Bank of Georgia Investor Presentation July 2012 Contents Bank of - PowerPoint PPT Presentation

Bank of Georgia Investor Presentation July 2012

Contents Bank of Georgi gia a Overv rview ew Georgian ian Macro Bank of Georgi gia a 2011 and Q Q1 2012 Results lts Overv rview ew Business ess Segment t Discuss ussio ion Appendices Page 2 July 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir

The leading bank in Georgia Sustainable growth combined with strong capital, Leading market position: No. 1 bank in Georgia by assets liquidity and strong profitability (35.6%), loans (34.5%), client deposits (36.9%) and equity Change (35.4%) 1 (US$ mln) 2 Q1 2012 2011 2010 2011/2010 Total Assets 2,704.9 2,793.6 2,258.8 23.7% Underpenetrated market with stable growth perspectives: Loans to customers, net 1,634.8 1,566.7 1,334.5 17.4% Nominal GDP growth for 2004-2011 of 13.8% CAGR. IMF Customer funds 3 1,581.5 1,637.9 1,142.9 43.3% estimates 6.0% growth for 2012. Net loans/GDP grew from 9.2% Shareholders’ equity 571.4 486.6 391.1 24.4% to 29.5% over the period, still below regional average; Total Revenue 70.4 264.2 195.5 35.1% Profit 5 24.0 90.4 46.6 93.8% deposits/GDP grew from 9.9% in 2004 to 27.9% in 2011 Liquid assets 4 /total liabilities 29.0% 34.7% 30.9% Strong brand name recognition and retail banking franchise: ROAA 5 3.5% 3.5% 2.4% ROAE 5 18.9% 20.6% 13.5% Offers the broadest range of financial products to the retail Tier I Capital Adequacy Ratio (BIS) 6 23.2% 19.9% 17.5% market through a branch network of 164 branches and 431 ATMs Total Capital Adequacy Ratio (BIS) 6 29.7% 28.5% 26.6% to approximately one million customers as of March 2012 Leverage ratio 3.7x 4.7x 4.8x The only Georgian company with credit ratings from all three global rating agencies: S&P: ‘BB - ’ , Moody's: ‘B1/Ba3’ (foreign and local currency), Fitch Ratings: ‘BB - ’; outlooks are Experienced management with deep understanding of ‘Stable’ local market and a strong track record: High standards of transparency and governance: First and 2004 31 March 2012 Change still the only entity from Georgia to list on the London Stock 45.2 595.5* 13.2x Market capitalisation (US$ mln) Exchange since 2006 (in the form of GDRs since 2006 and Total assets (US$ mln) 199.0 2,704.9 13.6x premium listing since February 2012) 19% 36% 89% Market share by total assets * Market capitalisation for Bank of Georgia Holdings plc., the Bank’s holding company, as of 4 July 2012 1 Market data based on standalone accounts as published by the National Bank of Georgia (NBG) as of 31 December 2011 www.nbg.gov.ge 2 US$/GEL 1.66 as at 31 March 2012 3 Amounts due to customers 4 Liquid assets include cash and cash equivalents, cash placed with credit institutions and NBG CDs and Georgian government treasuries 5 Profit for the period from continuing operations used for the calculation of ROAA and ROAE 6 Capital Adequacy ratios as of 31 March 2012 include EBRD and IFC loan conversions and are presented on a consolidated basis Page 3 July 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir

Shareholder structure and share price Bank of Georgia Holdings plc. (BGH) (LSE: BGEO) a UK-incorporated holding company of JSC Bank of Georgia. As of 31 March 2012, BGH’s Share price performance shareholder structure was as follows: 7.1% 2.6% GBP 14 Selected Institutional Shareholders 12 East Capital Firebird Management LLC 10 International Finance Corporation 8 European Bank for Reconstruction and Development 6 Prosperity Capital Management Limited OP-Pohjola Group Central Cooperative 4 90.3% Artio International Equity Fund 2 0 Institutional Investors Jan-10 Apr-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Management & Employees* Management Trust (Unvested and unawarded share options) BGEO LN GDR • BGEO is included in FTSE 250 and FTSE All Share Index Funds as of 18 June 2012, as announced by FTSE on 6 June 2012 * Includes shares held by and share options allocated for the Bank’s Supervisory and Management Board members and certain other employees of the Bank and its subsidiaries Page 4 July 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir

Leveraged play on the growing Georgian economy through an LSE premium listed company With one third of the Georgian market by assets, loans and client deposits, Bank of Georgia is a uniquely placed growth bank in an underpenetrated, highly capitalised and profitable banking market that has been growing in terms of assets at 33% CAGR 2003-2011 Strate ategi gic c busi siness ess Synergi gisti stic busi siness ess Non Non-core re busi siness ess Growth opportunities Intention to exit from Well established brand to support strategic business the non-core business over time Retail • Insurance and Healthcare BNB Largest retail franchise: 926,800+ retail • • Strongly positioned to benefit from the Belarus banking operation accounting for clients, 164 branches, 431 ATMs, 703,000 growth of insurance and healthcare sectors 2.2% total assets as of 31 December 2011 cards outstanding as of 31 March 2012 • • through insurance subsidiary ABCI, one of The Bank owns 80%, the remainder owned Market shares of c.37% by retail loans and the leading providers of life and non-life by IFC/World Bank c.32% by retail deposits as of year end 2011 • insurance in Georgia with c.33.4%* market Assets of US$ 56.0 mln and equity of Corporate share by gross premiums written • US$ 21.9 mln as of 31 December 2011 Largest corporate bank with more than 8,900 • Vertical integration with healthcare business • corporate clients; 41% market share by Fully written off goodwill (GEL 23.4 mln) to boost insurance business growth and its corporate deposits as of year end 2011 contribution to the Bank’s income Liberty Consumer • Wealth Management (WM) The Bank’s equity interest of 67%, or Affordable Housing • • WM client deposits 2009-2011 CAGR GEL 17.0 mln Stimulate mortgage lending and improve • growth of 66.9%; Outstanding WM client liquidity of the repossessed real estate assets Legacy asset management investments in the deposits of GEL 454.2 mln at 31 December through housing development; pilot project Georgian consumer-driven businesses such 2011 successfully completed as wine production, supermarket chain, etc. • International network in Israel and UK. Intention to open Representative Office Eastern Europe *As of 30 September 2011 per NBG. Includes market share of newly acquired insurance company Imedi L International Page 5 July 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir

Strong profitability and excellent capital adequacy ROE c.20% TIER I c.20% Growth wth c.20% Dividends Revenue up 27.3% y-o-y to GEL Conservative National Bank of Strong growth across the board Declared an interim dividend of 441.2 mln in 2011 and up 28.9% Georgia (NBG) regulation supported by synergistic business GEL 0.70/27p per share; • y-o-y to GEL 116.9 in Q1 2012 Risk weighting of FX assets at Loan book** growth of 21.0% to payment date 2 July 2012 Profit from continuing operations 175%, Bank’s leverage at 3.7x GEL 2,714 mln in Q1 2012 driven Progressive dividend policy in up 82.6% y-o-y to GEL 150.9 mln as of 31 March 2012 by Retail loan book growth of place to increase capital in 2011 and up 36.4% to GEL 26.3% and Corporate loan book management discipline during Strong internal cash generation 39.7 mln in Q1 2012 growth of 20.3% to support loan growth without the growth phase Other non-interest income surged compromising capital ratios Customer funds grew 26.6% in Q1 Dividend of GEL 0.30/11p per • 87.6% to GEL 108.9 mln in 2011, 2012 BIS Tier I of 23.2% and BIS share paid for 2010 • and amounted to GEL 32.2 mln in Total Capital ratio of 29.7% as of Consumer driven franchise with Q1 2012, up 136.3% y-o-y 31 March 2012 robust sales force to increase • Operational efficiency/scale: cross selling with synergistic NBG Tier I 15.2% and NBG • Cost to income ratio improved to businesses Total Capital of 18.2% as of 31 • 49.1% in Q1 2012 from 55.5% in March 12 Increase in contribution from Q1 2012 synergistic business in the group’s Prudent risk management: profit • Cost of risk* of 1.0% in Q1 2012 2011 ROAE of 20.6%; compared to 2010 ROAE of 13.5% and ROAE of 18.9% in Q1 2012 compared to 22.8% in Q1 2011 * Impairment of interest earning assets of the period to average interest earning assets **Including finance lease receivables Page 6 July 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir