q1 results presentationbgeo.com/uploads/presentations/1155.pdfmay 2010 page 4 q1 2010 p&l...
TRANSCRIPT
May 2010
GROWTH AT THE RIGHT PRICELSE: BGEO / GSE:GEB
JSC Bank of Georgia Q1 2010 results overview
Page 2May 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$4.5 bln international assistance package pledged to Georgia by international donors in the aftermath of Russia-Georgia conflict in August 2008Disciplined capital management, low leverage, conservative liquidity position, no exposure to sub-primeSophisticated management team with Western banking & finance backgroundTransparency and good governance, over 89% institutionally owned. Supervisory Board includes two large institutional shareholders and two independent directors
The leading universal bank in Georgia
Leading corporate bank with approximately 85,500 legal entities and over 157,600 current accountsLeading card-processing, leasing, insurance, wealth management and asset management services providerThe only Georgian entity with credit ratings from all three global rating agencies
S&P: ‘B/B’ – at the sovereign ceilingFitch Ratings: ‘B/B’Moody’s: ‘B3/NP (FC)’ & ‘Ba3/NP (LC)’
Listed on the London Stock Exchange (GDRs) and Georgian Stock ExchangeMarket Cap (LSE) US$ 313 mln as of 25 February 2010Approximately 95% free float
Issue of the first ever Eurobonds in GeorgiaBloomberg: BKGEO; 5 year, 9%, US$200 mlnB/Ba2/B (composite B+)
No.1 by assets (34.3%), (1) gross loans (32.7%), (1) client deposits (29.9%) (1) and equity (39.3%) (1)
Leading retail banking, with top brand, best distribution network and broadest range of services of any bank in Georgia
420382379ATMs
142141140Branches
645,000+537,000+570,000+Cards Outstanding
875,000+999,000+996,000+Retail Accounts
200920092010
MarchDecemberMarch
(1) All data according to the NBG as of 31 March 2009
May 2010
JSC Bank of Georgia Q1 2010 results overview
Page 4May 2010
Q1 2010 P&L results highlights
16.4%19.7%17.7%Tier I Capital Adequacy Ratio (NBG)17.4%16.8%15.9%Total Capital Adequacy Ratio (NBG)
Q1 2009Millions unless otherwise noted Q1 2010 Q4 2009 Growth Growth 1
Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ Q-O-Q GEL US$ Y-O-Y(Unaudited) (Unaudited) (Unaudited)
Net Interest Income 45.3 25.9 46.0 27.3 -1.7% 52.4 31.4 -13.7%Net Non-Interest Income 30.6 17.5 31.3 18.6 -2.2% 29.3 17.5 4.6%Total Operating Income (Revenue)2 75.9 43.4 77.4 45.9 -1.9% 81.7 48.9 -7.1%Recurring Operating Costs 46.3 26.4 46.6 27.6 -0.7% 44.6 26.7 3.6%Normalized Net Operating Income3 29.6 16.9 30.8 18.3 -3.7% 37.1 22.2 -20.1%Net Non-Recurring Income (Costs) (3.3) (1.9) (106.8) (63.4) NMF (0.2) (0.1) NMFProfit Before Provisions 26.4 15.1 (76.1) (45.1) NMF 36.8 22.1 -28.5%Net Provision Expense 7.4 4.2 30.3 18.0 -75.7% 32.1 19.2 -77.0%Net Income/ (Loss) 16.8 9.6 (102.3) (60.7) NMF 5.1 3.0 229.8%Tier I Capital Adequacy Ratio (BIS) 22.1% 22.4% 22.2%Total Capital Adequacy Ratio (BIS) 32.3% 33.8% 31.7%
1 Compared to the same period in 2008; growth calculations based on GEL values.2 Revenue includes Net Interest Income and Net Non-Interest Income.3 Normalized for Net Non-Recurring Costs.
Page 5May 2010
31 March 2010 Balance Sheet results highlights
13.6 22.8 11.3 19.1 11.2 19.5 Book Value Per Share, GEL & US$
426.3 711.8 355.0 598.4 349.6 611.7 Shareholders’ Equity
1,482.0 2,474.9 1,373.2 2,315.0 1,436.2 2,512.4 Total Liabilities
696.3 1,162.8 541.8 913.3 521.3 912.0 Borrowed Funds
710.1 1,185.9 768.1 1,294.9 841.8 1,472.7 Total Deposits
1,908.2 3,186.8 1,728.2 2,913.4 1,785.8 3,124.1 Total Assets
1,144.7 1,911.6 995.5 1,678.2 1,015.9 1,777.3 Net Loans
(Unaudited)(Unaudited)
US$GELUS$GELUS$GELBank of Georgia (Consolidated, IFRS Based)
Q1 2009YE 2009Q1 2010Millions, unless otherwise noted
-14.2%2.2%Book Value Per Share,
-14.1%2.2%Shareholders’ Equity
1.5%8.5%Total Liabilities
-21.6%-0.1%Borrowed Funds
24.2%13.7%Total Deposits
-2.0%7.2%Total Assets
-7.0%5.9%Net Loans
Q1 10/Q1 09Q1 10/YE 09
ChangeChange
Page 6May 2010
Composition of revenue in Q1 2010Revenue by segments, Q1 2010Composition of Revenue, Q1 2010
Consolidated
Total Revenue: GEL 75.9 million in Q1 2009
Net interest income 59.6%,GEL 45.3 mln (-1.7% q-o-q)
Net income from documentary
operations 2.9%,GEL 2.2 mln
(-5.5% q-o-q)
Net foreign currency re lated
income 9.7%,GEL 7.3 mln
+29.5% q-o-q)Net fee and commision
income13.6%,GEL 10.3 mln
(-18.2% q-o-q)
Net other non-interest income
14.2%,GEL 10.8 mln(+0.6% q-o-q)
Other5.6%,
GEL4.2 mln(+179.1% y-o-
y )
Aldagi BCI 6.0%,
GEL4.5 mln(+32.5% y-o-y)
Belarus 3.8%,
GEL2.9 mln(+20.0% y-o-y)
Ukraine 4.0%,
GEL3.1 mln(-44.0% y-o-y) BoG
Standalone 80.6%,
GEL61.2 mln(-11.2% y-o-y)
Page 7May 2010
Analysis of revenue
Net fee & commission income & Income from documentary operations
Net foreign currency related incomeRevenue growth
Other non-interest income
Consolidated
9.48.8
7.16.5
5.7
7.3
4.3
6.1 6.2
10.1
13.2
10.4
14.9
0
2
4
6
8
10
12
14
16
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
GEL mln
5.9 5.66.9 7.6
10.2 10.2
12.910.9 11.1 11.6 12.0 12.6
10.30.7 1.3
1.81.9
1.4 1.9
1.7
1.42.3 1.8
2.32.3
2.2
0
2
4
6
8
10
12
14
16
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
GEL mln
Net Fee & Commission Income Net Income From Documentary Operations
26.0 30.9 33.542.8 49.8 55.8 58.9 56.4 52.4 49.5 48.9 46.0 45.3
15.021.3 22.7
25.3
31.330.3 27.1 30.2
29.3 31.1 30.4 31.3 30.6
0
10
20
30
40
50
60
70
80
90
100
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
GEL mln
Net Interest Income Net Non-Interest Income
41.0
81.786.685.986.181.1
68.1
56.252.2
77.4 75.980.6 79.3
1.4 2.1
-0.11.6 1.7 2.5 3.2 3.0
5.1 4.93.7 4.2
1.4
1.0
1.3 1.60.4 0.3
1.91.6
2.2
0.6 0.2
0.2
3.0
2.4
-0.4 -0.4 -1.1
-3.4
-0.5
0.63.3 1.9
2.63.3
4.7
1.4
1.03.6
3.7 3.0 4.4 4.4
2.1
1.9
0.1
1.3
0.51.0
0.2
0.1
1.8
0.2
0.3 0.6
-0.1
0.3
0.11.0
-6
-4
-2
0
2
4
6
8
10
12
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
GEL mln
Net Insurance Income Brokerage Income Asset Management Income Realized Net Investment Gains Other
