Welcome everyone to the TBC full year 2023 IFRS results conference call. My name is Jordan, and I'll be your coordinator today. If you wish to ask a question during the webinar and you've joined us via Zoom, you can use the raise hand icon or type your question into the Q&A chat box. If you're joining us via phone, you can press star 1. 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. With that, I'll hand over to Vakhtang. Thank you.
Yes. Okay. Thank you, Andrew. And dear all, thank you for joining our Q1 and full year 2023 financial results conference call. I'm delighted to report that the Q1 of 2023 marked another successful quarter for TBC. Rounding out what has been an excellent full year performance. In addition to posting a 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 the 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 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 group's activities, the key highlights for Georgia in 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'm 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 has had an excellent year and is contributing 5% of the group's net profit and serving 4.3 million monthly active customers. It continues to grow with GMV of GEL 164 million, up almost 60% year-over-year. The next slide presents a high-level overview of the year.
In 2023, our Group maintained an excellent return on equity of 26.5%. Our CET2 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 90% and 12% respectively. In Uzbekistan, our operations continue to deliver positive results with a net profit of GEL 59 million and 26% 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 base 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'm proud to say that despite 2022 having exceptionally high EBITDA revenues, we succeeded in increasing earnings in 2023 both on a reporting basis and adjusted for the one-off tax charge we had in the Q1 of 2022. Meanwhile, return on equity of nearly 27% underscores our exceptional performance. It's also worth noting that the group's balance sheet 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 rates with the reference rate now at 9%. Central Bank reserves are at the record high, standing at $5 billion.
Next slide is a bit more color on Georgia's solid 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 input prices remain high across the board. On the next slide, I reiterate my point that low inflation is enabling monetary easing, and we expect another 50 basis point decline in the reference 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 are up by 74% 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.
To understand it, just to see, it's around 50% of the bankrolled population of the country. Turning to Georgia, on slide 11, you can see our leadership position across all the major financial services segments. In the Q1, our loan book increased by 90% year-over-year, driven by very strong growth in the CIB segment. At the same time, deposits rose by 12% year-over-year, led by the retail segment.
On the next slide, next slides highlight the performance of our payment business in Georgia. Net revenue grew by 26% year-over-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 non-interest income business, representing 65% of our fee and commission income.
On slide 13, we want to introduce our digital ecosystem TNET, which comprises a wide range of products and services across four verticals. 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 profits to GMV ratio at 17%. Lifestyle, led by ticketing and housing segments, were the main contributors to this success.
Over the same period, 24,000 retailers were dispatched through TNET leads, accounting for around 5% share of the TBC's retail dispatchment in the quarter. Now, it's my pleasure to share more about how our business in Uzbekistan has fared in 2023. Our digital financial services in Uzbekistan had almost GEL 60 million net profits, equivalent to 5% of the total group's net profit, with 26% return on equity, serving 4.3 million monthly active users.
On 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 monthly active users more than doubling year-on-year. Our retail loan and deposit books continue to grow very strongly, giving us 3% share of the retail deposits market and 14% share of unsecured cash flows, what are known as microloans 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 Q1. Finally, on 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 Uzbek earnings. Now, I'd like to hand over to Giorgi.
Thank you, Vakhtang. Thanks all for joining our quarterly call today. I will now take you through our Q1 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 2023, our net profits stood at more than GEL 1.1 billion and rose up by 2% versus adjusted profit for one-off tax charge last year, despite very high EPS in 2022, 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 non-interest income continue to display strong year-on-year growth dynamics for 12 months, with total revenues up by 15% year-on-year.
Net interest income was up by 27%. Our non-interest income decline was due to high base in EPS from last year. However, our normalized full year EPS still stood at very strong GEL 257 million, around two-thirds 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-over-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-over-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 quantitative easing policy and higher EPS funding costs.
For full year 2024, we expect NIM to be somewhere around 6.5%. Now, I would like to turn to the cost slide. Here, I would like to highlight that we remain committed to controlling our growth of our costs while simultaneously investing in additional growth of our business, both within Georgia and into Uzbekistan.
Cost growth remains more or less in line with our core business growth, up by 24% compared to last year, and with a 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 MTL 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% for 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 Georgia 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 2024. On 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, with all our capital ratios being above the minimum regulatory requirements. Our C2R ratio ended the year at 17.4%, more than 3 percentage points above minimum reg requirement. Our strong capital position allows us to support our high growth and to increase the dividend payout ratio to 35%. 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 there are delivering both very strong and very profitable growth. In 2023, loans have more than doubled year-on-year, and deposits are up by 76%. We generated around GEL 60 million in net profit in 2023, that translates into a very, let's say, nice 26% return on equity.
