TBC's Uzbekistan Recalibration Turns the Corner as New CFO Guides Through a Temporary Risk-Cost Spike
Record profitability and dividend growth continue, while the loan book stabilizes and a regulatory pause removes an overhang.
TBCG.L · Earnings Call · 2026-08-06
TBC Bank Group reported another strong quarter: net profit rose 12% YoY to GEL 386m and ROE came in at 23.6%, the 14th consecutive quarter above 23%. But the real news is under the hood in Uzbekistan, where the long-awaited loan book stabilization is now being matched by a surprising regulatory development and a fresh strategic bet.
A Resilient Core, A Pivotal Uzbekistan
"We continue to strengthen our market-leading franchise in Georgia," CEO Vakhtang Butskhrikidze noted, with Georgian loans growing 14% YoY and digital MAU up 19%. The asset quality engine remains intact despite a modest uptick in NPLs. However, analyst attention quickly turned to Uzbekistan, where loan portfolio growth has finally resumed after a year of contraction. CFO Guy Stevens confirmed the turning point: “we're seeing signs that the NIM has turned the corner” — Guy Richard Stevens, Group CFO · 2026-08-06. The pivot away from risky instant cash loans toward credit cards, BNPL, and SME lending is starting to pay off, with credit cards now 10% of the loan book, up from 4% a year earlier.OLX: A Strategic Ecosystem Bet
Perhaps the most definitive sign of intent is the late-July acquisition of OLX, Uzbekistan's leading classifieds platform. Vakhtang emphasized the strategic logic: “monthly users of OLX today is more than 5 million” — Vakhtang Butskhrikidze, Group CEO · 2026-08-06, providing a massive funnel for retail and SME clients. The company plans to keep OLX as a classifieds business rather than a marketplace, using it to drive loan origination and payment services. This aligns with the broader return to growth narrative for the Uzbek franchise.Regulatory Surprise and Risk-Cost Outlook
The biggest surprise came early in the call when Stevens revealed that the consumer loan risk-weight framework, set to take effect July 1, has been paused:This removes an immediate capital burden, though the company still maintains buffers. However, near-term asset quality remains a watch item. The group's NPL ratio ticked up to 3.3%, driven by Uzbekistan, and Q3 cost of risk is expected to spike to low-to-mid teens. Stevens walked through the drivers: an extended write-off period, vintage seasoning, and the portfolio contraction. Critically, he expects a positive trajectory from Q4: “we do expect an increase in the cost of risk in Uzbekistan, taking us to low mid-teens” — Guy Richard Stevens, Group CFO · 2026-08-06. This contrasts sharply with the prior guidance. In February, then-CFO Oliver Hughes had reassured investors: “we expect our cost of risk to come in within the corridor as previously guided of 7% to 10%” — Oliver Hughes, Joined for Q&A, likely senior management (possibly CFO or similar) · 2026-02-20. The shift to a temporary overshoot reflects both the maturing vintages and the impending changes to the auto-collection system. The regulatory backdrop has been a persistent theme, as Hughes had spelled out last November: “But if we have a very high share, i.e. 75% or more than it's up to 250%” — Oliver Hughes, Head of International · 2025-11-07, referring to risk weights. Today's pause removes some of that immediate pressure, though the broader direction of tighter consumer lending remains.Today, we have learned that this has actually been paused and is not currently being implemented.