Bank of Georgia Q results overview

Transcription

1 Standard & Poor s: B/B Fitch Ratings: B/B Moody s: B3/NP (FC) & Ba1/NP (LC) LSE: BGEO GSE: GEB Berlin-Bremen Boerse: B7D1 Bank of Georgia Q results overview Reuters: BGEO.L Bloomberg: BGEO.LI

2 Introduction to Bank of Georgia The leading universal bank in Georgia No.1 by assets (circa 32.9%), (1) loans (circa 32.6%), (1) deposits (circa 27.8%) (1) and equity (circa 37.3%) (1) Leading retail banking, with top brand, best distribution network and broadest range of services of any bank in Georgia September June 2008 March 2008 YE 07 YE Retail Accounts 904, , , , ,000+ Cards Outstanding 767, , , , ,000+ Branches ATMs Leading corporate bank with approximately 73,000 legal entities and over 133,000 current accounts Leading card-processing, leasing, insurance, wealth management and asset management services provider The only Georgian entity with credit ratings from all three global rating agencies S&P: B/B at the sovereign ceiling Fitch Ratings: B/B Moody s: B3/NP (FC) & Ba1/NP (LC) Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange Market Cap (LSE) US$217 mln as of 31 October 2008 Approximately 95% free float Issue of the first ever Eurobonds in Georgia Bloomberg: BKGEO; 5 year, 9%, US$200 mln B/Ba2/B (composite B+) Notes: (1) As of 30 September 2008; based on standalone accounts as reported to the National Bank of Georgia and as published by the National 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 two independent directors Page 2

3 Bank of Georgia Q & nine months 2008 results overview Page 3

4 Nine months 2008 P&L results highlights Millions, unless otherwise noted Nine months 2008 Nine months 2007 Growth, Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ Y-O-Y 1 Unaudited Unaudited Net Interest Income % Net Non-Interest Income % Total Operating Income (Revenue) % Recurring Operating Costs % Normalized Net Operating Income % Net Provision Expense % Net Income/(Loss) % Consolidated EPS (Basic), GEL & US$ % Consolidated EPS (Fully Diluted), GEL & US$ % ROAA, Annualised 6 0.1% 3.5% ROA, Annualised 0.03% 2.8% ROAE, Annualised 7 0.2% 16.2% ROE, Annualised 0.1% 14.3% Includes extraordinary provisions related to Russia-Georgia conflict in August Compared to the same period in 2007; growth calculations based on GEL values. 2 Revenue includes Net Interest Income and Net Non-Interest Income. 3 Normalized for Net Non-Recurring Costs. 4 Basic EPS equals Net Income of the period divided by weighted average outstanding shares for the period. 5 Fully Diluted EPS equals Net Income of the period divided by the number of outstanding ordinary shares as of the period end plus number of ordinary shares in contingent liabilities. 6 Return on Average Total Assets equals annaulised Net Income for the period divided by the average Total Assets for the period. 7 Return on Average Total Shareholders Equity equals annualised Net Income for the period divided by the average Total Shareholders Equity for the period. Page 4

5 Q P&L highlights Millions, unless otherwise noted Q Q Q Growth, Growth, Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ GEL US$ Y-O-Y 1 Q-O-Q 1 Unaudited Unaudited Net Interest Income % 5.4% Net Non-Interest Income % -10.1% Total Operating Income (Revenue) % 0.0% Recurring Operating Costs % 1.6% Normalized Net Operating Income % -2.1% Net Provision Expense % % Net Income (59.0) (42.0) NMF % Consolidated EPS (Basic), GEL & US$ % % Consolidated EPS (Fully Diluted), GEL & US$ % % ROAA, Annualised 6-7.2% 3.5% 3.2% ROA, Annualised 7-7.5% 3.3% 2.9% ROAE, Annualised % 14.8% 16.1% ROE, Annualised % 14.5% 15.1% Includes extraordinary provisions related to Russia-Georgia conflict in August Compared to the same period in 2007; growth calculations based on GEL values 2 Revenue includes Net Interest Income and Net Non-Interest Income. 3 Normalized for Net Non-Recurring Costs. 4 Basic EPS equals Net Income of the period divided by weighted average outstanding shares for the period. 5 Fully Diluted EPS equals Net Income of the period divided by the number of outstanding ordinary shares as of the period end plus number of ordinary shares in contingent liabilities. 6 Return on Average Total Assets equals annaulised Net Income for the period divided by the average Total Assets for the period. 7 Return on Average Total Shareholders Equity equals annualised Net Income for the period divided by the average Total Shareholders Equity for the period. Page 5

6 September 2008 Balance Sheet results highlights Millions, unless otherwise noted Sep-08 Q Q Sep-07 Bank of Georgia (Consolidated, IFRS) GEL US$ GEL US$ GEL US$ GEL US$ (Unaudited) (Unaudited) (Audited) (Unaudited) Net Loans 1, , , , , , , Total Assets 3, , , , , , , ,449.5 Total Deposits 1, , , , Borrowed Funds Total Liabilities 2, , , , , , , Shareholders Equity Book Value Per Share, GEL & US$ Tier I Capital Adequacy (BIS) % 25.0% 25.0% 23.2% Total Capital Adequacy (BIS) % 25.8% 22.0% 23.3% Tier I Capital Adequacy (NBG) 3,5 18.2% 15.8% 13.2% 14.0% Total Capital Adequacy (NBG) 4,5 15.5% 15.1% 13.1% 16.9% Growth, Q-O-Q Growth, YTD Growth, Y-O-Y Net Loans -6.4% 12.1% 51.2% Total Assets -7.2% 6.8% 31.2% Total Deposits -12.9% -6.8% 16.9% Borrowed Funds 4.9% 15.4% 37.9% Total Liabilities -7.7% 0.8% 24.6% Shareholders Equity -5.6% 32.5% 59.0% Book Value Per Share -5.6% 15.1% 38.2% Tier I Capital Adequacy (BIS) -1.3% -1.1% 6.5% Total Capital Adequacy (BIS) -2.0% 14.6% 8.4% Tier I Capital Adequacy (NBG) 15.7% 38.2% 30.3% Total Capital Adequacy (NBG) 2.4% 18.4% -8.6% 1 BIS Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I. 2 BIS Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I. 3 NBG Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements the National Bank of Georgia. 4 NBG Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of the National Bank of Georgia 5. In Q risk weighting of foreign currency denominated assets decreased from 200% to 175% Page 6

7 Consolidated Composition of revenue in Q Composition of Revenue, Q Revenue by Segments, Q Net Income From Documentary Operations 2% of Revenue GEL1.7 mln (-7% y-o-y) Net Other Non-Interest Income 6% of Revenue GEL 5.0 mln (-36% y-o-y) BNB 2% of Revenue GEL 2.1 mln Aldagi BCI 2% of Revenue GEL 2.1 mln 26% growth y-o-y Other 2% of Revenue GEL 1.6 mln Net Foreign Currency Related Income 11% of Revenue GEL 9.4 mln (+51% y-o-y) UBDP 10% of Revenue GEL 8.7 mln Net Fee & Commission Income 13% of Revenue GEL 10.9 mln (+58% y-o-y) Net Interest Income 69% of Revenue GEL 58.9 mln (+76% y-o-y) BoG Standalone 83% of Revenue GEL 71.4 mln 46% growth y-o-y Total Revenue: GEL 85.9 million (53% y-o-y growth, 0.01% q-o-q decline) Page 7

8 Consolidated Analysis of revenue Revenue growth Net foreign currency related income GEL mln GEL mln % Q Q Q Q Q Q Q Net Interest Income Net Non-Interest Income % Q Q Q Q Q Q Q Net fee & commission income & income from documentary operations Other non-interest income GEL mln GEL mln % Q Q Q Q Q Q Q Net fee & commission income Net Income From Documentary Operations % (0.4) (0.4) (1.1) -2 Q Q Q Q Q Q Q Net Insurance Income Brokerage Income Asset Management Income Realized Net Investment Gains Other Page 8

9 Consolidated Analysis of recurring operating costs Recurring operating cost structure, Q Recurring operating cost structure by segments, Q Procurement & Operations Support Costs 7% of Total Recurring Costs GEL 3.5 mln (+58% y-o-y) Other Operating Costs 3% of Total Recurring Costs GEL 1.5 mln (+273% y-o-y) Aldagi BCI 5% of Recurring Costs 46% growth y-o-y Other 10% of Recurring Costs Depreciation & Amortisation 11% of Total Recurring Costs GEL 5.5 mln (+121% y-o-y) Selling, General & Administrative Costs 22% of Total Recurring Costs GEL 10.7 mln (+66% y-o-y) Personnel Costs 57% of Total Recurring Costs GEL 28.4 mln (+62% y-o-y) BNB 3% of Recurring Costs UBDP 14% of Recurring Costs BoG Standalone 68% of Recurring Costs 51% growth y-o-y Total recurring operating costs: GEL 49.6 million in Q (71% growth y-o-y, 1.6% growth q-o-q) Page 9

