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

Welcome, everyone, to the TBC Full Year '23 IFRS Results Conference Call. My name is Jordan, and I'll be your coordinator today. [Operator Instructions] I'm now going to hand over to Andrew Keeley, Director of Investor Relations, to begin. Andrew, please go ahead.

Thanks very much, Jordan, and hello, everybody. Thank you for joining our call. I'm joined today by Vakhtang Butskhrikidze, our CEO; and Giorgi Megrelishvili, our CFO. As usual, we'll start off with a presentation and then have time for Q&A. So with that, I'll hand over to Vakhtang.

Yes, okay. Thank you, Andrew, and dear all, thank you for joining our first quarter and full year 2023 financial results conference call. I am delighted to report that the fourth quarter of 2023 marked another successful quarter for TBC. Rounding on both what has been an excellent full year performance. In addition to posting record earnings, I'd like to comment on a couple of important achievements for the group in 2023. First in May, we acquired the remaining 49% stake in Payme, giving us a full ownership and clearing the way for much closer synergies with our digital bank business in Uzbekistan. Then in September, Oliver Hughes joined us as the Head of International business. Oliver's energy, vision and experience have already been evident not only in Uzbekistan, but in Georgia as well through his role on the management board. Beyond the growth activity, the key highlights for Georgia 2023 were the granting of EU candidacy status last December, which I think will be a very positive long-term driver for Georgia and TBC. Now I'd like to touch some key highlights of 2023. As usual, I will start our presentation, which reviews our position across the group's three main areas of activity. I am delighted to say that we maintain our position as the leading financial institution in Georgia delivering over 25% return of equity and working with 1.6 million monthly active customers. Our digital financial services business in Uzbekistan have had an excellent year and are contributing 5% of the group's net profit and serving 4.3 million monthly active customers. Additionally, our Georgian ecosystem TNET continues to grow with GMV of GEL 164 million, up almost 60% year-on-year. On the next slide -- the next slide presents a high level overview of the year. In 2023, our groups maintained an excellent return on equity of 26.5%. Our CET1 ratio per IFRS remained strong at 17.4% which is 3.1 percentage points above the minimum regulatory requirements. At the same time, our loan to deposit portfolio in Georgia grew by 19% and 12%, respectively. In Uzbekistan, our operations continued to deliver positive results with a net profit of GEL 59 million and 26% of return on equity. Notably, our loan book has more than doubled over the past 12 months to almost GEL 800 million. Importantly, our digital user space keeps growing with 5.2 million digital monthly active users across the group and increased 1.4 million users in 2023. Moving to the next slide, I'd like to briefly go over the financial performance in 2023. I am proud to say that despite 2022 having exceptionally high FX revenues, we succeed in increasing earnings in 2023, both on a reporting basis and adjusted for the one-off tax charge we had in the fourth quarter of 2022. Meanwhile, return on equity of nearly 27% underscores our exceptional performance. It's also worth noting that the group's [indiscernible] growth was very strong in 2023 with 21% loan growth on a constant currency basis. Before I review our performance in more detail, let me provide you with a brief update on how the Georgian economy has done in 2023. Economic growth has remained very strong with 7.5% real GDP growth Meanwhile, the inflation remains low, which has enabled the National Bank of Georgia to cut interest rate with the refinance rate now at 9%. Central Bank reserves added the record high stand at $5 billion. Next slide, it's a bit more color on Georgia's economic fundamentals. As you can see, we expect economic growth to normalize this year, but still post a very decent 5.6% growth. The chart on the right nicely highlights that the fixed inflows remain high across the board. On the next slide, reiterates my point that low inflation is enabling monetary easing, and we expect another 50-basis point decline in the refinance rate this year, which should provide a supportive backdrop to our business. Now let's move to the next slide, which highlights our growing customer base and digital engagement. The group's monthly active customers is up by 34% year-on-year, reaching 5.9 million and our digital footprint also continues to expand. And we added 1.4 million digital monthly active users over the 12 months and to understand it -- just to -- see it's around 50% of the backward population of the country. Turning to the Georgia on Slide 11, you can see our leadership position across all the major financial services -- processing segments. In the fourth quarter, our loan book increased by 19% year-on-year driven by very strong growth in the CIB segment. At the same time, deposit rose by 12% year-on-year, led by the Retail segment. On the next slide, next slide to highlight the performance of our payment business in Georgia. Net revenue grew by 26% year-on-year, reaching GEL 269 million, with card operations continuing to play a significant role, contributing nearly half of the revenues. Payment remains a key part of our noninterest income business, representing 65% of our fee and commission income. On this Slide 13, I -- we want to introduce our digital ecosystem TNET, which comprises a wide range of products and services across four verticals. And on the next slide, it gives a bit more color of the TNET performance. Last year, GMV increased by 59% year-on-year. reaching GEL 164 million with gross profit-to-GMV ratio at 13%, a lifestyle led by ticketing and housing segments were the main contributors to this success. And over the same period, 24,000 retail loans we have dispersed through TNET leads, accounting around 5% share of the TBC's Retail disbursement in the quarter. Now it's my pleasure to share more about how our business in Uzbekistan have fared in 2023. Our digital financial service in Uzbekistan had almost GEL 60 million net profits equivalent to 5% of the total group's net profit reached 26% return on equity. We're serving 4.3 million monthly active users. On the Slide 16, I will give a bit more color about the performance of TBC UZ, our digital retail bank. We continue to acquire new customers with registered users up by 72% and mostly active users more than doubling year-on-year. Our retail loan and deposit books continued to grow very strongly, giving us 3% share of the retail deposits market and 14% share of unsecured cash loans. What are known as the micro loans in Uzbekistan. At the same time, TBC UZ revenue more than doubled year-on-year, reaching over GEL 45 million and it posted its first full year of profitability, including GEL 8 million net profit in the fourth quarter. Finally, on the Slide 17, let's turn to Payme, a leading payment provider in Uzbekistan. Monthly and daily active users grew by around 30% year-on-year, reaching 3.3 million and 1.2 million, respectively. Meanwhile, the top line revenues increased by 16% year-on-year and Payme contributed the lion's share of our Uzbekistan revenues. Now I'd like to hand over to Giorgi.

