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TRANSCRIPT
November 2010
GROWTH AT THE RIGHT PRICELSE: BGEO / GSE:GEB
JSC Bank of Georgia Q3 2010 & YTD 2010 results overview
Page 2November 2010
Introduction to Bank of Georgia
Investment highlightsUndisputed leader of Georgian financial services industry with market-leading retail and corporate banking franchiseStrongly positioned to benefit from US$4.5 bln international assistance package pledged to Georgia by international donors in the aftermath of Russia-Georgia conflict in August 2008Disciplined capital management, low leverage, conservative liquidity position, no exposure to sub-primeSophisticated management team with Western banking & finance backgroundTransparency and good governance, over 89% institutionally owned. Supervisory Board includes two large institutional shareholders and five independent directors
The leading universal bank in Georgia
Leading corporate bank with approximately 90,500 legal entities and over 171,000 current accountsLeading insurance, card-processing, leasing, trade finance, wealth management and asset management services providerThe only Georgian entity with credit ratings from all three global rating agencies
S&P: ‘B/B’Fitch Ratings: ‘B+/B’ – at the sovereign ceilingMoody’s: ‘B3/NP (FC)’ & ‘Ba3/NP (LC)’
Listed on the London Stock Exchange (GDRs) and Georgian Stock ExchangeMarket Cap (LSE) US$ 546 mln as of 8 November 2010Approximately 95% free float
Issue of the first ever Eurobonds in GeorgiaBloomberg: BKGEO; 5 year, 9%, US$200 mlnB/Ba2/B (composite B+)
No.1 by assets (34%), (1) gross loans (34%), (1) client deposits (30%) (1) and equity (39%) (1)
Leading retail banking, with top brand, best distribution network and broadest range of services of any bank in Georgia
380387388ATMs
140137137Branches
569,000+551,000+565,000+Cards Outstanding
895,000+953,000+986,000+Retail Accounts
200920102010
SeptemberJuneSeptember
(1) All data according to the NBG as of 30 September 2010
November 2010
JSC Bank of Georgia Q3 2010 and YTD 2010 results overview
Page 4November 2010
Q3 and 9 months 2010 P&L results highlights
NMF0.05 0.08 6.3%0.31 0.56 0.33 0.60 EPS (diluted) NMF0.05 0.08 6.3%0.34 0.63 0.37 0.66 EPS (basic)
Q3 2009Millions unless otherwise noted Q3 2010 Q2 20103 Growth1 Growth 2
Bank of Georgia (Consolidated, IFRS-Based) GEL US$ GEL US$ Q-O-Q GEL US$ Y-O-Y(Unaudited) (Unaudited) (Unaudited)
Net Interest Income 56.5 31.3 51.7 28.0 9.4% 48.9 29.2 15.5%Net Non-Interest Income 34.7 19.2 30.9 16.7 12.3% 30.4 18.1 14.1%Total Operating Income (Revenue)4 91.2 50.5 82.5 44.8 10.5% 79.3 47.3 15.0%Recurring Operating Costs 51.0 28.2 47.8 25.9 6.7% 45.0 26.8 13.5%Normalized Net Operating Income5 40.1 22.2 34.7 18.8 15.6% 34.3 20.5 16.9%Net Non-Recurring Income (Costs) (1.6) (0.9) 1.5 0.8 NMF (1.9) (1.1) -13.6%Profit Before Provisions 38.5 21.3 36.2 19.6 6.2% 32.4 19.3 18.7%Net Provision Expense 14.2 7.9 12.6 6.8 12.8% 30.0 17.9 -52.6%Net Income/ (Loss) 20.8 11.5 19.6 10.6 6.3% 2.6 1.6 NMF
1 Compared to Q2 2010, growth calculations based on GEL values.2 Compared to the same period in 2009; growth calculations based on GEL values.3 Q2 2010 and 6 months 2010 Consolidated numbers have been Reviewed 4 Revenue includes Net Interest Income and Net Non-Interest Income.5 Normalized for Net Non-Recurring Costs.
NMF0.06 0.10 0.91 1.64 EPS (diluted) NMF0.06 0.11 1.01 1.83 EPS (basic)
9 months 2009Millions unless otherwise noted 9 months 2010 Growth 2
Bank of Georgia (Consolidated, IFRS-Based) GEL US$ GEL US$ Y-O-Y(Unaudited) (Unaudited)
Net Interest Income 153.4 84.9 150.8 89.9 1.7%Net Non-Interest Income 96.2 53.3 90.8 54.1 5.9%Total Operating Income (Revenue)4 249.6 138.2 241.6 144.1 3.3%Recurring Operating Costs 145.1 80.3 135.9 81.1 6.7%Normalized Net Operating Income5 104.5 57.9 105.7 63.0 -1.1%Net Non-Recurring Income (Costs) (3.4) (1.9) (2.4) (1.4) 40.9%Profit Before Provisions 101.1 56.0 103.2 61.6 -2.1%Net Provision Expense 34.2 18.9 102.8 61.3 -66.8%Net Income/ (Loss) 57.2 31.7 3.4 2.0 NMF
Page 5November 2010
30 September 2010 Balance Sheet results highlights
14.5%15.7%Total Capital Adequacy Ratio (NBG)
15.8%15.2%Tier I Capital Adequacy Ratio (NBG)
32.7%32.6%Total Capital Adequacy Ratio (BIS)
20.3%19.9%Tier I Capital Adequacy Ratio (BIS)
13.69 22.96 11.25 20.74 12.01 21.69 Book Value Per Share, GEL & US$
428.4 718.5 352.3 649.8 376.2 679.6 Shareholders’ Equity
1,348.5 2,261.6 1,504.1 2,773.8 1,625.4 2,936.0 Total Liabilities
547.7 918.6 512.7 945.6 488.0 881.5 Borrowed Funds
705.1 1,182.5 806.4 1,487.2 918.1 1,658.5 Client Deposits
1,777.0 2,980.2 1,856.4 3,423.6 2,001.5 3,615.6 Total Assets
989.4 1,659.3 1,075.0 1,982.5 1,141.1 2,061.4 Net Loans
(Unaudited)(Unaudited)(Unaudited)
US$GELUS$GELUS$GELBank of Georgia (Consolidated, IFRS-Based)
Q3 2009Q2 2010Q3 2010Millions, unless otherwise noted
-5.5%13.5%4.6%Book Value Per Share,
-5.4%13.6%4.6%Shareholders’ Equity
29.8%26.8%5.8%Total Liabilities
-4.0%-3.5%-6.8%Borrowed Funds
40.3%30.3%11.5%Client Deposits
21.3%24.1%5.6%Total Assets
24.2%22.8%4.0%Net Loans
Y-O-YYTDQ-O-Q
ChangeChangeChange
Page 6November 2010
Composition of revenue in Q3 and 9 months 2010Revenue by segments, Q3 2010Composition of Revenue, Q3 2010
Consolidated
Total Revenue: GEL 91.2 million in Q3 2010 and GEL 249.6 in 9 months 2010
Composition of Revenue, 9 months 2010 Revenue by segments, 9 months 2010
Net interest income 62.0%,GEL 56.5 mln
(+9.4% q-o-q)
Net income from documentary
operations 2.7%,GEL 2.5 mln
(+13.8% q-o-q)
Net foreign currency related
income 8.8%,GEL 8.0 mln
(-9.2% q-o-q)Net fee and commision
income15.1%,GEL 13.7 mln
(+26.5% q-o-q)
Net other non-interest income
11.5%,GEL 10.5 mln
(+15.9% q-o-q)
Net othe r n on -in te re st i ncom e
12.1%,GEL 30.3 mln
(+10.6% y-o-y)
Ne t fee an d comm i sion
i ncom e14.0%,GEL 34.9 mln(+0.4% y-o-y)
Ne t fore ign curre ncy re late d
i ncom e 9.7%,GEL 24.2 mln(+8.5% y-o-y)
Ne t i ncom e from docum e ntary
operati on s 2.7%,GEL 6.8 mln
(+7.0% y-o-y)
Ne t i nte re st in com e 61.5%,GEL 153.4 mln (1.7% y-o-y)
O ther6.5%,
GEL5.9 mln
Aldagi BCI 4.5%,
GEL4.1 mln(-31.2% q-o-q)
BNB 3.5%,
GEL3.2 mln(+6.3% q-o-q)
BG Bank 3.3%,
GEL3.0 mln(-30.1% q-o-q)
BoG Standalone
82.2%,GEL74.9 mln
(+8.4% q-o-q)
BoG Standalone
81.5%,GEL203.4 mln(+6.8% y-o-y)
BG Bank 4.2%,
GEL10.4 mln(-36.3% y-o-y)
BNB 3.6%,
GEL9.0 mln(+44.9% y-o-y)
Aldagi BCI 5.9%,
GEL14.6 mln(-6.5% y-o-y)
O ther4.8%,
GEL12.1 mln(-6.8% y-o-y )
Page 7November 2010
Analysis of revenue
Net fee & commission income & Income from documentary operations
Net foreign currency related incomeRevenue growth
Other non-interest income
Consolidated
33.542.8
49.8 55.8 58.9 56.4 52.4 49.5 48.9 46.0 45.3 51.7 56.5
22.7
25.3
31.330.3 27.1 30.2
29.3 31.1 30.4 31.3 30.630.9
34.7
0
10
20
30
40
50
60
70
80
90
100
Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Net Interest Income Net Non-Int erest Income
82.581.786.685.986.1
81.1
68.156.2
91.2
77.4 75.980.6 79.3
6.9 7.610.2 10.2
12.910.9 11.1 11.6 12.0 12.6
10.3 10.913.7
1.81.9
1.4 1.9
1.7
1.41.8
2.3 2.3
2.2 2.2
2.5
2.2
0
2
4
6
8
10
12
14
16
18
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL m ln
