The FTSE 100 has rewarded investors with a 4.5% rise over the past month. But the momentum’s nothing compared to this stock. TBC Bank‘s (LSE:TBCG) been one of the standout performers on the London Stock Exchange in recent weeks.
Shares of the FTSE 250 company are up roughly 20% in the past month alone, pushing the Georgian lender’s market-cap ever closer to FTSE 100 territory. And despite that rally, the stock still trades on just 5.9 times earnings with a dividend yield of 5.9%. In other words, it still looks cheap versus peers.
At around £2.6bn, TBC’s market-cap still falls well short of Rightmove — the current smallest FTSE 100 constituent at roughly £3.3bn. Under FTSE Russell’s rules, a company needs to rank 90th or above by full market capitalisation at a quarterly review to gain entry. It’s currently the 138th largest company with some form of UK listing, although around 15 above it are eligible for the FTSE 100. So TBC has some ground to make up, but not that much.
What’s more, I don’t think there are many companies above it that are as cheap and have such strong operation momentum. So what’s driving the momentum?
A rock-solid Q4
Fourth-quarter results, released earlier this month, were impressive. Net profit jumped 16% year on year to GEL387m (£1’s around 3.6 GEL/Lari), delivering a return on equity (ROE) of 24.9% — comfortably ahead of management’s 23%+ target.
The Georgian core business — which accounts for the vast bulk of earnings — was the engine room. Net interest income grew 23.3% in Q4, while operating expenses rose just 9.6%, pulling the cost-to-income ratio down to 37.3%. That kind of operational leverage is rare in European banking.
The dividend picture is equally strong. The board proposed a total payout of GEL8.87 per share for 2025, up 10% on the prior year. Including a GEL75m buyback, total capital returns hit GEL564m — around 40% of net profit.
For income investors, this is a genuinely attractive proposition.
The Uzbek question mark
But I’d be doing readers a disservice if I didn’t flag the risks, and Uzbekistan is the obvious one. TBC’s Uzbek operation is growing rapidly — the loan book surged 45% year on year and operating income jumped 67% for the full year. But profitability’s being squeezed by rising provisions. The cost of risk in Uzbekistan climbed to 10.2%, up from 6.3% in 2024. Fourth-quarter net profit actually fell 13% despite that top-line growth.
Management’s acknowledged the challenges. The Uzbek banking market is less mature, credit infrastructure is still developing, and the risk profile is inherently different to Georgia. If provisions continue to escalate, it could weigh on group-level returns — even if the Georgian business keeps firing on all cylinders.
My take
I think TBC Bank is one of the most interesting opportunities on the London market right now. A sub-6 times earnings multiple and near-6% yield for a bank generating 24%+ ROE is, frankly, cheap by any reasonable measure. Compared to FTSE 100 banks, it’s trading at a near-50% discount, based purely on the earnings multiple and the dividend yield.
The FTSE 100 promotion narrative adds a potential catalyst too, as index trackers would be forced buyers. I absolutely think it’s worth considering.
