JSC Bank of Georgia Q4 2010 & Full Year 2010 results...
65
February 2011 GROWTH AT THE RIGHT PRICE LSE: BGEO / GSE:GEB JSC Bank of Georgia Q4 2010 & Full Year 2010 results overview
Transcript of JSC Bank of Georgia Q4 2010 & Full Year 2010 results...
February 2011
GROWTH AT THE RIGHT PRICE LSE: BGEO / GSE:GEB
JSC Bank of Georgia Q4 2010 & Full Year 2010 results overview
February 2011 Page 2
Introduction to Bank of Georgia
Investment highlights
Undisputed leader of Georgian
financial services industry with
market-leading retail and corporate
banking franchise
Strongly positioned to benefit from
US$4.5 bln international assistance
package pledged to Georgia by
international donors in the aftermath
of Russia-Georgia conflict in August
2008
Disciplined capital management, low
leverage, conservative liquidity
position, no exposure to sub-prime
Sophisticated management team with
Western banking & finance
background
Transparency and good governance,
over 89% institutionally owned.
Supervisory Board includes two large
institutional shareholders and five
independent directors
The leading universal bank in Georgia
Leading corporate bank with approximately 93,500 legal entities and over 179,400 current
accounts
Leading insurance, card-processing, leasing, trade finance, wealth management and asset
management services provider
The only Georgian entity with credit ratings from all three global rating agencies
S&P: „B/B‟
Fitch Ratings: „B+/B‟ – at the sovereign ceiling
Moody‟s: „B1/NP (FC)‟ & „Ba3/NP (LC)‟
Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange
Market Cap (LSE) US$ 636 mln as of 17 February 2011
Approximately 95% free float
Issue of the first ever Eurobonds in Georgia
Bloomberg: BKGEO; 5 year, 9%, US$200 mln
S&P: B; Moody‟s: Ba3; Fitch: B+; (composite B+)
No.1 by assets (36%), (1) gross loans (36%), (1) client deposits (32%) (1) and equity 40%) (1)
Leading retail banking, with top brand, best distribution network and broadest range of
services of any bank in Georgia December September December
2010 2010 2009
Retail Accounts 984,000+ 986,000+ 999,000+
Cards Outstanding 603,000+ 565,000+ 537,000+
Branches 142 137 141
ATMs 405 388 382
(1) All data according to the NBG as of 31 December 2010
February 2011
JSC Bank of Georgia Q4 2010 and Full Year 2010 results overview
February 2011 Page 4
Q4 and YTD 2010 P&L results highlights Millions unless otherwise noted Q4 2010 Q3 20101 Growth2 Q4 2009 Growth 3
Bank of Georgia (Consolidated, IFRS-Based) GEL US$ GEL US$ Q-O-Q GEL US$ Y-O-Y
(Unaudited) (Unaudited) (Unaudited)
Net Interest Income 57.1 32.2 56.5 31.3 1.1% 46.0 27.3 24.0%
Net Non-Interest Income 38.0 21.4 33.9 18.8 12.0% 31.3 18.6 21.3%
Total Operating Income (Revenue)4 95.1 53.6 90.4 50.0 5.2% 77.4 45.9 22.9%
Recurring Operating Costs 52.0 29.3 50.3 27.8 3.4% 46.6 27.6 11.5%
Normalized Net Operating Income5 43.1 24.3 40.1 22.2 7.4% 30.8 18.3 40.1%
Net Non-Recurring Income (Costs) (1.4) (0.8) (1.6) (0.9) -16.8% (106.8) (63.4) -98.7%
Profit Before Provisions 41.7 23.5 38.5 21.3 8.4% (76.1) (45.1) NMF
Net Provision Expense 10.8 6.1 14.2 7.9 -24.1% 30.3 18.0 -64.4%
Net Income/ (Loss) 25.7 14.5 20.8 11.5 23.4% (102.3) (60.7) NMF
EPS (basic) 0.82 0.46 0.66 0.37 23.3% (3.27) (1.94) NMF
EPS (diluted) 0.74 0.42 0.60 0.33 23.3% (2.94) (1.74) NMF
1 Q3 2010 Consolidated numbers have been Reviewed
2 Compared to Q3 2010, growth calculations based on GEL values. 2 Compared to the same period in 2009; growth calculations based on GEL values. 4 Revenue includes Net Interest Income and Net Non-Interest Income. 5 Normalized for Net Non-Recurring Costs.
Millions unless otherwise noted YTD 2010 YTD 2009 Growth 3
Bank of Georgia (Consolidated, IFRS-Based) GEL US$ GEL US$ Y-O-Y
(Unaudited)
Net Interest Income 210.5 118.7 196.8 116.8 6.9%
Net Non-Interest Income 133.4 75.2 122.1 72.4 9.2%
Total Operating Income (Revenue)4 343.9 194.0 319.0 189.2 7.8%
Recurring Operating Costs 196.3 110.7 182.5 108.3 7.5%
Normalized Net Operating Income5 147.6 83.3 136.4 80.9 8.2%
Net Non-Recurring Income (Costs) (4.8) (2.7) (109.3) (64.8) -95.6%
Profit Before Provisions 142.8 80.6 27.2 16.1 NMF
Net Provision Expense 44.9 25.4 133.1 78.9 -66.2%
Net Income/ (Loss) 82.9 46.7 (98.9) (58.7) NMF
EPS (basic) 2.65 1.49 (3.16) (1.88) NMF
EPS (diluted) 2.38 1.34 (2.85) (1.69) NMF
February 2011 Page 5
31 December 2010 Balance Sheet results highlights Millions, unless otherwise noted Q4 2010 Q3 2010 Q4 2009
Bank of Georgia (Consolidated, IFRS-Based) GEL US$ GEL US$ GEL US$
(Unaudited) (Unaudited)
Net Loans 2,368.7 1,336.2 2,061.4 1,141.1 1,678.2 995.5
Total Assets 4,098.9 2,312.1 3,615.6 2,001.5 2,913.4 1,728.2
Client Deposits 2,011.2 1,134.5 1,658.5 918.1 1,272.5 754.8
Borrowed Funds 1,012.3 571.0 881.5 488.0 913.3 541.8
Total Liabilities 3,406.3 1,921.4 2,936.0 1,625.4 2,315.0 1,373.2
Shareholders‟ Equity 692.7 390.7 679.6 376.2 598.4 355.0
Book Value Per Share, GEL & US$ 22.10 12.46 21.69 12.01 19.12 11.34
Tier I Capital Adequacy Ratio (BIS) 18.2% 19.9% 22.4%
Total Capital Adequacy Ratio (BIS) 29.0% 32.5% 34.7%
Tier I Capital Adequacy Ratio (NBG) 13.0% 15.2% 19.7%
Total Capital Adequacy Ratio (NBG) 14.5% 15.7% 16.8%
Change Change
Q-O-Q 1 Y-O-Y 2
Net Loans 14.9% 41.1%
Total Assets 13.4% 40.7%
Client Deposits 21.3% 58.1%
Borrowed Funds 14.8% 10.8%
Total Liabilities 16.0% 47.1%
Shareholders‟ Equity 1.9% 15.7%
Book Value Per Share, 1.9% 15.6%
1 Compared to Q3 2010 growth calculations based on GEL values. 2 Compared to the same period in 2009; growth calculations based on GEL values.