Net Fee & Commission Income Net Income From Documentary Operations
8.8
6.55.7
7.3
8.88.0
6.2
10.1
13.2
10.49.4
14.9
7.1
0
2
4
6
8
10
12
14
16
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
1.7 2.5 3.2 3.05.1 4.9
3.7 4.2 4.25.4
0.4 0.3
1.3
1.9 0.21.8
0.3
-0.4 -1.1 -0.5
4.7
1.4
1.03.6
3.7 3.0 4.4 4.4
4.6
4.0
1.6
1.3 1.6
1.9 0.5
0.10.20.6
0.10.2
0.2
0.1
0.1
0.2
2.0
-0.4
0.2
-3.4
0.6
0.30.5
0.0
3.3
-6
-4
-2
0
2
4
6
8
10
12
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Net Insurance Income Brokerage Income Asset Management Income Realized Net Investment Gains Other
6.5
9.510.7
7.17.8
5.0
7.89.0
10.810.7 10.5
Page 8November 2010
Analysis of recurring operating costsRecurring operating cost structure by segments,
Q3 2010Recurring operating cost structure, Q3 2010
Consolidated
Total recurring operating costs: GEL 51.0 million in Q3 2010 (up 6.7% q-o-q), and GEL 145.1 million in 9 months 2010 (up 6.7% y-o-y)
Recurring operating cost structure, 9 months 2010 Recurring operating cost structure by segments, 9 months 2010
Other operating costs 5.5%
GEL 2.8 mln(-10.4% q-o-q)
Procurment & operations support
costs 7.5%,GEL 3.8 mln
(+16.1% q-o-q)
Depreciation & amortization 13.6%,
GEL 6.9 mln(+6.2% q-o-q )
S elling, general & administrative costs
20.5%,GEL 10.5 mln
(+17.9% q-o-q)
Personnel costs 52.9%,
GEL 27.0 mln(+3.9% q-o-q)
Personnel costs 52.6%,
GEL 76.3 mln(+13.0% y-o-y)Selling, general &
administrative costs 20.1%,
GEL 29.2 mln(-9.4% y-o-y)
Depreciation & amortization 13.9%,
GEL 20.1 mln(+11.4% y-o-y )
Procurment & operations support
costs 7.3%,GEL 10.7 mln(+8.7% y-o-y)
Other operating costs 6.1%
GEL 8.8 mln(+5.4% y-o-y)
Other, 15.7%GEL 8.0 mln
Aldagi BCI, 4.6%
GEL 2.4 mln(-48.6% q-o- q)
BNB, 4.9%GEL 2.5 mln
(+25.3% q-o-q )
BG Bank, 6.4%GEL 3.3 mln
(-32.9% q-o-q)
BoG standalone,
68.4%GEL 34.9 mln(+7.4% q-o-q)
BoG standalone,
67.6%GEL 98.1 mln
(+10.8% y-o-y)
BG Bank, 8.3%GEL 12.1 mln(-14.6% y-o-y)
BNB, 4.3%GEL 6.3 mln
(+42.0% y-o-y )
Aldagi BCI, 7.2%
GEL 10.4 mln(-1.0% y-o-y )
O ther, 12.5%GEL 18.2 mln(-0.5% y-o-y)
Page 9November 2010
Analysis of recurring operating costs cont’d
Cost/Income ratio
Personnel costsEmployees
Normalized net operating income, Profit before provisions
Consolidated
17.8
25.727.3
23.122.0
23.222.3 22.5
23.4
25.927.0
28.4
0
5
10
15
20
25
30
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
55.5%
54.9%
90.0%
198.3%
65.3%
59.1%60.8%52.9%57.8%
56.1%
44.4%
57.8%
42.2%50.8%
44.0%
60.7% 58.0%50.5%50.0%
41.0%
45.1%56.6%49.6%
53.9% 49.6% 49.0%
140.5%
91.5%100.1%
35.7%
116.9%
74.7%76.0%
230.0%
106.2%105.1%
0.0%
59.1% 55.6%64.5% 62.8% 80.4%
84.6%
90.7%
66.6%60.6%
69.0%67.8%
61.5%
0%
40%
80%
120%
160%
200%
240%
Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Cost/Income Ratio, ConsolidatedCost Income Ratio, Bank of Georgia StandaloneCost/Income Ratio, BG BankCost/Income Ratio, BNB
5,313
3,056
3,619
3,853
2,741
2,692
2,665
2,669
2,674
2,825
2,963
3,060
824
836
842
786
757
707
617
621
593
468
454
5,118
5,048
4,781
4,798
4,914
4,964
4,949
6,196
5,911
4,926
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Group Consolidated BoG Standalone BG Bank
30.8 29.6
40.136.832.4
26.434.336.6 37.3 36.3 38.7 37.1 34.3 34.734.0
45.140.5
33.7
8.7
(76.1)
36.2 38.5
-80
-60
-40
-20
0
20
40
60
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Norm alised Net Opeart ing Income P rofit /(Loss) Before P rovisions
Page 10November 2010
Composition of assets as at 30 September2010Consolidated
22.7 23.4 19.7 12.2 Intangible Assets Owned Net
GEL million 30-September-09 31-December-09 30-June-10 30-September-10Other Fixed Income Instruments 67.2 - - -Insurance Related Assets 45.6 26.7 34.4 33.6 Investments In Other Business Entities & Investment Property 75.5 89.2 104.8 119.3
Goodwill 135.7 65.8 69.2 69.2 Tax Assets, Current And Deferred 12.9 23.5 24.9 26.0 Prepayments And Other Assets 56.6 36.6 58.9 64.7 Other Assets 405.7 261.4 315.6 335.5 Note: Net loans include Net finance lease receivables
335.5315.6261.4405.7
293.0280.4299.9
2,061.41,982.5
1,678.21,659.3
480.2381.1
265.5
383.0
136.1
147.7
157.0
165.6
310.6
303.7
270.966.6
291.9
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q3 2010Q2 2010YE 2009Q3 2009
Government Treasuries &Equivalents
Cash & Equivalents
Cash with other Banks
Net Loans
Property & Equipment
Other Assets
GEL m ln
4.3%of total assets
57.9% of total assets
9.2% of total assets
8.6% of total assets
11.1% of total assets5.4% of total assets
9.1% of total assets
57.6% of total assets
9.6% of total assets
9.0% of total assets
5.6% of total assets
12.9% of total assets
55.7% of total assets
13.6% of total assets
10.1% of total assets
2,913
3,424
2,980
3,616
9.3% of total assets
3.8% of total assets
13.3% of total assets
57.0% of total assets
8.1% of total assets
2.2% of total assets 9.3% of total assets
8.9% of total assets
8.6% of total assets
Page 11November 2010
Composition of gross loan book as at 30 September 2010Consolidated
Georgia: RB & WM, CB
Ukraine: BG Bank
Belarus: BNB
Numbers do not include CC/Eliminations
Gross loan book Q3 2010: GEL 2,247.3 million
21.4%
RB & WM, 1,022
BG Bank, 255
BG Bank, 265
BG Bank, 194
BG Bank, 199
BG Bank, 190 BG Bank, 184
BG Bank, 208 BG Bank, 192
BNB, -
BNB, - BNB, 35
BNB, 36
BNB, 26 BNB, 25
BNB, 33
BNB, 42 BNB, 52
CB, 999 CB, 981 CB, 869 CB, 811 CB, 770 CB, 806 CB, 796 CB, 821 CB, 866 CB, 968 CB, 881
RB & WM, 966 RB & WM, 887 RB & WM, 910 RB & WM, 887 RB & WM, 854
RB & WM, 983 RB & WM, 1,055 RB & WM, 976 RB & WM, 965 RB & WM, 790
BG Bank, 186
BG Bank, 257
BG Bank, 177
BNB, 27
BNB, 30
0
500
1,000
1,500
2,000
2,500
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
47% of gross loans
39% of gross loans
46% of gross loans
42% of gross loans
4 3% of gross loans
44% of grossloans
48% of gross loans
42% of gross loans
48% of gross loans
44% of gross loans
42% of gross loans
48% of gross loans
42% of gross loans
49% of gross loans
44% of gross loans
46% of gross loans
44% of gross loans
45% of gross loans
45% of gross loans
44% of gross loans
44% of gross loans
45% of gross loans
Page 12November 2010
Liabilities breakdown as at 30 September 2010Consolidated
30-September-09 31-December-09 30-June-10 30-September-10Issued Fixed Income Securities 0.7 0.7 3.7 3.6 Insurance Related Liabilities 52.2 34.2 44.4 44.0 Tax Liabilities, Current And Deferred 22.8 25.2 31.8 35.4 Accruals And Other Liabilities 41.4 46.6 42.8 54.0 Other liabilities 117.1 106.8 122.7 137.0
Total liabilities 30 September 2010: GEL 2,936.0 million
259.0218.422.543.4
1,658.51,487.2
1,272.51,182.5
881.5945.6
913.3918.6
137.0122.7
106.8117.1
679.6649.8
598.4718.5
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q3 2010Q2 2010YE 2009Q3 2009
GEL mlnTotal equity
Other Liabilites
Borrowed Funds
Client Deposits
Deposits And Loans From Banks
21% of total liabilities + equity
4% of total liabilities + equity
31% of total liabilities + equity
44% of total liabilities + equity
1% of total liabilities + equity
19% of total liabilities + equity
4% of total liabilities + equity
28% of total liabilities + equity
43% of total liabilities + equity
