Standard & Poor’s: ‘B+/B’ Stable Moody’s: ‘B3/NP’ (FC) & ‘Ba1/NP’ (LC); Stable Fitch Ratings: ‘B+/B’ Stable LSE: BGEO GSE: GEB Berlin-Bremen Boerse: B7D1 Reuters: BGEO.L Bloomberg: BGEO.LI Bank of Georgia Q3 2007 Results Overview January 2008
Introduction To Bank of Georgia Market Leader In All The leading universal bank in Georgia Six Business Lines No.1 by assets (circa 34.0%), (1) loans (circa 30.8%), (1) deposits (circa 31.4%) (1) Investment Highlights • Retail Banking and equity (circa 33.6%) (1) A „leveraged play‟ on Georgia‟s • Corporate & 6.0% YTD 2007 market share gain in total assets (+10.2 % in 2006) economic growth Investment Banking 4.4% YTD 2007 market share gain in gross loans (+8.2 % in 2006) • Insurance Diversified revenue streams and 6.9% YTD 2007 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 30 November 2007 30 September 2007 31 March 2007 YE 2006 • Securities driving profitable growth Retail Accounts 655,000+ 595,000+ 450,000+ 425,000+ Domestic sector consolidator and Cards Outstanding 593,000+ 520,000 340,000+ 285,000+ aspirations for regional expansion Branches 116 109 103 100 ATMs 217 185 146 124 Sophisticated management team with Western banking & finance background Top brand, best distribution network and broadest range of services of any bank and education in Georgia Transparency and good governance, circa Leading corporate and investment banking franchise Approximately 64,000 legal entities have opened accounts 85% institutionally owned, majority of Top broker-dealer with circa 63% market share in equities trading by September the Board seats held by large shareholders 2007 and an independent director Leading card-processing, leasing, insurance, wealth management and asset management services provider Strategy The only Georgian entity with credit ratings from all three global rating agencies S&P: „B+/B‟; Stable – at the sovereign ceiling Consolidate leading position in the Moody‟s: „B3/NP (FC)‟ & „Ba1/NP (LC)‟; Stable domestic banking market Fitch Ratings: „B+/B‟; Stable Promote the future growth of the retail Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange banking business Market Cap (LSE) US$978mln as of 30 September 2007 Further diversify the business, including Approximately 91% free float 2006 share price performance 383%, 2007 share performance 31% funding base and loan portfolio Issue of the first ever Eurobonds in Georgia Continue improving risk management Bloomberg: BKGEO; 5 year, 9%, US$200 mln policies and procedures B+/Ba2/B+ (composite BB-) Actively pursue sensible regional Notes: (1) As of 30 September 2007; based on standalone accounts as reported to the National Bank of Georgia and as published by expansion opportunities the National Bank of Georgia www/nbg.gov.ge Page 2 January 2008 www.bog.ge/ir
Bank of Georgia Q3 2007 Results Overview Page 3 January 2008 www.bog.ge/ir