February 2011 Page 6
Composition of revenue in Q4 and full year 2010 Revenue by segments, Q4 2010 Composition of revenue, Q4 2010
Consolidated
Total Revenue: GEL 95.1 million in Q4 2010 and GEL 343.9 in 2010
Composition of revenue, Full Year 2010 Revenue by segments, Full Year 2010
BoG
Standalone
84.2%,
GEL80.1 mln
(+6.9% q-o-q)
Ukraine
2.3%,
GEL2.2 mln (-27.1% q-o-q)
Belarus
3.8%,
GEL3.6 mln (+14.9% q-o-q)
Aldagi BCI
5.7%,
GEL5.5mln (+32.9% q-o-q)
Other
3.9%,
GEL3.7 mln (-37.7% q-o-q)
BoG Standalone
82.4%,
GEL283.5 mln (+12.2% y-o-y)
Ukraine
3.7%,
GEL12.6 mln (-37.0% y-o-y)
Belarus
3.7%,
GEL12.7 mln (+50.9% y-o-y)
Aldagi BCI
5.8%,
GEL20.1 mln
(+5.8% y-o-y)
Other
4.4%,
GEL15.0 mln (-20.2% y-o-y)
Net interest
income 60.1%,
GEL 57.1 mln (+1.1% q-o-q)
Net other non-
interest income
11.7%, GEL 11.1 mln
(+14.8% q-o-q)
Net fee and
commision
income14.9%,
GEL 14.1 mln
(+3.0% q-o-q)
Net foreign
currency related
income 9.9%, GEL 9.4 mln
(+17.5% q-o-q)
Net income from
documentary
operations 3.4%,
GEL 3.3 mln
(+33.1% q-o-q)
Net interest
income 61.2%,
GEL 210.5 mln (6.9% y-o-y)
Net other non-
interest income
11.8%, GEL 40.7 mln
(+6.7% y-o-y)
Net fee and
commision
income 14.3%,
GEL 49.1 mln
(+3.5% y-o-y)
Net foreign
currency related
income 9.8%, GEL 33.7 mln
(+20.3% y-o-y)
Net income from
documentary
operations 2.9%, GEL 10.0 mln
(+16.3% y-o-y)
February 2011 Page 7
Analysis of revenue
Net fee & commission income & Income from
documentary operations
Net foreign currency related income
Revenue growth
Other non-interest income
Consolidated
49.8 55.8 58.9 56.4 52.4 49.5 48.9 46.0 45.3 51.7 56.5 57.1
31.3 30.3 27.1 30.2
29.3 31.1 30.4 31.3 30.6 30.9
33.9 38.0
0
20
40
60
80
100
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
Net Interest Income Net Non-Interest Income
82.5 81.7 86.6 85.9 86.1
81.1
95.1 90.4
77.4 75.9 80.6
79.3
10.2 10.2 12.9
10.9 11.1 11.6 12.0 12.6 10.3 10.9
13.7 14.1
1.4 1.9
1.7
1.4 2.2 1.8 2.3 2.3
2.2 2.2
2.5 3.3
0
2
4
6
8
10
12
14
16
18
20
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
Net Fee & Commission Income Net Income From Documentary Operations
6.2
10.1
13.2
10.4 9.4
14.9
8.8
7.1 6.5 5.7
7.3
8.8 8.0
9.4
0
2
4
6
8
10
12
14
16
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
Q4
2010
GEL mln
1.6 1.7 2.5 3.2 3.0 5.1 4.9
3.7 4.2 4.2 4.4 4.5 1.3 1.6 0.1 0.4 0.3
1.3 1.9
1.9 0.2 0.5
1.3
0.6 0.2
0.1
1.8 0.2
0.3 0.2
0.2
0.1 0.1
-0.4 -0.4 -1.1
-3.4
0.3
-0.5
0.6 2.0 0.2
0.5 0.2
3.3 4.7
1.4
1.0 3.6
3.7 3.0 4.4 4.4
4.6 4.3
5.1
-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
Q4
2010
GEL mln
Other Realized Net Investment Gains Asset Management Income Brokerage Income Net Insurance Income
6.5
10.8 10.7 9.5
10.7
7.1 3.0
3.0
7.8
11.1
9.7 9.0
February 2011 Page 8
Composition of recurring operating costs in Q4 and full year 2010 Recurring operating cost structure by segments,
Q4 2010 Recurring operating cost structure, Q4 2010
Consolidated
Total recurring operating costs: GEL 52.0 million in Q4 2010 (up 3.4% q-o-q), and GEL 196.3 million in 2010 (up 7.5% y-o-y)
Recurring operating cost structure, Full Year 2010
Recurring operating cost structure by segments,
Full Year 2010
Personnel costs
52.8%,
GEL 27.5 mln (+1.8% q-o-q) Selling, general &
administrative
costs 20.9%,
GEL 10.9 mln
(+11.9% q-o-q)
Depreciation &
amortization
13.1%, GEL 6.8 mln
(-2.0% q-o-q) Procurment &
operations support
costs 6.5%, GEL 3.4 mln
(-11.8% q-o-q)
Other operating
costs 6.6%
GEL 3.4 mln (22.9% q-o-q)
Personnel costs
52.9%,
GEL 103.8 mln (+15.3% y-o-y) Selling, general &
administrative costs
20.0%,
GEL 39.3 mln
(-7.9% y-o-y)
Depreciation &
amortization
13.7%, GEL 26.9 mln
(+7.9% y-o-y)
Procurment &
operations support
costs 7.1%,
GEL 14.0 mln
(+3.1% y-o-y)
Other operating
costs 6.2%
GEL 12.3 mln (+8.5% y-o-y)
BoG standalone,
67.5%
GEL 35.1 mln (+0.5% q-o-q) BG Bank, 7.0%
GEL 3.6 mln
(+11.2% q-o-q)
BNB, 6.0%
GEL 3.1mln
(+25.4% q-o-q)
Aldagi BCI, 8.1%
GEL 4.2 mln
(+78.7% q-o-q)
Other, 11.4%
GEL 5.9 mln
(-26.1% q-o-q)
BoG
standalone,
67.9%
GEL 133.2 mln
(+9.0% y-o-y)
BG Bank, 8.0%
GEL 15.7 mln
(-14.5% y-o-y)
BNB, 4.8%
GEL 9.4 mln
(+47.0% y-o-y)
Aldagi BCI,
7.4%
GEL 14.6 mln (+3.2% y-o-y)
Other, 11.9%
GEL 23.3 mln
(+9.3% y-o-y)
February 2011 Page 9
Analysis of recurring operating costs
Cost/Income ratio
Personnel costs Employees
Normalized net operating income, Profit
before provisions
Consolidated
25.7 27.3
28.4
23.1 22.0 23.2 22.3 22.5
23.4
25.9 27.0 27.5
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
Q4
2010
GEL mln
36.6 37.3 36.3
38.7
37.1 34.3 34.3 30.8
29.6 34.7
40.1 43.1 45.1 40.5
33.7
8.7
36.8 34.0 32.4
(76.1)
26.4
36.2 38.5 41.7
-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
Q4
2010
GEL mln
Normalised Net Opearting Income
Profit/(Loss) Before Provisions
4,926
5,911
6,196
4,949
4,964
4,914
4,798
4,781
5,048
5,118
5,313
5,610
3,056
3,619
3,853
2,741
2,692
2,665
2,669
2,674
2,825
2,963
3,060
3,110
824
836
842
786
757
707
617
621
593
468
454
449
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
Q4 2010
BG Bank BoG Standalone Group Consolidated
44.4% 52.9%
60.8%
90.0%
54.9% 57.8% 59.1%
198.3%
65.3% 56.1% 57.4% 56.1%
45.1% 41.0% 50.0% 60.7% 44.0% 50.8% 50.5% 58.0% 53.9% 49.6% 49.0% 44.0%
109.2% 116.9%
76.0%
35.7%
100.1% 91.5%
74.7%
230.0%
140.5%
106.2% 105.1% 117.4%
55.6% 64.5%
62.8%
80.4% 61.5% 84.6% 66.6%
90.7%
60.6% 67.8% 69.0% 85.6%
0%
40%
80%
120%
160%
200%
240%
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Cost/Income Ratio, ConsolidatedCost Income Ratio, Bank of Georgia StandaloneCost/Income Ratio, BG BankCost/Income Ratio, BNB
February 2011 Page 10
Net interest margin
Consolidated
8.1%
8.9% 9.1% 9.8% 10.1%
9.2%
9.0% 9.1%
8.5% 8.0%
8.3% 8.2% 7.8%
6.5%
7.1% 7.7% 8.9%
6.2% 6.1%
10.4% 10.4%
12.6%
8.3% 10.3%
6.4%
4.1%
7.5%
8.6% 9.0%
9.8% 9.9%
9.1%
8.8% 8.9% 8.6%
7.8%
8.1% 8.1% 7.9%
8.4%
10.5%
11.7%
13.0%
9.5%
10.9%
10.9%
16.6%
12.7%
14.9%
14.1%
12.1%
10.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
Net Interest Margin, Group Consolidated Net Interest Margin, BG Bank Net Interest Margin, BoG Standalone Net Interest Margin, BNB
February 2011 Page 11
Composition of assets
Consolidated
GEL million 30-September-09 31-December-09 30-September-10 31-December-10
Available for sale Trading Securities 30.0 21.7 12.9 15.8
Other Fixed Income Instruments 67.2 - - -
Insurance Related Assets 45.6 26.7 33.6 28.7
Investments In Other Business Entities & Investment Property 75.5 89.2 119.3 120.7
Intangible Assets Owned Net 12.2 19.7 22.7 22.2
Goodwill 135.7 65.8 69.2 69.2
Tax Assets, Current And Deferred 12.9 23.5 26.0 25.4
Prepayments And Other Assets 56.6 36.6 64.7 67.5
Total 435.7 283.1 348.4 349.4 Note: Net loans include Net finance lease receivables
349.4 348.4 283.1 435.7
292.1 291.9 280.4 299.9
2,368.7 2,061.4
1,678.2 1,659.3
600.1
480.2
265.5
383.0
