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

Good afternoon, everyone, and thank you for joining us on today's TBC Bank 3Q '23 results calling. My name is Andrew Keeley. I'm Director of Investor Relations at TBC, and I'm joined on today's call by our CEO, Vakhtang Butskhrikidze; and our CFO, Giorgi Megrelishvili. As usual, we'll start today's call with a short presentation on the results, and then will finish up with a Q&A session. And with that, I'd like to hand over to Vakhtang. Thank you.

Thank you, Andrew. Thank you for joining our third quarter financial results conference call. Before I discuss our results, I'd like to mention the excellent news that came yesterday for Georgia and the European Commission recommending granting candidate EU status. All of us at TBC greatly welcome this decision. I am pleased to report that it has been another very successful quarter for TBC as we remain focused on providing the best products and services for our growing customer base and delivering value for our shareholders. Today, I'd like to focus on the key achievements for this quarter. As usual, I will start our presentation from this slide, which reviews our position across the group's 3 fundamental strategic pillars. I am pleased to say that we remain -- our position as the leading financial institution in Georgia, delivering almost 26% return of equity in this quarter and working with 1.6 million monthly active customers. Our digital financial services business in Uzbekistan are really gaining momentum, contributing 5% of the group's net profit and serving 3.7 million monthly active users. Additionally, our Georgian ecosystem TNET continues to grow with an annualized GMV of GEL 170 million and transactions up by 30% year-on-year. The next slide presents a high level overview of the third quarter. In the third quarter, our groups maintained an excellent return on equity of 27.6%. Our CET1 ratio per IFRS remained strong at 17.5%, which is 3.1 percentage points above the minimum regulatory requirements despite the paying feasible dividends. At the same time, our loans and deposit portfolios grew impressively by 17% and 11%, respectively, on a constant currency basis. In Uzbekistan, our operations continued to deliver positive results with a net profit of 14% and 23.4% on a return of equity. Notably, our gross loan book has more than doubled over the 12 months to over GEL 630 million. Importantly, our digital user base keeps growing with 4.5 million digital monthly active users across the group and daily active users to monthly active users ratio at 32%. As for the Georgian operations, daily active users to monthly active users ratio stood even higher at 44%. Moving on to the next slide, I'd like to briefly go over the financial performance in the third quarter. I am proud to say that for only the second quarter, our quarterly earnings topped GEL 300 million. This previous equation was yearly ago when we benefited from the unusually high FX revenues. So to achieve this GEL 300 million level in a quarter without any one-offs is an excellent achievement. Meanwhile, return on equity of almost 28% speaks for itself. And it's also worth noting that our balance sheet growth remains very decent with 19% gross loan growth on a constant currency basis. Before I review our performance in more detail, let me provide you with a brief update on the recent key macro developments in Georgia. The Georgian economy continues to show very positive growth with 5.4% real GDP growth in the third quarter. Meanwhile, inflation remains low and National Bank of Georgia has started monetary policy easing. There is more to come over the next 18 to -- 12 to 18 months. Central bank reserves are at record highs and while there has been moderate weakening of lari in the past few months, this follows a prolonged period of appreciation. At the end of 2021, as you remember, the lari was trending at GEL 3.10 to USD 1 while it's now around GEL 2.70 The next slide further shows Georgia's solid economic fundamentals. The Georgian economy has grown at 6.8% in 9 months, and