TBC Bank half-year results 2026: profit rises 13% as dividend grows

TBC Bank Group PLC has delivered another profitable half-year, supported by loan growth, resilient margins and a strong performance from its core Georgian banking operation.

For the first half of 2026, net profit increased by 13% year-on-year to GEL 751 million. GEL is the Georgian lari, TBC's reporting currency. Return on equity, or ROE, remained high at 23.5%, putting the group above its target of at least 23%.

The board also declared a second-quarter dividend of GEL 1.75 per share, taking the first-half distribution to GEL 3.50 per share. That is an 8% increase compared with the previous year.

The headline numbers are strong, but there is a clear split underneath them. Georgia continues to generate excellent returns, while elevated credit losses and deteriorating loan-quality measures in Uzbekistan remain the main concern.

TBC Bank's key first-half figures

Metric	1H 2026	Year-on-year change
Net profit	GEL 751 million	13.0%
Total operating income	GEL 1.78 billion	10.4%
Net interest income	GEL 1.28 billion	14.9%
Operating expenses	GEL 697 million	15.8%
Return on equity	23.5%	Down 0.2 percentage points
Net interest margin	7.1%	Up 0.2 percentage points
Cost of risk	1.5%	Unchanged
Earnings per share	GEL 13.50	13.9%
First-half dividend	GEL 3.50 per share	8%

The strongest contributor was net interest income, which is broadly the difference between the interest a bank earns and the interest it pays. This rose by 14.9% to GEL 1.28 billion.

The net interest margin, which measures that lending profitability relative to interest-earning assets, increased to 7.1% from 6.9%. Stable or improving margins alongside loan growth are usually a helpful combination for bank earnings.

Second-quarter profit reaches GEL 386 million

Second-quarter net profit rose by 11.5% year-on-year to GEL 386 million and increased by 5.9% from the first quarter. ROE was 23.6%, compared with 24.3% a year earlier.

Total quarterly operating income increased by 9.9% to GEL 917 million, led by 12.8% growth in net interest income. Net fee and commission income was down slightly year-on-year, but improved by 14% quarter-on-quarter to GEL 154 million.

That sequential recovery is encouraging, although first-half net fee and commission income remained 4.6% below the previous year. Fee income rose strongly on a gross basis, but fee and commission expenses increased even faster.

Operating expenses grew by 11.9% in the quarter. However, the cost-to-income ratio improved from 40.2% in the first quarter to 38.3%, suggesting better operating efficiency as revenue growth accelerated.

Georgia remains the earnings engine

Georgia generated second-quarter net profit of GEL 379 million, up 14.2% year-on-year. It accounted for 95% of group earnings and produced an ROE of 24.3%.

Net interest income from Georgian financial services increased by 18.7%, while its net interest margin rose by 0.4 percentage points to 6.3%. The Georgian cost of risk was also relatively contained at 0.7%.

Loan growth was broad, with the Georgian portfolio reaching GEL 29.0 billion. Retail lending grew by 17.3% year-on-year, while corporate and investment banking loans increased by 12%.

Digital engagement is moving in the right direction too. Georgian digital monthly active users rose by 18.9%, while daily active users increased by 25.9%. Half of Georgia's active digital customers now interact with TBC daily.

This combination of growth, engagement and profitability helps explain why Georgia remains the foundation of the investment case.

Uzbekistan is stabilising, but credit risk is still high

The Uzbek loan book increased slightly during the second quarter to GEL 2.31 billion. Growth in business lending, credit cards, buy now, pay later and point-of-sale finance offset the continued decline in unsecured cash loans.

There was also strong payments momentum. TBC had issued more than 1.2 million Salom Cards, while total payment value increased by 54% year-on-year in US dollar terms to GEL 8.6 billion.

TBC completed its acquisition of a majority stake in OLX Uzbekistan in July, extending its digital ecosystem into online classifieds. The acquisition price was not disclosed in the announcement.

However, Uzbek asset quality remains the most obvious weak spot. The operation's cost of risk rose to 11.8% in the second quarter, while non-performing loans increased to 10.6% of gross loans from 6.7% in March.

Management attributed this to older loan vintages, the previous contraction of the loan book and an extension of the loan write-off period from 270 to 360 days. The business remained profitable, generating second-quarter net profit of GEL 20.6 million, but this was 36.3% lower year-on-year.

The Uzbek operation therefore offers significant growth potential, but investors will want evidence that stabilising loan volumes are followed by improving credit quality.

Costs and bad loans deserve attention

Group operating expenses increased by 15.8% during the first half, faster than the 10.4% growth in operating income. Staff costs rose by 20.8%, while depreciation and amortisation increased by 17.8%.

The first-half cost-to-income ratio consequently increased to 39.2% from 37.4%. Second-quarter efficiency improved sequentially, but maintaining that trend will matter if TBC is to protect its returns while investing in growth.

Group non-performing loans increased by 43.8% year-on-year to GEL 1.03 billion. The NPL ratio rose to 3.3% from 2.5%, while total NPL coverage declined to 119.8% from 142.4%.

Not all of this deterioration came from Uzbekistan. Georgian corporate and investment banking NPLs also increased, with the segment's NPL ratio reaching 3.4% from 1.5% a year earlier.

Capital and shareholder returns remain supportive

TBC's capital position continues to provide a useful buffer. The Georgian common equity tier one capital ratio, a core measure of a bank's financial strength, stood at 16.7%. The equivalent Uzbek ratio was 19.1%.

Both remained above regulatory minimums. That capital strength, together with high profitability, supports the quarterly dividend policy.

The GEL 3.50 per-share first-half dividend follows the higher distribution covered in my review of TBC Bank's 2025 results.

What investors should watch in the second half

Management says TBC remains on track for its 2026 to 2028 targets of at least 15% annual loan-book growth, ROE above 23% and an annual payout ratio of 25% to 45%.

Profitability is already running above the ROE target, but reported constant-currency loan growth of 12% at the end of June was below the annual target rate. Continued Georgian growth and a genuine return to expansion in Uzbekistan will be important.

The main positives are strong profit growth, resilient margins, excellent Georgian returns, rising deposits and a higher dividend. The main negatives are faster cost growth, weaker fee economics and the sharp deterioration in Uzbek credit quality.

For now, Georgia is doing the heavy lifting. The next stage is proving that Uzbekistan can return to sustainable growth without elevated credit losses absorbing too much of the opportunity. Investors can review the figures in the original company announcement.