Thank you, Vakhtang, and thanks all for joining our quarterly call today. I will now take you through our fourth quarter and full year performance, and I'll start from Slide 19. I'm pleased to report that we continue to deliver very strong results. In '23, our net profit stood at more than GEL 1.1 billion and was up by 2% versus adjusted profit for one-off tax charge last year despite very high FX in '22, as already mentioned. Without one-off tax charge, the net profit growth was 14%. Our high profitability is actually reflected in a very nice 26.5% return on equity for the full year and with 25.2% in Q4. On Slide 20 now, I'll go into more details about the main drivers. Both net interest and noninterest income continued to display strong year-on-year growth dynamics for 12 months. This total revenues is up by 15% year-on-year. Net interest income was up by 27%. Our noninterest income decline was due to high base in FX from last year. However, our normalized full year FX still stood at very strong GEL 257 million, around 2/3 of the last year's level and which we now confidently consider as our base run rate going forward. Our net fee and commission income also increased at a very healthy 28% year-on-year. Now I'll move to our margin dynamics at Slide 21. NIM increased by 70 basis points in 12 months and 40 basis points in Q4 year-on-year. As a result, our NIM stood at 6.7% in both 12 months and Q4. As expected, we now started to see a bit of NIM coming down in the final quarter on the back of the [indiscernible] policy and higher FX funding costs. Full year '24, we expect NIM to be somewhere around 6.5%. And now I would like to turn to the cost slide. And here, I would like to highlight that we remain committed to controlling our growth of our cost while simultaneously investing in additional growth of our business, both within Georgia and in Uzbekistan. Cost growth remains more or less in line with our core business growth, up by 24% compared to last year. And with the pickup in the final quarter due to strong business growth and performance bonuses given the great achievements for the full year. I would also like to highlight that cost-to-income ratio of our Georgian financial services stood at very decent 31.9% for full year. Now I'd like to move to Slide 23, which highlights our very healthy asset quality. Our NPL ratio decreased year-on-year across all segments and stood at 2% at year-end. At the same time, total coverage was 146%, while provision coverage stood at 80%. As you can see, our cost of risk was just 0.8% both 12 months and Q4, which confirms strong credit quality of our book. On Slide 24, I would like to share with you the performance of our core balance sheet portfolios. The loan book growth for the group was a very nice 21% on a constant currency basis, while Georgian growth was 19% year-on-year. Much of the Q4 growth came at the end of the year, and we will -- yet to see the benefit of the growth in '24. For the same period, Georgia customer funding grew by 12%. Now moving on to Slide 25, where you can see our solid capital position. We continue to operate with all our capital ratios at prudent levels. And with all our capital ratios being above the minimum regulatory requirements. Our CET1 ratio ended the year at 17.4%, more than 3 percentage points above minimum reg requirements. Our strong capital position allows us to support our high growth and to increase the dividend payout ratio to 35%. And finally, on Slide 26, I will highlight the financial performance of our Uzbek business, which continues to deliver great results. I would like to reiterate that our fully end-to-end digital businesses, they are delivering both very strong and very profitable growth. In [indiscernible] loans have more than doubled year-on-year and deposits are up by 76%. We generated around GEL 60 million in net profit in '23, that translate into a very, let's say, nice 26% return on equity. In terms of the some main financial -- let's say, financials of the TBC Uzbek, NIMs stood at 22.4% for '23, while cost of risk was 6%. And the contribution of our Uzbek business into the group is already tangible, that translates to a 5% share into group net profit, 18% of group fee and commission income, 22% improved retail non-mortgage loan book. And all this note, I would like to thank you and hand back to Vakhtang for the final remarks.

Thank you, Giorgi. And now it gives me great pleasure to announce the final dividend payment for 2023 of GEL 4.67 per share. This brings our full year dividend per share to GEL 7.22, up by 32% year-on-year. with an increased dividend payout ratio of 35% of net profit, up from 30% in 2022. As the dividend highlights, we remain committed not to only pursuing value accretive growth opportunity, but also returning capital to our shareholders. Finally, I'd like to reiterate the target that we have set ourselves through the -- until end of 2025, which you can see on the Slide 28, we are confident we are heading in the right direction to achieve these goals, but we recognize the importance of staying focused on providing the best possible services for our 6 million monthly active customers. On that note, I would like to thank you for your ongoing support, and we are now ready to answer any questions you may have.

[Operator Instructions].

Thank you, Jordan. So first question comes from Robert Sage.

Yes, can you hear me?

Just about, yes.

Okay. I have two questions. The first one relates to loan growth, it was quite spectacular, I thought, in the fourth quarter of the year. And you've ended up with a much bigger end balance than I was expecting. I was wondering if you could perhaps provide a few more details about some of the drivers behind that performance in Q4. And in particular, how that momentum has moved into the early part of 2024. My second question is on the Uzbek operations. And I was quite struck by the significant increase in profitability in Q4 relative to the first 3 quarters. And I was just wondering whether we should use the Q4 profit as a base from which you could perhaps grow through the course of the coming year.

