Standard & Poor’s: ‘B+/B’ Stable Moody’s: ‘B3/NP’ (FC) & ‘Ba1/P - 3’ (LC); Stable Fitch Ratings: ‘B/B’ Stable LSE: BGEO GSE: GEB Berlin-Bremen Boerse: B7D1 Reuters: BGEO.L Bloomberg: BGEO.LI Bank of Georgia Q1 2007 Results Overview July 2007
Introduction To Bank of Georgia The leading universal bank in Georgia Market Leader In All Six Business Lines No.1 by assets (circa 33.0%) (1), loans (circa 27.6%), (1) deposits (circa 24.8%) (1) Investment Highlights • Retail Banking and equity (circa 38.2%) (1) A „leveraged play‟ on Georgia‟s • Corporate & 5.1% Q1 „07 market share gain in total assets (+10.2 % in 2006) economic growth Investment Banking 1.1% Q1 „07 market share gain in gross loans (+8.2 % in 2006) • Insurance Diversified revenue streams and 0.3% Q1 „07 market share gain in total deposits (+5.5 % in 2006) • Wealth disciplined capital management Management Leadership in retail banking, with • Asset Management Domestic universal banking strategy May 31, 2007 April 30, 2007 March 31, 2007 YE 2006 • Broker-Dealer driving profitable growth Retail Accounts 519,000+ 500,000+ 450,000+ 425,000+ Domestic sector consolidator and Cards Issued 418,000+ 380,000+ 330,000+ 285,000+ aspirations for regional expansion Branches 103 103 103 100 Sophisticated management team with ATMs 166 150 146 124 Western banking & finance background Top brand, best distribution network and broadest range of services of any bank in and education Georgia Transparency and good governance, circa Leading corporate and investment banking franchise More than 50,000 legal entities have opened accounts 85% institutionally owned, majority of Top broker-dealer with circa 90% (1) market share in equities trading in 2006 the Board seats held by large shareholders Leading card-processing, leasing, insurance, wealth management and asset management and an independent director services provider The only Georgian entity with credit ratings from all three global rating agencies Strategy S&P: „B+/B‟; Stable – at the sovereign ceiling Moody‟s: „B3/NP (FC)‟ & „Ba1/P - 3 (LC)‟; Stable Consolidate leading position in the Fitch Ratings: „ B+/ B‟; Stable domestic banking market Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange Promote the future growth of the retail Market Cap (LSE) US$996 mln as of 20 June 2007 banking business Approximately 93% free float Further diversify the business, including 2006 share price performance 383%, YTD 2007 share performance 75% Issue of the first ever Eurobonds in Georgia funding base and loan portfolio Bloomberg: BKGEO; 5 year, 9%, US$200 mln Continue improving risk management B+/Ba2/B (composite BB-) policies and procedures Actively pursue sensible regional Notes: (1) As of 31 March 2007; based on standalone accounts as reported to the National Bank of Georgia and as published by the expansion opportunities National Bank of Georgia www/nbg.gov.ge Page 2 July 2007 www.bog.ge/ir
Bank of Georgia Q1 2007 Results Overview Page 3 July 2007 www.bog.ge/ir
Q1 2007 Results Highlights Growth, Y-O-Y 1 Millions, unless otherwise noted Q1 2007 Q1 2006 Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ Unaudited Unaudited Net Interest Income 26.0 15.3 10.5 5.7 149.1% Increasing Net Non-Interest Income 15.0 8.8 7.3 4.0 105.6% Operating Total Operating Income (Revenue) 2 41.1 24.2 17.8 9.7 131.2% Leverage Recurring Operating Costs 16.5 9.7 9.5 5.2 73.8% Normalized Net Operating Income 3 24.5 14.4 8.2 4.5 197.4% Pre-Bonus Result 22.5 13.2 6.8 3.7 229.6% Net Income 13.7 8.0 4.2 2.3 229.2% Consolidated EPS (Basic), GEL & US$ 4 0.54 0.32 1.62 0.95 Consolidated EPS (Fully Diluted), GEL & US$ 5 0.50 0.30 1.45 0.84 ROAA 6 , annualised 3.8% 3.5% ROA, annualised 3.3% 2.2% ROAE 7 , annualised 14.4% 16.5% ROE, annualised 14.2% 7.1% Despite Tier I CAR of 34% 1 Compared to the same period in 2006; growth calculations based on GEL. 2 Revenue includes Net Interest Income and Net Non-Interest Income. 3 Normalized for the 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 annualised 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 July 2007 www.bog.ge/ir
