Hello everyone and a warm welcome to TBC Bank's Fourth Quarter and Full Year 2024 Results Conference Call. My name is Emily and I'll be coordinating your call today. After the presentation, you will have the opportunity to ask any questions, which you can either do so by raising your hand or by typing any questions into the Q&A chat box if you have joined us on Zoom. Alternatively, if you are dialed into today's call on the telephone lines, please press *, followed by the number 1 on your telephone keypad to ask a question. I will now hand over to Andrew Keeley, Director of Investor Relations, to begin. Please go ahead, Andrew.
Thanks very much, Emily, and welcome everybody to TBC's Fourth Quarter and Full Year 2024 Results Call. Thank you very much for joining us today. As usual, I'm joined on the call by Vakhtang Butskhrikidze, our CEO, and Giorgi Megrelishvili, our CFO. So we'll start off with a presentation and then we'll have time for Q&A. And with that, I'll hand over to Vakhtang. Thank you.
Yeah, thank you, Andrew. Good afternoon, everyone, and thank you for joining our Fourth Quarter and Full Year Financial Conference Call. Before discussing our results, I'd like to briefly address the current situation in Georgia. As you're aware, protests related to the elections are ongoing. At TBC, we remain fully focused on our business and our customers, and I'd like to emphasize that we have not seen any material impact on our operations.
As always, we continue to monitor developments closely and we remain confident in our ability to continue delivering strong results for our shareholders. On a more positive note, I am pleased to share that the board has recommended a final dividend of GEL 5.55 per share, subject to AGM approval. This brings our total dividend for the year to GEL 8.10 per share, up by 12% from the previous year. We target 100% dividend payout ratio.
Adding in our buyback, we have returned 39% of earnings to shareholders in 2024. Turning to our results, slide number four shows some of the key financial and operating highlights for the final quarter. I'm very pleased to announce that we finished the year strongly with a net profit of GEL 335 million, up 15% year on year. At the same time, return on equity in the final quarter stood at 24.1%, supported by very solid loan growth. In Georgia, we maintained a high profitability with an excellent return on equity and a very strong capital position. Meanwhile, Uzbekistan saw rapid expansion with record earnings and high loan book growth.
In the final quarter, while unique registered users reached 18 million, accounting for almost half of Uzbekistan's population. Slide 5 summarizes the key takeaways for the past year as a whole. In 2024 was another year of strong profitability and growth for the group, with total operating income up by 19%, loan book growth of 18%, and high return on equity of 25.6%. Our Uzbekistan business continued to scale rapidly and profitably, with total operating income almost doubling and its share in the group's profit reaching 8%. In addition to investing in growth, we were also able to increase capital returns to shareholders, returning 39% of our net income to shareholders through dividends and buybacks.
Following on from the previous slide to slide six, this means that we are well on a track to meet our 2025 targets, as can be seen here. Next, I'd like to reiterate how our 2024 results underpin TBC's investment case. We are a leading regional financial institution, combining market dominance in Georgia with high growth expansion in Uzbekistan. We are building a world-class digital proposition in Uzbekistan that already has a huge customer reach.
In Georgia, we continue to deliver both strong profitability and growth. We have a proven long-term track record of impressive delivery since 2014 IPO. This can be seen in some of the financial outcomes we have been achieving, including 23% average return on equity over the past five years, and in fact, 26% if we strip out the COVID-affected year, 15% annual growth in loans, and consistently returning 25%-35% of earnings to shareholders as dividends. Now moving to Georgia, let's take a look at the broader macroeconomic environment.
Economic growth in Georgia remained very strong at 9.5% in 2024, with inflation still low and below the target. The economic outlook for this year looks less certain, and while international organizations such as the World Bank and the International Monetary Fund expect around 5.5%-6% growth, our in-house team at TBC Bank, TBC Capital sees a base case of GDP growth coming in somewhat below that level. However, we know that December GDP growth print came in at strong 6.7%.
Slide 10 highlights how well placed we are to capitalize on a sound economic backdrop, given our dominant market share in loans and deposits, and the fact that we remain the top choice for newly registered businesses. On this slide, we can see our very solid balance sheet growth in Georgia, with the total loans increasing by 14% and the total deposits growing by 8% in 2024. Slide 12 shows the growing digital engagement for our retail customer base.
