by our Group CEO,Vakhtang Butskhrikidze; our Group CFO, Giorgi Megrelishvili; and our Head of International, Oliver Hughes. We'll start with a presentation, and then we'll go to Q&A. And with that, I'll hand over to Vakhtang. Thank you.

Thank you, Andrew. Hello, everyone, and thank you for joining us today. I'm pleased to present our results for the first quarter. We made a good start to the year delivering. Gross net profit of GEL 365 million, up by 15% year-on-year with a return of equity of 23.4%. Georgia had another strong and consistent quarter with net profit of GEL 362 million, up by 14% year-on-year and return of equity of 24.1% helped by a decent start to the year in lending as loans rose by 12% year-on-year.

In Uzbekistan, as we have previously guided, we continue to recalibrate our loan book in the first quarter, which impacted our revenues and overall profitability, but net profit was still up by 14% year-on-year with double-digit return on equity. But we continue to successfully diversify our loan book, including building out our business lending with more than $150 million portfolio, and we see a very good momentum across our core verticals and product pipeline. Overall, for the first quarter, I believe our growth outlook for the full year remains on track.

Turning now to Georgia. Georgia's economy continues to post dynamic growth with real GDP growth accelerating to 9.4% in the first quarter. As elsewhere in the world, the Middle East conflict has impacted inflation, which has kicked up to 4.3% in March. In response to today, the National Bank of Georgia has raised the refinance rate by 25 bps to 8.25%.

Reflecting the strong start to the year for the Georgian economy, we have revised upwards our GDP growth outlook to 7.4%.

Slide 7 simply highlights the consistently high profitability that our Georgia franchise generates with many several quarters of return of equity around the mid-20s. One additional observation is that you can see the first quarter is typically a bit softer than following quarters, which is something we expect to see this year as well.

We continue to be a leading player across most key banking segments in Georgia with 37% share of both loans and deposits. The first quarter saw decent growth with gross loans up by 2% quarter-on-quarter and rising by 12% year-on-year. Cash loans continue to show strong growth, while we also had a very decent 15% year-on-year growth in CIB business. Meanwhile, our customer deposits are up by 40% year-on-year.

Slide 9 shows how digital engagement among our retail customers in Georgia continues to grow. With digital monthly active users up by 19% year-on-year and our DAU to MAU ratio now standing at around 50%, a good achievement as one of our customers interact with us on a daily basis. We also continue to see the high share of unsecured consumer loans and retail deposits issued fully digitally.

Now I'm pleased to share that we have received increasing recognition from our innovation, technology and digital customer experience, including recent awards from The Banker, Global Finance, Euromoney and The Digital Banker. These awards reflect the efforts we have made to provide the best possible customer experience for our customers.

Now let's turn to our Uzbekistan business. As we told you, Uzbekistan economy continues to post remarkable growth with real GDP growth of 8.7% in the first quarter. Inflation moderated to 7.1% also as of March. However, recent increases in global commodity prices are likely to push inflation in the near term.

On the Slide 13, we continue to see very strong traction across the businesses. Our daily banking product continues to scale with Salim card issuance now about $1 million and Osmon credit card issuance about 180,000. We see high activation rates across both projects, and both are starting to become a more material contributor to our deposit and loan books.

Payments total value in the first quarter reached $2.6 billion, up by 40% year-on-year as more customers use Payme and TBC for a range of daily payment activities. Indeed, we now have 1.1 million active customer subscriptions across TBC Plus and Payme Plus. On the lending side, our loan book is diversified and business lending is becoming a larger part of the portfolio with over 185,000 business loans issued to date and business loans now representing 18% of the total loan book. We expect this year to continue growing, helped by the upcoming launch of collateralized loans in the next few months.

On the Slide 14, we see that the strong momentum across our core verticals is supported by an active product development pipeline. In the first quarter, we launched TBC Business application, and this slide also sets out several planned launches in the coming months, including collateralized loans and auto loans. We have also rolled out new features in Payme, including BNPL for PayMe Travel.

We continue to build out a proprietary AI infrastructure with the recent launch of AI Assistant Lola, inside the TBC Bank mobile application. This launch lay the foundation for the further development and intelligent financial services, and there will be more to come in the coming months as we expand Lola's capabilities.

Now my final slide looks at some of the key core metrics of our Uzbek business over the past 3 years. As you can see, while user numbers remain very impressive, loan growth and profitability have taken a hit over the past couple of quarters as we have adapted the business to regulatory changes around the consumer lending.

While this process has not been easy, it is laying the foundation for a well-diversified business over the next few years. As we also expect to see loan growth recovering in the second half of the year, which will be good to see.

Thank you very much for your attention, and I will now hand over to Giorgi Megrelishvili.

Thanks, Vakhtang, and thanks all for joining our call today. I'll take you through the financial performance of the Q1 and then we move to next Slide 17. It was a solid start of the year, as you can see, the net profit was GEL 365 million, up by 15% year-on-year. The quarterly decline is just normal, let's say, seasonality versus Q4 and return on equity was 23.4%, above our 23% target. So overall, I would like to reiterate Vakhtang's comments that we feel confident that this first quarter provides a very good foundation to meet our strong growth targets.

Now Andrew, if we move to Slide 18 to discuss the key drivers of our profitability. Top line was up by more than 10%, as you can see, double digits to GEL 859 million. That was mainly fueled by net interest income of 17%. Noninterest income growth was a bit softer side as we guided. It was slightly down year-on-year and it's mainly driven by Georgia business as we continue to build out TBC card, but with lower bonuses and cash tax from our schemes this year.

We do expect Georgia fee and commission income to be flattish this year with year-on-year growth to pick up later from H2. Strong take-up of TBC card is actually feeding into cross-sell, as you can see, such as consumer loans or CASA accounts and that drives our strong net interest income. Overall, we do expect to have a double-digit top line growth this year.

Also, I'm very pleased to see that group NIM actually remained at 7% level. Georgia NIM was up by 20 basis points quarter-on-quarter. That was driven by strong loan growth in the consumer loans, as I mentioned already, and a robust balance sheet management. Our Uzbekistan NIM ticked down slightly as we guided. That was only because of higher liquidity as we're still getting funds from our clients and lower loan yields.

If we move to Slide 19. Our cost growth. Our costs grew by 20% year-on-year. That was mainly driven by a lower cost base in Q1 last year, as you clearly see from the charts. Also, we had some new launching of the bonus schemes and the normal business growth. So we do expect Georgia cost growth to actually stabilize to low teens, and this will translate into returning to our cost-to-income ratio that we have seen last few quarters around 37%, maybe 38%.

Now please let's move to the next slide, Slide 20 to our asset quality. Our cost of risk was up by 10 basis points compared to last year. However, Georgia's cost of risk actually remained very healthy at 60 basis points. But we saw the pickup in our TBC Uzbekistan business as we also guided was mainly driven some seasonality, also some residual provisioning on the back book cash loans and the contraction of the loan book.

Now if we turn to the next slide, Slide 21, to have a look at our balance sheet growth. The portfolio growth was strong. We were up double digits both for customer funding and gross loans, and we do expect to continue strongly. So not much to say on this slide. If we move to Slide 22. Again, I'm not going to spend too much time on this slide as little has changed. We have a comfortable capital buffers well above regulatory minimum requirements.

Now if you move to Slide 23. So our strong capital position, our profitability actually allows us to continue to pay dividend this quarter, we will be paying GEL 1.75 per share that will be paid in September. And if we move to the last slide, 24. And finally, I would like to reiterate our 3 [years] group financial targets that we laid out at our Strategy Day in late February, and we remain committed to meet those targets. So those are to grow our loan book 15% plus, deliver ROE 23% plus and our payout ratio to be between 25% and 45%.

So on this note, I'd like to open for Q&A.

[Operator Instructions]

Our first question is from Alex Kantarovich of Roma.

Can you hear me now? It seems like very robust performance in Georgia. That's great. In Uzbekistan, I'm looking at the quarterly loan intake numbers, and I'm seeing that in the business loans or SME loans, I presume these are the same. We have a sharp drop in new net loans in Q1 '26. If I took your split for gross loans, and it appears that in Q1, SME loans increased by just GEL 5.4 million, which is a massive drop from Q4. Credit cards also were just half of new loan intake from Q4. So I would like to get some guidance what should we expect in the remaining 3 quarters for the year, so I can do some number crunching.

Alex, we'd be happy to help you understand the numbers offline. So please feel free to reach out after this call. But just to give you the high-level view. So there are basically 2 parts to the business loan portfolio. So you're right that SME, we use the words SME and business lending interchangeably. So there are business cash loans, BCL, which we disburse to self-employed people in Uzbekistan. And that loan book is very similar to the instant cash loan, ICL loan book that we've had for 5, 6 years, which is our most mature business. And that's part of the sales funnel for the cash lending business.

So when we basically slowed down to a trough and actually stopped our cash lending business in December and January due to the regulatory changes. That meant that we had less leads coming at the top of the funnel for business loans, the BCL side as well. And so that explains the slowdown in business cash loan lending, which has now resumed.

The second part of our business loan book is MSME. So there we have micro and small loans, and we have some larger, let's say, medium-sized SMEs. And that's been growing nicely. It's obviously very early stage for us, but that's something that, as you know, we're putting a lot of emphasis on because that was something that was in our product development road map, but also we need to do a lot more of this in order to rebalance our portfolio due to the regulatory changes. So that explains a little bit about what's been going on in quarter 4, quarter 1, which are the dynamics that you picked up on. You should expect to see the business cash loan book increasing as well as the MSME lending book as well.

In terms of the loan dynamics for the year, Vakhtang referred to this in his introductory presentation, we are seeing a contraction in the loan book in quarter 1. We believe that quarter 2 will bottom out. And we actually -- if you look at the leading indicators, you can see that we are booking more customers now. So in terms of numbers of customers, the loan book is growing. But in terms of balances, it's still declining a little bit. But as I say, we expect it to bottom out towards the end of quarter 2. And then we'll go back into growth, cautious growth in quarters 3 and 4.

So that's where we expect to be. It's difficult to give numbers due to low visibility at the moment. But by the time we get to quarter 3, when we're giving the quarter 2 results, we'll be able to give you a lot more clarity in terms of the loan growth outlook.

Okay. Yes. I appreciate it. We can discuss it offline. And just a second question I have. We before mentioned margin stabilization at near low 20s or 20%. Could you please confirm this? Net interest margin, yes.

Yes. So let me just explain a little bit more about what's happening to the NIMs. So we had NIMs in the low 20s a year or so ago. they ticked down as the loan book mix started to change. But more importantly, in quarter 3, quarter 4 and going into quarter 1 as we had to reduce our higher-margin lending businesses due to the regulatory changes that I think everybody understands, but I can remind you just in case you need reminding. So that meant that we were doing more business loans, which are lower yielding and a lot less, in fact, virtually no cash loan business, which is the high-yielding numbers.

There was also a backdrop of, let's say, soft regulation where the regulator is talking down headline rates, and therefore, the yields are going down on our loan book. And that explains why we dipped down to 17% thereabouts for quarter 1. We now expect that trend -- downward trend to stop. We expect it to pick up as we go into quarter 3 and quarter 4. And the reason for that is because we have restarted our cash lending business on the MFO.

As I mentioned earlier, we're now doing a lot more business cash loans, which is part of the overall cash loan funnel. We're obviously still doing SME loans, which is a business we want to grow and that's lower margin. But we also have credit cards, which are now a bigger part of the mix. That's already 9% of our total loan book, and that's growing and they're high margin as well. So we expect the margins to recover. And just to reiterate, we believe that we can recover to the region of 20% NIM by the time we get to the end of the year.

Okay. Okay. That's very good. And my last question, given this somewhat uneven revenue dynamics, what should we expect in terms of operating costs for Uzbekistan? Will it be sort of comparable to Q1? Is this the run rate? Or will you add capacity, people, what have you?

Sure. So again, it's very difficult to give you any meaningful short- to medium-term numbers because things are still moving around a little bit. But as I say, we'll have more clarity on in quarter 3 as we look back to quarter 2 and when we give those results to the market. But we're obviously trying to keep very tight costs because the revenue has gone down as a result of the loan book rebalancing.

However -- Yes, so we're now investing in growth again. As I said, we think we're going to bottom out in quarter 2 and the loan book should resume growth as we go into quarter 3, quarter 4. And to do that, we obviously have to invest in people and acquisition cost, basically marketing. So you should expect the run rate to be similar, but maybe go up a little bit.

Next question from Piers with Investec. I can't hear you. I think you're muted. We still can't hear you. Okay. Maybe you can try again, Piers, because we can't hear you. Okay.

Lucy, can we go to the next question, which is coming from Dmitry from Wood.

Congrats on the results. I have a few questions, please. Yes. Just the first one on cost-to-income ratio, specifically in Georgia. Yes, we saw a bit of an uptick, and you mentioned during the conference call that on a group level, it will normalize in the coming quarters towards the 37% level. I'm just wondering, specifically in Georgia, like did you see an inflation uptick? Like how difficult would it be to reverse it in this region? That's the first question.

The second one is on fees and commission. It's clear that it will be flattish in the 2026. I was just wondering what sort of growth you expect later maybe in 2027? And just to finally follow up on what Alex was asking for the Uzbek business. Previously, you mentioned that you expect around 20% growth year-over-year. And like looking at the first quarter so far, do you still expect it? Or do you expect it to be a bit lower than that?

Oliver. I'll take first 2 and then you can please cover Uzbekistan. On cost-to-income ratio, as I mentioned on the call, for Georgia, we do expect low teen growth. So it will stabilize [indiscernible] market growth and allow Georgia cost to income to be at the same level we have seen last few quarters again Q1, low 30s. So we don't expect any pressure or any abnormality on the Georgia cost side. So it's just Q1 was, let's say, outlier, I would say. So nothing to worry about.

On fee and commission income, as I mentioned, we -- sorry, on Q1, we expect to pick up from H2 and '27 and '28, we do think already to have a double-digit growth in fee and commission income as well. So that will be -- so the growth will resume starting already H2 and double-digit '27 and [indiscernible].

On the Uzbek question, so let me just take a step back from your question just for a second just to make sure that everybody is on the same page. So the backdrop is that the regulator has basically took a different view to what was previously the case, the previous course of regulation and decided to reduce the money supply or control the money supply. And one of the ways of doing that was through consumer lending and making sure that, a, they were able to meet their inflationary targets; b, control money supply by, let's say, reducing the growth rate of consumer lending and c, managing the macro risk buildup over time.

And they, as a result of this, introduced 2 things. The first were portfolio caps, which meant that different asset classes were capped at 25% effective from the 1st of January 2029, although the Central Bank wanted this to happen earlier. And the second was the reintroduction basically of risk weights for consumer lending, different asset classes. And so as a result of the agreement that we struck with the Central Bank and as a result of the introduction of much higher risk weights for unsecured consumer loans from the 1st of July this year, we had to climb into this new structure of our portfolio.

And in order to do that, there are 2 things. It's a function of 2 things. The first is the speed with which we can reduce our micro loan book, which is cash loans. That's what it's called in Uzbekistan. And the second is the speed with which we can ramp up other businesses, which sit in different portfolio caps, different buckets. And obviously, we're ramping up credit cards, we're ramping up business loans. We're soon to launch auto loans basically next month, and we're actually testing at the moment. And we'll be launching secured loans, collateralized loans for SMEs in midyear. And that means we'll be speeding up the diversification of the balance sheet.

But on the other hand, we have to do something with our cash loans because they have to fall below basically 50% at the end of this year. They already fell from 80% of our loan book on the bank's balance sheet at the end of last year to -- sorry, at the end of quarter 3 last year to 66% at the end of quarter 1 this year. So you can see that progress is good on that front. But this obviously means that the loan book dynamic is negative, and it's been continuing to fall as we went into quarter 2.

As I said earlier, we believe that's now going to bottom out because we resumed cash loans on the MFO balance sheet, the microfinance organization. We'll see where this all takes us. We said that we believe we can maybe get to 20% growth for the year in terms of the total balance sheet for Uzbekistan, the TBC Uzbekistan as a group. But we'll see. So we're seeing things changing in quarter 2, but we'll be able to give you much more clarity on that as we get into the results for quarter 2 when we give it in August.

Thanks, Dim. Okay. Piers, should we try there...

Can you hear me this time?

Yes.

Excellent. Great. I've got just 2 strategy questions. The first one is just following on from what you were just talking about, Oliver, on the Uzbekistan pivot. I mean, could acquisitions be part of the solution here in terms of getting to a quicker rebalancing of the loan portfolio? That's the first question. And the second question is just also on Uzbekistan. You mentioned potential IPO of the Uzbekistan business at the Strategy Day. Has there been any further developments or thinking on that option?

Sure. I'll take the first one and Vakhtang I don't know if you want to do the second?

I'll do.

Okay. So on acquisitions, this is a question which obviously we've been asked quite a few times. Our preference would be to do portfolio acquisitions. But in Uzbekistan, there is nothing for sale, certainly not at the moment. So if we see portfolios of good quality, the right profile at the right price, then we will be acquisitive when it comes to acquiring portfolios, which enable us to accelerate the rebalancing of our portfolio. But that's not something which is available today as an option.

In terms of other acquisitions of banking institutions, that's not something which we're currently looking at. We're in the market. We're obviously keeping our ear to the ground. We see what's around, but it doesn't look like something which is feasible for us. And we believe in our ability to grow organically and to ramp up our business, diversify and build good product, which customers want. That's what we do, and that's what we're continuing to do as we go through this period of adjustment and pivoting, as you said.

However, as you know, we announced the OLX deal, and we're still working on that. We're making progress. And there could be other small, let's say, incrementally attributive deals, which we look at in the market, which will enable us to build out our ecosystem. So we did the BILLZ deal, for example, last year, which brought in lots of SME customers to whom we can lend as well as building payments and additional services because it's a SaaS provider. And there may be other things of that nature, which enable us to accelerate our ecosystem development. So that's something we're very much attuned to.

But probably the answer to your question is no in terms of what you're asking about. And on the IPO. So this is a strategic option, which is something the group is thinking about. This is what we announced as an option during our Strategy Day in New York. There's nothing else to say. That was only a few months ago. So we have to go through this period of readjustment in Uzbekistan to make sure we get everything back on track and executing really well and diversifying and basically on track to achieve our ambition of $200 million or so by the time we get to 2030. And once we're on track, the trajectory is going in that direction, then we can return to the strategic option of thinking about IPO. But right now, it's just too early to talk about that.

Yes. To add from my side on the second question, so I agree fully with Oliver in addition to that, this is one of the strategic options we are looking for our Uzbek business. But to come to that, as Oliver said already, we need to grow our balance sheet. We need to grow our profitability, and we are looking at moving to that [indiscernible]

There's a question maybe for Giorgi. Could we give some guidance on the tax rate trajectory through the year? What was the split between tax credits and ECR-related deferred tax assets in driving lower effective tax rate in the first quarter? And what should we model as the full year '26 run rate?

Yes. There has been no change in the run -- tax rate. It was a one-off that was contained less in Q1, maybe some very small in Q2, but you should consider normal ETR that we just talk about in Georgia -- in Uzbekistan.

Okay. I think, Lucy, you've got a question on the phone.

The question is from Rahim Karim of Cavendish Capital Markets Limited.

The first is just to get your sense of the impact of the refi rate move in Georgian in terms of NIM guidance for '26. The second was just to get a bit more color perhaps on the cost of risk in Uzbekistan and how you see that unfolding over the course of '26 as the recalibration of the loan book unfolds and whether we can get to 8%, 9% as I think is your kind of medium-term target by the end of the year.

And then the third question was just looking at the trajectories of MAU and registered users in Uzbekistan. Obviously, registered users kind of tracking up very nicely, but MAU seems to have kind of been stuck at around 6 million or so for the last year or so. Is there anything in particular there that is driving that divergence? And how should we think about that growth and when growth might recover in terms of MAU for Uzbekistan?

I'll start off and hand over to Oliver. So on the NIM guidance, probably we expect to stay around the level we are now. We don't expect any decrease. There may be some upside given change today that you have just seen in case of [indiscernible] freight. So probably at least flat and probably some [indiscernible] upside in next few quarters.

