TBC Bank Uzbekistan, the only mobile-only bank in Uzbekistan owned by London Stock Exchange-listed TBC Bank Group, has raised $38.2 million in new capital as the bank looks to expand its local presence in the country and launch new financial products.
TBC Bank Group led the latest financing for TBC Bank Uzbekistan with a USD 23 million investment, while shareholders the European Bank for Reconstruction and Development (EBRD) and the World Bank’s International Finance Corporation (IFC) participated in the round with USD 7.6 million each.
After serving customers in Georgia, TBC Bank Group decided to expand its business beyond the country’s borders in 2019, finding Uzbekistan as its first international market. The bank began operations in Uzbekistan in 2020 through a separate legal entity, TBC Group Uzbekistan, which launched a mobile-only bank after its debut, and has no physical branches in the country. The plan was to capitalize on Uzbekistan’s growing digitalization efforts and to grow its business in a country that is the most populous in the region after Russia and Ukraine, and the second most populous of all Commonwealth of Independent States countries, with a straight economic and socio-demographic profile.
“Before TBC came in, there was no banking app in Uzbekistan… Fast forward four years and most banks have mobile apps, but TBC is way ahead of the curve,” Oliver Hughes, TBC Group’s head of international operations, said in an exclusive interview.
According to official statistics, Uzbekistan has a smartphone penetration rate of 70%, an internet penetration rate of 77%, and 59% of its 37 million population are under 30 years old, making it a market suitable for mobile-focused businesses.
TBC Bank Uzbekistan offers a mobile app that allows customers to open bank accounts and access services, including cash loans and deposits, without having to go to a bank branch to access banking.
Hughes told TechCrunch that just a few years ago, Uzbek customers had to go to the bank and wait in line to do their banking.
TBC Group Uzbekistan owns Payme, a digital payment app for individuals and small businesses, along with a mobile-only bank, and Payme Nasiya, a Sharia-compliant credit business. In order to expand its scope, it intends to integrate some of the experience of these two businesses within the bank or synchronize it with its operations.
For example, TBC Group Uzbekistan offers complementary services that are not strictly financially related by providing tips, recommendations and user-generated content on local events, entertainment, concerts and travel through the app. Some of these features will be available first on the Payme app, but will be available to TBC Bank Uzbekistan customers over time.
Similarly, Payme Nasiya currently offers POS and installment loan services to customers in Uzbekistan. It plans to introduce e-commerce and offline Buy-Now-Pay-Later to expand its credit business. This is expected to attract more local businesses and ultimately help the mobile bank gain more customers.
In addition to new financial products in the pipeline, TBC Group Uzbekistan plans to bring AI experiences to mobile banking. Hughes told TechCrunch that the group has built a large-scale language model using primarily customer data sets, and is developing a voice assistant that will provide banking and financial services through a chatbot integrated into the app.
Hughes said in the fall that TBC Bank Uzbekistan would use the new funds to add credit card and insurance products next year.
Hughes added that the bank's roadmap includes additional services such as checking accounts, accounting, offline payments, e-commerce payments and lending to small business customers.
“This investment will allow us to further capitalize on the tremendous opportunities in Uzbekistan, a fast-growing country with a population of over 37 million, and TBC UZ continues to capitalize on the growth momentum in the country,” Vakhtang Butskhrikidze, CEO of TBC Bank Group, said in a prepared statement.
By the end of 2022, TBC Bank Uzbekistan reached the break-even point, and 2023 was the first year in which the bank made a net profit. As of March 2024, the bank had 4.8 million unique registered users. It also recorded 1.2 million monthly active users in the first quarter of 2024.
With a total registered user base of 15 million, TBC Group Uzbekistan achieved profitability within two years of launch and recorded 85% year-on-year revenue growth in the first quarter of this year. The company achieved total loans of $296 million and deposits of $216 million through its three subsidiaries. Net income for fiscal 2023 amounted to $23 million, most of which came from Payme. However, TBC did not disclose the revenue or profit of the mobile bank.
“TBC UZ’s impressive growth trajectory and innovative approach are aligned with our mission to support sustainable economic development in the region,” said Andi Aranitasi, EBRD Country Representative in Uzbekistan.
Hughes said he expects TBC Group Uzbekistan to generate $75 million in net income by the end of 2025, most of which will come from TBC Bank Uzbekistan.
“We are encouraged by the progress TBC UZ has made to date and are confident in its potential to contribute to economic growth and financial inclusion in Uzbekistan,” said Neil McCain, IFC Uzbekistan Country Manager.