Page 8May 2010
Analysis of recurring operating costsRecurring operating cost structure by segments,
Q1 2010Recurring operating cost structure, Q1 2010
Consolidated
Total recurring operating costs: GEL 46.3 million in Q1 2010 (-0.7% q-o-q), (+3.6% y-o-y)
O ther operating costs 6.3%
GEL 2.9 mln(-0.1% q-o-q)
Procurment & operations support
costs 7.6%,GEL 3.5 mln
(-8.0% q-o-q)
Depreciation & amortization 14.4%,
GEL 6.7 mln(-3.8% q-o-q )
Sell ing, general & administrative costs
21.2%,GEL 9.8 mln
(-6.4% q-o-q)
Personnel costs 50.5%,
GEL 23.4 mln(+4.0% q-o-q)
O ther, 14.7%GEL 6.8 mln
(+120.8% q-o-q)
Aldagi BCI, 6.4%
GEL 2.9 mln(-18.9% q-o- q)
BNB, 3.8%GEL 1.8 mln
(-10.4% q-o-q )
BG Bank, 8.6%GEL 4.0 mln
(-6.4% q-o-q)
BoG standalone,
66.5%GEL 30.8 mln(-8.6% q-o-q)
Page 9May 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
23.2 22.3 22.5 23.4
28.4
0
5
10
15
20
25
30
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
30.8 29.636.8 32.434.336.6 37.1 36.3 38.7 37.1 34.3
26.434.0
45.140.5
33.7
8.7
(76.1)-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
GEL mln
Normalised Net Opearting Income Profit Before Provisions
53.4% 49.9%55.5%
90.0%
201.8%
53.9%
140.5%
60.8%52.9%
57.8% 59.1%53.0%
44.4%42.2%
65.3%
60.7%
50.0%41.0%50.8%
42.2%
45.1%56.6%49.6%46.8%50.1% 50.5%
58.0%
74.7%
35.7%
76.0%
116.9%
68.0%
100.1%109.2%91.5%
145.2%
59.1% 55.6% 64.5% 80.4% 84.6%61.5%66.6% 60.6%
89.4%
62.8%
0%
40%
80%
120%
160%
200%
240%
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
Cost/Income Ratio, ConsolidatedCost Income Ratio, Bank of Georgia StandaloneCost/Income Ratio, BG BankCost/Income Ratio, BNB
2,692
3,056
3,619
3,853
2,741
2,692
2,665
2,669
2,674
2,825
821
824
836
842
786
757
707
617
621
3925,048
4,781
4,798
4,914
4,964
4,977
6,196
5,911
4,926
4,459
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Q4 2007
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Group Consolidated BoG Standalone BG Bank
Page 10May 2010
NIM & loan yields
CB loan yield (annualized)(Excluding provisions)
RB & WM loan yield (annualized) (Excluding provisions)
Net Interest Margin (annualized)
Blended loan yield (annualized)*(Excluding provisions)
Consolidated
* Based on consolidated data, including Corporate Center where all loan recoveries are allocated
13.5%14.4% 14.5% 14.0% 14.4%
15.0%15.6% 15.2%
15.9%14.9%
19.1%
14.8% 15.2%
10%
16%
22%
28%
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
22.2%20.9%
19.8% 19.9% 20.3%19.7% 19.2%
19.9% 20.1% 19.8% 19.3%20.5%
19.6%
10%
16%
22%
28%
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
12.4%
7.8%9.1%
17.2%
15.1%
8.0%8.5%
9.1%
9.0% 9.1%9.3%
10.1%9.8%8.9%
8.1%
10.2%9.6%
5.6%6.2%
8.9%7.7%7.1%6.5%
8.1%9.6%10.0% 9.3%
9.9%9.8%
9.0%8.6%7.5%
10.6%
9.3%9.5%
13.0%11.7%
10.5%
8.4%
13.4%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
Net Interest Margin, Group Consolidated Net Interest Margin, BG Bank
Net Interest Margin, BoG Standalone Net Interest Margin, BNB
24.8% 24.7% 24.3%
21.6% 22.2% 21.8%20.6% 20.4% 20.1% 20.5%
23.7%22.3%
23.2%
10%
16%
22%
28%
34%
40%
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
Page 11May 2010
Composition of assets as at 31 March 2010Consolidated
GEL million YE 2008 31-March-09 31-Dec-09 31-March-10Available-For-Sale & Trading Securities 33.7 40.5 21.7 17.8 Treasuries And Equivalents 8.3 38.3 249.2 249.2 Other Fixed Income Instruments 14.6 0.0 - -Insurance Related Assets 42.0 52.6 26.7 32.6 Investments In Other Business Entities & Investment Property 64.0 36.5 89.2 103.2 Intangible Assets Owned & Goodwill 152.5 146.7 85.4 91.0 Tax Assets, Current And Deferred 12.8 6.7 23.5 23.8 Prepayments And Other Assets 51.4 27.9 36.6 52.6 Other Assets 379.4 349.3 532.3 570.2
Note: Net loans include Net finance lease receivables
570.2532.3349.3379.4
280.4
339.9301.8
1,777.31,678.21,911.6
2,080.6
322.2
265.5
414.999.6
177.9
157.0
171.1397.6
276.5
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q1 2010Q4 2009Q1 2009YE 2008
Cash & Equivalents
Loans & Advances To CreditInstitutions
Net Loans
Property & Equipment
Other Assets
GEL mln
5.4%of total assets
57.6% of total assets
18.3% of total assets
9.6% of total assets
9.1% of total assets
5.4% of total assets
13.0% of total assets
60.0% of total assets
10.7% of total
11.0% of total assets
12.2% of total assets
3.1% of total assets
63.8% of total assets
11.6% of total assets
9.3% of total assets
3,1872,913
3,259
3,124
18.3% of total assets
5.7% of total assets
10.3% of total assets
56.9% of total assets
8.9% of total assets
Page 12May 2010
Composition of gross loan book as at 31 March 2010Consolidated
Georgia: RB & WM, CB
Ukraine: BG Bank
Belarus: BNB
Numbers do not include CC/Eliminations
Gross loan book Q1 2010: GEL 1,957.3 million
CB, 821 CB, 796 CB, 795 CB, 760 CB, 811 CB, 869
RB & WM, 895 RB & WM, 867
BG Bank, 255
BG Bank, 265 BG Bank, 257
BG Bank, 194
BG Bank, 199
BG Bank, 190 BG Bank, 186
BG Bank, 184
BNB, 35
BNB, 36
BNB, 30
BNB, 27 BNB, 26 BNB, 24
BNB, 32
CB, 881 CB, 958 CB, 857
RB & WM, 790 RB & WM, 965 RB & WM, 976 RB & WM, 1,050 RB & WM, 974 RB & WM, 854 RB & WM, 887
BG Bank, 177
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
GEL mln
12% of gross loans
47% of gross loans
39% of gross loans
1 3% of gross loans
46% of gross loans
42% of gross loans
14% of gross loans
4 3% of gross loans
44% of grossloans
2% of gross 2% of gross loans
9% of gross loans
48% of gross loans
42% of gross loans
10% of gross loans
48% of gross loans
44% of gross loans
1% of gross loans
42% of gross loans
47% of gross loans
10% of gross loans
1% of gross loans
41% of gross loans
47% of gross loans
10% of gross loans
1% of gross loans
44% of gross loans
46% of gross loans
1% of gross loans
10% of gross loans
44% of gross loans
45% of gross loans
9% of gross loans
2% of gross loans
Page 13May 2010
Securities portfolio as at 31 March 2010Breakdown of securities investmentsBreakdown of securities portfolio,
31 March 2010
Consolidated
Total securities portfolio: GEL 17.8 million
Local Debt, 36%
Equities, 64%