Sure. And thanks for the questions, Rahim. So on the cost of risk in Uzbekistan, so we came in around 10% in quarter 1. We believe we'll be around the same number broadly in quarter 2. And then going through the rest of the year, this really depends on what happens next because all things being equal, our risks would have trended downwards as previously communicated. However, there's a few things moving around as usual. We're in a frontier market and things change.

So on the one hand, the vintages with higher risk, which we booked in 2024, particularly in the second half and going into the first half of 2025, they're still running off. They're going through the stages and coming out to write-off, which is what you're seeing in quarter 1 and going into quarter 2. However, there is also a change which has been announced by the Central Bank at the request of the President of Uzbekistan, which is to auto collections.

Just to remind you, auto collections is where using the open banking API infrastructure, the different banks in Uzbekistan can go and deduct funds from accounts. And the President has requested the Central Bank to look at this. So they're doing some work on this, basically to restrict it. And what we have already seen is that the 2 main payment systems in Uzbekistan, Uzcard and Humo have already put in place restrictions on auto collections.

This may be the extent of it, we don't know because the Central Bank is still working on this, and they'll come out with our position before August, which is when the President has asked for this to be implemented. So we'll see how this pans out. This will be a bit of a headwind in terms of cost of risk. We're obviously putting lots of mitigants in place, but we'll be able to give you more clarity on that as we go into quarter 3 when we know what the impact is.

We guided previously, gave a corridor of a soft guidance for cost of risk of 7% to 10%. We very much hope that we can still stay within that range, but we'll see how it pans out. And in terms of MAU, yes, so we're sticking around 6% -- 6 million, sorry, MAU in Uzbekistan and around 2 million DAU. So there are 2 things which are impacting this number and which is why it's been flattish basically over the last year, as you quite rightly pointed out.

So the first reason is that some of that is driven by lending. And we have mass market lending through cash loans, and that slowed down and then slowed to a stop basically at the end of last year going into the beginning of this year. And a lot of that is driven by -- that drives the MAU in terms of customers who come in and do transactional activity once they receive the funds. So that's part of the answer.

The other part of the answer is that a lot of this is obviously driven by Payme, which is our app for payments. So this is mobile top-up as transfers, P2P. And that was impacted by regulation, which came out in the spring of last year, which required all payment apps to identify all customers for all payment activity and for re-onboarding basically. So all of the payment apps had a dip, ourselves included, that then recovered in the second half of the year, but that's part of the dynamic as there's been regulatory tightening on the payment side of the market.

We now see MAU growth. We see very strong payments growth. So actually payment volumes have been growing very strongly by 40% year-on-year, as you can see. So the payment's healthy, is very, very -- payments business is very healthy, and we hope that MAU will follow that.

Last kind of chance for any further questions. Okay. It doesn't look like we have any further questions coming through. So I'll just say thank you very much for everybody for your interest and for joining this call. And please feel free to reach out if you have any further questions. And we will all meet again in August for the second quarter call. Thanks very much, and goodbye.

Thanks.

This concludes today's call. Thank you all for joining. You may now disconnect.

Good morning, everybody, and thank you so much for joining us today. So after the Great Blizzard of 2026, it's a very warm welcome to TBC Group's Strategy Day for 2026.

My name is Andrew Keeley, and I'm Head of Investor Relations. I have to admit that there were times over the past few days when I wasn't sure that this event was actually going to happen, but somehow we have all made it here, and it's so great to see those of you who have been able to join us in person. I think a lesson learned is probably to think twice about organizing a future Strategy Day in New York in February.

But thank you also to all of you who have joined via the webcast. It's great to have you with us today. It's really great to have so much interest in TBC's story. As I think our strong results last Friday demonstrated, we believe we have the right strategy, are executing on it, and continuing to deliver value for our shareholders. And we plan to show you more on this today.

So let me run you through today's agenda. We will start with our Group CEO, Vakho Butskhrikidze, taking us through the way we think about our group strategy over the next few years. After that, we will focus on Georgia with incoming TBC Georgia CEO, George Tkhelidze, outlining the plans for CIB. This will be followed by Ivan Gulmagarashvili and Nika Gvaberidze presenting on retail. We'll then have a short break.

After that, it is our great pleasure to be joined by the Minister of Investment, Industry and Trade for the Republic of Uzbekistan, Mr. Laziz Kudratov. Following this, we will have a deep dive into our plans in Uzbekistan to be kicked off by Head of International, Oliver Hughes, followed by TBC Uzbekistan's CEO, Nika Kurdiani; and TBC Uzbekistan's CFO, Sharof Sharipov. We will finish with a Q&A session, in which listeners on the webcast will be able to participate and ask questions through the chat function.

A couple of other housekeeping items. All of the slides presented today will be available on our website straight after the event.

Finally, everybody here today is very welcome to join us this evening for a dinner of Georgian and Uzbek food, wine and song at Ubani Midtown restaurant at 6:00 p.m.

And with that, all it remains for me to say is that I hope you enjoy the event. Thank you.

[Presentation]

Thank you. Good morning, everyone. It's wonderful to see both familiar and new faces today and to see your interest in hearing about TBC Group's strategic plans for the next few years.

To briefly introduce myself, I'm Vakho Butskhrikidze, CEO of TBC Bank Group. I have been in TBC a long time, in fact, since very beginning, 34 years ago, in '92 when the bank was established by $500 of capital. I have been CEO the past 28 years, and I have a great team around me, some of whom you will meet today.

My brief today is to share some insights about how I see TBC evolving over the next few years. The title message on this slide is an important one. At TBC, we have been creating and shaping financial services markets for many years in the region, and we will continue to do so. First, in Georgia, where we went from the start-up to the leader bank in the country over the 3 decades. More recently, in Uzbekistan, we built a digital bank from the beginning that compares with the best in the world.

Why should you own TBC shares? I believe we offer investors a rare mix of strong growth, high profitability and attractive returns. And the numbers on this slide really to speak for themselves. These results have been enabled by the consistent success we have had in Georgia and the rapid scaling up of our digital ecosystem in Uzbekistan.

Today, my team will explain why we believe there is much more ahead for TBC, including growth in mass retail in Georgia and the continued scaling of our digital financial ecosystem in Uzbekistan.

The message on this slide captures a simple truth about TBC. We know how to deliver financial services at a scale in markets that are not always easy to navigate. We are proven builders. Our digital mindset took us from Georgia to Uzbekistan long before others put this market opportunity. But life is not a straight journey, especially in emerging markets. What's key that we have the experience and quality to navigate, adapt and capture opportunities when they arise.

Today, we will focus on the future, not the past. But let me pause on this slide, which shows our strong track record and gives us confidence for the future. Over the past decade, we have grown both our earnings and loans at 17% CAG (sic) [ CAGR ] in dollars. We have averaged 23% return of equity over this time. Meanwhile, we have been gaining customers. Our digital monthly active users have grown 6x over the last several years and now exceeds 7 million users.

And this proven track record directly benefits you. We have returned $735 million to our shareholders over the past 5 years, and total shareholders' return has averaged 36% per year in dollars, more than twice the S&P 500.

I will now tell you something of our plans in Georgia. Let me start with why I think Georgia remain a great place to do business over the next several years and more. It is well known that Georgia's economy has been booming over the past few years, and banks naturally have benefited from this. We think an annual 5% real GDP growth outlook over the next 5 years, and Georgia's location as a trading and tourist hub linking Asia and Europe brings increasing long-term benefits.

Georgia also has a very robust financial services landscape. It has relatively low levels of debt and competitive market with major banks that provides a high barrier to entry and the population that expects high-quality digital banking services. It is that we continue to be a great place for -- to do the business.

Turning from Georgia's economy to TBC Bank Georgian operations. We are delivering strong growth and a high profitability year after year. We lead the market in many segments, and where we are the second player, we recognize that we have to work harder to win our customers from our competitors, and we have 2 clear strategy to do so.

While I'm proud of the digital ecosystem we have built in Uzbekistan, it has grown out of the digital roots that we have in Georgia. For example, I want to flag our mobile application in Georgia. After bringing our core banking technologies in-house in '23, '24, we have already seen clear benefits, faster delivery and stronger customer adoption. We added over 0.25 million digital users last year, and Ivan, our Head of Banking and Payments, will tell you how we intend to add another 300,000 users over the next 3 years.

Over 80% of our deposits and consumer loans are now digital. Nika, our Head of Lending, will talk about innovations he's implementing to build the best customer experience in the market.

Our aim in Georgia over the next 3 years is to become a top choice and dominant bank across all segments. Where we are leaders, we will keep moving forward. We aim to maintain and strengthen our leadership. In CIB, for example, which has an important profit center, George, our Head of CIB and Incoming CEO of TBC Bank, Georgia, will later explain where he sees the growth opportunities in the years ahead.

We aim to become the bank of choice for the mass retail banking with a clear ambition to lead in areas such as payments and consumer lending. [indiscernible] will speak more about this later. In terms of numbers, Georgia aims to sustain return of equity 23% and deliver loans and profitability growth at 10% to 15% annually.

Why do we think we can win? We have a track record and a leadership position that gives us a clear competitive advantage. Now that is in-house, our best-in-class digital retail customer experience is already translated into a strong MAU growth and the market share gains in target segments like unsecured lending.

Finally, we have a proven and experienced management team. This includes some new faces that you will see today, that know the Georgian market inside and out.

Now turning to Uzbekistan. This photo shows just a snapshot of the modern and fast-growing city that Tashkent is becoming. I sincerely recommend that you visit the country to see for yourself the progress it is making every year. Uzbekistan's economy is booming, and this is just the start of the potential it offers. IMF forecast suggest that GDP will grow at an average 6% over the next 5 years to over $0.25 trillion in 2030.

I won't go into details as my colleagues, Oliver, Nika and Sharof, will cover this later. But I want to highlight that in a fast-growing economy like this, building a strong and well-regulated market is a gradual process. Over the past year, we have shown that we can adapt quickly, including by accelerating our SME lending plans while continuing to make progress. Our excitement about the long-term potential of this market remains very strong.

Nika and Oliver will take you on a deep dive into the business we have built and are scaling in Uzbekistan. What I want to say is that we have achieved a huge amount in the past 5 years, and I have no doubt that we will achieve a huge amount again over the next 5 years.

I would summarize the past 5 years as laying out all the essential building blocks for the long-term success in the digital banking. Our growth digital DNA inspires us to launch a fully digital greenfield bank to complement our payments leader, Payme. We develop products carefully and build the business with a clear and fast path to profitability.

The next years will be about capturing the potential of our digital ecosystem to connect our millions of customers with many thousands of Uzbek businesses that now work with TBC. By 2028, we intend to have the largest digital financial ecosystem in Central Asia. This will be a highly diversified business, one that enables us to capture the long-term opportunities. We will also target mid-20% return of equity by 2028 and higher beyond that.

Why I'm confident that we will win in Uzbekistan? Because we have one of the strongest fintech teams anywhere. We have a hugely popular brand and the best digital banking proposition in the market. We are very aware of our responsibility to shareholders to maximize the long-term value of TBC Uzbekistan. Last year has not been easy. They are bumps on the long-term road. And we are committed to build a big, beautiful and diversified business there.

We constantly review the strategic options for this business as it delivers on its growth ambitions. This would include both organic and inorganic growth, and possibly an IPO of our Uzbekistan business. We'll, of course, keep our shareholders fully informed.

Turning to ambitions for the group. Our financial targets for '26-'28 are outlined here. My key message is that we will continue to give our shareholders a rare combination of high growth, high profitability and strong returns. We will grow our loan book by at least 15% every year, deliver 23% or higher annual return of equity, and pay out 25% to 45% of earnings through dividends and buybacks in the next 3 years, with a minimum 25% dividend payout ratio and progressive dividend policy.

I also want to share with you a slightly longer-term vision I have for the group through to 2030. Simply put, we plan to double the size of our business with net profit increasing to $1 billion with a loan book of more than $20 billion. Our digital customer base will also expand strongly, both in Georgia and Uzbekistan, and we target 12 million digital MAU by 2030.

By 2030, we expect Uzbekistan to be a material earnings contributor to the group, accounting for 25% of the total group's profits. Nika and Oliver will tell you later how we intend to achieve this. Over the next few years, we'll also explore opportunities to further international expansion, based around digitally led retail and SME banking.

As you may have seen with this in mind and given my intention to focus more on strategic priorities in our existing markets, I'm handing over leadership of our Georgian bank to my colleague, George Tkhelidze. This will enable me to focus fully on my role as the Group CEO. I believe George will be a great leader of our Georgian business, and I have every confidence in him and the team. We have to keep delivering great results. George will lead our presentation on Georgia.

But before I hand over to George, I'd like to share with you that we have a very special guest with us today. Let me introduce you a man which is one of the Georgia's most celebrated global sports figure and UFC World Champion and our friend, Merab Dvalishvili. Please, welcome.

Hello, guys. How are doing?

Hello, brother.

Hello.

Thank you very much to be together with us today.

My pleasure. Thank you. I think I have microphone. How are you guys? I'm happy to be here and talk in front of you. I'm sure a lot of people knows who I am, but I am Georgian and former UFC champion, and I'm planning to get my UFC belt back. Thank you.

And I think me and TBC Bank, we're both representing Georgia worldwide. And I'm not going to stop and many success is in front of me. And I believe also TBC Bank has a big success in front and then they will go even more further.

And today...

Just 1 minute. May I jump here, Merab?

Yes.

So you see, all the banks worldwide they are saying that we have very good mobile applications, it's very easy to navigate, but I ask now Merab to do by himself on TBC Bank mobile application, how easy to onboard as an individual on that and also to make investments. Merab, could you help me to show to our auditorium people?

I will. I will show and -- me and technology, we're not really friends.

But it's so easy. We can do...

Brother, this is really so simple and easiest bank app I have worked with, really. And you guys, you will see it now. Because like I said, me and technology we're not really friends because I like to work with my hands, not with my brain. But today, I will show you. So like, yes, this is -- so like it's easy.

Let's start it.

Gets start. I have a language, English, as you see, and it gets start. Now I'm going to change the phone number to...

1, 2, 3...

So to U.S., and put my phone number, 516-66 -- no -- 3787. Yes, this is my phone number. So I will get a code now. Yes, it's easy, boom.

It's 2 seconds.

Now, yes, I'm going to take a picture, a selfie. Who is this handsome guy, uh? No, easy.

3 seconds.

Yes.

Confirm.

And then I'm going to set up like easy password, boom, boom, boom. That's how I do. If I lend someone my phone, that's my code always.

So done. So Merab already on board now.

Easy.

And Merab, as I know, Mark is also your friend. And could you make investment in Meta?

Yes. Yes, I can. It's so easy. So yes, I can invest in anything, Apple or -- yes. Now we -- in the Meta, right? So I have to push products, which is bottom, your left. Yes, right there. I push already. So now investment.

Investment.

Yes. And now...

Find Meta.

Yes, now I'm going to find Meta.

[Indiscernible].

Say again?

[Indiscernible].

No, no, no. Marketing -- he sells those.

So Meta is -- so yes, I'm going to -- I find already Meta, boom. And now I'm going to buy. So I'm going to change the -- oh, no, I have -- yes. Okay, I have to change to U.S. dollar. It's not in Georgia. So okay, I'm going to buy $10, right?

Great investment.

Yes, yes. Well, investment is investment. Doesn't matter. It's going to grow. It doesn't matter.

Of course.

Yes. And then buy. Easy. Boom.

Processing. Enjoyed this thing?

Yes. Now an official investment, right, an official investment. Yes, it's easy. Yes. As you see guys, really easy, simple.

Thank you very much.

My pleasure. Thank you. Thank you, guys.

Now I will hand over to George Tkhelidze.

Many thanks, Vakho, for your introductions and kind words. And Merab, thank you for joining us today. It was amazing.

It's a great honor for me to be succeeding Vakho as the CEO of TBC Georgia. Vakho has been in the center of TBC's success for over the past 3 decades, as he mentioned, and I'm really greatly looking forward to continuing working with him and with an excellent TBC's team.

A short info about my background. I spent about 25 years in financial sector, both in Georgia and in United Kingdom. I joined TBC in 2014 as a Chief Risk Officer, and over the past decade, I led TBC's investment, corporate business and wealth management.

But my relationship with TBC started a bit earlier before I joined as a team member. I started working with TBC when I was in Barclays Capital. And in 2013, I remember that we won a mandate to work on TBC's IPO. And this was the opportunity for me to work with TBC's management team to build the equity story, to prepare the company for the successful listing in 2014. And my admiration and believe in the success and capabilities of TBC, as I mentioned, started before I became officially part of the team.

So today, I will start with a brief overview with where we stand in Georgia and what are our ambitions in the next 3 years. So as you see, we have a track record over many years of strong growth and profitability. This is averaging 26% return on equity over the past 5 years, and growing our loans and deposits at mid-teens. We are leading players in all key financial services with 37% market share across loans and deposits and being #1 player in leasing and insurance businesses. But today, let me focus more on the future strategy and our aims in Georgia.

As you can see, we target continuous dominance in the areas we are already leaders. This is our corporate and investment banking. And in addition, we are aiming to become bank of choice in the mass retail and payments businesses. And our management team members, Ivano and Nika, will present more details about these areas.

This will add up into the continuation of our strong and consistent delivery on the promised results, and we are aiming to deliver more than 23% return on equity and 10% to 15% annual growth in loans and profits.

Now I will focus on corporate investment banking and our plans here for the next few years. So if we look at the snapshot, you see clearly that we have consistently been dominating the market across multiple products in CIB, where we are having more than 14% market share.

The key to our success is -- lies on the long-term relationship with our clients and our execution capabilities. We have very broad reach. I think it's important to highlight that we are working with 93 clients -- companies out of top 100 companies. So 93% penetration. Most importantly also what I want to highlight is that 70% of our clients are working with us for more than 5 years. So we are working with them for -- as a part of their corporate journeys, and we are embedded in their kind of corporate lifestyle.

CIB is also a main contributor of growth and profitability to TBC Georgian business. We're consistently delivering up to 50% of profit over the past few years.

So now looking a little bit deeply into our CIB business. I mean, core of our business is the lending to our corporate clients. As you can see, we have a strong track record of growth over the past 5 years. We averaged 18% CAGR. We expect that we will continue to grow double digits, well above the nominal GDP growth rate.

And why we have confidence? First is our own capabilities and strong positioning with our clients, but second is the corporate landscape. Considering the strong growth of profitability of our corporates over the past 5 years, we have accumulated really stable and confident conditions, and corporate debt levels are way below of most European and West average. It's 30% of the average. So that gives us the opportunity to lend more and grow both for the daily working capital needs and also for the expansion CapEx, et cetera.

Another important driver for our growth is our market-leading MSME franchise. So SMEs are contributing annually to 350 companies, who are transferring from SME to the corporate world. So that will be another strong driver.

So our relationships with our key companies are representing the whole economy of Georgia. As you can see, in multiple important and key sectors of the economy which are contributing to the growth of Georgia, we are holding approximately 40% market share, a little bit more there or little bit less. But importantly, this is on the back of working with most of the leading company, Georgian companies and some of the well-known brands you can see here. These are like, I don't know, Coca-Cola, Carrefour, Philip Morris, SPAR, world-leading hotels, et cetera.

We also presented another set of important sectors of Georgian economy. And what we want to see, we are everywhere, presented as a trusted partner of the Georgian corporates. And then just looking at the energy and infrastructure, you can see that over the past 3 years, we have contributed to the growth and financing of 71% of Georgia's energy supply generation and 66% of the old road infrastructure financing.

I would like also to focus and look at the segments which we believe are -- have strong growth potential in the future. This is Wealth Management and Asset Management business. And we believe that -- yes, we had a very good growth, 26% of CAGR over the past 4 years. But working with the founders and executives of Georgia's leading companies, we believe that there is further growth potential. Because they are growing, as we already mentioned. Profitability of the Georgian companies is stable and has a good outlook. On the other side, our founders and executives are looking for the ways to further diversify both their savings and the investments.

Another important area that we have been building over the last few years is Asset Management business. So it's only 3-year-old company. And then only in 2005 (sic) [ 2025 ], it has more than doubled its AUM. And this is on the back of growth of both on the retail investors and also on the corporate investor base.