10 Consolidated Analysis of recurring operating costs cont d Employees Personnel Costs GEL mln Q ,853 6, , Q , Q ,056 4, ,459 Q Q Q Q Q , Group Consolidated BoG Standalone UBDP Cost/Income ratio 130% 120% 109.2% 116.9% UBDP 110% 100% 90% 76.0% BNB 80% 68.5% 70% 64.5% 62.8% 59.1% 55.6% 60% 56.6% 52.9% 60.8% BoG, Consolidated 50% 42.2% 44.4% 50.0% 40% 45.1% 41.0% BoG, Standalone 30% Q Q Q Q Cost/Income Ratio, Consolidated Cost Income Ratio, Bank of Georgia Standalone Cost/Income Ratio, UBDP Cost/Income Ratio, BNB Page 10 GEL million Normalised Net Operating Income +5% Q Q Q Q3 2008

11 Consolidated NIM & loan yields Net Interest Margin (annualised)* RB & WM loan yield (annualised)* 12.0% 40.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 10.3% 9.8% 8.9% 9.1% 9.8% 8.4% 9.0% 8.9% 8.6% 8.8% 8.1% 8.1% 7.5% 7.7% 7.1% 6.5% Q Q Q Q % 28.0% 22.0% 16.0% 24.1% 23.0% 22.5% 20.5% 20.1% 18.4% 17.4% Net Interest Margin, Group Consolidated Net Interest Margin, BoG Standalone Net Interest Margin, UBDP Net Interest Margin, BNB 10.0% Q Q Q Q Q Q Q CB loan yield (annualised)* Blended loan yield (annualised)* 20.0% Includes conflict related provisions in Q % 20.0% 15.0% 22.6% 22.0% 19.2% 19.6% 20.2% 18.9% 17.9% 19.0% 18.9% 16.4% 17.6% 16.2% 20.4% 19.5% 15.0% 10.0% 12.9% 12.7% 12.7% 13.2% 13.1% 12.5% 10.0% 5.0% 0.0% -5.0% 1.0% -2.2% Q Q Q Q % 1.6% Blended Loan Yield, Group Consolidated Blended Loan Yields, BNB Blended Loan Yield, BoG Standalone Blended Loan Yields, UBDP 0.0% Q Q Q Q Q Q Q * Based on consolidated data, including Corporate Center where all loan recoveries are allocated Page 11 Includes conflict related provisions in Q3 2008

12 Consolidated Composition of assets as at 30 September ,400 GEL mln 3,500 Cash & Equivalents 2, % of Total Assets % of Total Assets 11% of Total Assets 61% of Total Assets 3, % of Total Assets 9% of Total Assets 3, % of Total Assets 61% of Total Assets 2,500 57% of Total Assets Loans & Advances To Credit Institutions 2,000 2, ,930.6 Loan Portfolio 1, ,500 Property & Equipment 1,000 Other Assets % of Total Assets 17% of Total Assets % of Total Assets 16% of Total Assets % of Total Assets 15% of Total Assets 500 YE 07 Q Q YE 2007 Q Q Available-For-Sale Securities Treasuries And Equivalents Other Fixed Income Instruments Investments In Other Business Entities & Investment Property Intangible Assets Owned & Goodwill Tax Assets, Current And Deferred Prepayments And Other Assets Total Net loans include net finance lease receivables Page 12

13 Consolidated Composition of gross loan book as at 30 September 2008 GEL mln 2,500 2,000 1,500 Ukraine, 255 RB & WM Georgia, % of gross loans 43% of gross loans Ukraine, 265 RB & WM Georgia, % of gross loans 46% of gross loans Belarus, 35 Ukraine, 257 RB & WM Georgia, 976 2% of gross loans 12% of gross loans 47% of gross loans RB & WM account for 55% and CB accounts for 45% of BoG standalone loan portfolio 1,000 44% of gross loans 42% of gross loans 39% of gross loans 500 CB Georgia, 821 CB Georgia, 881 CB Georgia, Q Q Q Gross loan book Q3 2008: GEL 2,060 million Note: includes loans allocated to corporate center/eliminations Page 13

14 Securities portfolio as at 30 September 2008 Breakdown of securities portfolio, 30 September 2008 Breakdown of securities investments Equities, 46% Local Debt, 54% GEL 000 s Exposure to Sovereign Equity Total GTS - 2,067 2,067 GTC/GTAM - 21,339 21,339 UBDP 26,628-26,628 Other Total 27,219 23,406 50,625 Total securities portfolio: GEL 51 million Page 14

15 Consolidated Liabilities breakdown as at 30 September 2008 GEL mln 4,000 3,500 Total Shareholders Equity Other Liabilites % of Total Liabilities 6% of Total Liabilities 35% of Total Liabilities % of Total Liabilities 7% of Total Liabilities 35% of Total Liabilities % of Total Liabilities 5% of Total Liabilities 50% of Total Liabilities 3,000 2,500 2,000 Borrowed Funds Client Deposits 1,355 57% of Total Liabilities 1,395 53% of Total Liabilities 1,202 39% of Total Liabilities 1,500 1, Deposits And Loans From Banks 65.8 YE % of Total Liabilities Q % of Total Liabilities Q % of Total Liabilities 0 YE 2007 Q Q Issued Fixed Income Securities Insurance Related Liabilities Tax Liabilities, Current And Deferred Accruals And Other Liabilities Other liabilities Total Liabilities 30 September 2008: GEL 2,415 million Page 15

16 Consolidated Client deposits breakdown GEL mln 1,600 1,400 1,326 16% of client deposits 1,395 Ukraine, % of client deposits RB & WM account for 41% and CB accounts for 59% of BoG standalone client deposits 1,200 Ukraine, % of client deposits 1,202 Belarus, 27 2% of client deposits 34% of client deposits Ukraine, % of client deposits 1,000 RB & WM Georgia, % of client deposits RB & WM Georgia, RB & WM Georgia, % of client deposits % of client deposits 48% of client deposits 400 CB Georgia, 653 CB Georgia, 682 CB Georgia, Q Q Q CB Georgia RB & WM Georgia Ukraine Belarus Client deposits Q3 2008: GEL 1,202 million Note: RB & WM client deposits include deposits at Galt & Taggart Securities Page 16

17 Capital adequacy & wholesale funding Page 17

18 Capital adequacy BIS capital adequacy ratios, BoG consolidated NBG capital adequacy ratios, BoG standalone 26.0% 25.8% 25.6% 25.4% 25.2% 25.0% 24.8% 24.6% 24.4% 24.2% 24.0% 25.8% 25.8% 25.2% 25.3% 25.0% 24.7% Q Q Q % 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 18.3% 18.2% 16.3% 15.8% 15.1% 15.5% Q Q Q Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio Risk-weighted assets BIS vs. NBG Net loans/deposits & loans/(deposits+equity), BoG consolidated GEL mln 4,000 3,500 3,000 2,500 2,000 1,500 3,100 2,593 3,605 2,734 3,132 2, % 140.0% 120.0% 100.0% 80.0% 60.0% 132.6% 135.7% 85.8% 89.5% 152.1% 96.1% 1, % % - Q Q Q % Q Q Q BIS NBG Net Loans/Total Deposits Net Loans/(Total Deposits+Equity) Page 18

19 International borrowings Selected international loans International borrowings - fixed vs. floating rates, 30 September 2008 Key Lenders Note: excluding credit lines as part of documentary business Principle Amount Outstanding as at 30 Maturity September 2008 Syndicated Loan arranged by Citi and ADB, 2 nd Tranche US$43.5 million 2009 Senior Term Loan from Merrill Lynch US$65.0 million 2009 Loan Passthrough Notes (Put in 2009) US$ 140 million 2010 Syndicated Loan arranged by Citi and ADB, 3 rd Tranche US$25 million 2010 Eurobonds US$200 million 2012 Senior Term Loan from FMO US$12.5 million 2014 Subordinated Loan from Thames River Capital (Call in 2011) US$5.0 million 2016 Senior Term Loan from WorldBusiness Capital US$8.6 million 2016 Subordinated Loan from HBK Investments (Call in 2012) US$15.0 million 2017 Subordinated Loan from Merrill Lynch (Call in 2012) US$35.0 million 2017 Senior Term Loan from WorldBusiness Capital (GLC) US$5.2 million 2017 Subordinated loan from FMO and DEG (Call in 2013) US$ 30 million 2018 Total US$584.8 * Floating Interest Rate, 57% Fixed Interest Rate, 43% International borrowings by maturities International borrowings by currencies, 30 September 2008 GEL '000s 300, , , , , , % 8.6% 10.1% 275, , , % 1.6% 1.5% 0.2% 0.6% 0.6% 42,572 5,628 17,279 17,091 70,250 41, % 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Euro, 0.6% GEL, 6.4% Principle Amounts Outstanding as of 30 September 2008 (LHS) As % of 30 September 2008 Assets (RHS) US$, 93.0% * Puttable in June 2009 Page 19

20 Business overview Page 20

21 Reporting Lines Group structure: business lines BoG Group Commercial Banking Securities Insurance Asset Management Georgia CB RB WM CC Ukraine BNB* Galt & Taggart Securities Aldagi BCI GTAM - the asset mgt subsidiary** Fund Liberty Consumer** Fund SBRE** Other funds * Belarusky Narodny Bank acquired in June 2008 ** BoG owns approximately 65% of Liberty Consumer (formerly called Galt & Taggart Capital), which in turn owns approximately 52% of SBRE. There fore both Liberty Consumer and SBRE are fully consolidated in BoG financials. BoG owns small minority stakes in other funds managed by GTAM Page 21

22 Bank of Georgia nine months 2008 business unit results 30 September 2008 (GEL '000) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 71, ,129 4,372 21,963 2,087 (1,322) 14,557 6,501 1, ,929 Net Income/(Loss) (22,749) 37, ,020 (6,699) 11,154 (361) (19,574) 1,295 Total Assets 1,228,414 1,506,102 73, ,787 66,719 79, ,230 83,221 (339,193) 3,154,255 Total Liabilities 1,048, ,506 96, ,249 29,735 36,222 36,529 64,921 (617) 2,414, September 2007 (GEL '000) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 49,057 65,326 3, ,703 2,403 6,032 4, ,379 Net Income 22,058 20,891 1, ,926 (1,152) 645 (4,863) 49,868 Total Assets 1,235, ,474 70, ,442 57,822 54,339 15,112 2,403,333 Total Liabilities 1,081, ,565 83, ,230 30,926 39,258 60,136 1,938,341 Y-O-Y Growth CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 45.96% % 25.78% NMF NMF % % 7.78% % 69.32% Net Income/(Loss) % 78.27% % NMF NMF NMF NMF NMF NMF % Total Assets -0.54% 63.80% 4.67% NMF NMF 54.77% % 53.15% NMF 31.25% Total Liabilities -3.04% 38.97% 15.52% NMF NMF % 18.12% 65.37% NMF 24.59% 30 September 2008 (Share) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 28.31% 52.24% 1.73% 8.68% 0.83% -0.52% 5.76% 2.57% 0.41% % Net Income/(Loss) % % 44.70% 52.63% 78.76% % % % % % Total Assets 38.94% 47.75% 2.33% 10.68% 2.12% 2.52% 3.78% 2.64% % % Total Liabilities 43.41% 36.17% 4.01% 9.49% 1.23% 1.50% 1.51% 2.69% -0.03% % 30 September 2007 (Share) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 32.84% 43.73% 2.33% 0.00% 0.00% 12.52% 1.61% 4.04% 2.93% % Net Income/(Loss) 44.23% 41.89% 2.73% 0.00% 0.00% 21.91% -2.31% 1.29% -9.75% % Total Assets 51.39% 38.26% 2.92% 0.00% 0.00% 2.14% 2.41% 2.26% 0.63% % Total Liabilities 55.78% 32.43% 4.33% 0.00% 0.00% 0.73% 1.60% 2.03% 3.10% % Page 22

23 Bank of Georgia Q business unit results Q (GEL '000) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 24,680 50,621 1,485 8,714 2,087 (1,934) 477 2,101 (2,316) 85,914 Net Income/(Loss) (45,630) 11,488 (406) 721 1,020 (2,292) (410) (26) (23,423) (58,958) Q (GEL '000) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 22,841 43,782 1,247 6,746 - (1,006) 1,678 2,600 8,034 85,921 Net Income/(Loss) 12,383 12, (2,553) 3, ,261 28,335 Q (GEL '000) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 17,545 23,184 1, , ,668 4,897 56,172 Net Income/(Loss) 6,721 6, ,213 (758) (116) 1,816 17,515 Y-O-Y Growth CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 40.66% % 10.84% NMF NMF NMF % 25.94% NMF 52.95% Net Income/(Loss) % 87.03% % NMF NMF NMF NMF NMF NMF NMF Q-O-Q Growth CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 8.05% 15.62% 19.06% 29.18% NMF NMF % % NMF -0.01% Net Income/(Loss) NMF NMF NMF NMF NMF % NMF NMF NMF % Q (Share) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 28.73% 58.92% 1.73% 10.14% 2.43% -2.25% 0.55% 2.45% -2.70% % Net Income 77.39% % 0.69% -1.22% -1.73% 3.89% 0.70% 0.04% 39.73% % Q (Share) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 26.58% 50.96% 1.45% 7.85% 0.00% -1.17% 1.95% 3.03% 9.35% % Net Income/(Loss) 43.70% 45.24% 1.11% 2.32% 0.00% -9.01% 12.06% 0.13% 4.45% % Q (Share) CB RB WM Ukraine Belarus GTS AM Insurance CC/Eliminations Total Total Operating Income (Revenue) 31.24% 41.27% 2.38% 0.00% 0.00% 12.20% 1.22% 2.97% 8.72% % Net Income/(Loss) 38.37% 35.07% 2.84% 0.00% 0.00% 18.35% -4.33% -0.66% 10.37% % Page 23

24 BoG standalone results overview Page 24

25 BoG standalone performance GEL mln Revenue growth Q Q Q Recurring operating cost structure, Q Other operating costs 4% of recurring operating costs GEL 1.3 mln (-3% q-o-q) Procurement & operationssupport costs 10% of recurring operating costs GEL 3.4 mln (+3% q-o-q) Depreciation & amortization 13% of recurring operating costs GEL 4.3 mln (+10% q-o-q) Selling, general & administrative costs 16% of recurring operating costs GEL 5.6 mln (-10% q-o-q) Personnel costs 57% of recurring operating costs GEL 19.2 mln (+12% q-o-q) Net Interest Income Net Non-Interest Income Net income Cost/income ratio GEL mln % 50.0% 40.0% 45.1% 42.7% 44.7% 41.0% 50.0% 47.3% 30.0% - Q Q Q % (20.0) 10.0% (40.0) 0.0% Q Q Q (60.0) (58.0) Cost/income, Bank of Georgia standalone Normalized Cost/income, Bank of Georgia standalone* * Normalized for non-recurring costs Page 25

26 Composition of assets as at 30 September 2008 GEL mln 2, % of Total Assets 3,000 2, % of Total Assets % of Total Assets 2, % of Total Assets 10% of Total Assets 2, % of Total Assets 61% of Total Assets 61% of Total Assets 2,000 58% of Total Assets 1,815 1,664 1,500 1,482 Cash & Equivalents 1,000 Loans & Advances To Credit Institutions Loan Portfolio % of Total Assets % of Total Assets % of Total Assets 500 Property & Equipment % of Total Assets % of Total Assets % of Total Assets Other Assets YE 2007 Q Q Breakdown of other assets GEL Million YE 2007 Q Q Treasuries And Equivalents Other Fixed Income Instruments Investments In Other Business Entities, Net Intangible Assets Owned, Net Goodwill Tax Assets, Current And Deferred Prepayments And Other Assets Other assets Page 26

27 Analysis of the loan book GEL mln 1,800 1,600 1,400 RB & WM Card overdrafts, 2% Legacy retail loans, 4% POS loans, 6% Credit card loans, 12% Mortgage loans, 33% Car loans, 7% 1,200 Micro loans, 17% 1,000 Consumer loans, 19% CB Q Note: does not include the loans allocated to corporate center Pharmaceuticals & Healthcare, 2% Other, 10% Industry & State, 7% Construction & Real Estate, 9% Fast Moving Consumer Goods, 15% Energy, 12% SME, 26% Trade, 19% Page 27

28 CB exposure to real estate CB exposure to real estate CB gross loans to construction and real estate sector, 30 September 2008 CB gross loans to construction and real estate sector as % of CB gross loans, 30 September % 12.0% 10.0% 8.0% 12.7% 10.7% 9.6% 9.2% % % Q Q Q % 0.0% 2007 Q Q Q Note: BoG standalone, does not include Ukraine and Belarus Page 28

29 BoG standalone mortgage portfolio (Georgia) Number of loans Loan amount, GEL Outstanding, GEL Collateral value, GEL Volume of loans on real estate projects under construction Original loan to value Outstanding mortgage to original value ,804 73, , % 43.7% ,974 30, , % 13.9% ,047, ,158 1,759, % 24.1% ,922,586 8,143,792 19,476, % 41.8% ,029,419 21,969,086 50,812, % 43.2% , ,098, ,733, ,150, % 41.6% Q ,350 67,097,349 64,351, ,114, % 54.5% Q ,876 92,183,013 89,492, ,895, % 52.7% Q ,252,582 29,459,493 64,985, % 45.3% Total 7, ,885, ,678, ,579, % 46.9% Note: mortgage loans outstanding include RB, WM and corporate center mortgage loans outstanding On completed but unregistered apartments, 14.1 On apartments under construction, 17.5 Page 29

30 Tbilisi Bucharest Sofia Kiev Warsaw Prague Budapest Bratislava Vilnius Riga Tallinn Price (US$ per Sq m) Tbilisi residential real estate market highlights Tbilisi residential prices, 2007 Average living space per person, ,600 Square meter 1,400 1,200 1, Tbilisi EU 15 Capitals CE 10 Capitals Economy housing High-end apartments Source: Colliers CRE Source: Colliers CRE Average household size, Source: Colliers CRE Page 30

31 Analysis of the loan book Loans by currency, 30 September 2008 (BoG standalone) Loan concentration (BoG standalone) 100% 25.0% 23.1% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 64.2% 71.6% 67.5% 35.8% 28.4% 32.5% RB & WM CB Total 20.0% 15.0% 10.0% 5.0% 0.0% 18.8% 16.7% 13.0% Q Q GEL Foreign Currency Top 10 Borrowers Top 20 Borrowers Loans by maturity, 30 September 2008 (BoG standalone) Loan Book collateralization (BoG standalone) 80.0% 70.0% 60.0% 68.0% 100.0% 80.0% 90.1% 87.0% 50.0% 60.0% 40.0% 30.0% 29.1% 40.0% 20.0% 20.0% 10.0% 0.0% 1.7% 1.2% Less than 1 month 1 to 3 months 3 months to 1 year Over 1 year 0.0% Q Q Page 31

32 Provisioning policy 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% NPLs & write-offs, 30 September 2008 (BoG standalone) 0.76% 1.42% 1.52% 0.76% 1.36% 1.13% CB RB & WM Total NPLs as % of Gross Loans Write-offs as % of Gross Loans NPL coverage ratio, BoG standalone 600% 554.4% 500% 524.0% 400% 300% 208.4% 200% 138.3% 100% 166.8% 117.6% 0% Q Q Q BoG standalone BoG consolidated Note: NPLs include 90 days overdue loans including principal and/or interest payments Reserve for loan losses to gross loans Impairment seasoning, Q % 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Due to conflict related provisions in Q % 1.9% 2.1% 2.0% 1.7% 2.0% 1.7% 1.5% 22.8% 6.3% 19.8% 6.8% Q Q Q Reserve for loan losses to gross loans, BoG consolidated Reserve for loan losses to gross loans, BoG standalone 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% GEL mln % % 1.29% % % 1.47% % 1.01% 0.75% % Nil Nil - Q Q Q Q Q Q Q Cost of risk, BoG consolidated, annualised Write-Offs as % of Loans Issued (LHS) NPLs as % of Loans Issued (LHS) Loans Issued (RHS) Cost of risk, BoG standalone, annualised Page 32

33 Provisioning policy cont d BoG standalone Loan loss reserve, 30 September 2008 NPLs, 30 September 2008 GEL mln % % 1.9% 1.9% Q Q Q Q % 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% GEL mln % 1.7% 1.3% 1.2% Q Q Q Q RB CB % of Gross loans 2.0% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% RB CB Loan loss reserve as % of gross loans RB & WM loan loss reserve breakdown by loan type, 30 September 2008 CB loan loss reserve breakdown by loan type, 30 September 2008 Other loans, 5% Credit cards, 14% Mortgage loans, 26% Energy, 7% Other, 16% Fast moving consumer goods, 29% Micro loans, 20% Consumer, Car, POS & Legacy Retail loans, 34% Retail, 21% Construction & Real Estate, 27% Page 33

34 BoG standalone liabilities GEL mln 3,000 Leverage ratio, BoG standalone % of Total Liabilities 47% of Total Liabilities 2, Deposits And Loans From Banks , Client Deposits 46% of Total Liabilities Q Q Q ,500 Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date Borrowed Funds ,000 Liquidity ratio, BoG standalone Other Liabilites % of Total Liabilities 50.0% 45.0% 45.0% 32% of Total Liabilities % 35.0% 34.2% 33.8% % 27.2% Total Shareholders Equity Q % 20.0% 15.0% 10.0% 5.0% 0.0% 2007 Q Q Q Page 34 Liquidity ratio is calculated by dividing liquid assets by Total Liabilities

35 Analysis of deposits Client deposit breakdown, 30 September 2008 Client deposits by currency, 30 September 2008, BoG standalone Individual Current Accounts, 10% Individual Time & Demand Deposits, 23% Corporate Current Accounts, 32% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 34.7% 59.2% 70.1% 77.0% 65.3% 40.8% 29.9% 23.0% RB CB WM Total Corporate Time & Demand Deposits, 19% GEL Foreign Currency Total Deposits: GEL 1,063 million (-3% y-o-y) CB, RB & WM deposits, BoG standalone Deposits by maturity, 30 September 2008, BoG standalone GEL mln 1,400 1, % 50.0% 51.3% 1, % % % % 28.1% % % Q Q Q RB & WM Client Deposits CB Client Deposits 20.0% 10.0% 0.0% 12.5% 3.3% 4.9% On Demand Less than 1 month 1 to 3 months 3 months to 1 year Over 1 year Page 35

36 Deposit yields 10.0% 9.0% 8.0% 7.0% 9.1% 8.2% 8.1% 8.0% 6.6% 6.7% 6.0% 5.8% 5.7% 5.4% 5.6% 5.0% 4.0% 3.0% 3.8% 4.0% 2.0% 1.0% 0.0% Q Q Q Q RB Deposit Yields, BoG standalone Blended Deposit Yields, BoG Standalone CB Deposit Yields, BoG standalone Page 36

37 Risk management Liquidity risk management, Q Currency risk management, Q GEL mln % 16.0% 15.1% 16.0% (92.0) (136.4) (54.7) (190.6) -200 Up To 1 Month, Consolidated 1-3 Month 3 Month - 1 Year 1-5 Years Over 5 Years Past Due -400 Assets Liabilities Accumulated Liquidity Gap 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 9.2% 7.5% 6.2% 5.5% 4.9% 3.8% 2.1% 1.8% 1.7% Q Q Q Q Q Q Q Notes: (1) Liquidity & Currency Risk Management calculations are based on the National Bank of Georgia requirements (2) Liquidity risk management and currency risk management are based on standalone numbers (3) Breakdown of securities portfolio and securities investments are based on consolidated numbers Page 37

38 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 Corporate banking No.1 corporate bank in Georgia Circa 35% market share based on customer deposits (1) Circa 26% market share based on corporate loans (2) Integrated client coverage in key sectors 73,000+ clients of which 8,881 served by dedicated relationship bankers Circa 45% 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 approximately 700 at the end of 2007 to over 944 by 30 September 2008 Approximately 2,200 legal entities opened accounts at the bank in Q3 2008, bringing the total number of current accounts to approximately 133,000 Corporate client deposits (30 September 2008) Time Deposits, 35% Overview Current Accounts & Demand Deposits, 65% Corporate loan portfolio (30 September 2008) Total corporate loans: GEL 796 mln GEL mln Pharmaceuticals & Healthcare, 2% Other, 10% Industry & State, 7% Construction & Real Estate, 9% Corporate gross loan portfolio growth 807 Fast Moving Consumer Goods, 15% +2% 821 Energy, 12% +7% SME, 26% Trade, 19% YE Mar Jun Sep % 796 Total corporate deposits: GEL 576 mln Notes: (1) As of September 2008, source: National Bank of Georgia, does not include interbank deposits (2) Management estimates (based on the NBG data) Note: does not include Ukraine Page 38