17,750 11,353 6,397 Total
---Other
---BNB (Belarus)
6,397 -6,397 BG Bank (Ukraine)
1,145 1,145 -SBRE
3,329 3,329 -Liberty Consumer
4,316 4,316 -Aldagi BCI
2,563 2,563 -BG Capital
TotalEquityDebtGEL '000s
Page 14May 2010
Liabilities breakdown as at 31 March 2010Consolidated
YE 2008 31-March-09 31-Dec-09 31-March-10Issued Fixed Income Securities - 0.1 0.7 -Insurance Related Liabilities 55.4 63.8 34.2 42.7Tax Liabilities, Current And Deferred 24.4 19.0 25.2 27.3Accruals And Other Liabilities 50.4 43.3 46.6 57.8Other liabilities 130.2 126.2 106.8 127.8
Total liabilities 31 March 2010: GEL 2,512.4 million
78.222.552.979.0
1,394.41,272.51,132.91,193.1
912.0
913.31,162.81,137.8
127.8
106.8126.2130.2
611.7
598.4
711.8718.8
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q1 2010Q4 2009Q1 2009YE 2008
GEL mlnTotal equity
Other Liabilites
Borrowed Funds
Client Deposits
Deposits And Loans From Banks
22% of total liabilities + equity
4% of total liabilities + equity
36% of total liabilities + equity
36% of total liabilities + equity
2% of total liabilities + equity
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
22% of total liabilities + equity
4% of total liabilities + equity
35% of total liabilities + equity
37% of total liabilities + equity
2% of total liabilities + equity
3,124
2,913
3,1873,259
20% of total liabilities + equity
3% of total liabilities + equity
45% of total liabilities + equity
29% of total liabilities + equity
4% of total liabilities + equity
Page 15May 2010
Client deposits breakdownConsolidated
Client deposits Q1 2010: GEL 1,394.4 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 , 629 CB , 606 CB , 521
CB , 595 CB , 588
BG Bank, 216
BG Bank, 180
BG Bank, 121
BG Bank, 115
BG Bank, 117
BG Bank, 139
BG Bank, 122
BNB , 16
BNB , 20
CB , 652 CB , 681 CB , 576 CB , 656
RB & WM, 458 RB & WM, 534 RB & WM, 396 RB & WM, 416 RB & WM, 374 RB & WM, 389 RB & WM, 463 RB & WM, 539 RB & WM, 595
BG Bank, 171
BG Bank, 127 BNB , 27
BNB , 31
BNB , 25
BNB , 18
BNB , 12
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
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
34% of client deposits
1,326
1,395
1,202 1,193
1,133
37% of client deposits
50% 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
43% of client deposits
47% of client deposits
43% of client deposits
1,394
May 2010
Capital adequacy & wholesale funding
Page 17May 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
25.2% 25.0% 23.9% 22.4% 22.1%25.4%
22.2%22.5%24.7%
34.6%34.2%31.7%
27.3%25.3%
25.8%25.8%
33.8% 32.3%
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
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%
16.3% 16.8% 15.9%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
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
161.2% 164.1%
135.4% 129.6%120.7%
88.6% 85.3%
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
Net Loans/Total Deposits Net Loans/(Total Deposits+Equity)
2,7682,559 2,549 2,451
2,597
3,4583,302
3,0412,870
1,031
2,593 2,7342,516
2,920
1,724
3,100
3,605
3,1322,720
2,717
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q1 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
BIS NBG
Page 18May 2010
International borrowings
International borrowings repayment schedule
International borrowings - fixed vs. floating rates, 31 March 2010
Selected international loans
International borrowings by currencies, 31 March 2010
Note: Depicts final maturity dates Excluding credit lines as part of documentary business
Euro, 0.2%
US$, 99.8%
Fixed Interest Rate, 82%
Floating Interest Rate, 18%
Key LendersPrinciple Amount Outstanding
as of March 31, 2010 MaturitySyndicated Loan arranged by Citi and ADB, 3rd Tranche US$ 8.3 million 2010Eurobonds US$ 200.0 million 2012Senior Term Loan from FMO US$ 9.1 million 2014Senior Term Loan from WorldBusiness Capital US$ 6.4 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$ 4.6 million 2017Subordinated loan from FMO and DEG (Call in 2013) US$ 30.0 million 2018Senior Loan from OPIC US$ 28.2 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$ 4.8 million NMF
Other, EUR denominated EUR 0.9 million NMF
Total US$ 552.6 million
31,982 68,376
504,289
119,373
23,140 8,732 5,905 23,162
174,940
6,7781.1%
2.3%
16.6%
3.9%
5.8%
0.8%
0.2%0.2%0.3%
0.8%
0.0
100,000.0
200,000.0
300,000.0
400,000.0
500,000.0
600,000.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
GEL '000s
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Principle Amounts Outstanding as of March 31, 2010 (LHS) As % of March 31, 2010 Assets (RHS)
May 2010
Business overview
Page 20May 2010
Group structure
Page 20
BoG Group
Rep
ortin
g L
ines
* Formerly Galt & Taggart SecuritiesNote: Following the sale of GTAM, its asset management arm, BoG owns approximately 65% of Liberty Consumer, and 100% of SBRE. Both Liberty Consumer and SBRE are fully consolidated in BoG financials
Securities Insurance
Aldagi BCIBG Capital *Bank of Georgia BGB BNB
May 2010
BoG standalone results overview
Page 22May 2010
BoG standalone performance
Net income
Recurring operating cost structure, Q1 2009Revenue performance
Cost/Income Ratio
Standalone
45.3 50.1 52.2 51.1 50.4 45.5 44.5 44.8 42.6
21.321.0 19.2 18.5 16.3
16.8 17.0 17.5 16.8
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
GEL mln
Net Interest Income Net Non-Interest Income
66.671.1 71.4 69.9
66.762.3 61.5 62.3
59.4
Personnel costs, 50.3%
GEL 15.5 mln(-0.8% q-o-q)
Selling, general & administrative
expenses, 19.7%GEL 6.1 mln
(-23.8% q-o-q)
Depreciation & amortization,
17.9%GEL 5.5 mln
(-11.0% q-o-q)
Procurement & operations support
expenses, 9.3%GEL 2.8 mln
(-0.3% q-o-q)
Other operating expenses, 2.9%
GEL 0.9 mln(-17.7% q-o-q)
25.4 28.4
-58.0
28.8
11.3
0.9
10.8 7.812.8
-70
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 21010
GEL mln
60.7%
53.9%
45.1%
41.0%
50.0% 50.8%50.5%
42.2%
58.0%
44.5%
44.7%
47.3%43.1% 41.4%
47.7% 48.9%54.0% 51.8%
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 2010Cost/income, Bank of Georgia standalone
