TBC Bank Group PLC (TBCG) Earnings Call Transcript & Summary

Thank you, Altan. I want to thank for invitation at this event, and it's good opportunity for TBC Bank, for Georgian regulator as well to talk about the banking sector in Georgia. I'll have myself timer here, 15 minutes to make sure that I don't have used my time. I hope that I will be able to manage it. Georgia, as you know, it's located in South Caucasus and population is about 3.7 million. GDP in U.S. dollars in 2021 is USD 18.7 billion. According to latest estimates and projections in 2022, there should be quite significant increase in nominal GDP. We expect something like USD 25 million by the end of 2022. GDP per capita here is given in PPP terms. If we talk about the nominal terms, in 2021, it was USD 5,000 and we expect in 2022 to be close to USD 7,000. Average real growth for the period of 2010, 2021 is 3.10%, quite high growth of 10.4% after the COVID year. Of course, we know that basis was quite low in 2020, but still 2021 was quite remarkable. In addition to that, we expect at least 10% real GDP growth in 2022. Inflation is a challenge -- a global challenge. Currently, if you talk about the average inflation in Georgia for the last 10 years, close to 4.3%. This year, we expect inflation -- annual inflation to be close to 10% and in the second half of the next year, all other things being equal, we expect it to be close to our target of 3%. External public debt, quite manageable, close to 42%. And in terms of Fitch, S&P ratings, ratings are given on the presentation, and we have had quite good years starting from 2017 in terms of improvement of ratings. Unfortunately, pandemic did not allow it to grow. And if not pandemic, I'm sure we would have been already there at the lowest level of investment grade. And I very much hope that the resilience of the Georgian economy, which we have seen after pandemic and after the war, will enable Georgia to reach that quite soon. If we talk about the financial system in Georgia, its financial system is quite concentrated. The lion's share, of course, goes to the banking system. Macro finance organizations are getting bigger, I mean still quite low, but we started regulation of nonbank financial institutions back in 2018. We have quite a good system now. We found the synergy between financial banking system and nonbanking financial system, and they are becoming quite attractive in Georgia, and I'm sure that they will share will increase in the future because we see the growing interest from investor side for this micro finance -- for micro finance sector. Asset to GDP, the growth was quite good. Of course, in 2021, you see the reduction, but that's just the impact of higher nominal GDP growth and currency appreciation. Structure of the banking system. The banking sector itself is concentrated. If we talk about the largest 2 banks, the market share is about 75%. Concentration is a main challenge for regulator. But at the same time, we look at it from a positive side as well. That is a quite high -- there is a quite high competition in the system. And the banks, which represent 2 largest banks, which is the competition in many directions, but again, to strengthen it and to make sure that there are no loopholes for less competition. Our consumer protection, our financial education is directed towards increasing it -- to increasing it even more, we have a special consumer protection department in Georgia. We pay attention and commercial banks also know that, that's a very important part of our supervision process. If you talk about equity prices, the 2 largest banks of Georgian banking system are listed in the London Stock Exchange. The stocks of our banks are pretty much and highly demanded by the institutional investors, and both banks have stable financial performance over the years. You see this fall on share price and there is always explanation, but actually, they are not in isolation. You will see the fall before -- when pandemic started, and you will see the fall when Russian war started. But overall, the performance is quite good. And today, for example, if you look at it, the share price of TBC rose by 45% and return to historical value. So again, these shares are quite in high demand. Profitability. If we look at -- and based on the profitability and accumulated capital buffers of previous years, the banking sector easily coped with the crisis, which was presented by COVID pandemic and even after COVID pandemic and Russian invasion of Ukraine, and as many regulators in order to cope with the difficult situation, we released capital buffers during pandemic. And as of now, majority of banks restored their capital buffers ahead of deadlines, including TBC Bank and it's quite comfortable situation with capital. Yes, and there is also a comparison with the regulatory capital adequacy of other banks. There is one type of glitch there. It says on the right chart, 250%, it should be 25%, not 250%. So everything is fine otherwise. In terms of profitability, Georgian banking sector remains quite profitable. Historically, profitability is between 17% and 20%. 2020 was low. You may know that as a regulator, we requested commercial banks to make assessment of pandemic -- impact of pandemic portfolio, and we asked to provision a possible posted bad loans, and that's why it fell. But at the same time, its impact is notable in 2021 when recovery -- when there was an economic recovery and many banks, in fact, many loans actually which were provisioned before did not need to be provisioned and it definitely played its role for 2021 results. And that it is going to normalized level in 2022, the number which you see here for September '22. It's annualized. Well, I mean, it is quite high profitability. Of course, it cannot continue forever for a very long period of time. And -- but I think that Georgian banks are projected to remain very profitable. Liquidity coverage ratio, of course, liquidity -- liquidity became very important since 2008 global crisis in Basel, by Basel III framework. We, and Georgian banks, have quite comfortable situation here as well. During pandemic, we widened collateral base for refinancing loans. At the same time, we canceled the LCR requirement in local currency and banks were requested to pay attention to observe with the total liquidity and banks maintained high liquidity during the whole period. In terms of credit activity, we saw that, of course, there was an impact of pandemic, and we see this in numbers. What we have noticed is that during pandemic when we tighten monetary policy once we noted -- noticed that inflation was becoming -- inflation was increasing and as in many central banks, especially in emerging economies and developing countries with tightened monetary policy. And as loans became more expensive in Georgian currency, there was a tilt and loans in foreign exchange have been extended, but later, we took some macroprudential measures because our goal as a regulator is to make sure that inflationary problems are addressed as well as financial stability problems. And now we see that activities in foreign exchange loans are moderating. Of course, tightening by Fed, ECB is also helping this situation. If we talk for the loans, the breakdown in sectors, both retail and corporate SME lending contributes almost equally to the growth. Then in terms of also further analyzing sector analysis due to the inflation pressures, which we had -- which we are still having but less and less, consumer loans started to increase. If you compare in 2018, '19, 2020 they started to increase, and we took some macroprudential measures to maybe cost refinancing rate is not affecting it. And we took some macroprudential measures to make sure that it moderates and it is close to its sustainable level. And as we see from the consolidated banking accounts, this macro-prudential tools are giving the results. We have been hoping to receive. Again, credit to GDP ratio after the measures which we took, we see that the gap, which we had credit to GDP, which was high in 2020s and it's moderating and which means that there should be less pressure on inflation from demand side and at the same time, any financial stability risks should be mitigated. In terms of nonperforming loans Georgian regulator is considered to be sort of quite tough in many directions and this as well. Of course, we saw some increase in nonperforming loans during pandemic, but again, banks and financial system was ready to cope with it. And NPLs returned to its pre-COVID level. And so this is on the left side, it's our methodology, which is stricter than international methodology. And on the right side, you see methodology -- international methodology used by International Monetary Fund and even there, Georgia is quite good in terms of NPLs. I mean that there is also information about Ukraine, but I guess, we all know what's the reason for this. So quite comfortable with nonperforming loans in the banking system. Dollarization. Dollarization is a structural problem for Georgian economy as well for Georgian financial system. There was a question about dollarization in Georgia from one of the investors yesterday at macro level discussion, I also see this investor this here. Of course, we are aware of this, and we have been taking our measures to reduce dollarization as market-friendly manner as possible. If you take any assessment of international organizations or rating agencies dollarization comes as a first problem and vulnerability for the financial system. It has its roots -- after the breakup of Soviet Union dollar was the only currency who was fulfilling its role as a currency. But I have to say that the measures which we implemented very actively, I have to say, okay, my 15 minutes is over, but I will have just 2 more minutes, but we started to experience of many developing countries and successful countries in terms of the dollarization, Latin American countries, Israel stand out as quite good performance, and we put together the basket for measures. And I think that they are working quite well, I have to say. If you look at the performance dollarization, both deposits and loans, and if you take the breakdown on the right side, breakdown through physical persons and legal entities are doing quite well, and it's not our intention to bring dollarization to 0%, absolutely not. But I think that and it comes down to about like 20%, 25% that should be the level it should be quite tolerable, I guess, for a regulator to assume that there are no financial risks stemming from dollarization. But again, I also noted yesterday that long term, low inflation and sustainable growth usually is a cure for dollarization. For interest rates, if you look -- of course, on the left side, monetary policy was tightened in Georgia. And because of this foreign exchange loans became more attractive, but now with the tightening of Fed by ECB by [ Inc ] of England, we also see the increase in [indiscernible] this impact will also, I guess, will diminish and national -- loans in national currency and deposits in the national currency will be encouraged even more, which will also help to the process of the dollarization. And yes, as discontinuation of the characterization of dollarization and what we are doing to make sure that it is still in-force and it continues. It also gives a breakdown of interest rates. And at the end, because this financial system, banking system does not exist in isolation, just very brief information about the macro situation in Georgia. Inflation has peaked at 13.9%, 14% and its already has a downward trend. As I noted, we expect inflation is expected to be close to its target level in the second half of the day. Macroeconomic policies, which are conducted by economic team of Georgia is praised on many occasions by many institutions of international financial organizations. We have successfully completed the 4-year program supported by IMF back in 2021 and very soon, we started the new program, a 3-year program. In this case, it's a precautionary program, which is very good for signaling to investors at Georgia is implementing sound macro policies. And I very much hope that improving doing business indicators in Georgia, even now doing business does not exist anymore, but still and a favorable macro situation in Georgia will bring to Georgia even more investors and there will be even more interest from investor side. As a regulator, we are always very happy and very open to meet investors to explain to give information. So please, any time come to us, ask us questions, we'll be more than happy to provide your response. And we are very happy that TBC representation in Uzbekistan is taking its traction, and I very much hope that it will continue the same successful way in Uzbekistan like in Georgia. Thank you very much.