39 Retail Banking No. 1 retail bank in Georgia Retail loans originated RB loan portfolio (30 September 2008) GEL mln POS Loans, 6% Legacy Retail Loans, 4% Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Card Overdrafts & Credit Card Balances, 14% Car Loans, 8% Mortgage Loans, 32% Consumer Loans, 19% Micro Loans, 18% (1) Monthly average Total retail loans: GEL 931 mln Note: does not include Ukraine & Belarus Leadership in consumer lending YE 2006 YE 2007 Sep-08 POS Contracts Signed ,310 Exclusive ,185 Outlets Operating Outlets Served ,148 Number of Consumer Loans Outstanding* 23,338 50,120 67,252 Volume of Consumer Loans Outstanding (GEL mln)* Relationship With Car Dealers Exclusive Presence In Outlets Credit Cards Outstanding , ,998 GEL mln Retail gross loan portfolio growth % % +17% YE Mar Jun Sep-08 * data does not includes WM Consumer Loans Page 39 Note: does not include Ukraine

40 Loan origination Mortgage loans Consumer loans GEL mln % % Volume of Mortgage Loans Originated Q Q Q Note: includes RB and WM mortgage loans only +27% % Volume of Mortgage Loans Outstanding GEL mln % % Volume of Consumer Loans Originated Q Q Q % % Volume of Consumer Loans Outstanding Micro loans Other RB & WM loans GEL mln % -65% Volume of Micro Loans Originated Q Q Q % +11% Volume of Micro Loans Outstanding GEL mln % % 39.4 Volume of Other RB & WM Loans Originated* Q Q Q % % Volume of Other RB & WM Loans Outstanding Note: does not include Ukraine * Other RB & WM Retail Loans Originated include POS and car loans originated Page 40

41 Deposit origination Volume of deposits outstanding (RB & WM) Volume of deposits outstanding (CB) GEL mln GEL mln Q Q Q Q Q Q Volume of RB & WM current accounts outstanding Volume of CB current accounts outstanding Volume of RB & WM demand deposits outstanding Volume of CB demand deposits outstanding Volume of RB & WM time deposits outstanding Volume of CB time deposits outstanding Number of RB & WM time deposits issued Volume of RB & WM time deposits issued 20,000 18,000 16,000 17,136 17,855 GEL mln , ,000 10,000 10, ,000 6, ,000 2, Q Q Q Q Q Q Q Q Q Q Q Q Page 41

42 RB cross-selling Product/client ratio RB loans penetration rate* 3,000,000 2,500,000 2,000,000 1,500, % 40% 35% 30% 25% 20% 15% 27.5% 17.6% 29.1% 21.4% 35.8% 34.1% 31.8% 32.0% 30.4% 31.7% 30.9% 25.9% 39.3% 29.1% 1,000, , % 5% 0% 1.9% 2.0% 2.1% 2.1% 2.0% 2.2% 2.1% 0.5% 0.6% 0.6% 0.7% 0.9% 1.0% 1.1% Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Mortgage Loan Penetration Rate Micro Loan Penetration rate Consumer Loan Penetration Rate Other Loans Penetration Rate Number of clients (LHS) Number of products (LHS) Product/Client Ratio (RHS) Cards penetration rate* Current accounts & deposits penetration rate* 120% 100% 80% 60% 72.1% 79.0% 85.3% 92.2% 95.6% 98.7% 104.0% 140% 120% 100% 80% 60% 73.5% 83.5% 91.2% 100.6% 105.0% 111.2% 114.3% 40% 20% 0% 31.4% 23.6% 26.9% 18.6% 12.8% 1.3% 4.5% Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Debit Cards Penetration Rate Credit Cards Penetration Rate 40% 20% 0% 23.1% 20.2% 19.2% 20.3% 20.0% 19.8% 19.5% 4.7% 4.7% 5.1% 5.4% 5.6% 6.7% 7.3% Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Demand & Term Deposits Penetration Rate Universal Current Accounts Penetration Rate Standard Current Accounts Penetration Rate * Calculated as percentage of Bank of Georgia clients for the period Page 42

43 Card processing Client banks Number of cards serviced by Georgian Card 56% ownership of Georgian Card Migration to TietoEnator Transmaster in 2005 Enhanced functionality and new product support '000s 1, ,054 1, YE 2005 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Bank of Georgia Other Banks Transaction authorisations by Georgian Card Georgian Card s revenue & assets '000s 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, ,536 8,613 7,176 6,584 5,027 4,224 2,954 2,914 1,776 2,151 1,105 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 GEL mln Dec-05 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep Total Assets (LHS) Revenue (RHS) Page 43

44 Superior retail footprint & consumer reach 140 Branches POS Call Center New universal remote 386 ATMs Internet Banking banking platform Service delivery channels 88 flagship (full service) branches 103 on fiber optic network 13 new branches being bought or fitted out in 2008 Utility & other payments (10 vendors) Visa/MasterCard Merchant Acquiring Licenses 2,969 POS terminals Full transactional functionality 256-bit SSL encryption Online payments (28 vendors) 24/7 50 operators Fully functional enterprise class IP call center supplied by Cisco Systems, scalable to up to 200 operators Multiple communications channels Internet voice telephony and mobile Transactions offered Transfers in Georgia and internationally Currency conversions Online payments Block/unblock cards Setting up standing orders Direct debit Hypo+/Auto+/Micro Loan+/Deposits Product Pull MeloMoney/Student Loan+/ Traveler+/Ski+ As of 30 September 2008: 593,000+ debit cards/904,000+ current accounts Approximately 154,000+ employees served through Payroll Services Estimated 40% market share Alternative customer acquisition channels Magti has 55% market share with 1.3+ mln active mobile subscribers Launched Magti credit card Distribution to Magti s top 60,000 retail clients The largest supermarket chain with 31 outlets 19.9% owned by BoG Exclusive POS acquiring Co-branded cards/in-store promotion of BoG products Launched Populi credit card in Q Real estate brokerage established by Bank of Georgia Sales brokers present in BoG s mortgage centers Presto will also serve as the exclusive sales agent for residential development projects of SB Iberia, a JV between BoG and Iberia Real Estate 45% market share with 1.1 mln+ active mobile subscribers Co-branded loyalty debit cards Chemebi Consumer Insurance brand since 2006 Circa 220,000 clients Aversi 100+ outlets Co-branded cards/exclusive POS acquiring Exclusive right to manage municipal bus payment system as of Q Sole servicing bank & fair collector of Tbilisi Metro since September 2006 Small service centers at all 23 metro stations Access to c. 900,000 residents of Tbilisi Page 44

45 Analysis of mortgage portfolio Number of mortgage loans issued & outstanding Volume of mortgage loans outstanding 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, ,476 6,881 5,340 4,230 3,409 2,365 1,915 1,426 1,166 1, Q Q Q Q Q Q Q GEL mln Q Q Q Q Q Q Q Number of mortgage loans issued Number of mortgage loans outstanding Typical mortgage terms Volume of mortgage loans issued Rate: 16% - 18% GEL mln 120 Tenor: years Currency: US$ LTV: Normally 70% - 80% Q Q Q Q Q Q Q Page 45

46 Wealth Management (WM) performance review WM clients and client assets WM products penetration Client deposit outflow during and in the aftermath of the conflict US$ mln 80 1,382 1,384 1,081 1,187 1,291 1, Nil Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 1,600 1,400 1,200 1, % 140% 120% 100% 80% 60% 40% 20% 0% 120% 106% 92% 80% 83% 82% 66% 63% 83% 80% 42% 64% 22% 22% 16% 13% 134% 138% 135% 130% 114% 100% 100% 81% 80% 80% 67% 64% 65% 67% 66% 28% 17% 21% 26% 16% 6% 12% 13% 14% 14% 15% 15% 15% 15% Mar Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 OneCard Penetration Rate All Other Cards Penetration Rate Demand & Term Deposits Penetration Rate Internet Banking Penetration Rate SMS Banking Penetration Rate Private Banking Client Assets (LHS) Private Banking Clients (RHS) Notes: (1) Converted at exchange rates of GEL/US$, (2005),1.714 (2006), (Q1 2007), (Q2 2007), 1.66 (Q3 2007), 1.59 (Q4 2007), 1.48 (Q1 2008), 1.42 (Q2 2008) and 1.41 (Q3 2008) (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 WM loans and deposits (30 September 2008) WM products penetration cont d Car Loans, 7% Other, 6% 140% 120% 100% 99% 97% 99% 113% 119% Consumer Loans, 21% Mortgage Loans, 66% Time Deposits, 55% Current Accounts & Demand Deposits, 45% 80% 60% 40% 20% 0% 80% 56% 51% 40% 39% 41% 46% 47% 33% 31% 25% 19% 22% 11% 12% 12% 12% 12% 11% 3% 5% 4% 4% 4% 4% 4% 0.1% 3% 4% 3% 5% Mar Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Loan Penetration Rate Insurance Products (Non-Life) Penetration Rate Life & Pensions Penetration Rate Brokerage & Asset Management Accounts Penetration Rate Total PB loans: GEL 45 mln Total PB deposits: GEL 70 mln Page 46

47 UBDP standalone results overview Page 47

48 Ukraine (UBDP) performance Revenue growth Recurring operating cost structure, Q GEL mln % 8.3% 8.4% 8.2% % % 7.5% 7.6% 7.2% 7.4% % 7.0% 6.8% 6.6% Q Q Q Net interest income Net non-interest income Net interest margin, annualised Depreciation & Amortization 1% of Recurring Costs GEL 0.1 mln (-57% q-o-q) Selling, General & Administrative Expenses 32% of Recurring Costs GEL 2.2 mln (-4% q-o-q) Personnel Costs 66% of Recurring Costs GEL 4.5 mln (-2% q-o-q) Other Operating Expenses 0.3% of Recurring Costs GEL 0.02 mln (-53% q-o-q) Net income Cost/income ratio GEL mln % 120.0% 100.0% 80.0% 109.2% 116.9% 76.0% % (0.20) (0.40) (0.60) (0.80) Q Q Q (0.70) 40.0% 20.0% 0.0% Q Q Q Page 48

49 Ukraine (UBDP) assets as at 30 September 2008 GEL mln Asset growth Low leverage (at 2.1x) c. 4% growth despite challenging market conditions in Ukraine No int l loan refinancing in 2008/ % of Total Assets 1% of Total Assets 63% of Total Assets % of Total Assets 2% of Total Assets 74% of Total Assets % of Total Assets 3% of Total Assets 74% of Total Assets ,400 1,200 1, ,131 1,217 1,149 1, Q Q Q Q Assets (GEL mln) Assets (UAH mln) GEL/UAH Exchange, e-o-p Gross loan book growth Cash & Equivalents Loans & Advances To Credit Institutions Loan Portfolio Property & Equipment Other Assets YE % of Total Assets 10% of Total Assets Q % of Total Assets 10% of Total Assets Q % of Total Assets 10% of Total Assets , Q Q Q Q Loans (GEL mln) Loans (UAH mln) GEL/UAH Exchange, e-o-p GEL million YE 2007 Q Q Available-For-Sale Securities Intangible Assets Owned, Net Prepayments And Other Assets Other assets Page 49

50 Ukraine (UBDP) loan portfolio Loan portfolio breakdown, 30 September 2008 Corporate loan portfolio breakdown, 30 September 2008 Pharmaceuticals & Healthcare, 1% Other, 8% Retail Loans, 21% Fast Moving Consumer Goods, 5% Construction & Real Estate, 14% Trade, 32% Corporate Loans, 79% Industry & State, 19% SME, 22% Gross loans: GEL 257 million Gross corporate loans: GEL 203 million Retail loan portfolio breakdown, 30 September 2008 Loans by geographic region Car Loans, 17% Card Overdrafts, 3% POS Loans, 2% Odessa Krivoy Rog GEL 2.7 mln GEL 22.0 mln (1% of gross loans (9% of gross loans Limited exposure to real estate in both retail and corporate segments Mortgage Loans, 18% Micro Loans, 21% Consumer Loans, 20% Lviv GEL 34.2 mln (13% of gross loans Credit Card Balances, 19% Kiev GEL mln (77% of gross loans Gross retail loans: GEL 54 mln Page 50

51 Ukraine (UBDP) analysis of the loan book Loans by currency, 30 September 2008 Top ten borrower concentration 33.0% 32.5% 32.5% 32.0% Foreign currency, 35% 31.5% 31.0% 30.5% 30.0% 30.0% 31.3% 29.5% UAH, 65% 29.0% 28.5% Q Q Q Loans by maturity, 30 September 2008 Loan book collateralization 120.0% 100.0% 96.8% 92.0% 91.5% 91.5% 80.0% 60.0% 91.0% 90.5% 90.9% 40.0% 90.0% 89.9% 20.0% 0.0% 0.2% 0.4% 2.6% 1 to 3 months 3 to 6 months 6 months to 1 year Over 1 year 89.5% 89.0% Q Q Q Page 51

52 Ukraine (UBDP) provisioning policy NPLs Loan loss reserve GEL mln % 1.3% % Q Q Q % 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% GEL mln Q Q Q RB CB NPL ratio RB CB NPL coverage ratio Reserve for loan losses to gross loans 350% 300% 250% 298.4% 3.0% 2.5% 2.0% 2.8% 2.2% 2.5% 200% 166.4% 174.7% 1.5% 150% 1.0% 100% 0.5% 50% 0% Q Q Q % Q Q Q Q Q Q Page 52

53

54 Ukraine (UBDP) client deposits Client deposits Deposit yields 13.5% 13.3% Q Q Q Q GEL mln UAH mln GEL/UAH Exchange, e-o-p % 12.5% 12.0% 11.5% 11.0% 10.5% 12.5% 12.0% 11.5% Q Q Q Q CB & RB client deposits Deposits by maturity, 30 September 2008 GEL mln % 60.0% 60.7% % % -9% % 30.0% 20.0% 22.4% % % % 6.6% 5.3% 4.9% 0.0 Q Q Q % On demand Less than 1 month 3 to 6 months 6 months to 1 year Over 1 year CB client deposits RB client deposits Page 54

55 Ukraine (UBDP) analysis of deposits Client deposits breakdown, 30 September 2008 Client deposits by currency, 30 September 2008 Retail current accounts, 1.8% Corporate time & demand deposits, 17.9% Foreign currency, 34% Corporate current accounts, 18.1% Retail time & demand deposits, 62.1% UAH, 66% Client deposits: GEL 171 mln Client deposits: GEL 171 mln Page 55

56 Ukraine (UBDP) capital adequacy BIS capital adequacy ratios NBU capital adequacy ratios 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 19.0% 16.3% 31.3% 29.1% 32.6% 30.8% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 13.7% 12.4% 14.5% 12.9% 15.6% 14.0% 5.0% 0.0% Q Q Q % 0.0% Q Q Q Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio Risk-weighted assets BIS vs. NBU Net loans/deposits & Loans/(deposits+equity) GEL mln % 120.0% 100.0% 80.0% 60.0% 89.0% 71.5% 113.7% 116.5% 75.3% 77.7% % % Q Q Q % Q Q Q NBU BIS Net loans/(total deposits+equity) Net loans/total deposits Page 56

57 Belarus (BNB) Page 57

58 Belarus (BNB) balance sheet as at 30 September 2008 Sep-08 Thousands, unless otherwise noted (Unaudited) GEL US$ Cash And Cash Equivalents 4,863 3,461 Loans And Advances To Credit Institutions 10,003 7,120 Mandatory Reserves With NBRB 1,460 1,039 Other Accoutns With NBRB - - Balances With And Loans To Other Banks 8,543 6,080 Available-For-Sale Securities - - Treasuries And Equivalents - - Other Fixed Income Instruments - - Loans To Clients, Gross 34,681 24,684 Less: Reserve For Loan Losses (628) (447) Net Loans To Clients 34,053 24,237 Investments In Other Business Entities, Net - - Property And Equipment Owned, Net 16,904 12,032 Intangible Assets Owned, Net Goodwill - - Tax Assets, Current And Deferred - - Prepayments And Other Assets Total Assets 66,719 47,487 Client Deposits 26,558 18,903 Deposits And Loans From Banks 2,754 1,960 Borrowed Funds - - Issued Fixed Income Securities - - Insurance Related Liabilities - - Tax Liabilities, Current And Deferred Accruals And Other Liabilities Total Liabilities 29,735 21,164 Share Capital - Ordinary Shares 29,204 20,786 Share Premium - - Treasury Shares - - Retained Earnings (6,137) (4,368) Revaluation And Other Reserves 12,897 9,179 Net Income For The Period 1, Shareholders Equity Excluding Minority Interest 36,984 26,323 Minority Interest - - Total Shareholders Equity 36,984 26,323 Total Liabilities And Shareholders Equity 66,719 47,487 Page 58

