UPDATE 1-Georgia's top retail lender TBC Bank profit jumps

* Sees medium-term cost-to-income below 35 pct vs below 40 pct earlier

* Considers entering other markets, expanding beyond Georgia

* Says Turkey developments to impact Georgia’s economic growth (Adds interest margin, details, comment on wider market)

Aug 20 (Reuters) - Georgia’s TBC Bank Group Plc posted a 25.2 percent rise in half-year pretax profit on Monday, as lending grew on the back of stronger economic growth in the former Soviet republic.

The Georgian banking industry is dominated by TBC and its main rival Bank of Georgia Group, which also reported a double-digit increase in profit last week.

TBC, which has emerged as the country’s largest bank by loans and deposits with the takeover of Bank Republic, said pretax profit rose to 239.5 million laris ($94.3 million) for the six months ended June 30, from 191.4 million laris a year earlier.

Shares of TBC were up 2.4 percent on the London Stock Exchange minutes after the opening bell.

TBC Bank, started as Tbilisi Business Centre in 1992, said net interest margin climbed to 7 percent in the first half from 6.7 percent, driven by a rise in yields on local currency loans.

The bank said cost-to-income ratio was 36.8 percent compared with 42.8 percent a year earlier. It expects the ratio in the medium term to be below 35 percent, compared with previous forecast of below 40 percent.

Tbilisi-based TBC’s market share in total loans was 38.3 percent as of June 30, a 0.3 percentage point rise year-on-year.

The company, which runs 157 branches employing about 7,100 people, said it would also consider entering other markets to expand its banking operations beyond Georgia.

Gross loans and advances to customers stood at 8.90 billion laris at the end of June, up 20.4 percent from a year earlier.

TBC and Bank of Georgia’s results often mirror the country’s economic growth. Georgia’s economy grew 5.7 percent year-on-year in the first half of 2018, preliminary data showed in July, up from 4.5 percent in the same period last year.

Georgia, which hosts pipelines carrying Caspian oil and gas to Europe, is recovering from a decline in exports and a plunge in the currencies of its main trading partners, which have depressed economic growth in recent years.

TBC cautioned on Monday that the recent developments in Turkey are expected to have negative impact on economic growth in Georgia.

The lira has lost nearly 40 percent of its value against the dollar this year as investors fret about Turkish President Tayyip Erdogan’s influence over monetary policy. ($1 = 2.5400 laris)

Reporting by Muvija M in Bengaluru, additional reporting by Margarita Antidze in Tbilisi; Editing by Gopakumar Warrier