I'll take those questions. On loan growth, we're just working well and hard to deliver these results. Now into more details, it's actually seasonality. It's also the kind of, again, our strength of our CIB franchise. This growth was there mainly, but also SME and Retail grow very well. Falling rates also supports because on my side, we see NIM coming down. But on the other side, we also see coming low, let's say, demand and all that actually contributed overall growth. Like in next year, probably on Georgian side, we do consider around 15% growth. But for the group level, it will be much higher, maybe up to 20%, that will be our expectations, more or less. And on Uzbekistan profitability, it was very nice to see indeed. It's really a kind of pleasure to see Uzbekistan contributing. And we do contribute -- we do expect this contribution to increase, as you can see, we have GEL 200 million profit for '25. However, we need to [indiscernible] because next year, we need to actually invest a lot into the business growth. However, as we committed we will have a decent return on equity still despite those spending, maybe more than 20%. And [indiscernible] or less can be considered not directly, but [indiscernible] the growth. but maybe a bit lower.

Okay. We have a question from [ Jens Ehrenberg ]. Jens, please go ahead.

Can you hear me all right?

Yes, all good.

Just two questions from my side, if that's all right. Firstly, just on the sort of cost outlook for next year. I think having obviously looked at a, the growth you've shown in the Uzbek business and at the same time sort of looking at the run rate of the cost base for the fourth quarter. It does feel a little bit like this might suggest slightly higher OpEx growth for 2024 than at least we were considering. Any color on that? And then the second question sort of in a similar vein. I mean, I appreciate we have your targets for 2025 on an earnings basis. Any sort of earnings outlook? Any color you can give us in terms of expectations for 2024, sort of the journey?

Okay. Thanks again. It's -- like I'll take those ones. On the cost outlook, yes, our costs increased 24%. But as I mentioned, those -- if we are to grow the business and we still delivered 26.5% return on equity. So this spend has actually translated to higher earnings. For '24, we are going to continue our growth. We have kind of lot of [ plus ] in Uzbekistan, adding new product lines, strengthening our technology cost [ target, ] hiring new senior people, all that would require some less investments that will pay its fruits and will help us to deliver our medium-term targets. Therefore, I would assume the cost growth will be more or less aligned with the kind of [indiscernible] '23, more or less. So that we expect. However, about half of this will be, as I mentioned, for Uzbekistan growth. And into Georgia, we are also going to strengthen our digitalization, our efficiency and grow the kind of business. Having said that, this is a very controlled cost growth. We do understand where we are spending, why we are spending, what it brings back and we are committed to deliver our targeted return on equity, maybe considerably and comfortably high of 23%. Therefore, this cost spending will help us kind of to remain very profitable. That on the cost side. And second question was on Uzbekistan side. Can you remind exactly, sorry just...

Sorry, it's more around -- so we have -- where sort of your earnings targets for 2025 -- any color sort of on the journey there, if that makes sense.

For '25, first thing I would look -- reiterate, we are absolutely confident to deliver our '25 targets. There is no doubt a bit. Bank is very well positioned. And like all our profitability, customer targets or GM are well on the track However, as I mentioned for Uzbekistan, it might not be linear. So for example, from this year profit, we might not be able to jump in the middle point to 1.5 kind of million because, as I mentioned, we will be having a bit cost -- investments this year. However, we are absolutely confident about [ GEL 1.5 billion, ] as I mentioned. And I would reiterate that overachieving our 23% return on equity is also what we are striving and are confident.

Thanks, Jens. Okay. We have a question from Can Demir.

Just wanted to understand the Georgian net interest margin a bit more, maybe there was some [indiscernible] pressure Q-on-Q in the fourth quarter, which was, I think, expected, the margin held up very well, but there was a point where it would come down a bit. But would you say that the fourth quarter margin is sustainable throughout 2024? Or could it come down a little bit more from those levels? And -- yes, sorry, go ahead.

Just go on -- yes...

Yes. And I also wanted to maybe talk a bit about the synergies and cross-selling opportunities in Uzbekistan, given that now you own 100% of Payme because I remember that, that was kind of a burden in front of cross-selling because you didn't own the business entirely. So it would be great if you could talk about those opportunities as well, just to give us some insight.