208.3
136.1
157.0 165.6
280.3
297.7
249.2 36.6
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q4 2010Q3 2010Q4 2009Q3 2009
Government Treasuries
& Equivalents
Cash & Equivalents
Cash with other Banks
Net Loans
Property & Equipment
Other Assets
GEL
3.8%of total assets
57.0% of total assets
9.6% of total assets
8.1% of total assets
13.3% of total assets
5.4% of total assets
9.1% of total assets
57.6% of total assets
9.6% of total assets
9.7% of total assets
5.6% of total assets
12.9% of total assets
55.7% of total assets
14.6% of total assets
10.1% of total assets
2,913
3,616
2,980
4,099
8.5% of
total assets
5.1% of
total assets
14.6% of
total assets
57.8% of
total assets
7.1% of
total assets
1.2% of total assets 8.6% of total assets
8.2% of total assets
6.8% of
total assets
February 2011 Page 12
Gross loan book breakdown
Consolidated
Georgia: RB & WM, CB
Ukraine: BG Bank
Belarus: BNB
Numbers do not include
CC/Eliminations
Gross loan book Q4 2010: GEL 2,546 million
37.5%
CB, 821 CB, 881 CB, 796 CB, 968 CB, 866 CB, 806 CB, 770 CB, 811 CB, 869 CB, 981 CB, 999
CB, 1,221
RB & WM, 790
RB & WM, 965
RB & WM, 976
RB & WM, 1,055
RB & WM, 983
RB & WM, 910
RB & WM, 887
RB & WM, 854
RB & WM, 887
RB & WM, 966
RB & WM, 1,022
RB & WM, 1,063 BG Bank, 255
BG Bank, 265 BG Bank, 257
BG Bank, 194
BG Bank, 199
BG Bank, 190 BG Bank, 186 BG Bank, 177
BG Bank, 184
BG Bank, 208 BG Bank, 192
BG Bank, 200
BNB, 35
BNB, 36
BNB, 30
BNB, 27
BNB, 26 BNB, 24
BNB, 32
BNB, 42 BNB, 52
BNB, 77
0
500
1,000
1,500
2,000
2,500
3,000
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
GEL mln
47% of
gross
loans
39% of
gross
loans
46% of
gross
loans
42% of
gross
loans
43% of
gross
loans
44% of
gross
loans
48% of
gross
loans
42% of
gross
loans
48% of
gross
loans
44% of
gross
loans
48% of
gross
loans
42% 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
1,855.7 1,957.3
1,851.9 1,825.7
1,897.3
2,039.5
2,189.4
2,059.7 2,106.7
2,546.3
2,247.3 2,179.7
February 2011 Page 13
Liabilities breakdown
Consolidated
30-September-09 31-December-09 30-September-10 31-December-10
Issued Fixed Income Securities 0.7 0.7 3.6 21.3
Insurance Related Liabilities 52.2 34.2 44.0 37.1
Tax Liabilities, Current And Deferred 22.8 25.2 35.4 40.8
Accruals And Other Liabilities 41.4 46.6 54.0 68.4
Other liabilities 117.1 106.8 137.0 167.6
Total liabilities 31 December 2010: GEL 3,406 million
215.1 259.0 22.5 43.4
2,011.2 1,658.5
1,272.5 1,182.5
1,012.3
881.4
913.3 918.6
167.6
137.0
106.8 117.1
692.7
679.6
598.4 718.5
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q4 2010Q3 2010Q4 2009Q3 2009
GEL mln
Total 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
24% of total liabilities + equity
46% of total liabilities + equity
7% 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
32% of total liabilities
4,099
3,616
2,913 2,980
17% of total
liabilities +
equity
5% of total
liabilities +
equity
49% of total
liabilities +
equity
25% of total
liabilities +
equity
4% of total
liabilities +
equity
February 2011 Page 14
Client deposits breakdown
Consolidated
Client deposits Q4 2010: GEL 2,011 million Note: 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 , 652 CB , 681 CB , 576 CB , 626 CB , 605 CB , 518 CB , 597 CB , 588 CB , 656 CB , 683 CB , 799 CB , 1,006
RB & WM, 458 RB & WM, 534
RB & WM, 396
RB & WM, 419
RB & WM, 374
RB & WM, 391
RB & WM, 461
RB & WM, 539
RB & WM, 595 RB & WM, 660
RB & WM, 713
RB & WM, 803
BG Bank, 216
BG Bank, 180
BG Bank, 171
BG Bank, 127
BG Bank, 121
BG Bank, 115
BG Bank, 117
BG Bank, 139
BG Bank, 122
BG Bank, 142
BG Bank, 155
BG Bank, 197
BNB , 27 BNB , 31
BNB , 25
BNB , 16
BNB , 18
BNB , 20
BNB , 12
BNB , 16
BNB , 18
BNB , 30
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 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
1,202
1,193
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
2,011
40% of client
deposits
50% of client
deposits
February 2011
Capital adequacy & wholesale funding
February 2011 Page 16
Capital adequacy
Risk-weighted assets BIS vs. NBG
NBG capital adequacy ratios, BoG standalone BIS capital adequacy ratios, BoG consolidated
Net loans/deposits & loans/(deposits+equity),
BoG consolidated
18.3%
15.8%
18.2% 16.6% 16.4%
17.8%
20.4% 19.7%
17.7%
15.8% 15.2%
13.0%
16.3% 15.1% 15.5% 13.5% 17.4% 18.4% 21.2%
16.8% 15.9% 14.5% 15.7% 14.5%
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
Q4
2010
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
132.6% 135.7%
145.7% 163.6%
161.2% 164.1%
135.4% 129.6% 120.7% 116.2%
107.5% 106.4%
85.8% 89.5% 93.5% 104.5%
100.7%
98.5%
85.3% 88.6%
85.3%
84.2%
79.4%
81.1%
0%
40%
80%
120%
160%
200%
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Net Loans/Total Deposits Net Loans/(Total Deposits+Equity)
25.2% 25.0% 24.7%
21.6%
22.6%
23.5%
25.0% 22.4%
21.9%
20.3% 20.2% 18.2%
25.8% 25.8%
25.3%
26.3%
34.3% 35.6% 36.4%
34.7% 34.6%
32.7% 31.6%
29.0%
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
Q4
2010
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
2,593 2,734
2,516
2,951 2,730
2,609 2,592 2,455
2,628 2,880
3,048
3,461 3,100
3,605
3,132
3,458 3,302
3,041
2,720 2,717 2,870
3,128 3,272
3,801
-
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
Q4
2010
GEL mln
BIS NBG
February 2011 Page 17
International borrowings
International borrowings repayment schedule
International borrowings - fixed vs. floating rates,
31 December 2010
Selected international loans
International borrowings by currencies,
31 December 2010
Note: Depicts final maturity dates
Excluding credit lines as part of documentary business
Key Lenders Principle Amount Outstanding as of 31
December 2010 Maturity mil US$
Eurobonds US$ 147.7 million 2012 147.7
Senior Term Loan from FMO US$ 8.0 million 2014 8.0
Senior Term Loan from WorldBusiness Capital US$ 5.6 million 2016 5.6
Subordinated Loan from HBK Investments (Call in 2012) US$ 15.0 million 2017 15.0
Subordinated Loan from Merrill Lynch (Call in 2012) US$ 35.0 million 2017 35.0
Senior Term Loan from WorldBusiness Capital (GLC) US$ 4.1 million 2017 4.1
Subordinated loan from FMO and DEG (Call in 2013) US$ 30.0 million 2018 30.0
Senior Loan from OPIC US$ 25.8 million 2018 25.8
Subordinated Loan from OPIC US$ 10.0 million 2018 10.0
Senior Term Loan from IFC US$ 50.0 million 2013 50.0
Senior Term Loan from EBRD US$ 50.0 million 2014 50.0
Subordinated Loan from IFC US$ 24.0 million 2019 24.0
Subordinated Loan from EBRD US$ 24.0 million 2019 24.0
Convertible Loan from IFC US$ 26.0 million 2019 26.0
Convertible Loan from EBRD US$ 26.0 million 2019 26.0
Other, USD denominated US$ 4.5 million NMF 0.5
Other, EUR denominated EUR 0.3 million NMF 0.3
Senior Term Loan from ADB US$ 25 million 2018 25.0
Senior Term Loan from EFSE US$ 34 million 2018 34.0
Senior Term Loan from EBRD US$ 20 million 2015 20.0
Total US$ 561.0 million 561.0