59 Belarus (BNB) Q P&L Q Thousands, unless otherwise noted GEL US$ (Unaudited) Interest Income 1,697 1,208 Interest Expense Net Interest Income 1, Fees & Commission Income Fees & Commission Expense Net Fees & Commission Income Income From Documentary Operations - - Expense On Documentary Operations - - Net Income From Documentary Operations - - Net Foreign Currency Related Income Net Insurance Income (Loss) - - Brokerage And Investments Banking Income - - Asset Management Income - - Net Investment Gains (Loss) - - Other - - Net Other Non-Interest Income - - Net Non-Interest Income Total Recurring Income (Revenue) 2,087 1,486 Personnel Costs Selling, General & Administrative Expenses Procurement & Operations Support Expenses Depreciation And Amortization Other Operating Expenses Total Recurring Operating Costs 1, Normalized Net Operating Income (Loss) Net Non-Recurring Income (Costs) 9 7 Profit Before Provisions Net Provision Expense (340) (242) Pre-Tax Income 1, Income Tax Expense / (Benefit) Net Income 1, Page 59

60 Belarus (BNB) loan portfolio as at 30 September 2008 Loan Portfolio Breakdown, 30 September 2008 Loan loss reserve, 30 September 2008 RB, 11% RB: GEL 0.07 mln CB, 89% CB: GEL 0.56 mln Gross loans: GEL 35 mln Loan loss reserve: GEL 1 mln RB Loan Portfolio Breakdown, 30 September 2008 CB Loan Portfolio Breakdown, 30 September 2008 Mortgage loans, 3% Overdrafts & credit card loans, 1% Industry & state, 2% Other, 10% Car loans, 20% Construction & real estate, 31% Retail trade, 57% Consumer loans, 76% RB loans: GEL 4 mln CB loans: GEL 31 mln Page 60

61 Belarus (BNB) client deposits as at 30 September 2008 Client deposits breakdown, 30 September 2008 CB client deposits breakdown, 30 September 2008 GEL mln 30.0 CB demand deposits outstanding, 0.04% CB current accounts outstanding, 45% CB time deposits oustanding, 55% RB client deposits breakdown, 30 September RB current accounts outstanding, 5% RB demand deposits outstanding, 1% RB deposits outstanding Sep-08 CB deposits outstanding RB time deposits outstanding, 94% Page 61

62 Galt & Taggart securities Page 62

63 Galt & Taggart Securities Revenue Net income/(loss) GEL mln (0.5) (1.0) (1.5) (2.0) (2.5) 1.6 (1.0) Q Q Q (1.9) GEL mln 0.0 (1.0) (2.0) (3.0) (4.0) (5.0) Q Q Q (1.9) (2.6) (2.3) (6.0) Proprietary book Headcount GEL '000s 40,000 35,000 36, ,000 25,000 20,000 15,000 10,000 5, ,276 3,912 Q Q Q Q Q Q Galt & Taggart Georgia Galt & Taggart Ukraine Page 63

64 Asset management Page 64

65 Asset Management review The Owner BoG The Funds Aldagi BCI Pension Fund 2 nd largest pension fund in Georgia The Manager Iavnana Endownment Fund Paata Burchuladze s International Charity Foundation GTAM 1.5%/15% Caucasus AgroDevelopment Agriculture Bidzina Bejuashvili Chief Investment Officer Established in October %/15% Liberty Consumer Formerly Galt & Taggart Capital Consumer, Retail, TMT, Business Support Services, Real Estate 23% Free Float AUM circa US$145 million as of 30 September %/15% Caucasus Energy & Infrastructure Energy, Infrastructure Private Placement successfully completed in February 2008; Raised US$50 million 1.5%/15% SB Real Estate To be opened up to third parties Commercial, Warehousing, Leisure/Vacation Home, Other % TBD New Funds (2008) Page 65

66 Asset Management review cont d Liberty Consumer* MCAP: circa US$47 million as at 30 September 2008 GSE: GTC Investments include consumer, retail, TMT, business support services & real estate sectors * Formerly Galt & Taggart Capital Caucasus Energy & Infrastructure (CEI) MCAP: circa US$57 million as at 30 September 2008 GSE: NRGY Successfully completed its first private placement in February 2008, raising US$50 million Aims at investing in small and medium-sized hydro plants in Georgia, as well as infrastructure projects in the region Aldagi BCI Pension Fund NAV: circa US$ 1.2 million as at 30 September 2008 Second largest Pension Fund in Georgia SB Real Estate (SBRE) NAV: circa US$34 million as at 30 September 2008 (last NAV valuation done as of 30 June 2008) 14 properties in the portfolio Page 66

67 Insurance Page 67

68 Claims Reimbursed GEL mln Gross Premiums Written Aldagi BCI (Insurance) Size of the Georgian Insurance Market Aldagi BCI GPW, net premiums earned & net income/(loss) Georgian insurance market product breakdown (Q1 2008) GEL mln YE 07 YE 06 YE 05 GPW Claims Reimbursed GEL 000s 59,500 49,500 39,500 29,500 30,442 24,395 49,293 27,425 Pension, 2% Life, 4% Civil Liability, 3% Aviation & Cargo, 3% Personal Accident & Travel, 1% Other, 3% 19,500 Financial Risks, 7% 9,500 (500) 645 (361) Health, 46% 9 months months 2008 Casco, 14% Gross Premiums Written Net Premiums Earned Net Income (Loss) Property, 18% Source: State Insurance Supervision Service of Georgia Aldagi BCI market share by GPW (31 March 2008) Gross premiums written & total claims reimbursed 20 33% 35% 18% 50% Net loss ratio* Others, 23.5% Aldagi BCI, 30.2% Imedi L, 7.8% Irao, 17.2% GPIH, 21.3% (1.4) (1.7) (5.6) (1.6) 2.0 (0.3) (1.4) (0.4) (1.8) (1.5) (6.5) -5 Source: State Insurance Supervision Service of Georgia -10 Aldagi BCI GPIH Irao Imedi L Others Q1 '07 Q1 '08 Page 68 * Net Loss Ratio equals Claims Reimbursed by Companies divided by Total Premiums Written

69 Contact Nick Enukidze Chairman of the Supervisory Board nenukidze@bog.ge Irakli Gilauri Chief Executive Officer igilauri@bog.ge Macca Ekizashvili Head of Investor Relations ir@bog.ge Page 69

70 Appendices Page 70

71 Bank of Georgia shareholder structure, management & price performance Page 71

72 Ownership structure & share price performance Broadly owned by over 100 institutional accounts Ownership structure, September 2008 Management & Employees Local Shares Held By Institutional Shareholders 17.2% Individuals 5.5% 5.3% 30-Sep-08 Total % GDR Holders* 22, % Local Shares Held by Institutional Shareholders 5, % Management & Employees** 1, % Local Shares Held by Domestic and Foreign Retail Shareholders 1, % Total Shares Outstanding 31, % Adjusted for Galt & Taggart Securities' Proprietary Book (1 ) (166) Adjusted Total Shares Outstanding 31,029 (1) Treated as treasury shares as per IFRS *through BNY Nominees Limited ** includes GDRs held by Employee Benefit Trust Non-Resident Institutional Shareholders 72.7% Note: certain shareholder data is based on management s estimates Supervisory board Management board Nicholas Enukidze Chairman of the supervisory board Irakli Gilauri Chief executive officer Allan Hirst Ian Hague Jyrki Talvitie Kaha Kiknavelidze Vice chairman of the supervisory board, independent member Member, Firebird Management LLC Member, East Capital Independent member Sulkhan Gvalia George Chiladze Murtaz Kikoria Avto Namicheishvili Ramaz Kukuladze Deputy chief executive officer Chief financial officer Deputy chief executive officer Deputy chief executive officer Deputy chief executive officer Irakli Burdiladze Chief operating officer Konstantin Poloskov Chief executive officer, UBDP Page 72