we forecast 6.6% growth in the whole year. The chart on the right shows the strong growth of FDI inflows in the recent quarters with tourism and remittances leading the way. Slide 8 reiterates my point that Georgia's inflation remains at a very low level, and we expect to close to 200 basis points of refinancing rate cuts by the end of 2024, which showed by supporting for the economic backdrop to our businesses. Now let's move to the next slide, which highlights our growing customer base and digital engagement. The group retail monthly active customer is up by 36% year-on-year, reaching 5.3 million. Our digital footprint continues to expand, and we added 1.3 million digital monthly active users over the past 12 months, which is a great achievement and we think that in Uzbekistan in particular, there is much more to come. Turning to Georgia. You can see our leadership position across all the major segments and in third quarter, our loan book increased by 17% on a constant currency basis, driven by a very strong growth in CIB segment. At the same time, deposits rose by 11% also on a constant currency basis, led by the retail segment. On the next slide, highlight the performance of our payment business in Georgia. Net revenue grew by 15%, reaching GEL 69 million with card operations continuing to play a significant growth, contributing nearly half of the revenues. The slowdown in this quarter in a year-on-year growth is primarily driven by the timing differences in receiving cashbacks from the payment networks. And as you see, payment remains a key part of our noninterest income business, representing almost 70% of our fee and commission income. Next slide introduces our digital ecosystem TNET, which comprise a wide range of products and services across 4 verticals. And next slide gives a bit more color of TNET performance. And as you see in the third quarter, GMV increased by an impressive 55% year-on-year reaching GEL 45 million with gross profit to GAV at 13%. Lifestyle led by the [ ticketing ] and housing segments, the main contributors to this success. Over the same period, 5,000 retail loans were dispersed through TNET [ leads ] accounting for around 4% share of TBC retail loan disbursements in the quarter. As our ecosystem business continues to grow, we expect it to further increase its positive contribution to the group's fee and commission income and retail loan generation. Now it's my pleasure to share more about our fast-growing operations in Uzbekistan. Our digital financial services in Uzbekistan had positive contribution to the group's earnings, 5% of the total group's net profit in the third quarter with 23% return on equity, was serving 3.7 million monthly active users. Another very important thing I'd like to flag regarding our Uzbekistan operations. In September, as probably you know, Oliver Hughes joined us, our team as the Head of International Operations. We are delighted to welcome such a high-caliber addition to our executive team, and we think that Oliver, [ Nikai ] and the team in Tashkent can take our Uzbek operation to a new level in the coming years. On the next slide, I will give a bit more color about the performance of Payme, leading payments provider in Uzbekistan. Monthly and daily active users grew by 43%, reaching 3 million and 1 million, respectively. And top line revenues and the net profit grew by 41% and 45% and driven by a 21% decrease in payment volumes. And finally, on the next slide, let's turn to TBC UZ Bank, a digital retail bank. We continue to acquire new customers with registered and monthly active users up by 67% and 75% year-on-year, respectively. Our retail loan and deposit books continue to grow very strongly, giving us a 3% share on the retail deposit market and 12.5% shares of our secured cash loans, what are known as a macro loans in Uzbekistan. At the same time, TBC's revenues more than doubled year-on-year, reaching over GEL 37 million, and it continued delivering positive returns with GEL 2.8 million in net profit for the third quarter. And now I'd like to hand over to Giorgi.

