The record high net income of GEL 45.6 mln reported by TBC in 1Q15 (17.9% implied annualized ROE) shows the bank is successfully coping with continued economic turbulence. As a result, TBC's operating revenue is set to expand decently in 2015 on the back of surging non-interest income. With operating expenses under tight control, the bank will nearly reach its mid-term C/I target of 45% already this year. On the other hand, asset quality pressures are likely to rise as the effects of the GEL depreciation take their toll. Although we see full-year ROE edging down to 16-17% on increased loan provisioning and last year's IPO-related effect on equity, a return to the mid-term target of above 18% is achievable in 2016. We keep our 12-m target price for TBC Bank unchanged at USD 14.4/DR and maintain our BUY recommendation.

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