Normalized Cost/Income, Bank of Gerorgia standalone
Page 23May 2010
Composition of assets as at 31 March 2010Standalone
GEL million YE 2008 Q1 09 YE 09 Q1 10
Treasuries And Equivalents 8 38 249 249
Other Fixed Income Instruments 15 - - -
Investments In Other Business Entities, Net 295 315 334 356
Intangible Assets Owned, Net 13 7 14 17
Goodwill 23 23 23 23
Tax Assets, Current And Deferred 7 - 7 6
Prepayments And Other Assets 31 15 26 24
Other assets 392 398 653 675
675653398392
216226
231232
1,7001,606
1,7501,885
258165324
249
184214229
192
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q1 2010Q4 2009Q1 2009YE 2008
GEL mln
Cash & Equivalents
Loans & Advances To CreditInstitutions
Net Loans
Property & Equipment
Other Assets
7% of total assets
6% of total assets
57% of total assets
8% of total assets
23% of total assets
3,0332,987
8% of total assets
8% of total assets
63% of total assets
8% of total assets
13% of total assets
2,8427% of total assets
11% of total assets
60% of total assets
8% of total assets
14% of total assets
2,916
22% of total assets
56% of total assets
9% of total assets
7% of total assets
6% of total assets
Page 24May 2010
Analysis of the loan bookStandalone
* Other loans include car, POS and legacy retail loans
Credit cards and overdrafts, 16%
Micro loans, 14%
Mortgage loans, 43%
Consumer and other, 27%
FMCG, 15%
Energy, 9%
Industry & State, 17%
Construction & Real Estate, 19%
Other, 6%
Pharmaceuticals and Healthcare,
2%
Trade, 32%
40.6
951
846.6
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q1 2010
GEL mln
CB
RB
WM
1,838.2
Page 25May 2010
Analysis of the loan book
Loans by maturity, 31 March 2010
Loan concentrationLoans by currency, 31 March 2010
Loan book collateralization
Standalone
3% 2% 4%
22%
69%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Less than 1month
1 to 3 months 3 to 6 months 6 to 12 months Over 1 year
10.7%
13.8%
16.6%
19.6%
0%
5%
10%
15%
20%
25%
Q1 2009 Q1 2010
Top 10 Borrowers Top 20 Borrowers
25.1% 24.0% 24.5%
74.9% 76.0% 75.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RB & WM CB TotalGEL Foreign Currency
86.2% 87.7%
0%
20%
40%
60%
80%
100%
Q1 2009 Q1 2010
Page 26May 2010
Provisioning policy
Reserve for loan losses to gross loans
NPL coverage ratioNPLs & write-offs, 31 March 2010
Impairment seasoning, Q1 2010
Standalone
3.77% 3.68%
7.44%
0.75%
0.06% 0.69%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
CB RB & WM Total
NPLs as % of Gross Loans Write-offs as % of Gross Loans
208.4%
554.4%
96.7%117.4%152.6%
524.0%
117.6%166.8%
106.5% 115.2% 100.7%
104.2%129.3%169.1%
138.3%
124.2% 124.1% 106.6%
0%
100%
200%
300%
400%
500%
600%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
BoG Standalone BoG Consolidated
9.2%
2.1% 2.1%
6.3% 5.0%
6.6%
8.1%
9.5% 9.4%
7.5%
1.9% 2.0%
6.8%4.9%
5.5%6.7%
7.5% 7.4%
6.4%
1.5%
1.7%
1.5%
19.8%
2.0%
6.6%8.3%
6.7%
16.9%
1.7%
22.8%
-1.0%
5.6% 6.6%2.0%
4.3%2.8%
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 2010-5%
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
2.5% 2.6% 2.4%3.0%
3.5% 3.8%3.2%
2.0%1.7%
1.2% 1.3% 1.1%0.3%
1.2%
0.7%
1.3%1.4%
2.9%
1.2%1.1% 2.0%
1.6%
432.6
491.3
179.8
439.3
356.7292.4 327.6 300.9
548.3
632.3604.0
200.9
239.1
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 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)
Page 27May 2010
Provisioning policy cont’d – BoG standalone
RB & WM loan loss reserve breakdown by loan type, 31 March 2010
NPLs, 31 March 2010Loan loss reserve, 31 March 2010
CB loan loss reserve breakdown by loan type, 31 March 2010
Standalone
Mortgage loans, 25.6%
GEL (19.6 mln)
Consumer and other, 15.9%
GEL (12.2 mln)
Credit cards and overdrafts,
54.2%GEL (41.6 mln)
Micro loans, 4.3%
GEL (3.4 mln)
8.7 8.1 9.7 12.0 20.046.3
67.454.5
35.9
67.6
16.6 10.922.4 11.3
36.6
41.1
51.361.4
75.4
69.2
1.7%1.2%
1.7%1.3%
3.2%
4.7%
6.9% 7.0%6.4%
7.4%
0
20
40
60
80
100
120
140
160
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
0%
1%
2%
3%
4%
5%
6%
7%
8%
RB &WM CB % of Gross loans
16.5 14.5 22.2 29.849.8 57.7
75.5 67.9 70.9 76.7
11.4 16.310.8
83.6
36.442.2
56.856.0
45.038.2
2.0% 1.9% 2.0%
4.9%5.5%
7.5% 7.4% 7.5%
6.7%6.8%
0
20
40
60
80
100
120
140
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
0%
1%
2%
3%
4%
5%
6%
7%
8%
RB & WM CB Loan loss reserve as % of gross loans
Other, 4.0%GEL (2.1 mln)
Pharmaceuticals & Healthcare,
0.2%GEL (0.1 mln)
Industry & State 3.7%
GEL (2.1 mln)
Construction & Real Estate
29.9%GEL (16.7 mln)
Fast Moving Consumer
Goods, 13.2%GEL (7.4 mln )
Energy, 11.5%GEL (6.4 mln)
Trade, 37.5%GEL (21.0 mln)
Page 28May 2010
BoG standalone liabilitiesLeverage ratio, BoG standalone
Liquidity ratio, BoG standalone
Standalone
Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date
Liquidity ratio is calculated by dividing liquid assets by Total liabilities
3.9
2.93.1 3.1 3.1
2.8 2.8 2.83.0
3.3
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
751.9
58.8
912.0
1,251.5
59.0
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q1 2010
GEL mln
Deposits And Loans From Banks
Client Deposits
Borrowed Funds
Other Liabilities
Total Shareholders Equity
25% of Total Liabilities + equity
2% of Total Liabilities + equity
41% of Total Liabilities + equity
30% of Total Liabilities + equity
2% of Total Liabilitis + equity
3,033
34.2% 33.8%
27.2% 27.3%
37.6%
43.5%
35.6%38.7%37.6%
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
Page 29May 2010
Analysis of deposits
CB, RB & WM deposits, BoG standalone
Client deposits by currency, 31 March 2010 Client deposit breakdown, 31 March 2010
Deposits by maturity, 31 March 2010
Standalone
22.6%
50.1%
3.2%
34.2%
77.4%65.8%49.9% 96.8%
0%10%20%30%40%50%60%70%80%90%
100%
RB CB WM TotalGEL Foreign Currency
54%
0%3%
9%
21%
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
Individual current accounts, 10.3%
Corporate time & demand deposits,
17.6%
Individual time & demand deposits,
37.3%
Corporate current accounts, 34.8%
363.6 403.4 326.0 319.8 280.4 282.8 331.2 376.1 414.7