Fixed Interest
Rate, 71%
Floating Interest
Rate, 29%
US$, 99.97%
Euro, 0.03%
39,140
245,062
80,210 32,887 24,511 11,421
10,922 16,911
100,000 1.8%
11.0%
3.6%
1.5% 1.1%
0.5% 0.5%
0.8%
4.5%
0%
2%
4%
6%
8%
10%
12%
0
50,000
100,000
150,000
200,000
250,000
300,000
2011 2012 2013 2014 2015 2016 2017 2018 2019
US$ '000s
Principle Amounts Outstanding as of 31 December 2010…As % of 31 December 2010 Assets (RHS)
February 2011
Business overview
February 2011 Page 19
Group structure
Bank of Georgia Group
Commercial Banking
Georgia
Uk
rain
e
Bel
aru
s
Corporate Banking
Retail Banking
Wealth Management
BG Bank
BNB BG
Capital Aldagi
BCI
JSC “Bank of Georgia”
Geo
rgia
U
kra
ine
Bel
aru
s
Geo
rgia
Securities Insurance
Isra
el
UK
February 2011
BoG standalone results overview
February 2011
45.3 50.1 52.2 51.1 50.4 45.5 44.5 44.8 42.6 48.3 52.5 54.8
21.3 21.0 19.2 18.5 16.3
16.8 17.0 17.5 16.8
20.8 22.5
25.3
0
10
20
30
40
50
60
70
80
90
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
Net Interest Income Net Non-Interest Income
66.6 71.1
71.4 69.9 66.6
62.3 61.5 62.3 59.4
69.1
74.9 80.1
Page 21
BoG standalone performance
Net income
Recurring operating cost structure, Q4 2010 Revenue performance
Cost/Income Ratio
Standalone
+6.9%
Personnel costs,
53.5%
GEL 18.8 mln (-3.8% q-o-q)
Selling, general &
administrative
expenses, 19.5%
GEL 6.8 mln
(+18.2% q-o-q)
Procurement &
operations
support expenses,
7.4%
GEL 2.6 mln
(-16.0% q-o-q)
Depreciation &
amortization,
15.9%
GEL 5.6 mln
(-1.3% q-o-q)
Other operating
expenses, 3.6%
GEL 1.3 mln (+56.4% q-o-q)
25.4 28.4
(58.0)
28.8
11.3
0.9
10.8 7.8
12.8
24.4 23.7 30.0
-70
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 21010 Q3 2010
GEL mln
45.1%
41.0%
50.0%
60.7%
44.0%
50.8% 50.5% 58.0%
53.9% 49.6% 49.0%
44.0%
44.5%
44.7%
47.3%
43.1% 43.2% 47.7%
48.9% 54.0% 51.8% 47.0%
46.5% 43.8%
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
2010
Q2
2010
Q3
2010
Q4
2010
Cost/income, Bank of Georgia standaloneNormalized Cost/Income, Bank of Gerorgia standalone
February 2011 Page 22
Composition of assets Standalone
495 491 404 437
228 231 226 240
2,203 1,926
1,606 1,528
589
463
223 386
152
112
134 126
280
298
249 37
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q4 2010Q3 2010Q4 2009Q3 2009
GEL mln
Government
Treasuries &
Equivalents
Cash & Equivalents
Cash with other Banks
Net Loans
Property & Equipment
Other Assets
3% of total assets
13% of total assets
55% of total assets
7% of total assets
14% of total assets 61% of total assets
7% of total assets
16% of total assets
3,948
2,753
5% of total assets
14% of total assets
56% of total assets
9% of total assets
16% of total assets
3,522
5% of total assets
8% of total assets
57% of total assets
8% of total assets
14% of total assets
2,842
13% of total
assets
56% of total
assets
15% of total
assets
6% of total
assets
4% of total
assets
1% of total assets
9% of total assets
8% of total assets
7% of total
assets
GEL Million Q3 2009 Q4 2009 Q3 2010 Q4 2010
Other Fixed Income Instruments 66 - - -
Investments In Other Business Entities & Investment Property 304 334 410 417
Intangible Assets Owned, Net 7 14 18 17
Goodwill 23 23 23 23
Tax Assets, Current And Deferred - 7 7 7
Prepayments And Other Assets 37 26 34 31
Other assets 437 404 491 495
February 2011 Page 23
Loan book composition Standalone
* Other loans include car, POS and legacy retail loans
1,259.8
39.8
1,023.3
0
500
1,000
1,500
2,000
Q4 2010
GEL mln
CB
RB
WM
2,322.9
Trade, 24%
Energy, 25%
FMCG, 11%
Construction &
Real Estate, 17%
Industry & State,
5%
Pharmaceuticals
and Healthcare,
1%
Other, 16%
Mortgage loans,
37%
Consumer and
other, 28%
Credit cards and
overdrafts, 12%
Micro loans, 19%
SME, 3%
February 2011 Page 24
Analysis of the loan book
Loans by maturity, 31 December 2010
Loan concentration Loans by currency, 31 December 2010
Loan book collateralization
Standalone
36.9%
14.9% 25.0%
63.1%
85.1% 75.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RB & WM CB Total
GEL Foreign Currency
3% 4% 8%
17%
68%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Less than 1
month
1 to 3 months 3 to 6 months 6 to 12
months
Over 1 year
12.1%
16.5%
19.1%
22.5%
0%
5%
10%
15%
20%
25%
Q4 2009 Q4 2010
Top 10 Borrowers Top 20 Borrowers
87.0% 88.2%
0%
20%
40%
60%
80%
100%
Q4 2009 Q4 2010
February 2011 Page 25
Provisioning
Reserve for loan losses to gross loans
NPL coverage ratio NPLs & write-offs, 31 December 2010
Impairment seasoning
Standalone
NPLs include 90
days overdue
loans, including
principal amount
and interest
payments
166.8% 117.6%
524.0%
152.6%
110.4% 96.7% 106.5%
115.2% 100.7%
106.5%
139.6%
148.1%
208.4%
138.3%
554.4%
169.1% 116.1%
99.3% 118.8%
124.1%
106.6%
113.5% 141.4%
151.0%
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
Q2
2010
Q3
2010
Q4
2010
BoG Standalone BoG Consolidated
4.3%
2.5% 3.5%
0.9%
6.5% 3.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
CB RB & WM Total
Write-offs as % of Gross Loans NPLs as % of Gross Loans
4.94% 4.75% 3.83%
1.30% 2.12% 1.96%
1.41%
0.35% 0.12% 0.07%
1.45% 1.28%
0.98%
0.06%
0.79%
1.36%
3.19% 2.98%
2.98%
0.41%
548.3 604.0
327.6
300.9
179.8 200.9
239.1
439.3
356.7
501.1 485.9
908.6
0
200
400
600
800
1000
0%
1%
2%
3%
4%
5%
6%
7%
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
NPLs as % of Loans Issued (LHS) Write-Offs as % of Loans Issued (LHS)
Loans Issued (RHS)
2.1% 2.1%
6.3% 5.0%
6.3%
7.8%
9.1% 9.4% 9.2% 9.0%
8.3%
7.0%
1.9%
2.0%
6.8%
4.9%
5.5%
6.7% 7.5% 7.4% 7.5%
6.9%
6.5%
5.2%
1.7% 1.5%
19.8%
2.0%
6.1%
8.4% 6.4% 6.7%
1.6% 2.4% 2.6% 1.8%
1.7% 2.0%
22.8%
-1.0%
5.0% 6.7%
4.2% 4.3% 2.8%
1.4% 2.0% 1.8%
-5%
0%
5%
10%
15%
20%
25%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010Reserve 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
February 2011 Page 26
Provisioning cont’d – BoG standalone
RB & WM loan loss reserve breakdown
by loan type, 31 December 2010
NPLs Loan loss reserve
CB loan loss reserve breakdown by loan type,
31 December 2010
Standalone
14.5 22.2 29.8 51.7
62.3 75.5 77.1 74.7 76.7 83.2
72.4 51.2 16.3
10.8
83.6 46.4 40.3
39.4
46.3 53.6 61.0 54.4
62.4
69.1
1.9% 2.0%
6.8%
4.9%
5.5%
6.7%
7.5% 7.4% 7.5% 6.9%
6.5%
5.2%
0%
1%
2%
3%
4%
5%
6%
7%
8%
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
Q4
2010
GEL mln
RB & WM CB Loan loss reserve as % of gross loans
8.1 9.7 12.0 33.3
50.2 65.7
54.1 35.5
67.0 69.8 59.8
27.0 10.9 22.4 11.3
24.4
42.8
53.1 61.8
75.8
69.8 59.4
36.8
54.2
1.2% 1.7%
1.3%
3.2%
5.0%
6.9% 7.0%
6.4%
7.4%
6.5%
4.7% 3.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
0
40
80
120
160
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
RB &WM CB % of Gross loans
19.0
129.2 136.8
111.3 115.9 118.7
93.0
57.7
23.3
32.1
96.5
81.2
Trade, 24.8%
GEL (17.1 mln)
Energy, 17.8%
GEL (12.3 mln)
Fast Moving
Consumer Goods,
8.5%
GEL (5.9 mln)
Construction &