In the fourth quarter, our digital monthly users in Georgia surpassed 1 million, with a digital monthly active users penetration of 62%. I'm also pleased to highlight the continuing long-term trend of increasing digitalization within our Georgian business. We can see here that the share of consumer loans issued fully digitally has increased strongly over the past year, which in turn has enabled us to cut average branch transactions by 25%.
The next slide gives an overview of some of the main business achievements in Georgia in 2024. On the retail side, our loan growth was driven by fast consumer loans, while the launch of the re-designed TBC card greatly strengthens our payment proposition and has already had excellent take-up. We also enhanced our mobile banking application with new features. In corporate, we streamlined credit processes, introduced new FX pricing solutions, and hosted the first international Georgian Capital Market Conference. While in MSME, we launched digital MSME pre-approved loans and more than doubled the maximum limit to GEL 500,000 for automatically approved loans.
Now moving to our Uzbekistan business. The Uzbekistan economy also remains strong and steady, with real GDP growth of 6.5% in 2024 and international organizations expecting around 6% growth in 2025. Inflation is high at 9.8% at the end of 2024, and it will take some time to bring this down to the targeted 5% level. Slide 16 shows how exceptionally well our Uzbek business continues to perform. We now have over 18 million unique registered users, with almost 6 million monthly active users, an increase of over 1.5 million in 2024.
I also want to highlight that our Uzbekistan monthly active users increased by 1 million in the final quarter, a tremendous achievement that shows how we are now successfully converting more than our 18 million customer base into regular users as we expand the range of products and services that we offer. Our loan book more than doubled year on year to $626 million, while our deposit rose over 80% to $376 million, and crucially, we are scaling up profitability as both our revenues and profitability showed very strong growth, with net profit of $13 million and total operating income of $15 million in the fourth quarter, both record numbers.
2024 was a year of major progress in Uzbekistan on many different fronts. We continue to build out a world-class and a highly international team, which talent made up to 25 nationalities. Strong shareholder confidence drove $75 million in capital injections, while we diversified funding with $105 million in wholesale financing, and one of Uzbekistan's largest corporate bond issues to date. We also made huge progress in AI, which is now heavily used in collections, and in January, we deployed Uzbek language LLM for sales. We plan to extend its use to customer support and other areas later during the year. We also launched a proprietary processing center and struck partnerships with Visa and Mastercard.
On the next slide, you can see some of the core products that we launched in 2024, including our flagship daily banking product, Salom Card, our first revolving credit card, Osmon Card, and Uzbekistan's first fully digital MSME banking proposition. Launching three major product verticals in a single year is an impressive achievement, and we are incredibly proud of it. On this slide 19, you can see how far we have come since 2020. In just four years, we have already become a big player in Uzbekistan in the retail banking space.
Slide 20 highlights the growing contribution of Uzbekistan to the group's overall performance. Uzbekistan already accounts for half of the total unsecured consumer loans, 11% of the group's retail deposits portfolio, 15% of the total operating income, and 8% of the net profits for the full year of 2024 and with that, I'd like to hand over to Giorgi.
Thank you, Vakhtang, and thanks all for joining our call today. Now I'm going to take you through our fourth quarter and full year results, and I'll start with slide 22. I'm very pleased to report that we delivered another year of very strong profitability. Net profit for the full year was over GEL 1.3 billion, that implies 15% year-on-year growth and record earnings. In the first quarter, we achieved a net profit of GEL 335 million, or GEL 344 million if we adjust for around GEL 10 million of net required provision for the planned sale of our TBC Kredit, our subsidiary in, let's say, Azerbaijan.
We hope to close this deal in the first half of the year, subject to completing paperwork and regulatory approval, which will leave TBC with a cleaner footprint focused on our key markets. This translated into a very strong ROE of 25.6% for the full year and 24.1% for the Q4. On adjusted basis, Q4 ROE was 24.8%. Now I would like to turn to slide 23 to discuss our revenue performance. Both net interest and non-interest income posted very strong year-on-year growth for full year, with total up by 19% year-on-year, reaching GEL 2.8 billion .
The growth was actually well distributed across the board. Net interest income was up by 16% year-on-year, while our net fee and commission income grew by 26% year-on-year. And for Q4, we reached a record GEL 784 million of operating income, up by 23% year-on-year. Now let's move on to slide 24 to look at our margin dynamics. Despite seeing quite a bit of NIM compression in Georgia, if we call 5.7% squeeze, we successfully maintained a stable level of NIM 6.7% for full year, which was helped by the increased contribution of our Uzbek business. Going forward, we would aim to maintain NIM more or less at the same level for the next few quarters.
Now I'll move to slide 25 to look at our costs. We remain committed to the disciplined cost management, while at the same time, we invest into sustainable growth of our businesses in both countries. OpEx grew by 25% in 2024 compared to last year due to our continuous scale-up of our businesses, particularly in Uzbekistan, which accounted for around 50% of the increase. Georgian cost growth was 14% year-on-year. As a result, the group's cost-to-income ratio stood at 37.9% in 2024, with Georgia's cost-to-income at 32.7%.
Now let's move to slide 26 to look at our asset quality that remains very solid, with low NPL levels and healthy cost of risk. NPLs were stable at 2.2%, while cost of risk stood at 1% for the Q4. That reflects the strong quality of our loan book. For the full year, our cost of risk remained flat at 80 basis points. Our balance sheet also continued its strong growth trajectory, as you can see from slide 27. Gross loans were up by 18% year-on-year on a constant currency basis, and the total customer funding was up by 10% over the same period on the same basis.
Now let's turn to slide 28 to our Uzbekistan business that really developed very strongly on many fronts in 2024. For the full year, our net profit reached $41 million, up by 86% year-on-year, while return on equity remained at a very strong 26.9% level, highlighting how we are scaling up this business profitably. Now look into more financial details. We continue to maintain our high-end, our high-yield margins, with NIM being above 24% for both final quarter and full year.
Asset quality remained very healthy. However, I'd like to spend a moment on the pickup of the cost of risk in Q4. This was due to annual recalibration of the models based on the recent historical data in December that we also guided during Q3 call. That doesn't actually reflect any worsening in our asset quality. This can also be seen by strong pickup in coverage ratio in Q4 that was 230%, with NPLs being at very healthy 2% Now let's move to slide 30 to look at our capital that remains very solid. We continue to maintain the strong capital buffers comfortably above regulatory requirements in both countries.
And finally, on slide 31, I'd like to reiterate that we remain committed to return capital to our shareholders. As already mentioned, the board has recommended a final dividend of GEL 5.55 per share. That brings our full year dividend per share to GEL 8.10, up 12% year-on-year, and that translates into a 35% dividend payout ratio, the top of our guided range for the second consecutive year. With the GEL 50 million buyback, overall capital distribution to shareholders was 39% of the full year net profit. And on that note, I'd like to thank you, and now we are ready to answer any questions you may have. Thanks.
Thank you. As a reminder, if you would like to ask a question today, please do so now, either by raising your hand or typing any questions into the Q&A chat box if you have joined us on Zoom, or if you have joined us on the phone lines, please feel free to press *, followed by the number 1 on your telephone keypad to ask a question.
Thanks very much. Okay, I think the first question comes from Robert Sage of Peel Hunt. Robert, please go ahead. Hi, Robert. Can you hear me?
Sorry, can you hear me now?
Yes, all good.
Okay, apologies. Yeah, I've got a couple of questions relating to the very strong growth in Uzbekistan, and they're probably two parts of the same point, to be honest, but the first question, I think that Vakhtang pointed this out on the way through, that the growth in digital monthly active users was very strong, and in particular, it picked up, I think, by over 20% in the fourth quarter. A nd I was wondering if there's anything specific about that surge in the active users' numbers, and perhaps how we should think about this number moving into 2025, given the fact that you've already significantly exceeded your end-2025 target by the end of 2024.
The second question, which is kind of related to that, I guess, relates to the lending growth in Uzbekistan. You gave a three-year CAGR of 80% plus, and you did more than 130% in year one, 112% in 2024. And I was wondering how we should think about 2025. I'm presuming there's going to be a lower percentage increase of only because mathematically you start from a higher starting point, but any sort of kind of feel for how this might grow again in the coming year, I'd be very interested in.