In terms of some main financial, let's say, financials of the TBC Uzbekistan, NIM stood at 22.4% for 2023, while cost of risk was 6%. The contribution of our Uzbek business into the group is already tangible. That translates to 5% share into group net profit, 18% of group fee and commission income, 22% in group retail non-mortgage loan book. On this note, I would like to thank you and hand back to Vakhtang for the final remarks.
Thank you, Giorgi. Now, it gives me great pleasure to announce the final dividend payment for 2023 of GEL 4.67 per year. This brings our full year dividend per year to GEL 7.22, up 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 only to pursuing value equity growth opportunities but also returning capital to our shareholders.
Finally, I'd like to reiterate the target that we have set ourselves through until end of 2025, which you can see on 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 six million 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.
As a reminder, for those of you on Zoom, if you'd like to register an audio question, please use the raise hand icon, or you can type any questions into the Q&A chat box. If you're connecting to us via phone, you can press star one to register a question.
Thank you, Giorgi. So first question comes from Robert Sage. Robert, please go ahead.
Yes. Can you hear me?
Yes. Just about, yes.
Okay. I have two questions. The first one relates to loan growth that was quite spectacular, I thought, in the Q4 of the year. 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. I was quite struck by the significant increase in profitability in Q4 relative to the first three quarters. 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.
Thank you, Robert. I'll take those questions. On loan growth, we just worked well and hard to deliver these results. Now, into more details, it's actually seasonality. It's also the kind of, again, our strengths of our CIB, let's say, franchise. This growth was there mainly, but also SME and retail grow very well. Falling rates also supports because on one side, we see NIM coming down, but on the other side, we also see coming the low, let's say, demand.
And all this actually contributed overall growth. 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.
We do contribute kind of. We do expect its contribution to increase. As you can see, we have GEL 200 million profit for 2025. However, we need to consider it won't be straight line because next year, we need to actually invest a lot into the business growth. However, as we committed, we will have decent return on equity still despite those spendings, maybe more than 20%. Q4, more or less, can be considered not directly but good proxy for the growth, but maybe a bit lower.
Thank you.
Thanks, Robert. Okay. We have questions from Jens Erlenberg. Jens, please go ahead.
Thanks, Andrew. Can you hear me all right?
Yep.
Yes. All good.
Brilliant. Thank you. 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 Q4, 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, 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 expectation for 2024, sort of the journey?
Okay. Thanks again. It's like I'll take those ones. On the cost outlook, yes, our cost increased 24%. But as I mentioned, those are required to grow the business, and we still delivered 26.5% return on equity. So this spend is actually translating to higher earnings. For 2024, we are going to continue our growth. We have a kind of lot of plans into Uzbekistan, adding new product lines, strengthening our technological stack, hiring new senior people.
All that would require some investments that will bear 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 with the 2023, 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 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 higher of 23%. Therefore, this cost spending will help us kind of to remain very profitable. That's on the cost side. And second question was on Uzbekistan side. Can you remind exactly? Sorry.
Sorry. It's more around so we have sort of your earnings targets for 2025. Any color sort of on the journey there if that makes sense?
Sorry. So for 2025, first thing I would look reiterate, we are absolutely confident to deliver our 2025 targets. There is no doubt a bit. Bank is very well positioned. And all our profitability, customer targets, or GMV are well on the track. However, as I mentioned, for Uzbekistan, it might not be linear. S
o, for example, from this year profit, we might not be able to jump in the middle point to $1.5 million kind of because, as I mentioned, we will be having a bit of costly investments this year. However, we are absolutely confident about $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.
Super. Thank you.
Thanks, Jens. Okay. We have a question from Jandimir. Jan, please go ahead.
Yes. Thank you, Andrew. And thank you for the presentation. Thank you, Giorgi. Just wanted to understand the Georgian net interest margin a bit more, maybe. There was some 30 bps pressure Q-on-Q in the Q4, 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 Q4 margin is sustainable throughout 2024, or could it come down a little bit more from those levels? And yeah, sorry. Go ahead, Giorgi.
No. Go on. Just ask the question.