6% of total liabilities + equity
24% of total liabilities + equity
4% of total liabilities + equity
31% of total liabilities + equity
40% of total liabilities + equity
1% of total liabilities + equity
3,616
3,424
2,9132,980
19% of total liabilities + equity
7% of total liabilities + equity
46% of total liabilities + equity
24% of total liabilities + equity
4% of total liabilities + equity
Page 13November 2010
Client deposits breakdownConsolidated
Client deposits Q3 2010: GEL 1,658.5 millionNote: RB & WM client deposits include deposits at BG Capital
Georgia: RB & WM, CB
Ukraine: BG Bank
Belarus: BNB
Numbers do not include CC/Eliminations
CB , 605 CB , 588 CB , 683
CB , 799
RB & WM, 713 BG Bank, 216
BG Bank, 180
BG Bank, 121
BG Bank, 115
BG Bank, 117
BG Bank, 139
BG Bank, 122
BG Bank, 142
BG Bank, 155
BNB , 16
BNB , 20
BNB , 16
BNB , 18
CB , 597 CB , 626 CB , 518 CB , 656
CB , 576 CB , 681 CB , 652
RB & WM, 660 RB & WM, 595 RB & WM, 539 RB & WM, 461 RB & WM, 391 RB & WM, 374 RB & WM, 419 RB & WM, 396 RB & WM, 534 RB & WM, 458
BG Bank, 127
BG Bank, 171
BNB , 12
BNB , 18
BNB , 25
BNB , 31 BNB , 27
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
CB RB & WM BG Bank BNB
34% of client deposits
49% of client deposits
35% of client deposits
49% of client deposits
38% of client deposits
49% of client deposits
35% of client deposits
52% of client deposits
33% of client deposits
1,326
1,395
1,2021,193
1,133
38% of client deposits
51% of client deposits
1,025
1,183
53% of client deposits
1,272
50% of client deposits
39% of client deposits
46% of client deposits
42% of client deposits
47% of client deposits
43% of client deposits
1,394
1,487
44% of client deposits
46% of client deposits
1,659
48% of client deposits
43% of client deposits
November 2010
Capital adequacy & wholesale funding
Page 15November 2010
Capital adequacy
Risk-weighted assets BIS vs. NBG
NBG capital adequacy ratios, BoG standaloneBIS capital adequacy ratios, BoG consolidated
Net loans/deposits & loans/(deposits+equity), BoG consolidated
161.2% 164.1%
135.4%129.6%
120.7%116.2%
107.5%
88.6% 85.3% 84.2%79.4%
132.6% 135.7%145.7%
163.6%
85.8% 89.5% 93.5%104.5% 100.7% 98.5%
85.3%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Net Loans/Total Deposits Net Loans/(Total Deposits+Equity)
25.2% 25.0%23.5% 22.4% 21.9%
20.3% 19.9%
25.0%
22.6%21.6%24.7%
36.4%35.6%34.3%
26.3%25.3%
25.8%25.8%
34.7%34.6%
32.7% 32.6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
18.3%
15.8%
18.2%16.6% 16.4%
17.8%
20.4% 19.7%
17.7%
15.8% 15.2%13.7%
16.3% 16.8% 15.9%14.5% 15.7%
14.2%15.1% 15.5% 13.5% 17.4% 18.4% 21.2%
0%
5%
10%
15%
20%
25%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q32010* Tier I Cap ital Adequacy Ratio Total Capital Adequacy Ratio
* Pro-forma according to new regulations
2,609 2,5922,455
2,626
2,9283,046
3,3023,041
2,720
3,1283,272
2,5932,734
2,516
2,9512,729
3,100
3,605
3,132
3,458
2,717 2,870
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
BIS NBG
Page 16November 2010
International borrowings
International borrowings repayment schedule
International borrowings - fixed vs. floating rates, 30 September 2010
Selected international loans
International borrowings by currencies, 30 September 2010
Note: Depicts final maturity dates Excluding credit lines as part of documentary business
Key LendersPrinciple Amount Outstanding as of
September 30, 2010
Maturity
Eurobonds US$ 149.0 million 2012Senior Term Loan from FMO US$ 8.0 million 2014Senior Term Loan from WorldBusiness Capital US$ 5.8 million 2016Subordinated Loan from HBK Investments (Call in 2012) US$ 15.0 million 2017Subordinated Loan from Merrill Lynch (Call in 2012) US$ 35.0 million 2017Senior Term Loan from WorldBusiness Capital (GLC) US$ 4.2 million 2017Subordinated loan from FMO and DEG (Call in 2013) US$ 30.0 million 2018Senior Loan from OPIC US$ 26.6 million 2018Subordinated Loan from OPIC US$ 10.0 million 2018Senior Term Loan from IFC US$ 50.0 million 2013Senior Term Loan from EBRD US$ 50.0 million 2014Subordinated Loan from IFC US$ 24.0 million 2019Subordinated Loan from EBRD US$ 24.0 million 2019Convertible Loan from IFC US$ 26.0 million 2019Convertible Loan from EBRD US$ 26.0 million 2019Other, USD denominated US$ 4.5 million NMF Other, EUR denominated EUR 0.3 million NMF Total US$ 488.5 million
9,29570,609
428,594
123,312
23,894 9,016 6,096 23,913
180,640
6,999
2.0%
12.2%
3.5%
5.1%
0.7%
0.2%0.2%0.3%
0.7%0.3%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
GEL '000s
0%
2%
4%
6%
8%
10%
12%
14%
Principle Amounts Outs tanding as of September 30, 2010 (LHS) As % of September 30, 2010 Assets (RHS)
Euro, 0.1%
US$, 99.9%
Fixed Interest Rate, 82%
Floating Interest Rate, 18%
November 2010
Business overview
Page 18November 2010
Group structure
Commercial Banking
Georgia
Corporate Banking
Retail Banking
Wealth Management
BG Bank BNB BG
CapitalAldagi
BCI
JSC “Bank of Georgia”
Securities Insurance
November 2010
BoG standalone results overview
Page 20November 2010
45.350.1 52.2 51.1 50.4
45.5 44.5 44.8 42.648.3 52.5
21.321.0 19.2 18.5 16.3
16.8 17.0 17.516.8
20.822.5
0
10
20
30
40
50
60
70
80
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Net Interest Income Net Non-Interest Income
66.671.1 71.4 69.9
66.662.3 61.5 62.3
59.4
69.1
74.9
BoG standalone performance
Net income
Recurring operating cost structure, Q3 2010Revenue performance
Cost/Income Ratio
Standalone
8.4%
Personnel costs, 56.0%
GEL 19.5 mln(+13.4% q-o-q)
Sell ing, general & administrative
expenses, 16.6%GEL 5.8 m ln
(+2.7% q-o-q)
Procurement & operations support
expenses, 8.9%GEL 3.1 mln
(+18.8% q-o-q)
Depreciation & amortization,
16.2%GEL 5.6 mln
(+2.0% q-o-q)
O ther operating expenses, 2.3%
GEL 0.8 m ln(-44.7% q-o-q)
25.4 28.4 28.8
11.3
0.9
10.8 7.812.8
24.4 23.7
(58.0)-70
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q121010
Q22010
Q32010
GEL mln
60.7%
53.9%49.0%
45.1%
41.0%
50.0% 50.8%50.5%
44.0%
58.0%
49.6%
44.5%
44.7%
47.3%43.1% 43.2%
47.7%48.9%54.0% 51.8%
47.0% 46.5%
0%
10%
20%
30%
40%
50%
60%
70%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010Cost/income, Bank of Georgia s tandalone
Normalized Cost/Income, Bank of Gerorgia s tandalone
Page 21November 2010
Composition of assets as at 30 September 2010Standalone
GEL million Q3 09 YE 09 Q2 10 Q3 10
Investments In Other Business Entities, Net and Investment Property 304.4 334.1 395.5 409.9 Intangible Assets Owned, Net 6.5 14.3 18.2 17.7 Goodwill 23.2 22.8 22.7 22.7 Tax Assets, Current And Deferred - 6.6 6.6 6.6
Prepayments And Other Assets 36.8 25.8 32.4 34.2 Other assets 371 404 476 491
491476404371
231231226240
1,9261,8441,6061,528
463399
223386
112
134126
298268
249102
115
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q3 2010Q2 2010YE 2009Q3 2009
GEL mln
Government Treasuries &Equivalents
Cash & Equivalents
Cash with other Banks
Net Loans
Property & Equipment
Other Assets
3% of total assets
12% of total assets
55% of total assets
7% of total assets
14% of total assets
3,522
2,753
5% of total assets
14% of total assets
56% of total assets
9% of total assets
13% of total assets
3,333
5% of total assets
8% of total assets
57% of total assets