Q3 2007 Results Highlights Millions, unless otherwise noted 9 Months 2007 9 Months 2006 Growth, Y-O-Y 1 Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ Unaudited Unaudited Net Interest Income 90.4 54.5 42.0 24.2 115% Increasing Net Non-Interest Income 59.0 35.6 30.4 17.5 94% Operating Total Operating Income (Revenue) 2 149.4 90.1 72.4 41.7 107% Leverage Recurring Operating Costs 58.5 35.3 33.6 19.4 74% Normalized Net Operating Income 3 90.8 54.8 38.8 22.3 134% Pre-Bonus Result 82.8 50.0 28.6 16.5 190% Net Income 49.9 30.1 17.3 10.0 188% Consolidated EPS (Basic), GEL & US$ 4 1.95 1.17 1.10 0.64 84% Consolidated EPS (Fully Diluted), GEL & US$ 5 1.83 1.10 0.95 0.55 102% ROAA 6 , annualised 3.5% 3.2% ROA, annualised 2.8% 2.7% ROAE 7 , annualised 16.2% 20.5% Despite Tier I ROE, annualised 14.3% 16.8% CAR of 23.2% Net Loans 1,277.2 770.3 567.2 326.8 125% Total Assets 2,403.3 1,449.9 856.7 493.6 181% Total Deposits 1,134.7 683.8 483.9 278.8 134% Total Liabilities 1,938.3 1,169.1 719.7 414.7 169% Shareholders‟ Equity 465.0 280.5 137.0 79.0 239% Book Value Per Share 17.12 10.33 8.19 4.72 109% 1 Compared to the same period in 2006; growth calculations based on GEL except for the EPS. 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 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 January 2008 www.bog.ge/ir
Q3 2007 Performance Composition of Revenue (GEL mln) Revenue Market Share* GEL mln 160 +106% 149.4 45% 40% 140 20.1 40% 35% 120 16.6 +155% 3.8 +109% 30% 100 18.4 +40% 25% 21% 80 72.4 +56% 20% 7.9 7.9 60 2.7 +115% 15% 11.8 90.4 40 10% 42.0 20 5% 0 0% September 2006, YTD September 2007, YTD September 2006, YTD September 2007, YTD Net Interest Income Net Fee & Commission Income Net Income From Documentary Operations Net Foreign Currency Related 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 25.0 100 +115% 90.4 90 80 +155% 20.1 20.0 70 +94% 59.0 60 6.1 50 42.0 15.0 40 30.4 241% 30 5.5 20 10.0 7.9 612% 0.01 10 1.8 2.9 0 0.8 121% - 5.0 September 2006, YTD September 2007, YTD 1.3 39% 5.6 4.0 Net Interest Income Net Non-Interest Income 0.0 September 2006, YTD September 2007, YTD 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 January 2008 www.bog.ge/ir
Q3 2007 Performance cont’d Operating Cost Structure Normalised Net Operating Income GEL mln GEL mln 70.0 100 +134% 90.8 +74% 58.5 90 60.0 1.3 6.7 80 -29% 50.0 6.7 70 +83% 40.0 33.6 +65% 60 16.4 1.8 30.0 3.7 50 +76% 4.1 38.8 40 20.0 9.3 +86% 27.4 30 10.0 14.7 20 0.0 10 September 2006, YTD September 2007, YTD 0 Personnel Costs Selling, General & Administrative Expenses Procurement & Operations Support Expenses Depreciation And Amortization September 2006, YTD September 2007, YTD Other Operating Expenses Pre-Bonus Result Net Income GEL mln GEL mln 60 90 +190% 82.8 +188% 49.9 80 50 70 40 60 50 30 40 28.6 17.3 20 30 20 10 10 0 0 September 2006, YTD September 2007, YTD September 2006, YTD September 2007, YTD Page 6 January 2008 www.bog.ge/ir
Composition of the Balance Sheet Liabilities & Shareholders’ Equity Assets, +181% y-o-y (+98% YTD) GEL mln GEL mln 2,500 2,500 2,403 2,403 +98% +98% 93 1,065 CIB +137% YTD 671 333 2,000 2,000 1,277 +57% YTD CIB +120% y-o-y RB 701 323 WM -2% YTD 64 1,500 1,500 1,938 RB +157% y-o-y 523 1,213 1,213 108 +98% y-o-y 560 WM CIB 34 66 283 1,000 1,000 688 -32% y-o-y CC RB 19 206 838 WM 694 65 142 186 224 500 500 55 67 557 465 375 279 0 0 YE 2006 30-Sep-07 YE 2006 Sep-07 Other Assets Property, Equipment & Intangible Assets Cash & Equivalents Loans & Advances To Credit Institutions Loans To Clients, Net Loans & Advances To Credit Institutions Client Deposits Borrowed Funds Other Liabilities Equity Equity Other Liabilities Borrowed Funds Client Deposits Cash & Equivalents Loans To Clients, Net Property, Equipment & Intangible Other Assets Page 7 January 2008 www.bog.ge/ir
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