Real Estate
33.6%
GEL (23.3 mln)
Industry & State
1.0%
GEL (0.7 mln)
Pharmaceuticals &
Healthcare, 0.2%
GEL (0.2 mln) Other, 14.1%
GEL (9.7 mln)
SME, 2.6%
GEL (1.3 mln)
Mortgage loans,
28.3%
GEL (14.5 mln)
Consumer and other,
22.6%
GEL (11.6 mln)
Credit cards and
overdrafts , 37.6%
GEL (19.3 mln)
Micro loans, 8.9%
GEL (4.6 mln)
February 2011 Page 27
BoG standalone liabilities Leverage 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
34.2% 33.8%
27.2% 27.3%
37.7% 38.0%
43.5%
35.6% 38.8%
34.8% 33.8%
34.7%
0%
10%
20%
30%
40%
50%
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
3.9
2.9 3.1 3.1
3.3 3.1
2.8 2.8 2.8 3.0
3.2 3.3
3.7
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
Q4
2010
837
100
1,004
1,808
199
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
31-Dec-10
GEL mln
Deposits And Loans From
Banks
Client Deposits
Borrowed Funds
Other Liabilities
Total Shareholders Equity
21% of Total Liabilities + equity
5% of Total Liabilities + equity
46% of Total Liabilities + equity
25% of Total Liabilities + equity
3,948
3% of Total Liabilities + equity
February 2011 Page 28
Analysis of deposits
CB, RB & WM deposits, BoG standalone
Client deposits by currency, 31 December 2010
Client deposit breakdown, 31 December2010
Deposits by maturity, 31 December 2010
Standalone
Corporate
current
accounts,
36.8%
Individual time
& demand
deposits,
36.6%
Corporate time
& demand
deposits,
18.8%
Individual
current
accounts, 7.8%
22.5%
45.0%
2.9%
32.2%
77.5% 55.0% 97.1% 67.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RB CB WM Total
GEL Foreign Currency
55%
1%
6% 7%
19%
12%
0%
10%
20%
30%
40%
50%
60%
On Demand Less than 1
month
1 to 3 months 3 to 6
months
6 to 12
months
Over 1 year
363.6 403.4 326.0 320.4 280.4 283.1 326.3 376.1 414.7
448.6 494.2 540.9
76.5 81.6
70.4 98.6 93.3 107.8 134.4 163.1
180.7 211.2
218.7 261.6
652.7 681.5 576.2 626.2 605.2 518.4 596.7 587.6 656.1
682.5 799.4
1,006.0
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Q1 2008Q2 2008Q3 2008Q4 2008Q1 2009Q2 2009Q3 2009Q4 2009Q1 2010Q2 2010Q3 2010Q4 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
-2%
+10%
+12%
+11% +17%
+8%
+4% +17
+4%
+10%
+26%
+9%
+20%
February 2011 Page 29
Deposit yields Standalone
9.1%
8.2% 8.1% 8.0%
10.4%
8.6%
9.1%
9.6%
10.5% 10.3%
9.9% 10.3%
9.5%
3.8% 4.0%
5.4% 5.6%
5.0%
7.7%
8.4%
8.0% 8.3%
7.2% 7.1%
5.8%
6.2% 5.8% 5.7%
6.6% 6.7% 7.0%
7.5% 8.0%
8.4% 8.5%
7.7% 7.3%
6.6% 6.7%
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 Q4 2010
RB Deposit Yields, BoG Standalone CB Deposit Yields, BoG Standalone Blended Deposit Yields, BoG Standalone
February 2011 Page 30
Risk management Currency risk management, 31 December 2010 Liquidity risk management, 31 December 2010
Standalone
16.0%
3.8%
6.2%
1.7%
4.1% 3.5%
0.8%
5.8% 6.0%
0.6% 1.5%
3.9%
13.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Open Foreign Currency Position (as % of Regulatory Capital)
907.2
320.3
629.0
997.8
267.3
19.1
1,358.4
207.2
479.0
643.0
413.0
-
(451.3) (338.1)
(188.1)
166.6
20.9 40.0
-600
-400
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
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
February 2011
Trade, 24%
Energy, 25%
FMCG, 11%
Construction &
Real Estate, 17%
Industry & State,
5%
Pharmaceuticals
and Healthcare,
1%
Other, 16%
826 875
794
928 870
806 765
880 951
1,016 1,039
1,260
0
200
400
600
800
1,000
1,200
1,400
Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10
GEL mln
Page 31
Corporate banking
Corporate client deposits, 31 December 2010
Corporate loan portfolio, 31 December 2010
Overview
Corporate gross loan portfolio growth
Standalone
Integrated client
coverage in the
following key
sectors
Construction &
Real Estate
Energy
Fast Moving
Consumer
Goods
Financial
Institutions
Foreign
Organizations &
Diplomatic
Missions
Pharmaceuticals
& Healthcare
Retail &
Wholesale
Trade
State & Industry
Telecommunica
tions, Media &
Technology
Transport &
Logistics
SME
No.1 corporate bank in Georgia
Circa 36% market share based on customer deposits(1)
Circa 29.6% market share based on corporate loans(2)
Integrated client coverage in key sectors
93,507 clients of which 9,171served by dedicated relationship
bankers
Circa 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 1,657 in Q3 2010 to 1,737 in Q4 2010
More than 8,300 corporate accounts were opened at the bank in Q4
2010, bringing the total number of current accounts to 179,411
Notes:
(1) source: National Bank of Georgia, does not include interbank deposits
(2) Management estimates (based on the NBG data)
Total corporate deposits: GEL 1,006 mln
43.1%
Current
Accounts
&
Demand
Deposits,
77%
Time
Deposits,
23%
February 2011
656
755
922 931
1,000 932
861 831 807
847
930 981
1,023
-
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
Q4
2010
GEL mln
Page 32
Retail Banking – No. 1 retail bank in Georgia
Leadership in consumer lending
RB loan portfolio, 31 December 2010 Retail loans originated
Retail gross loan portfolio growth
Standalone
Total retail loans: GEL 1,023.3 mln Note: does not include Ukraine & Belarus
Q4 2009 Q3 2010 Q4 2010
• Number of Retail Clients 732,241 729,578 739,522
Number of consumer loans outstanding 49,608 58,121 67,243
• Volume of consumer loans outstanding (GEL mln) 114 147 163
• Credit Cards Outstanding, of which 77,330 94,480 106,809
American Express cards 2,070 32,726 58,711
• Number of Solo clients outstanding, (premier banking) 87 1,608 2,303
122.1
177.5 183.3
235.6
266.9
317.6
140.2
74.9
55.9
68.8
97.5 104.9
128.2
186.9
211.3 226.0
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
Q4
2010
GEL mln
26.9%
Mortgage loans,
37%
Consumer and
other, 28%
Credit cards and
overdrafts, 12%
Micro loans,
19%
SME, 3%
February 2011 Page 33
Retail loan book analysis
Micro loans (RB & WM)
Consumer loans (RB & WM)
Mortgage loans (RB & WM)
Other RB & WM loans
Standalone
23.4
370.5
58.7
417.3
35.4
396.2
-
50
100
150
200
250
300
350
400
450
Volume of Mortgage
Loans Originated
Volume of Mortgage
Loans Outstanding
GEL mln
Q4 2009 Q3 2010 Q4 2010
-5%
+151 -40%
+13%
43.7
126.9
79.9
159.7
88.1
179.0
-
20
40
60
80
100
120
140
160
180
200
Volume of Consumer
Loans Originated
Volume of Consumer
Loans Outstanding
GEL mln
Q4 2009 Q3 2010 Q4 2010
+10+83
+26
+12
40.0
98.9 78.3
182.7
102.9
238.4
-
50
100
150
200
250
300
Volume of Micro
Loans Originated
Volume of Micro
Loans Outstanding
GEL mln
Q4 2009 Q3 2010 Q4 2010
+96%
+85%
+32%
+31%
3.3
258.0
8.1
262.1
15.4
249.5
-
50
100
150
200
250
300
Volume of Other RB &
WM Loans
Originated*
Volume of Other RB &
WM Loans
Outstanding
GEL mln
Q3 2009 Q2 2010 Q3 2010
+142%
+2%
+91%
-5%
February 2011 Page 34
Deposit analysis
Number of RB & WM time deposits accepted
Volume of deposits outstanding (CB)
Volume of deposits outstanding (RB & WM)
Volume of RB & WM time deposits accepted
Standalone