Thank you very much governor for this presentation and to be -- together with us today. And now my 15 minutes begin. So my presentation has 2 parts. First, I will introduce you for TBC Group, who we are, what we are doing today. And in the second part, I will present the strategy overview. Who we are. We, TBC, are a technology-driven company that exits for its users, cares for them and make their lives easier. We have nearly 13 million users who currently engage with our wide range of services. As a leading financial institution in Georgia, we cover all segments from micro entrepreneurs to corporate customers from mass market retail to high [ netted ] individuals. We have a leading position in insurance, leasing, investment banking and payment services. In addition, we have the largest digital ecosystem in Georgia TNET, which I will cover in detail later in this presentation. In Uzbek market, which we entered in 2019, we have the leading payment service provider, PayMe, and the first digital mobile bank TBC UZ. Both are examples of our ambitious international expansion potential. This also will be one of the central parts of today's presentation. And finally, the gross profitability corporate culture and the governance of our company are remarkable and places us in forefront of our industry. So this slide shows -- illustrate our huge potential for growth. The growth of TBC has been impressive over the last 4 years, we increased our addressable market 10x from 4 million to nearly 40 million. During the same period, the user base increased 5x, reaching impressive 13 million, as I mentioned before. Today, group serves 3.9 million monthly active users, which is 3x more than we had 4 years ago. This underpenetrated markets allows us to further increase the number of customers and market penetration in the future. Now let me show our digital footprint across the group. We are happy to announce that we reached 1.1 million daily users in September. The number of digital monthly users are very exciting. We have 3.3 million users per month. As illustrated on this slide, daily active users to monthly active users ratio during this period was 34%, which also has the potential for further growth. And I think also very important to mention that 99%, all of the transactions are done through remote channels, and our consumer loans and deposits are also departed digitally at the level of 70%. So our priority is to continuously improve our customer satisfaction. And as shown on this slide, we prioritize, this not only theoretically but also when we allocate our technology course in practice. As I have already mentioned, TBC is a technology-driven company. And during the current year, we invested impressive GEL 255 million in technologies. As you can see from the chart, nearly 70% of this investment went towards customer satisfaction and the growth. In addition, I'd like to also mention that investments were also made to further enhance our efficiency, risk and compliance. So this -- now let me show you who we are in Georgia. We pride ourselves that in Georgia, we are not only the leading bank, but also, we are the top provider, all types of the financial services and we are the largest technology company in the country. When I say we are the leading financial service provider in Georgia, I mean that we have a leading retail and SME franchise. We have the largest corporate banking in the country. We have analytic investment and brokerage house. We have the largest non-health insurance business. We have around 40% market share in POS transactions, which makes us a leading payment provider. And we have the largest company -- leasing company in the country and not to forget that the number of our group TNET is the largest technology company. So as I have already mentioned, previous slide, TNET is the largest digital ecosystem in the country with 1.8 million unique monthly users and has 40% of Internet traffic and multi Georgian traffic and gross merchandise volume of GEL 100 million. This ecosystem has 4 business verticals, which are lifestyle, housing, e-commerce and automobiles with impressive market shares sees between 51% to 82% in the country. Having this large digital ecosystem in the country enables us to first, to leverage our largest consumer base; second, to generate net fee and commission income serve to generate loan leads and finally, to strengthen our customer loyalty engagement as well as to position as a future pro customer-centric digital brand. So now let's move to the most exciting part of the presentation, who we are in Uzbekistan. We began our business journey in this country just 3 years ago. And currently, we have 2 fast-growing scalable technological businesses, one is TBC UZ Bank, a fully digital mobile bank, serving customers through our fintech platform space, which allows our customers to make our operations through the application. In its 2 years operations, TBC UZ has gained more than 2.1 million users and accumulated portfolios of around GEL 300 million in loan deposits and around GEL 270 million in loans. And the second is PayMe, a leading payment application. PayMe helps people to pay and transfer money instantly or pay utility bills and allows merchants to accept payments online or off-line through QR codes. PayMe currently has more than 7 million registered individual users and more than 55,000 merchants. These 2 businesses will be further separately presented and discussed comprehensively later today. Now I'd like to highlight our growth, profitability and efficiency. In the last 3 years, our loan portfolio annualized growth was 16%. And as you can see, we have the constant growth of our profitability. And in the third quarter, we had remarkable results as we achieved historically high quarterly profits, return on equity is 31.1%. Finally, as you see on this slide, we are becoming more and more efficient every year. We managed to decrease our cost-to-income ratio from 40% in 2019 to 30% since the third quarter of this year. Now I'd like to reiterate our medium-term guidance and compare our performance in the last 4 years again these targets. Our aspiration was to have 10 million customers, and we have managed to outperform this target. And currently, we have 12.6 million users. Our targeted loan book growth was between 10% to 15%. However, we here also outperformed the growth with single exception in 2020 due to the COVID-19 pandemic. Our targeted return on equity was 20% plus, and we also outperformed this target and managed to improve the number to 26.6% in the 9 months of this year. Our targeted cost-to-income ratio was below 35%, and we are continuously coming closer to this target. And in the 9 months of this year, we managed to achieve 33.5%. And finally, we returned to our dividend payout ratio to 25% in 2021 after the COVID pandemic. As you might know, this year, we have 30 years anniversary, and we celebrated this event together with thousands of our employees. And now I'd like to show you this short video. [Presentation]

I want to say that we truly believe that happy and engaged team is the true reason for any success. And in our case, we treat this as a fundamental priority. So this we managed to have 66% ENPS, which we think is truly remarkable. We also believe that without diversing and equal opportunities, it will be impossible to cultivate and healthy corporate culture. Our strong focus on this resulted in female representation of approximately 36% in our middle management. And finally, one of the sectors of our success is that we create a supportive environment when everyone can develop and grow. And as a result, only during this year, 20% of our staff we have promoted internally. Another contributor to our success is the best-in-class corporate governance. As you know, TBC Bank PLC is a U.K. premium-listed company, and we have high standards of the corporate governance. We have 7 independent board members with a diverse range of knowledge and experience that ensures the efficient management and supervision of the company. The group strategy is executed by the Board through 6 committees covering all major directions and our Board recently added 2 committees, the technology and the ESG committees in addition to the traditional mandatory committees. This helps us to focus more on the key strategic methods associated with technology and also further increases our social responsibility to our stakeholders. We are proud that TBC was ranked #8 among the FTSE 250 companies and #1 in the banking sector in terms of female representation on Boards and in leadership position in 2021. And finally, as this slide shows, according to the ISS quarterly scores on the 1st of October, TBC Bank Group PLC also has the lowest governance risks. Now with the introduction about the company, let me share with our strategy. As the leading financial institution in Georgia, we'll continue further growth and penetration of our financial services and products in the country. In the future, we intend to fully utilize the large potential of our digital ecosystems. And as I have already mentioned in my presentation, we have successfully entered to Uzbek market and we plan to further grow in the highly promising market. As you know, our mission is to make people's life easier and we have an ambition to bring consumer -- customers' experience to the next level in the future. In order to achieve these strategic priorities, we have all the necessary enablers, superior risk management, advanced analytics, cutting edge digitalization and technologies, and our outstanding team. These are the main enablers, which will help us in future to achieve our strategic priorities. And as a company, we are confident that we will deliver robust profitability and solid financial results. Now let me show a video which demonstrates how our mission to make life easier comes to life. [Presentation]

So after this wonderful video, let me now discuss our strategic priorities in more detail. Let me start with our strategic priorities related to our banking operations in Georgia. First, we are further aiming to grow in specific segments such as consumer and micro loans. Second, we intend to refocus our growth towards fee and commission income generation on the back of the large potential of the payment businesses. Third, we are also planning to further strengthen our focus to end-to-end digitalization, and also we plan to increase our efficiency by utilizing our data analytical capabilities. And again, utilizing the potential of our digital ecosystem is one of our main strategic priorities for the future. TNET is the largest technology company in Georgia. And if we fully utilize its resources, this will significantly contribute to our company's growth. It is our medium-term goal to increase gross merchandise volume from the current GEL 100 million to ambitious GEL 1 billion. Additionally, we aim to generate a net income of GEL 50 million from this ecosystem and also to generate GEL 1 billion leads in the medium term. Now let's tell you about -- now I will tell you about our priorities regarding Uzbek market. In this regard, our medium-term targets are remarkable. We are planning to generate synergies between PayMe and Uzbek Bank during the coming years, and we are targeting to have 5 million monthly active users and to have a return of equity 30% plus in the medium term in our Uzbek operations. We also expect that our Uzbek operations will contribute minimum 10% to 15% in our group's net profits. And this is my last slide, and I want to show that we are planning to add 2 new targets and also reiterate our existing medium-term targets. So we want to almost double our monthly active users and to achieve 7 million. As I have already mentioned, we also expect that Uzbek operations to contribute minimum 10% to 15% in our group's net income. And also, I'd like to reiterate our existing medium-term targets, annual loan book growth of 10% to 15%, return of equity more than 20%, cost-to-income ratio less than 35%, and dividend payout ratio of 25% to 35%. Now I'd like to invite Nikoloz Kurdiani, please.

Thank you. First, it's an honor to be here and to be representing our results in Uzbekistan, which have been quite remarkable. And I have, I guess, not a less video that Vakhtang had. So I'll start with the video first. [Presentation]

So why Uzbekistan? We are asked this question frequently. And basically, there are several answers, obvious and none of this in my opinion, obviously, is that it's a country in our region, firstly, which is very close to Georgia, culturally and historically. Secondly, because it has one of the biggest populations in the region, which is very young, around 30 or below 30 years and growing. So basically, Uzbekistan offers a massive opportunity in terms of total addressable market. And plus, what is very important. We saw massive reforms in the country, which enabled many things, especially in digital, for instance, one of the last ones being digital on-boarding for private individual customers, which physically allowed us to onboard customers from their homes. However, there's other and unobvious or sometimes not known things, which is, for instance, 30 million payment cards already present in the country and active or Internet penetration being very high, right, 24 million users using Internet. So this all lays very good ground for us to operate in Uzbekistan in digital manner with fintechs, with 2 big fintechs, the bank being the first one to be present on the market in its form, and PayMe being one of the biggest fintech companies in the country. Now how -- basically, we saw the video, it was a very good summary, but just to mention certain things. These 2 companies, basically in TBC, we already have several products. We have car loans, cash loans, deposits, 2 types of deposit cards, international and local cards, transactions, of course, and this gave us more than 2 million customer base in just 2 years from the launch. In PayMe, we have more than 7 million customers registered and PayMe is majorly a payment service provider for 2 segments: merchants and priority individuals. Priority individuals can top up their mobile phone, pay utilities, transfer money P2P or use our QR network of more than 50,000 merchants around the country to pay through QR codes with the services they get. This has been the growth track, so to say, from the very start of our presence in the market until today, until the third quarter of this year. There are major milestones, so to say. However, basically, this all won't be possible. You see number 9.5%, right? It's a massive figure, massive also in terms of representation in the country, considering 35 million population. But this always won't be possible if we didn't have 2 very important pillars upon which we basically base all our activities. One being the team, we call happy, young, energetic and positive team and this is also represented in our NPS scores in PayMe and in TBC, both are very high, high compared to the group, high compared to the market and region. And this makes us very happy. The average age is 27 years old team members. And most of them are technological. So this is also a very important component. And second is corporate social responsibility. From the day 1, we understood that this is something we have to start doing from the day 1, start towards to be a corporate citizen, a proper corporate citizen, meaning we have to invest our attention into financial literacy. We have to invest our attention into popularizing certain things about Uzbekistan, which amaze us, for instance, Uzbek Ornaments was the project, which quite presently, by the way, won many prices on one of the biggest regional advertising festivals or investing into popularizing the topic of technology, where we have blogs, we have partnerships, and many programs. And this corporate social responsibility program will continue. Of course, it is not just for the start, and we'll be investing furthermore in different directions. But these are for now the key pillars. This message is very important to us because we've been operating in the country. We've been investing in the country, growing in the country. And by the third quarter of this year, we already saw the profitability coming for our Uzbekistan business as a whole, which makes us very happy. And one more time confirms that we are doing something right. So kudos to the team. Now moving a bit down to 2 businesses, I will summarize. This slide represents the concept for space, digital banking platform, which we always indicate basically, the concept is that we developed a technology platform space, which basically is a hub for our banking products and technology, which enables TBC Uzbekistan to operate the app in the country. So basically, the app is developed by its space technology platform. Space operates in Georgia, but the main bar market for space, of course, is Uzbekistan, where we have most of our customers. And basically, the whole product suite or technology solutions, would it be risk management, antifraud or many others are coming from that platform. This is important because, as you know, starting a bank is not an easy job, and positioning the bank in a very short period of time on the market is even more difficult. These are the market shares. We are already present on the market and comparable to long-standing banking players in loans and deposits. However, for me, one of the biggest achievements is the chart in the lower right side, which is top of mind which means that the brand perception of the market has even higher market share. So customers in the country know us, they heard about us, and they want to have relationship with us. And this is -- this gives us even more promising vision that we'll be penetrating the market further more. This had some commercial figures. Basically, we have 2.8 million downloads in these 2 years. We have 1.3 million cards in the app. I'll show you a bit later how these cards are generated. But having 1.3 million cards already in the portfolio is massive too. The NPS score, as we all know, just to say once more, it's a recommend -- how much recommendable our app our businesses to other customers by our customers stands at 70%, which industry-wide is really remarkable. And again, this proves to us that we are doing something great. Or I don't know, 150,000 loans and 68,000 deposits. For instance, deposits has a very interesting insight because when you launch a digital app, which is first time happening on the market for a banking business, for us, it was a big question mark, would it be successful in deposits gathering, where we ended up is that we have more deposits than the loans also in terms of portfolio, and this is also remarkable because this is fully local currency funding for our lending business. And then one more time, this is a very big trust from local customers. In terms of cards, I was saying, yes, these are the registered customers above and the cards, 1.3 million cards. However, there is a split. And this split is something very specific to Uzbekistan banking markets where you can use your application as a wallet too. So the customers can link their card issued by another bank to your application and transact through your application normally using your app. So we have issued our own cards, 451,000 and we have gathered, so to say, attracted 852,000 cards issued by other banks. So the customer is having other banks link the cards with us and transact through their other cards in our application. This is also, in our opinion, a very good achievement. Customer acquisition costs. We all know that in digital banking business, customer acquisition is a burden. We managed to keep the customer acquisition cost at the level of USD 5 per customer, even if the customer base was growing massively. As we also know, as the customer base basically grows and you penetrate even more, it becomes more costly to attract new customers, right? But we managed to keep it at the same level. And this, of course, because we have very strong team in digital marketing, which was learning as we were going forward, and we kept this level stable. Loan portfolio, as I mentioned, we already have GEL 269 million portfolio and 150,000 tickets, so to say, contracts, which is also massive because we started lending as it was on the initial slides of our road map. We started lending not in the same moment as we started our commercial operations. It was like a leg of 9 months, so less than 2 years. And we already have a penetration of 153,000. And the only channel we distribute loans with is our application. So there is nothing else. Our deposits, GEL 297 million portfolio, where we have 68,000 deposit customers. Yes, these are all the channels. We also saw in the video. There was a very interesting insight initially when there was no digital onboarding. We understood that the last mile of the customer onboarding had to be done through our own effort. So we deployed the courier model, so the delivery management model, basically people who would do the last signature with the customer, and opened many customer acquisition points all across the country because some customers still prefer to come and touch the branch, touch the physical outlet, which we call [indiscernible] because inside, there is nothing else just our team members in our T-shirt standing and onboarding customers or explaining the concept. This also actually was a very good finding in terms of deposit acquisition because people wanted to fill the tangibility of our brands because they wanted to see where is their money and to come and maybe complain at one point in time. So in every big city, we have the showrooms, and we have many more so-called customer acquisition islands in shopping centers and big shopping malls all across the country. What is very important is top of mind things I mentioned, 41% TBC users perceived as a digital bank by the customers. So people know that basically TBC is the first digital bank in the country. Moving on to the payment business. Basically, we have PayMe 7.4 million registered customers being one of the biggest players on this market, 2.3 million active users and 55,000 merchants. And basically, PayMe has very strong DAU/MAU parameters to 35% and 45% in merchant business. Moving on, PayMe transactions, 111 million transactions by the end of last year and already this year, 122 million transactions. And in 9 months of this year, the volume of these transactions went over GEL 5 billion. Yes. Now moving on to the strategic vision. Basically, this is a bit complicated slide, but the message is simple. PayMe gives us the chance of building a super app based on PayMe. PayMe is a very well-perceived app. Brand is loved by the customers. We have 7-point something million customers in PayMe already. So if we embed TBC products into PayMe and build verticals -- various verticals in PayMe, which has already started, we will be able to have an application, which is almost in every bankable customer's pocket, offering various services. And of course, we know these practices all over the world. And we are on this road, too. And hopefully, we'll be very successful as we were until now. And Vakhtang said the midterm targets. Basically, we are committing to these figures, and we are sure we will be delivering it. So by this, I'm finishing my presentation. Thanks a lot. And again, it's an honor to present Uzbekistan space.

Thank you, Niko. Great story we have seen. And now I'm going to speak more boring [indiscernible], let's say, exciting things, numbers. I'm going to present our remarkable financial performance for the Q3 and 9 months. Let me begin with an overview of our proven long track record of the robust profitability. As you can see on this slide, year after year, we delivered and managed to achieve outstanding results across all of the key metrics with a strong growth trend. And even during challenging COVID years, we delivered double-digit ROE, almost up to 12%. And Q3 is no exception. Actually, it brings our profitability to a next level with 31.1% ROE and our 9 months is 26.6%. Now next slide, I would like to keep dive more into the details. Our net profit increased by 55% year-on-year for the quarter and 28% for 9 months. And the key drivers were both noninterest and actually NII. And as a result, as I mentioned, we are looking at ROE of 31.1% and 26.6% for the 9 months. Now next slide, I'm going to Slide 55, where I would like to discuss our profitability drivers. Most of them, as I mentioned, actually performed very well. So 56, our NIM -- I'm sorry -- sorry, I joined this slide. So now as you can see, our NIM increased by remarkable 100 basis points compared to last year, lending at 6.3%. And actually, we continue to stay more or less that level. Our noninterest income also increased significantly. And there, we have 2 key drivers. The first one was FX, increased spread volatility. But to mention new treasury products, we are also the drivers of this and our net fee and commission income also increased significantly, and we also continue this growth momentum to continue. Now going to the next slide. Total OpEx. So it increased by 34% and it may seem high, but we need to consider we grow our business. As Vakhtang mentioned, we actually put money to our technology both here in Uzbekistan and in Georgia. Also, our revenues, we had a high actual income that we need to pay bonuses to the staff. But the key point to mention here is that our income grew more than our cost and that drove our cost-to-income ratio first time below 35% and actually 30%, 29.9% for the Q3 and 33.5% for the 9 months. Now if I go to the next slide, our cost of risk. It actually started to normalize as we already anticipated for a long time. In Q -- sorry, it was 100 basis points that brought 9 months into 70 basis points. And NPL remained at a very strong level, 2.3%. It was stable quarter-on-quarter, and our coverage ratio is also very strong, 164%. So I would like to briefly discuss our loan and funding position. On the loan side, we increased 19% year-on-year. It was mainly driven by MSME and retail segments. And on a quarterly basis, we remained more or less stable, around up to 2% growth. Corporate book decreased by actually repayment of 1 large CIB customer. Actually, we continued the more aggressive growth trend in terms of the customer funding side. We increased by 29% year-on-year and 12% on a quarterly basis. And we see the results on the next slide -- actually it's a few slides after. Another point I would like and we are very proud of is our solid capital position. We were well above regulatory limits for all tiers. But also, I would like to mention our CET1 ratio increased even despite paying a generous interim dividend in September. It increased by 30 basis points. And the key point, it was driven by net profit faster supported by, I would say, [ hedge ] tail from FX, but profit was the key driver. So our liability structure, and I already mentioned our funding increase customer funding that resulted with share of customer funding is 73% into our total portfolio. And we have been growing the trend, and it's up by 2 percentage points year-on-year. IFI funding both sub debt and loan is around 80%, GEL 1.9 billion of our portfolio. Our liquidity is very strong, well above regulatory limit. And I want to mention also that if you translate on Basel basis, it's 351%. So that puts us in a very strong position. And now longer awaited numbers of our Uzbekistan business. Most of them were already mentioned. And a key point I would like to highlight, in Q3, the bank was profitable. Actually, the country was profitable. And we expect the bank itself on its own for '23 and throughout '23 to be profitable. That's also a key message. And all the bank's key ratios, NIM was 16.2%, many of you asked many times, here it is. And our cost of risk is 7.4%. So it means at risk adjusted basis, our margins are very healthy and sufficient. And I would like to reiterate our midterm targets once again. This is the new target, 30% plus ROE, 5 million MAU now and 10% to 15% profit into group share. And I would like to move to our last slide, where I would like to conclude how we are going to use our strong capital, where we are going to put it and what it brings for the growth and for the shareholders. First, we are going to continue our steady growth in Georgia, more or less maybe nominal GDP growth, develop our Uzbek business. It means to grow our digital bank, and we target to acquire minority shareholders of PayMe next year, and we have sufficient capital for this. And third, we are going to pay 25% to 35% dividend to our shareholders. And from September numbers, one can easily guess the direction of the travel. Therefore, all this will be supported by our high ROE 20% probably few pluses and 10% to 15% annual loan book growth, probably in the medium term it higher end. So on that note, I would like to thank you for your attention and open the floor for the first Q&A session.