I will try to answer yours. Thank you, Robert. First of all, I will try to answer the first question, and Giorgi will answer the second question. I agree with you. We have a very good result. Monthly active users grow by around one million in the fourth quarter in Uzbekistan. There are a few reasons. As I have already mentioned in the presentation, we brought three big new products in Uzbekistan. This is the new type of the debit card, Salom Card. We brought the credit card and also MSME products.
This also has an influence on the MAU for our Uzbek operations. In addition to that, also in payment business, we are doing a lot of things which also helps us to increase the MAU. And also in the consideration, we have to have that fourth quarter is a very active quarter to increase the monthly active users as a customer. So to summarize everything, on the one hand, the new products which are bringing in a business, payment business in the bank in Uzbekistan, and also seasonalities.
Okay, thanks. And Robert, to cover, I think I need to refer to our 2025 guidance that sets out, I would say, for Uzbekistan net profit and loan growth. So we guided for $200 million loan growth and on the, sorry.
Now, because we don't hear you well.
Sorry, can you hear me better?
Yes.
Yeah, so what I was saying, I need to refer to our 2025 guidance that sets out our gross loans and net profits. As you know, we guided market 15% CAGR for loans that translates to a $1 billion loan. So we reached just above $600 million. And for the net profit side, again, we are very confident to reach GEL 200 million. I just covered both our guidance points in this question.
Thank you very much.
Thanks, Robert. Next up, we have Gustavo Campos. Gustavo, please go ahead.
Hi, thank you very much for the presentation. Congratulations on the results. Yeah, a few questions from my side. I guess the first one, I would like to understand the dynamic in the overall deposits. I've seen that they've been broadly stable, but although these are like end-of-the-quarter figures, if you could, you know, please elaborate a bit as far as, you know, any dollarization trends you've noticed through the quarter. Any, you know, if you could disclose like maybe trough conditions of where these deposits reached during the quarter and any trends after the reporting period. That would be my first question here. Thank you.
Thank you very much. On the deposit side, we have a very nice growth, 8% on full year basis. As you noticed, and there's a second question in Q&A, I would also kind of combine with this on the side. As I mentioned, it was very, very strong growth. On the dollarization side, we indeed observed increases into our dollarization, particularly during the election period. That was short-lived. That slightly changed our dollarization structure as far as I remember, by 3 percentage points.
We are around 54% on the dollar side, but that trend now has fully stopped. We don't see any more trends. That was mainly driven by the large corporate customers, less of on the retail side. On the other hand, that creates very significant FX buffer into the system. So at the moment, we have a lot of FX buffers that probably the system doesn't need. At some point, we need to expect reversal of this because corporates need to pay salaries, pay taxes into Lari. So that would be kind of our expectations for the future period.
Perfect. Yeah, that's very clear. Thank you very much. I was also wondering if you had any in-house expectations or views on the trajectory of the Lari through 2025? That would be very helpful. Thank you.
Yes, it's quite difficult to answer, but if we observe Lari, despite all that what's going, it actually remained quite stable, just a few percentage points devaluation. It stands around, I would say, 2.82. We don't expect any material movement from that side, maybe a few percentage points up and down, but around 2.85 level would be our kind of current guess.
Understood. Yeah, that's very helpful as well. Thanks very much, and I was looking at your guidance around the 23% return on equity, strong profitability, and continuing profitability growth. I was wondering if you could please elaborate here, like what are your underlying assumptions here for the Lari? Is it assuming that the Lari will remain stable, and is there like, what are the main sources of growth that will drive strong results in 2025 that you see? Thank you.
Yes, thanks. So to start, first of all, actually return on equity doesn't too much dependent on Lari because mainly of our income and capital earning Lari. So we guide GEL 1.5 billion net profit as well. Depending on the FX, it may vary, but like that's what we target, what we guided market, and that's what we are going to actually deliver. So what are the key points? Like it spread across all P&L lines. Georgian economy grows very nicely.
Again, we expect our loan book to grow double digits despite NIM probably in Georgia remaining more or less stable in mid five levels. We don't expect any kind of upside or significant downside, maybe some volatility, but loan growth will be very healthy. Second point, we also expect very nice growth in net fee and commission income on the non-interest income side overall that we have been delivering over the past few years. We expect at least 15% plus, maybe stretching to 20%, and it's driven by different factors, macro growth, a lot of products.
Actually, we are going to launch new business lines. Our cost of risk remains very stable. We usually guide 1% cost of risk. We usually lend below that in Georgia. Probably we continue to be below that, maybe marginally, but still. All that creates very healthy profits for Georgia that we have been delivering, as Vakhtang mentioned, for the last 10 years and before then after IPO. That will be also supplemented to very strong profitable growth from Uzbekistan because we guide a significant increase into loan book, but we guide this growth also very profitably.
As kind of as we guide it, we guide it around GEL 110 million net profit, but in Uzbekistan, we guide GEL 200 million. So significant upside will be coming from that front as well. So overall, we are very confident at 23% plus. Probably we have not been to that low level for a few quarters. We target to be mid 20s around that level, and again, we are very confident to deliver our GEL 1.5 billion net profit.
Understood. Yeah, thank you very much. Just very quick last question for me. How much in capital injections are you expecting to deploy on the Uzbekistan business in 2025? Thanks again.
Exactly. We generally don't provide exactly what we do, guys, but the first thing we will provide as much capital as it needs. Group has like all the muscles to do so. Second, probably Uzbekistan becomes profitable. There has been change in capital treatment, and we don't expect any material injection, anything like close to what we injected so far. So it will be very immaterial amounts, if any.
Understood. Thanks again and congrats on the results.
Thank you.
Thanks, Gustavo. Next up is Can Demir. Can, please go ahead. Thank you.
Yes, good afternoon. Thank you for taking my questions, gentlemen. So my question is on the Georgian net interest margin. It's been, I mean, it's been more resilient than previous years, but it's been coming down a bit. So I was wondering what your thoughts would be for the long-term margin outlook, also incorporating higher for longer scenarios and things like that. What would you think?
Yes, so we already guided about medium term, around mid-5% for longer term. It's difficult to say, but at the moment, what we are seeing is the macro parameters. The quantitative easing period has started, but paused for a period, but actually National bank guided that they are looking at all the options and depending on the scenario. So our expectation is the quantitative easing will continue probably like always in long term, given how macro is performing. And that's probably a bit puts additional pressure on Georgian NIM.
However, there are other means that we can deploy, like again, changing our portfolio structure, Larization increase. So even in a longer term, we don't foresee, and a longer term, I mean like a few years down the road to fall below 5%. I can't say much. It's very, let's say, difficult to say, but 5% plus the level. But as I mentioned, our medium term, like middle fives is something we expect to actually retain.
This is for the whole group?
Yes,
For Georgia only.
For the whole group. For the whole group, we kind of expect to retain 6% very long time. Like we are 6.7% around that level for the next few quarters, as I mentioned. If not higher than the level we are going, because Uzbekistan business has very healthy NIM. Its share of in the portfolio is going up. That has very positive impact on the NIM and profitability of the overall group.
Got it. Thank you very much.
Thanks, Can. Next up is Dan Mikhaylov. Dan, please go ahead. Your line is open. Thank you.
Hi, [audio distortion]. First of all, congratulations on the stellar set of results. Just two. The first one is on your provisioning. From the reporting, you report 25.7 billion GEL loans net, and the gross loans is about GEL 26.7 billion in your reporting. That implies that your provision has doubled in absolute amounts and in relative amounts as a percentage of gross loans quarter-on-quarter. I was wondering if you could explain what the rationale behind this extra level of provisioning has been and kind of where it comes from on both segment side and stage side.
Yes, probably. It's like I need to look at because our cost of risk is like in Georgia was 60 basis points. If you look in Uzbekistan, it's 1%. Our ECL shall be standard. It has not been anything like this. So from credit risk quality and ECL quality perspective, again, we have quite a low cost of risk versus our provisions versus our, let's say, guided levels. Because it has not been anything new for that we booked. It's all in our kind of all in our P&L.
No, I understand. Yeah, it seems a bit like there's been a transfer of provisioning from somewhere because it's not showing up in the cost of risk, but the difference.
I mentioned Azerbaijan sale. Yes, if you look at, let's say, overall provision level, Azerbaijan subsidiary there is sale and loss for it was actually provision line. That is not cost of risk. It's a provision for the anticipated sale, as I mentioned. So that's quite sizable number, GEL 10 million.
Lovely. Thank you so much. And my last question just on the macro side. In your economic forecast, what is your rates expectation for both Georgia and Uzbekistan? Thank you.
So as I mentioned in my part of the presentation, World Bank, IMF, the international organization forecasting real GDP growth in Georgia 6% plus. And our internal team, they are forecasting on moderate growth in the range of 4.5-5%. But moving to Uzbekistan, the growth that we are forecasting around 6%.
Thank you. Sorry, I meant not on the GDP growth, but on the policy, on the interest rate, on the interest rates. How many cuts or if any are you expecting in Uzbekistan and Georgia?
You mean the benchmark rate?
Yeah, the benchmark rates, yes.
Yes, it's again difficult to say. Generally, is it general trend? Like we can easily see low sevens or as a medium to long period. So that's probably the expectation. Exactly how it will be phased out, difficult to say. But again, we would expect to see low sevens at some point in medium term, if not quicker.
But if you want to forecast that next six months, that rate will be changed. So we are forecasting to be on the same.
Okay, thanks. Thanks so much, Dan. Next is Stephen Payne. Stephen, please go ahead.
Thank you. A couple of questions, if I may. I know that cost growth in 2024 was running ahead of income growth. I mean, clearly, as you were heavily investing in the growth in Uzbekistan, launching the three new verticals, just wondering if we can expect cost growth to sort of moderate, to be more in line with income growth going forward?
It's okay. So first of all, to start, we are going to launch and develop our businesses, particularly into Uzbekistan and Georgia. So we will expect some, again, material cost growth because that creates future foundation. But in 2025, we would expect that cost and let's say income will be more or less the same. So probably we may even see the positive growth from that perspective. But at the moment, our key focus is to develop the business to ensure we are hitting our GEL 1.5 billion plus net profit, deliver mid-20 return on equity, and to ensure long-term, let's say, sustainability of our businesses.
Okay, great. Thank you. And secondly, just wondering, I mean, given the dividend payout was right at the top of your range again, and then we clearly had the buyback on top of that as well, all of that was funding this faster than expected growth in Uzbekistan. Just wondering whether we could assume a, should we be thinking about a higher level of capital distributions going forward above and beyond the 35%?
Yes, thanks. That's actually, you mentioned one of the unique strengths that the group has because it has very fast-growing business that we funded from the IPO, but we also can pay the decent level of capital back to the shareholders. From that perspective, like we guided 25%-35% DPR ratio, all things being equal, we don't expect our DPR to fall down.
On the buyback at the moment, it's not generally in our formal guidance, but we look at our efficiencies of our capital. So the group generates much surplus capital generally. At the moment, we are happy to keep a bit higher buffers than we usually do given the circumstances. But again, once it starts to clear out, the group may have capability again to conduct some buybacks in 2025, but we need to see.
Okay, great. Thank you very much.
Thank you.
Thanks very much. Just while we wait to see if there's any more call, any questions coming through, we've got a couple on the chat from Brad Levitsky. It's still early, but can you comment on how the rollout of cards are going in Uzbekistan relative to your expectations? At what point will you update your targets for that business?
Very well. So just we began and we launched this new card, Salom Card recently, just at the end of the first quarter. So it's early to say, but what we have seen practically just during December and January, we did very well. And probably when we'll have our first quarter results, I think we'll update investors on that in this protocol. But till today, we are doing very well.
Also, there's one more question from Simon. What was driving the loan growth? Like particular structural ISIC, it's like as you looked, the macro performed strongly. Like Vakhtang mentioned, GDP growth was 6.7% in Q4. Therefore, it translated into like very strong loan growth as well. It's just, I would say, macro and strong economic performance driven.
Giorgi, there's just a question come in about the rise in the provision coverage in Uzbekistan as well. What's driven this change?