169.9 185.3 120.9 98.1 95.2 93.6 102.5 118.8 128.5 139.4 139.4 140.8
39.2 36.9 18.6 18.0 16.3 20.7 34.8 43.1 50.1 62.8 71.0 73.8
231.1 262.9
257.0 302.9 262.2 276.6 323.4
377.4 416.8
457.7 502.6
588.0
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
Q4
2010
GEL mln
Volume of RB & WM time deposits outstanding
Volume of RB & WM demand deposits outstanding
Volume of RB & WM current accounts outstanding
121.7 125.9 119.1 100.2 94.8 99.0 112.8 113.7 116.7 128.4
159.8 163.8
8.0 16.9 16.2 25.8 20.0
34.9 40.6 34.6 40.7 33.0
36.0
120.0
0
50
100
150
200
250
300
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
Volume of RB time deposits issued Volume of WM time deposits issued
410.4 363.3 349.9 350.2 382.3 322.9 403.2 370.0 435.5 475.2 542.3
665.1
53.6 39.2 26.8 90.2 69.3
79.2 74.2 78.1
75.1 71.7 104.6
113.2
188.7 279.0 199.5
185.8 153.6 116.3
119.3 139.4 145.6 135.6
152.5
227.6
0
200
400
600
800
1000
1200
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
Volume of CB time deposits outstanding
Volume of CB demand deposits outstanding
Volume of CB current accounts outstanding
10,912
17,136 17,855
19,403
12,051
15,312 18,322
18,739 19,092 18,629
21,056
24,546
-
5,000
10,000
15,000
20,000
25,000
30,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
February 2011 Page 35
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
Current accounts & deposits penetration rate*
3.0 3.2
3.3 3.5
3.1 2.9 2.8 2.8 2.7 2.8 2.8 2.8 2.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Dec-
07
Mar-
08
Jun-
08
Sep-
08
Dec-
08
Mar-
09
Jun-
09
Sep-
09
Dec-
09
Mar-
10
Jun-
10
Sep-
10
Dec-
10
Number of clients (LHS) Number of products (LHS)
0.9% 1.0% 1.1% 1.1% 1.2% 1.1% 1.1% 1.1% 1.1% 1.2% 1.2% 1.1%
31.7% 30.9%
29.1%
10.1% 9.0% 8.2% 7.6% 6.8% 6.9% 7.3% 8.0% 9.1%
2.0% 2.2% 2.1% 2.2% 1.7% 1.3%
1.0% 0.8% 0.2% 0.9% 1.0% 1.1%
34.1% 35.8%
39.3%
58.2% 54.3%
51.4% 49.1%
45.2% 45.4% 47.3% 46.2% 43.2%
0%
10%
20%
30%
40%
50%
60%
70%
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Mortgage Loan Penetration Rate Consumer Loan Penetration Rate
Micro Loan Penetration rate Other Loans Penetration Rate
95.6% 98.7% 104.0%
75.4%
73.2% 67.8%
66.3%
62.8%
66.3%
65.9%
64.5% 67.1%
23.6% 26.9%
31.4%
24.8%
20.6% 17.7%
15.0%
10.6% 11.4% 11.4% 12.9%
14.4%
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-10 Dec-10
Debit Cards Penetration RateCredit Cards Penetration Rate
5.6% 6.7% 7.3% 8.8%
7.1% 7.6%
9.2% 9.7% 10.3% 10.8% 11.3% 12.5%
105.0%
111.2%
114.3%
110.9%
110.9%
111.4%
112.9%
122.1%
121.5%
119.2%
121.0%
119.2%
20.0% 19.8% 19.5% 18.8%
16.4% 15.7% 14.7% 14.3% 14.2% 14.3% 14.2%
13.9%
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 Dec-10
Demand & Time deposits Penetrartion rateUniversal Current Accounts Penetration RateStandard Current Accounts Penetration Rate
February 2011 Page 36
Card processing
Cars transaction authorizations by Georgian Card
Number of cards serviced by Georgian Card Client banks
Georgian Card’s revenue & assets
Standalone
• 56% ownership of
Georgian Card
286 337 437 460
649 721 776 774 658 636 582 539.0 541 525 496 520 589 84
119
138 247
227 256
278 304
256 262 227
230 237 227 186 175
132
370 456
575
706
876 914
897 809
769 777 753 681 695 720
0
200
400
600
800
1,000
1,200
1,400
Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10
'000s
Bank of Georgia Other Banks
1,078
1,054 978
2.5 2.6
3.1 3.3
3.8 4.0 4.0 4.0
4.2
4.7 4.7
5.5 5.5 5.5 5.4 5.6
5.3
1.4
0.5 0.4
1.7
1.0 1.1
2.2
1.1
1.3 1.2
1.1
1.4 1.5 1.2
1.4
1.3
1.4
0
1
2
3
0
1
2
3
4
5
6
Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10
GEL mln
Total Assets (LHS) Revenue (RHS)
2.9
4.2
5.0
6.6
7.2
8.5 8.6 9.0
8.4
7.7 7.2
7.8 7.4
8.0 8.0
9.3
0
1
2
3
4
5
6
7
8
9
10
Q1 07Q2 07Q3 07Q4 07Q1 08Q2 08Q3 08Q4 08Q1 09Q2 09Q3 09Q4 09Q1 10Q2 10Q3 10Q4 10
mln
February 2011 Page 37
Analysis of mortgage portfolio
Typical mortgage terms
Volume of mortgage loans outstanding, (RB & WM) Number of mortgage loans issued & outstanding
Volume of mortgage loans issued, (RB & WM)
Standalone
Rate: 13% - 15%
Tenor: Normally 6-120 months
Currency: US$
LTV: Normally 75% - 90%
69.5
81.3
96.1
32.5
18.5
10.1 11.5
23.1 23.4 27.0
46.7
58.7
35.4
0
20
40
60
80
100
120
Q4
2007
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
1,129 1,426 1,915
850 691
231 259 423 437 492 817 766 694
4,230
5,340
6,881 7,476
7,967 7,994 7,916 7,809 7,900 8,023 8,223 8,479 8,434
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q4
2007
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Number of mortgage loans issuedNumber of mortgage loans outstanding
245.5
312.0 325.9
389.3 386.5 373.7 372.2 370.5 385.1
406.1 417.3 396.2
0
50
100
150
200
250
300
350
400
450
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
February 2011 Page 38
Wealth Management (WM) performance review
WM loans, 31 December 2010
WM products penetration WM clients and client assets
WM deposits
Standalone
Notes: WM 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
Mortgage
Loans,
53.2% Consumer
Loans,
41.3%
Credit
Cards &
Overdrafts,
3.0%
Car Loans,
2.5%
49.5 31.5 35.7 35.1 38.4 47.9 52.1 57.2 62.9 56.7 48.3
32.1 39.0
62.8 58.2 69.4 86.6
111.0 123.4
148.4 162.1 213.3
0
50
100
150
200
250
300
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
Time Deposits Current Accounts & Demand Deposits
211
71 82
181
163
134 108
93 99
219
262
66.9% 66.8% 65.8%
52.2% 55.3%
54.0%
71.4% 65.8%
60.5% 64.0%
70.2% 73.7%
135.0% 130.2%
114.2% 111.2% 101.0%
93.4% 93.7% 96.2%
79.2%
66.9%
65.6% 62.6%
21.2% 25.5% 27.8% 32.2% 31.8% 32.8%
40.1% 40.8%
62.7%
45.5%
53.5%
73.4%
80.7% 78.2%
76.4% 70.2% 69.6%
65.2% 62.5%
57.1%
52.5%
49.4%
47.1% 44.3%
15.3% 14.8% 15.4% 10.5% 20.6% 21.9% 23.7% 23.7% 24.1%
27.5% 29.6%
30.3%
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
Q2
2010
Q3
2010
Q4
2010
OneCard Penetration RateAll Other Cards Penetration RateDemand & Term Deposits Penetration RateInternet Banking Penetration RateSMS Banking Penetration Rate
104.0
77.8
101.5 98.5 114.9
147.2 183.4
205.6
235.7 247.2
298.6
1,304 1,382
1,384 1,387
1,341 1,358
1,364
1,429 1,444
1,454
1,331
1,272
1,150
1,200
1,250
1,300
1,350
1,400
1,450
1,500
-
50
100
150
200
250
300
Q1
'08
Q2
'08
Q3
'08
Q4
'08
Q1
'09
Q2
'09
Q3
'09
Q4
'09
Q1
'10
Q2
'10
Q3
'10
Q4
'10
US$ mln
Private Banking Client Assets (LHS) Private Banking Clients (RHS)
February 2011
BG Bank (Ukraine) standalone results overview
February 2011 Page 40
BG Bank performance
Net income
Costs, Q4 2010 Revenue growth
Cost/Income Ratio
4.8 5.5
6.4
3.8 2.9
4.3 4.0 4.2 2.7
3.8 2.4
1.4
1.7 0.8
2.7 5.5
2.6 1.2 1.3
(0.6)
0.3
0.5
0.6
0.8
7.2% 7.5%
8.3%
11.3%
6.1%
10.4% 10.4%
12.6%
8.3%
10.3%
6.4%
4.1%
0%
2%
4%
6%
8%
10%
12%
14%
-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
Q4
2010
GEL mln
Net Non-Interest Income Net Interest Income
Net Interest Margin, annualized
9.2
6.3 6.5
9.3
