UPDATE 1-TBC Bank annual profit plunges on pandemic hit

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Feb 19 (Reuters) - Georgia’s largest banking group TBC Bank on Friday posted a slump in annual underlying profit due to lower interest rates and limited lending growth in the fourth quarter from the COVID-19 pandemic.

The FTSE 250-listed bank, which reiterated its medium-term targets, said underlying profit fell to 322.5 million lari ($97.96 million) for the 12 months ended Dec. 31, from 540.3 million lari a year earlier.

In line with lenders across the world, TBC had set out 225 million lari in provisions for loans that could go bad due to the global health crisis while it focuses on strengthening its digital capabilities.

TBC’s net interest margin, the main measure of a bank’s profitability, dipped to 4.7% for the period from 5.6%.

Its gross loan portfolio reached 15.20 billion lari at 2020-end, a 3% rise on a constant currency basis but a lower growth rate compared to the previous year.

“The limited growth was related to the second wave of pandemic-related restrictions in 4Q,” the company said.

The bank reiterated its medium-term targets of return on average equity of above 20%, dividend pay-out ratio of 25-35% and loan book growth of around 10-15%.

$1 = 3.2921 laris Reporting by Priyanshi Mandhan in Bengaluru; Editing by Sriraj Kalluvila and Vinay Dwivedi