Yes, so as I mentioned, we recalibrated our model so that we kind of given the small size of the book to once a year. So that was kind of increased our cost of risk slightly and that resulted into additional provision. But as I also highlighted, that doesn't reflect any, I would say, deterioration in overall asset quality. Like the book is very well covered. And we still guide that our kind of normalized cost of risk will be around 7-8%. And with 20% plus NIM, that provides very strong risk-adjusted NIM with very high ROI. That's a business model of Uzbekistan, high margins, high risk, high profitability.
Thank you. Okay. I don't think we have any further questions.
We do have a question on the telephone lines.
Okay.
Thank you. Our next question comes from Rahim Karim with Investec. Rahim, your line is now open.
Thank you. Good afternoon and congratulations on the strong results. A couple of questions from the first with respect to Georgia, if I may. A very strong kind of effect and fee and commission performance in the period. I was wondering if you could perhaps give some guidance around how you expect that to unfold in 2025 and if there's any seasonality that we should be aware of.
And then secondly, with respect to Uzbekistan, I appreciate it's been a very busy year, lots of product rollouts, but it's obviously an ambitious team, sorry. So is there any indication of the pipeline or product that we can consider or expect next year as we move into 2025 to help further enhance the long-term growth of that business?
Exactly. I'll start with the FX at Vakhtang, our second part. So I think I was, I would say we can consider 24 FX profit as a run rate or like baseline that can only grow from that point. So probably I was thinking it will be at least double, let's say digit growth from FX 10% plus or even maybe higher. So I would not consider any kind of one-offs or anything that will bring it down next year.
Yeah. To answer on the second question, so we will concentrate in Uzbekistan on the products which we launched in the first quarter of last year. This is the daily banking product, the Salom Card, the credit card, which we believe that will have a huge potential for a growth. And as last four, five years, and you have seen the financials and we are doing very well in the consumer lending, we believe that also we can do in the micro and the SME businesses. And as we launched the daily banking in SME businesses, now we'll push more and more micro and SME lending from 2025.
Thank you very much. Giorgi, can I just double check? Is there any seasonality in that?
Oh, sorry, I missed that part. Usually Q1 is like slowest generally given the like holiday season, less of activities, and Q4 usually strongest. So we should expect probably as I guided on full year basis, we should expect nice double digit growth, but probably Q1 will be lower than Q4 because of the seasonality.
That's super helpful. Thank you both very much.
There are a couple of other questions in the chat. One is on the cost of risk in Georgia across the different segments, and another is on the political instability and how we see that affecting our business in Georgia this year.
I see. Okay. So if we look, as I mentioned, the Georgian cost of risk generally is very strong. If you look at the distribution on corporate, we are quite low, like close to 0-0.2 around that level. Highest cost we have in MSME generally sets a business nature. However, again, it's at a very comfortable level. And our retail, we remain like, as I kind of remember, around just about 1% if I recall correctly.
But generally, it's all within like our risk appetite within expected and within retail. I'm not going into the details because it's becoming too kind of narrowed down. We have mortgage book, we have FCL. Most of them have different cost of risk. But our key driver generally is that what is the profitability that this business actually, let's say, can generate. So it's not cost of risk. We can like take in certain cases higher cost of risk, as you said, in Uzbekistan if a business delivers high profitability.
Yeah. To answer on the second question, how the politics influence the economy in Georgia, I think the good example is December. We have seen the real GDP growth in December, 6.7%, and we have demonstrations in that time. So it less than in November of the last year, when the real GDP growth was 7%. We feel we have not the results of this real GDP growth numbers for January and February.
But what internally we feel that what we see that probably January has to be better than in December. So it means that it had influenced somehow, but taking into account that in 2024, the real GDP growth was 9.5%, why we are forecasting that putting everything together, our internal forecast, the real GDP growth in the range of 4.5%-5%.
Thanks very much, Vakhtang and Giorgi. Do we have, Emily, do we have any other questions on the phone lines?
We currently have no further questions registered.
Okay. I think we have no more questions. So just leaves me to say thank you very much, everybody, for joining this call today. Please keep in touch. We're always around and happy to help out with any follow-up questions. And we look forward to catching up with you again with our first quarter results in May. So thank you very much and goodbye.
Thank you very much.
Thank you. Goodbye.
Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.