And importantly, why we believe that we have a growth potential also for the next few years. If we look at the EU comparison of Georgia, the securities represent in Georgia only 10% of the total investments, and in EU, it's 40%. So that gives us significant upside to further grow before we will be close -- even close to the European average.

Similarly, another area that we have been developing over the past 5, 6 years is debt capital markets. This is a growing and very ambitious area for Georgian corporates in Georgian capital markets. You see that we are holding here 54% market share. So we are issuing and underwriting more than half of the Georgian corporate issuances in the debt capital markets. And we believe, again, considering the low levels of debt of Georgian corporates, this area also has significant growth potential.

Okay. We talked about our success factors, what we are going to achieve in the future. I think it's important for me to highlight to you what gives us the competitive advantage today and in future. And there are 3 areas I would focus. First is our people. Second, this is a long-standing relationship, strategic partnership with our clients. And third is the digitalization of our business. And I'll spend a couple of minutes on each of them.

So people. We have a team of 500 professionals in CIB. Many of them have huge education, coming not only from Georgian, but also from the Western universities. More importantly, we have very experienced team, and we have an ambitious and willingness to promote most of our senior people from within.

Second thing is the strategic partnerships. Our clients stay with us and work with us because we have -- we are providing with unrivaled combination of industry expertise, execution -- strong execution capabilities and strong data analytics, which are tailoring all our services to their needs individually.

And third is the digitalization. So I want to give you one example we are proud of. So over the past 2 years, we have been working on digitalizing our credit flow, which is the main product in corporate business. And we have brought the time to cash to 15 days. This was a significant decrease from 25 days. And now we are able to issue even most complex ones on an average within 2 weeks. And the NPS of our digital banking stands over 80%, which is also a very, very strong figure.

Here, we wanted to bring a couple of real-life examples that we executed last year. First, like, last year, we were joint lead managers in the -- on the issuance of largest ever corporate Eurobond issued by the Silk Road Group. And we used these proceeds to finance now one of the iconic hotels that has been opened in Tbilisi last year, Telegraph Hotel. You see the picture here. And if you visited Georgia, I'm sure you visited this hotel as well.

Another very, very important transaction is our strategic advisory and financing project, where we created a market leader in the retail, and this was the largest M&A retail transaction in past decade in Georgia. So now Daily, who is our core client, holds 33% market share in retail, is an undisputed leader of retail business.

Another important pillar of our success is artificial intelligence. So we are increasingly using AI in CIB currently already, both for the internal purposes and for the client-facing tasks. This includes the daily and transactional banking tools and predictive analytics within our own in-house built CRM platform.

And importantly, we believe that 20% of growth of our profit will come from the AI initiatives over the next 3 years. And this will be coming both from the revenue uplift opportunities and from the cost efficiencies. I can provide some examples during the Q&A if you will be interested in that.

And in my final slide, I would like to further highlight our ambitions. So we will further strengthen our position in CIB leadership. And we believe that we are well positioned here to be go-to bank -- to continue to be go-to bank for the Georgia's biggest companies. And we believe that holding over 40% market share is something that we are comfortably confident with.

We will further use digitalization and AI to further optimize our work and boost earnings, and we will tap into the new revenue streams in high-growth market segments.

Why do I think we will win? Because we have highly embedded positions with our key corporate partners, and we are continuing investing both in our team, in technology and in the artificial intelligence. And we have importantly very strong alignment between client coverage and product teams and all important enablers that support the growth of the businesses. This leaves us very well placed to extend our leadership in the strong segments.

As you know, I will be soon taking over as the CEO of our Georgian bank, and I'm very proud that CIB will remain in very, very strong hands. This is a team that we built over the past decade, and I'm very proud and happy that they will be taking over the leadership of corporate and investment banking.

Thank you for your time and for your interest. I will be happy to answer any questions during the break. And now I would like to hand over to my colleague, Ivano, to talk about the daily banking and payments. Thank you.

All right. Thank you, George. Good morning. I'm Ivan Gulmagarashvili, and I look after the e-banking and payments business.

I'm a new joiner to this wonderful team. Before joining TBC Bank, I spent nearly 25 years in financial systems. I worked at various roles for Barclays, HSBC and other financial institutions in Europe. Most recently, I spent 4 years with Amazon in the U.K. and here in the States before finally moving back to Georgia.

Now I will be sharing our retail banking presentation together with Nika. We have experienced strong growth over the past few years, and we believe there is a great opportunity to gain market share in each segment. With 1.0 million monthly active customers, we have 36% market share in retail loans and 35% market share in deposit portfolio. We have a strong team and strategy in place, so we are well positioned to execute and deliver further growth in 2026 and beyond.

Now let's look at the daily banking. We are proud to say that we touch 50% of our population on a monthly basis. This derives from having 1.3 million digital monthly active users and 1.0 million daily card transactions. More than 50% of newly registered businesses opt for TBC acquiring.

It is impressive to see that volume we manage through our payment platforms equals to 80% of Georgia's GDP. Our strategy for 2026 through 2028 is to be the go-to financial institution in Georgia. We will further strengthen our leadership position in affluent banking and become a leader in mass retail by 2028.

To achieve this, we will stay focused on customer experience, work closely with mass retail segments to better identify their needs and build best-in-class proposition to simplify our customers' daily lives. In the next couple of years, we will also widen our network of merchants and offer new solutions, enabling our customers to better satisfy their needs for payments and transfers.

Lastly, to achieve the above, we are moving from transactional loyalty to a more relationship, long-term driven approach, where we value most those who do more with us, whether through higher cashback special offers or various events.

Around a year ago, we launched our flagship TBC card, debit card. We are proud that we have issued 1 million cards before our first anniversary. This strong proposition enabled us to acquire new customers and revive dormant ones. More importantly, having more and more mass retail customers means that this card has become a gateway into our affluent banking service. The numbers speak for themselves. Four out of the 10 Georgians use a card. Nearly 50% of the cards are issued to new customers with less than 3% churn rate. Lastly, we are delighted that over 75% of our customers have come through our digital channels, completing their end-to-end journey under 25 seconds.

We are and have been an undisputed leader in affluent banking from day one. We grew over 50% in 2025, and now we have close to 200,000 members, which accounts for 55% of deposits and 60% of the loan portfolio of the retail business. We will keep this leadership going forward and further invest in personal bankers who not only solve our customers' financial pain points, but also provide lifestyle services to make them feel special.

The set of exclusive offers and lifestyle benefits is truly a differentiator in the market. For example, we have recently launched the co-branded Metal debit card that you can see here with Turkish Airlines. Turkish Airlines is the most frequently used airline in Georgia.

As for the acquiring side of the payments business, we are a leader with 45% market share in e-commerce in Georgia. We have onboarded all major merchants such as McDonald's and Spanish delivery merchant Glovo.

POS acquiring is advancing more slowly. We will be launching Amex later this year, which will enable smaller merchants to use our POS terminals. QR payments do not yet exist in Georgia, and we plan to be the first to offer the QR payment service to micro merchants. This should put us in a much better position as a preferred partner for this segment.

Separately, we have invested to build a more integrated sales structure, which enables us to get closer to existing and, more importantly, to new merchants in Georgia. We believe these changes should help us go above 50% market share in the acquiring business in Georgia.

Previously, when we launched our new debit card, we opted for simplicity, rewarding our customers' transactional behavior. While we offered nearly 700 unique cashback offers ranging from 20% to 70% cash back in 2025, this program was not really designed to create long-term relationships.

On a positive note, the program's NPS reached to 56%, up from 42% in the first 3 months post launch. The merchant co-funding also exceeded 60% compared to just 20% in 2024 as more and more merchants see the value of bringing our customers to them. You can see this on the flywheel on the right-hand side. Going forward, we have made changes. We will provide most value to our customers who are most loyal to us, who treat us as their primary bank.

We have also made a strategic decision to invest and build out our gamification platform, which will improve all elements of the customer life cycle starting from acquisition through to churn management.

Although we have grown massively in 2025, reaching 1.0 million monthly active customers, we believe there is an opportunity to further grow in various segments in which we haven't penetrated to a maximum level. We will further look into each segment to learn more, create even more value-added services, offer tailor-made solutions and be closer to them.

Now let me pass over to Nika, who will talk more about our retail lending business in Georgia. Thank you.

Hello, everyone. Great to be here. And thank you to my colleagues for a great overview of businesses.

Briefly about myself. I'm Nika and I used to work in TBC Group more than 15 years. My previous job was in TBC Uzbekistan for 4 years, where I was responsible for business acceleration from the day one. And 1.5 years ago, I joined back TBC Bank Georgia.

Today, my colleague, Ivano, covered daily banking, and I will cover retail lending. Retail lending is one of the strongest engines overall of TBC Bank dominance and profitability, and we believe that right focus and dedication in this product field is essential for overall success in retail segment, which is very much credit driven.

Very briefly regarding numbers. As you can see, our total loan portfolio is more than $3.6 billion. And I want to emphasize here our strong presence in mortgages -- in secured loans, which represents 72% of our total portfolio and gives us 43% of market share. And just to clarify, our secured loans combines mortgages and home equity loans.

At the same time, we successfully accelerated unsecured products. And out of total disbursement, 83% comes from digital channels and overall total portfolio is more than $1 billion. I will tell you more regarding unsecured products in upcoming slides. So to summarize this slide, we can say that our lending strategy combines stable, strong growth with profitability and driven by higher digitalization.

Our lending proposition is thoughtfully designed as a life cycle offering after researches, observations and analysis of data. We linked products to clients and their profiles. This approach helps us in better targeting, better cross-sell and best customer experience.

For instance, buy now pay later, or BNPL, is a key entry product in our lending ecosystem, is designed for acquisition and cross-sell afterwards. And it needs to be mentioned that 75% of BNPL product users are converting into other products, in credit cards, mortgages and cash loans. And it also needs to be mentioned that overall stickiness of BNPL product users is more than 95%, which means that practically we are not losing BNPL product users.

Cash loan is a monetization portfolio growth and cross-sell engine with super simple user journey, creative commercial offerings and comprehensive coverage of customer needs. Therefore, cash loan is the backbone of unsecured products with huge portfolio and customer base.

And lastly, let me touch mortgages here, as in our anchor product with strong growth, huge portfolio, stickiness and trust among the clients.

This slide explains how we scale lending sustainably through customer centricity and clearly designed product value proposition. We continuously learn from customer behavior and feedback, tracking usage, funnel management, cross-sell and conversion. And this translates into tailored offering, data-driven decision-making, conscious underwriting, which is very important, and best-in-class experience.

So this process and value chain, every single step matters a lot. And overall, it creates customer-centric driven product excellence, which translates into strong results and sales.

Here in this slide, I will focus more in unsecured products, because we see huge improvement and potential here to grow.

And this slide summarizes development, innovation and movement, what we've done in last 2 years. To emphasize the important ones is that all our unsecured products are end-to-end digital. We launched numerous of commercial creative campaigns, and we managed to deploy all must-have product features in 2024 and 2025.

So our last 2-year portfolio growth is 37%. Share of loans digitally delivered is 83%. And our time to cash, in less than 2 minutes, and in most cases, it's less than 1 minute. And we hold market share above 30% and it's growing very fast.

A few words regarding risk management. Our automated decision-making is based on strong usage of internal and external data sources, and we have topped our model performance with Gini coefficient from 65% to 75%.

Before I move to next slide, I want to emphasize that these results demonstrates a proven execution track record and gives us a strong base for scaling business further.

Continuously building best-in-class products is our forward-looking North Star, and we believe that by delivering these initiatives, we will strengthen our lending franchise even more. For instance, I will emphasize several ones. We are aiming to improve our value proposition for self-employed segment, which is a very important subsegment for overall retail. We are launching subscription-based lending, which means that paying a small fee customer can get special product terms, and this will be much more personalized. AI-driven soft collection, which will help us in both risk reduction and cost optimization. And for instance, modernized overdraft in digital, which is very important for payroll clients and especially for those who are not banking with us.

Therefore, our ambitious forward-looking is very clear and very business driven. We want to be first and largest credit product provider in the country, and therefore, best choice for individuals. And this ambition translates into dominance. And in market share, we are aiming to achieve over 35% by the end of 2028.

We are aiming to have strong portfolio growth from 20% to 25% annually, whilst improving our penetration into our customer base by 25%, which means that by the end of 2028, every fourth client should hold at least one credit product. And this everything should be achieved by powerful digitalization above 90% of all products sold.

Just to summarize retail banking and again highlight the key takeaways, what me and my colleague, Ivano, mentioned. By the end of 2028, we aim to become first choice for mass retail by reaching 2.5 million monthly active users. This growth strategy focuses on 3 core areas: go-to choice in daily banking, strong acquiring network and redefining loyalty and engagement system.

Also, we aim to have a strong lending franchise reflected with our anchor presence in mortgages, remaining comfortably above 40% market share, and the rapid growth in unsecured products, which itself reflects large scale of digitalization above 90% and strong dominance above 35% market share by the end of 2028.

That's all. Thank you for your attention, and now we will have a short coffee break.

Thanks, Nika. Just to say, we'll probably only have about a 5-minute break now because the minister will be arriving fairly soon. So please grab a coffee or use the restrooms and come back in a few minutes. Thank you very much.

[Break]

Take your seats please for the second part of today's proceedings. Thank you very much.

Welcome back, everyone, and welcome to the second part of our Strategic Day. We will focus on Uzbekistan. As I mentioned earlier today, we are hugely excited about this opportunity. As this business grows, one of the strategic options we would consider, a possible IPO of our business in Uzbekistan. But before we dive more into TBC Uzbekistan, it's my great pleasure to introduce a very special guest we have with us today. Ladies and gentlemen, please welcome Laziz Kudratov, Minister of Investment, Industry and Trade, Republic of Uzbekistan.

Thank you, Mr. Butskhrikidze. Dear ladies and gentlemen, it's a great pleasure for me to be here. Thank you for the invitation. First time for me to attend such event dedicated to a specific company. So it's a great experience for me as well. I will not talk too much. I want to keep my message clear and straightforward.

Uzbekistan is open for investment. Uzbekistan is stable, and Uzbekistan delivers on its commitments. So over the past 5 years, we have focused on one thing: building a predictable and reform-driven economy. Our growth has been above 6.5% annually. Last year alone, GDP growth was 7.7%. We have attracted and consumed since 2017 $70-plus billion of foreign direct investment.

When we started the reforms in 2017, we used to attract at around $3 billion of foreign investment per annum. Last year alone, in 2025, we reached $43 billion, which is more than 10x growth compared to 2017 when the reforms started. And this is, of course, not just activity. This is structural transformation. And the figures are showing that investors are confident in Uzbekistan. They are comfortable and they are actively entering the Uzbek market.

International rating agencies upgraded our sovereign rating from BB- to BB positive. That is a signal of confidence and it reflects macroeconomic discipline and consistent reforms. Our next clear objective is to achieve investment-grade status within the next 4 years. This is why we are aligning our fiscal policy, debt management and financial sector reforms. This is not only an ambition, it is a structured and measurable target.

Uzbekistan today has more than 38 million people. It is the largest population in Central Asia. We are young. More than 60% of our population below 30 years old, which is the solid driver for the sustainable growth. We are increasingly urban and rapidly digitalizing. Consumption along with the economy is growing, financial services demand is expanding. This is why the financial sector is central to our reform agenda.

We are increasing competition in banking. We are attracting strategic foreign investors, and we are preparing major state and private companies for IPOs. And TBC's performance is strong proof that the market works, growth is real and returns are also real.

Privatization is our key priority. We created a $2 billion national investment fund managed by Franklin Templeton. Preparations for an international IPO are underway. And in addition to this, 29 large state-owned enterprises will be privatized this year.

We're also modernizing the financial system together with the International Monetary Fund and the World Bank. We are working together to improve regulation and to introduce financial stability tools. We are also working on a new law on alternative investment funds, which is being prepared now. Our goal is to attract at least $1 billion of alternative investments over the next 3 years.

We also have an ambition to create and to turn Uzbekistan into a regional financial hub. This is why we are progressing rapidly with the establishment of the Tashkent International Financial Center, which will have a common law regulation within its jurisdiction.

Housing finance is another priority. We are developing mortgage-backed securities, covered bonds and public-private partnerships. We will be doubling the housing construction by 2040, and for this, we are building a stable long-term mortgage market, which is -- we are confident will be attractive to institutional investors.

Energy is another success story and equally important sector. Since 2018, we have attracted $35 billion of foreign direct investments through PPPs and added 9,000 megawatts of capacity. By 2030, we will be reaching 54% of green electricity in our energy generation mix. That is why we are open for partnerships in energy storage projects, including hydrogen and hybrid solutions. These are large bankable projects open to international partners.

Ladies and gentlemen, the global economy is shifting, supply chains are moving and new growth centers, as you see, are emerging, and countries that combine stability, reform and demographic strength will lead the next phase of growth. And Uzbekistan intends to be one of them. And we are not offering promises. We are showing results, results that are backed by the concrete reforms. The momentum is real and the opportunities in Uzbekistan are concrete. So we would like to invite you to be part of these solid transformations.

Thank you very much for your attention.

Thank you. Many thanks for your comments, Mr. Kudratov. And now I want to hand over to Oliver, our Chairman of Uzbek Operations. Please, Oliver.

[Presentation]

I hope everybody can hear me. Great. So welcome. Thank you very much indeed to Minister Kudratov. Thank you, Vakho, for the intro. Welcome, everybody, to the session on TBC Uzbekistan. I'm glad to say that we also have almost 400 attendees online. So welcome to you.

I'm Oliver Hughes, Head of International Business for TBC Group. And this is a session, obviously, on TBC Uzbekistan. I'm going to be talking about TBC Uzbekistan, one of the fastest-growing digital financial ecosystems in the world today. And I'm going to be starting with an overview of the market, talking about our strategy, talking about why we're going to win. Then Nika Kurdiani, who's the CEO of TBC Uzbekistan, is going to take us through our product, our platform and all the advantages that we have in the market, which are going to power us to success and now powering us already. Then Sharof, our CFO, will wind up the session by talking about some useful metrics for you to understand the business and give us the outlook. And then we'll move into Q&A.

So we've talked a lot about Uzbekistan, about -- and we've been hearing all day about how the economy is powering forward. Obviously, it's all true. The economy is going to grow to over $250 billion, which will basically be doubling in a short space of time, by 2030. We've also heard that the socio demographics of Uzbekistan are amazing, and they really are. So by 2030, the population will grow to 42 million people, which will be adding 4 million new people between now and then.

The amazing thing about the socio demographics is that you get this wonderful generational effect. So the penetration of digital services obviously increases the younger you get. TBC is a digital bank. In Uzbekistan, we're completely online. And so the younger the person, the more likely they are to be our customer. And every time a new cohort comes into the market, our market share automatically goes up. So it's a wonderful socio demographic environment to be working in.

I'll talk about the low banking penetration a little bit later, but that's a very important backdrop to what we're doing in the country. There's huge MSME potential. So there are 0.5 million MSMEs in the country, and there are 5.5 million self-employed people. This number is growing. Uzbeks are very commercial, they're great sellers, and this is something that the government is obviously very keen to foster as one of the pillars of economic growth going forward.

The banking system is still state dominated. So 63% of banking assets are in state-owned banks. And we've heard about the clear reform agenda. Thank you very much again to the minister for being here today. So the privatizations, but also FDI is one of the important metrics here. And almost $40 billion of FDI came into the market last year, and that's a number which is constantly growing. So that's a great endorsement.

Uzbekistan is a fast-changing country. So like many frontier markets, the regulatory environment is shifting, and something -- this is -- we have to navigate very carefully. You can see in the white boxes here the GDP per capita, and this is a very important metric as well. So the GDP per capita was $2,000 in 2020. It grew to almost $4,000 per capita last year. But by 2030, it's set to reach over $6,000.

So while household incomes are growing, you can see on this slide, where Uzbekistan is in the bottom left-hand corner, that it's very underpenetrated in terms of retail and MSME credit. So even though it's a rapidly growing market from a very low base, it's still only 11% retail lending to GDP. This is obviously something which is set to grow despite the Central Bank of Uzbekistan's cautious stance.

