GROWTH AT THE RIGHT PRICE LSE: BGEO / GSE:GEB JSC Bank of Georgia Q1 2011 results overview April 2011
Introduction to Bank of Georgia The leading universal bank in Georgia No.1 by assets (35.7%), (1) gross loans (35.3%), (1) client deposits (33.9%) (1) and equity Investment highlights 36.1%) (1) Undisputed leader of Georgian financial services industry with Leading retail banking, with top brand, best distribution network and broadest range of market-leading retail and corporate services of any bank in Georgia March December March banking franchise 2011 2010 2010 Strongly positioned to benefit from US$4.5 bln international assistance Retail Accounts 1,092,600+ 1,130,900+ 1,124,900+ package pledged to Georgia by Cards Outstanding 614,900+ 603,000+ 570,600+ international donors in the aftermath Branches 143 142 140 of Russia-Georgia conflict in August ATMs 408 405 379 2008 Leading corporate bank with approximately 96,885 legal entities and over 186,044 current Disciplined capital management, low accounts (2) leverage, conservative liquidity Leading insurance, card-processing, leasing, trade finance, wealth management and asset position, no exposure to sub-prime management services provider Sophisticated management team with The only Georgian entity with credit ratings from all three global rating agencies Western banking & finance S&P: „B/B‟ background Fitch Ratings: „B+/B‟ – at the sovereign ceiling Transparency and good governance, Moody‟s: „ B1/NP (FC)‟ & „Ba3/NP (LC)‟ over 89% institutionally owned. Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange Market Cap (LSE) US$ 586 mln as of 18 April 2011 Supervisory Board includes two large Approximately 95% free float institutional shareholders and five Issue of the first ever Eurobonds in Georgia independent directors Bloomberg: BKGEO; 5 year, 9%, US$200 mln S&P: B; Moody‟s: Ba3; Fitch: B+; (composite B+) (1) All data according to the NBG as of 31 March 2011 (2) Includes SME and Micro from retail banking Page 2 April 2011
JSC Bank of Georgia Q1 2011 results overview April 2011
Q1 2011 P&L results highlights Q4 2010 Growth 1 Growth 2 Millions unless otherwise noted Q1 2011 Q1 2010 Bank of Georgia (Consolidated, Unaudited IFRS-Based) GEL US$ GEL US$ Q-O-Q GEL US$ Y-O-Y (Unaudited) (Unaudited) (Unaudited) Net Interest Income 56.9 33.4 57.5 32.4 -1.0% 45.3 25.9 25.7% Net Non-Interest Income 34.2 20.0 37.7 21.3 -9.3% 30.6 17.5 11.7% Total Operating Income (Revenue) 3 91.1 53.4 95.2 53.7 -4.3% 75.9 43.4 20.1% Recurring Operating Costs 47.3 27.7 50.9 28.7 -7.2% 46.3 26.4 2.2% Normalized Net Operating Income 4 43.8 25.7 44.3 25.0 -1.0% 29.6 16.9 48.0% Net Non-Recurring Income (Costs) (2.3) (1.3) (1.4) (0.8) 67.7% (3.3) (1.9) -30.0% Profit Before Provisions 41.5 24.3 42.9 24.2 -3.2% 26.4 15.1 57.6% Net Provision Expense 5.2 3.0 10.8 6.1 -52.4% 7.4 4.2 -30.0% Net Income/ (Loss)* 30.6 17.9 25.7 14.5 19.0% 16.8 9.6 82.4% EPS (basic) 0.97 0.57 0.82 0.46 18.9% 0.54 0.3 82.1% EPS (diluted) 0.93 0.55 0.79 0.45 17.8% 0.54 0.3 74.4% 1 Compared to Q4 2010, growth calculations based on GEL values. 2 Compared to the same period in 2010; growth calculations based on GEL values. 3 Revenue includes Net Interest Income and Net Non-Interest Income. 4 Normalized for Net Non-Recurring Costs. * Excluding extraordinary item Page 4 April 2011
