(Alliance News) - TBC Bank Group PLC on Friday reported increased annual profit, despite a drop in the fourth quarter, lifted by higher interest rates.

The Tbilisi, Georgia-based lender said pretax profit in the quarter ended December 31 dropped 9.0% to GEL337.3 million, about GBP101.6 million, from GEL351.0 million a year prior. Compared to the third quarter, it was down 3.9% from GEL379.7 million.

Fourth quarter net interest income increased 24% to GEL441.7 million from GEL427.9 million. Compared to the third quarer, it was up 3.2% from GEL357.4 million.

For all of 2023, pretax profit rose 7.0% to GEL1.33 billion, about GBP400 million, from GEL1.25 billion in 2022.

Net interest income jumped 27% to GEL1.64 billion from GEL1.29 billion the year before, with net fee and commission income 28% higher at GEL412.3 million, rising from GEL322.7 million.

Customer deposits rose 13% to GEL20.4 billion from GEL18.04 billion and loans increased 21% to GEL22.07 billion from GEL18.20 billion.

TBC said the rise in net interest income was supported by net interest margin increasing by 40 basis points year-on-year to 6.7% in the fourth quarter.

The cost to income ratio increased to 39.2% from 33.2% the year before. TBC said the rise was primarily due to the robust growth of the business in the final quarter and performance-related pay in recognition of the year's strong operating performance.

TBC highlighted the strength of its liquidity and capital positions with the CET1, Tier 1 and Total Capital ratios at 17.4%, 19.6% and 22.1%, respectively, at the end of 2023.

However, all three measures were down compared to the 17.5%, 19.9% and 22.3% reported at the end of the third quarter.

Nonetheless, TBC pointed out this remained comfortably above the minimum regulatory requirements by 3.1 percentage points, 3.0 points and 2.3 points, respectively.

TBC noted: "While the geopolitical backdrop has remained difficult, the final quarter brought some very positive news for Georgia, with the EU's decision in mid-December to grant candidate status. Much work remains to be done, but this represents a massive step for Georgia in its long-term aim of closer integration with the EU. All Georgians can be rightly proud to have achieved this recognition."

The bank declared a final dividend per share of GEL4.67, which took the full year dividend to GEL7.22 per share, about GBP2.17, an increase of 32% year-on-year. In 2002, the total dividend was GEL 5.45 per share.

Shares in TBC Bank were up 0.2% at 2,845.00 pence per share in London on Friday.

By Jeremy Cutler, Alliance News reporter

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