Thank you, Vakhtang. Thank you all for joining our quarterly call today. So I'm going to take a deeper dive into our quarterly performance. And I'll start from Slide 19. I'm very pleased to say that we continue to deliver very strong results in the outcome. And as you can see, during the 9 months in '23, our net profit is up by 9% year-on-year, reaching almost GEL 850 million. In the third quarter, we generated almost GEL 300 million for only the second time, with the previous time was just a year ago when we had unusually high FX, [ and a 6% ] year-on-year drop. But I'm very pleased to report we have reached this milestone this time without any one-offs. And consequently, our high profitability is actually shown in a very nice 27% return on equity for 9 months with [ 27% ] for Q3. Now I'll go into more details about the main drivers of our profitability in Slide 20. Both net interest and noninterest income have continued to display strong year-on-year growth dynamics for 9 months with total revenues up by 18%. Net interest income was up by an excellent 28% year-on-year, and I'll explain a bit more about how we achieved this result when I discuss our margins. Despite the high base in FX revenues from last year, our noninterest income has still shown year-on-year growth for 9 months and net fee and commission income is up by a very healthy 33% year-on-year. I would also like to highlight that our Uzbek operations contributed GEL 143 million or around 8% of our total revenue in the first 9 months. Now let's move to our margin dynamics. As you can see, NIM grew by 80 basis points and 60 basis points year-on-year in 9 months and third quarter consequently. As a result, our NIM stood at a very impressive 6.7% in 9 months and 6.9% in Q3. The last quarter was a bit -- marginally a little lower. As you may recall from last quarter's call, I mentioned that we are at the peak of the margin cycle and we are very pleased to see that NIM continues to stay at this peak for this quarter. Now on Slide 22, I'm going to discuss our costs. We continue to try to manage our cost growth even as we put in faster digitalization, expand our operation both in Georgia and beyond. Cost growth remains more less in line with our business growth, up by 24% compared to Q3 last year. Favorable operating income dynamics have allowed us to maintain a cost-to-income ratio close to 35%. I also would like to highlight that cost-to-income ratio of our Georgia Financial Services stood at 30.7% for the first 9 months. Now I would like to move to Slide 9 (sic) [ Slide 23 ], which highlights our healthy asset quality. I'm glad to say actually there is not a great deal new to report with regards to the credit quality. Our NPL ratio decreased year-on-year across all segments and stood at 2% at the quarter end. At the same time, total coverage was 152%, while provision coverage stood at 88%. And as you can see, our cost of risk was just 90 basis points for 9 months in Q3. So on Slide 24, I would like to share with you the performance of our core balance sheet. So the loan book, as you can see, for the group has grown by very decent 19% on a constant currency basis, while Georgian growth was 17% year-on-year, also on a constant currency basis and 4% Q-on-Q in Q3. Over the same period, the Georgian customer funding grew by, let's say, 11% without FX, mainly driven by CIB and retail. Now I would like to move to Slide 25, where you can see our solid capital position. We actually continued to stay fairly above -- of minimum regulatory requirements for all tiers, and our capital position is very strong. Our CET1 ratio dropped a bit to 17.5% by 80 basis points from last quarter, but it was driven by dividend payments. Nevertheless, we remained 3.1% above minimum regulatory requirements. And now finally, on Slide 26, I will [ finish with ] the financial performance of our Uzbek business, which continues to deliver very strong outcome. I would like to reiterate that our business they are delivering was very strong and mainly profitable growth. Loans have more than doubled year-on-year, and the customer funding is up by 74%. We generated around GEL 14 million in net income in Q3, that actually translates into 23.4% return on equity. In terms of some financial measures of TBC UZ Bank, NIM stood above 20%, almost 21% for Q3, while cost of risk was 7.3%. The contribution of our Uzbek business in the group is already tangible. That means 5% share in group net profit, 17% of group net fee and commission income and 12% contribution in loan book growth, with loans for let's say 8% of the group's retail loan book. So for now that's all from my side, thank you, and I would like to hand back to Vakhtang for some final remarks.

