Georgian Banks: Betting on the Region's Highest ROEs and Call Option on Uzbekistan

1Q26 Results Season: Strong macro momentum de-risks the sector as Bank of Georgia beats on volumes and TBC signals an imminent earnings rebound.

Macro Backdrop: Georgia continues to outperform expectations, with 1Q26 GDP growth re-accelerating. This massive outturn points to substantial upside risks for the conservative 5.5% full-year forecasts (ADB), providing a highly supportive environment for loan growth and profitability. Systemic risk remains low as foreign currency loan dependencies continue to slide.
Bank of Georgia / Lion Finance Group (BGEO): The FTSE 100 entrant delivered a strong 1Q26 group profit of GEL 585m (+14.0% YoY), driving an impressive adjusted ROAE of 27.4%. Standalone Georgian operations remain exceptionally efficient with a 6.2% NIM and a peer-leading 34.7% cost-to-income ratio.
TBC Bank Group (TBCG): TBC remains a premium domestic digital powerhouse, consistently generating superior profitability with an industry-best 27.3% projected FY26E ROAE and a structural 7.0% NIM. It also retains significant medium-term upside via its rapidly expanding digital bank infrastructure in Uzbekistan.
The Recovery Catalyst: While TBC’s FY25 bottom-line growth slowed due to a temporary spike in its cost of risk, 1Q26 shows this trend sharply reversing. A normalization of credit costs back to historical levels is set to release an estimated GEL 250m to the bottom line, driving a projected +33% YoY net profit recovery for FY26E.
Relative Value Play: TBC currently trades at an excessive discount compared to BOG ( 4.8x P/E vs. BOG’s 8.4x, and 1.22x P/B vs. BOG’s 1.63x). TBC also offers a superior forward dividend yield of ~8.3% (assuming a standard 40% payout), making it an incredibly attractive risk/reward play for the next 12 months as the market underprices its earnings recovery.

For more details read the full report:

Georgia Banks Update 29may2026 2
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