5.5 5.6 5.3
3.7
3.1
4.3
3.0 2.2
109.2%
116.9%
76.0%
35.7%
100.1%
91.5% 74.7%
230.0%
140.5%
106.2%
105.1%
117.4%
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
Q4
2010
3.3 3.6
3.8
1.0
-
1
2
3
4
5
6
7
8
Q3 2010 Q4 2010
GEL mln
Recurring Operating Costs Provision Expense
(0.7)
0.7 0.7
(10.7)
(7.3)
(10.8)
(5.5)
(11.3)
0.3
(1.7) (3.1) (0.9)
(12)
(10)
(8)
(6)
(4)
(2)
0
2
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
BG Bank
February 2011 Page 41
BG Bank assets
Asset growth
Gross loan book growth
No international loan
GEL million Q4 2009 Q3 2010 Q4 2010
Available-For-Sale Securities 6.2 - 4.5
Investment Property 7.3 15.4 13.4
Intangible Assets Owned, Net 1.0 0.8 0.7
Tax Assets, Current And Deferred 10.1 11.8 11.0
Prepayments And Other Assets 1.2 1.0 0.6
Other assets 25.8 28.9 30.1
30.1 28.9 25.8
11.3 9.1 11.3
144.0 134.6
125.6
9.1
8.8
7.5
31.2
12.8 27.8
0
50
100
150
200
250
Q4 2010Q3 2010Q4 2009
Cash & Equivalents
Loans & Advances To Credit
Institutions
Loan Portfolio
Property & Equipment
Other Assets
14% of Total Assets
4% of Total Assets
63% of Total Assets
6% of Total Assets
5% of Total Assets
7% of Total Assets
69% of Total Assets
5% of Total Assets
13% of Total Assets
198
GEL
15% of Total Assets
226
194
14% of
Total
Assets
13% of
Total
Assets
5% of
Total
Assets
64% of
Total
Assets
4% of
Total
Assets 360 350 337
248 245 205 202 198 191 215 194 226
1,217 1,149
1,213
1,147 1,129
946 965 936
864 923
851
1,014
0.3 0.3
0.3
0.2 0.2 0.2 0.2 0.2 0.2
0.2 0.2 0.2
0.0
0.1
0.1
0.2
0.2
0.3
0.3
0.4
0
200
400
600
800
1000
1200
1400
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Assets (GEL mln) Assets (UAH mln) GEL/UAH exchange rate, e-o-p
255 265 257 194 192 184 180 177 184 208 192 200
862 871 925
898 886 845 858 836 834
890 839
880
0.3 0.3
0.3
0.2 0.2 0.2 0.2 0.2
0.2
0.2 0.2
0.2
0.0
0.1
0.1
0.2
0.2
0.3
0.3
0.4
0
200
400
600
800
1000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Loans (GEL mln) Loans (UAH mln)
GEL/UAH exchange rate, e-o-p
BG Bank
February 2011 Page 42
BG Bank loan portfolio
Retail loan portfolio breakdown, 31 December 2010
Corporate loan portfolio breakdown, 31 December 2010
Loan portfolio breakdown, 31 December 2010
Gross loans: GEL 200.4 million Gross corporate loans: GEL 161.0 million
Total retail loans: GEL 37.1 million
RB & WM,
19.6%
CB, 80.4%
Mortgage loans,
48.7%
Consumer and
other*, 49.8%
Credit cards and
Overdrafts, 0.9% Micro loans, 0.6%
Trade, 71%
Construction &
Real Estate, 12%
Industry & State,
13%
Other, 4%
BG Bank
February 2011 Page 43
BG Bank provisioning policy
NPL coverage ratio
Loan loss reserve NPLs
Reserve for loan losses to gross loans
7.3 5.7 6.3 8.3 12.2 12.8 12.9 14.5 14.7 15.4 13.3 14.1 0.6
0.2 0.2 6.3
12.8
19.5
30.6
36.8 37.4
48.8
43.6 42.3
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
Q4
2010
GEL mln
CB RB
167.0%
166.4%
168.2%
319.4%
156.9%
116.8%
182.1% 199.3%
181.1% 153.2%
174.3%
158.9%
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
Q4
2010
2.6 2.9 2.7 1.1
8.7 5.6
17.6 11.5 12.2
17.5 13.7
16.2
0.1 0.7 1.0 1.6
7.2
22.1
6.3 14.2
16.6
24.4
19.0 19.3
1.7% 1.3%
1.5%
4.6%
8.3%
15.1% 13.3% 14.5%
15.6%
20.2%
17.1%
17.7%
0%
5%
10%
15%
20%
25%
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
Q4
2010
GEL mln
CB RB NPL ratio
2.8% 2.2% 2.5%
10.5%
13.0%
17.6%
24.2%
29.0% 28.3%
30.9% 29.7%
28.1%
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
Q4
2010
BG Bank
February 2011 Page 44
BG Bank standalone liabilities breakdown Leverage ratio
Q4 2009 Q3 2010 Q4 2010
Issued Fixed Income Securities 0.7 0.0 0.0
Accruals And Other Liabilities 2.0 1.1 1.0
Other liabilities 2.7 1.1 1.0
0.3 9.2
25.2
197.3
155.2 138.9
1.0
1.1 2.7
27.2
28.8 31.2
0
50
100
150
200
250
Q4 2010Q3 2010Q4 2009
GEL mln
Total Shareholders
Equity
Other Liabilites
Client Deposits
Deposits And Loans
From Banks
16% of Total
Liabilities + equity
13% of Total
Liabilities + equity
70% of Total
Liabilities + equity
1% of Total
Liabilities + equity
5% of Total
Liabilities + equity
80% of Total
Liabilities + equity
1% of Total
Liabilities + equity
15% of Total
Liabilities + equity
12% of
Total
Liabilities +
equity
0.1% of Total
Liabilities +
equity
87% of
Total
Liabilities +
equity
0.4% of
Total
Liabilities
+ equity
198 194
226
4.3
2.3 2.1
2.9 3.0 3.2
3.9
5.3 4.9
5.5 5.7
7.3
0
1
2
3
4
5
6
7
8
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
BG Bank
February 2011 Page 45
BG Bank analysis of deposits Client deposits by currency, Q4 2010 Client deposits breakdown, Q4 2010
Client deposits: GEL 197.3 mln
Current
accounts, 25%
Time&Deman
d deposits,
75%
UAH, 52%
Foreign currency,
48%
BG Bank
February 2011 Page 46
BG Bank capital adequacy
Risk-weighted assets BIS vs. NBU
NBU capital adequacy ratios
BIS capital adequacy ratios
Net loans/deposits & Loans/(deposits+equity)
71.5% 75.3%
77.7% 73.7%
68.8%
74.6% 68.1%
64.3% 69.7% 67.0% 69.7%
64.1%
89.0%
113.7% 116.5%
99.7%
91.9% 98.2%
85.9%
76.6%
84.1% 79.3% 81.9%
72.9%
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
Q4
2010Net Loans/(Total Deposits + Equity) Net Loans/Total Deposits
19.0%
31.3% 32.6%
28.6% 28.6%
26.5% 23.4%
17.5% 17.5% 16.2% 15.5%
12.7%
16.3%
29.1% 30.8% 30.9% 31.4%
28.4%
25.8%
20.2% 19.7% 18.6%
17.7%
14.7%
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
Q4
2010
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
361.6 355.0
327.7
290.7 274.1
234.6 234.4
211.7 199.2
229.3 227.6 220.5
352.9 340.6
327.0
212.5 202.8
179.0 168.5 164.5 175.9
190.8 174.7
201.4
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
Q4
2010
GEL mln
NBU BIS
12.4% 12.9% 14.0%
20.1% 21.4%
22.7% 20.5% 22.0%
23.0% 22.1%
21.2%
26.9%
13.7% 14.5%
15.6%
22.0% 23.5%
24.8%
22.5% 24.2%
25.4%
22.3%
21.4%
26.9%
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
Q4
2010
Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio
BG Bank
February 2011
Belarusky Narodny Bank (BNB), Belarus
February 2011 Page 48
BNB performance
Net income
Costs Revenue growth
Cost/Income Ratio
1.1 1.0 1.0 1.4 1.6
2.3 2.3 2.2 2.5 0.8 1.4 0.8
0.7 0.6
0.6 0.6 1.0
1.1
10.8% 10.9%
10.9%
16.6%
12.7%
14.9% 14.1%
12.1%
10.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
1
2
3
4
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
GEL mln
Net Interest Income Net Non Interest Income
Net Interest Margin, annualized
1.7
2.4
1.9
2.1 2.2
2.9 3.0 3.2
3.6
(0.3)
0.7
0.2
0.6
(0.9)
0.5 0.6
0.8
0.5
(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
Q4
2010
GEL mln
80.4%
61.5%
84.6%
66.6%
90.7%
60.6%
67.8% 69.0%
85.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q4 2008Q1 2009Q2 2009Q3 2009Q4 2009Q1 2010Q2 2010Q3 2010Q4 2010
2.0
3.1
1.3
(0.2)
-1
0
1
2
3
4
Q4 2009 Q4 2010
GEL mln
Provision Expense Recurring Operating Costs
BNB
February 2011 Page 49
BNB loan portfolio as at 31 December 2010
RB loan portfolio breakdown, 31 December 2010