76.5 70.4 98.7 93.3 107.5131.4
163.1180.7
652.7681.5
576.2626.7
605.2 519.0
594.9587.6
656.1
81.6
0
200
400
600
800
1,000
1,200
1,400
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
RB Client Deposits WM Client Deposits CB Client Deposits
+11%
+4%
-19%
-15% +9%
-2%
-3%
-12% 1%
-14% +15%
17%
+22%+15%-5%+37%-14%+7% +24%
+14%
-1%
+10%
+12%
+11%
Page 30May 2010
Deposit yieldsStandalone
9.1%8.2% 8.0%
10.4%
12.5%13.7% 14.1%
11.7%10.5%
3.8% 4.0%5.0% 4.9% 4.5%
5.1% 4.9%5.8% 5.7%
7.0%7.5% 7.7%
8.4% 8.6%7.6%8.1%
5.6%5.4%7.2%
6.7%6.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
RB Deposit Yields, BoG Standalone CB Deposit Yields, BoG Standalone Blended Deposit Yields, BoG Standalone
Page 31May 2010
Risk managementCurrency risk management, Q1 2010Liquidity risk management, Q1 2010
Standalone
44.3
353.1
548.8558.5
222.0
558.3
-
379.4
569.7
381.9
149.2
818.5
(13.7)(58.0)
(31.7)(10.8)(187.4)
(260.2)-400
-200
0
200
400
600
800
1,000
Up To 1 Month 1-3 Month 3 Month - 1Year
1-5 Years Over 5 Years Past Due
GEL mln
Assets Liabilities Accumulated Liquidity Gap
0.8%
3.5%4.1%
1.7%
6.2%
3.8%
16.0%
0.6%
6.0%5.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
1-Dec-07 1-Mar-08 1-Jun-08 1-Sep-08 1-Dec-08 1-Mar-09 1-Jun-09 1-Sep-09 1-Dec-09 1-Mar-10
Open Foreign Currency Position (as % of Regulatory Capital)
Page 32May 2010
Corporate banking
Corporate client deposits, 31 March 2010
Corporate loan portfolio, 31 March 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 37.9% market share based on customer deposits(1)
Circa 29.6% market share based on corporate loans(2)
Integrated client coverage in key sectors85,500+ clients of which 9,047 served by dedicated relationshipbankersCirca 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 1,424 at 31 December 2009 to 1,475 in Q1 2010Approximately 4,169 corporate accounts were opened at the bank in Q1 2010, bringing the total number of current accounts to 157,632
Notes: (1) As of September 2009, source: National Bank of Georgia, does not include interbank deposits(2) Management estimates (based on the NBG data)
Total corporate deposits: GEL 656 mln
Current Accounts &
Demand Deposits,
78%
Time Deposits,
22%
FMCG, 15%
Energy, 9%
Industry & State, 17%
Construction & Real Estate, 19%
Other, 6%
Pharmaceuticals and Healthcare,
2%
Trade, 32%
874826
875
794
928870
806765
880
951
0
100
200
300
400
500
600
700
800
900
1,000
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
GEL mln
-5% +6% -9% +17% -5%-7%-6% +15%+8%
Page 33May 2010
Retail Banking – No. 1 retail bank in Georgia
Leadership in consumer lending
RB loan portfolio, 31 March 2010Retail loans originated
Retail gross loan portfolio growth
Standalone
(1) Monthly average Total retail loans: GEL 847 mln Note: does not include Ukraine & Belarus
Q1 2009 YE 2009 Q1 2010
Number of Consumer Loans Outstanding* 61,593 48,614 50,335• Volume of Consumer Loans Outstanding (GEL mln)* 144.8 114.0 116.7• Credit Cards Outstanding 131,523 79,318 78,361
122.1
177.5 183.3
235.6
266.9
317.6
140.2
74.9 68.8
97.5 104.9128.2
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
GEL mln
656
755
931995
923844
809 807847
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
GEL mln
+15% +22% +1% +7% -7% -4%-9% -0.2% +5%
Credit cards and overdrafts, 16%
Micro loans, 14%
Mortgage loans, 43%
Consumer and other, 27%
Page 34May 2010
Loan origination
Micro loans (RB & WM)
Consumer loans (RB & WM)Mortgage loans (RB & WM)
Other RB & WM loans
Standalone
386.5
10.1 23.4
370.5
27.0
385.1
-50
100150
200250
300350
400450
Volume of Mortgage LoansOriginated
Volume of Mortgage LoansOutstanding
GEL mln
Q1 2009 Q4 2009 Q1 2010
-4%
+130+16%
+4%
15.3
124.0
40.0
98.9
120.7
51.6
-
20
40
60
80
100
120
140
Volume of Micro LoansOriginated
Volume of Micro LoansOutstanding
GEL mln
Q1 2009 Q4 2009 Q1 2010
+162%
-20%
+29%
+22%
316.6
259.7
3.8 3.3
258.0
2.8-
50
100
150
200
250
300
350
Volume of Other RB & WMLoans Originated*
Volume of Other RB & WMLoans Outstanding
GEL mln
Q1 2009 Q4 2009 Q1 2010
-11%
-19 %
-17%
-52%
+1%
32.1
155.5
43.7
126.9
48.7
121.6
-20406080
100120140160180
Volume of Consumer LoansOriginated
Volume of Consumer LoansOutstanding
GEL m ln
Q1 2009 Q4 2009 Q1 2010
+11%+89%
-18%
-4%
Page 35May 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
8.016.9
16.225.8
20.034.9
40.6 34.640.7
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
GEL mln
Volume of WM time deposits issuedVolume of RB time deposits issued
GEL m ln
10,912
17,13617,855
19,403
12,051
15,312
18,322 18,739 19,092
-
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
169.9 185.3120.9 95.6 95.2 101.7 105.4 118.8 128.5
39.2 36.9
18.6 18.0 16.3 20.7 34.8 43.1 50.1
231.1262.9
257.0 302.1 262.2 266.3322.4
377.4416.8
0
100
200
300
400
500
600
700
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
Volume of RB & WM time deposits outstandingVolume of RB & WM demand deposits outstandingVolume of RB & WM current accounts outstanding
410.4 363.3 349.9 326.5 382.5 329.4400.4 370.0 435.5
53.639.2 26.8 90.2
69.379.2
74.2 78.175.1
188.7 279.0199.5 186.6 153.6
117.3112.0 139.4
145.6
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
GEL mln
Volume of CB time deposits outstandingVolume of CB demand deposits outstandingVolume of CB current accounts outstanding
Page 36May 2010
RB cross-selling
Cards penetration rate*
RB loans penetration rate*Product/client ratio
Current accounts & deposits penetration rate*
Standalone
* Calculated as percentage of Bank of Georgia clients for the period
2.22.4
2.73.0
3.23.3
3.5
3.1 3.02.8 2.8 2.7 2.8
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 31-Mar-10
0.0
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)
95.6% 98.7%104.0%
75.4% 73.2%67.6% 66.1% 66.18%
23.6% 26.9%31.4%
24.8%20.6% 17.5% 15.0%
10.56% 11.38%
62.61%
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
Debit Cards Penetration Rate Credit Cards Penetration Rate
111.2% 111.3% 112.8%122.4%
9.7%9.2%7.6%7.1%8.9%7.3%6.7%5.6%
110.8%111.1%114.3%105.0%