8% of total assets
14% of total assets
2,842
14% of total assets
55% of total assets
13% of total assets
7% of total assets
3% of total assets
4% of total assets
9% of total assets
8% of total assets
8% of total assets
Page 22November 2010
Analysis of the loan bookStandalone
* Other loans include car, POS and legacy retail loans
1,038.9
41.1
980.6
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Q3 2010
GEL mln
CB
RB
WM
2,060.6
FMCG, 14%
Energy, 10%
Industry & State, 10%
Construction & Real Estate, 18%
Other, 16%Pharmaceuticals and Healthcare,
1%Trade, 30%
Credit cards and overdrafts, 14%
Micro loans, 19%
Mortgage loans, 40%
Consumer and other, 27%
Page 23November 2010
Analysis of the loan book
Loans by maturity, 30 September 2010
Loan concentration , 30 September 2010Loans by currency, 30 September 2010
Loan book collateralization , 30 September 2010
Standalone
35.3%22.2%
28.7%
64.7%77.8%
71.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RB & WM CB Total
GEL Foreign Currency
4% 3%7%
19%
67%
0%
10%
20%
30%
40%
50%
60%
70%
Less than 1 month 1 to 3 months 3 to 6 months 6 to 12 months Over 1 year
86.8% 88.0%
0%
20%
40%
60%
80%
100%
Q3 2009 Q3 2010
9.7%
12.2%
16.3%
18.5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Q3 2009 Q3 2010
Top 10 Borrowers T op 20 Borrowers
Page 24November 2010
Provisioning
Reserve for loan losses to gross loans
NPL coverage ratioNPLs & write-offs, 30 September 2010
Impairment seasoning, Q3 2010
Standalone
NPLs include 90 days overdue loans, including principal amount and interest payments
1.78%2.90%
4.69%
2.31%
0.45%
1.85%
0%
1%
2%
3%
4%
5%
6%
7%
8%
CB RB & WM Total
NPLs as % of Gross Loans Write-offs as % of Gross Loans
4.1%4.6%
3.6%
1.3%2.1% 1.8%
1.0%
1.2%0.4%
0.06%0.17%
1.8% 2.60%1.08%
1.2%
1.3%
1.1%1.3%
356.7
485.9501.1
200.9
300.9
179.8
439.3
239.1
548.3
327.6
604.0
0%
1%
2%
3%
4%
5%
6%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 20100.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0GEL mln
Write-Offs as % of Loans Issued (LHS) NPLs as % of Loans Issued (LHS) Loans Issued (RHS)
208.4%
554.4%
96.7%110.4%152.6%
524.0%
117.6%166.8%
106.5%115.2% 100.7% 106.5%139.6%99.3%
116.1%169.1%
138.3%
118.8%124.1% 106.6% 113.5%141.4%
0%
100%
200%
300%
400%
500%
600%
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
BoG Standalone BoG Consolidated
9.2% 9.0%8.3%
7.5% 6.9% 6.5%
2.1% 2.1%
6.3%5.0%
6.3%
7.8%
9.1%
9.4%
1.9% 2.0%
6.8%
4.9%
5.5%
6.7%
7.5%7.4%
6.4%
1.6%2.6%
4.2%2.0%
1.7%
1.5%
19.8%
2.0%
6.1%
8.4%
6.7%
2.4%1.7%
22.8%
-1.0%
5.0%6.7%2.0%
4.3%2.8%
1.4%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010-5%
0%
5%
10%
15%
20%
25%
Reserve for loan losses to Gross loans, BoG ConsolidatedReserve for loan losses to Gross loans, BoG StandaloneCost of risk, BoG Consolidated, annualisedCost of risk, BoG Standalone, annualised
Page 25November 2010
Provisioning cont’d – BoG standalone
RB & WM loan loss reserve breakdown by loan type, 30 September 2010
NPLsLoan loss reserve
CB loan loss reserve breakdown by loan type, 30 September 2010
Standalone
Mortgage loans, 24.7%
GEL (17.9 mln)
Consumer and other, 14.5%
GEL (10.5 mln)Credit cards and
overdrafts, 54.7%
GEL (39.6 mln)
Micro loans, 6.0%
GEL (4.4 mln) Other, 18.6%GEL (11.6 mln)
Pharmaceuticals & Healthcare,
0.3%GEL (0.2 mln)
Industry & State 1.9%
GEL (1.2 mln)Construction &
Real Estate 24.3%
GEL (15.2 mln)Fast Moving
Consumer Goods, 9.0%
GEL (5.6 mln )
Energy, 7.0%GEL (4.3 mln)
Trade, 38.9%GEL (24.3 mln)
14.5 22.2 29.849.8 51.7
62.375.5 77.1 74.7 83.2
72.4
16.310.8
83.6 48.3
39.446.3 53.6
54.462.4
46.4
40.3
1.9% 2.0%
6.8%
5.5%
6.7%
7.4% 7.5%6.9%
6.5%
7.5%
4.9%
0
20
40
60
80
100
120
140
160
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
0%
1%
2%
3%
4%
5%
6%
7%
8%
RB & WM CB Loan loss reserve as % of gross loans
8.1 9.7 12.033.3
50.265.7
54.135.5
67.0 69.8 59.8
10.922.4 11.3
24.4
42.8
53.161.8
75.8
69.8 59.4
36.8
1.2% 1.3%
3.2%
5.0%
6.9% 7.0%6.4%
7.4%
6.5%
4.7%
1.7%
0
20
40
60
80
100
120
140
160
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL m ln
0%
1%
2%
3%
4%
5%
6%
7%
8%
RB &WM CB % of Gross loans
19.0
129.2136.8
111.3115.9
118.8
93.0
57.7
23.332.1
96.5
Page 26November 2010
BoG standalone liabilitiesLeverage ratio, BoG standalone
NBG Liquidity ratio, BoG standalone
Standalone
Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date
NBG Liquidity ratio is calculated by dividing liquid assets per NBG by Total liabilities per NBG
816
67
882
1,512
245
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q3 2010
GEL mln
Deposits And Loans From Banks
Client Deposits
Borrowed Funds
Other Liabilities
Total Shareholders Equity
23% of Total Liabilities + equity
7% of Total Liabilities + equity
43% of Total Liabilities + equity
25% of Total Liabilities + equity
3,522
2% of Total Liabilities + equity
34.2% 33.8%
27.2% 27.3%
38.0%
43.5%
35.6%
38.8%
34.8% 33.8%
37.7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
3.9
2.93.1 3.1 3.1
2.8 2.8 2.83.0
3.2 3.33.3
0
1
2
3
4
5
2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Page 27November 2010
Analysis of deposits
CB, RB & WM deposits, BoG standalone
Client deposits by currency, 30 September 2010 Client deposit breakdown, 30 September 2010
Deposits by maturity, 30 September 2010
Standalone
Individual current accounts, 9.2%
Corporate time & demand deposits,
17.0%
Individual time & demand deposits,
37.9%
Corporate current accounts , 35.9%
20.8%
42.4%
2.7%
29.6%
79.2%70.4%57.6% 97.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RB CB WM Total
GEL Foreign Currency
55%
0%
6% 6%
20%
13%
0%
10%
20%
30%
40%
50%
60%
On Demand Less than 1month
1 to 3 months 3 to 6 months 6 to 12 months Over 1 year
363.6 326.0 320.4 280.4 283.1 326.3 376.1448.6 494.2
76.570.4 98.7
93.3 107.8131.4
163.1180.7
211.2218.7
403.4 414.7
81.6
652.7 681.5 576.2 626.2 605.2 518.4 596.7 587.6656.1
682.5 799.4
0
200
400
600
800
1,000
1,200
1,400
1,600
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
RB Client Deposits WM Client Deposits CB Client Deposits
+11%
+4%
-19%
-15% +9%
-2%
-3%
-12% +1%
-14%+15%
+15%
+25%+15%-5%+40%-14%+7% +21%
+15%
-1%
+10%
+12%
+11%+17%
+8%
+4%
+17%
+4%
+10%
Page 28November 2010
Deposit yieldsStandalone
9.1%
8.2% 8.0%
10.4%
8.6%9.1%
9.6% 9.8%10.3%
9.9%10.3%
3.8% 4.0%
5.0%
7.7%
5.8% 5.7%
7.0% 6.9%
8.0% 7.9%7.3%
8.1%
5.6%5.4%7.2% 7.1%
5.8%
8.0%7.6%
8.4%
6.7%6.6%
7.9%8.2%
7.5%
0%
2%
4%
6%
8%
10%
12%
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
RB Deposit Yields, BoG Standalone CB Deposit Yields, BoG Standalone Blended Deposit Yields, BoG Standalone
Page 29November 2010
Risk managementCurrency risk managementLiquidity risk management, Q3 2010
Standalone
29.1
361.4
701.2562.3
283.2
785.8
387.6
516.2436.0
174.5
1,195.8
12.8(16.3)10.0(175.0)
(301.3)
(410.0)-600
-400
-200
0
200
400
600
800
1,000
1,200
1,400
Up To 1 Month 1-3 Month 3 Month - 1 Year 1-5 Years Over 5 Years Past Due
GEL mln
Assets Liabilities Accumulated Liquidity Gap
16.0%
3.8%
6.2%
1.7%
4.1%3.5%
0.8%
5.8% 6.0%
0.6%1.5%
3.9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Open Foreign Currency Position (as % of Regulatory Capital)
Page 30November 2010
Corporate banking
