Dividend stock TBC Bank (LSE:TBCG) has been one of the standout performers on the London market over the past year. Its share price has surged 82%. However, even after this strong run, the stock still offers a forward dividend yield of 5.5%. This makes it an intriguing option for income-seeking investors.
TBC Bank is Georgia’s leading financial institution, and its growth story has been underpinned by the country’s robust economic expansion. The economy is expected to grow by around 6% in 2025. Moreover, the bank’s push into Uzbekistan appears successful and it’s rapidly scaling digital banking operations there.
However, Georgia’s stability has come into question over the past year following a hotly contested election. As such, political and economic risk remain factors to monitor.
Looking at the numbers
Looking at the forward numbers, TBC’s valuation remains undemanding. For 2025, the shares trade on a price-to-earnings (P/E) ratio of just 6.1 times, with the dividend yield at 5.5%. The dividend per share is forecast to rise to GEL9.05, and dividend coverage remains entirely sustainable, with a payout ratio of 33.9%. At current exchange rates (20 June 2025), one Georgian Lari equals around 27p.
In 2026, the P/E drops to 5.2 times and the yield climbs to 6.4% on a projected dividend of GEL10.51. Again, coverage stays healthy at 33.5%. By 2027, the P/E falls further to 4.4 times, and the yield is expected to reach 7.5% with a dividend of GEL12.28, while the payout ratio is still a conservative 32.7%.
In addition to the projected yields being attractive already, this consistent, low payout ratio gives TBC plenty of room to reinvest for growth or weather any economic shocks.
For context, these dividend yields are in excess of any of the FTSE 100 banks we know so well. What’s more, the P/E ratio is significantly discounted versus these British peers.
Outperforming
The bank’s underlying performance is strong. In Q1 2025, net profit rose 7% year on year to GEL319m, with return on equity above 23%. Operating income surged 25% to GEL774m, and the bank continues to expand its digital footprint, particularly in Uzbekistan, which now accounts for over a fifth of group operating income.
Management remains confident in hitting its strategic targets for 2025, including a profit goal of GEL1.5bn and a dividend payout at the upper end of its 25%-35% range.
Despite a brief share price dip after the latest results — driven by short-term concerns over fraud in Uzbekistan and regulatory changes — the long-term growth story remains intact.
With a low valuation, rising dividends, and a strong track record of profitability, TBC Bank is certainly worth considering. However, investors should continue to follow Georgia’s fortunes. Political or economic instability isn’t good for banks, and that’s why I’m not buying at the moment.
