Capturing Growth Opportunities Investor Presentation: 3Q15 & 9M15 results www.bgeo.com November 2015
Disclaimer Forward Looking Statements This presentation contains forward-looking statements that are based on current beliefs or expectations, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward- looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and JSC Bank of Georgia and/or the Bank of Georgia Holdings’ plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are various factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, legal, business and social environment. The forward-looking statements in this presentation speak only as of the date of this presentation. JSC Bank of Georgia and Bank of Georgia Holdings undertake no obligation to revise or update any forward-looking statement contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. www.bgeo.com page 2 November 2015
Contents BGEO Group PLC | Overview Results Discussion | BGEO Group PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Appendices www.bgeo.com page 3 November 2015
BGEO | Shareholder structure and share price Top Shareholders BGEO shareholder structure As of 30 September 2015 As of September 2015 2% 3% Rank Name Ownership % 17% 1 Schroders Investment Management 10.42 Unvested and unawarded shares for management and employees 2 Harding Loevner Management LP 9.09 Vested shares held by management and employees 7% 3 Westwood International Advisors 4.34 UK/Ireland 41% 4 Artemis Investment Management 3.29 US/Canada 5 Firebird Management LLC 3.19 Scandinavia Others 30% BGH has been included in the FTSE 250 and FTSE All-share Index Funds since 18 June 2012 x50 growth in market capitalisation Share price performance Up 120% since Average daily trading volume Market Capitalisation premium listing 1 9,500,000 10,000,000 1,200 1,060 26 9,000,000 1,000 24 8,000,000 22 7,000,000 US$ 800 20 US$ millions GBP 6,000,000 5,300,000 18 5,000,000 16 600 14 4,000,000 12 400 3,000,000 2,000,000 10 2,000,000 950,000 8 200 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 1,000,000 21 0 - Average daily trading volume 30-Sep-04 5-Oct-15 BGEO LN 2011 2012 2013 2014 GDR www.bgeo.com 1 Share price change calculated from the last price of BGEO LI on 27 February 2012 to the price of BGEO LN on 5 th October 2015 page 4 2 Market capitalisation for Bank of Georgia Holdings PLC, the Bank’s holding company, as of 5 th October 2015, GBP/USD exchange rate of 1.5223 November 2015
Renaming the group to reflect 4x20 strategy Platform for Efficiently Allocating Cash & Human Capital BGEO is a Georgia focused bank holding company with investment arm BGEO aims to deliver on its 4X20 strategy by allocating capital efficiently www.bgeo.com page 5 November 2015
BGEO at a glance Group Structure Banking Business Investment Business GGU Water utility and hydro Healthcare Real Estate Utilities Legacy Retail Corporate Other Banking Investments Business Business (GGU) Banking Banking Businesses #1 Healthcare #1 Real Estate Major player on the #1 Corporate Bank in Georgia P&C #1 Retail Bank in Georgia company in Georgia company in Georgia market Insurance • 5k clients • Provides water and • 2 completed projects • Revenue GEL • GEL 2,253.2mln net loans Leasing wastewater services to • 2.0mln retail clients 171.4mln in 9M15 and 5 under • GEL 1,607.8mln client deposits 1.4mln people (1/3 of • • EBITDA GEL 260 branches construction Georgia) • Payment • Total sales of 1,376 703 ATMs 39.6mln • Operates 3 hydro • 2,354 Express Pay terminals Services apartments US$ facilities with 143MW • 7,685 POS terminals 115.8mln since 2011, Healthcare services capacity • 1,053,564 Express cards • 42 healthcare facilities of which US$ 58.9mln IB • Acquired 25% of • Investment 1.9mln cards • 2,670 beds to be recognised upon shareholding Management • Over 3/4 of population completion of projects • 2014 EBITDA of GEL • • 99% sale in completed GEL 2,751.3mln net loans BNB covered 51.6mln 1 • GEL 1,805.8mln client deposits • Market share of projects • Wealth management, research, • GGU profit (BOG • 72% pre-sales for on- advisory, brokerage, private equity 26.6% by beds share) of GEL 1.4mln going 4 projects • GEL 1,347.0mln AUM Plans to divest in 3Q15 and GEL • Total BOG mortgages • GEL 1,016.4mln WM client deposits Health insurance from BNB 2.1mln in 9M15 sold GEL 66.3mln • 38.1% market share • Insuring 270k people 1 Per GGU management accounts, neither audited or reviewed by auditors or Bank of Georgia Source: Company, financial and operating data is for FY 2014 www.bgeo.com page 6 November 2015
4x20 strategy – Strong performance in 2015, 9M We are a Georgia Focused Banking Group with an Investment Arm Banking Business Investment Business 1 • ROAE of 23.3% in 3Q15 ROE • ROAE of 20.6% in 9M15 c.20% 121% IRR from 4 Min. IRR GHG IPO N/A – became non-relevant: 2 of 20% Tier I 1.Regulation moved to Basel 2/3 65% IRR from m2 2.In the context of excess capital of c. c.20% Real Estate projects GEL700mln at HoldCo, have efficient capital management at bank • 48.0% y-o-y growth 3 Retail Growth • 27.7% y-o-y growth on c.20% constant currency basis Profit Contribution 9M15: 9M15: GEL 22mln GEL 194mln Up to 20% At least 80% Target : Target : or 10% or 90% Ongoing Dividends • Ordinary dividends: • Capital return: • Dividend 2014 was GEL 2.1 / share • Planned US$ 10mln management trust share buy- • GEL 80.4mln total, 31.2% payout ratio back www.bgeo.com page 7 page 7 November 2015
BGEO | Robust corporate governance compliant with UK Corporate Governance Code Board of Directors of BGEO Group PLC 8 non-executive Supervisory Board members; 8 Independent members, including the Chairman and Vice Chairman • Neil Janin , Chairman of the Supervisory Board, Independent • Hanna Loikkanen , Independent Director Director experience: Currently advisor to Representative office of East experience: formerly director at McKinsey & Company in Paris; Capital international; previously: Senior executive at East formerly co-chairman of the commission of the French Institute Capital, FIM Group Russia, Nordea Finance, SEB of Directors (IFA); formerly Chase Manhattan Bank (now JP Morgan Chase) in New York and Paris; Procter & Gamble in Toronto • Irakli Gilauri , Group CEO experience: formerly EBRD banker; MS in banking from CASS • Kaha Kiknavelidze , Independent Director Business School, London; BBS from University of Limerick, experience: currently managing partner of Rioni Capital, Ireland London based investment fund; previously Executive Director of Oil and Gas research team for UBS • David Morrison , Chairman of the Audit Committee, Vice Chairman of the Supervisory Board, Independent Director • Tamaz Georgadze , Independent Director experience: senior partner at Sullivan & Cromwell LLP prior to experience: Partner at McKinsey & Company in Berlin, retirement Founded SavingGlobal GmbH, aide to President of Georgia • Al Breach , Chairman of the Remuneration Committee, Independent Director • Bozidar Djelic , Independent Director experience: Head of Research, Strategist & Economist at UBS: experience : EBRD’s ‘Transition to Transition’ senior advisory Russia and CIS economist at Goldman Sachs group, Deputy Prime Minister of Serbia, Governor of World Bank Group and Deputy Governor of EBRD, Director at Credit Agricole • Kim Bradley , Chairman of Risk Committee, Independent Director experience: Goldman Sachs AM, SeniorExecutive at GE Capital, President of Societa Gestione Crediti, Board Chairman at Archon Capital Deutschland www.bgeo.com page 8 November 2015
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