Okay. I'll take the first one and probably Vakhtang, you can take the second one. So on the Georgia NIM, it was not surprise exactly, we have guided market for a while that NIM compression is coming, and it was not like high rocket science -- refinance rate coming down. Refinance rate decreased from 11% to 9% already. As I mentioned, we are also seeing FX funding costs going up. We expect that this trend will continue, however, at a less extent, because now, as Vakhtang mentioned, we are forecasting 50 basis points decrease but the full cycle should [indiscernible]. So short-term in Georgia, yes, we do still expect some more compression, maybe even going to 6 points or below 6% NIM handle, seeing 5%. However, at the group level, as I guided, we are seeing the increased contribution from Uzbekistan and we expect to be around 6.5% level for group level.

Yes, to answer the second question. So you're right, as I have in our -- my part of the presentation, so finally, consolidated 100% of the Payme and we have a big opportunities to get the synergies from the Payme and by the way, we already began, but it takes time. And now our priority during 2024 just to bring daily operations, daily products to the Uzbek operations. I openly said, we are looking at these two businesses, Payme as a payment business and the Uzbek bank, one fintech operations within Uzbekistan and just the -- we will get the synergies probably from the second part of this year and potentially as a result and financial we'll see in the second part. So we are pushing more and more on the products such as daily user of our debit cards, and we are doing new type of the products. And which will be launched in the second -- from the -- from the third quarter of this year for that we are making a lot of integrations in Payme and also in TBC Uzbek bank -- UZ, we are trying to bring the new type of the credit cards at the end of 2024. So as a financial results as the volumes and -- to see the results in the P&L on the balance sheet probably we need some time, but also integration is going on and the results we will see probably in the second part of this year.

Thanks, Can. I think we have a couple of questions on the telephone line. So if you could do those, Jordan.

Of course, our next question comes from Simon Nellis of Citigroup.

I've got three questions. First question is on risk cost. Just wondering behind the -- in CIB and SME NPLs in Georgia over the quarter? And any outlook on risk costs for 2024 for the group. A question would just be on fees. I think you've given guidance most things, except for fees. If you could give us some color on what kind of fee growth you expect this year? Last, it's more of a technical question. In your divisional breakdown of the P&L, the other division, which is kind of this intragroup -- but also TNET. And I think the Azerbaijani business is a [ GEL 75 million ] loss, I think -- if there's ways you could cover that negative drag on group earnings? Or what was behind that [ GEL 75 million ] loss figure?

Okay. Thank you very much on cost of this, our kind of book quality has been very strong, they're translating into our NPLs, and we so expect this strong credit quality to remain in place. So as well, we guide for Georgia, it's around 1%, probably in '24, we don't expect to be any higher. And for Uzbekistan it's around 6%, 7% handle, that will be because we need to separate our two businesses. On fee and commission income in Georgia, we are doing a lot of things into our payment business, a lot of business initiatives and overall for group, we target 20% plus fee and commission income growth, that will be our target that we want to kind of follow and achieve. And on your technical questions, here are the intragroup eliminations. Yes, indeed, for example, when on intragroup entity places, let's say, deposits to others, so that's eliminated or some, let's say, recharges. From [ poorly ] business cost perspective, the key drivers are PLC, PLC costs and like to remuneration, as you mentioned, TNET and some other small, let's say, subsidiaries. So at the moment, we don't expect this to grow up even to come down like during the year and over the next period.

Just on TNET, is that a loss-making operation currently?

TNET is breaking even. It's slightly kind of -- but mainly, as I mentioned, it's not for a business line. It's just the intragroup trades between the subsegments. So like, for example, as I mentioned, one group entities at [indiscernible] group makes certain trade for -- issuing bonds to get on a stand-alone basis, the profit for one entity, but when you consolidate that goes into intragroup elimination line or against the, let's say, funding line when one entity places deposits. It's one entity's income, but for the other, it's like cost and that goes into the other line.

And Giorgi -- but for the clarity, TNET and the Uzbek-Azerbaijan operations are profitable, am I right?