In terms of the entry into Uzbekistan. So TBC Group has the Georgian business, which is very cash generative. So through these organic cash flows, TBC Group was able to go into the Uzbek market using its own cash. We invited a couple of investors with us. We're very fortunate to have our partners, EBRD and IFC, who have 10% stake in the business each. And a decision was taken to enter the market with a mobile-only banking model.

So we have 2 apps, Payme and TBC UZ, the banking app. We drove a wedge into the market with our own tech stack, with our own licenses, banking license from scratch. And we chose 3 product segments or verticals to concentrate on. That was mobile payments, digital cash loans and online deposits. And this enabled us through the focus and great execution we had to build up a very strong position in those 3 product verticals very quickly, which took us to breakeven in record time, basically a little over 2 years.

So we drove this wedging through more of a monoline approach. But over the last couple of years, we've been diversifying our business as we build out a digital banking ecosystem with lots of different product verticals. So we've been adding debit cards, our flagship Salom debit card product, Osmon credit card, business daily banking, business lending, BNPL, subscription and lots of other stuff. And this has been built by our world-class team in Uzbekistan. It's our proprietary stuff in-house.

We've also done some selective M&A acquisitions. So we acquired BILLZ, which you'll be hearing about later from Nika. This is the leading SaaS platform for retailers in Uzbekistan. So where things make sense, where it's value accretive, we'll look at that in terms of acquisitions beyond organic.

And we're unlocking the ecosystem effect over time by adding more and more products and services in order to grow the number of products per customer in our very large customer base. So we have 23 million registered users, unique registered users in our ecosystem in Uzbekistan, 6 million monthly active users. We're a top-of-mind brand in Uzbekistan. So we're the first in terms of financial services in Tashkent. We're top 3 in Uzbekistan in general. Which is pretty impressive results for basically just 5, 6 years of being operational in Uzbekistan.

We have very, very strong distribution capabilities. So we're market leaders in digital online marketing, in performance marketing. We have some offline sales capability. And obviously, we have a very large customer base, different customer bases into which we can cross-sell. So we're able to reach deep down into our very large customer base to monetize through multiple product holdings. So now that we've achieved critical mass, our goal now is to drive lifetime value and grow that in terms of customers in the customer base.

We've become one of the largest unsecured consumer finance player in the country with almost $950 million of loan book at the end of last year. We're one of the leading players in the emerging credit card segment in the market, which is new but growing very quickly. We're a top 3 player in terms of installment loans and BNPL. In general, we're a top 10 consumer player in Uzbekistan in terms of retail deposits and retail loans.

And the next phase is for us to build out the B2B side of our ecosystem in this 2-sided ecosystem play, because through business lending, through business daily banking, through B2B payments acquiring, we can attract more sellers onto our platform. And this is something that Nika is going to be talking about in his section.

Basically, the more content from our partners we can put on our platform, the more consumers will come to our apps and spend time in them. The more consumers we have, the more sellers we have, who are bringing more content, and we get this wonderful virtuous circle and the ecosystem effect is unlocked.

We've also become one of Uzbekistan's leading payments players. So last year, we processed over $9 billion worth of payments volume. And Payme and TBC Bank now capture over 20% market share in terms of payments. We have over millions -- several millions of users doing transactions on our platforms every day, which makes us one of the largest payments ecosystems in Central Asia.

And transactional business is very important because it means that customers are not only sticky and bound to our platform, but we also have -- we generate lots of data, which drives insight to build engagement and also enables us to monetize our customer base.

Competition is intensifying in Uzbekistan. So the country has a very well-regulated financial services system, and it's increasingly digital. There's lots of digital e-government services and digital services from privately held players. This is attracting competition, but competition is good because it raises all the boats. So the more muscular competitors we have in the market, the better for everybody. They're investing in the market. They're educating consumers, and they're building infrastructure. So it's not just alone trying to build this ourselves.

And as you can see, we have lots of different ecosystems appearing in Uzbekistan. There are some of the domestic players, for example, Uzum, Alif, Click, Octo and there are some foreign players as well. So for example, Yandex, Wildberries, Ozon, Temu. And we believe that, as we look at this table, we have lots of different competitors in different spaces. So in payments and consumer lending, MSME banking, transactional business and MSME lending.

We're very well positioned to compete. And this is becoming increasingly the clash of the ecosystems in Uzbekistan about share of mind or share of attention. So we're very well placed because we have strong brand recognition, we have good product differentiation, and crucially, very strong customer service. So we can compete in this space against these emerging competitors. It's becoming exciting.

We've tried to scope out the opportunity in Uzbekistan. And basically, the whole market is growing. We're growing more quickly than the market. And so our market shares in all the segments in which we operate -- and we're adding more and more product verticals -- will grow over time.

We see our total addressable market in 2 dimensions. These are based on the National Statistic Office data from Uzbekistan. So one is the TAM of total loans. This is retail lending and MSME lending, which was around $23 billion last year, and over the next 3 years, will grow to around $41 billion by 2028. This is fairly rapid growth. It's a good clip. However, that means that the credit to GDP penetration still remains low. It will go from 15% in 2025 to around 18% in 2028. So still a low level of penetration. That's retail and MSME.

And the second dimension in which we see our TAM, our addressable market, is the total contribution of financial services in the country, which last year was around $7 billion. This will double to $14 billion by 2028. Our obtainable market, our SOM, last year was around $2.7 billion, and that will almost double to $5.3 billion by 2028. Our market share of this net revenue was around 8% last year, and that will comfortably grow to over 10% in 2028. So lots of growth to come.

And looking a little bit further ahead to 2030. We're building the largest digital financial ecosystem in Central Asia. We aim to have by 2030 -- it's our ambition -- 10 million monthly active engaged unique users across our ecosystem, $3 billion of loan book in MSME and retail, $250 million of net profit. In order to do that, we have to become or stay one of the leaders in all of the segments in which we operate. So Nika Kurdiani will tell us just how we do that. We believe we can get there, and we're moving in that direction very quickly.

So just while Nika is coming to the stage to take over, I'd just like to reiterate that one of the strategic options that we're considering very seriously is IPOing, listing the Uzbekistan business. So thanks very much again for your attention. Nika?

Hello. Thanks for being with us. Mr. Minister, thanks again. So I'll try to dive deeper into how we do things. But before going into some product highlights and strategic highlights, obviously, there is a question, why we win, right? And Oliver mentioned super ambitious targets, which are cool. Of course, they are our North Stars. We're sure about achieving them. But in reality, it all stands on a fundament, which is -- I will mention just a couple of them.

Super experienced team. Oliver said we are a superstar team that we manage together in Uzbekistan. Many experiences, many different great companies in the background. And the main thing is also, in my opinion, the mentality, right, the way we approach things, the way we think about the product management, product development, customer experience building and everything that builds this success.

And one last thing I want to mention from this slide is the customer base we managed to collect in 5 -- a bit more than 5 years now, which is 23 million registered users and monthly active 6 million people. And this is massive because Uzbekistan, it is growing every year, but we already have 23 million out of 38 million, right? This is very important for us. This is our strategic flywheel. And the way we think about it is basically that each of these items on the slide are the strategic pillars we try to develop.

Firstly, of course, the product has to be fantastic. But if the product is great but the customer experience of delivering this product is not good enough, then the product doesn't help. We are a technology business. We are in digital banking business, in digital payments business. So if the technology is not stable, there is no trust and there is no usage for the products. So basically, technology has to be fantastic.

We are investing a lot into branding, into design because we think that this helps in building the love marks. People have to love our brand. They want -- they have to be willing to connect with our brand and represent our brand. So in this regard, having the chance of building a love mark is super important pillar of our strategy.

Analytics, AI, data-driven thinking is something that we cultivate, something that we cherish really, and we have almost every decision based on very deep analytics. And this is super important for taking right decisions, doing right product developments.

And finally, profitability is something that I call personally a thank you from the customer, because if the customer is happy with the whole cycle, then finally comes the moment when the customer is paying a fee, which is a thank you. Otherwise, they wouldn't pay. And this rotates the cycle once more. So the flywheel concept is super important for us and everything that we think is going through this cycle.

Yes. Then the second also important concept is the use cases we are trying to solve for our customers. We have on the slide the 2 sides of our ecosystem. As Oliver said, one is consumers, the other one is businesses. For consumers spend, save, earn, borrow, invest and protect are the main use cases we are trying to develop. And for the businesses, it's sell, mortgage paid, manage finances, operate efficiently and access funding is something that we are developing.

And considering our mission statement, which is making people's life easier, we are trying to make people's life easier through spending less of their time on the services we provide and spending less of their money on the services we provide so that, again, they are thankful and decide to rotate.

I won't go into each of these items, but this is the product pipeline. The green dots are the ones we delivered and we are scaling, and the gray ones are coming up. But basically, there are lots of things that we are planning to introduce into Uzbekistan market, and we are working on most of them.

This is our -- Oliver said, our flagship, Salom Card. Basically, we had a debit card, of course, from the day one, but it was mostly supporting other products. And once we thought that we are ready to go into daily banking market, basically, we developed Salom Card, which is, in reality, best card on the market because the customers don't spend money on it, they earn money from it, because we accrue interest, we pay cash backs.

And we see the uptake as well, right, in almost a year from the launch. We launched it -- went to the market fully in January last year. We have already 950,000 people end of last year, but now it's already more than 1 million. And this is a key to our consumer [ ecosystem ]. Basically, the card is integrated. And I'll be showing a slide where I'll explain better, but the card is integrated into the whole cycle of consumers' ecosystem.

Big things coming up in Q2 is Salom Card for youth. And we mentioned it multiple times today that Uzbekistan is a young country. It is a country that is getting younger every year. So the Salom Card for youth will be introduced in second quarter and Salom Card for premium customers as well will be introduced in second quarter. So this will further increase the access to different segments.

The next product is Osmon Card. We first launched with cash loans. Then we went into POS loans, point-of-sale loans. Then we went into BNPL. And lastly, in the consumer credit product line, basically, we went into credit cards. We have already around 150,000 users, and the number is growing. We think this card is already in this product category #1, #2 in the market. And this will further grow because it is a very important product for us and we know exactly how to build it. So investing a lot of attention into Osmon Card. Osmon in Uzbek is sky. So it's Sky Card.

This is brand-new product. We basically piloted it last year, tried to understand how it works. But then we had the full go-to-market in the beginning of this year in 20th of January, actually. And we already have 140,000 users. This is a built-in BNPL into our mobile app. So basically, the customers are transacting within our mobile apps and this BNPL works within it.

And it is a fantastic acquisition tool. It has a fantastic NPL because it's -- NPS because it is basically delivering just one togal experience for access to the BNPL. So we are very hopeful it will scale. And now, currently, we are -- I'll show you a bit later, we are integrating this product with various platforms like marketplaces and retail chains. This is another very big bet we are doing, and hopefully, we're going to launch it in the middle of the second quarter.

We are doing this year is the car financing. Uzbekistan has 100 cars per 1,000 population. Kazakhstan, a neighboring country, has 200 and Europe has 600. Almost all banks are offering car financing. However, it takes on average 10 to 2 weeks -- 10 days to 2 weeks to close the loan and buy a car. We intend to disrupt this market like we did in cash loans, where we launched cash loan in 1 minute. And basically, we intend here to do car financing within 1 day. The whole experience will be not in branch in the car saloon, but it will be in-app experience, where the customer will buy a car, literally starting from the app of TBC.

This beautiful crystal is Novvot, which is the crystallized sugar that is used also in Georgia, by the way, with tea or the kid candy. And we are calling our loyalty platform -- the new loyalty platform that will be launched very soon in Uzbekistan Novvot. And people will be collecting Novvot crystals. They will be collecting cash backs. They will be getting discounts from our partners.

The whole idea here is basically now that we have 2 ecosystems to connect merchants and consumers to each other through a loyalty platform. So basically, we have now already 55,000 registered businesses in our ecosystem through BILLZ, through Payme, through TBC. We have 23 million registered users. And we are trying to build a loyalty platform where basically merchants will be offering to our consumers certain actions, I don't know, commercial offers, discounts, Novvot points, so that they can motivate them to go into the merchants and buy something.

So Oliver was explaining it well that the more content is in the middle, the more motivation that consumers and businesses have to be on the platform. So basically, this is exactly one of the tools how you build this self-reinforcing network effect, 2-sided network effect. Yes. And it will connect BILLZ, TBC, TBC business and then Payme, because these are the key brands and then products and then businesses basically that are connecting these 2 sides in our ecosystem.

This is another ecosystem product. We call ecosystem products, the products that can span all over our businesses. We launched last year subscription, paid subscription services for TBC and for Payme. We saw increased uptake in terms of volumes, that the customers would do once they are subscribed, they are paying for this again. So we are earning all the subscription, but at the same time, the customers increase their transaction volumes. And on average, the earnings per customer increased by 4x.

The issue is we have it separately for Payme and separately for TBC. I mean this is good because both customers are happy. However, we want to connect the subscription across the ecosystem. And this is something we're going to be building this year and launching next year. And once we have single subscription for all across the ecosystem, basically, we will have more motivation for the customers to use products within the ecosystem. And this will once more help the network effect. And yes, the figure, we have around 700,000 subscribers already.

This is also something very new. We are building this product from last year. We had it in the friends and family mode, Payme Travel. By this, Payme will be entering travel vertical. And the ambition, of course, is to become the biggest travel agency in the country. We sold last year 1,000 tickets. And this year, once we launched BNPL, we will couple these products together. We will couple it together with Salom Card because Salom Card will offer a 10% cash back on travels.

And basically, these 3 together will give to the customers the best price and best offer on the market. And by this, we hope, and we have seen it in other places, the sales will increase 10x. We intend, hopefully, in summer to have the first month where we're going to sell 1,000 tickets per month.

Now moving to the business side of the ecosystem. I mentioned the use cases we are trying to solve. And we started building this in 2024, actually. September 2024 was the first month when we launched our web app for businesses. It was poor in terms of value proposition, but we developed ever since. So now we have a fully functional daily banking web portal. And we are also launching in March our mobile banking basically for businesses. So we're going to have mobile and web for businesses, and it covers all critical use cases for daily banking for businesses. And we have already 55,000 registered businesses in the ecosystem, and you know that we started our pilot in the first quarter of last year.

We also entered business lending. We started it also somewhere in the beginning of last year. And we already have $94 million portfolio for self-employed people and we have approximately $20 million in the book for SMEs, micro SMEs. And of course, we are further building it out. We are increasing the volumes -- increasing the volumes to our customers, and we are adding some products now. So this will become our and is already our main focus in terms of growing our loan book.

This is another, in my opinion, super strategic tool that we are now scaling. It is one of the main payment apps and interfaces on the market. It's called Payme Go. And what we are trying to do is basically we are trying to build within the interface of Payme many different things. So one is the wallet, so you can link all your cards. And of course, we are showing the Salom Card, which will have the biggest motivation for the customer to be linked into Payme Go. You can scan QRs, you can let your QR be scanned. And you have all the benefits, meaning cashbacks from all cashback providers on the market.

You can also have toggle for BNPL. It's just literally like Wi-Fi toggle in the phone. You have all your loyalty cards inside the Payme Go. Meaning that if you're using a loyalty card from Korzinka, for instance, the biggest retail chain in Uzbekistan, you will -- by paying, you will automatically get the benefits, meaning cash backs. You will get the loyalty points from Korzinka and you will get loyalty points from Payme.

And also transport hub, basically. With Payme Go, you can travel in any transport, basically, bus, metro, so on and so on also. So basically, this will become our strategic answer to payment acceptance. And the key thing here is that it is not driven by the merchant side of the ecosystem. This is driven by the 23 million users because it is already working in TBC and in Payme.

So we will push into the business side of the sellers' ecosystem through our individuals, through our consumers, and we have 23 million registered of them. This is the uptake. In December, we had already 600,000 Payme Go users. And basically, the volumes were USD 38 million through Payme Go, and this is increasing.

Yes, BILLZ. We bought BILLZ -- controlling stake in BILLZ last year. And on this slide, there are many figures, but I just want to explain the main concept why we did it. Basically, it is easier to change a bank for a business than to change an accounting system, than an ERP system, right? Because once you have all your inventory brought into the system, once you have your accountant working with the system, once you are basically linked to it, it becomes heart of your business.

So before changing and trying to switch to a new system, you will think 10x because it increases your switching cost. So mentally, companies tend to switch banks more frequently than their core accounting and ERP systems. And this is exactly why we went through it because it is the heart of the seller's ecosystem that we are trying to build. And we are enhancing BILLZ as much as we can with all our products so that it becomes not only the biggest in fashion retail and in certain verticals, but the biggest retail POS system in Uzbekistan.

Now moving to the customer experience bullet on the flywheel. Basically, we spent all last year in redesigning our both apps. Basically, on the left side, you have the old app, and on the right side, for Payme -- for TBC and Payme, you have the new ones. We are launching Payme in -- on the 26th of March, which is the birthday of Payme. And TBC is already launched to 10%, and we are rolling it out further slowly because it's a brand-new design and then the structure is totally new. So we have to be very careful. But it has shown a very good uptake and very good engagement from the customers.

Lola, you saw it in the clip. Lola is our AI assistant, and we intend to think this way. So -- and this is how I'm always explaining. So if you think about early 2000s or the decade of 2000s, the banks were modernizing their branches. They were saying that basically the branch of the future is coming. And it was more digital and all these kind of words. Then 2010-2020, it was about do-it-yourself trend, right? So we all went into digital mobile banking, and we took out the relationship from the customer. Basically, it was the interface.

And the next decade, basically, in my opinion and in our team's opinion, is about bringing the relationship back into the mobile app, but through AI assistant. And this is exactly what we are betting on. So basically, Lola will deliver ChatGPT type of experience. When you talk to Lola, like the boy, our consumer was doing there, and basically, Lola will be transacting with you, giving you advice on your financial standing and many other things.

We are running Lola already on the friends and family mode. It speaks Uzbek, it speaks Russian. It knows how to differentiate the mixture of Uzbek and Russia, which frequently happens. And basically, it can talk back to you. It is running on friends and family mode. And slowly and slowly, we will be rolling it out.

And yes, Oliver mentioned about our top of mind. We are super proud of it. We are #1 for both Payme and TBC in Tashkent and we are #3 for TBC and #2 for Payme nationwide. And having this result in 5 years, this is really remarkable and the fantastic work of everybody in the team.

And final slide, flywheel again, and 2 sides of our ecosystem. The main thing I just want to mention here are all these lines between products. The whole idea which we try to put visually is that within the ecosystem, all products should support each other so that they can enhance themselves. For instance, Salom Card in travel brings more customers to travel. Travel offers better discounts for Salom Card. Then we have for the tourist agency a working capital loan from TBC business, and so on and so on.

So the whole idea of the 2 sides itself reinforcing ecosystem is to make sure that there are products that work together and there are customers and businesses that see value in the content that is creating on the platform. So the more content there is, the more businesses and customers they are on the platform. Thank you.

Sharof? Sharof is our new incoming CFO for the group in Uzbekistan, and he will be telling you some commercial metrics. Thank you.

Thank you, Nika. Good morning, everyone. As Nika said, I'm Sharof, the CFO of Uzbekistan business. And what I would like to tell you about -- today is about how everything you have heard earlier from Oliver and Nika fit together to deliver our financial results.

In this section, I'll be covering the pace of our growth, our ability to rapidly scale new products and diversify our revenue base and the foundations of our financial strategy. As highlighted by Minister Kudratov and Oliver, Uzbekistan is growing rapidly, thanks to a favorable demographics, solid reforms and growing digital adoption.

Over the last 5 years, Uzbekistan on average has been adding 1 million people to its population every year. And we, TBC Uzbekistan, have been doing exactly the same in terms of our active user base. We have done so, as highlighted by Nika, by focusing first on the retail side of our ecosystem. Every second person today in the country has had some sort of interaction with TBC Uzbekistan.

We're now excited to be growing our capabilities on the business side of ecosystem as well. It all comes together to highlight that we are a rapidly growing ecosystem in a fast-evolving environment. But we are not looking for growth at any cost. In fact, we are optimizing for the profitable and sustainable growth trajectory, and cost of customer acquisition is paramount in this respect.