Yes. Thank you, Giorgi. And I'd like to wrap up today's presentation by reiterating the target that we have set ourselves through until the end of 2025, which you can see. We believe we are on the right track to deliver on these aims and I realize we need to keep our focus on the executing in terms of delivering the best possible services for our 5 million plus monthly active customers. On that note, I'd like to thank you for your ongoing support, and we are now ready to answer any questions you may have.

Thank you, Vakhtang and Giorgi, for your comments. Now we'll open the floor for Q&A. [Operator Instructions] So in terms of the first question, we have Robert Sage from Peel Hunt.

I've got three, all of them short questions, one of which is, I guess, strategic. And that reference was made to the appointment of Oliver Hughes? And I think it was stated that you can see the potential [indiscernible]

We hear you very badly, Robert. Sorry.

Can you speak up a bit, Robert. The line is not great.

The strategic question is with respect to Oliver Hughes' appointment. I believe you mentioned that you might be able to take the Uzbek operation to new levels. I was wondering whether you could share what his initial focus might be? And what in particular you think he might be able to add, also to the extent to which you might be looking at opportunities beyond Uzbekistan? The second question relates to the net interest margin where again, you've exceeded my expectations. My question really relates to, again, the Uzbek operation because I see that the margin in Uzbekistan increased by 80 basis points quarter-on-quarter. And I was wondering if you could give a steer at least directional in terms of how you see it developing over the next year or so? And finally, just a quick one on deposits. I see there was a small contraction in the deposit base at the same time when asset growth was quite strong in the quarter. I know that looking at quarter-to-quarter fluctuations can be misleading, but I was wondering if you have any comments on that.

So I will take the first question and second and third question you will take. So thank you, Robert, for all of these questions. So for the Oliver -- so I have this slide on the screen, and as you see on this slide, in August, we published our mid-term targets, what we are targeting. So a very tough but also very ambition plans which we have in our Uzbekistan. What does it mean for us that we want to increase monthly active users in Uzbekistan 5 million plus in 2026. This is the first. Second, to have a monthly growth of the portfolio to 80% per year. So this is second. And the third, we are targeting to have a minimum GEL 200 million net profit in 2026. So if you take exchange rate it means that we want to generate [ $80 ] million net profit in Uzbekistan. And Giorgi mentioned that even today, Uzbek's net profits became material for the group, but looking on these figures, it means that in 2026, we need to become a material for our operations. To answer your question, so for us, important to go more deep in Uzbek market for this year, for 2024, 2025. And afterwards, we will see if there will be some interest for to go for the other markets. So to answer your question, we will concentrate next 2 years on Uzbekistan. Giorgi, you are on mute.

Sorry, apologies. So Robert, so I'm going to take 2 of your questions. The first one was about NIM. And as I mentioned, we are very pleased to see that we managed to remain in the peak. That's actually we are at the peak, we still think so, like 10 basis points here or there, it doesn't really change the definition of the peak. And again, from now on we expect to gradually coming down but pace can be a bit slower than we expected, for example, to a few factors at the moment. But again, we do expect to remain at a very decent level in the foreseeable future for -- from the NIM perspective. On Uzbekistan, it's a very small book. And as you know, it's fully ICL. We think at the moment, for a medium term, we do expect to remain around 20% NIM, maybe a bit more, at least for next year or 2, that would be our kind of expectation and target. And the second question on the drop of the customer funding side. It is nothing else than just managing our liquidity and balance sheet management because our loans grew to be over liquid and our liquidity now at a lower level because we used to have a positive carry. Not anymore and expecting our reference coming down and et cetera, now we just to the balance sheet and cost optimization, that's an exercise. Does it [ answer ] questions?

Okay. And our next question comes from Rahim at Investec.

So 2 questions for me if I'm on. Just the first on the Georgia operations and your cost of risk [indiscernible] come in lower than we had anticipated or at least I had anticipated. Just give us a sense of whether that's something that you expect to continue for the next few quarters? Or there should be a normalization towards your kind of 1% guidance or historic trajectory? And then the second question was just again about Uzbekistan and follow-up on the second question. With Oliver's arrival, can you give us a sense of perhaps where the areas of focus might be in terms of new products or development, especially in TBC UZ and kind of where the area of focus is going to move to over the next, say, 6 to 12 months?

Giorgi will take the first question, and I will try to answer the second question.

Yes. On the cost of risk, like our guidance remains unchanged. It's around 90 to 110 basis points for the Georgian operations. We are below [ Uzbek ] level for a quarter or 2. But again, we do expect over time to actually [ be resilient ] business is at. We look at the next quarter or like within 2 quarters, it's a bit difficult to say. But overall, like when [ Mamuka Khazaradze ] we can safely assume [ this business range ]

Yes. to take the second purchase. So Oliver openly said he has a huge experience, so he was the CEO of the company, probably the largest digital bank worldwide results. He began this journey from the zero and brought it back to that level. So -- and we are continuing our strategy. You know that we have a retail business here, but we will continue to be fully digital bank. But quarter-by-quarter, we will increase our operations and will bring the products which will be similar, and this will include in our digital operations, such as, for example, we want to increase our type of the consumer loans, but more wide range of the products. We are planning to increase our -- to bring the credit card [ retail ] products to the -- in our product leasing Uzbek market. And also in the middle term also, we are planning in addition to our retail product to bring micro and SME products. So this is the plans which we have in our medium term. So to summarize, we want to be fully digital bank but in addition to retail products, also to have a micro and SME products.