14.4%
14.7%
15.7%16.4%19.0%19.5%19.8%20.0%
0%
20%
40%
60%
80%
100%
120%
140%
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09
Demand & Time deposits Penetrartion rateUniversal Current Accounts Penetration RateStandard Current Accounts Penetration Rate
1.1% 1.1% 1.1% 1.1%
9.2% 7.6% 7.6%
2.2% 2.1% 1.9% 1.5% 0.8% 0.6% 0.6%
35.8%39.3%
44.3%46.4% 47.9% 47.6%
44.5% 44.8%
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
Mortgage Loan Penetration Rate Consumer Loan Penetration RateMicro Loan Penetration rate Other Loans Penetration Rate
Page 37May 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
• Migration to TietoEnatorTransmaster in 2005
• Enhanced functionality and new product support
1,105
1,7762,151
2,954 2,914
4,224
5,027
6,5847,176
8,536 8,6139,014
8,406
7,660 7,660 7,8397,449
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
'000s
90 121203
286337
437 460
649721
776 774658 636 582
539.0 541 525
4966
72
84
119
138
247
227
256
278 304
256 261
227230 237 227
139
275
370
456
575
706
876 914 897809
769 778
186
753
0
200
400
600
800
1,000
1,200
1,400
Mar-06 Jun-06 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
'000s
Bank of Georgia Other Banks
1,0781,054
978
5.5 5.5 5.5
2.5 2.6
3.1 3.3
3.84.0 4.0 4.0
4.2
4.7 4.7
1.2
1.4
0.5
0.4
1.7
1.0 1.1
2.2
1.1
1.31.3
1.1
1.4 1.5
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
GEL mln
0
1
2
3
Total Assets (LHS) Revenue (RHS)
Page 38May 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: 14.5% - 15.5%Tenor: Normally 10 yearsCurrency: US$ and GELLTV: Normally 70%%
231 259 423 437 517
7,4767,967 7,994 7,916 7,809 7,796
8,240
455 678 858 1,129 1,4261,915
850 691
2,3651,166
3,4094,230
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
Number of mortgage loans issued Number of mortgage loans outstanding
33.837.6
43.3
69.5
81.3
96.1
32.5
18.5
10.1 11.5
23.1 23.427.0
0
20
40
60
80
100
120
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
101.6128.7
157.7
203.5
245.5
312.0 325.9
386.7 383.1 373.7 358.8 370.5 385.1
0
50
100
150
200
250
300
350
400
450
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
GEL mln
Page 39May 2010
Management (WM) performance review
WM loans, 31 March 2010
WM products penetrationWM clients and client assets
WM Deposits
Standalone
Notes: (1) Converted at exchange rates of GEL/US$, 1.793(2005),1.714(2006), 1.70 (Q1 2007), 1.67 (Q2 2007), 1.66 (Q3 2007), 1.59 (Q4 2007), 1.48 (Q1 2008), 1.42 (Q2 2008) , 1.41 (Q3 2008), 1.67 (Q4 2008), 1.67 (Q1 2009) and 1.67 (Q2 2009) Q3 2009 (1.68) Q4 2009 (1.69)
(2) PB Client Assets include: Balances on OneCard Accounts, Credit Balances on Other Cards, Credit Balances On Regular Current Accounts, Demand & Time Deposits, Brokerage & Asset Management Accounts, Pensions
101.0%93.7% 96.2%
79.2%
21.2% 25.5% 27.8%
62.7%
59.5%
71.4%
54.0%55.3%65.8%66.8%66.9%
52.2%65.8%
93.4%
111.2%114.2%
130.2%135.0%
32.8%31.8%32.2%40.1% 40.8% 52.5%
57.1%62.5%
65.2%69.6%70.2%76.4%78.2%80.7%
24.1%23.7%23.7%21.9%20.6%10.5%15.4%14.8%15.3%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
OneCard P enet ration Rate All Other Cards Penetration RateDemand & Term Deposits Penetration Rat e Internet Banking P enetration Rat eSMS Banking P enet ration Rate
Other, 10.0%
Mortgage Loans, 72.4%
Consumer Loans, 12.1%
Car Loans, 5.5%
108.8
87.869.3
59.060.955.4
73.366.8
64.866.463.4
48.348.2
6.7
117.5
1,3411,4291,364
1,358
1,3411,3871,384
1,3821,3041,291
1,1871,081
943873
460
-
20
40
60
80
100
120
2004 2005 2006 Q1'07
Q2'07
Q3'07
Q4'07
Q1'08
Q2'08
Q3'08
Q4'08
Q1'09
Q2'09
Q3'09
Q4'09
Q1'10
US$ mln
0
200
400
600
800
1,000
1,200
1,400
1,600
Private Banking Client Assets (LHS) Private Banking Clients (RHS)
155.2
49.531.5 35.7 35.1 36.9 47.9 52.1 57.2
23
3239
61 5867
84
111123
0
20
40
60
80
100
120
140
160
180
200
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
Current Accounts & Demand Deposits Time Deposits
178
7182
181
163
131
1049397
May 2010
BG Bank (Ukraine) standalone results overview
Page 41May 2010
BG Bank performance
Net income
Recurring operating cost structure, Q1 2010Revenue growth
Cost/Income Ratio
4.8 5.56.4
3.82.9
4.3 4.0 4.32.7
1.7 0.8
2.61.2 1.3
(0.5)
0.3
2.75.5
9.9%10.6%
12.9%
8.1%
7.2%7.5%
8.3%
6.0%
11.3%
-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
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
5.74.0
8.5
(1.6)
(4)
(2)
-
2
4
6
8
10
12
14
16
Q4 2009 Q1 2010
GEL mln
Recurring Operating Costs Provision Expense
(7.3)
(10.8)
(5.5)
(11.5)
0.3
(0.7)
0.7 0.7
(10.7)
(14)
(12)
(10)
(8)
(6)
(4)
(2)
0
2
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
GEL mln
109.2%116.9%
100.1%91.5%
74.7%
140.5%
76.0%
39.6%
145.2%
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
Page 42May 2010
BG Bank assets as at 31 March 2010Asset growth
Gross loan book growth
No international loan
10.110.12.3Tax Assets, Current And Deferred
GEL million Q1 2009 YE 2009 Q1 2010Available-For-Sale Securities 13.6 6.2 6.4Investments In Other Business Entities, Net 0.0 7.3 12.2Intangible Assets Owned, Net 0.5 1.0 0.9
Prepayments And Other Assets 1.4 1.2 0.9Other assets 17.8 25.8 30.6
30.625.817.8
11.511.3
14.4
131.9125.6
167.2
5.7
7.5
23.8
11.127.8
21.7
0
50
100
150
200
250
300
Q1 2010Q4 2009Q1 2009
Cash & Equivalents
Loans & Advances To Credit Institutions
Loan Portfolio
Property & Equipment
Other Assets
9% of Total Assets
10% of Total Assets
68% of Total Assets
6% of Total Assets
14% of Total Assets
4% of Total Assets
63% of Total Assets
6% of Total Assets
13% of Total Assets
245
GEL mln
7% of Total Assets
191198
6% of Total Assets
16% of Total Assets
6% of Total Assets
69% of Total Assets
3% of Total Assets
357 360 350 337249 245 205 202 198 191
849
1,217 1,213 1,150 1,129
965946
1,1491,131
934
0.3
0.20.3 0.30.3
0.2 0.2 0.20.2 0.2
0
200
400
600
800
1000
1200
1400
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 20100.0
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
230 255 265 257194 199 190 186 177 184
917896925862 871
729
876 889836 819
0.3
0.20.2
0.3
0.30.3
0.20.2
0.20.2
0
100200300400
500
600
700800900
1000
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 20100.0
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 43May 2010
BG Bank loan portfolio
Retail loan portfolio breakdown, 31 March 2010
Corporate loan portfolio breakdown, 31 March 2010
Loan portfolio breakdown, 31 March 2010
Gross loans: GEL 184 millionGross corporate loans: GEL 148 million
Total retail loans: GEL 36 million
CB, 80%
RB & WM, 20%
Mortgage loans, 54.1%
Consumer and other*, 42.9%
Micro loans, 2.6%Credit cards, 0.4%
SME, 7%Other, 2%
Industry & State, 21%
Construction & Real Estate, 15% Trade, 55%
Page 44May 2010
BG Bank analysis of the loan book
Loans by maturity, 31 March 2010
Top ten borrower concentrationLoans by currency, 31 March 2010
Loan book collateralization
UAH, 52.8%
Foreign currency,
47.2%
23.6%
13.7%
38.5%
24.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1 to 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%
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
89.9%
91.5%90.9%
92.1%93.0%
95.8%96.6%
97.5%
96.2%
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
Page 45May 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%
15.9%
20.5%
26.9%
31.5%
28.3%
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
2.6 2.9 2.7 2.68.7
5.6
17.611.5 12.2
4.0
7.2
22.1
6.314.2
16.6
0.1 0.7 1.01.7% 1.3%
1.5%
4.6%
8.0%
14.6%12.8%
14.0%15.6%
0
5
10
15
20
25
30
35
Q1 2008 Q2 2008Q3 2008Q4 2008 Q1 2009Q2 2009Q3 2009 Q4 2009Q1 2010
GEL mln
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
RB CB NPL ratio
7.3 5.7 6.3 5.912.2 12.8 12.9 14.5 14.7
8.5
19.4
26.2
37.3 36.8 37.4
0.60.2 0.2
0
10
20
30
40
50
60
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
RB CB
167.0%
319.4%
210.0%224.8%
140.9%
198.8%
168.2%
166.4%
181.1%
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
Page 46May 2010
BG Bank standalone liabilities breakdownLeverage ratio
Q1 2009 YE 2009 Q1 2010Issued Fixed Income Securities 0.1 0.7 0.0Tax Liabilities, Current And Deferred 0.0 0.2 0.0Accruals And Other Liabilities 1.6 1.8 1.4Other liabilities 1.8 2.7 1.4
4.3
2.3 2.1
2.9 3.0 3.2
3.9
5.44.9
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
34.625.2
60.9
122.3138.9
121.0
1.4
1.832.5
31.2
61.1
2.7
0
50
100
150
200
250
300
Q1 2010Q4 2009Q1 2009
GEL mln
Total Shareholders Equity
Other Liabilites
Borrowed Funds
Client Deposits
Deposits And Loans From Banks
25% of Total Liabilities + equity
25% of Total Liabilities + equity
49% of Total Liabilities + equity
1% of Total Liabilities + equity
13% of Total Liabilities + equity
70% of Total Liabilities + equity
1% of Total Liabilities + equity
16% of Total Liabilities + equity
17% of Total Liabilities + equity
18% of Total Liabilities + equity
64% of Total Liabilities + equity
1% of Total Liabilities + equity
245
191198
Page 47May 2010
BG Bank client deposits
CB & RB client deposits
Deposit yieldsClient deposits
Deposits by maturity, 31 March 2010
270216
180 171127 121 115 117 139 122
656
554
856730
592 614 588 558 528 559 0.22
0.320.30
0.300.28
0.22 0.22 0.22 0.21 0.21
0
100
200
300
400
500
600
700
800
900
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 20100.00
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%
10.9%
12.3%
14.0%15.8%
11.8%12.2%
11.4%
12.8%
10%
11%
12%
13%
14%
15%
16%
17%
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
85.460.5 61.5
45.7 47.0 37.7 43.258.8
40.1
130.6
119.7 109.1
81.7 74.177.1 73.9
80.0
82.2
0
50
100
150
200
250
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
CB Client Deposits RB Client Deposits
-29%
-8%
-9%
+2%
-25%
-26%
-9%
+3%
+4%
-20%
-4%
+15% +36%
+8%+3%
-32%
31.2%34.2%
9.7%
17.1%
7.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
On demand Less than 3 month 3 to 6 months 6 months to 1 year Over 1 year
Page 48May 2010
BG Bank analysis of depositsClient deposits by currency, 31 March 2010Client deposits breakdown, 31 March 2010
Client deposits: GEL 122 mln
Current accounts, 21%
Time&Demand deposits, 79%
UAH, 43%Foreign
currency, 57%
Page 49May 2010
BG Bank capital adequacy
Risk-weighted assets BIS vs. NBU
NBU capital adequacy ratiosBIS capital adequacy ratios
Net loans/deposits & Loans/(deposits+equity)
19.0%
30.6%
18.1% 19.5%
32.8%
21.1% 22.0%
27.9%30.5%
24.9%
32.6%31.3%28.4%
33.3%
25.8%
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
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
17.3%
23.3%
19.0%
25.8%
12.4% 12.9%14.0%
21.0%22.8% 23.8% 22.8%
13.7% 14.5% 15.6%
21.0%22.8% 23.8%
22.8%
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
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
244.1230.4
271.77
196.18
158.65 158.13
282.1305.2
327.7355.0361.6
176.4178.2190.4
255.4
327.0340.6352.9
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
GEL mln
NBU BIS
77.7% 73.7% 74.6%68.1% 64.3%
69.7%
85.9%76.6%
84.1%
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 2010Net Loans/(Total Deposits + Equity) Net Loans/Total Deposits
May 2010
Belarusky Narodny Bank (Belarus)
Page 51May 2010
BNB Bank performance
Net income
Recurring operating cost structure, Q1 2010Revenue growth
Cost/Income Ratio
1.1 1.0 1.01.4 1.6
2.3
0.618
0.6
0.8 1.40.8
0.7
15.0%
10.8% 10.6% 10.7%
13.4%
17.0%
0
3
5
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Net Interest Income Net Non Interest Income Net Interest Margin, annualized
1.8
2.4
1.9
2.1 2.2
2.9
1.5 1.8
0.03
0.4
0
1
2
3
4
Q1 2009 Q1 2010
GEL mln
Recurring Operating Costs Provision Expense
0.70.6
0.2
0.7
(0.3)(0.4)
(0.2)
0.0
0.2
0.4
0.6
0.8
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009
GEL mln
80.4%
61.5%
89.4%
60.6%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
Page 52May 2010
BNB loan portfolio as at 31 March 2010
RB Loan Portfolio Breakdown, 31 March 2010
Loan loss reserve, 31 March 2010Loan Portfolio Breakdown, 31 March 2010
CB Loan Portfolio Breakdown, 31 March 2010Gross loans: GEL 32 mln
RB loans: GEL 1.7 mln* Other loans include car, POS and legacy retail loans
Loan loss reserve: GEL 1.3 mln