Yeah. Yeah. 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 hurdle 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. Thanks. I'll take first one. Probably, Vakhtang, you can take the second one.
Oh, the first.
So on the Georgian NIM, it was not surprising, frankly. We have guided market for a while that the NIM compression is coming, and it was not like high rocket science reference rate coming down. Reference rate decreased from 11%-9% already. As I mentioned, we are also seeing equity 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 play. So short-term swing in Georgia, yes, we do still expect some more compression, maybe even going to 6% 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.
Yeah. To answer on the second question, so you're right. As I said in my part of the presentation, so finally, we consolidated 100% of the PayMe, and we have big opportunities to get the synergies from the PayMe. By the way, we already began, but it takes time. Now, our priority during 2024, just to bring daily operations, daily products to the Uzbek operations.
As I openly said, we are looking these two businesses, PayMe as a payment business and as a Uzbek bank, one fintech operations in Uzbekistan. We will get these synergies probably from the second part of this year. Potentially, as a result and financial, we will 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 bringing new type of the products which will be launching the second probably from the Q3 of this year. For that, we are making a lot of integrations in Payme and also in TBC Uzbekistan. Also, we are trying to bring the new type of the credit cards at the end of 2024. So as a financial result, as a 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.
Great. Thank you, Vakhtang.
Thanks, Jan. I think we have a couple of questions on the telephone line. If you could do those, Jordan.
Of course. Our next question comes from Simon J. Nellis of Citigroup. Simon, please go ahead.
Thanks for the opportunity. I've got three questions. The first question is on risk cost. Just wondering behind in CIB and SME NPLs in Georgia over the quarter and any outlook on risk cost for 2024 for the group. And question would just be on fees. I think you've given guidance on most things except for fees. If you could give us some color on what kind of fee growth you expect this year.
Last, and it's more of a technical question, in your divisional breakdown of the P&L, there's the other division, which is kind of this intra-group eliminations, but also TNET, and I think the Azerbaijani business. This is a $75 million loss. If there's ways you could lower that negative drag on group earnings or what was behind that $75 million loss figure.
Okay. Thank you very much. On cost of risk, our kind of book quality has been very strong. That translates into our NPLs. And we also expect this strong credit quality to remain in place. So as usual, we guide for Georgia, it's around 1%. Probably in 2024, 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 those 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%+ 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 intra-group eliminations. Yes, indeed.
For example, when one intra-group entity places deposits to others, so that's eliminated or some, let's say, recharges. From purely business cost perspective, the key drivers are PLC, PLC costs, and let's say 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 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 poor business line. It's just the intra-group, let's say, intra-group trades between the subsegments.
I missed the fee growth.
Yes. So for example, as I mentioned, one group entity that is in another group makes certain trades, for example, issuing bonds. It gets on a standalone basis the profit for one entity. But when you consolidate, that goes into intra-group 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 cost, and that goes into the other line.
We will check. For the clarity, TNET and Azerbaijani operations are profitable, am I right?
Yes, that's correct. As I confirmed, TNET is profitable. And also, we had some costs at PLC that is not allocated at the moment to businesses. And we might look at this as well.
Sorry, I missed the fee guidance. I thought I heard 30%. Is that the growth guidance?
Sorry. Fee and commission income, as we said, 20% plus. That's what we expect. Sorry. Can you hear me?
Commission income growth.
30%.
24?
20%. 20%, yes. Minimum. 20%+. 20%+.
% plus. Okay. Thank you very much.
As a reminder, for those joining via Zoom, you can register questions with the raise hand icon. Or if you're joining us via phone, that's star one. Our next question comes from Konstantin Rozantsev of J.P. Morgan. Konstantin, the line is yours.
Yes. Thank you very much for the presentation and for taking my questions. I had a couple of quick questions about the perpetual 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 this scenario, if you decide to call these bonds, how do you look at different replacement options for that perpetual bond 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 PERP, when should we expect an issuance of that PERP in the market? Thank you.
Thank you. Kind of my answer will be similar as I provided to the general question was asked. Legally, kind of I can't say anything. And we do understand market sentiments, what market expects generally. And we do understand consequences of not calling generally. That's all I can say at the moment. I can't comment anymore.
Okay. Okay. Thank you very much. If I could maybe get into with another question. So on transition to IFRS accounting for capital at equity ratio calculation, the group realized quite some increase in capital ratios on day one. 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 going to be deployed and over 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? Thank you.