[Operator Instructions]

Thank you very much for the presentation. It's really amazing. If I may, I'll touch on the several points, if I may. In the strategy, you mentioned that you're actually looking at the other international expansion option outside of Uzbekistan. Can you please elaborate a little bit more on this detail, that's the first point. The second point, coming on the back of the words of NBG Governor has been presenting. He was talking about it's still around 96% of the financial sector contribution to GDP other banks. I was wondering on whatever you are looking to more aggressively go into the other financial verticals apart from insurance, let's say, wealth management, capital markets, especially given what's going on.

So thank you for this question. I will try to answer the first question. So first priority as myself [indiscernible] presentation. So for us, very important Uzbek market, and we are successfully developing our business in this market. And we have 2 directions payment, and the Uzbek Bank, and we have a very ambitious plan. So to achieve this 5 million monthly users and to have profitability 30%. We understand that it's not an easy job. So it's a very hard work we have to do there. And to answer your question, probably next minimum 12 to 18 months our concentration will be on the Uzbek market. But what I want to say is that also, we will look to the other markets, but probably it will take more time. And in 2025, we'll be ready to go to the other markets, too. Koba, could you answer the second question?

I wanted to ask, given that the penetration of the other financial verticals, especially the capital markets is still fairly low according to the presentation coming from the NBG Governor. I wonder on whatever you would be looking to explore opportunities in wealth management, asset management and the other verticals related on the capital markets side within Georgia, especially given that the liquidity profile is obviously very strong at the bank and there is an appetite for alternative options.

Thank you, Michel. In fact, we already started and just not to spoil my presentation. Anyway they have a few slides about how we started this management just a few months ago and also on the capital markets development. So I suggest that will cover in my section.

We have several questions coming online. So how much do you plan to invest in Uzbekistan in 2023?

Thank you. As I reiterate, we have sufficient capital to invest into Uzbekistan. At the moment, we are working on the plan. And the quantum probably we are not disclosing at the moment. But the amount that will allow us to reach our ambitious plan. So that will be our target, and we are all set up for this.

Thank you, Giorgi. One more question for you. In your opinion, what proportion of 3Q FX income is sustainable?

Again me -- so obviously, what we have seen in Q3 on FX is not sustainable overall. But what I want to say, what you have seen in Q2, it was very strong number. And many of you thought that it's not sustainable. Actually, the Q2 number is our business as usual line, as that means that around 50% to 60%, what was in Q3 probably business as usual, the rest is one-off. Question, how [indiscernible] to continue few months quarter which I talk now at the moment. But overall, our FX will be significantly be increased compared to what we have said in '21, and we should expect positive trends there as well.

To add from my side, our CFO, all time is making very specific assumptions. So I believe that the growth and this revenues will be continued minimum 6 to 9 months, it's a minimum.

Thank you for presentation. [indiscernible], investor. Question to, Giorgi again. More and more people are talking about forthcoming crisis, economic or just financial. What do you consider as a CFO, the most vulnerable part of TBC business as a whole? And what are the main strategies of facing them?

Yes. Thank you very much. Good question. Of course, there is uncertainty about geopolitical situation that remains a risk. It's very difficult to further process. From our bank perspective, on our liquidity and capital position, we have sufficient buffers built up for such event. We have all the international established practices such as RRP recovery and resolution plan, ICAP, probably the key risk for this system is the lari and lari stability that remains, for example, because our capital base is strongly depends on lari and that may get overnight hit. But before that, we also consider into our stress scenario, and we have been sufficient buffer for that.

I have 2 questions. One is I was wondering if you could elaborate a little bit more on the new treasury products or sort of what has been driving the noninterest income beyond just the FX? And then I have a question for the National Bank. I'm just curious sort of what incremental areas of regulation you'll be focusing on for the next couple of years, if there's things you think are under-regulated at this point.

Okay. So it's -- I need to say here probably. On the FX products, they are the wholesale markets that will become more active on FX side of the wholesale market in Georgia as well exchange points, also different maybe products on the derivative side. So those are the kind of key points that we have been developing a treasury. Treasury, we are seeing as a market business going forward and some more new products to come. On net fee and commission income, if you looked in our video, for example, we are the first app to have a subscription model, that's a new product, for example, that we introduced. There are several few small things that are new to the market and that helps us along the transaction volume growth to increase our net fee and commission income.

So to answer your question, we are -- every year, we are publishing and updating our strategy -- supervision strategy. It's on our website, both in English and in Georgian. And the idea behind is pretty much to respond to questions like this. So we have updated it if I'm not mistaken months ago. So this is to give sort of transparency and credibility for the future. As of now, we don't have anything, any sort of big regulatory changes anticipated. What we have done before pandemic is that we created quite a large basket of macroprudential tools, which was linked to -- which was sort of in a way, continuous and completion of Basel III framework. If anything, what I expect this point is that we can be recalibrating this macroprudential tools based on circumstances we will have, and what we will need for ensuring financial stability. So no big changes anticipated again. And on our website, you can find quite comprehensive information and analysis about our strategy for supervision.

And we have 2 more questions. Relative projects related to crypto in Uzbekistan?

For the time being, we do not see this coming. However, we know the changes which are happening in terms of regulation and crypto basically demand on the market, we are observing. But for the time being, we are not on that point.

Thank you. And there is one more question, Niko, for you. How are you going to compete with other payment systems? What is your main advantage over your competitors?

I think for now, we hold a brand PayMe, which is having the biggest top of mind on the market, which gives us more confidence that customers love this brand and use it. In terms of active customer base as well, we are, if not the biggest, one of the biggest and also the vertical strategy, otherwise called Super App strategy, we think is something which will give us first more advantage in many verticals and this will create more traction. And plus the massive growth in our merchant acquiring business we grew, we doubled or even tripled over 2 years, the merchant base in PayMe will give us more synergies in terms of network effects. So these are the main actions basically.

Great job. Per usual, really excellent results and presentation. I just wanted you to speak a bit about the employment environment, both in Georgia and Uzbekistan, whether you're able to find and attract talent, retain talent required maybe on the technical side or to sustain the growth plan?

Yes. I will try to answer this question on the gross level and towards maybe Niko will add on the Uzbek markets on the gross level, as you see, ENPS antitrust and the brand, which we built it 30 years already, I think it's very helpful. But the real challenge, which we have mainly in the technologies with the IT people because the competition we see not from the locals -- I mean, in the Georgia or the Uzbekistan, the reality we have seen competition from the global companies, but how to challenge it and how to manage that. We are doing a lot of things for that area. First of all, to be interesting for the IT people to work in TBC. And today, we are saying that, as I made in my presentation that we are a technology company. We are not saying that we are the bank. And in reality today, we have more than 1,000 IT data analytic managers and credit managers much less around 500 to 600, so it means that in real terms we are more a technology company than like a standard commercial bank and how to manage it. So 2 years ago, we established in TBC, IT academy. And up to 800 new IT people just we are educating in TBC and approximately around 60 to 70 of them are becoming employees of TBC. This is very helpful. But also to be open in IT up to work today work around 17 different nationalities, beginning from Asia and ending from Spain and Portugal. So everybody employed in TBC because we need these special areas, there is no knowledge in Georgia, and we need this knowledge it. So we're bringing this knowledge from the experts.

I wouldn't say Uzbekistan in terms of challenges in terms of employment is different from Georgia. Yes, technology stuff is a difficulty. However, in Uzbekistan. On the bank side, the technology platform space is the most tech intensive, so to say, item, having approximately 200 people there. And there, of course, we are sourcing people from TBC Group IT Academy and other sources. I'd add that this NPS -- ENPS score mentioning today all over the presentations is another big actions we are doing because frequently, it is important for all kinds of employees to fill the company and to be part of it, right? And this engagement is something we are putting huge attention on in Georgia and Uzbekistan. In Uzbekistan, on top basically in PayMe, we try to keep ourselves as efficient as possible in terms of focus. So at this point, we are not having any troubles there in terms of staffing the team. However, as the verticals will add and we will grow most probably, we will face these challenges and we'll use the same tools.

Thank you. If there are no more questions, I suggest that we have a short break we can. Yes, 10 minutes. Just to remind you, the coffee break is served in the networking area. It is in the main hall to the left in the end to the left. And please come back sharply in 10 minutes so that we can start on time. Thank you. [Break]