Loan loss reserve, 31 December 2010 Loan portfolio breakdown, 31 December 2010
CB loan portfolio breakdown, 31 December 2010 Gross loans: GEL 76.8 mln
RB loans: GEL 4.8 mln * Other loans include car, POS and legacy retail loans
Loan loss reserve: GEL 1.2 mln
CB loans: GEL 71.9 mln
RB, 6%
CB, 94%
RB, 0.10
CB, 1.06
Consumer and
other*, 99%
Mortgage
loans, 0.3% Card
overdrafts, 1%
Trade, 46%
Construction
& real estate,
14%
Industry &
state, 32%
Other, 8%
BNB
February 2011 Page 50
BNB client deposits as at 31 December 2010 Client deposits breakdown
4,986
24,617
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
CB Deposits Outstanding RB Deposits Outstanding
Current Accounts
Outstanding ,
53.5%
Time Demand
Deposits
Outstanding ,
46.5%
BNB
February 2011
Insurance
February 2011
656
1,699 1,640
(277)
1,060
871
1,329
1,761
(500)
-
500
1,000
1,500
2,000
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
GEL '000
Page 52
Aldagi BCI
Recurring operating costs
Revenue Gross premiums written/Net premiums earned
Net Income/Loss +32.5%
3.4
6.3 6.1
4.9 4.6
6.0
4.2
5.5
-
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 Q4 2010
GEL mln
2.9
4.0 3.8 3.7
3.1
4.9
2.5
4.2
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 Q4 2010
GEL mln
7,397
14,954
11,534 12,492
13,065 12,366
(500)
2,500
5,500
8,500
11,500
14,500
17,500
Q4 2009 Q3 2010 Q4 2010
GEL 000s
Gross Premiums Written Net Premiums Earned
Aldagi BCI
February 2011
BG Capital
February 2011 Page 54
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) (0.7)
(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
Q2
2010
Q3
2010
Q4
2010
GEL mln
(2.6) (2.3)
(4.6)
(1.6)
0.2
(1.7) (1.6)
0.8
(1.1)
(2.4) (2.3)
(5)
(4)
(3)
(2)
(1)
0
1
2
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
GEL mln
19,276
36,968
3,912 2,588
1,364 2,790
5,289 5,285
5,334
1,685
4,734
1,559
-
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
Q2
2010
Q3
2010
Q4
2010
GEL mln
20 22 22 18 15 16 13 13 15 15 13 13
38 43 34
27 24
27 31 28
15 18 15 13
58 65
56
45 39
43 44 41
30 33 28 26
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
Q2
2010
Q3
2010
Q4
2010
GEL mln
BG Capital Georgia BG Capital Ukraine
BG Capital
February 2011 Page 55
Contact
Irakli Gilauri
Chief Executive Officer
+995 32 444 109
Macca Ekizashvili
Head of Investor Relations
Head of Representative Office, London
84 Brook St, London, W1K 5EH
+44 203 178 4052
Giorgi Chiladze
Deputy CEO, Finance
+995 32 444 249
February 2011
Appendices
February 2011
Bank of Georgia shareholder structure & management
February 2011 Page 58
Ownership structure
Supervisory board
Ownership structure, 31 December 2010
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
Mikheil Gomarteli Deputy CEO, Retail Banking
Avto Namicheishvili Deputy CEO, Legal
Archil Gachechiladze Deputy CEO, Corporate banking
Nikoloz Shurgaia Deputy CEO, International Banking
Murtaz Kikoria Deputy CEO
Vasil Revishvili Head of Wealth Management
Neil Janin Chairman of the Supervisory Board
David Morrison Vice Chairman of the Supervisory
Board, independent member
Ian Hague Member, Firebird Management LLC
Hanna Loikkanen Member, East Capital
Kaha Kiknavelidze Independent member
Allan J. Hirst Independent member
Al Breach Independent member
GDR
Holders*,
88.1%
Local Shares
Held by
Institutional
Shareholders,
5.3%
Management
&
Employees**
, 3.3%
Local Shares
Held by
Domestic and
Foreign
Retail
Shareholders,
3.2%
31-Dec-11 Number %
GDR Holders* 27,627,777 88.1%
Local Shares Held by Institutional Shareholders 1,670,990 5.3%
Management & Employees** 1,047,488 3.3%
Local Shares Held by Domestic and Foreign Retail Shareholders 998,605 3.2%
Total Shares Outstanding 31,344,860 100%
Adjusted for BG Capital's Proprietary Book (1 ) (1,693)
Adjusted Total Shares Outstanding 31,322,773
(1) Treated as treasury shares as per IFRS
*through BNY Nominees Limited
** includes GDRs held as part of EECP
February 2011 Page 59
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]
Analyst Email
Renat Syzdykov [email protected]
February 2011
Georgian banking sector – key trends 2008- 2010
February 2011 Page 61
Georgian banking sector – key trends 2008/June 2010
Growth
Market Share Market Share Market Share
Q4 2010 (YE 2008) (YE 2009)
GEL mln YE 2008 YE 2009 YE 2010
As % of
GDP*
2008
Y-O-Y
2009
Y-O-Y
2010
Y-O-Y
Top 5
Banks
Bank of
Georgia
Top 5
Banks
Bank of
Georgia
Top 5
Banks
Bank of
Georgia
Total Assets 8,866 8,293 10,564 55.0% 23.0% -6.5% 27.4% 79.26% 32.89% 78.1% 33.0% 78.1% 36.2%
Gross Loans 5,993 5,185 6,261 32.6% 30.6% -13.5% 20.7% 81.78% 32.87% 81.4% 31.8% 82.8% 35.9%
Deposits 3,845 4,174 5,818 30.0% 9.5% 8.6% 39.4% 75.00% 28.76% 77.70% 27.4% 80.1% 32.6%
Equity 1,517 1,517 1,788 9.5% 3.1% 0.0% 17.8% 75.69% 40.03% 79.60% 38.6% 78.8% 40.5%
Net Income/(Loss) (216) (65.3) 156.3 0.3% NMF NMF NMF NMF NMF NMF 37.3% NMF 85.6%
* As % of YE 2009 GDP
Ensuring solvency and stability of the banks
High BIS Capital Adequacy Ratio: Banking Sector Average – 21%, Bank of Georgia –28.4%
High level of liquidity requirements from NBG at 20% of Liabilities, Bank of Georgia 34.7%
Low Leverage in the banking sector: Banking Sector Average – 4.2x, Bank of Georgia –4.9x
Resilient Banking Sector
Demonstrated strong resilience towards domestic challenges during the August 2008 conflict as well as towards external
shocks of global financial turmoil without single bank going bankrupt
No nationalization of the banks have occurred, no government bail-out plans have been required, no Government
ownership since 1995
Excess liquidity and excess capital that has been accumulated by the banking sector to enable boosting the financing of
the economic growth
Very 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%)
February 2011
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%
36.2%
21.3%
8.2% 7.3%
5.0%
3.2%
18.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
BoG TBC ProCredit Bank Bank Republic Cartu VTB Other Banks
YE 2008 YE 2009 YE 2010
Page 62
Peer group’s market share in total assets
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
February 2011
32.9%
23.7%
8.7%
10.1%
6.4% 6.0%
12.2%
31.8%
21.6%
10.2%
10.1% 7.6%
5.6%
13.0%
35.9%
23.8%
9.4%
6.8% 6.8%
3.7%
13.5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
BoG TBC ProCredit Bank Republic Cartu VTB Other Banks
YE 2008 YE 2009 YE 2010
Page 63
Peer group’s market share in gross loans
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
February 2011
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%
32.6%
24.1%
8.1% 8.3%
3.1% 2.1%
21.7%
0%
5%
10%
15%
20%
25%
30%
35%
BoG TBC ProCredit Bank Republic VTB Cartu Other Banks
YE 2008 YE 2009 YE 2010
Page 64
Peer group’s market share in deposits
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
February 2011 Page 65
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