Corporate client deposits, 30 September 2010
Corporate loan portfolio, 30 September 2010 Overview
Corporate gross loan portfolio growth
Standalone
Integrated client coverage in the following key sectors
Construction & Real EstateEnergyFast Moving Consumer GoodsFinancial InstitutionsForeign Organizations & Diplomatic MissionsPharmaceuticals & HealthcareRetail & Wholesale TradeState & IndustryTelecommunications, Media & TechnologyTransport & LogisticsSME
No.1 corporate bank in GeorgiaCirca 30.0% market share based on customer deposits(1)
Circa 29.6% market share based on corporate loans(2)
Integrated client coverage in key sectors90,508 clients of which 9,242 served by dedicated relationship bankersCirca 47% market share in trade finance and documentary operations(2)
Second largest leasing company in Georgia(2) – Georgian Leasing Company (GLC)Increased the number of corporate clients using the Bank’s payroll services from 1,567 in Q2 2010 to 1,657 in Q3 2010More than 6,000 corporate accounts were opened at the bank in Q32010, bringing the total number of current accounts to 171,052
Notes: (1) source: National Bank of Georgia, does not include interbank deposits(2) Management estimates (based on the NBG data)
Total corporate deposits: GEL 799.4 mln
FMCG, 14%
Energy, 10%
Industry & State, 10%
Construction & Real Estate, 18%
Other, 16%Pharmaceuticals and Healthcare,
1%Trade, 30%
Current Accounts &
Demand Deposits,
81%
Time Deposits,
19%874
826875
794
928870
806765
880
951
1,016 1,039
0
200
400
600
800
1,000
1,200
YE 2007 31-Mar-08 30-Jun-08 30-Sep-08 31-Dec-08 31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Mar-10 30-Jun-10 30-Sep-10
GEL mln
-5% +6% -9% +17% -5%-7%-6% +15% +8% +7% +2%
35.9%
Page 31November 2010
Retail Banking – No. 1 retail bank in Georgia
Leadership in consumer lending
RB loan portfolio, 30 September 2010Retail loans originated
Retail gross loan portfolio growth
Standalone
Total retail loans: GEL 980.6 mln Note: does not include Ukraine & Belarus
Credit cards and overdrafts, 14%
Micro loans, 19%
Mortgage loans, 40%
Consumer and other, 27%
122.1
177.5 183.3
235.6
266.9
317.6
140.2
74.968.8
97.5104.9
128.2
186.9
211.3
55.9
0
50
100
150
200
250
300
350
Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1' 10 Q2' 10 Q3 '10
GEL mln
656
755
931
1,000
932
861831
807847
930981
922
-
200
400
600
800
1,000
1,200
YE 2007 Q1 08 Q2 08 Q3 09 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
GEL mln
+15%+10%+22% +1% +7% -7% -3%-8% -3% +5% +5%
21.6%
58,12152,42353,264§ Number of consumer loans outstanding146.9130.9125.6• Volume of consumer loans outstanding (GEL mln)
94,48081,119105,040• Credit Cards Outstanding, of which34,35919,600-§ American Express cards1,6081,043-• Number of Solo clients outstanding, (premier banking)
Q3 2009 Q2 2010 Q3 2010
• Number of Retail Clients 701,441 714,484 729,578
Page 32November 2010
Loan origination
Micro loans (RB & WM)
Consumer loans (RB & WM)Mortgage loans (RB & WM)
Other RB & WM loans
Standalone
358.8
23.1 46.7
406.1
58.7
417.3
-
50
100
150
200
250
300
350
400
450
Volume of MortgageLoans Originated
Volume of MortgageLoans Outstanding
GEL mln
Q3 2009 Q2 2010 Q3 2010
+16%
+103%+26%
+3%
60.3
143.3
65.3
135.5
79.9
159.7
-
20
40
60
80
100
120
140
160
180
Volume of Consumer LoansOriginated
Volume of Consumer LoansOutstanding
GEL mln
Q3 2009 Q2 2010 Q3 2010
+22%+8%
-5%+18%
92.3
25.7
156.8
71.778.3
182.7
-
20
40
60
80
100
120
140
160
180
200
Volume of Micro LoansOriginated
Volume of Micro LoansOutstanding
GEL mln
Q3 2009 Q2 2010 Q3 2010
+179%
+70%
+9%
+16%
272.5262.1
3.7 5.0
267.5
8.1-
50
100
150
200
250
300
Volume of Other RB & WMLoans Originated*
Volume of Other RB & WMLoans Outstanding
GEL mln
Q3 2009 Q2 2010 Q3 2010
+36%
-2 %
+62%
-2%
Page 33November 2010
Deposit origination
Number of RB & WM time deposits issued
Volume of deposits outstanding (CB)Volume of deposits outstanding (RB & WM)
Volume of RB & WM time deposits issued
Standalone
121.7 125.9 119.1100.2 94.8 99.0 112.8 113.7 116.7 128.4
159.8
8.016.9 16.2
25.820.0
34.940.6 34.6 40.7
33.0
36.0
0
50
100
150
200
250
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Volume of RB time deposits issued Volume of WM time deposits issued
10,912
17,13617,855
19,403
12,051
15,312
18,322 18,739 19,092 18,629
21,056
-
5,000
10,000
15,000
20,000
25,000
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
410.4 363.3 349.9 350.2 382.3322.9
403.2 370.0435.5 475.2
542.3
53.639.2 26.8
90.2 69.379.2
74.278.1
75.171.7
104.6188.7 279.0
199.5185.8 153.6
116.3
119.3 139.4145.6
135.6
152.5
0
100
200
300
400
500
600
700
800
900
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Volume of CB time deposits outstandingVolume of CB demand deposits outstandingVolume of CB current accounts outstanding
169.9 185.3120.9 98.1 95.2 93.6 102.5 118.8 128.5 139.4 139.4
39.2 36.9
18.618.0 16.3 20.7 34.8 43.1 50.1 62.8 71.0
231.1262.9
257.0 302.9262.2 276.6
323.4377.4
416.8457.7
502.6
0
100
200
300
400
500
600
700
800
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Volume of RB & WM time deposits outstandingVolume of RB & WM demand deposits outstandingVolume of RB & WM current accounts outstanding
Page 34November 2010
RB cross-selling
Cards penetration rate*
RB loans penetration rate*Product/client ratio
Standalone
* Calculated as percentage of Bank of Georgia clients for the period
2.7
3.03.2
3.33.5
3.13.0
2.8 2.8 2.7 2.8 2.8 2.8
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 31-Mar-10
30-Jun-10 30-Sep-100.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Number of clients (LHS) Number of products (LHS) Product/Client Ratio (RHS)
1.1% 1.1% 1.1% 1.1% 1.2% 1.2%
9.2% 7.6% 7.6% 7.9% 8.7%
2.2% 2.1% 1.9% 1.5% 0.8% 0.6% 0.6% 0.7% 0.8%
35.8%39.3%
44.3%46.4% 47.9% 47.6%
44.5% 44.8%46.8% 45.5%
1.2%1.2%1.1%1.0%0.9%
11.8%
17.0%24.2%
29.1%
30.9%31.7%
1.1%2.0%
34.1%
0%
10%
20%
30%
40%
50%
60%
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10
Mortgage Loan Penetration Rate Consumer Loan Penetration RateMicro Loan Penetration rate Other Loans Penetration Rate
95.6% 98.7%104.0%
75.4% 73.2%67.6% 66.1% 66.2% 65.7% 64.4%
23.6% 26.9%31.4%
24.8%20.6% 17.5% 15.0%
10.56% 11.38% 11.3% 12.9%
62.6%
0%
20%
40%
60%
80%
100%
120%
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10Debit Cards Penetration Rate Credit Cards Penetration Rate
Current accounts & deposits penetration rate*
11.3%
111.2% 111.3% 112.8%122.4% 121.7% 119.4%
14.8%9.7%9.2%7.6%7.1%8.9%7.3%6.7%5.6%
10.8%10.3%
110.8%111.1%114.3%105.0% 121.5%
14.4%14.7%15.7%16.4%19.0%19.5%19.8%20.0%
14.3% 14.4%
0%
20%
40%
60%
80%
100%
120%
140%
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10
Demand & Time deposits Penetrartion rateUniversal Current Accounts Penetration RateStandard Current Accounts Penetration Rate
Page 35November 2010
Card processing
Transaction authorizations by Georgian Card
Number of cards serviced by Georgian CardClient banks
Georgian Card’s revenue & assets
Standalone
• 56% ownership of Georgian Card
5.5 5.5 5.5 5.45.6
2.5 2.6
3.1 3.3
3.84.0 4.0 4.0
4.2
4.7 4.7
1.4
0.5
0.4
1.7
1.0 1.1
2.2
1.1
1.31.3
1.1
1.4 1.51.2
1.4
1.3
0
1
2
3
4
5
6
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
GEL mln
0
1
2
3
Total Assets (LHS) Revenue (RHS)
1,105
1,7762,151
2,954 2,914
4,224
5,027
6,584
7,176
8,536 8,6139,014
8,406
7,660 7,660 7,8397,449
7,982 7,958
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
'000s
203286
337437 460
649721
776 774
658 636582
539.0 541 525 496 52072
84
119
138
247
227
256
278 304
256 261
227230 237 227
186 175
275
456
575
706
876914
897
809
769 778753
681
370
695
0
200
400
600
800
1,000
1,200
1,400
Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10
'000s
Bank of Georgia Other Banks
1,0781,054
978
Page 36November 2010
Analysis of mortgage portfolio
Typical mortgage terms
Volume of mortgage loans outstandingNumber of mortgage loans issued & outstanding
Volume of mortgage loans issued
Standalone
Rate: 14%Tenor: Normally 10 yearsCurrency: US$LTV: Normally 75-85%
231 259 423 437 517817 766
7,4767,967 7,994 7,916 7,809 7,796
8,240 8,2238,479
455 678 8581,129
1,4261,915
850 691
2,365
1,166
3,409
4,230
5,340
6,881
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Number of mortgage loans issued Number of mortgage loans outstanding
101.6128.7
157.7
203.5
245.5
312.0325.9
386.7 383.1 373.7358.8
370.5385.1
406.1 417.3
0
50
100
150
200
250
300
350
400
450
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
33.837.6
43.3
69.5
81.3
96.1
32.5
18.5
10.1 11.5
23.1 23.427.0
46.7
58.7
0
20
40
60
80
100
120
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
Page 37November 2010
Management (WM) performance review
WM loans, 30 September 2010
WM products penetrationWM clients and client assets
WM deposits
Standalone
Notes: (1) Converted at exchange rates of GEL/US$, 1.793(2005),1.714(2006), 1.70 (Q1 2007), 1.67 (Q2 2007), 1.66 (Q3 2007), 1.59 (Q4 2007), 1.48 (Q1 2008), 1.42 (Q2 2008) , 1.41 (Q3 2008), 1.67 (Q4 2008), 1.67 (Q1 2009), 1.67 (Q2 2009), 1.68 (Q3 2009),1.69 (Q4 2009), 1.75 (Q1 2010), 1.84 (Q2 2010) 1.81 (Q3 2010) (2) PB Client Assets include: Balances on OneCard Accounts, Credit Balances on Other Cards, Credit Balances On Regular Current Accounts, Demand & Time Deposits, Brokerage & Asset Management Accounts, Pensions
Car Loans, 3.3%
Mortgage Loans, 61.4%
Consumer Loans, 31.9%
Credit Cards & Overdrafts, 3.4%
127.8136.9108.8
87.869.3
59.060.955.4
73.366.8
64.866.463.4
48.348.2
6.7
117.5
1,3411,454
1,3311,4291,364
1,358
1,3411,3871,384
1,3821,3041,291
1,1871,081
943873
460
-
20
40
60
80
100
120
2004 2005 2006 Q1'07
Q2'07
Q3'07
Q4'07
Q1'08
Q2'08
Q3'08
Q4'08
Q1'09
Q2'09
Q3'09
Q4'09
Q1'10
Q2'10
Q3'10
US$ mln
0
200
400
600
800
1,000
1,200
1,400
1,600
Private Banking Client Assets (LHS) Private Banking Clients (RHS)
49.531.5 35.7 35.1 38.4 47.9 52.1 57.2 62.9 56.7
32.139.0
61.0 58.269.4
83.6111.0
123.4
148.4 162.1
0
50
100
150
200
250
Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
Current Accounts & Demand Deposits Time Deposits
211
71
82
181163
131
1089397
219
101.0%93.7% 96.2%
79.2%
21.2%25.5% 27.8%
62.7% 70.2%
64.0%
65.8%52.2%
66.9% 66.8% 65.8%
55.3% 54.0%
71.4%
60.5% 65.6%
66.9%
135.0% 130.2%
114.2% 111.2%
93.4%
45.5%40.8%40.1%
32.2% 31.8% 32.8%
53.5%
47.1%
80.7% 78.2%76.4%70.2% 69.6%
65.2%62.5%
57.1%
52.5%49.4%
15.3% 14.8% 15.4% 10.5% 20.6%21.9% 23.7% 23.7% 24.1%
27.5%
29.6%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
OneCard Penetration Rate All Other Cards Penetration RateDemand & Term Deposits Penetration Rate Internet Banking Penetration RateSMS Banking Penetration Rate
November 2010
BG Bank (Ukraine) standalone results overview
Page 39November 2010
BG Bank performance
Net income
Costs, Q3 2010Revenue growth
Cost/Income Ratio
4.85.5
6.4
3.82.9
4.3 4.0 4.22.7
3.82.4
1.7 0.8
2.61.2
1.3
(0.5)
0.3
0.5
0.6
2.75.5
10.4% 10.4%
12.6%
8.3%
10.3%
7.2%7.5%
8.3%
6.1%
11.3%
6.4%
-2
0
2
4
6
8
10
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
0%
2%
4%
6%
8%
10%
12%
14%
Net Interest Income Net Non-Interest Income Net Interest Margin, annualized
9.2
6.36.5
9.3
5.5 5.6 5.3
3.8
3.1
4.1
3.0
109.2%116.9%
100.1%91.5%
74.7%
140.5%
105.1%
76.0%
35.7%
230.0%
106.2%
0%
50%
100%
150%
200%
250%
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
4.9
3.3
3.82.0
-
1
2
3
4
5
6
7
8
Q2 2010 Q3 2010
GEL mln
Recurring Operating Costs Provision Expense
(7.3)
(10.8)
(5.5)
(11.3)
0.3
(3.1)
(0.7)
0.7 0.7
(10.7)
(1.7)
(12)
(10)
(8)
(6)
(4)
(2)
0
2
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
Page 40November 2010
BG Bank assets as at 30 September 2010Asset growth
Gross loan book growth
No international loan
11.811.28.2Tax Assets, Current And Deferred
GEL million Q3 2009 Q2 2010 Q3 2010Available-For-Sale Securities 6.1 7.4 -Investment Property - 15.7 15.4Intangible Assets Owned, Net 0.8 0.9 0.8
Prepayments And Other Assets 1.1 0.5 1.0Other assets 16.2 35.7 28.9
28.935.7
16.2
9.19.8
14.1
134.6
143.4
136.0
8.8
11.5
6.6
12.8
14.9
28.9
0
50
100
150
200
250
Q3 2010Q2 2010Q3 2009
Cash & Equivalents
Loans & Advances To Credit Institutions
Loan Portfolio
Property & Equipment
Other Assets
14% of Total Assets
3% of Total Assets
67% of Total Assets
7% of Total Assets
7% of Total Assets
5% of Total Assets
67% of Total Assets
5% of Total Assets
17% of Total Assets
202
GEL mln
8% of Total Assets
194
215
7% of Total Assets
15% of Total Assets
5% of Total Assets
69% of Total Assets
5% of Total Assets 360 350 337
249 245 205 202 198 191 215 194
923851
1,149 1,147 1,129
946 936965
1,2131,217
864
0.2 0.20.3
0.3
0.2 0.2 0.2 0.20.2
0.20.3
0
200
400
600
800
1000
1200
1400
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
0.0
0.1
0.1
0.2
0.2
0.3
0.3
0.4
Assets (GEL mln) Assets (UAH mln)GEL/UAH exchange rate, e-o-p
255 265 257194 192 184 180 177 184 208 192
839
845886896871
925862
858 836 834890
0.2
0.20.20.2
0.30.3
0.2 0.2
0.20.2
0.3
0
100
200
300
400
500
600
700
800
900
1000
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
0.0
0.1
0.1
0.2
0.2
0.3
0.3
0.4
Loans (GEL mln) Loans (UAH mln)GEL/UAH exchange rate, e-o-p
Page 41November 2010
BG Bank loan portfolio
Retail loan portfolio breakdown, 30 September 2010
Corporate loan portfolio breakdown, 30 September 2010
Loan portfolio breakdown, 30 September 2010
Gross loans: GEL 191.6 million Gross corporate loans: GEL 165.9 million
Total retail loans: GEL 25.7 million
CB, 86.6%
RB & WM, 13.4%
Other, 4%
Industry & State, 14%
Construction & Real Estate, 12%
Trade, 70%
Credit cards and Overdrafts, 1.2%
Mortgage loans, 46.2%
Consumer and other*, 51.6%
Micro loans, 1.0%
Page 42November 2010
BG Bank analysis of the loan book
Loans by maturity, 30 September 2010
Top ten borrower concentrationLoans by currency, 30 September 2010
Loan book collateralization 39.9%
19.7%
13.8%
26.7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Less than 3 months 3 to 6 months 6 months to 1 year Over 1 year
30.0% 31.3%32.5%
30.8% 31.4%33.5%
36.6%38.9% 38.3% 38.0%
40.4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
UAH, 42.8%Foreign currency,
57.2%
89.9%
91.5%90.9%
92.1%93.0%
95.8%96.6%
97.5%
96.2%
98.9%99.5%
84%
86%
88%
90%
92%
94%
96%
98%
100%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Page 43November 2010
BG Bank provisioning policy
NPL coverage ratio
Loan loss reserveNPLs
Reserve for loan losses to gross loans
2.8% 2.2% 2.5%
10.5%
13.0%
17.6%
24.2%
29.0%28.3%
30.9% 29.7%
0%
5%
10%
15%
20%
25%
30%
35%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
167.0%
319.4%
182.1%199.3%
174.3%
116.8%
156.9%
168.2%
166.4%
181.1%153.2%
0%
50%
100%
150%
200%
250%
300%
350%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
2.6 2.9 2.7 2.6
8.75.6
17.6
11.5 12.2
17.513.7
4.0
7.2
22.1
6.314.2
16.6
24.4
19.0
0.1 0.7 1.01.7%
1.3%1.5%
4.6%
8.3%
15.1%13.3%
14.5%15.6%
20.2%
17.1%
0
5
10
15
20
25
30
35
40
45
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
0%
5%
10%
15%
20%
25%
RB CB NPL ratio
7.3 5.7 6.3 8.312.2 12.8 12.9 14.5 14.7 15.4 13.3
6.3
12.8
19.5
30.6
36.8 37.4
48.8
43.6
0.60.2 0.2
0
10
20
30
40
50
60
70
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
RB CB
Page 44November 2010
BG Bank standalone liabilities breakdownLeverage ratio
Q3 2009 Q2 2010 Q3 2010Issued Fixed Income Securities 0.7 - -Accruals And Other Liabilities 1.5 1.2 1.1Other liabilities 2.2 1.2 1.1
9.2
38.941.3
155.2
142.0
117.1
1.12.2
28.8
33.2
41.4 1.2
0
50
100
150
200
250
Q3 2010Q2 2010Q3 2009
GEL mln
Total Shareholders Equity
Other Liabilites
Client Deposits
Deposits And Loans From Banks
21% of Total Liabilities + equity
20% of Total Liabilities + equity
58% of Total Liabilities + equity
1% of Total Liabilities + equity
18% of Total Liabilities + equity
66% of Total Liabilities + equity
1% of Total Liabilities + equity
15% of Total Liabilities + equity15% of Total Liabilities + equity
5% of Total Liabilities + equity
80% of Total Liabilities + equity
1% of Total Liabilities + equity
202
194
215
4.3
2.3 2.1
2.9 3.0 3.2
3.9
5.34.9
5.55.7
0
1
2
3
4
5
6
7
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Page 45November 2010
BG Bank client deposits
Client deposits
Deposit yieldsClient deposits, by currencies
Deposits by maturity, Q3 2010
270216
180 171127 121 115 117 139 122 142 155
656
554609
680
559528558588614592
730856
0.220.23 0.2
0.210.210.220.220.22
0.280.30
0.300.32
0
100
200
300
400
500
600
700
800
900
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
GEL mln UAH mln GEL/UAH exchange rate, e-o-p
12.0%
12.7%12.4%
13.0%
15.1%
14.0%15.8%
12.0%12.5%
12.8%12.8%
10%
11%
12%
13%
14%
15%
16%
17%
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
29.9%
24.7%
13.9%
22.6%
8.8%
0%
5%
10%
15%
20%
25%
30%
35%
On demand Less than 3 month 3 to 6 months 6 months to 1 year Over 1 year
85.460.5 61.5
45.7 44.6 37.7 43.2 39.2 44.3 43.2
130.6
119.7 109.1
81.7 76.477.1 73.9
83.7
83.097.6 112.0
55.2
0
50
100
150
200
250
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
CB Client Deposits RB & WM Client Deposits
-29%
-8%
-9%
+2%
-25%
-26%
-6%
-2%
+1%
-15%
-4%
+15% +28%
+13% -1%
-29%
+18%
+13% -3%
+15%
Page 46November 2010
BG Bank analysis of depositsClient deposits by currency, Q3 2010Client deposits breakdown, Q3 2010
Client deposits: GEL 155.2 mln
Current accounts, 29%
Time&Demand deposits, 71%
UAH, 47%Foreign currency, 53%
Page 47November 2010
BG Bank capital adequacy
Risk-weighted assets BIS vs. NBU
NBU capital adequacy ratiosBIS capital adequacy ratios
Net loans/deposits & Loans/(deposits+equity)
77.7%73.7% 74.6%
68.1%64.3%
69.7% 67.0% 69.7%
85.9%76.6%
84.1%79.3% 81.9%
68.8%75.3%
71.5%
98.2%91.9%
99.7%
116.5%113.7%
89.0%
0%
20%
40%
60%
80%
100%
120%
140%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Net Loans/(Total Deposits + Equity) Net Loans/Total Deposits
19.0%
25.1%23.7%
19.5%17.3%
16.1%
27.5% 27.3%
22.0%
18.6%17.2%
28.7%
31.4%
35.6%
32.6%31.3% 31.0%
34.7%35.8%
30.8%29.1%
16.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
23.9% 23.3%
21.4% 21.1%
26.3% 25.8%
12.4% 12.9%14.0%
19.2%20.8% 21.8% 20.8%
13.7%14.5%
15.6%
21.0%
22.8% 23.8%
22.8%
21.6%21.2%
0%
5%
10%
15%
20%
25%
30%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
244.1230.4
196.2 196.2
236.7 231.5
123.3
158.1177.9
167.3
282.1305.2
327.7
355.0361.6
160.0165.1184.9184.5
327.0
340.6352.9
0
50
100
150
200
250
300
350
400
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
NBU BIS
November 2010
Belarusky Narodny Bank (Belarus)
Page 49November 2010
BNB Bank performance
Net income
Costs, Q3 2010Revenue growth
Cost/Income Ratio
1.1 1.0 1.01.4 1.6
2.3 2.3 2.2
0.6 0.6 1.0
0.70.8
1.40.8
0.6
14.9%14.1%16.6%
12.7%
10.9%
10.9%
10.8%
12.1%
0
5
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Net Interest Income Net Non Interest Income Net Interest Margin, annualized
1.7
2.4
1.92.1 2.2
2.9 3.03.2
1.5
2.5
(0.2)
0.03
-1
0
1
2
3
4
Q3 2009 Q3 2010
GEL mln
Recurring Operating Costs Provision Expense
(0.9)
0.5 0.6
0.8
0.6
0.2
0.7
(0.3)
(1.0)
(0.8)
(0.6)
(0.4)
(0.2)
0.0
0.2
0.4
0.6
0.8
1.0
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
80.4%
61.5%
90.7%
60.6%67.8% 69.0%
66.6%
84.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Page 50November 2010
BNB loan portfolio as at 30 September 2010
RB Loan Portfolio Breakdown, 30 September 2010
Loan loss reserve, 30 September 2010Loan Portfolio Breakdown, 30 September 2010
CB Loan Portfolio Breakdown, 30 September 2010Gross loans: GEL 51.7 mln
RB loans: GEL 2.4 mln* Other loans include car, POS and legacy retail loans
Loan loss reserve: GEL 1.3 mln
CB loans: GEL 49.3 mln
CB, 95%
RB, 5%
CB, 1.19
RB, 0.13
Card overdrafts, 2%
Consumer and other*, 97%
Mortgage loans, 1%
Other, 11%
Industry & state, 14%
Trade, 63%
Construction & real estate, 13%
Page 51November 2010
BNB client deposits as at 30 September 2010Client deposits breakdownClient deposits breakdown
4,458
13,908
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Jan-00
GEL '000
RB Deposits Outstanding CB Deposits Outstanding
Time Deposits Outstanding ,
24.1%
Current Accounts Outstanding ,
75.9%
November 2010
Insurance
Page 53November 2010
GEL '000
656
1,699 1,640
(277)
1,060
871
1,329
(500)
-
500
1,000
1,500
2,000
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Aldagi BCI
Recurring operating costs
RevenueGross premiums written/Net premiums earned
Net Income/Loss
+52.6%
GEL mln
3.4
6.3 6.1
4.94.6
6.0
4.2
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
GEL mln
2.9
4.03.8 3.7
3.1
4.9
2.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
-48.6%
15,62616,777
14,954
12,076 12,523 13,065
(500)
1,500
3,500
5,500
7,500
9,500
11,500
13,500
15,500
17,500
19,500
Q3 2009 Q2 2010 Q3 2010
GEL 000s
Gross Premiums Written Net Premiums Earned
November 2010
BG Capital
Page 55November 2010
BG Capital
Proprietary book
Net income/(loss)Revenue
Headcount
1.6
(1.0)
(1.9)
(2.8)
(0.5)
0.9 1.1 1.1
2.9
0.9
(0.6)
(4)
(3)
(2)
(1)
0
1
2
3
4
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
(2.6)(2.3)
(4.6)
(1.6)
0.2
(1.7) (1.6)
0.8
(1.1)
(2.4)
(5)
(4)
(3)
(2)
(1)
0
1
2
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
20 22 22 18 15 16 13 13 15 15 13
2722
25 30 27
14 1714
38 43 34
5865
56
4539 43 44 41
30 33 28
0
10
20
30
40
50
60
70
80
90
100
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
BG Capital Georgia BG Capital Ukraine
19,276
36,968
3,9122,588 1,364
2,7905,286 5,285 5,334
1,6854,734
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
GEL mln
Page 56November 2010
Contact
Irakli GilauriChief Executive Officer+995 32 444 [email protected]
Macca EkizashviliHead of Investor RelationsHead of Representative Office, London84 Brook St, London, W1K 5EH+44 203 178 [email protected]
Giorgi ChiladzeDeputy CEO, Finance+995 32 444 [email protected]
November 2010
Appendices
November 2010
Bank of Georgia shareholder structure & management
Page 59November 2010
Ownership structure
Supervisory board
Ownership structure, 30 September 2010
Management board
Broadly owned by over 100 institutional accounts
Head of Wealth ManagementVasil Revishvili
Deputy CEOMurtaz Kikoria
Irakli Gilauri Chief Executive Officer (CEO)
Sulkhan Gvalia Deputy CEO, Chief Risk officer
George Chiladze Deputy CEO, Finance
Irakli Burdiladze Deputy CEO
Mikheil Gomarteli Deputy CEO, Retail Banking
Avto Namicheishvili Deputy CEO, Legal
Archil Gachechiladze Deputy CEO, Corporate banking
Nikoloz Shurgaia Deputy CEO, International Banking
* Expected to be replaced by Hanna Loikkanen by the EGM to be held on 22 November 2010
Neil Janin Chairman of the Supervisory Board
David Morrison Vice Chairman of the Supervisory Board, independent member
Ian Hague Member, Firebird Management LLC
Jyrki Talvitie* Member, East Capital
Kaha Kiknavelidze Independent member
Allan J. Hirst Independent member
Al Breach Independent member
Name Number %GDR Holders* 27,457,490 87.6%Local Shares Held by Institutional Shareholders 1,704,866 5.4%Local Shares Held by Domestic and Foreign Retail Shareholders 1,199,141 3.8%Management & Employees** 971,756 3.1%Total Shares Outstanding 31,333,253 100.0%
Adjusted for BG Capital's Proprietary Book (1 ) (4,734) Adjusted Total Shares Outstanding 31,328,519
(1) Treated as treasury shares as per IFRS*through BNY Nominees Limited** includes GDRs held as part of EECP
Management & Employees**, 3.1%
Local Shares Held by Domestic and Foreign Retail Shareholders,
3.8%Local Shares Held by
Institutional Shareholders, 5.4%
GDR Holders*, 87.6%
Page 60November 2010
Analyst coverage
Analyst Email
Andrzej Nowaczek [email protected]
Analyst Email
David Nangle [email protected]
Analyst Email
Mikhail Shlemov [email protected]
Analyst Email
Thomas Stögner [email protected]
November 2010
Georgian banking sector – key trends 2007- Q3 2010
Page 62November 2010
Georgian banking sector – key trends 2008/June 2010GEL/US$
Period End YE 2006= 1.71
YE 2007=1.59
YE 2008=1.67
Q1 2009=1.67
Q2 2009=1.66
Q3 2009= 1.68
YE 2009= 1.69
Q1 2010= 1.75
Q2 2010= 1.84
Q3 2010= 1.81
GrowthMarket Share Market Share Market Share
Q3 2010(YE 2008) (YE 2009)
GEL mln YE 2008 YE 2009 Q3 2010As % of GDP*
2008 Y-O-Y
2009 Y-O-Y
Q3 2010 YTD
Top 5 Banks
Bank of Georgia
Top 5 Banks
Bank of Georgia
Top 5 Banks
Bank of Georgia
Total Assets 8,866 8,293 9,869 55.0% 23.0% -6.5% 19.0% 79.26% 32.89% 78.1% 33.0% 78.0% 34.2%Gross Loans 5,993 5,185 5,844 32.6% 30.6% -13.5% 12.7% 81.78% 32.87% 81.4% 31.8% 82.6% 34.1%Deposits 3,845 4,174 5,378 30.0% 9.5% 8.6% 28.8% 75.00% 28.76% 77.70% 27.4% 79.9% 29.4%Equity 1,517 1,517 1,697 9.5% 3.1% 0.0% 11.8% 75.69% 40.03% 79.60% 38.6% 77.5% 39.2%Net Income/(Loss) (216) (65.3) 58.0 0.3% NMF NMF NMF NMF NMF NMF 37.3% NMF NMF
* As % of YE 2009 GDP
Ensuring solvency and stability of the banksHigh BIS Capital Adequacy Ratio: Banking Sector Average – 21%, Bank of Georgia – 32.6%High level of liquidity requirements from NBG at 20% of Liabilities, Bank of Georgia 33.8%Low Leverage in the banking sector: Banking Sector Average – 4.2x, Bank of Georgia – 4.3x
Resilient Banking SectorDemonstrated strong resilience towards domestic challenges during the August 2008 conflict as well as towards external shocks of global financial turmoil without single bank going bankruptNo nationalization of the banks have occurred, no government bail-out plans have been required, no Government ownership since 1995Excess liquidity and excess capital that has been accumulated by the banking sector to enable boosting the financing of the economic growthVery low leverage of population, with Bank Loans to GDP ratio of c. 30% resulted in contained number of defaults during the global crisis (Average Loan Loss Provisions by BoG standalone as of end Q3’10 at c. 6.5%)
Bank debt to GDP
24.3
30.0
33.1
45.7
47
47.3
49.5
67.9
76
76.9
90.4
114.6
186.0
0 50 100 150 200
Azerbaijan
Georgia
Turkey
Bulgaria
Russia
Poland
Belarus
Kuwait
Bahrain
Ukraine
UAE
USA*
EU*
Page 63November 2010
32.9%
22.0%
7.7%9.6%
7.0%
4.8%
15.9%
33.0%
20.8%
8.6%9.8%
5.9%4.6%
17.3%
34.2%
20.7%
8.4% 9.5%
5.2%3.6%
18.4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
BoG TBC ProCredit Bank Bank Republic Cartu VTB Other Banks
YE 2008
YE 2009
Sep-10
Peer group’s market share in total assetsGEL/US$
Period End YE 2006 = 1.71
YE 2007=1.59
YE 2008=1.67
Q1 2009= 1.67
Q2 2009=1.66
Q3 2009=1.68
YE 2009= 1.69
Q1 2010= 1.75
Q2 2010= 1.84
Q3 2010= 1.81
Note: all data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge
Page 64November 2010
12.2%
6.0%6.4%
10.1%8.7%
23.7%
32.9%
13.0%
5.6%
7.6%10.1%10.2%
21.6%
31.8%
18.5%
3.6%
5.2%
9.5%
8.4%
20.7%
34.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
BoG TBC ProCredit Bank Republic Cartu VTB Other Banks
YE 2008
YE 2009
Sep-10
Peer group’s market share in gross loansGEL/US$
Period End YE 2006 = 1.71
YE 2007=1.59
YE 2008=1.67
Q1 2009= 1.67
Q2 2009=1.66
Q3 2009=1.68
YE 2009= 1.69
Q1 2010= 1.75
Q2 2010= 1.84
Q3 2010= 1.81
Note: all data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge
Page 65November 2010
28.8%
22.5%
8.1%8.9%
6.5% 6.8%
18.5%
27.4%
24.1%
9.1%
10.8%
5.5%
2.7%
20.4%
29.4%
23.7%
8.5%
11.5%
3.6%2.0%
21.3%
0%
5%
10%
15%
20%
25%
30%
35%
BoG TBC ProCredit Bank Republic VTB Cartu Other Banks
YE 2008
YE 2009
Sep-10
Peer group’s market share in depositsGEL/US$
Period End YE 2006 = 1.71
YE 2007=1.59
YE 2008=1.67
Q1 2009= 1.67
Q2 2009=1.66
Q3 2009=1.68
YE 2009= 1.69
Q1 2010= 1.75
Q2 2010= 1.84
Q3 2010= 1.81
Note: all data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge
Page 66November 2010Page 66
This presentation contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives and other statements relating to our business development and financial performance.
While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other factors could cause actual developments and results to differ materially from our expectations.
These factors include, but are not limited to, (1) general market, macroeconomic, governmental, legislative and regulatory trends, (2) movements in local and international currency exchange rates, interest rates and securities markets, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties and developments in the markets in which they operate, (6) management changes and changes to our group structure and (7) other key factors that we have indicated could adversely affect our business and financial performance, which are contained elsewhere in this presentation and in our past and future filings and reports, including those filed with the NSCG.
We are under no obligation (and expressly disclaim any such obligations) to update or alter our forward-looking statements whether as a result of new information, future events, or otherwise.
Caution Regarding Forward-Looking Statements