Hello, I'm Bidzina Matsaberidze, I'm CIO of TBC Group. And I'm happy to tell you a few words about really outstanding technology team, which we have consisting more than 1200 employees from on average 10 different countries. And just a few years ago, we were operating only in Georgia, as you probably know. And all our technology specialists were located, originated from Georgia. And then we made the decision to go international. And as you know, we are operating now in Uzbekistan, but from the technology team's perspective, we went much more international already. Actually, we have converted the restrictions and limitations of COVID-19 pandemic into the opportunities to hire the experienced software engineers from around the world. We allowed everyone to work remotely, and we are hiring experienced auto engineers because we are raising the new generation, new technology talent ourselves in TBC IT academic, where we have around 200 graduates every year and increasing. And this outstanding team delivers not only the amazing products, but I'm happy to say that this is one of the happiest team in the world as a technology team, because as you see we have Tech employee net promoter score of 76% and Tech employee happiness index around 90%. How we do this. We are operating in flat organizational structure, where each product like deposit like a credit card, car loan, anything, is owned by small teams, and these teams are making all the decisions around these products -- around the product they own. So they are delegated to take decisions, and this ensures the agility and the speed of decision-making, and this means that these teams are empowered and autonomous is reasonable as possible because, of course, in order to control the risks, they are working in predefined, pre-agreed frameworks and architecture. At the same time, I'm also very proud to say that around 20% of the working hours is given for professional development. So the team members are not working on the regular business project, but they are working on themselves. They are trying something new. They're researching new technologies. And hopefully, later, they are using these technologies to create even better products for our customers. What we do in this team, as Vakhtang mentioned, we are building innovative digital ecosystem for our customers. So we put the customer in the center of everything we do. And we provide different services through digital platforms. And this ecosystem and these platforms have key characteristics, like they are agile, these platforms are agile, meaning that they are continuously updated based on the customer feedback and customer needs. They are resilient, meaning that they have to be always available, and they are protected with the best-in-class cybersecurity practices and tools. And they are simple, meaning that it's -- they are simple to use and they have intuitive and pleasant user experience. In total, this creates the superior customer experience and makes our customers life easier. Of course, these characteristics needs a constant focus and constant thought from our side. And as we speak now, there are 3 parallel strategic initiatives, projects running. For example, Here, we have TBC Bank, Georgia as example. So for agility, for example, we are running the so-called x5 program, which means that we are increasing the number of software deployments 5 times. And why it is important? Because we believe that you are as responsive to the market as quickly we can delivered the software changes. As often, you can deliver the software changes to your customers. So just a few years ago, we were making 4 deployments per day. Now we are making around 10 deployments, 10 changes in our applications in our software per day. And in 2025, we will be making more than 40 deployments per day, I believe. For the resiliency, we are running so-called x3 program, meaning that all the software needs downtime, set the downtime, right, because of some software incidents or because of some regular maintenance. So today, if we sum up all the downtimes which we have, during the whole year, it's around 1 day, like 25 hours. And we want to make it 3x smaller and almost unnoticeable to our customers. And for the simplicity, we are regularly running the simplification programs, because some products -- some business products may be very popular -- were very popular 10 years ago, but now they are less popular. And also some similar products exist with some similar features. So we are trying to remove the duplications and remove the less popular products. And we believe this is important because we wanted our customers choose the most suitable products for them very easily. And while talking about the strategic programs and projects and initiatives, we should definitely separately mention the data analytics because we believe that data and analytics is one of the key competitive advantages of TBC Group. We have around 200 specialists across the group, I mean data professionals. And during recent years, they have delivered over 25 artificial intelligence projects generating GEL 137 million additional profit. Let me also share how we made sure that our technologies don't get hold and how we constantly modernize them. So we have 3 types of teams. We have research and development teams who are continuously exploring new technologies and the applicable technologies they are providing to the platform teams. These platform teams are creating this software platforms and tools for our software engineers to maximize their productivity. And these software engineers working in product teams, they are creating new products or developing existing products to enable business growth and create best customer experience. And I think this slide was presented by Vakhtang as well. Looking at the technology investments from another angle, we can clearly see what are our priorities. So around 1/3 of the technology investments goes for initiatives, which enable business growth. Another 1/3 is the customer satisfaction. And of course, another 1/3 goes for the efficiency and risks and compliance regulations. And finally, I want to also share with you some technology pillars or principles which are very important for our business. First of all, we are using only proven technologies. This means that we may experiment with the new technologies, but whatever goes to production, it has to be proven. And it has to be -- it has to have the enterprise level support from the corresponding vendor. This means that we are controlling the technology-related risks. This means this is also translated into the resiliency. We support the modularity. We love to build the systems -- the modular systems instead of monoliths, like LEGO blocks. And this is important because our teams, which I mentioned, cross-functional small teams are able to develop the product independently from each other. And we support visibility, we love visibility because it is translated into the cost efficiency. Again, that LEGO blocks, that models, which I mentioned, if 1 block is built with 1 -- by 1 team, if it is reusable by other teams in the same company or in other subsidiary they're using it. All these systems we build -- these systems are scalable, meaning that they can automatically scale up and scale down based on customer demand. And this is also translating into resiliency and cost efficiency. And finally, in the recent years, the systems we build are cloud-ready, meaning that they can run in both on-premises infrastructure as well as in cloud infrastructure, meaning that we have this flexibility, portability to select where to run our software. And this is a, let's say, foundational formula for everything. This -- we have the formula, what we do by ourselves, by our hands, what we do in-house and what we outsource. So whatever is strategic, whatever is changing often we are doing by ourselves in-house. We are outsourcing other things. This means reduced vendor dependency. This means competitive time to market, and this means cost efficiency. And finally, I'm glad that it's not only us who are talking about our amazing products. Here, we see the recent international recognition of our achievements. And here, we see well-known international magazines and reviewers. And I'm even more happy to see here in this list, the technology giants like Kong and Amazon, appreciating our achievements. Thank you. And I'm inviting Giorgi Chumashvili, who will be talking about the digital ecosystems in more details. Thank you.

Thank you, Bidzina, for introduction. Today, I will tell you a little bit about our company about TNET. What is your strategy, what we achieved and how we see future in development of our digital ecosystem. After the new strategy was approved in 2022, TNET became the largest Georgian technology company. We are presented in 4 verticals with 8 platforms in e-commerce in lifestyle, in housing and in auto. To emphasize the scale of our business, I will tell you some more numbers that will give you idea of our ecosystem. What is it? TNET has 1.8 million unique users, which is 70% of Georgia total market, adult market, I mean. 1.4 million unique users, which is monthly active users. 40% of total Georgia and traffic are generated on our platforms, 5 billion page views are generated on our web applications and mobile applications. 100 and more companies -- sorry, for my loud voice, 100 and more companies use our campaign management system, including international companies, 100 and more thousand -- 1,000 leads are generated on our platforms for financial and nonfinancial institutions. And what is remarkable conversion rate is 8%, which is higher than benchmark average. As for market share, we use international tools similar way. On this slide, you can see that we are dominated in all verticals. In Lifestyle, we have 78%; in auto market, share is 82%; in e-commerce, 69%; and in housing, 51%, respectively. Our direct competitor represents all in 2 verticals in e-commerce with 10% share and in housing with 1% share. On the slide, you can see our dynamic progress, what we have already achieved in 2012. Here are 4 main parameters -- parameter indicators. GMV net income, GMV per user, and Leads which means loan portfolio for financial institutions. As you see, we have increased 4.5x from GEL 22 million to GEL 100 million our GMV. It was only in 1 year. Net income increased 10x. It was from GEL 0.5 million increased to GEL 5 million. GMV per user last year was only GEL 12, and we achieved to have GEL 50. And the loan portfolio, which was GEL 24 million last year, it was -- it is already GEL 100 million. So here, we have got great results -- great results of our ecosystem of our strategy, what we have already started to implement and it's already reflected to our ecosystem in great figures. What are our key enablers. We believe the modern technology approach is with the best talent and data capabilities, which are unique in our company [indiscernible] has a competitive advantage, which will be the main way to our success. It was diversified technologies that TNET use and the [indiscernible] structural framework enable us how to develop. And at the same time, he was a competitive rate that translates into the privilege of being able to hire the best talents in the country. Million of users, billion of page views, million of consumer behavior creates countless data. Data is our main asset. We track every year, more than 60% of Georgian customers' consumer behavior. We have 35% consents of Georgian total population that it's incredible, and it is near to European benchmark. We believe that in the next year, we will get 50% of total population's consent about their personal data processing system. The process shift from classified business to a marketplace business model has already started. It has been reflected in 2022 year's results. As I mentioned before, we increased GMV from GEL 22 million to GEL 100 million. This is just the beginning that will have a much bigger impact in the future as it process and gains momentum. That leverage monetization is an important initiative. We process customer behavior and the output is predicting of the exact customer needs. We have already attracted more than 100 local and international companies who are producing campaign management with our data and commercial rate is 8%, which is really superior figure. In the future, we are going to reinforce the data science and AI team and bring knowledge from abroad to this field. Super App is a creative initiative what we have all countries are waiting for its launch. And in the end of 2022, we will launch our [indiscernible]. We are putting all our services together in our -- in one mobile Super App. We will add payments and what were important, we are adding external partners AV services like food delivery, like taxi and et cetera. We believe that TNET perhaps will become for everyday use. The visibility of the product, what we are doing. I am prepared with a teaser about TNET Super App. [Presentation]

Thank you for your attention. I would let Tornike.