73 2006-YTD 2008 price performance Bank of Georgia price vs. selected MSCI indices, November 2006 YTD 2008 Bank of Georgia price vs. CIS banks 2007 & YTD 2008 price performance MSCI EM Turkey Price Index (US$) Bank of Moscow MSCI EM (Emerging Markets) Price Index (US$) Rosbank MSCI EM EMEA Price Index (US$) Kazkommertzbank Bank of Georgia Price (US$) Alliance Bank MSCI EM Eastern Europe Price Index (US$) Ukrgazbank MSCI EM Russia Price Index (US$) Bank of Georgia -72% -63% -54% -45% -36% -27% -18% -9% 0% Bank of Georgia price vs. selected MSCI indices, YTD 2008 MSCI FM (Frontier Markets) Price Index (US$) VTB Raiffeisen Bank Aval Vozrozhdenie MSCI EM (Emerging Markets) Price Index (US$) MSCI EM EMEA Price Index (US$) MSCI FM Central & Eastern Europe+CIS Price Index (US$) Ukrsotsbank Halyk MSCI EM Turkey Price Index (US$) Sberbank MSCI EM Eastern Europe Price Index (US$) MSCI EM Russia Price Index (US$) Bank of Georgia Price (US$) Rodovid Forumbank -81% -72% -63% -54% -45% -36% -27% -18% -9% 0% Source: MSCI Barra -100% -50% 0% 50% 100% Page Y-O-Y Change 2008 YTD Change Source: Bloomberg

74 Analyst coverage Analyst Andrzej Nowaczek Analyst David Nangle Analyst Mark Rubinstein Analyst Radena Georgieva Page 74

75 Georgian banking sector key trends 2006-YTD 2008 Page 75

76 Georgian banking sector key trends 2006/YTD 2008 GEL/US$ Period End YE 2006= 1.71 YE 2007=1.59 Sep-2008=1.41 Growth Market Share (YE 2006) Market Share (YE 2007) Market Share (Sep-2008) Growth As % of Bank of Top 5 Bank of Top 5 Bank of GEL mln YE 2006 YE 2007 Jun-08 Sep YTD GDP* Y-O-Y Y-O-Y Top 5 Banks Georgia Banks Georgia Banks Georgia Total Assets 4,217 7,208 8,606 8, % 48.4% 65.9% 70.9% 80.1% 27.9% 80.0% 35.2% 76.9% 32.9% Gross Loans 2,676 4,589 5,531 5, % 32.0% 55.0% 71.5% 83.2% 26.5% 81.7% 32.7% 81.8% 32.6% Deposits 2,327 3,511 4,075 3, % 21.8% 51.4% 50.9% 82.2% 24.5% 81.4% 31.4% 75.9% 27.8% Equity 889 1,471 1,792 1, % 10.1% 87.4% 65.5% 78.3% 39.9% 73.3% 33.8% 73.6% 37.3% Net Income/(Loss) (37) NMF -0.2% 50.5% 17.5% 80.8% 23.6% NMF 41.9% NMF NMF 22 banks as at 31 July 2008 Minimum capital requirement GEL 12 mln and growing Since 1 January 2007 local presence established by HSBC, Halyk, Privat, JSC Kor Bank No state ownership since 1995 Very open to foreign ownership All leading banks have meaningful foreign capital participation Significant IT/infrastructure and marketing spend drives increasing retail banking penetration Increasing adoption of the universal banking business model, following the lead of Bank of Georgia Increasing availability of non-deposit funding key to sustained growth Four top banks are rated Domestic bonds, Eurobonds, CLNs, unsecured term loans, syndicated loans, subordinated debt A small structural funding gap exists Real estate boom competes for consumer savings The economy and consumers significantly underlent (all-in consumer debt per capita US$142 at 30 June 2008) Note: All data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia * YE 2007Total Assets/2007 GDP, YE 2007 Gross Loans/2007 GDP, YE 2007 Deposits/2007 GDP, YE 2007 Equity/2007 GDP, 2007 Net Income/2007 GDP Page 76

77 Significant regulatory changes In Q the following important regulatory changes took place in Georgia Minimum reserve requirement has been decreased from 13% to 5% Liquidity ratio has been decreased from 30% to 20% Risk weighting of foreign currency denominated loans has been decreased from 200% to 175% Page 77

78 Peer group s market share in total assets GEL/US$ Period End YE 2006 = 1.71 YE 2007=1.59 Sep-2008= % 35% 30% 35.4% 32.9% Peer Group s market shares in total assets, September % 27.9% 23.7% 20% 22.5% 23.7% 18.1% 15% 10% 5% 0% 10.2% 8.3% 7.9% 7.4% 7.7% 6.9% 12.6% 14.3% 11.1% 7.3% 6.7% 5.0% 5.0% 5.5% BoG TBC Republic ProCredit Bank VTB Cartu Other Banks YE 2006 YE 2007 Sep-08 Note: all data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia Page 78

79 Peer group s market share in gross loans GEL/US$ Peer Group s market shares in gross loans, September 2008 Period End YE 2006 = 1.71 YE 2007=1.59 Sep-2008= % 30% 25% 26.5% 32.6% 32.7% 25.6% 25.3% 22.2% 20% 15% 10% 5% 7.3% 7.0% 9.2% 11.8% 8.3% 8.4% 14.0% 8.8% 7.6% 7.5% 6.3% 6.3% 11.9% 11.3% 9.5% YE 2006 YE % BoG TBC Republic ProCredit Bank Cartu VTB Other Banks Sep-08 Note: all data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia Page 79

80 GEL/US$ Period End YE 2006 = 1.71 YE 2007=1.59 Sep-2008=1.41 Peer group s market share in deposits 35% 31.4% 30% 27.8% Peer Group s market shares in deposits, Sep % 25% 20% 24.5% 24.7% 24.8% 21.8% 16.5% 15% 11.3% 12.0% 14.2% 10% 9.6% 8.9% 7.9% 7.9% 7.7% 8.6% 6.6% 5% 0% 3.6% 2.3% 2.1% BoG TBC ProCredit Bank Republic VTB Cartu Other Banks YE 2006 YE 2007 Sep-08 Note: all data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia Page 80

81 Georgia Kazakshtan Czech Republic Turkey Romania Hungary Bulgaria Poland Russia Ukraine Market potential and high degree of concentration The highest degree of market concentration in CEE benefits large, entrenched domestic players 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Market shares of top 5 banks by assets (2007) Gross loans to GDP (%, 2007E) 80% 77% 65% 62% 60% 58% 57% 48% 43% 33% Israel South Africa Chile Kazakhstan Czech Republic Hungary Ukraine Turkey Poland Russia Brazil Georgia 27% Colombia Mexico Azerbaijan Argentina Armenia Note: 2006 data for Czech Republic, Hungary and Poland Sources: National Bank of Georgia, CA IB 0% 20% 40% 60% 80% 100% 120% Note: data for South Africa, Chile, Brazil, Argentina, Colombia and Mexico is as of YE 2006 Source: National Bank of Georgia, National Bank of Ukraine, data from Deutsche Bank Banking assets to GDP (%, 2007E) Deposits to GDP (%, 2007E) Israel Hungary South Africa Czech Republic Kazakhstan Chile Ukraine Turkey Poland Brazil Russia Argentina Georgia Colombia Mexico Azerbaijan Armenia 42% Israel South Africa Chile Ukraine Kazakhstan Hungary Russia Poland Brazil Turkey Czech Republic Colombia Mexico Georgia Azerbaijan Armenia Argentina 21% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% Note: data for South Africa, Chile, Turkey, Brazil, Argentina, Colombia and Mexico is as of YE 2006 Source: National Bank of Georgia, National Bank of Ukraine, Deutsche Bank 0% 20% 40% 60% 80% 100% 120% 140% Note: data for South Africa, Chile, Brazil, Argentina, Colombia and Mexico is as of YE 2006 Source: National Bank of Georgia, National Bank of Ukraine, Deutsche Bank Page 81

82 The Georgian banking sector in the regional context Banking assets per capita YE 2007E (US$) Gross loans per capita YE 2007E (US$) Deposits per capita YE 2007E (US$) Israel 40,673 Israel 26,327 Israel 33,124 Czech Republic 19,953 Czech Republic 13,590 Czech Republic 14,967 Hungary 18,647 Hungary 8,765 Hungary 6,576 Poland 9,715 Kazakhstan 4,632 Poland 4,631 Kazakhstan Russia 6,287 5,467 Poland Russia Turkey 4,185 3,368 2,789 Turkey Russia Kazakhstan 3,626 3,057 2,094 Ukraine 2,518 Ukraine 1,512 Ukraine 1,143 Azerbaijan 980 Azerbaijan 663 Armenia 655 Georgia 975 Georgia 621 Georgia 475 Armenia 846 Armenia 466 Azerbaijan ,000 20,000 30,000 40,000 50,000-7,000 14,000 21,000 28,000-7,000 14,000 21,000 28,000 35,000 Source: Galt & Taggart Securities Page 82