September Retail Banking Speaker: Irakli Gilauri, CEO

Transcription

1 September 2012 Retail Banking Speaker: Irakli Gilauri, CEO

2 Discussion topics Retail banking financial statements Superior franchise Strategic goals Innovative channels September 2012 Page 2

3 Retail banking delivers profitable growth Revenue +23.2% y-o-y % % 21% H H 2H Other operating non-interest expenses Revenue breakdown % y-o-y 12% 21% Operating leverage Net Interest Income Net fee and comission income Other operating income % y-o-y % % % H H 2H 22% 18% 14% 10% 18.7% 17.6% September 2012 Page 3

4 Retail banking improved cost of risk and profitability Operating income before cost of credit risk Cost of credit risk % y-o-y 22% % 42% H H 2H H H 2H Net operating income Cost of risk (provisions) % y-o-y % % % H H 2H 4% 3% 2% 1% 0% -1% 3.2% 1.7% -0.3% H September 2012 Page 4

5 Retail banking loan portfolio 1, Loan portfolio +38.5%* 1, , , % 62% % 38% H 2012 GEL FC 50% 50% 12% 10% 8% 6% 4% 2% 0% Net Interest Margin & Deposit Cost 9.6% 9.4% 7.5% 6.7% 10.3% 6.3% H 2012 Net interest margin** Deposit cost Deposits +47.9%* Share of GEL loans in total loans increased from 38% in 2010 to 50% in 1H % % % Strong NIM Declining cost of deposits % % GEL FC 1H % *Growth in US$ **Includes effect of transfer pricing September 2012 Page 5

6 Retail banking loan portfolio, cont d Loan yield, blended Loan yields, by currencies 22% 21% 21.4% 21.0% 21.1% 30% 20% 28.1% 26.6% 27.8% 18.3% 16.7% 14.7% 10% 20% H 2012 Loan yield, blended 0% H 2012 Loan yield, GEL Loan yield, FC Loan book breakdown, 30 June % Total RB Loan book: GEL 1,309 mln 15% Credit card balances, 134.9, 10% Consumer loans, 468.4, 36% Mortgage loans, 369.6, 28% Micro & SME loans, 335.9, 26% 12% 11% Outer layer represents proportion of respective segment of total bank loan portfolio September 2012 Page 6

7 Retail banking loan portfolio, cont d Mortgage loans % % 20% 40% Share in RB loans 30.9% 0.9% 28.2% Penetration rate 1.0% Micro & SME +22.6% % 25% 26% 24.9% Share in RB 25.7% Consumer loans Credit card balances % % 20% 40% 60% Share in RB loans Penetration rate 34.0% 35.8% 37.7% 46.7% % % 10% 11% 12% Share in RB loans Penetration rate 10.1% 10.3% 10.8% 11.7% September 2012 Page 7

8 Affordable Housing: supporting mortgage growth Chubinashvili Street Project Units sold since 09/10 91% IRR 43% Impact of Affordable Housing Projects on Bank of Georgia Group US$ 000s 250, , , , ,000 72,586 Tamarashvili Street Project Total Units sold since 06/ Total 29% 30% Expected IRR 34% Sold 159 Sold 50, ,949 Value of the land plots 25,417 Expected net profit of the projects Expected increase in mortgages (affordable housing) BoG current gross mortgage portfolio Mortgage Loans Disbursed on Affordable Housing Projects Project Total volume of mortgages issued # of mortgages Total area of flats purchased with mortgages, sqm Tamarashvili St $5,225, ,458 Chubinashvili St $2,675, ,690 Total $7,900, ,148 Project Average mortgage size Average LTV at current prices Average LTV at completion prices Tamarashvili St $64,511 77% 63% Chubinashvili St $52,459 75% 68% September 2012 Page 8

9 Discussion topics Retail banking financial statements Superior franchise Strategic goals Innovative channels September 2012 Page 9

10 Superior franchise Strong brand and scale Segments 930,000+ retail clients (and legal entities), up c.5% YTD 182 branches as of 30 August sales points 459 ATMs 3,233 POS (Point-of-Sale) terminals 2,115 sales force >13m metro and bus payment clicks per month Leading market reputation for performance and service Strongly positioned for new client acquisition Products/Client # of Clients Branches SME / Micro N/A 48,334 Points of Sale in 41 Branches Mass Affluent ,375 1 Branch, 8 Corners Retail , Branches Emerging Retail , Express Branches Note: In addition, the bank s branch network includes one WM and two CB branches September 2012 Page 10

11 Discussion topics Retail banking financial statements Superior franchise Strategic goals Innovative channels September 2012 Page 11

12 On a path of creating an indestructible franchise Strategic goals Key initiatives and rationale Key strength 1 Further strengthen client driven franchise Creating an indestructible Segment offering franchise 2 Increase efficiency No need to build costly flagship branches Intensify the shift to transactional banking through wide-range of electronic channels Step-up optimisation of the centralised RB back office; we invested in ITto eliminate the document flow Shift to electronic channels Superior risk insight 3 Increase revenue and product per client Introduce sophisticated CRM system to increase product to client ratio Increase penetration within our client base. Currently: Mortgages - 1.0% Credit Cards % Differentiated product and service offering for different segments Superior retail franchise & segment approach September 2012 Page 12