And we have a question from Carlo. I don't have a surname.

Carlo [ Bata ] from [indiscernible] Just one question. I think there is perpetualities that can be called next year. What is the policy of the bank? Would it be just -- is it too early? Or you guys are already thinking about it? Is it going to be just based on pure economics and where the refinancing rate, the interest rates will be? Or you think you're going to call it?

Thank you, Carlo. And you probably know, we kind of can't really comment on this. What I can really say about this point, we do understand what the market expects and market, let's say, sentiments. That's all I can say for now.

And the next question we have is from Ronak Gadhia.

This is Ronak Gadhia from EFG Hermes. I guess mine are just a couple of follow-up questions. Firstly on NIMs. Giorgi, you mentioned NIMs are at peak and we should expect lower. But could you give us a sense of what -- where the NIMs could end up in the -- where the NIMs could eventually end up? Could we go back to where they used to be say back in 2021? Or even with NIMs declining, we should still expect higher -- higher than 2021 levels because, obviously, [ Lloyds come in, membership ] has grown. And at the same time, your Uzbekistan exposure is also increasing. The second question, again, somewhat of a follow-up on your Uzbekistan business. We've seen one of your competitors scale up or at least continue to build up their ecosystem quite aggressively. It seems like they've added a buy now pay later e-commerce having tied in with a local bank. So could you just talk more specifically about that competitor and how that plays into your growth outlook?

So Giorgi will take the first question and I will try to answer the second.

So a very good question, Ronak. What I can say, definitely, we are not going to 2021 level, so we'll definitely going to stay higher. So just to provide for group Uzbekistan will help a lot, of course. But we do think we are going to maintain 6% for a long time for a while, whether it be 6.5% plus or 6.3% plus. It's difficult to say. We will need to see. But definitely, like I would say, 6% and again, 6.5% may be good level to consider at least for the next year or 2. As for Georgian's operations there, we do expect some squeeze. But again, our expectation we would stay again quite well above those levels you mentioned, maybe 5.5% to 6% level for Georgia. You should consider, I would say, medium term, not in the next quarter or 2, but over time at the level we may stabilize.

To answer second question, Ronak. So in Uzbekistan, you know that today we have 2 businesses. We have a fully digital bank, and we have a second largest payment provider. And we are trying strategically to build financial service ecosystem. We are not going to the marketplace here to build. So ideally strategically, we will have a financial service ecosystem, and we will find interesting strategic partnership with the potential marketplace in Uzbekistan, and we'll have a strategic partnership with them.

Just maybe as a follow-up. If we were to see the example of case in Kazakhstan, not having the entire digital ecosystem. Wouldn't that we a bit of a competitive disadvantage for TBC because your rival, your competitor would offer the whole package or bouquet within their ecosystem, whereas you might not be able to...

We don't think so because we believe that we have our competitive advantage. And if we build our financial service ecosystem in the right way and we have a strategic partnership with the existing marketplace in Uzbekistan, we will have our competitive advantage in digital market with the population of the [ 37 million ] And they're [ clearly ] one player in Uzbekistan. So market is big and we have cases in the Asian countries, and we have cases in Russia, in the Asian country that there are a few players, and we have success case is that the financial service ecosystems are successfully partnering with the ecosystems and strategically, and they are winning the markets, and we can take it. In cost case in Russia, I think what was in Russia, ecosystem -- financial ecosystem and the strategic partnerships with the market players and the were a successful case -- it was a very successful case.