Giorgi, thank you for the amazing presentation. It's really fantastic to see the -- how big is our traction in the digital space in Georgia. Well, I don't have the nice video, but I really hope that my presentation is going to be excited enough and will encourage you. So I represent retail MSME and the payment business in Georgia. My name is Tornike Gogichaishvili. And so today, I'm going to talk about our achievements and how we are progressing on our local market. But it's a main market for us, were at least for now. Our loan book -- our market shares in loan book and deposits are quite remarkable. On the back of our exceptional Net Promoter Score, we are constantly refining our customer lowering culture. The thing that really we think that is an out is, how to say, a differentiator for us. And that's why we think that our customers -- our customers will really love us. Our dominance in MSME is even more evident. We have more than 37% market share in the lows and 70% of newly registered legal entities choose to bank with us. I think this really says a lot. So what enables us to be in the forefront of the market. I would really like to underline 3 key main enablers for us. Digital Banking. We see today more and more customers are leaning towards digital, using their mobile application and the internal banking application, they transact more with our mobile banking and also do other services. Our payment system is widely adopted in the country. And most of our -- and well-positioned not only for our private individuals, but also for other payment ecosystem players like merchants and search service providers as well. And of course, we couldn't miss out to underline our data capabilities, which basically creating a lot of value already in our organization, and we have a data engineers already across the old units of our organization. And using data analysis in our everyday decisions is already a new normal for us. Well, most of the time, figures speak for themselves. But international recognition is something that we really -- is something that really motivates and inspires us to do the extra mile. We are really delighted and honored to be repeatedly named as the best bank by various respective organizations in different nominations in recent years. Perhaps the most recent one we've been named as the best bank in Georgia and Eastern and Central Europe by Global Finance for the year of 2023. Now let's talk about the retail banking. Our number of active customers grew by 7% on a year-over-year basis, which is more than our CAGR growth for the years of 2019, 2021. For the time being, we serve approximately 68% of the bankable population and 42% of the total population. Our market shares, as -- as already mentioned, are very strong on the back of our very strong NPS. We have a very high penetration in the Youth segment, payroll penetration around 42%, and our cash flow -- 45% of our cash loans are sold remotely through our contact center and the mobile banking. Our market shares in loans for the years of 2019, 2021 grew by 12%, which is a very impressive figure considering the turmoil of COVID-19 years. We have a high market share, both in mortgages, 45%-plus and then a 30% plus in non mortgage. We are really happy that we are leading the mortgage market share. And our mortgage holders perceive as a primary bank and have more share of both with us. At the same time, we also push hard on the nonmortgage market. It is a very strategic market for us because it really helps us to penetrate regions and then acquire new customers. And this is a very important strategy for our retail business. Now on this slide, I would like to emphasize again the composition and our structure of the portfolios in the loans and deposits. But really, what I really want to outline is the composition of our loan book in 2019 and 2022. If you see, our nonmortgage loans have increased by 3% since 2019, which once again emphasized our strategic focus on mass retail, small ticket size Lari loans, again, very, very important metric and this growth I would really say is indeed remarkable for us. And on that note, let's have a closer look what helps us basically to acquire new customers through the non-mortgage market. First of all, our market share in cash loan stands around 32.5%, which is 5% up since 2019. The 90% of the cash loans are automated, we have automated approvals. It takes less than 1 minute to disperse, we have around GEL 1.2 billion of the loan book, and what is the strategic rationale behind it. It helps client acquisition. It is high-yielding Lari loan, and it, of course, generates fee and commission business. Now let's see how it translates into per customer engagement, which is definitely very, very important. We see that net interest income grew by 6% on a year-over-year basis. Our noninterest income grew by 75% on a year-over-year basis. Transactions increased as well by 70% and our average loan ticket size by 4%. We closely monitor a very important metric, which is net retention revenue. And of course, it's not surprising that most of our revenues are generated by returning customers. This is very essential metric that any sound business is looking at. Although most of our revenues are tied to the existing customer base, I would like to underline our ability to generate earned growth as well, which is 6% this year. Well, serving the affluent segment at TBC has always been a region. And now we have taken it to even another level. Concept is a dedicated brand and value proposition for our upscale segment. Our customers love and enjoyed lifestyle offers that concept is providing for them. Concept is really important segment for us. As you see from this slide, it generates the biggest part of the loan book, deposits and revenues for our retail business. Now let's talk about the room for improvement and if there is a room for the growth. Yes, we have high market share across all our segments. And Georgia is not too big country, right? With too many millions in population. But it really means that the growth story is over? If so, I wouldn't be standing here, right? And let me tell you why we believe that there is still plenty of room for the growth. If you look at our mortgage -- Larization rate in Georgia, it stands around 59% versus 72% in Europe. Our average family size is 3.4 vs 2.3 in Europe, and our mortgage to GDP stands at modest 16% versus 30% in Europe. As it already was mentioned today, we have very impressive GDP growth this year, double digit. Next year, focus according to our Chief Economist, looks also very nice, and our unemployment rate is at historic low, decreased by 4% this year. So I think that there is still plenty of room for growth for the businesses in Georgia. Now let's talk about the MSME. Well, small- and medium-sized enterprises is a backbone for any economy, right? Which drives the growth, help diversity and intend and stimulate and serve as a feeder, if you like, for other segments like corporate business and retail business. We are delighted that MSME is yet another business line that TBC has been historically #1 choice to bankers. Our market shares in loans is 30.4%, which is a leading market share on the market. We have exceptional NPS. And as I already mentioned, 70% of newly registered legal entities choose to bank with us. Our growth, if you look at the structure of our portfolio, our growth is also remarkable, right? We have double-digit growth in recent years. And one thing that I really would like to outline from this slide is, again, the composition of our loan book and our very strong focus on the number of active customers. Well, in MSME, we do not only have the enterprises, but we also have very small enterprises, which are represented by individuals. If you look at our loan book, our micro segment have increased by 6%, so 45% from 2019 up to 51% this year, which is very remarkable for us and something that we are really proud of. We have also very good results in per customer engagement in MSME. Businesses are growing with us, transacting more, thus stimulating fee and commission business as well. And also, the net retention revenue and own growth are also helping to grow our MSME further. Now let's talk about our enablers. So clients favorite digital channels. Digital Banking has already become a dominant way of doing banking in many countries and the financial institutions and would try to underline the TBC's among those pioneers. As I told you, most of our customers really love and prefer to do their daily banking activities and even by the coal products from us using our digital application. We have a remarkable increase in deposits, offloading up to 65% and 47% offloading in other products like consumer loans -- consumer loans. Our penetration is also increasing on a year-over-year basis and our [Indiscernible] stands at 43%. While basically digital banking is piling its momentum, our traditional channels are also under significant changes and for the good, I would say. In the recent years, we changed the major business processes in our branches to enable our front-facing -- customer-facing employees to focus more on consulting and proactive sales. We also redesigned and changed the layout for the most of our branches to accommodate all those business revisions. And this resulted in a fantastic result in terms of the efficiency, increased productivity and offloading as well. Now let's talk about our payment business, and perhaps the business line, which is very promising and lucrative in terms of the growth. Our payment ecosystem is widely adopted in the country and construct it in a way to serve, meet and enable all players, starting from individuals, merchants and service providers to onboard really easily and enjoy all our products. We have a wide range of products, they are sophisticated, yet very easy to onboard and use. On this slide, we can see the very strong growth rates in volumes, both in acquisition and issuing business, which once again reinforces our very positive outlook in fee and commission business. And last, but not the least, again, I would really allow to underline our data capabilities. Today, everyone is talking about data, right? And how valuable it is. But at TBC, we believe that it's rather important to translate this data analysis into successful use cases and help businesses generate more revenues, be more efficient. So -- and as I mentioned, we're already planted data scientists across all the units in our organization, and this is the result. In recent years, we generated additional GEL 137 million in revenues in different projects. And on the last slide, I would once again reiterate our midterm guidance, we will be very strongly focused on the number of active customers. And in the medium term, we target GEL 1.7 million in active customers in retail. We are targeting 40% of market share in our household lending, digital penetration up to 75% and NPS around 80%. On MSME, basically the number of active customers equally applies to MSME, and we're going to increase the number of customers there as well. The automation levels in MSME now are quite high, but we basically want to stretch the envelope even further and hit the 100%. And of course, the NPS, right, is basically our Bible, and say why we believe we're so successful at least so far. And of course, the payment business that I underline maybe most promising business line. So we target to increase our active payment customers by 30% and almost double or at least by 100% active merchants. And by this, I conclude. Thank you very much.

Thank you, Toco for a great presentation. It's really highly motivating to present CMD in these great country, Uzbekistan and especially in this historic city of Samarkand. Thanks for your -- it's okay -- thanks for your patience. I know that especially second half of the presentation is more difficult now to pay attention. I can tell you that I have a video in my presentation, a short one. And then after my presentation, we have very good 2 presentation on macro and risk management, so bear with us. I'll start with second. Yes, I'll start with a brief overview of our corporate and investment banking franchise overall. I mean, I will not be exception. Probably we'll continue Tornike story. We are holding market-leading positions and dominating corporate business for many years already. We have 42% market share, both in deposits and in loans. And I can proudly look into our CROs eyes, we have market-leading and best portfolio quality also historically spending NPLs at 1.4%. If we move to the Wealth Management business, we have been growing it over the last decade successfully, predominantly with the deposit base, but currently, we are holding both investments and deposit portfolio of our clients over GEL 3 billion. And then I would like to also talk about TBC Capital, our investment banking arm, which is leading the capital market development in Georgia and generating 63% of DCM transactions in the country. These great achievements is enabled by 3 main pillars. One is the current centric client model, second is our best team, and third is analytical and client management tools, and I'll talk about them briefly in my presentation. I would like to continue with the second pillar I mentioned on the previous slide team. So we are investing a lot into client acquisition and development. This is done through the graduate programs, experienced hires, including expert Georgians who are working and gaining experience abroad, effective succession planning, carrier development, coaching and training, which are local and international. And it's -- I'm proud to say as well that we have 280 professionals in our business. We are managing 1/3 of the bank, 30% of the managerial staff have more than 10% of experience in banking sector, and 70% of leadership position vacancies are filled with the internal hires. Now I will structure my presentation. Sorry. I will structure my presentation into 2 parts. One will be corporate banking and then Investment Banking and Wealth Management. And I hope I will answer questions that Misha asked earlier during the day. Okay. So Corporate Banking, I mean, we already talked about the market-leading position and growth. What I want to focus on this slide, if you look at the left-hand side, you see that we have been growing, but we will -- we have diversified our portfolio. And we see it in 2 dimensions. One, our largest and biggest client share, which we call strategic clients, decreased from 60% to 47%, and top 10 concentration decreased from 8.3% to 6%. On the other side, if you look at the right-hand side, we have a diversified portfolio, which is represented into all sectors of Georgian economy, and this is ranging from energy, hospitality, towards retail, manufacturing for the industry. I mean all the sectors are covered well and especially, I would like to highlight that we have sectoral coverage focus in our corporate banking where all the teams are aligned with the sector experience, and sector coverage perspective. We talked about numbers, but I would like to also focus what stands, I mean, next numbers. The credit and lending is the backbone of corporate business, and we have been focusing on the process efficiency over the last 12 months. We are completing currently very important projects, which we are calling end-to-end credit optimization. This addresses all 4 stages of credit process, which is information gathering, project implementation, credit committee and then actual disbursement. And as part of this improvement, we will have 32% efficiency increase in time to yes and 40% efficiency increase in time to cash. This in total generated 38,000 man-hour savings per year annual. After the lending now, I want to move towards the syndications overview. So when I talked about the diversification, this indication works as a very important part in this effort because we are originating much larger and high-volume transactions in the corporate segment, what -- versus what we are retaining on our corporate books. And this is done through the syndication and offloading to our partners, both local and international, which we are listed on this slide. Last year was another record year on syndications. We generated 27 large transactions and increased our syndications portfolio by 49%. Again, this helps us to manage the capital, manage concentration and also add additional fee income and ROE to our business. After the credit now, I would like to move to deposits, cash management and transactional business. The growth of this business was led by local currency deposits, which translated into increase Larization. This is in line with our long-standing strategy. So Larization increased from 47.5% to 57.8% over the last 2.5 years. And then that helped us also to drive and grow our noninterest income generation capacity. And we had another record year growth of 67%, growing our noninterest income from GEL 83 million to GEL 139 million. They are also related to transactional business and cash management. We implemented this year in a new cash management solution for our clients. Now 55 cash collection machines are spread across all major cities of Georgia and in large client premises. This enables our clients 2 important components in the daily activities. One, to cash in both coins and any type of cash notes instantly and get instant generation and crediting on their accounts immediately same day. So that helped us what we discussed on the previous slide, generate additional income of lari deposits. And we have been also recognized with our strong FX capabilities. We improved the client journey, and we also have been recognized as best FX provider by Global Finance consistently over the 4 years. And yes, at the last part in our section, you talk about the numbers is trade finance. In trade finance, we have been historically strong, especially after the acquisition of Bank Republic in Georgia where we captured almost half of the market in trade finance or 2 billion portfolio. We are maintaining this strength. We are growing this business and have been recognized as my colleague said, by all major magazines and surveyors. Another important addition which we put into this business line was new factoring platform. This is a fully digital proposition, which enables our clients to execute and originate transactions paperless. This increased number of transaction in fact only 3x already. And hopefully, we'll have even better numbers by year-end. And now promised video about the digital capabilities and analytics in our business. [Presentation]