31 March 2011 Balance Sheet results highlights Millions, unless otherwise noted Q1 2011 Q4 2010 Q1 2010 Bank of Georgia (Consolidated, unaudited IFRS-Based) GEL US$ GEL US$ GEL US$ (Unaudited) (Unaudited) (Unaudited) Net Loans 2,241.9 1,314.2 2,368.7 1,336.2 1,777.3 1,015.9 Total Assets 4,049.2 2,373.7 4,098.9 2,312.1 3,124.1 1,785.8 Client Deposits 1,976.9 1,158.9 2,011.2 1,134.5 1,394.4 797.1 Borrowed Funds 965.8 566.1 1,012.3 571.0 912.0 521.3 Total Liabilities 3,311.7 1,941.3 3,406.3 1,921.4 2,512.4 1,436.2 Shareholders‟ Equity 737.6 432.4 692.7 390.7 611.7 349.6 Book Value Per Share, GEL & US$ 23.52 13.79 22.10 12.46 19.53 11.17 Tier I Capital Adequacy Ratio (BIS) 18.0% 17.5% 21.9% Total Capital Adequacy Ratio (BIS) 28.8% 26.6% 34.6% Tier I Capital Adequacy Ratio (NBG) 12.7% 13.0% 17.7% Total Capital Adequacy Ratio (NBG) 15.6% 14.5% 15.9% Change Change Q-O-Q 1 Y-O-Y 2 Net Loans -5.4% 26.1% Total Assets -1.2% 29.6% Client Deposits -1.7% 41.8% Borrowed Funds -4.6% 5.9% Total Liabilities -2.8% 31.8% Shareholders‟ Equity 6.5% 20.6% Book Value Per Share, 6.5% 20.4% 1 Compared to Q4 2010 growth calculations based on GEL values. 2 Compared to the same period in 2010; growth calculations based on GEL values. Page 5 April 2011
Consolidated Composition of revenue in Q1 2011 Revenue by segments, Q1 2011 Composition of revenue, Q1 2011 Aldagi BCI Net other non- Net income from 5.5%, Other interest income documentary GEL5.0 mln 4.1%, 10.0%, Belarus operations 3.8%, (-8.8% q-o-q) GEL3.7 mln GEL 9.2 mln 4.5%, GEL 3.5 mln (-35.5% q-o-q) (-16.6% q-o-q) GEL4.2 mln (+7.4% q-o-q) (+14.5% q-o-q) Net foreign currency related income 10.5%, GEL 9.6 mln (+1.3% q-o-q) Net interest Net fee and income 62.5%, commision income BoG Standalone GEL 56.9 mln 13.2%, 85.9%, (-1.0% q-o-q) GEL 12.0 mln GEL78.2 mln (-14.6% q-o-q) (-2.6% q-o-q) Total Revenue: GEL 91.1 million in Q1 2011 Page 6 April 2011
Consolidated Analysis of revenue Revenue growth Net foreign currency related income GEL mln GEL mln 100 90.3 95.2 91.1 16 14.9 81.1 86.1 85.9 86.6 81.7 80.6 79.3 77.4 75.9 90 82.5 14 13.2 80 30.9 34.2 37.7 34.2 31.3 30.3 27.1 30.2 29.3 31.1 30.4 31.3 30.6 12 70 10.4 9.4 9.6 60 9.4 10 8.8 8.0 8.8 50 7.3 8 7.1 6.5 5.7 40 30 6 49.8 55.8 58.9 56.4 52.4 49.5 48.9 46.0 45.3 51.7 56.1 57.5 56.9 20 4 10 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 Net Interest Income Net Non-Interest Income Net fee & commission income & Income from Net Other non-interest income documentary operations GEL mln GEL mln 20 10.7 10.8 12 10.7 9.5 11.0 18 10 9.9 