CB loans: GEL 30.6 mln
CB, 95%
RB, 5%
CB, 1.17
RB, 0.11
Mortgage loans, 1%
Consumer and other*, 98%
Other loans, 1% Other, 1%Industry & trade, 10%
Retail trade, 72%
Construction & real estate, 17%
Page 53May 2010
BNB client deposits as at 31 March 2010Client deposits breakdown, 31 March 2010Client deposits breakdown, 31 March 2010
4,586
6,972
0
2,000
4,000
6,000
8,000
10,000
12,000
Jan-00
GEL mln
RB Deposits Outstanding CB Deposits Outstanding
Current Accounts Outstanding ,
58.7%
Time Deposits Outstanding ,
38.7%
Demand Deposits
Outstanding , 2.6%
May 2010
BG Capital
Page 55May 2010
BG Capital
Proprietary book
Net income/(loss)Revenue
Headcount
(2.6)(2.3)
(4.6)
0.1
0.80.5
(3.9)
0.7
(5)
(4)
(3)
(2)
(1)
0
1
2
Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
19,276
36,968
3,9122,516 1,364
2,7905,289 5,292 5,334
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
20 22 22 18 15 16 13 13 15
27
2225 30 27
14
38 4334
5865
56
4539 43 44 41
30
0
10
20
30
40
50
60
70
80
90
100
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
BG Capital Georgia BG Capital Ukraine
1.6
(1.0)
(1.9)
(2.8)
1.21.5
1.8
0.4
2.9
(4)
(3)
(2)
(1)
0
1
2
3
4
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
GEL mln
Page 56May 2010
ContactNick EnukidzeChairman of the Supervisory Board+ 995 32 444 [email protected]
Irakli GilauriChief Executive Officer+995 32 444 [email protected]
Macca EkizashviliHead of Investor Relations+995 32 444 [email protected]
May 2010
Appendices
May 2010
Bank of Georgia shareholder structure & management
Page 59May 2010
Ownership structure
Supervisory board
Ownership structure, 31 December 2009
Management board
Broadly owned by over 100 institutional accounts
Irakli Gilauri Chief Executive Officer (CEO)
Sulkhan Gvalia Deputy CEO, Chief Risk officer
George Chiladze Deputy CEO, Finance
Irakli Burdiladze Deputy CEO, Chief Operating Officer
Mikheil Gomarteli Deputy CEO, Retail Banking
Avto Namicheishvili Deputy CEO, Legal
Archil Gachechiladze Deputy CEO, Corporate banking
Nikoloz Shurgaia Deputy CEO, International Banking
Nicholas Enukidze Chairman of the Supervisory Board
Allan Hirst Vice Chairman of the Supervisory Board, independent member
Ian Hague Member, Firebird Management LLC
Jyrki Talvitie Member, East Capital
Kaha Kiknavelidze Independent member
David Morrison Independent member
Irakli Gilauri Member, Chief Executive Officer
Local Shares Held by Institutional
Shareholders, 5.8%
Management & Employees**, 6.2%
Local Shares Held by Domestic and
Foreign Retail Shareholders, 2.5%
GDR Holders*, 85.4%
Name Number %GDR Holders* 26,745 85.4%Local Shares Held by Institutional Shareholders 1,831 5.8%Management & Employees** 1,957 6.2%Local Shares Held by Domestic and Foreign Retail Shareholders 773 2.5%Total Shares Outstanding 31,306 100.0%
- Adjusted for BG Capital' Proprietary Book (1 ) (5.3) Adjusted Total Shares Outstanding 31,301
(1) Treated as treasury shares as per IFRS*through BNY Nominees Limited** includes GDRs held as part of EECP
Page 60May 2010
Analyst coverage
Analyst Email
Andrzej Nowaczek [email protected]
Analyst Email
David Nangle [email protected]
Analyst Email
Radena Georgieva [email protected]
Analyst Email
Pedro Fonseca [email protected]
May 2010
Georgian banking sector – key trends 2006- Q1 2010
Page 62May 2010
Georgian banking sector – key trends 2007/Q1 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
GrowthMarket Share Market Share Market Share
Q1 2010(YE 2008) (YE 2009)
GEL mln YE 2008 YE 2009 Q1 2010As % of GDP*
2008 Y-O-Y
2009 Y-O-Y
Q1 2010 Q-O-Q
Top 5 Banks
Bank of Georgia
Top 5 Banks
Bank of Georgia
Top 5 Banks
Bank of Georgia
Total Assets 8,866 8,293 8,473 47.21% 23.00% -6.5% 2.2% 79.26% 32.89% 78.1% 33.0% 78.8% 34.3%Gross Loans 5,993 5,185 5,344 29.77% 30.59% -13.5% 3.1% 81.78% 32.87% 81.4% 31.8% 81.5% 32.7%Deposits 3,845 4,174 4,284 23.87% 9.51% 8.6% 2.6% 75.00% 28.76% 77.70% 27.4% 79.96% 29.7%Equity 1,517 1,517 1,549 8.63% 3.14% 0.0% 2.1% 75.69% 40.03% 79.60% 38.6% 79.65% 39.3%Net Income/(Loss) (216) (65.3) 15.3 0.1% NMF NMF NMF NMF NMF NMF 37.3% NMF NMF
21 banks as at 31 March 2010Minimum capital requirement GEL 12 mln and growingSince 1 January 2007 local presence established by HSBC, Halyk, Privat, JSC Kor Bank
No state ownership since 1995Very open to foreign ownership
All leading banks have meaningful foreign capital participationSignificant IT/infrastructure and marketing spend drives increasing retail banking penetrationIncreasing adoption of the universal banking business model, following the lead of Bank of Georgia
The economy and consumers significantly underlet (all-in consumer debt per capita US$163 at 31 December 2008)
* As % of YE 2009 GDP
Page 63May 2010
35.4%
23.7%
6.9% 7.7%
5.5%6.7%
14.3%
32.9%
22.0%
9.6%
7.7%
7.0%
4.8%
15.9%
33.0%
20.8%
9.8%8.6%
5.9%4.6%
17.3%
34.3%
21.3%
8.7% 9.1%
5.4% 4.9%
16.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
BoG TBC Bank Republic ProCredit Bank Cartu VTB Other Banks
YE 2007
YE 2008
YE 2009Q1 2010
Peer group’s market share in total assetsGEL/US$
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
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 64May 2010
11.3%
7.5%7.6%8.3%
7.0%
25.6%
32.7%
12.2%
6.0%6.4%
8.7%10.1%
23.7%
32.9%
13.0%
5.6%
7.6%
10.2%10.1%
21.6%
31.8%
13.0%
5.5%
7.5%
9.8%9.6%
22.0%
32.7%
0%
5%
10%
15%
20%
25%
30%
35%
BoG TBC Republic ProCredit Bank Cartu VTB Other Banks
YE 2007
YE 2008
YE 2009
Q1 2010
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
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 65May 2010
31.4%
24.7%
8.9%7.9% 8.6%
2.1%
16.5%
28.8%
22.5%
8.9% 8.1%
6.5% 6.8%
18.5%
27.4%
24.1%
10.8%9.1%
5.5%
2.7%
20.4%
29.7%
24.9%
9.3% 9.6%
6.5%
1.6%
18.4%
0%
5%
10%
15%
20%
25%
30%
35%
BoG TBC Republic ProCredit Bank VTB Cartu Other Banks
YE 2007
YE 2008
YE 2009Q1 2010
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
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 66May 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