Yes, that's correct. As I confirm TNET is profitable. And also, we had some cost PLCs that is not allocated at the moment to businesses, and we might look at this as well.

I'm sorry, just I missed the fee guidance. I thought I heard 30%. Was that the...

Sorry, fee and commission income, 20% plus, that's what we expect. Sorry, can you hear me?

Commission income growth and will grow...

20% growth.

20%, yes. Minium -- 20% plus.

20% plus.

[Operator Instructions] Our next question comes from Konstantin Rozantsev of JPMorgan.

Yes. I had a couple of quick questions about the potential bonds that the bank has, which has the call date this year. So the first question is, could you please update us on the latest thinking of the bank whether this bond is going to be called or not? What should we expect about this? And second, specifically in a scenario, if you say, to call these bonds, how do you look at different replacement options for that perpetual bonds in capital and do you need any replacements at all given the strong capital position at the moment? And if you consider replacement, say, with another purpose, when should we expect an issuance of that [indiscernible] in the market?

Second -- kind of my answer I -- will be similar as I provided to the general -- that question was asked. Like legally kind of, I can't say anything. So -- and what we are -- we need to understand market sentiment, what market expects generally, and we do understand consequences of not calling generally. So that's all I can say at the moment, I can't comment anymore.

Okay. Okay. If I could maybe get into with another question. So on transition to IFRS accounting for capital adequacy ratio calculation, the group realized quite some increase in capital ratios on day 1. And at the same time, the minimum requirements were raised as well in my understanding. So could I please ask prospectively, how do you see -- how is this excess capital that you currently operate with this going to be deployed? And what time frame? And with respect to the minimums, is there some -- what should we expect? Are these minimums going to be relaxed at some point as well? Or should they stay the same?

Okay. So first of all, I would like to mention that there have been no material changes into excess capital from moving from NBG to IFRS. As you rightly mentioned, the total capital ratios increased but like the minimum reg requirements also increased. So overall, total capital requirement or excess didn't change. So that's the first point I want to make. It's just optically, we don't need to explain that we are very well capitalized because now we can show the true IFRS ratios and the market would understand how well capitalized we are. That was quite beneficial, but not from economical perspective. So on the excess capital, as I highlighted, we do have 3% -- more than 3% of the excess capital. And we have three major pillars for capital allocations. The first on loan growth in Georgia we increased 19% last year. We target around 15%. As I highlighted, that's the first -- second point, we are growing into Uzbekistan significantly as well. And third, we increased our dividend payout ratio from 30% to 35% because we would like our shareholders to be happy and they get our capitals back. So like our capital accretion supports all our plans. We don't foresee any issues. So this surplus sometimes go up -- sometimes go up depending on the time of the year. For example, after dividend, it will go down. However, we do have minimum internal buffer to cover mainly for FX risk because in case, as you know, half of our booking FX. And if lari devaluates suddenly, our risk rates go up, our capital doesn't change. And we want to be absolutely comfortable that we don't go anywhere nearby reg limit. Therefore, we have internal management buffer for that. It's like around at least 1.5%. And given what's going in the region and around, we might like to have a bit more buffer for now. Did I cover your question?

Yes, and in terms of the capital minimum, should we expect this capital minimums to be reduced at some point going forward? Or are they going to be maintained at current levels?

So it depends, again, as I mentioned, 1.5% is a minimum. It depends on the situation, geopolitical situation, the portion of our FX loan book. However, we actually will remain prudent to ensure that we manage our capital in the most optimal economical way. Also covering all the risks.

Thank you. So we have a couple of questions from Patrick Fisher on -- written questions. Where Patrick is basically asking us about was Uzbekistan and our loan growth expectations. And just what's the kind of target for loan growth is for this year? And what we think we need to do to reach our 80% loan CAGR guidance for '25. So just any thoughts on that?