We are proud of the fact that we spend on average about $1.42 in digital marketing costs to attract a new user. This figure not only compares well to our global peers, but also has halved, as you can see, over the last year or so. This low CAC is one of our key strengths because it allows us to rapidly scale and launch new products, including when we are cross-selling products such as Payme Plus and Salom Card throughout our ecosystem.

However, building an ecosystem is not cheap. You need to build foundations across a number of verticals, which often means costs upfront and payback in revenue later. We are acutely aware of this, and that is why we focus on growing our revenue per user year after year. That figure has grown at over 60% in the last 2 years and increased from $37 to $86. This metric is a key element of our unit economics trajectory. And going forward, we'll be increasingly assessing it separately on a per user and a per business basis.

Our vision for the ecosystem relies on the abundance of relevant and tailored products. Over the last 5 years, we have developed a range of almost 30 essential and high engagement products. The fusion of innovation and crossing the chasm models are not simply theories to us. In fact, they are the reality that we live with every day.

Thanks to our strengths on the customer acquisition and productivity front, we are regularly launching products such as Salom Cards and moving such products across the chasm, which often separates early adopters from the mass market.

Thanks to our strength in product innovation, we are actually also able to actively diversify our revenue base. Our vision for our business model is not about building a bank plus, plus, but rather building a holistic ecosystem. And we are regularly looking to develop new sources of high-quality non-interest income.

Fees and commissions today already comprise about 24% of our gross revenues, but we are actively looking for every opportunity to further improve that ratio and challenge historical dominance of P2P transfers in that space by rolling out new products such as BILLZ and service payments, subscriptions and our most recent success, insurance.

As noted by Nika, we are now assessing our financial performance from a perspective of core verticals, each structured around a key customer need that we cater to. From a financial perspective today, these verticals are spending, borrowing, saving and protecting. And we already have critical mass across all of these verticals.

In spending, we are very much proud of our 20% market share in payments and 6% market share in cards. In borrowing, despite our relatively recent entry into the MSME segment, we are -- our market share there, about 3%, is already coming close to our 5% market share in retail loans.

In savings, even without physical branches, we are already the 10th largest bank in the country by the size of retail deposits with about 4% market share. And finally, and as a testament to our product innovation strength, in protecting, we have built the second largest life insurer in the country with over 20% market share in just 9 months last year.

If we look at every vertical in a bit more detail, we benefit in the spending vertical from a sustained growth in the volumes, supported by the deepening customer engagement and increasing use cases. Our GTV grew over the last 2 years at over 60%, almost 70%, and it highlights the role which our platform increasingly is playing as a high-frequency everyday payment utility for millions of users.

We process on average about 1.6 million transactions per day with an average value of $16, which creates a large, scalable and recurring base for this vertical, all the while supporting us from a fees and commissions perspective. This vertical generates very attractive sources of fees and commissions income for us.

Usage-driven recurring revenues are the backbone of the scale of this vertical. Overall, this vertical has generated just under $70 million in gross revenues for us in the last 6 months and -- characterized by high user engagement and capital-light economics.

Our borrowing vertical has achieved a remarkable scale since inception. Our loan portfolio today stands at just short of $1 billion and has been growing at over 70% annually. We have disbursed over 6 million loans since inception with an average $600 value, which creates a large basis for the scale in this segment, all the while providing us with solid interest margins.

Retail segment and ICL, in particular, still dominate our loan portfolio at 83% and 65%, respectively. However, the business segment is growing rapidly and came to comprise 16% of our total loan portfolio at the year-end, fueled, in particular, by the growth in products such as loans to self-employed and loans to medium enterprises.

In our saving vertical, we offer simple and high conversion products. They fulfill a key saving need for our customers, both in the mass retail and the business segment. Here, we build the deepest form of a banking relationship, all the while gaining a stable source of liquidity.

Our deposit portfolio crossed the $0.5 billion mark last year and has been growing at almost 70%. And Salom Cards, one of our key product success stories, have been paying dividends in this vertical as well, thanks to its innovative product structure that allow us to gradually acquire primary current account relationships with our retail customers, even though in Uzbekistan these tend to be tied to the wider corporate banking relationships of the employers.

And finally, protecting, our most recent addition. It represents from our perspective, a highly attractive market segment and offers opportunities to cross-sell significant products across our ecosystem. Even at this early stage, the traction is strong with almost every second a new ICL being covered by insurance.

In the near term, we'll be looking to expand our insurance coverage to other products in other verticals, products such as loans to self-employed in borrowing and credit cards in spending. For us, this segment represents a very attractive monetization opportunity to cross-sell insurance products throughout our ecosystem, all the while generating additional income streams from yet another capital-light source.

In conclusion, I would like to leave you with a small set of key metrics. These provide a helpful context about how we think about value creation as we execute our financial strategy going forward. As of the end of 2025, these were our market share across our core verticals of about 8%, an engagement overlap between the core verticals of about 25% and net income per user per active client of about $8.

In the near term, our financial strategy will be focused on the following 3 clear priorities: number one, expanding market share by leveraging scale, brand strength and product depth; number two, increasing cross-vertical engagement among customers by growing the number of products per customer; and finally, number three, enhancing net income both per user and per business for improved product mix and pricing. We are excited about the market that we operate in and the potential of our business. And I look forward to sharing more with you about our journey going forward.

At this point, I thank you for your time and attention, and I hand over to Andrew, who I think will kick off our Q&A session. Thank you.

Thank you, Sharof. Okay. So we're now going to go into the Q&A session. And I shall be joined on stage by Vakho, by Oliver, by Nika, by George and also by Giorgi Megrelishvili, our CFO, who I think all of you know well.

We should have some mics. Or maybe I have this -- so to kick off, it would be great if you are joining online. Please put your question into the chat, and we'll try to go through as many of them as possible. But first of all, if there's anybody here in the room that has a question, please go ahead and feel free to ask our management team anything you like. Thank you. Ted?

[Indiscernible].

Sorry. Hold on just one second. We need a microphone.

That was a great presentation, guys. You did a great job talking about the huge runway for growth in Uzbekistan. But coming back to Georgia, when you think about banking penetration rates there and the fact that you guys are kind of in a duopoly, just give me an idea on the kind of long-term revenue pool and kind of banking penetration metrics in Georgia that make it still an attractive market.

Georgia, as we discussed, has a great macro growth still, 5% on average per annum. So great potential. What we see from a loan perspective to answer your questions directly, we need to be on loan growth somewhere from 10% to 15% depending on the [Technical Difficulty]. Also -- can you hear me better? I think it was mute. So to repeat very shortly, we need to expect at least 10%, double, let's say, digit growth, 10% to 15% for loan growth.

I won't go into details. But as we highlighted, we do believe that Georgia's net profit will also grow double digit, like 10% to 15%, depending on the year. So Georgia, although not as a huge potential as maybe, let's say, our Uzbekistan business, it has great potential. It's still a very much growing business, and more to come in the coming years.

Next question. Dan?

You mentioned the potential IPO of the international business a few times. So maybe you could talk a little bit more about the timing for that. And then also maybe relatedly or perhaps separately, talk a bit about your thoughts on entering new markets aside from Uzbekistan?

Yes. So a potential listing is one of the ideas that we're thinking about. So there's no final decision in terms of timing, where that venue might be, but it's something that we are thinking about very, very seriously because it kind of makes sense in the longer term as we crystallize value for TBC Group in terms of what has been successfully built and scaling in Uzbekistan. So watch this space. You'll get more information over time if that is actually what we decide to do.

In terms of international, we potentially -- yes. So we've always made it clear that we would think about market #3 once we have Uzbekistan executing, scaling up and running on the track that we want it to be. It's a little bit early. We have tons of stuff going on in Uzbekistan. And as you can see, we're doing all sorts of build-outs. We're building vertical by vertical and scaling in all sorts of different directions.

So we've got all hands on deck as we execute and build out that track record in Uzbekistan. So it's a bit early to think about market #3. We have a few ideas, but we will come back to that and communicate to investors over time.

Any further questions in the room?

Don't be shy.

Yes, Roman.

I noticed that you were more willing to offer targets, numerical targets for Georgia than you were for Uzbekistan over the next several years. So I'm just wondering if you could maybe shed a little more light in terms of what you expect for profitability segment by segment and how the market might look?

For Uzbekistan. So we'll do this together with Nika. You snuck in quietly there. Good to see you. So we actually gave quite a few numbers. We gave an ambition by 2030 of $250 million of net profit, a $3 billion loan book ambition. We believe that we can grow our market share of -- our share of net revenue for financial services covering MSME, retail and payments from probably around 8% today to over 10% in 3 years' time, by 2028.

So we gave you a few kind of helpful numbers. Sharof gave you some unit economics or something that's very close to it, which helps people move in the right direction if you're thinking about building the models, which obviously we understand analysts quite often want to do. We didn't give granular numbers in terms of, let's say, market shares for different product lines. Partially that is because it's a market which is forming, and maybe the data is actually shown in slightly a different way in terms of central bank reporting, for example.

But you can see from the trajectory that we have in many of the products that we've been building and launching and scaling over the last 2, 3 years, where this is going to take us. I mean we can obviously separately go through some of the numbers, if you like, and explain a little bit more as to how some of the numbers that Sharof was sharing will actually feed into the bigger picture, but that's basically where we are today. Nika, I don't know if you want to add anything to that.

I said one more figure, which is 10 million monthly active users by 2030, which is almost doubling of the base in just several years. And this is massive as well.

And in addition to that, we told in our presentation that in 2030, we want to have Uzbekistan deliver 25% of the net profit for the group.

Next question.

My name is [ Tayona ]. I'm native Georgian that grew up here in New York and seeing TBC Bank here for the first time. I just want to congratulate you for such a successful conference. So thank you for having us here. My question is for Nika. What would you say had the biggest impact in terms of growth in Uzbekistan, given that you've only been there a little over 5 years?

And then a question for Vakho. In terms of the U.S., are there any plans for the U.S.? Are you thinking about having more events like this here? Or any future plans regarding United States?

Yes, so -- I don't have one. So...

Yes. So the biggest impact, I would say, is what Oliver mentioned, is the fact that Uzbekistan is getting younger every year. And this automatically feeds into digital adoption. And this is massive. So basically, if you look at the penetration figures of smartphones, Internet, data, all this that is important to build a proper digital business, basically, these are very high comparable to very high penetrations in other markets. So in my opinion, this was the biggest factor that helped us to launch successfully.

And another cultural thing, again, in my opinion, linked because of the age, average age being so young, is that the people in Uzbekistan are very adaptive to new technologies and new tools for their daily life. And us offering, for instance, a cash loan that can be granted -- decided and granted within just several minutes, it was a massive transformer. So basically, these kind of things really made it happen.

Yes. And it's very logical. As you see, as TBC Group here in New York, it means that this market is very important for our development. And already, just to remember you, 25% of the existing investors we have from U.S.A. And especially last 2, 3 years, we see growth of the new type of the investors, so-called growth investors as we begin to grow up our business in Uzbekistan. To summarize, we think it is very important. And Investor Day, we are not doing every year. It's once in 3 years, and we decided to come to New York for this.

Okay. There's a question over there.

I have a question about the customer acquisition cost in Uzbekistan. It was interesting how it increased a lot from '23 to '24, and then it's obviously come down a lot since then. Wondering if you could just explain the trends, like what caused it to go up so much? And then why has it come down?

Sharof, do you want to take this one? I'll give you a chance.

I think the short answer is it takes a lot of more effort at the beginning to acquire critical mass. And then as I think was highlighted by Nika and Oliver, you get into the self-sustaining ecosystem effect. We have been spending quite a bit in the early periods on marketing cost. And I need to be clear that marketing cost is not the entire customer acquisition cost. It's just one of the elements.

So that is why you're seeing the trend as it is. We have basically accelerated in last year -- sorry, the year before. And then as we start coming into a critical mass, we're now reaping the benefits of it from economies of scale. Hopefully, that answers the question.

Just to add one more point. It's important to consider that when we entered Uzbekistan in 2019, the first step was acquisition of Payme, right? And you may think that Payme already gave us several million customer base, which is not true. So Payme back then had around 700,000 to 800,000 customers.

So basically, the growth from 700,000 at the start to 23 million is a massive effort. And as Sharof correctly said, initially, you invest a lot and then you are trying to cultivate your own customer base already because there are referrals, word of mouth and all these kind of things that kick in. That's why it is optimized and coming down.

Maybe we can take one of the online questions, and it's coming back to Georgia. We got a question from Dmitry at Wood about what our plans are in terms of capturing market share in Georgia. We talked obviously about looking to grow market share in various segments. And where do we think the majority of these gains will come from?

Sure. I think the structure of our presentation and participants is answering this question, right? We specifically invited Nika and Ivano to present mass retail banking and payments. These are the 2 areas where we would like to grow and further strengthen our positioning.

And I think the strength will come through the focusing on real customer experience and our clients, listening to them, but also through the -- our data analytics and AI capabilities, anticipating their needs and then executing on them. And we believe there is also amazing cross-sell protection -- potential with our MSME and corporate banking because we are holding close to 44% market share, and there is an amazing opportunity to cross between these 2 lines.

There's a couple of questions, coming back to Uzbekistan, on the regulatory environment and how we see ourselves kind of negotiating that over the next few years and how this impacts the way we think about transitioning the business from consumer to business.

Yes. So firstly, every country that is on this trajectory of growth and reforms has the regulatory framework that is constantly changing, adopting and developing itself. So this is kind of -- nothing strange in this. The point is from our side that we have to be adaptable, flexible and very good in pivoting from one side to another. And this is exactly what we did.

I mean in the group, TBC has massive experience in business banking. We have -- I don't remember the last figures, but around 40% in MSME banking in Georgia. We have a very strong team that did this business, including myself for many years. So we are now successfully pivoting into SMEs, which was, in any case, a plan -- initial plan in terms of sequencing.

First, we were trying to go into consumer, build the scale and then bring in the business customers. And we started that in 2024, actually before the regulatory environment started to change significantly. And now we are in good shape to continue and deliver on the regulatory needs and requests and on our business plan.

Just to add to that very quickly. So obviously, we've done lots of investor communications around this over the last 6 months or so. So Andrew, Giorgi and myself, we met lots and lots of investors to discuss this. And we've been saying that there's been a lot of regulatory changes over the last 6 to 12 months, and there will be more.

So there's more stuff coming down the tubes. And everybody has to be aware of this. But we're able to adapt. We're in a market where there's lots of things happening to all the players at the same time. And we're technologically enabled. We're able to move very quickly. We have a very experienced seasoned team, as Nika has said. Sometimes markets go through these processes. They're necessary. And we'll come out in the next 12 months or so and go back into growth.

So another question has come in from [ Rahim ] at Cavendish. It's about the potential IPO of the Uzbekistan business and just whether we can elaborate at all on kind of structure this would take or -- so...

Yes. So basically, I think the answer is the same as we gave before. We just don't have details at this stage. It's one of the strategic options we're considering.

Okay. And another question, given the various moving parts in terms of the business, is there any guidance we can provide generally on how we think about cost growth and the cost-income for both Georgia and Uzbekistan over the next few years?

I'll take this one. So overall -- I'll just answer at the group level. We do probably continue double-digit growth for a year or 2, both in Georgia and Uzbekistan. In Georgia, obviously, it will be lower. We do target -- like to move gradually to high single digits, maybe not this year, but next year.

We do target our cost-to-income ratio to be mid to high 30s, at the moment where we are, and we target to decrease it. Ultimately, what it means, we are targeting to grow our revenue more than costs. So that will be our key target. And we ensure that every dollar we spend generates more revenue, therefore, even strengthens our already very good profitability.

Okay. So we've got a question from [ Sasha ] at Prosperity. It's around the longer-term return on equity that we think about in Uzbekistan. And he's generally asking, we're talking about earning $250 million plus of net income. And just some thoughts on how high you think the kind of return on equity can go in Uzbekistan.

So in the presentation, we highlighted that by '28, we target mid-20s, but it's just the beginning. Over coming years, on a normalized basis, we don't see any reason why it should be 30-plus. So it will be gradually building up. This year will be pivotal probably, coming up to the mid-20s and going 30-plus.

Okay. A question from Kevin at Wasatch. What makes you confident in terms of growing the Uzbek loan book this year given overall the kind of pivoting of the business? And could you also comment on how you see the outlook around cost of risk, particularly given the launch of new products?

So what makes us confident is our product pipeline and the business generation capabilities we have in the team. Basically, we know exactly what we have to do, and we are executing on that plan. So there is no whatsoever worry that we won't be able to do it. It takes time, and we will have the bump back to growth very soon. And we are already doing lots of things in terms of disbursing new loans and new type of loans.

Again, we have to remember that in the beginning of last year, we had very few business loans, and the business loans were mostly in the consumer finance book. They were not called business loans. Now we look at the book and it's around $130 million already 9 months into the business. So we are sure about our execution capabilities. The digital marketing force is massive. And that's why we think it's doable and growth is very soon to come again.

And maybe just to add to that very quickly. So we have different balance sheets inside TBC Uzbekistan, inside the group, and we can deploy them for different product sets. So that's also an important part of the answer to Kevin's question.

Yes. Maybe to elaborate, we have microfinance institution with its separate license. We have BNPL institution. We have a leasing company. We have a bank. And all of them are growing.

Okay. Another question in terms of -- I think George talked a little bit about some of the AI initiatives that would boost revenues and potentially cut costs. So any kind of further details on that?

Sure. It's a good question. And actually, I had an opportunity to discuss it with our guests during the break. So as I mentioned -- like I'll give you an example from the CIB, not only what we will be doing, but what we have been doing starting from last year, 2025. So this benefit is coming both from the revenue uplift type of projects, but also the cost efficiencies. And there were like 3 projects we are estimating where we will get this 20% revenue share over the next 3 years.

One is our CRM system. And we are now moving to the bionic model when AI and the relationship manager will work on the client portfolio and will generate tailored offers for clients, considering the sector they are representing, the profitability that they are targeting and also the behavior that we are seeing in the online banking, in the other channels of the bank. And this will be generating uplift in the penetration and share of wallets. So this is an example where we will be generating more revenues from the same customers.

Second project that I wanted to also highlight is linked to the cost efficiency. So as I already mentioned in the presentation, the main product is the lending for corporate business. So that means that writing on the and working on the analysis of the financials of the businesses. Writing the credit memo is the major part of our business, and we have the highest headcount there.

So we are moving to the generating of the credit analysis and paper supporting with the support of AI. And by the end of this year, it will be already 50% that will be generated through the AI. So that means that we will need less resources. And as we will be growing, we will not need to grow with the same pace we were growing last year. And this will be supporting the targets that Giorgi highlighted. So this is another very, very clear example.

And third, we are in the world where the compliance and regulatory needs are changing. And many of our clients are learning about this requirement when they're initiating transparent, different type of payments. Currently, integrating the AI chatbot within our Internet and mobile bank for business customers gives them the opportunity to know in advance what type of documents and precheck they need to go through to execute the payments. So this will save the time not to have -- not to be proactive rather than be reactive. And also saves the time to interact less physically with the banking representative rather than do it through the online channels.

Some questions from Simon at Citi. Could we elaborate a little bit more on how we manage and operate the 2 different -- our 2 different core platforms in Uzbekistan, TBC Uz and Payme.

How we manage. We manage well. And basically, they have 2 distinct roles in the customers' daily life. So Payme is for daily payments and everything around that. And TBC is for daily banking and everything around that, including lending. So these 2 apps are reinforcing each other.

We are connecting more and more customers from one platform to another, and I mentioned some of the tools today. It is subscriptions. It is loyalty platform. It is Salom Card that is present in Payme app, and so on and so on. So basically, they're feeling each other rather than creating as a headache of managing 2 platforms.

And a question, another one from Simon on whether we've identified other potential markets where we think we might need to replicate the kind of successful entry we've had in...

Outside of Uzbekistan?

Yes. Yes.

Yes. So we've been through a bit of a thinking mental exercise in terms of looking at different markets to understand where we may be able to deploy a similar business model and deploy our tech stack, which is purpose-built for Uzbekistan. We have, let's say, a short list of potential candidate markets. But we are doubling down, tripling down in Uzbekistan at the moment. So that idea is a very slow burning idea in the background, and it's just a little bit premature to start sharing some of that detail. But there are markets out there which are of interest over time.