Okay. Thank you, Ronak. And next up, it is Patrick Fisher.

Fantastic. I'm calling from an airport in India. But I wanted to dial in. And again, first, congratulations to you and the whole team on another stellar quarter, growth, cost control, cost income and exceptional credit quality, just really continuing a great, consistent pattern here. I guess 2 questions. One is about asset liability match. And if you can comment on that every financial institution is looking at asset liability matching, in particular with [ Tenor ]. You've done a really great job, obviously, with the development of finance institutions and having long-term funding. But just wanted to understand that at both levels, at Uzbekistan and in Georgia. But I also wanted to get another comment maybe about global interest rates. And if and when we see the global interest rates continue to stay flat or even start to decline, what additional [ pop ] you'll see in your own business? Will that improve NIMs or give access to new customer segments?

Okay. So it's probably my territory. So on [indiscernible] , all I can say is that we don't have any long-term [ unhinged U.S. ] treasuries in our book. So for the speculative we are very well placed. Actually, we don't have any long term. And I can assure you that [indiscernible] or let's say, durations well under control. We have a very prudent policy like -- that's all I can say. And on the Uzbekistan side, it's just simple landing and it's a customer funding, I think very simple [ IRR ] [indiscernible] and we are already safe-sides there. So you should not be worried about our position. And now moving on the second question on interest rate decrease. That's something that will actually impact us because half of our book almost into FX and USD and once benchmark rates start coming down, Of course, that will have some impact. It's how we will manage and how we have hedged. At the moment, I think we are quite in a good position. However, we do expect some hits on this. And when I mentioned for Georgian operations 5.5% to 6%. So that also includes potential impact, not only from Georgian refinance rate decrease, but also from U.S. FX benchmark actually more or let's say, coming down.

Very helpful. Giorgi, on the -- again, on asset liability, what's sort of the average duration of assets versus average duration liabilities at the Georgia level?

So we should like -- again, we should differentiate between lari and FX. Again, from a loan perspective, we are quite light. From FX, we don't have much like again FX bonds or FX [ loan ] books. Because I would say there is no FX bonds that can be more than with 1 year or a very like smaller number. We are talking about much very short term with liquidity to management. And for the lari, you should understand it's a less risk and we have local T bills and again, it's quite well managed for the duration.

Great -- congratulations on a great quarter.

Thank you, Patrick. And next up, it's Simon Nellis.

Most of my questions have been asked. Maybe just one on fees. And sorry if this has already been answered, I missed part of the earlier part of the presentation. Can you just walk through why fees were flat? I assume that you still -- you saw fee growth in Uzbekistan. So I guess it was decline in Georgia that was driving that? If you could just unpack that for me.

It's just simple cashback timing, the difference is nothing else because as you know, we are getting sometimes cashback from Visa and Mastercard. So it's getting pulled up. So that happened in Q2. So -- but if you look at the operating performance of the underlying business, it has been going up.

Okay. So that won't -- and those happen on what intervals? Just so we know the seasonality or...

In Q2, we received cash back from Visa and Mastercard that we usually receive, sometimes in Q3, and Q3 was just usual business performance. So we remain flat despite having like good cash back in Q2. So it's as simple as that. So our fee generation capacity is very strong and continues to grow.

Thank you, Simon. Next up, it's Craig [ Methereux ]

Andrew, just to echo all the comments around the great quarter. Just a question for Vakhtang and Giorgi around -- this quarter was the first that you've seen negative [ GAVs ], obviously given that base from a revenue point of view, was very high. But I just want to understand if you think that, that will be this quarter alone? Or do you think that going forward, you might still experience a couple of quarters where you see this negative operating efficiency given the investment mode you're in and the higher revenue base or if it's just a one-off this quarter?