9.2 9.0 7.8 16 3.7 4.5 4.4 2.5 3.3 3.0 4.4 8 6.5 7.1 7.8 4.9 14 0.3 4.0 1.7 1.4 2.2 1.8 2.3 2.3 3.5 0.2 4.6 0.2 0.3 6 0.6 4.7 1.0 1.9 1.3 1.3 0.1 0.2 12 2.2 2.2 3.6 2.0 3.3 0.5 5.0 0.2 0.1 1.4 1.9 1.9 1.8 0.2 0.1 4 0.4 0.1 0.2 10 0.2 1.4 0.4 0.6 0.3 0.1 0.5 1.6 5.1 5.0 4.9 1.3 4.7 4.2 8 2 0.1 4.2 3.9 3.7 3.2 3.0 2.5 13.8 14.0 12.0 1.7 1.6 12.9 10.9 11.1 11.6 12.0 12.6 10.3 10.9 6 0 -0.4 -0.4 -1.1 -0.5 10.2 10.2 4 -3.4 -2 2 -4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 -6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Other Net Investment gains 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 Asset Management Income Brokerage Income Net Fee & Commission Income Net Insurance Income Net Income From Documentary Operations Page 7 April 2011
Consolidated Composition of recurring operating costs in Q1 2011 Recurring operating cost structure by segments, Recurring operating cost structure, Q1 2011 Q1 2011 Other operating Depreciation & costs 5.5% amortization Other 13.9% GEL 2.6 mln 12.9%, Aldagi BCI GEL 6.6 mln (-25.1% q-o-q) GEL 6.1 mln 7.1% (-29.2% q-o- q ) (-10.3% q-o-q ) GEL 3.3 mln (-20.3% q-o-q ) Procurment & operations support costs BNB 6.6% 7.2%, GEL 3.1 mln GEL 3.4 mln (-0.9% q-o-q) Personnel costs (+0.9% q-o-q) 54.3%, BoG GEL 25.7 mln standalone, Selling, general (-5.1% q-o-q) 72.4% & administrative GEL 34.2 mln costs 20.1%, (-0.2% q-o-q) GEL 9.5 mln (-7.4% q-o-q) Total recurring operating costs: GEL 47.3 million in Q1 2011 Page 8 April 2011
Consolidated Analysis of recurring operating costs Employees Personnel costs GEL mln 3150 Q1 2011 27.3 28.4 30 5226 25.9 27.4 27.1 25.7 3,110 Q4 2010 25.7 5,610 3,060 Q3 2010 23.1 22.0 23.2 22.3 22.5 23.4 25 5,313 2,963 Q2 2010 5,118 2,825 Q1 2010 20 5,048 2,674 Q4 2009 4,781 2,669 Q3 2009 15 4,798 2,665 Q2 2009 4,914 2,692 Q1 2009 10 4,964 2,741 Q4 2008 4,949 3,853 Q3 2008 5 6,196 3,619 Q2 2008 5,911 3,056 Q1 2008 0 4,926 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0 2,000 4,000 6,000 8,000 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 BoG Standalone Group Consolidated Cost/Income ratio Normalized net operating income, Profit GEL mln before provisions 60 240% 45.1 39.0 44.3 43.8 198.3% 36.6 37.3 36.3 38.7 37.1 34.3 34.3 30.8 29.6 34.7 200% 40 37.3 42.9 41.5 40.5 33.7 36.8 34.0 32.4 36.2 160% 20 26.4 120% 8.7 65.3% 60.8% 90.0% 0 58.7% 59.1% 80% 54.9% 56.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 44.4% 52.9% 54.9% 54.4% 57.8% -20 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 58.0% 53.9% 40% 60.7% 45.6% 50.0% 50.8% 49.6% 50.2% 45.1% 41.0% 44.0% 50.5% 42.9% -40 0% Normalised Net Opearting Income Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Profit/(Loss) Before Provisions 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 -60 (76.1) Cost/Income Ratio, Consolidated Cost Income Ratio, Bank of Georgia Standalone -80 Page 9 April 2011
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