And then the final question was...

[ Bob Cavati ] on -- 2 questions on the markets. I guess help us just understand what would make -- what would shape your decision other than -- it could be capital commitment, it could be size of the market growth, et cetera, or any sort of pre-existing synergies, regional synergies between the countries. Like how would you make that decision? I understand it could be still a bit away. That's one question.

Second question, in Uzbekistan, there are multiple brands. Is there any thought in the future about merging the brands under one umbrella, like one app, one super app?

You take the second. I'll do the first. Yes. So in terms of identifying market #3, so we have a framework, and in that framework, there's a lot of parameters to help us make this kind of selection process through the funnel. So can we get a banking license, for example. Is there a path to a banking license. Does it have the right regulatory framework. What's the GDP profile of the country like. What's credit penetration to GDP. A lot of other parameters.

There's also a proximity parameter to our home markets and can we attract talent. So there's a lot of criteria that we would bring to bear when the time comes, which is not now. But we have a way of thinking about this.

Yes. And on the second question, we are not thinking about merging the brands. And we know what this means and the negativities we may get out of it because brands are loved. Payme is loved. Payme has massive love in reality. We have measured it and we know it. The same for TBC. So if suddenly one of these 2 disappears, there will be loss of customers, and we don't want to have it. The same for BILLZ.

What we are thinking and entertaining is to have somehow mentioning of more that this is all TBC to enhance TBC brand, but this also has to be introduced very carefully. So we are not rushing at all. What we are making sure is that the platforms cross-communicate the way I was explaining, so that there is Salom here, loyalty there and all these kind of links between the products.

Thank you. And just to say, Minister Kujaratov now has to leave for an interview. So Minister, thank you very much for your attendance...

Once more on behalf of TBC, thank you very much, Mr. Kujaratov.

[Foreign Language]

Okay. So another question from Simon is on how we think about the fee income outlook in both Georgia and Uzbekistan. And particularly in Uzbekistan, where obviously there's a lot of regulatory change affecting the way that we're thinking about lending, does that have any impact in terms of the fee income outlook in Uzbekistan? And in Georgia, obviously we're rolling out a lot in terms of TBC card and how we think about how the fee income outlook in Georgia can evolve.

Let me cover the Uzbek part, and I'll hand over to Giorgi on the Georgian part. From Uzbekistan part, I should say, and hopefully, you saw that throughout the presentations we made, we are great fans of an ecosystem impact, right? And it's not for just a single reason. There are a number of reasons. But one of the key reasons from my perspective is the capital efficiency of it. Focusing on simply growing banking-related revenues is very attractive, but nevertheless, it requires consistently larger volumes of capital.

Now fees and commissions, on the other hand, from my perspective, are relatively efficient. Yes, there is some capital requirements in some instances. But at the end of the day, they are more efficient than borrowing. From our perspective, we are very focused on growing the ratio, which I mentioned previously, the share of our gross revenues which is coming from fees and commissions.

There are a number of initiatives which we're exploring, including one of the particular products which we're looking to launch later in this year in conjunction with what we're trying to do for the MSME segment around foreign currency transactions, the FX business. So we believe that could be yet another stool or another leg to our fees and commission potential. And Giorgi, I guess.

So on the long term, short term -- so on the long term, we do expect our fee and commission income to grow, probably starting from next year, high single, double digits. My colleagues highlighted exactly how it will be done with the new products, penetrating markets. So as I highlighted previously, for '26, this outlook doesn't change. But it's temporary, only '26 to be flat or maybe decreasing. But our operating top line will grow by double digit. Our net profit will grow double digit, '26. And over long term, our fee and commission income will also grow double digits. So that is the answer to your question.

That basically brings the Q&A to an end. We don't have any further questions. Oh, we have one more in the room. Yes, please go ahead. If you could introduce yourself, that would be great.

My name is [ Miro ]. I'm Georgian. I work for JPMorgan Chase as a business relationship manager. Great presentation. I remember a couple of years ago, I spoke with Mr. [ Talent ] about TBC Group entering Uzbekistan market. And impressive progress and achievements group made. So congratulations on that.

My question is for Mr. Kurdiani. You discussed business owners offering business products in Uzbekistan market. And more products you are signed up for, less likely you were going to leave the bank. So it's going to make you more loyal. You mentioned you're offering some lending products, some investment products, advanced online banking.

I have 2 questions for you. When we say lending products, what does it include? Is it just a combination of credit cards and loans? Would it include line of credit now or in the future? And the second is if TBC Group is planning offering 401(k) services for business owners, like retirement services?

So firstly, we don't have investment products yet. This is something we are exploring because the regulatory frameworks are changing. So we may have a situation where people in Uzbekistan can invest in stocks, and we will be doing that for sure. On the business side, we, for now, are lending small ticket working capital loans.

We currently are developing the collateral platform that will enable us to go into bigger volume business loans, which will be collateralized, and we will have credit lines and investment loans there as well. And currently, we are working on business overdrafts and factoring products. We are exploring this market because there is a market in Uzbekistan for factoring. And of course, overdraft goes hand-in-hand with the daily banking for businesses. On pensions, no -- I mean, there is no such thing in Uzbekistan yet and we are not offering that.

We actually have another -- a couple of...

[ Isaac Schwartz ]. I wanted to ask something about the Georgia market. Clearly, the sad war in Russia and Ukraine has been a really big stimulus to the Caucuses in general, and Georgia has been a huge beneficiary. And everybody prays for people in those affected countries, that there'll be a resolution. And potentially with the new U.S. administration, there actually will be. And so I was just wondering how you estimate the kind of anti-stimulus effect. As we understand, it's been very potent in Georgia and Armenia and maybe to a lesser extent in the Central Asian states. So that's it. That's my...

And you are right. So we covered in our part of the presentation that the real GDP growth in Georgia last -- not in 2025, but last 3, 4 years, it was more than 7%. And forecast for '26, '27 is 5% plus. And we believe it's a pessimistic assumption what we see already in January and February of 2026.

And in addition to that, we believe there will be some kind of the resolution find out in Ukraine. But we believe that not only for Georgia, but also for the region, it's extra upside because that resolution will bring more stability in the region, including Georgia and Uzbekistan. And probably investors from their side will decide to make more investment than they are doing today.

[Indiscernible].

Yes. Not just in a short term, but in the medium term we believe that after the resolution, the cost of equity in Georgia and also in Uzbekistan will go down.

One thing to add as well. We will have opening of the big market that is closed for Georgia at the moment. Currently, we can't trade with the countries that are in war. But once the resolution is find and gradual sanctions are lifting up, we have a huge market at the moment, like 2 or 3 huge markets that will open for Georgia, that will bring some, let's say, additional benefits. Therefore, they will be negative, they will be positive. There may be timing lag. But overall, in the medium term, we don't expect any material negative impact.

Just a couple of final questions online. So coming back to Uzbekistan, there's a question from Alex at Roemer around our loan growth forecast generally for the sector and that we see the potential for retail and SME lending to almost double over the next few years. And do we feel that, that kind of squares with the central bank looking to try to kind of cool down certain segments of the market like consumer lending? And is that feasible? And just the second question is how we think about the evolution of the net interest margin in Uzbekistan over the next few years?

Sure. So the numbers that I gave where it's going to grow almost doubled to $41 billion, that's the total loan book for the country in retail and MSME. So MSME is going to be growing much more quickly. It's very underpenetrated. But that would still only take the level of penetration for the country for retail and MSME loans from the current 15% thereabouts, of which 11% is retail -- so a very low level of penetration retail to GDP -- up to around 18% by 2028.

So that's -- again, just to reiterate, that's including retail and MSME. So that's a very low number. So MSME is only 4% of MSME lending to GDP, which is super low. So they don't feel like they're stretching credibility in terms of the growth numbers. Yes, the central bank is very careful about unsecured consumer lending in particular but leverage in general. And they're quite right to do so because the country from a low base, but it is growing -- has been growing quite quickly in terms of consumer lending. And they're very cognizant of the fact that they don't want to see the loan book getting out of shape across the country or any bubbles appearing. So they're trying to cool that.

But still from a very low base, you get the base effect. I don't think that looks like a particularly challenging number in a country where the GDP is growing at such a rate, over 7%. So we'll see how that goes. But I think they feel like the right numbers.

In terms of net interest margin, which I think was the second question from Alex, yes. Our NIMs came down a little bit as the loan book changes. So the mix in our loan book in Uzbekistan is changing quite a lot, especially as we pivot during this critical year. So we're seeing more MSME loans. The working capital loan portion of that, in particular, has lower gross yield. So that changes the loan mix and the resulting NIM.

We have secured loans. Nika was explaining we're going to start with car loans, and there will be secured loans for SME. And that also has a very different pricing profile. We have credit cards, which probably take it the other way. So there's lots of things going on in the loan mix, which will be moving the NIM around. But a lot of that is offset by the fact that our funding costs are coming down really quite quickly, at quite a clip, and that will be accelerating.

We have a bit of a lagged effect on the funding side due to deposits. So you reduce the headline deposit rate, and it takes a while for that to kick in because people top up the old deposits. So you actually have the inverse effect in the short term. But that will all play itself out through this year. We've communicated that we think we can have a NIM which will recover to around 20% at the end of this year and will be sustainable going forward. So around 20% NIM, more or less in that ballpark we think that's a sustainable number.

Thank you, Oliver. Okay. I think we've reached time on the Q&A session. So thank you very much to the management team for coming up and answering the questions. Thank you very much for all of those who asked questions online in the audience. And thank you, everybody, for both being here today in person and online and taking an interest in TBC and our story.

And we look forward to continuing to communicate with you over the next few years as we implement the strategies that we've been outlining today. So once again, thank you very much for your attendance. Thank you.

Hello, and welcome, everyone, to the TBC 4Q and FY 2025 IFRS Results Conference Call. My name is Becky, and I will be your operator today. [Operator Instructions]. I will now hand over to your host, Andrew Keeley, Director of Investor Relations to begin. Please go ahead.

Thanks very much, Becky, and welcome, everybody, to TBC Group's 4Q and Full Year 2025 Results Call. It's great to have you with us today. As usual, I'm joined on the call today by our Group CEO, Vakhtang Butskhrikidze; our Group CFO, Giorgi Megrelishvili; and we'll also be joined for Q&A by Oliver Hughes, our Head of International Business. We'll also start with a presentation from Vakhtang and Giorgi and then go to Q&A. And with that, I'll hand over to Vakhtang. Thank you.

Thank you, Andrew. Hello, everyone, and thank you for joining us today. I am pleased to present our results for the fourth quarter and the full year of 2025. Overall, we had a very good final quarter, bringing 2025 to a successful conclusion. For the full year, the group delivered over GEL 1.4 billion net profit, up by 9% year-on-year with 24.2% return on equity.

As for the final quarter, it was a record quarter in which we also printed our highest return of equity of the year with almost GEL 390 million net profit and 24.9% return of equity. It was an excellent final quarter for our core Georgian franchise with net profit up by 15% year-on-year and 25.7% return on equity, driven by a strong combination of robust loan growth and net interest margin and low cost of risk and strong cost controls.

The quarter was more mixed in Uzbekistan as the changes in regulations that I have previously discussed meant the slight contraction in lending, impacting revenues and earnings. That said, taking the year as a whole, the team made a huge progress in scaling up the business, including 45% loan growth year-over-year, 67% revenue growth and almost 1 million daily banking Salom card issued and digital MAU topping 6 million.

As a result of our strong operating performance and the solid capital position, the Board has declared a final dividend of GEL 3.87 per share, bringing the total 2025 dividend to GEL 8.87, which is a 10% increase year-on-year. I won't dwell too long on this slide, but the main point I want to get across is that 2025 is another example of the TBC's long-term track record of delivering a nice combination of growth, profitability and returns.

Moving to our 2025 targets. Overall delivery against most of the -- overall, delivery against most of these targets has been good. Our digital monthly active user numbers have almost doubled over the past 3 years to 7.3 million. We have also consistently maintained return of equity above our 23% target level. Similarly, we have been paying out at the top of our guided range. As we discussed at the third quarter results, unfortunately, net profit in 2025 came in lower than targeted due to some challenges in Uzbekistan. That said, taking the past 3 years as a whole, we have still grown our group's earnings by over 40%. We also delivered 90% loan CAGR in Uzbekistan above our target and comfortably surpassed our 5 million monthly active users target.

Turning now to Georgia. As you can see, the Georgian economy remains strong with the real GDP growth standing at 7.5% in 2025. We see growth starting to normalize, but our economies and IFIs like Monetary Fund and the World Bank still expect around 5% growth in 2026, which is not a bad figure at all. The inflation rate is slightly above NBG's 3% target, driven by the combination of a low base of effect from 2024 and elevated domestic and global pressures on food prices. That said, we expect the NBG to resume cutting rate this year as inflation trends back down.

2025 was a strong year for our business in Georgia. We had a number of good operational achievements through the year. This included our flagship daily banking TBC card hitting almost 1 million cards in issuance, a doubling of our retail brokerage customer base to over 100,000 and 50% growth in our market-leading affluent product, TBC Concept. We also saw a number of tangible developments driven by AI with our mobile application chatbot launched in September and already handling over 100,000 iterations a month with a 50% of floating rate.

I like the next slide as it shows the highly consistent performance of our Georgian Financial Services business over the past 3 years as we continually delivering mid-20% return of equity.

We continue to be a leading player across most of the key banking segments in Georgia. In 2025, our gross loans were up by 11% year-on-year. I'd like to highlight particularly strong performance in cash loans, a key focus area for us, where our loan book portfolio grew by 36%. Meanwhile, our Georgian customer deposits decreased by 12% over the same period.

Digital engagement among our retail customers in Georgia continues to grow. Having brought our core banking technology platform in-house, 2025 was a year when we started to clearly see the benefits of having full control over all aspects of our digital banking. With faster deployments and the revamped customer experience, we have been strongly increasing our digital customer base. We added over 250,000 customers during the year, growth of 24% year-over-year. Engagement levels also remain very high with a 47% DAU to MAU ratio, and we continue to see very high levels of digital unsecured loans and deposit issuance.

Now let's turn to our Uzbek businesses. Starting with the economy. The Uzbek economy remains highly dynamic with real GDP growth of 7.7% in 2025. Inflation continued to decline to 7.3% in December. Importantly, seasonally adjusted annualized monthly inflation is now below the CBU's 5% target, which we think will help enable interest rate cuts this year.

Next slide highlights some of the key milestones in our Uzbek business in 2025. We scaled up our business in a number of areas during this year. In business lending, we have issued over 130,000 loans, while our BILLZ acquisition gives us access to more than 3,000 retail merchants, processing over $1.4 billion of transactions. At the same time, payment volumes have increased over 60% year-on-year to $9.2 billion. We have also had a great take-up of our daily banking products such as Salom and Osmon cards. We also now have an excellent 600,000 Payme Plus subscribers as we deepen engagement with our ecosystem customers.

On the next slide, we have an overview of Uzbekistan's progress over the past 3 years. During this time, we have more than doubled our registered users to 23 million, and we have hit 6 million monthly active users. As I mentioned earlier, our loan book has grown at 90% 3-year CAGR, while our retail deposits have increased at 65% 3-year CAGR to around $550 million. As mentioned previously, we saw a softening of operating income and the net profit in the final quarter. But for 2025 as a whole, operating income grew at excellent 67%, while we returned our 18% return of equity.

Next slide shows Uzbekistan increasing market share and the material contribution to the group. By the end of 2025, our market share of our retail loans and deposits stood at 4.2% and 3.8%, respectively, as TBC established itself as a top 10 bank in both retail loans and deposits. In 2025, Uzbekistan contributed 9% of the group's net profit and 20% of the total operating income.

Before handing over to Giorgi, I'd like to mention a couple of other important pieces of recent news. As you may have seen, we recently announced some changes to our management team. I have decided to commit my time fully to my role as the Group CEO, which will enable me to focus more closely on overall group strategy, including our business in Georgia and Uzbekistan as well as exploring international opportunities. As a result, Goga Tkhelidze will take over from me as the CEO of TBC Group Georgian subsidiary, Joint Stock Company TBC Bank, effective from the 1st of March, subject to the regulatory approval.

Goga has been Deputy CEO for 12 years, the last 10 years of which he has been running CIB and Wealth Management. During this time, he has built these businesses into a dominant franchise player today. I'm very confident that Goga will be a great leader for our Georgian business.

The other news, as you probably already know, is that we will be holding our Strategy Day next week in New York on Tuesday, 24th of February. I very much like forward to welcoming you to this event. And for those who are unable to join in person, there will be a live webcast as well. With that, I hand over to Giorgi.

Thank you, Vakhtang, and thanks, everyone, for joining our call today. Now I'm going to take you through our full year and Q4 results. Andrew, if we move to the Slide 20, that shows our strong profitability. So the first quarter was a record quarter, again, where we delivered GEL 387 million net profit, up by 16% year-on-year. That translated into a very solid 24.9% return on equity and full year profit exceeded GEL 1.4 billion, up by 9%. And again, our return on equity was about 24%, precisely 24.2%.

Now if we move to the next slide, Slide 21, that actually shows one of the key drivers of our solid profitability. Our top line increased by 15% in Q4 year-on-year. That was mainly driven by excellent performance in our net interest income. It was up by 23%. Our noninterest income remains flat, but that was mainly driven by very high FX revenues in Q4 last year, as you may remember. And on a full year basis, we also have a great 20% increase year-on-year, and that was driven both by net interest and fee and commission income.

So now if we move to the Slide 22, like I'm very glad to see NIM actually retains at a very solid level, 7%, broadly stable quarter-over-quarter. That was supported by 6% Georgia NIM that actually stood its ground. And on a full year basis, we saw NIM increasing by 30 basis points. That was mainly driven by increasing share of TBC into our portfolio.

So moving now next slide, Slide 23. So we are very much focused on our cost. As you can see, growth was very well contained both for the quarter and for the full year. In Q4 on year-on-year basis, it increased just 10% and on a full year basis, 18%. That translated into a decrease in cost-to-income ratio, both for the quarter and full year. On a full year basis, it landed at 37.5%, down by 40 basis points.

Now moving to the Slide 24. I would like to touch on our credit risk. It's like we saw our cost of risk declining by 50 basis points to 1.1%. We saw this decrease in both Georgia and TBC Uzbekistan. That's a very nice dynamic to see. I would like to comment a bit on the Georgian cost of risk that was below our normalized level. The better risk profile was supported by model recalibration and higher recoveries. In '26, we do expect Georgian cost of risk to be at the lower end of our normalized range, around 80 basis points.

Now move to Slide 25, our balance sheet growth. We see that also we had great growth into both our loan and customer funding side. Loans increased 12%, customer funding 13%, both on constant currency basis. However, the Q4 was also exceptionally strong by 5% up year-on-year and driven by Georgia an increase of 6%.

Now next slide, Slide 26, our capital positions. And despite the high growth, we do maintain very healthy capital levels, well above regulatory limits in both countries. And now moving to Slide 27. Exactly the strong capital position allows us to distribute a decent level of capital to our shareholders. As Vakhtang mentioned, our Board has approved GEL 387 final dividend that brings full year dividend to GEL 8.87, 10% up year-on-year, bringing dividend payout ratio to 35%. However, we also completed -- just completed GEL 75 million buyback. And with this, we returned 40% capital back. On this note, I would like to thank you and open for Q&A.

[Operator Instructions]

And yes, the first question is from Alex Kantarovich of Roemer Capital.

My first question is on OpEx. It was kind of flattish in Q4, which is fairly unusual given that normally banks have elevated OpEx in Q4 and so did you historically in the previous years. So can you comment on that? Second question is, can you give us a bit more color on cost of risk? It seems like NPLs were sort of steady and a bit elevated. And in Uzbekistan, cost of risk, whatever it was in the quarter, 8%, 9%, and you obviously guide higher cost of risk for 2026. So suddenly, you have this drop in Q4, which kind of caught my eye.

And third question is on capital restrictions on cash loans. And clearly, your loan portfolio actually dropped quarter-on-quarter in Uzbekistan. If you can comment on the details, how cash loans compared to SME as kind of substitute and what we can expect going forward?