I'll cover that and there's a few things to consider. First thing, like we had, as you say, quite a high income growth like during the recent period that we continued our life -- positive operating [ Jaws ] . But on the other hand also, we are starting and building our business, of course, in Georgia, like TNET or outside Georgia and Uzbekistan. Therefore, we are going to spend a significant amount of money, particularly in '24 and '25. -- Therefore, clear maybe a few quarters when we have a not positive [ Jaws ], but we don't see this as something that should be -- we should worry about or something we should really forecast because, a, we are going to meet our 23% plus return on equity targets. That's definitely what we are going to do. And the spend, we are going to spend will be used to grow faster business to increase our profitability, so that it's not a short term, but medium term, and so it doesn't mean we are going to spend like [indiscernible]. We are still going to maintain our cost-to-income ratio in mid-30s like [ that way it will be ] 35% or 36%. Difficult to say, but suddenly, it won't become 40% plus or 45%. But again, we do think that investing into future, particularly when we have such a growth businesses, it's a key part of our kind of strategy and vision.

Yes. To add from my side, what is Giorgi saying? For us, important to have a return of equity, 23% plus to control the efficiency, cost-to-income ratio. But on the other hand, we have to understand, we have a very high growth business in Uzbekistan. So as you see on this slide, 80% plus growth annually, it means we have to invest heavily in Uzbek operations in 2024, in 2025. Maybe in some quarters, maybe the [ Jaws ] will not be so -- we will see different [ Jaws ] as we have seen in the third quarter. But fundamentally, we are controlling as a management and early growth, we'll see the ROE at 23% plus and also [ Jaws ] will be the right way right trends in all of the trends.

All right. Thanks very much. Appreciate it.

Thank you, Craig. We've got a couple of questions that have come in on the chat, one which I think Giorgi has mainly answered, but may want to elaborate on. Can you please give more details about the future trend of the cost income ratio? And another question is on the market share in the Georgian market regarding retail deposits and why that's been falling over the last couple of years. And the next part is under our different business segments, other Azerbaijan and TNET making a loss? Will this change in the future?

Okay. I think I ask, of course, to coverage your questions, example mid-30s, let's me say, and we need to see, but again, we are not worried. Seeing is to continue our profitability and business growth. The next question on the retail deposit side. We need to look at from the perspective and split between residents and nonresidents part. And in the overall market share, we have been losing market share. But if you look only on the resident market share, we kind of have not -- we remain our market share. And it comes from our risk appetite and business approach because at the moment, we are not very active in the nonresident market, and we prefer at the moment kind of to be -- to focus on the local let's say, on the local side. That would be kind of our position and as a because we view them as maybe nonsticky at the moment. There's a few reasons for that I'm not going into. And the second part of the question, was about other segments. Other segment is not of TNET or Azerbaijan. It includes every single [ segment ] including PLC, headquarter, et cetera. What I can say, TNET is not loss-making. It's not hugely profit-making, but at least it breaks even. So [indiscernible] the group. And also Azerbaijan is just GEL 10 million, GEL 3 million or GEL 4 million. So it's like input is immaterial. So the Azer is mainly, I would say, plc headquartered et cetera, cost coming on the top of the Georgia Financial Services or Uzbekistan operations.

Yes. Just I want to emphasize that on the retail deposits in Georgia, on [ Azer ] -- so for us, the core deposits in retail is the Georgian residence. And as Giorgi mentioned, on the core deposit is on the Georgian residents approximately when we increased our same market shares last 3, 4 years. So for us, it's important to keep 38 or something like that as a percentage. So we believe that in our resident parties are very volatile, especially in the last 2 years, so we have not any appetite to bring in nonresident deposits, especially nonresident volatile deposits. This [indiscernible]

Okay. Vakhtang and Giorgi. Thank you very much. We don't have any further questions at the moment. So maybe Vakhtang, I'll hand over to you just for...

Yes. Thank you very much for your questions. So it was very good quarter for TBC Group, and we will continue to in the -- to continue working with these trends. Thank you.