WOOD Flash – TBC Bank: 2Q25 results and conference call highlights

TBC has announced GEL 346m in net income (before minorities) for 2Q25, up 8% qoq and 5% yoy. This was 1% lower than our EUR 348m estimate and 3% lower than the GEL 358m consensus. The group-level results were in line, supported by an 8% beat in Georgia (GE), driven by a 40bps qoq NIM expansion and the NII coming in 8% above our estimate. That said, our overall bias on 2Q25 is negative, due to a significant 44% earnings miss in Uzbekistan (UZ) (our forecast at GEL 58m, vs. the GEL 32m actual UZ net income), due to a higher-than-expected COR and a NII miss. We also get the impression that hitting the GEL 200m+ UZ 2025E net income guidance will be difficult. Despite the welcome margin improvement and bottom-line beat in Georgia, our bias on the 2Q25 results is negative as UZ’s profitability path appears bumpier than expected. Management aims to restore the UZ ROE to the mid-to-high 20s in the coming quarters (vs. 17% in 1H25). Our 2026E ROTE of 36% may be ahead of the near-term profitability run-rate. The bank retained its 30%+ long-term ROE target for UZ. We rate TBC a HOLD, with a GBP 53.1/share PT. The bank is trading at 6.9x P/E and 1.7x P/TBV on our estimates. The bank will launch a GEL 75m buyback (this can cancel 0.8% of the shares) and distribute a GEL 1.75/share quarterly dividend (a 1.0% yield).