Thank you for this question. So Patrick, so to work hard, it's not easy. It's very hard to achieve, but I think we do our best. I think we are on the right move because as myself and Giorgi presented already today, we are on the right move, and we had a very good results already in Uzbekistan and if you look on the MAU, monthly active users in the bank already and the growth which we have in the market share. So today, we have already 14% market share in the asset [indiscernible] and the deposits we are doing very well, 3% market share. So we have to continue and we have our pension plan. So we have to double the portfolio as quickly [indiscernible]. And we know what to do, what to implement. And I mentioned already that we are bringing new type of products not only in TBC Uzbek to the Uzbek bank, but also for the Uzbek market like credit cards, which will be new type of the products. And that will be -- it will be launched at the end 2024. There will be new micro and SME loans also at the end of this year, also new type of POS loans which will be -- we have already in our portfolio, but we are redesigning this type of the product. So this is very tough targets, but we believe that by the management -- by the way, which I believe not only in Uzbekistan but in the region, the management and the C minus level, the management which we have in Uzbekistan is very strong, probably strongest in the region, so we could achieve these targets.

And Vakhtang, may I add one point because Patrick in your question, you asked if we are going to open new branches. We are not because we don't have any branches. We are fully digital end to end bank. So therefore, we don't have any projects, and we are not going to have, it's fully end-to-end digital fintech bank and Vakhtang what we are going to do to achieve our targets.

[indiscernible] I'll answer the first question we had on the call that what we could learn -- and the fourth quarter results of the UZ bank, yes, now we need the scale and the scale and the growth there will be much more profitability, and we will see much more profits coming from these corporations because we are doubling and this clearly shows in the presentation quarter by -- quarter by quarter, our profits are going up.

Okay. Thank you. So there's another question -- a written question coming in on topical subjects. So a question from Bruno Barry saying beyond Uzbekistan, do we see any other interesting markets that we might consider expanding into, for example, Bank of Georgia has put out a statement that they are considering acquiring an Armenian bank. Any comments?

So as we reiterate it already with the investors. So we think that till 2026, we'll go more cheaper in Uzbekistan and we think that will create much more value in Uzbekistan. And as you see by the way, on this slide, we have very ambition plans to create value for our investors just to have a growth and a close 80% on the loan side and to the net profit we need GEL 200 million. But openly said we are creating different kind of business in Uzbekistan, it will be full type of the fintech operation in Uzbekistan. By the way the offer from the Armenian bank we had about 6, 8 months ago. But openly said we have a full different strategy. And as you know, outside Georgia -- in Georgia, we have everything. But outside Georgia, as you know, we are looking to go in the much feasible bigger markets such as Uzbekistan, we the population -- I mean the banking sector is underpenetrated. And population growth is 500,000 per year. and we see our role here, and our results show it. So to answer on your question, this year, next year, we'll concentrate in Uzbekistan and afterwards, we'll see but even afterwards we'll see more feasible and underpenetrated markets.

Thank you, Vakhtang. Another question that's come in is that the National Bank of Georgia announced a decrease in reserve requirements today on nonresident deposits, thus releasing some liquidity for the banking sector. Do you expect any significant impact on our NIM from this release?

So it not significantly impact us because it kind of applies to nonresident Russian deposits and we don't have many. So all our like, as I mentioned few times on the call, total share of our nonresident overall for all our 15% of our customer funding. So this will have -- it's kind of nice icing on the cake, but it won't shift any dials for us because it didn't really impact us in any significant way.

Okay. Thanks, Giorgi. So we have a spoken question potentially from Robert Sage, I don't know if it's relating to what you asked before. But if you have another question, please go ahead. No, I guess not. Robert, do you have another question or not?

No, sorry, no. I'm done. Thank you very much. You've answered my questions.

Okay. I think that's all the questions. I hand back over to Jordan.

Thank you. With that, ladies and gentlemen, we'll conclude today's call. Thank you for joining. You may now disconnect your lines.