Okay. Now I will continue second part with Wealth Management Investment Banking, and we'll start with the wealth management. So if you look at the Wealth Management business, we have also here market-leading positions have been growing our books by 25% CAGR over the last 3 years and then 19% year on year. What I would like to stress here, and ask for the attention of Misha is increase of the share of alternative investment solutions in our portfolio. So indeed, our clients currently are in demand of alternative solutions, taking different type of risks and generating different structures of the income. And we already are hitting 20% of share of investment portfolios in our total assets under management book. This is on the back of the strong growth of 60% -- 67% year-on-year versus deposit growth of 13%. All these, as you know, investment products are generating additional fee income. That translated into the both number of client growth. It increased by 20% over the last 2.5 years and also to additional profitability of our customers. So as you see, the income per customer year-on-year increased by 73%. And again, I won't be missing the recognitions consistently that we are receiving from global finance from the bankers being the best private banking provider in Georgia. Now I will move to the asset management. And this is the new vehicle that we founded this year. Some of you may know that Georgia established new lot of funds 2 years ago, we started working on license acquisition from the NBG, which was successfully completed in the end of 2022. And as I mentioned, we launched First Asset Management fund in Georgia in the beginning of this year. We are growing the fund. It currently stands at this GEL 6 million size. We will be doubling within the next 3 to 4 months, the size of this portfolio. What does it provide to our clients? It's an opportunity to further diversify the investment and invest in the secured Georgian corporate loans, diversified structure, 9-plus industries where you can generate, we are showing here 6.5% net realized this, but considering the rate hikes, this will include to 8% to 9% over the next -- before the end of this year. What I would like to stress as well is that we had interest not only from the Georgians, but even more interest from our international wealth management, nonresident clients. And as you see, 72% of fund investors are international, while 28% are locals. And then we would like to look at the brokerage business. I mean, this is more for us additional ad value service to our wealth management and affluent clients in concept business, we have been working on this effort with a different platform. But this year, we updated it. We -- now we have a new brokerage platform proposition, which enables our clients to both invest and trade and monitor their portfolio of worldwide stocks. And I'm proud to say again that the number of clients since the launch of this platform tripled and number of -- amount of assets under management increased by 82%. We are having more ambitious plans for the next year, not only on the affluent and [Indiscernible] segment, but also on the retail, which we will be presenting on new updates. And then the actual capital markets, I briefly mentioned in the beginning, but if we look at these figures and what Mr. [Indiscernible] presented, indeed, the capital market in Georgia holds a smaller portion, much smaller portion than other developed markets in the financial sector. It's growing fast, but is still very slow, small. I mean, we tripled the market together with other market participants over the last 2.5 years, and generated like 9.2 million new DCM deals, which enables both corporates to attract additional and alternative financing measures, but also our both institutional and local individual clients to have additional investment opportunities. But there is still a huge way to go to reach the milestone that we are targeting to have a substantial impact on the financial markets in Georgia. And the last part, what I want to present is our research, which has been growing impressively over the last 3 years. We positioned the research unit of TBC Capital as a strategic enabler for our clients, to plan their business and to make strategic or tactical decisions. And I'm proud to show you that in terms of coverage, we increased not only the number of the reports that we are publishing annually, but also we added new areas such as new industries within the Georgia and also global market watch both in DCM and fixed income and equity markets. We're also proud to say that we have been named as a best macro forecaster by National Bank of Georgia in 2021. And then you will feel it when Otar will present his presentation today. To conclude, I also want to summarize key targets. We believe that we will be -- we are well positioned to maintain our leadership position with a 40-plus percent market share. We would like to drive further share of investment portfolio growth and heavy to the 30% in total assets under management and have great customer experience with 75% NPS. Thank you.

And now I would like to invite one and only Nino Masurashvili, our Chief Risk Officer. Please.

Thank you Goga. Now it's finally my part to talk about, not that fascinating and shining thing that our business leaders talked already, but very important part of my presentation is about the risks. So the type of risk we have, how we manage them and what are our achievements. To start with, I would like to emphasize that our risk profile is very strong. We have very successfully overcome challenges related to the COVID pandemic recently, and this is the result of our very prudent underwriting standards is very strong. NPL debt, LTV debt, PTI ratios and FX buffers we maintain for our FX denominated portfolio. As you can see, our NPL ratio is 2.3 and cost of risk in the third quarter was 1% back to our normalized level. Also, it's important to highlight that in consumer lending, where we have automated decisions, we have a lot of score cards for multiple products, which is coupled with very robust validation system. It is essential to have this type of results that we are showing in this slide. Our capital liquidity is also very strong. We were using multiple stress testing tools to be aware and measure potential impact that we have and the buffers we have for both capital and liquidity is enough in order to overcome potential challenges we may address. Very important is our recovery plan. We have been working on our recovery plan for several years, and we have agreed and defined different recovery options in a case, the bank can face some extreme stresses. To talk about our risk strategy, we have built our risk strategy on 4 different pillars, which is have and build sophisticated tools in order to safeguard our bank from potential risk we are facing all the time, digitalize processes in order to improve customer experience, help with decisions, mitigate the operationality and of course, be cost effective. Very important third pillar is to embed in our everyday life in our decision-making risk-aware decisions. And the fourth would be partner with the businesses in order to facilitate risk and return decisions. We recently were working hard on these type of projects and I think have very good results. To speak of our risk management framework, I would like to emphasize that this framework is used across the whole group, both in Georgia and Uzbek operations in the market, and in all our subsidiaries. So it's like for overall risk management and not only for the Georgia. Very important part of our framework is, of course, risk appetite document. At board level, we have discussed a lot the appetite and limits to set for different risk, and this is cascaded down to all our subsidiaries. This is an important part to have a good measurement system in order to monitor the risk, which can be elevated and have a quick decisions. Internal capital and liquidity, annual process is also in place in order to have adequate capital liquidity. And once again, our recovery plan it is reviewed on an annual basis to have updated recovery options in case of severe stresses. And very important part, people -- already talked about it, but I will also mention that thinking about how to develop and train people, how to get the talent is very important in order to further improve our businesses and have a better expertise. Now a couple of slides showing our different risk profile. I will cover all of them. So here, we see how our portfolio is diversified between our segments, which is retail MSME in the corporate, and it is stable across the year. There is no big movement. The portfolio is also well diversified between the different industries. We have set sector limit in order to proactively manage sector concentration result here, you see that it is a very diversified. Top 20 borrowers and top 20 borrowers Gogo also mentioned it's decreasing over year-on-year, and we do not have risk and concentration risk here. And a very important part, everyone is mentioning, the governor also mentioned about that. So this is a FX-denominated share in portfolios, buys in loans and deposit. I would like to say that the figure of Lari share, Lari portion is increasing on an annual basis. And what is very important, so how we manage that proactively. We do have a target where we want to get. And those targets are then cascaded down to the businesses, and we work with the businesses on a monthly basis to have a different actions how to get there. So here, we see on the bottom slide that, for example, in the retail in a loan portfolio, GEL share local currency share 62%, which is already very good. And in the deposit size, businesses have a larger share of GEL portfolio. So it's increasing. We do have a target. We pay a lot of attention there. So it is -- it cannot be achieved on very quickly, but overall, we have a very good trend and continue to manage that. NPL and cost of risk, I already talked about it. So we are back to our prepandemic level of 2.3 and NPL coverage is also very strong, and 70% of our portfolio is collateralized, and this ratio is also stable across the different years. I have already talked about the financial risk and different financial ratios. And now I would like to talk a little bit about the nonfinancial risk, which is also very important for our group, and it needs very good management. So if we go one by one very quickly. So the cyber risk. This is something that we have that is elevated globally in the country, Georgia as well, a little bit less in Uzbekistan, but probably it will come at the banking and everything is being developed. So here, we have our in-depth security strategy with multiple preventive and detective controls, which help us to manage this risk. And we have not historically had any material bridge in this regard. So this is very good that we are here, but we're continuing -- to improving everything related to this topic. Operational risk, it has many different topics, but we have very rigorous process of identification, measuring and that mitigated the operational risk, and we are working with the businesses to mitigate our operational risk, reputational risk. Of course, we have a 0 tolerance to somehow damage our brand image. Compliance and regulatory, we have a central function of monitoring the compliance, so to be aware that to make sure that we're in compliance. Financial risks, obviously, there is a 0 tolerance towards that, and we have a multiple controls in order to make sure that we are finding this regard. And the model risk, as you know and Tornike was also mentioning there is quite a huge share of the non-collateralized cash loans, they were using our different score card, and in order to control model risk, we have a very robust model validation and a more installing system in order to have awareness what our models are doing. And finally, a very important part people risk. Of course, we are doing a lot of automation and digitalization in order to be less dependent on operations people, but we are very heavily dependent on our talented people in order to grow and develop our business. So that's why our leader of HR, [Indiscernible] together with our management team, really focusing significantly on different aspects of human capital management. In the start of my presentation, I have said that digitalization is one of our pillars. We have achieved a lot in this direction, and I would like to just mention several projects that we have. So first is like in the cash lending end-to-end digital process. It is absolutely important asset because it's increased customer experience, was a quick decision, but at the same time, mitigate operational risk because it avoids the mistake ex cetera. Our ratio in the Georgian operations here is 95% automation level, and Uzbekistan is 100% digital. So this is a really very good result. We have talked about the data. So everyone has mentioned that. And of course, smart usage of data is very important to have smart decisions. And we have deployed those data in fraud management. Recently, it has been elevated a little bit. So we have used data with -- coupled with AI tools in order to identify what can be the fraudulent transactions, and we had also very good results. And we also have used the data in IML, and there we have also very good results. In a risk, we have a so-called risk IT trial, which is absolutely important for us to further develop IT systems, which is related to the risk and the last, but very important part, we are heavily working to increase our expertise in IT of our risk of people, because it makes less dependent on the IT specialists and the risk of people themselves can do many things if they have that capability and expertise. So we are focusing on that as well. Probably the Russian-Ukrainian war is also something very important to give you information. So what are the -- what is the impact. When the work has started, of course, we were very worried because -- you can imagine so how we can have done different stress tests, and we are fearing that it may have an impact on TBC bank and the Georgian financial sector. However, after several months, we saw that vulnerable portfolio is really, very low, around 10 million Georgia lari. We have a few clients in our book who are dependent individuals who are dependent on Russia and Ukrainian and Belarus income. And for the businesses initially, there were challenges. But very quickly, they have managed to adjust and to change and switch to the new supply chain. So it has been overcome. And now, I would say, in a business-as-usual situation, we do not have any significant vulnerabilities in our portfolio. As for the sanction because this war brought a lot of sanctions. So as you probably know, the Georgian financial system follows U.K., U.S. in EU sections is obviously, we have a 0 tolerance towards the sanction evasion, and in the bank, we have increased the number of people who are overlooking this function, strengthens our onboarding and monitoring system. So we're really doing hard to be in line of this sanction and don't have any challenges regarding that. Now the second 2 slides shows some information regarding our Uzbekistan business. As Niko already said that one of the major business process is Uzbekistan is its consumer lending. And as already said, on a monthly basis, we are receiving up to 300 applications, and it's all digital. We have deployed some fraud management system, and we have a measure, and this system helped us to avoid around 1% of possible loss, which is related to the fraud, the team is continuing to fine-tune the system in order to even better because we have a different data, our approval rate is 43%, which is a very good compared to Georgia as well. And time to cash is only 7 minutes because, obviously, it's all digital, and it's very easy for the customers to get the loans, very important, Niko told that there is around 150,000 loans. It means that there is many things to be done in a soft collection as well. That's why that part is also very much automated in order to be -- to make a quick decision and be cost effective and at the same time when continuing to work in this direction as well. So as a result, our loan book is by the end of September is around GEL 300 million with NPL of 2.7%, and the cost of risk in the third quarter was around 7%. The last, but not least of the important slide, so this is the ESG. We are very proud to say that we have built very solid ESG framework where we have very strong governance. We'll also have committees both on the Board and the management level. We have a very ambition targets. One of the target is to reach GEL 1 billion of sustainable portfolio by the end of the next year and increase it from the GEL 700 million. Another very important part is share of the engagement of the women in the executive positions. So currently, our ratio is already high, 37% of all managerial position are held by the women. However, we're going to further increase it up to 40%. We have a multiple very good and solid ESG rating. And my favorite is that one ranked #1 in a banking sector in 2050, according to the [Indiscernible]. So it's to be -- #1 is something we're really proud of. So that's it. And to summarize my presentation, I would like to once again reiterate my messages, which is we really have an expertise in capacity to identify, manage the risk across our group within -- and manage them across the -- our risk management framework. Our asset quality is strong. We have enough capital, liquidity, and we have a tools to constantly examine that. And finally, in order to improve risk management, we're trying to bring best practices both in Georgia and Uzbekistan and we are paying a lot of attention to people development because these people who are bringing all the results. Thank you. And now I would like to ask our Chief Economist, Otar Nadaraia to talk about the macro environment.