13 On a path of creating an indestructible franchise Strategic goal Key initiatives and rationale Key strength 4 Increase revenue Organic growth to come on the back of: GDP growth Penetration growth as individual loans to GDP is at circa 13% Increase penetration within Bank of Georgia clients Capture emerging bankable population through Express offering Creating an indestructible Superior retail franchise franchise & Segment Offering In total we scored approximately 2 mln clients, which 5 gives us superior ability to understand credit risk Differentiated credit underwriting systems for GEL and Keep cost of risk down US$ loans 50% of RB loan book in GEL compared to 38% in 2010 Sophisticated collection IT software was introduced, which was one of the weaknesses back in 2008/09 6 More people pay with cards rather than cash Acquiring network of 50%+ market share Leadership in payments AmEx exclusivity in Georgia 108,000 cards Exclusive management of transportation system payment Introduction of Express Card with loyalty program Self Service Terminals to grow from 123 to 1,000 byye Superior risk Superior insight risk insight Further increase fee income September 2012 Page 13

14 Discussion topics Retail banking financial statements Superior franchise Strategic goals: Retail Innovative channels September 2012 Page 14

15 POS T. millions SST ATM SST millions thousands POS T. ibank ATM New channels driving growth 337,000+ Express branches Self Service Terminals Mobile bank Digital corners Internet 56 Express branches, including 24 metro branches 170,000 transaction per month 123 SSTs Utility payments Money transfers Loan & credit card repayment FC conversions >28K transactions per month >GEL 600K transactions/month >50K transactions per month >GEL 3 mln transaction/month +4% +29% Branches Remote channels Number of transactions 1H Volume 1H H H H H , % 1H , % 4, % 1H H H H H H H , ,282 1, % +60% +16% +44% September 2012 Page 15

16 Discussion topics Retail banking financial statements Superior franchise Strategic goals: Retail Innovative channels Bank of Georgia: Strategic goals September 2012 Page 16

17 Strategic goals, going forward Affordable Housing Insurance & Healthcare business Targeted IRR of 30%+ Aiming to cash out in 2015 and discontinue business Targeted capital formation of US$ 25 million from Target ROAE of 25%+ Target net profit of GEL 16 mln for 2012 and GEL 24 mln for 2013 (GEL 6.5 mln in 2011) Unlock Aldagi value: To encourage market for sum of the parts valuation as insurance & healthcare business multiples are significantly higher than banks multiples We will also consider Aldagi IPO in 2-3 years time Non-core assets Belarus: To continue focusing on ROAE formation Position the bank for sale within next 2-3 years Equity of GEL 41.3 mln Only meaningful remaining investment isteliani Valley Equity of GEL 14.1 mln September 2012 Page 17

18 Strategic goals, going forward Continue prudent capital management Continued focus on the rapidly growing Georgian market Maintaining progressive dividend policy, aiming to increase dividend per share over time 3x20 story to continue: ROAE 20% Loan and deposit growth of 20% Tier I of 20% Further capital flexibility from Insurance & Healthcare and Affordable Housing businesses Other key metrics To keep NIM between 7% - 7.5% range in next 2-3 years Maintaining positive operating leverage in next 2-3 years To bring cost/income close to 40% in 2-3 years time To keep net loans to deposits ratio in 100% -110% range over the next 2-3 years Risk Continue and enhance prudent risk management practice Decrease NPL coverage ratio to the 90%-100% range within one year as we move further away from crisis Maintain cost of risk at 0.8% to 1.2% level going forward September 2012 Page 18

19 Strategic goals/going forward Retail banking Corporate banking Asset & Wealth Management Continue segment approach to further build customer driven franchise and boost revenue and product per client Introduce sophisticated CRM system to further increase currently low penetration and enhance product to client ratio Through Express offering create platform for under-banked population in order to cement our leading retail franchise Shift customers (including through Express offering) to electronic channels to further improve efficiency Further decrease cost of deposits Continue to focus on mid-size corporate to further decrease concentration Expand research regionally Focus on fee generating businesses including advisory business Leverage on Bank of Georgia profile to expand export and trade finance businesses Further decrease cost of deposits Continue to expand distribution platform Build regional asset management business on the wealth management platform Targeted AUM of US$ 1 billion by YE September 2012 Page 19

20 Q&A September 2012 Page 20

21 Forward looking statements This presentation contains forward-looking statements that are based on current beliefs or expectations, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and JSC Bank of Georgia and/or the Bank of Georgia Holdings plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are various factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, legal, business and social environment. The forward-looking statements in this presentation speak only as of the date of this presentation. JSC Bank of Georgia and Bank of Georgia Holdings undertake no obligation to revise or update any forward-looking statement contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. September 2012 Page 21