Q1 2007 Performance Composition of Revenue (GEL mln) Revenue Market Share* GEL mln 45% +131% 41.1 42 40% 40% 36 35% 30 30% +149% 26.0 24 25% 19% 17.8 20% 18 15% 10.5 12 5.9 +65% 10% 0.7 +84% 4.3 6 3.6 +135% 5% 0.4 1.8 4.1 +172% 1.5 0 0% Q1 '06 Q1 '07 Q1 '06 Q1 '07 Net Interest Income Net Fee & Commission Income Net Other Non-Interest Income Net Foreign Currency Related Income Net Income From Documentary Operations Net Foreign Currency Related Income Net Income From Documentary Operations Net Fee & Commission Income Net Interest Income Net Other Non-Interest Income Net Interest Income vs. Net Non-Interest Income Net Other Non-Interest Income (GEL mln) (GEL mln) GEL mln GEL mln GEL mln 5 30.0 +149% y-o-y +172% 4.1 25.0 26.0 4 1.0 20.0 +609% +106% y-o-y 0.1 - 3 15.0 15.0 1.0 10.0 +593% 10.5 2 1.5 5.0 7.3 0.1 - - 0.1 +69% 2.1 1 0.0 1.2 Q1 '06 Q1 '07 0 Net Interest Income Net Non-Interest Income Q1 '06 Q1 '07 Net Insurance Income Brokerage Income Asset Management Income Realised Net Investment Gain Other *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 Page 5 July 2007 www.bog.ge/ir
Q1 2007 Performance cont’d Operating Cost Structure Normalized Net Operating Income GEL 'mln GEL mln 18 16.5 +74% 30 16 +197% 24.5 25 14 7.5 +82% 12 20 9.5 10 8 15 4.1 +53% 4.4 6 10 8.2 4 2.9 2.2 +137% 2 0.9 5 77% 2.0 1.1 0.5 0.5 0 -3% 0 Q1 '06 Q1 '07 Q1 '06 Q1 '07 Other Operating Expenses Depreciation & Amortization Procurement & Operations Support Expenses Selling, General & Administrative Expenses Personnel Costs Selling, General & Administrative Costs Personnel Costs Procurement & Operations Support Expenses Depreciation & Amortization Other Operating Expenses Pre-Bonus Result Net Income GEL mln GEL mln 15.0 25 13.7 +229% 22.5 +230% 20 10.0 15 10 4.2 6.8 5.0 5 0 0.0 Q1 '06 Q1 '07 Q1 '06 Q1 '07 Page 6 July 2007 www.bog.ge/ir
Composition of the Balance Sheet Liabilities & Shareholders’ Equity Assets, +158% y-o-y GEL million GEL million 1,700 1,700 +35% +35% 1,634 1,634 602 1,600 1,600 81 CIB +10% YTD 307 1,500 1,500 278 1,400 1,400 1,300 1,300 RB +13% YTD 1,213 241 1,213 814 1,200 CIB +15% YTD 1,200 560 440 108 CIB WM -17% YTD 1,100 1,100 312 54 65 685 1,248 1,000 1,000 RB 900 900 232 RB +19% YTD 330 800 800 838 527 WM 65 700 700 WM +32% YTD 29 600 600 224 +7% YTD CC 500 500 15 119 400 55 104 400 70 300 300 200 200 385 375 356 285 100 100 0 0 YE 2006 Q1 2007 YE 2006 Q1 2007 Other assets Cash & Equivalents Loans & Advances To Credit Institutions Property, Equipment And Intangible Assets Client Deposits Borrowed Funds Other Liabilities Equity Loans & advances to clients, net Loans & advances to credit institutions Shareholders' equity Other liabilities Borrowed funds Client Deposits Loans To Clients, Net Property, Equipment & Intangible Other Assets Cash & Equivalents Note: Segment growth calculations based on gross loan portfolio for each segments Page 7 July 2007 www.bog.ge/ir
Diversified Loan Book... Gross Loans, Q1 2007 (+17% YTD & +119% y-o-y) Gross RB Loans, Q1 2007 (+15% YTD & +135% y-o-y) RB & WM Corporate Center Account for 43% GEL 18 mln of Gross Loans (+7% YTD) Consumer Loans Card Overdrafts & Credit GEL 61 mln (+24% YTD) Card Balances Micro Loans GEL 9 mln (+139% YTD) GEL 118 mln (+18% YTD) Car Loans Legacy Retail Loans RB Other RB Loans GEL 12 mln GEL 29 mln GEL 336 mln (+18% YTD) (+8% YTD) GEL 75 mln (+19% YTD) CIB (+19% YTD) GEL 451 mln POS Loans (+15% YTD) GEL 24 mln (+10% YTD) Mortgage Loans GEL 81 mln (+27% YTD) Wealth Management GEL 30 mln (+32% YTD) Gross CIB Loans, Q1 2007 (+15% YTD & +116% y-o-y) Gross WM Loans, Q1 2007 (+32% YTD & +126% y-o-y) Other GEL 2 mln (+5% YTD) Pharmaceuticals & Healthcare, 2% Other, 11% Car Loans Industry & GEL 3 mln (+12% YTD) State, 7% SMEs, 29% Consumer Loans Energy, 9% GEL 5 mln (+16% YTD) Mortgage Loans Consumer GEL 20 mln (+18% YTD) Goods, 11% Trade, 18% Construction & Real Estate, 14% Page 8 July 2007 www.bog.ge/ir
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