So Oliver, I'll take the first question on the cost and probably you can cover Uzbekistan cost of risk and cash loans. So to start on OpEx, it increased in Q4 10% year-on-year for Georgia, 18% for the group. But as I mentioned, we managed our cost very consciously. We spread our costs throughout the year. So it is what it is. It actually indicates our strong control of the cost that results in our very strong profitability.

Alex, it's good to speak again. Yes, on cost of risk, as you said, NPLs ticked up throughout the year. But in terms of cost of risk, if you compare third quarter to fourth quarter, as we previously signaled, it was -- it topped out in quarter 2, quarter 3 and then started to come down in quarter 4. So that was exactly as planned and communicated.

So basically, we had a lot of tests that we've done in the latter part of, let's say, the second half of 2024, early '25 as we pushed into thin file segments, stuff that we've communicated thoroughly in the past, and that started to mature and come through the numbers in -- from quarter 2 onwards in Uzbekistan. So that topped out, started to come down. And the trend when you look at all of our leading indicators, means that, that will continue.

There is some volatility for sure. Some of it is seasonal. So for example, in quarter 1, you always see a bit of an uptick, so numbers can be softer in quarter 1 for seasonal reasons, and that will be true again this year, but it will still be within our range, the corridor that we've provided of 7% to 10% in terms of cost of risk, and that trend will continue throughout the year.

However, it has to be said that we are moving, pivoting during the first half of this year, as again previously communicated. So the loan book in terms of what we call ICL, instant cash loans, which is called micro loans in Uzbekistan is running off on the bank side, and I'll come on to that in a second when I answer your third question. And we are scaling up other products. So credit cards, business loans, and we'll be launching secured loans, hopefully, second quarter going into the third quarter, starting with auto loans.

So the mix of the loan book is changing. Some of those are products which have been around for a while, but we're scaling. Others are new products, which we'll be learning and there'll be a different loan book mix and therefore, stuff moving around a little bit on the cost of risk side as we build and scale those businesses. But as I say, we expect our cost of risk to come in within the corridor as previously guided of 7% to 10%.

On the third question, so we had some regulatory changes as obviously, we discussed a lot over the last couple of quarters in Uzbekistan. The Central Bank for a number of different reasons, including tackling inflation and bringing that down, including stimulating the growth of SME lending, including preventing the longer-term buildup of potential risks in consumer lending in the country, decided to cap the portfolio shares of various unsecured asset classes. So that covered auto loans, which have been -- the portfolio cap of 25% have been in place for a while. That added to that portfolio cap 25% caps on micro loans, credit cards, and that happened in April last year.

And then in November, they decided to accelerate that by announcing risk weights, which have been reintroduced, also based on portfolio shares, and they come into force the new risk weights from the 1st of July this year. Again, we talked about this on the last call.

So we are basically pivoting. So we've done a few things in order to make sure that we climb into the new structure of our loan book that the Central Bank wants to see in the medium term. So the share of ICLs, micro loans has been declining as we run off our loan book in that particular class on the bank's balance sheet. We have been ramping up credit cards. We've been ramping up business loans, and there's a couple of different products in terms of business loans. We'll be adding more during the course of this year. And as I said, we'll be launching secured loans in the next couple of quarters.

So this means that the loan book is changing. That also explains what you saw coming through in terms of the numbers on the loan book, which dropped in quarter 4 last year. We expect that in the first half of this year, it will be -- maybe diminishing, maybe reducing a little bit more, the loan book or flat. And then as we go into the second half of the year, that will pick up again and we'll go back into growth. And we expect growth to be, maybe around 20%, maybe more for this year in total for the year of the gross loan book.

Okay. That's actually quite positive. So 20% for the year is positive.

Next question is from Piers Brown of Investec. Piers, can you hear us? Can you go ahead.

We can't hear you, Piers.

We can't hear you.

Yes, we may take another question and...

Yes. We'll come back to you, Piers, because we can't hear you. Can we have Dmitry from Wood.

Congrats on the results. I have 2 general questions, if I may. The first one is at this moment of time, I mean, at least in the end of the 2025, how many percentage of deposits in Georgia are still opened by Russians, Ukrainians and Belarusians? And since we are in the process of the negotiations, how much would that close if we would see a ceasefire or the end of the war? That's the first question. And the second one, I noticed that on your macro forecast for Georgia, specifically, you are a bit more conservative than IMF and World Bank and [indiscernible], you are more bullish. I was just wondering why is that? What are the main reasons for that?

Giorgi, please answer the first question and the second question, I will take.

Okay. So generally, before the war, our total share of nonresident deposits were around 35%, 40%. Nowadays, it's around 60%, 70%. Therefore, we don't have any major concentration to the deposits from migrants as we call them, and we don't have any dependency on the liquidity. Therefore, even if suddenly like whoever put deposit with a minimum number decides to kind of walk away, we won't have any liquidity. So that's -- hopefully, that answers your question.

Yes. To answer on the second question about the growth for the GDP. So as I mentioned already in my part of the presentation, our internal target 5%. I agree, probably it looks pessimistic assumption. And just to remember in 2025, 2 times we made upgrade of the forecast for 2025. But what we see, we are already February, probably it looks that economy will grow more. But for the budgeting purposes, we prefer to have a more pessimistic assumptions for our targets and for our guidance.

Next question is from Rahim at Cavendish.

Three questions, if I may. The first was just to get a sense on the outlook for NIMs, if I can, in the 2 jurisdictions. I mean, Oliver, you talked a little bit about cost of risk movements in Uzbekistan because of the loan book shift. So it would be useful to understand that from a NIM perspective and then obviously the same for Georgia.

The second question was just on Uzbekistan in terms of the regulatory changes. I was just wondering if there was any remorse from the Central Bank or any other emotions that came out as a result of the changes that they've implemented, any regret or how have they received the changes to the industry's or the response to the industry's activity there? And then just third, Vakhtang, thanks for your comments with respect to your evolving role. Just a sense on how you see opportunities with respect to M&A in the international business as well and how your increased focus on that is, how we should think about that over the next year or so?

Thanks, Rahim. Good to see you again on the call. So now I'll take the first question on the NIM. So Georgia NIM, we expect to remain at the same level as it is around 6%, high 5s. We don't expect material changes. On Uzbekistan side, generally, we've seen like high teens in Q4. That's the level probably we may continue in Q1, Q2, but it will gradually start picking up to high -- to around 20s, high teens, that would be our expectations as gradually funding costs will tick down over the period. There is a timing lag and that will be kind of will be caught up. That's on the NIM side, and I'll hand over to Oliver to go on the exchanges.

Sure, yes. Maybe just to spell out the outlook for Uzbekistan as we see it today. And again, please bear in mind that things are still moving around in an environment which is a little bit fluid, as we've said. So as Giorgi just explained, we expect to finish the year with NIMs recovering to around 20% for the year. We expect the loan book to grow by 20% plus, and that will be backloaded in the second half of the year, as I said earlier.

Thirdly, we expect our ROEs to be at least what they were last year, if not higher, and we'll see how it goes in the rest of the year. In terms of the regulatory backdrop, so it's pretty busy, let's put it that way. So there's a lot going on as the regulator implemented varying new policies. So there's actually been more regulation coming out since we had our last call. Some of it in payments, some of it in consumer lending on secured and unsecured, including the introduction of DTI, so debt-to-income ratios on top of payment-to-income ratios, PTI. There's lots of stuff happening on the anti-fraud side on cybersecurity. So it's busy.

In terms of emotions of the regulator, I'm not sure if the regulators are supposed to have emotions, but they obviously have an agenda. The agenda is quite a forthright one. This is the environment in which we're in. This happens in different markets, especially markets that are learning and adjusting and let's say, frontier/emerging markets. Again, this goes with the territory. So organizations such as ourselves, which are high growth and high adaptation do well in these environments. We deliberately chose this country because it has some challenges, which makes it interesting, but also lots of upside when you get it right.

And we have a very good execution track record. We adapt this year. We've talked about this a lot. And we're already doing lots of stuff to respond, get ourselves back on the front foot and launching tons of new products and services, and we like the direction of travel. But it remains a little bit interesting, let's put it that way.

Yes. And to take -- I will take the last question, what are our plans for international expansion? We don't have any specific timing in mind. But on the other hand, we are open and looking at different international opportunities. And we believe that we have our competitive advantages, taking digital, retail, SME and other type of competitive advantages.

And we'll go back to Piers at Investec. Piers. Let's have another go.

Yes, I've got one probably for Giorgi and one for Oliver. Maybe just on the question for Oliver. Just a clarification on Uzbekistan. You've given a very helpful slide on Page 27, which gives the current breakdown of the loan book as per the Central Bank methodology, and you've got sort of 71% there in micro loans. Is that the number that we need to look at that needs to move to 25%?

And as I sort of understood it from your earlier answer, you sort of think you can get there by just rebalancing the book, i.e., growing the other businesses rather than shrinking necessarily the absolute level of outstanding micro loans. So if you could just clarify if that's the right understanding.

And the second question for Georgia on the Georgian business. Just on the retail cash loans progress, I mean that's 36% growth year-on-year. The book is now at GEL 2.4 billion. How should we think about the future opportunity there? What sort of market share have you got? What's the size of the market? Where do you think the market share could get to? And is that GEL 2.4 billion number going to get a lot bigger? Is it still got a lot of growth potential ahead of it?

Thanks for the questions, Piers. So I'll start. So on that slide, which you referred to, I think, is 27, there are 2 parts to it. On the left-hand side, you can see the consolidated numbers, which is very important. So that's the group-wide -- Uzbekistan group-wide numbers, which I'll come back to in a second. And on the right-hand side, the text at the bottom is what you're asking about, which is the Central Bank view because that's -- they look at the bank's balance sheet.

So we got our -- the share of our micro loans down to 70% by the end of the year from what was over 90% at the beginning of the year. The direction of travel is downwards because it has to be. And we believe we will be below 50%. That's what we're aiming for on the bank's balance sheet by the end of the year. And thereafter, it will decline more because obviously, we have to get to the 25% target by the 1st of January 2029, if not before. So that's the bank view of the answer to your question.

However, we have a group. So we have lots of -- well, not lot of, but several other balance sheets. We have the microfinance organization. We have TBC Nasiya, which is installment loans or installment finance. And we also have a new company that we're using for BNPL. So there are different balance sheets that we can deploy. And we've actually restarted micro loans or instant cash loans, as we call them, on the MFO balance sheet. We're doing this in a very gentle way, just building it up and restarting the machine, which means that you will see one of the sources of growth coming back into the overall consolidated balance sheet view this year from the microfinance organization's balance sheet off the bank's balance sheet.

So I think the short answer to your question is on the bank's balance sheet, this is our way of climbing into the structure below 50% ICL share -- micro loan share by the end of this year. But the growth will be coming from other non-micro loan asset classes that we're building in the bank or we're scaling up, example, credit cards, which is already 7% of the bank's balance sheet and stuff which is off the bank's balance sheet. So there's plenty going on.

Now to go to your cash loan side. Probably I will hold back the answer on these questions for 2 days. When during Strategy Day, my colleagues will cover it in more details, our strategic goals and directions. I don't want to put a spoiler. What I can say we have a big focus on cash loans. It will be a big driver of our profitability, and we are very comfortable making a great progress. How and exact targets to come in 2 or 3 days' time, 24th, on Tuesday. And I'm pretty certain you will be pleased with what you hear.

Thank you, Piers. It doesn't seem like there's any further questions in the queue at the moment. Becky, do we have any on the phone line?

We currently have no questions on the phone line.

Okay. Then all it remains for me to say is thank you very much for joining our full year call. It's great to see so much interest. And just to reiterate, we hope we will meet again shortly next Tuesday in New York and via the webcast for our Strategy Day. So thank you very much. And with that, it's goodbye from us. Thank you.

Thank you.

Thank you. See you see you next week. Bye.

This concludes today's webinar. Thank you, everyone, for joining. You may now disconnect your lines.

Hello, everyone, and welcome to today's TBC Third Quarter and 9 Months 2025 IFRS Results Conference Call. My name is Sam, and I'll be the call moderator today. [Operator Instructions] I'd now like to hand you over to today's host, Andrew Keeley, Director of Investor Relations, to begin. So Andrew, please go ahead.

Thank you very much, Sam. And welcome, everybody, to our third quarter results call. I'm joined on today's call by Vakhtang Butskhrikidze, our CEO; by Giorgi Megrelishvili, our CFO; and by Oliver Hughes, our Head of International.

As usual, we'll have a presentation, and then we'll run through and have a Q&A session afterwards. And with that, I'll hand over to Vakhtang. Thank you.

Thank you, Andrew. Hello, everyone, and thank you for joining us today. I am pleased to present another highly profitable quarter with record quarterly earnings. As you can see, our group's net profit in the third quarter reached GEL 368 million, up by 6% year-on-year, while return on equity was 24.4%. Our revenue growth was very respectable, 7% year-on-year growth. In Georgia, we had a strong and stable quarter with 24% plus return on equity, 9% growth in our loan book and net interest margin reaching 6%. Over the same period, Uzbekistan’s, net profit was GEL 41 million, up by 30% year-on-year with return of equity exceeding 23%, while the loan book has almost doubled year-on-year to close to $1 billion.

Our digital ecosystem continued to expand its reach with registered users totaling almost reached 22 million, up by 28% year-on-year. As a result of our strong operating performance and a solid capital base, the Board has declared a quarterly dividend of GEL 1.75 per share, bringing the total 9 months of 2025 dividend to GEL 5. Now turning to Georgia. Georgia's economy continued to perform strongly. Real GDP growth stood at 6.5% in the third quarter, bringing 9 months growth to 7.7%, while our macro team has revised its 2025 GDP growth forecast upwards to 7.3%. The inflation rate reached 4.8% in September, surpassing the National Bank of Georgia's 3% target, but we expect this to ease slightly over the next few months.

Next slide highlights the highly consistent performance of our Georgian Financial Services business as we continue to deliver close to mid-20s return on equity. The reason for this consistency, as you can see that we continue to be a leading player across most of the key banking segments in Georgia. In the third quarter, our gross loans were up by 9% year-on-year. And I'd like to highlight particularly strong performance in fast consumer lending, a key focus for us where our loan book portfolio grew by 42%, and we have gained 3 percentage points of market share over the past year.

Meanwhile, our Georgian customer deposit increased by 11% over the same period. We continue to maintain a strong position in both lending and deposits while constantly improving how we serve our retail and business clients.

Next slide illustrates the growing digital engagement among our retail customers in Georgia. By the end of September, our digital monthly users reached 1.2 million, accounting for 2/3 of our active customers. And our digital MAU continues to increase by around 50,000 users per quarter. What's also important is that our digital users are highly engaged with us on a daily basis as it reflected in a very impressive 46% DAU to MAU ratio. The increasing take-up of digital banking by our customers is also reflected in the very high levels of digital loans and deposit issuance.

Now let's turn to our Uzbekistan business. Starting with the economy, much like Georgia, the Uzbek economy also remains highly dynamic with real GDP growth of 8.2% in the third quarter, bringing 9 months 2025 growth to 7.6%. What is very encouraging is that inflation is also easing dropping to 8% in September and even lower in seasonality adjusted terms, supported by tight monetary policy, and we have also seen local currency strengthening this year.

Next slide provides an overview of the progress that we have made over the past 2 years across all major metrics. We have almost 22 million unique registered users, out of which almost 6 million are monthly active users. Our loan book continues to almost double year-on-year and now tops $970 million, while our deposits increased by 71%, reaching over $540 million. Our operating income reached a record $70 million in this quarter and increased by 69% year-over-year. In the third quarter, net profit of our Uzbekistan business reached $15 million, up by 30% year-on-yea. Now let's turn to some of our recent business updates in Uzbekistan.

We continue to expand our digital banking in the third quarter. We -- in the third quarter, we announced our planned acquisition of majority stake in OLX, the country's largest online classified platform. This will unlock powerful synergies with our financial services platform and help increase our share of customer retention. We also saw a great progress in the uptake of Salom card. By the end of September, we issued 700,000 cards, of which 500,000 have been funded as customers are increasingly choosing TBC for their daily banking needs.

In addition, we have been deepening customer engagement in Payme with Payme Plus subscriptions reaching 300,000 MAU. We keep scaling the use of AI throughout our business. As a result, we have reached 90% automation in early-stage delinquency cos, and we have conducted over 100,000 sales per month with our AI voice chatbots. Evidence of the popularity of our ecosystem can be seen in it being the top of mind brand in Tashkent and #3 in Uzbekistan as a whole, a great achievement in just a few years of operating.

Next slide shows our increasing market share and contribution to the group. By the end of the third quarter, market share of our retail loans and deposits stood at 4.9% and 4.2%, respectively. In the third quarter, Uzbekistan contributed 11% of the group's net profit, while the contribution in operating income was 21% . Next slide provides an update on the targets we set ourselves for Uzbekistan business. I think it is worth stepping back for a moment and considering what we have achieved in Uzbekistan over the past 6 years.

During this time, we have built one of the fastest-growing digital banking ecosystems globally. Our registered users have increased tenfold to 22 million, and we have built a $1 billion loan portfolio. Our digital bank broke even in the just 2 years and is already generating 20% return of equity despite being a early stage business. This year, we have scaled up launch new products and announced highly value accretive M&A with BILLZ and OLX, and we are a top 10 player in retail banking and even the top of mind bank in Tashkent. But of course, there has been some challenges this year. As you know, we had issues around fraud and asset quality in the first half, while in the second half, we had pivoted our business from micro loans to SME lending more quickly than we had anticipated, in line with the changing regulatory agenda. As a result, we expect to below our 2025 net profit guidance. I firmly believe that we have a flexible and resilient business model and an excellent team that will enable us to adapt quickly to the evolving environment, and we remain highly positive on the long-term growth opportunities in the country.

Finally, I'd like to provide an update regarding group's targets. First of all, I'd like to stress that the group's overall performance remains strong and resilient. Our return of equity has consistently been running ahead of the challenging 23% target. And since the start of 2023, we have almost doubled our digital MAU to close to 7 million as our customers choose TBC. Over the past 3 years, we have increased gross profit annually by 10% despite investing heavily in building out Uzbekistan. However, given that we are running below our profit targets in Uzbekistan, group's net profit was slightly below our GEL 1.5 billion target.

As a group, we are well positioned for the future. We combine consistently and proven leadership in Georgia with a dynamic digital ecosystem in Uzbekistan that is well placed to capture the huge opportunity available and remain highly positive on the long-term growth opportunities in both markets. With that, I pass over to Giorgi.

Thanks, Vakhtang, and thanks all for joining our quarterly call. Now I will go into more details for our financial performance, and we'll start with Slide 18. So it has been a strong quarter with a record profit, as Vakhtang mentioned, with GEL 368 million. That is up 6% both quarter-on-quarter and year-on-year basis. Our 9-month profit surpassed GEL 1 billion threshold, and that's actually again 6% up compared to the same period last year. So that translated into a very nice and strong 24.4% ROE.

So if you go to next slide, Slide 19, I would like to discuss the drivers of this performance. As you can see, our top line growth has been very strong, 17% year-on-year. That was mainly driven by our net interest income growth, [ 24% ], really solid growth. Our noninterest income also grew by 6% on quarter-on-quarter and 3% year-on-year. This, I would say, slowdown in growth driven mainly by 2 factors, fee and commission income in Georgia because of the increased card network fees. And also, we do invest a lot into our TBC card, cash backs, loyalty that becoming a go card, and we do expect this trend to continue. The second reason is that Lari has been very stable this year, a good sign. However, the margins compressed significantly compared to last year. But despite that, we still delivered and we were flat as last year for the 9 months. So Andrew, if you go to next slide, Slide 20.

So and if we look now our NIM dynamics, we are very pleased to see that we retained 7% level and we expect to stay at this level for a while. And actually, another nice development is that in Georgia, we are back to 6% handle from 5.9% last quarter. And also, we do expect to retain around this level in Georgia, maybe high 5s, low 6%, but more or less the level we are in Q3. So let's move to Slide 21. Our cost dynamics. Our OpEx was up by 18%, probably the trend we have seen nothing unexpected because we do continue to invest into our businesses in both countries, particularly into Uzbekistan.

However, our cost/income ratio remains broadly very stable. So it was 37.7% more or less the same as in Q2 last year and also 9 months trend is kind of more or less the same and in line. Now if we go to Slide 22, turning there, our credit quality. Cost of risk remains the same for the group and for Georgia as well. For group, it was 1.6%, for Georgia, 80 basis points. So that's the level we have seen for the last few quarters, a very good level. We are very comfortable with this level with our credit quality. Uzbekistan cost of risk ticked down slightly, 20 basis points to 9.7%. However, we still do see the less impact of our thin file consumer segment and long tail post merchant. So we do expect this trend to remain for a quarter or 2 going forward.

Now going to Slide 23. Our balance sheet growth, it was very healthy, 13% for the group, both for customer funding and loans. However, I would also like to comment on Georgian growth that was a bit subdued this quarter. That was driven by one-off, a large repayment in our corporate business. In Q4, we do expect to go back to our normal growth mode, and we do expect this year to be double-digit growth.

Now turning to Slide 24. I mean our capital positions, they remain very strong in both countries. We are well above our regulatory limits in both countries. And exactly the strong capital levels, if you go to Slide 25, turn to that, will allow us to continue returning capital to our shareholders. We repaid GEL 1.75 in Q3. That brings our overall distribution to GEL 5 this year. and that combined with GEL 75 million buybacks that's still ongoing, we are more than halfway through. So on this note, I would like to thank you, and now we can deep dive more into our TBC Uzbekistan business. Oliver, please go ahead.

Thanks, Giorgi. Yes. So I'm going to give you a bit more color on what's happening in Uzbekistan and what's been happening over the last 3 quarters. As you know, it's been a mixed year for TBC Uzbekistan in 2025 with lots of positive developments happening operationally, but a fair number of challenges as well. This sometimes happens in business and the important thing is how the team reacts to these situations when they arise.

I'll start with the positives. We've scaled our business considerably and launched new products. Our loan book has grown by over 90% year-on-year and isn't far off $1 billion. We are now a top 10 retail bank in Uzbekistan in both lending and deposits. We've made great progress in building one of the best consumer daily banking offerings in the market. We already have over 700,000 issued and 0.5 million funded Salom cards, which is our flagman debit card. We've launched business lending, which already accounts for above 10% of our loan book and digital insurance with over 300,000 policies issued. We've announced 2 great M&A deals, as Vakhtang mentioned, a partnership with BILLZ, which gives us access to a huge network of retailers and the acquisition of a majority stake in OLX, the country's largest online classifieds, which will unlock powerful synergies with our own financial services platform.

These deals help us deepen our relationships with our B2B and B2C customers. We've made great progress in building an AI-powered bank with our proprietary AI stack and our own AI voice assistant coming soon. We more than doubled our gross revenue year-on-year in 9 months to $350 million. And despite investing heavily in all aspects of the business, we've also increased earnings by almost 30% year-on-year with close to 20% ROE, which isn't bad for a digital bank that has just celebrated its fifth birthday. We've also had several challenges, which I will describe in brief here.

In quarter 1, we were hit by an external market-wide fraud. The P&L impact was $9 million. We owned it, dealt with it in quarter 1 by provisioning the loss and moved on. In quarter 2, our cost of risk increased mainly from tests that we've been conducting to find new segments and channels in which to grow our business going forward. There were also some scaling-related issues in collections. We made adjustments to our operations, took a more conservative approach to underwriting, and we believe that our credit risks have now more or less topped out. The loans that we booked were overwhelmingly NPV positive, but we understand that optics are also important. Also in quarter 2, the regulator tightened the KYC requirements for payments platforms, meaning that in effect, we had to reregister all of our 3.9 million Payme MAU. Not only did this cause a dip in MAU, which is now recovering, it also led to a slowdown in payments volumes and fee and commissions income.

In quarter 3, in line with the regulator's agenda of pivoting the national loan book towards SME, we had to slow down our disbursement of micro loans or unsecured personal loans. This, in turn, has had an impact on cost of risk because the front book is not growing as planned, which means that the risk in the back book is not being diluted as quickly as anticipated. This also hit our revenue and in turn, our bottom line. As we have been highlighting, retail lending and particularly unsecured consumer lending is at a very early stage of development in Uzbekistan. Total retail loans to GDP are just 12%, while unsecured consumer loans to GDP are just 4%, albeit this has been the fastest-growing segment over the last past couple of years.

Back at the end of last year, we were working under the assumption that consumer-facing products, including unsecured consumer loans of different types, will be a key driver of our portfolio growth for the next few years. However, since the beginning of this year, there has been a major change in the regulatory agenda in favor of promoting SME lending whilst becoming increasingly negative towards consumer loans, in particular, micro loans, which are perceived as inflationary and something that the population is not yet ready to adopt widely.

After the shift in the Central Bank's agenda, a fairly rapid but nonetheless staged market rebalancing from consumer lending to SME lending was implemented through the announcement of market-wide portfolio caps to be introduced by the 1st of January 2029, as we discussed on our first quarter call. Over the past couple of months, the regulators requested that we accelerate our disbursement of business loans.

In addition, the CBU has recently proposed new risk weights on unsecured consumer loans. These risk weights are based on the portfolio share of unsecured consumer loans, micro loans, credit cards and overdrafts and will be introduced from the 1st of July 2026. According to the CBU letter, which could still be subject to change. If a bank's share of micro loans or credit cards is higher than 25%, the risk weights applied to that part of the unsecured consumer loan book will vary from 150% to 250% depending on the share of these unsecured loans in the total loan book. As things stand, we expect to have 50% to 75% share of micro loans in the loan portfolio. It now stands at 79%, which would imply 200% risk weighting for the micro loan book.

If introduced in the current form, this would, a, have a negative impact on our capital ratios and b, worsen the economics of micro loans. So this is the regulatory environment in which we are working. As you know, in response to the CBU's introduction of portfolio caps and strong desire for the market to recalibrate, we accelerated the launch of SME lending in April. This now accounts for around 15% of our total loan book, and we are ramping up this business. However, it is now clear that we will have to further pivot away from unsecured consumer lending to business lending and secured lending. As Vakhtang covered earlier on this call, this all means that while we are on track to hit our 5 million MAU guidance and 80% loan CAGR targets, we're going to be below the highly ambitious net profit guidance we set ourselves back in 2023, for which I apologize.

As you know, we will be holding a Strategy Day in late February, on which we will update the market on our longer-term outlook, but it feels appropriate to outline some of our very initial thinking on 2026. First of all, we still see massive long-term potential in Uzbekistan as we continue to build out the largest digital banking ecosystem in Central Asia. As previously communicated, the SME banking opportunity is huge in Uzbekistan. This will be a key business priority in 2026 and beyond, providing us with new sources of growth as well as aligning us with the priorities of the government and the regulator.

We will look to move into new business lines in secured lending in 2026. We have the expertise and platforms to do this, and it provides another large opportunity in the country. We will continue to grow our loan book in segments of unsecured lending, such as credit cards and BNPL or installment loans. We have already issued 85,000 Osmon credit cards, accounting for 5% of our loan book.

In 2026 and beyond, we hope that Salom card will become the go-to product for affluent and mass affluent customers to conduct their daily banking. We will further integrate our 2-sided ecosystem, connecting our 22 million registered users on the one side with our exposure to tens of thousands of enterprises on the other. In 2026, we will integrate our CRM and loyalty platforms and start leveraging the opportunities created by our acquisitions of BILLZ and OLX.

We have a strong, largely proprietary tech platform, including our speech tech platform on the base of which we're launching a range of interesting AI-driven services over the coming months, including first and foremost, our own in-app voice assistant called Lola. Last but not least, we have an amazing experienced and ideas-driven team that has been through many different situations in many different markets. We know how to build good product and [ CX ], which is exactly what we will continue to do. So thank you. And now over to Q&A.

Thanks very much all of you for the presentation. Okay. So we can start with questions. I think first up is Piers Brown from Investec.

Can you hear me okay?

Yes, we can.

Yes. So I have one on Uzbekistan and one on Georgia. So this is probably one for Oliver. Thanks for all of the background information on the risk rating changes, Oliver. That was very helpful. I'm just thinking in terms of the -- I mean, you mentioned this increase up to, I think you said 200% on the micro loans. How impactful is that for your capital ratio in Uzbekistan? And I guess the question is, do you have sufficient capital in place currently to absorb that level of risk weighting increase? And then allied to that, how likely is it these caps may be amended or the risk rating proposals may be amended -- and are you still covering your cost of capital at that level of risk rating? So those are my questions on Uzbekistan. I don't know should I ask the question on Georgia? Would you like to address that first and then.

Let me answer the Uzbek piece first, yes. So thanks for the question Piers. So the first question was on the impact on the capital ratio of the proposed risk weights, which we have been notified will come into effect from the 1st of July next year. And the answer is we have capital to cover it. So the way this works is that it's based on the share in the loan portfolio, in the loan book. So our share of micro loans, which is obviously -- so these are unsecured personal loans or cash loans is going down because our share of other products is going up, first and foremost, SME, which is growing at a clip. And we will be accelerating that. We're gathering data, we're getting better at it. We're learning how to do the job, which will bring our share of micro loans as they call in Uzbekistan, down below 75%. And depending on how it goes, maybe below 50%, maybe not by the 1st of July because that's only in 7, 8 months, but certainly not long thereafter.

So there will be a reduction in our capital adequacy ratio for a period of time. But as our share of micro loans goes down, then it will reset. So there will be a period of time from the 1st of July, let's say, for a few months, while we're still above 50%. But then micro loans will go below 50% and our capital adequacy ratio will go up organically as the risk weights run off. So that's how you should think about this. We don't need to inject additional capital. So that is on the risk weights. And just maybe another piece of relevant information is that 1.5 years or so ago, the risk weights were 200%. They were reduced down to the current level, which is around 100% based on PTI. But now the Central Bank with its revised agenda in terms of driving SME and reducing consumer lending or slowing the pace of consumer lending growth across the system has now put them basically back up to where they were. But if we have a very high share, i.e. 75% or more than it's up to 250%.

So that's the [ live of land ]. Could these be amended further? I think it's unlikely because these have been communicated, but you can see that the Central Bank in Uzbekistan is -- has a very firm stance on where it wants to see consumer lending and what it wants to see happening with SME lending. So I can't rule it out completely, but I think it's unlikely.

Piers, do you want to ask on Georgia?

No thanks Oliver, that's very helpful. Yes. So on Georgia, I guess this is for Giorgi. I think you mentioned a NIM sort of guidance level or realistic level of somewhere in the 5 highs or maybe 6%. I'd just be interested in the components of that because I guess if I look at the Georgia business, the portfolio growth is coming mostly now in the very strong growth in the fast consumer loans. So I guess structurally, that's shifting the margin higher. But just if you could give some insights on to the components of NIM over the next year or so, that would be very helpful.

Yes. Thanks Piers. Good question. So there are different dynamics from currency [indiscernible] from Lari and FX. If you consider Lari over time, we are still in quantity easing cycle, we do expect the [ FX ]rate to come down. Maybe it's paused a bit. So that probably will put additional pressure. However, it's more than compensated, as you rightly mentioned, like the change of our portfolio structure. That's number one. Also change of our FX composition. Now our Lari is going up. We have more focus on Lari loans that also have higher yields.

On FX side, we do also see the benchmark rates coming down. That's maybe marginally negative. However, we also -- like on the FX, we have our wholesale funding more on a floating basis. Therefore, we are more hedged on that side. So overall, that's what I saying that taking into consideration all these components, growth and our plus, we do expect to remain high, as I said, high 5s, like around 6% level.

Okay. Next up, we have Stuart from Peel Hunt.

Hopefully, you can hear me. I've got 2 questions as well, actually almost similar to Piers. The first one on Georgia. Giorgi, you sort of mentioned about some of the pressures on the fee and commission income. I'd just be interested to know whether these trends continue and persist or whether at some point you start to see some sort of reversal and you start to see growth in that line again? And then the second question is on Uzbekistan for Oliver. And you've obviously spent quite a bit of time talking about some of the regulatory interventions, a fairly detailed regulatory agenda. I'd just be interested if there's any sort of other potential implications you see over the next 12 months or so from a regulator, which feels like it's doing quite a detailed work around the sector.

Probably fee and commission income is the outcome of our strategy, and I hand back to Vakhtang to kind of elaborate more wider. But generally, what I can say, our focus on top line growth given, we do expect our top line like gross NII and net fee and commission income combined to grow at healthy levels, maybe mid-teens, but there will be a composition change for which I'll pass to Vakhtang to elaborate more.

Yes. As you understand, main drivers of our fee and commission income, Georgia, is the debit cards and after that coming other type of income. So on that side, you know that at the end of the last year, we began to issue new type of the TBC card, and we are doing very well. So until today, we already issued more than 800,000 TBC cards and this is a very good tool for us to attract and to bring new customers on the one hand, new customers to TBC or passive customers who did not use historically our debit cards. So on that side, we are looking that it's a good tool for us to bring them and this TBC card is mainly has a free of charge on some of the operations. But indirectly, it's very valuable for us because a lot of consumer loans or the credit cards -- by the way, we are doing very well for the mortgages, other type of the loans. It's a very tool just to bring it up to us to offer different kind of the products.

And to summarize my answer, so we will continue to issue more and more TBC cards, which is very important to bring new customers. And we want to build on that to sell more different kind of the products, especially where we have a high profitability such as credit cards or consumer loans to these new customers. And to summarize, so probably we could not see growth in fee and commission income during 2026, but indirectly, it will influence our high growth in most profitable segments such as credit cards, consumer lands -- loans. And indirectly, it means that we will increase materially our net interest income in 2026.

And taking your question on Uzbekistan, could there be more regulatory changes, Stuart? So the answer is obviously, yes. So I would preface my answer by saying that the regulatory framework in Uzbekistan is pretty well formed as we've been saying a lot over the years. So on the consumer lending side, they have risk weights, PTI regulation, rate caps, ban on FX lending to consumer. So I think it's unlikely that major new changes to the regulatory framework are going to be introduced. But it's clear that the regulator has particular objectives that it's following that it's trying to achieve in the near to medium term. So it's trying to change the shape of the national loan book and push SME lending, get banks to focus their efforts on pushing SME lending as opposed to unsecured consumer lending. And part of this is inflation targets. Part of it is making sure that the national loan book is balanced in the way that the Central Bank wants to see.

So if they see the consumer lending growth and SME lending growth are not in the proportions that they want, then it's possible they will do more. But right now, we can't tell you what else they might do given that there's already quite a lot being done. So we'll keep you informed, obviously.

So we have next up from Simon at Citi.

Maybe just one more for Oliver. I mean the risk cost has remained elevated. How much of this is kind of testing your kind of micro loan client segments? And how much of it is testing the SME? And I guess going forward, if you have to accelerate faster in SME, is it fair to assume that continued testing is going to lead to continued high risk costs for quite some time?

So our loan book is predominantly unsecured consumer loans. It's mainly what they call micro loans, which is unsecured personal loans. And there that's as a result of the tests predominantly, as we said earlier. Obviously, there's the fraud hit that we took in quarter 1, but it's mainly tests, which matured a little bit of operational stuff in quarter 2 and quarter 3.

Our SME loan book is growing from 0 fairly quickly. And there is definitely elevated cost of risk, but that's not what you see coming through the numbers there because it has very little effect because it's a small share of the loan book. As we change the proportions going forward, obviously, we have to do a lot more testing to understand what lies where in micro business, small business and let's say, the larger end of SMEs who will be tackling predominantly through bills.

We will obviously try and manage risk in a way that doesn't affect the numbers. We think that we'll remain -- in the corridor that we communicated earlier, 7% to 10%. Certainly, the consumer lending book has topped out, and we think that will start coming down as we go into the beginning of next year. But in SME, depending on the pace of growth, obviously, you'll see some risk coming through that. So I can't guide you in any numerical way at the moment, but we will have to keep on top of that.

Thank you, Simon. There's a couple of questions that come through on the chat. One is about coming back to Uzbekistan, I think you've more or less answered on the kind of cost of risk about kind of normalized cost of risk, but also should we expect revisions to longer-term targets after the challenges that the bank has faced in Uzbekistan? And then a question on Georgia was just why was Q-on-Q growth -- loan growth in Georgia so muted. We've kind of covered that already, but you may want to add some more.

Maybe I'll answer the third question about the growth. So in Georgian operation in our CIB business in corporate business, we have 2 big one-offs and that influenced our growth. Others, if we extract the one-offs from the corporate business, we are following the growth of the total bank, especially for us, very important that we are winning market share in the consumer loans and credit.

And on the Uzbekistan question about longer-term outlook. So we reiterate our confidence in the potential in Uzbekistan and our ability to capture that potential medium to long term. But as you can see, right now, we've got a lot of moving parts. And so it's very difficult to give any meaningful guidance until things settle down into some kind of more predictable pattern, which we hope will happen in the next few months. So by the time we get to February next year on the Strategy Day, we hope the dust will have settled, and we'll be able to give some more meaningful longer-term projections. But right now, it's moving around.

And Oliver, maybe just another one for you about the micro loans and whether we can classify micro loans sort of maybe to very small businesses as SME kind of loans to help kind of grow the share of the SME loan book that way?

Sure. And it's a great question, absolutely the right question. So we have so far 2 lines, let's call them, business lines in SME. So there's, if you like, a true origination of SMEs who are new to bank. And that's a business we're learning. It's at the moment, it's working capital loans. We want to try and test secured loans to SMEs, and we'll start doing other stuff as well as we go through the year next year.

And then there's what you can maybe term as kind of business consumer or consumer business loans, which is your question, where generally in an unsecured mass market consumer loan book, you'll have 25% to 30% of those customers wearing a consumer hat but actually borrowing for business purposes. And that will be a big driver of our SME lending growth next year. So basically, we're hiving off some of the cash loan or the ICL business and reclassifying it as SME because these are either individual entrepreneurs or self-employed customers who indicate that the loan they're taking for business purposes, which means that they will be classified as SME from Central Bank reporting purposes.

Thanks, Oliver. Simon has his hand raised. I don't know if that was -- Simon, do you have another question?

Yes, I do actually. Just I was hoping you could elaborate a bit on the insurance business in Uzbekistan. You've booked some revenue there this quarter. Is that expected to grow nicely going forward? I assume it is. And then maybe just on the Georgian business, I think the FX revenues went up quite nicely in the quarter. If you could comment on that and how sustainable that is?

Would you like to take Georgia first?

Okay. I was [indiscernible] but I can take. So business, as I mentioned, like generally, margins this year went down significantly. The Lari has been very stable. It's just seasonality. So if you look how the flows are. So it has been higher flows during Q3, also a bit higher margins. Generally, what we can say is that 9 months is like truly conservative run rate for us on FX because with the subdued margins, we still delivered that level that as I mentioned during my call was flat compared to 9 months last year.

But in addition to that, what is Giorgi saying, we have very comfortable level of growth of the transactions in FX. But as Giorgi said, margins went down dramatically compared to 2024. And as you know, we have a very stable exchange rate during this year. So that influenced the FX. Otherwise, the transactions in the number and the volumes of transactions we are doing very well.

And very briefly on insurance, TVC, [indiscernible], which is the word for insurance. It's new. So we launched it basically in March, April this year. It's captive insurance. So basically, these are products which we are selling to our existing customer base, credit linked, but we have ideas, obviously, to add new insurance products and sell them to our existing customer base, which is obviously very large in Uzbekistan and growing. And then at some point, we will get around to selling insurance products into the market, which are not captive insurance products. But at the moment, that's where we're starting.

So that's credit protection primarily. Yes. Great. And who's your partner there?

So it's our in group.

In-house. Okay.

Thanks very much, Simon. Sam, are there any calls on the phone lines?

There are not, no.

No. Okay. We don't have any other questions at this time. Yes, nothing coming through. So I'd just say thank you all very much for joining this call. As always, we are around and available to answer any follow-up questions that you have. And I'm sure we'll be meeting and catching up over the coming months, and we'll be publishing our full year numbers in February next year. So thank you very much, and goodbye.

Thank you very much.

This concludes today's webinar. Thank you all for joining. You will now be disconnected. Have a great day.