Thank you very much. Thank you very much Nino. So I know I should be quick, but at the same time, I really hope to deliver and to focus really on something new for you, at least, well, at least -- what you don't obviously see in other macro style presentations and reports for Georgia and Uzbekistan. So growth -- we can't avoid growth. So all of us know, Uzbekistan strong growth and resilience, again, strong growth and resilience at the same time. But the question is why really is that the country depending still, to a large extent, on commodities. And the answer is because the prices of those commodities are not correlated with each other. And that's why even in the pandemic, Uzbekistan, unlike many other countries, showed slightly, but still positive growth. Now Georgia, of course, like many other countries, it was hard during pandemic. But really followed by what BlackRock would call restart rather than the recovery and restart continues for the second year now in 2022. We are slightly lower projection for '23 predominantly on the back of the very high base effect. But then we are now working on the Georgia's strength growth model, which we used to believe is something like 5%, 5.5%, but we may revise unit up to 6% or even slightly higher on the back of strong inflow of highly productive IT industry, highly productive migrants, as you know. So now to continue with resilience, we are living really unfortunately in very turbulent times. And as you can see, dotted or call it dashed lines, gold prices up and down, oil prices up and down. But the solid lines are terms of trade for Uzbekistan and Georgia. And as you know, terms of trade is export prices over import prices. And for the economies like developing economies, but not only like if you look at the EU area, the terms of trade are really volatile, but not in case of Georgia and Uzbekistan. And if you compare with other countries that's really the value. Now let's think of Georgia and Uzbekistan together. So if you wish to invest in Georgia and in Uzbekistan, as you know, major -- well, largest industry in Georgia is tourism industry, and largest industry in Uzbekistan is a gold industry. And if you look at tourism industry, this is worldwide. So international tourism expenditures worldwide. And the gold prices, those are not really correlated with each other, yes. So basically, that means that investing in both countries is a diversification really. So reforms, all of us know -- about reforms now, especially in Uzbekistan and we -- we copied some wording earlier on Georgia and now basically almost same wording on Uzbekistan. And also, what I would like to say is that what really also distinguishes Uzbekistan is very high investment to GDP ratio. Of course, productivity also matters definitely, and the labor force, but high investment to GDP ratio is a precondition for strong growth. And looking in the past enables us to argue that in Uzbekistan those investments should be productive because again, still dependent on commodities substantial, but we really see the emergence of the new industries, yes, the new industries, whether it is manufacturing, et cetera, et cetera, new services, and that's really, I think, important to mention. Now housing market, very important of course, to assess the health of housing market. We have separate assessments in our publications. Goga already mentioned on TBC Capital publications. We also have some assessments for the housing bubble in Georgia, also in Uzbekistan. And definitely, we don't want to invest in the country with overvalued housing prices like it's in Canada and many other places recently. And that's not the case in Uzbekistan also, as you can see from those charts, if you look at GDP per capita level and the benchmark housing price in the capital, there is very strong upside in Georgia, as well as in Uzbekistan and of course, yields are solid. And of course, over time, we have decreasing yields. So now exchange rates, like housing market you don't want to invest in the country with overvalued exchange rate. And you don't have all framework here, so for those of you who are familiar, so it's basically based on standard [Indiscernible] approach, the long-term trend of the real exchange rate. And based on our assessment, the GEL seems to be fairly valued or maybe slightly undervalued even at very recent exchange rates. So if you assume U.S.D. GEL at 2.75, but Som is clearly, clearly heavily undervalued, yes? And of course, all of us understand the benefits of entering country with really undervalued currency. So to be brief, to be in short, that means stronger growth in dollar terms going forward. Now inflation, unfortunately, inflation is an issue worldwide, and our baseline projection is that -- it should normalize in Georgia as well as in Uzbekistan. Uzbekistan now has an ambition to move -- to join the club of inflation targeters and that's, of course, good to hear. Now the dollarization, I think Nino already mentioned that together with a strong and proven track record of risk management. Also regarding the foreign currency risk, we are quite successfully increasing the large share of portfolio. But -- but also here, a very fundamental question is what would be our final target in terms of Larization should be 100%. So probably no, because there is a fancy term used by IMF, the so-called natural level of dollarization. So that means basically, as you can see from those charts, the inflows to GDP is quite high in Georgia, as well as in Uzbekistan. So the local currency share in portfolio should not really be 100%. Based on our estimates, around 30%, 30% in Georgian case should be seen as a natural level authorization. I would say maybe slightly lower, slightly lower in case of Uzbekistan. So another, I would say, maybe 1 of the most powerful, really powerful indicators, early warning indicators is a credit to GDP gap. We have seen positive gap, so credit increasing more than the trend in many countries for the many years and then what happened, I mean -- [Indiscernible] could be the best example. In our case, those are our estimates for Georgia and for Uzbekistan and -- in Georgia, it's [Indiscernible] gap even negative now. And Uzbekistan is very close to 0. So that also is very important from what you would call the macro level investment decision making. And by the way, also, you see here the trend in flight growth rates for Georgia and Uzbekistan. And Uzbekistan, as was highlighted in the previous slides, so it assumes a normalization of inflation, yes. So -- now the even longer, of course, Niko also mentioned, Tornike mentioned even stronger upside, especially in Uzbekistan in the retail segment. So 1 thing I want to say before -- before we look at the first chart. So penetration is a very important thing to look at and study. So first of all, in really, in really good macro financial literature, whether it is from IMF or from other Committee, so what matters is really the change in penetration level rather than the level itself, yes? And -- this is very important. Second, very important, how you measure the penetration. So the simple thing is to use credit to GDP. But in terms of households, that's often a missing indicator why? So think of Georgia as a household disposable income to GDP level in Georgia is one of the highest among other countries, why? First, remittances. So remittances are not directly included in GDP. But certainly, they are part of -- those type of inflows are part of household disposable income or think of pension contribution, like in Singapore, it can be around 30%, 40% of household disposable income, taxation also like in countries like Mongolia, very high share of commodities and large companies where the disposable income goes to -- goes to first of all to them. Of course, social redistribution then, of course, is important. So from that perspective, here you have the chart, household debt to household income. Of course, as Tornike mentioned still from growth potential in Georgia, but especially, of course, especially for Uzbekistan. So the second chart is mortgage to non mortgage ratio, and this is basically mortgage ratio, and GDP per capita. So of course, as you are reach here, we have more mortgages. Georgia's close to trend in Uzbekistan, what you can see from this chart, there is again from this chart stronger upside for consumer lending, again, if you compare with mortgages. So thank you very much. You can find more, as Gogo mentioned on our TBC Capital website, including publications on Uzbekistan, and we are going to do more also in this regard. Thank you very much.

Thank you. Now we are the last part of our session. I would like to ask all presenters to come to the stage, and we'll have our final Q&A session. So again, please a reminder. If you have any questions, please raise your hand, and we will provide you with a microphone. The online participants can submit their questions via our online chat, and I'll read them out.

When is the dinner?

In this case, just final words, we have some presents prepared for you, so please pick up one on your way. And also please make sure that you come to our dinner tonight at Platan restaurant. The individual e-mails has been sent out, but just to remind you here as well, we have a dinner at 8:00 at Platan restaurant. Those of you who are staying here at Samarkand, transfer will be provided at 7:30 from the Amir Temur Hotel. Thank you.