The dividend yield of the FTSE 250 today is a respectable 3.3%. Given that this is the average, it tells us that the index must be brimming with lucrative passive income opportunities.
One obvious hunting ground is renewable energy investment trusts, many of which offer dividend yields of 8%-10%. As tempting as these may appear, however, I see them as warning signals rather than juicy opportunities.
Looking further down the list though, TBC Bank (LSE:TBCG) does look attractive to me. The dividend yield is 5.4%, rising to 6.8% in 2027.
But does this FTSE 250 stock have anything else going for it, other than a high yield?
Extremely rare dividend stock
For those unfamiliar, TBC is a Georgian lender, with a dominant share of the domestic banking market alongside Lion Finance. It also has a digital banking operation in Uzbekistan, though this is a much smaller part of the business.
It’s extremely rare to find a stock still yielding over 5% after a 303% share price rally over five years. Yet, that’s what we have here in the case of TBC.
This points to how much the lender has been growing, fuelled by Georgia’s strong GDP growth. Between 2020 and 2025, revenue nearly tripled while net profit more than quadrupled.
The quality metrics are also worth pointing out here. TBC consistently generates a return on equity (ROE) in the mid-20s, which is excellent, and an almost fintech-like level of operational efficiency (40% cost-to-income ratio in Q1).
Why so cheap?
Currently, the stock is trading at just 5.5 times forward earnings. Why is there such a discount being applied here?
One could be a slowdown in both top and bottom-line growth rates. For 2026, City analysts see revenue edging slightly higher, with a 14% growth in earnings. That’s decent, of course, but not as strong as previous years.
On top of this, there’s perceived to be a fair amount of geopolitical risk here. You see, Georgia shares a long border with Russia, with all that this entails.
Adding fuel to these concerns, Georgia’s volatile political landscape has spooked investors. There’s been tension around Russian influence and targeted sanctions from the US and EU on certain members of the ruling party.
Finally, Georgia is probably closer to Iran than many investors are comfortable with. The ongoing conflict could have negative consequences for the global economy.
Like elsewhere, the countries in which we operate, Georgia and Uzbekistan, are not immune to the fallout from this [US-Iran] conflict. However, so far, the economic impact has been relatively muted and, for now, we still expect to see strong economic growth in both countries in 2026, with a 7.4% real GDP growth forecast for Georgia and 7.9% for Uzbekistan.
CEO Vakhtang Butskhrikidze
Passive income
As far as the dividend is concerned, though, I think the stock is still worth considering. The payout is extremely well-covered by prospective earnings, suggesting it’s safe (though never ultimately guranteed).
Over time, I also think there’s a good chance the TBC share price will do well due to the low starting valuation and strong growth prospects in Georgia and Uzbekistan.
At the current share price, 100 shares (costing about £4,650) would pay roughly £250 a year in passive income, rising above £300 by 2027.
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Ben McPoland has no position in any of the companies mentioned.
