The Georgia-focused banking group delivered its highest quarterly profit and announced a buyback, but profit from its Uzbek arm fell by more than 60%.

TBC Bank Group (LSE:TBCG) has reported a record third-quarter profit that illustrates both the strength of its home market and the difficulties of its expansion further east. Results released on 6 November showed net profit of GEL 404.2m, up 9.8% from GEL 368.3m a year earlier, alongside a new GEL 50m share buyback, worth about $19m, and a third-quarter Dividend of GEL 1.75 per share.

Return on shareholders' funds was 23.2%, down from 24.4%, while net interest Margin edged up to 7.4% from 7.3%. The group said it remains on track to meet its targets for 2026 to 2028, which include annual Loan growth of at least 15% and a return on shareholders' funds of at least 23%.

About the company

TBC Bank Group is a financial services group headquartered in Georgia, with banking operations in Georgia and Uzbekistan. In Georgia it is one of the two largest banks and serves retail customers, small and medium-sized businesses and large corporates, offering loans, deposits, payments, cards and digital services. Its mobile app and wider digital ecosystem are central to how it reaches customers.

The group earns most of its income from net interest income, the difference between interest charged on loans and paid on deposits, together with fees from payments, cards and other services. Its profitability is shaped by loan growth, the net interest margin, costs and the cost of risk, which measures Credit losses relative to loans. In Uzbekistan it operates TBC Uzbekistan and the Payme payments platform, serving a young, fast-growing population with lower banking penetration.

The article reports third-quarter net profit of GEL 404.2m, up 9.8%, a return on shareholders' funds of 23.2% and a net interest margin of 7.4%. Strategy aims to grow loans by at least 15% a year, maintain returns at or above 23% over 2026 to 2028 and build Uzbekistan into at least 20% of group net profit by 2030, while returning Capital through dividends and buybacks.

Georgia carries the group

The core Business remains highly profitable. Profit in Georgia increased 17.4% to GEL 406.2m, supported by a 19.7% rise in net interest income and loan growth of 18% excluding currency movements. Group Non-Performing Loans held steady at 3.3%, and group cost of risk fell to 1.3% from 1.6%.

Uzbekistan told a different story. Profit there dropped 61.2% to GEL 15.9m, from GEL 41.1m, and the non-performing loan ratio climbed to 11.8% from 4.7%.

Management explained that the deterioration in reported asset quality reflected older loan vintages maturing, particularly those issued in early 2025, as well as a mechanical effect from extending the write-off period from 270 days to 360 days. Cost of risk in the country was 10.8% in the quarter, which was below management's expectations following the second quarter but still elevated, and which the company (LSE:TBCG) flagged as a key risk. It expects the fourth-quarter figure to remain broadly similar.

Why asset quality and regulation matter

Banks in emerging markets typically earn higher margins but accept greater credit and regulatory risk. Consumer lending can grow quickly yet produce losses once loans mature, which is why older loan vintages and changes in write-off periods can alter reported non-performing loan ratios. Management guidance on cost of risk is therefore a key indicator.

Regulation is equally important. Central banks can change risk weights, lending limits and collection rules, each of which affects growth and returns. The rules on instant cash loans and automatic collections in Uzbekistan illustrate how policy can reshape a business model.

What the next updates could show

The coming quarters should show whether Uzbek credit losses stabilise at the level management expects and how far the loan book resumes growth after a year of contraction. Georgian performance, including loan growth and margin, will remain the main Earnings driver.

Investors may also follow operating jaws, which compare income growth with cost growth, as the group invests ahead of expansion. The year-end results are expected to provide more clarity on the collection rules, and the group's capital position will indicate how much room remains for further distributions alongside lending growth.

Currency adds a further layer for readers, because results are reported in Georgian lari while Uzbek activity is earned in local currency and many comparisons are made in US dollars.

Regulation and Fintech in Tashkent

Regulation remains a moving part of the Uzbek story. The Central Bank has dropped a plan to raise risk weights on consumer loans, which management welcomed, but a requirement to reduce instant cash loans to 25% of the Uzbek bank's Balance Sheet by the end of 2027 still stands. Further restrictions on automatic collections take effect in January, with their impact still being assessed.

The Uzbek loan book grew 3% over the quarter, or 13% excluding instant cash loans, but it remains almost 11% below its level of September 2025. The picture on the digital side is healthier. Monthly active users in Uzbekistan passed 6 million, up 5% in the quarter, and payment volumes rose 54% year on year in US dollar terms. The Salom debit card base reached 1.5 million.

Macroeconomic conditions also remain supportive, with Uzbekistan's real GDP growth reported at 8% in the third quarter and 8.3% over nine months. TBC retains its ambition for Uzbekistan to provide at least 20% of group net profit by 2030, a goal that implies a substantial recovery from current levels.

Management cautioned that positive operating jaws are not expected for the next couple of quarters as the business (LSE:TBCG) continues to invest ahead of growth, with improvement anticipated as it progresses through 2027. Further clarity on the collection rules is expected at the year-end results.