Okay. Thanks. 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 the minimum requirement also increased. So overall, total capital requirement or excess did not 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 two IFRS ratios, and the market would understand how well capitalized we are.
That was quite beneficial, but not from an economic perspective. So on the excess capital, as I highlighted, we do have more than 3% of the excess capital. And we have three major pillars for capital allocations. The first one, 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%-35% because we would like our shareholders to be happy, and they get our capital back. So our capital accretion supports all our plans. We don't foresee any issues. So this surplus sometimes goes up, sometimes goes 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 book in FX, and if Lari devalues 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 around at least 1.5%. Given what's going on in the region and what's around, we might like to have a bit more buffer for now. Did I cover your question?
Yes. Thank you very much. Thank you for the details. And in terms of the capital minimums, should we expect these capital minimums to be reduced at some point going forward, or are they going to be maintained at current levels?
It depends. Again, as I mentioned, 1.5 is the minimum. It depends on the situation, geopolitical situation, the portion of our existing loanbook. However, actually, we will remain prudent to ensure that we manage our capital in the most optimal economical way, also covering all the risks.
Okay. Thank you very much.
Thank you. We have a couple of questions from Patrick Fisher on written questions where Patrick's basically asking us about Uzbekistan and our loan growth expectations and just what 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 2025. Just any thoughts on that?
Thank you for this question, Patrick. So to work hard, it's not easy. It's very hard to achieve, but I think we do our best. And 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 very good results already in Uzbekistan if you look on the monthly active users in the bank already and the growth which we have at the market share.
So today, we have already 14% market share in the asset quote loans. And the deposits, we are doing very well, 3% market share. So we have to continue. And we have ambition plans. So we have to double the portfolio, as Giorgi mentioned. And we know what to do, what to implement.
I mentioned already that we are bringing new type of products, not only in TBC UZ to the Uzbek bank but also for the Uzbek market, like credit cards, which will be new type of products. And it will be launched at the end of 2024. There will be new micro and semi-loans also at the end of this year, also new type of the POS loans, which will be and we have already in our portfolio, but we are redesigning the 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-level, the management which we have in Uzbekistan is very strong, the strongest in the region. So we could achieve these targets.
Okay. Dwarsag, 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 branches, and we are not going to have. It's fully end-to-end digital fintech bank. Dwarsag covered what we are going to do to achieve those targets.
Indirectly, it somehow answered the first question we had on the call that could we learn and put forth the results of the Uzbek bank? Yes, because now we need the scale. As the scale is the growth out, there will be much more profitability, and we will see much more profits coming from these Uzbek operations because we are doubling. As Giorgi shows in the presentation, quarter by quarter by quarter, our profits are growing up.
Okay. Thank you, guys. So there's another written question coming in on a topical subject. So a question from Bruno Berry 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 reiterated already with the investors, we think that till 2026, we will go more deeper in Uzbekistan. We think that we'll create much more value in Uzbekistan and very ambitious plans to create value for our investors just to have an annual growth of 80% on the loan side and to have a net profit minimum of GEL 200 million.
But openly said, we are creating different kind of the business in Uzbek operations in Uzbekistan. By the way, the offer from the Armenian bank, we had around 6 or 8 months ago. But openly said, we have a fully 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 sizable, bigger market such as Uzbekistan. The population is under, I mean, the banking sector is underpenetrated.
Population growth is 500,000 per year. We see our role there. Our results showed so. To answer on your question, this year, next year, we'll concentrate in Uzbekistan. Afterwards, we'll see. But even afterwards, we'll see more sizable and underpenetrated markets.
Thank you, Dwarsag. Another question that's come in is that the National Bank of Georgia announced a decrease in reserve requirements today on non-resident deposits, thus releasing some liquidity for the banking sector. Do we expect any significant impact on our NIM from this release?
So it not significantly impacts us because it kind of applies to non-resident Russian deposits, and we don't have many. So all our, as I mentioned a few times on the call, total share of our non-residents overall for all are 15% of our customer funding. So this will have some, it's kind of nice icing on the cake, but it won't shift any dials for us because it doesn'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 Robert, if you have another question, please go ahead. No, I guess not.
Sorry. No.
Robert? Oh, you do.
Thank you.
Hi, Robert. Sorry. Do you have another question or not?
No. Sorry. No. I'm done. Thank you very much. You've answered my questions.
Okay. Okay. Thank you. Okay. I think that's all the questions. I'll 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.