Bank of Georgia 1H 2006 Performance Update October, 2006 The - - PowerPoint PPT Presentation

FitchRatings: ‘B-/B’ Positive Moody’s: ‘B3/NP’ (FC) & ‘Baa3/P-3’ (LC); Stable S&P: ‘B+/B’ Stable

Bank of Georgia 1H 2006 Performance Update

October, 2006

October 2006 2 www.bog.ge/ir

The Georgian Financial Services Sector

October 2006 3 www.bog.ge/ir

GEL '000s, except for branches

Assets Loans Deposits Equity Net Income Branches TBC Bank 868,266 613,604 546,635 106,802 13,653 12 Bank of Georgia 797,796 561,941 469,812 120,186 11,514 100 United Georgian Bank 467,775 366,935 312,908 45,249 4,560 28 ProCredit Bank 428,583 304,367 224,507 57,016 3,651 31 Bank Republic 293,846 185,708 226,942 41,448 8,325 19 Cartu Bank 258,783 185,120 78,473 88,962 8,087 3 Other Banks 404,150 221,111 213,356 135,455 6,665 186 Total Sector 3,519,200 2,438,786 2,072,634 595,117 56,455 379

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Belorus Georgia* Hungary Slovakia Czech Republic Slovenia Bulgaria Romania Poland Russia Ukraine

Ge o rg ia ****

The Georgian Financial Services Sector At A Glance The Georgian Financial Services Sector At A Glance

GEL/US$ Period End YE 2005= 1.79 August 31, 2006= 1.74

YE 2005 August 31, 2006 Since YE ’05 GEL 2,548 mln +38.1% +41.0% +34.8% +24.2% NMF GEL 1,730 mln GEL 1,538 mln GEL 479 mln Top 5 Banks Bank of Georgia GEL 62 mln GEL 3,519 mln GEL 2,439 mln GEL 2,073 mln GEL 595 mln GEL 56 mln Shareholders’ Equity 70.3% 20.2% Total Assets 81.2% 21.7% Loans 83.3% 23.0% Deposits 85.9% 22.7% Net Income* 81.7% 20.4%*

+4.9% since YE ‘05 +4.8% since YE ‘05 +1.5% since YE ‘05 +3.7% since YE ‘05

Market Share

19 banks, but sector consolidation in progress

BoG Market Share Gain

Georgian Banking Snapshot, August 31, 2006 Concentration Ratios (Total Asset Mkt Shares)***, Top 5 Banks

3 4 6 7 22 5 10 15 20 25 Bank of Georgia ProCredit Bank United Georgian Bank Bank Republic TBC Bank Bank of Georgia

*Based on standalone net income of GEL 11.5 mln ** 20 branches will be opened at the end of September 2006 *** YE 2005 **** August 31, 2006

797,796 561,941 469,812 120,186 11,514 100** Bank of Georgia

Number of branches & Service Centers per Million of Georgian Population, Top 5 Banks

October 2006 4 www.bog.ge/ir

The Georgian Financial Services Sector At A Glance cont The Georgian Financial Services Sector At A Glance cont’ ’d d

Banking Sector Equity & ROE Banking Sector Assets & ROA

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 YE 2002 YE 2003 YE 2004 YE 2005 1H 2006 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% Banking Sector Asstes (LHS) Banking Sector ROA (RHS)

GEL mln 100 200 300 400 500 600 YE 2002 YE 2003 YE 2004 YE 2005 1H 2006 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Banking Sector Equity (LHS) Banking Sector ROE (RHS) GEL mln

Bank-owned insurance companies account for an approximately 62% market share

• Bank of Georgia has an approximately 20% market share (BCI/EuroPace)

Bank-owned leasing companies account for 100% of the leasing assets

• Bank of Georgia (GLC) has an approximately 40% market share

Bank-owned broker-dealers account for more than 95%* of the trading volume on the GSE

• Bank of Georgia (Galt & Taggart) has an approximately 91.5% market share

2nd, 3rd and 4th largest banks are foreign-controlled

• Bank of Georgia (approximately 70% non-resident institutional investor ownership)
• United Georgian Bank (51% owned by VneshtorgBank)
• ProCredit Bank Georgia (majority controlled by the ProCredit network)

* Galt & Taggart Securities estimate

October 2006 5 www.bog.ge/ir

The Georgian Banking Sector The Georgian Banking Sector – – Significant Growth Potential Significant Growth Potential

As consumer demand for financial services becomes more sophisticated

Source: GFK, Pentor, McKinsey, Galt & Taggart Securities' estimates; Georgia 2005 1H data Basic products Current Accounts Transfers Cards/ATMs Internet banking Branch banking 2004/2005 Credit products Mortgages Consumer loans Credit cards 2005/2006 Savings products/ Deposit substitution Asset management Pensions/Life insurance 2007/2008

Intermediated Retail Financial Assets GEL 1,023 mln Total Retail Financial Assets GEL 2,344 mln Total Consumer Loan Stock Per Capita (including mortgages) GEL 129 Cards in circulation Circa 254,000

Branch Penetration Branches per mln people

36 57 81 86 108 167 190 208 234 285 354 50 100 150 200 250 300 350 GEORGIA Romania Bulgaria Turkey Poland Czech republic Slovakia Croatia New Europe Hungary Slovenia

ATM Penetration ATMs per mln people

40.8 38 164 209 250 50 100 150 200 250 GEORGIA Russia Poland Czech Republic Hungary

Card Penetration % of population

6 7 19 30 70 20 40 60 80 GEORGIA Russia Poland Hungary Czech Republic

Banking Penetration Accounts per hundred people

6.6 20 45 50 75 20 40 60 80 GEORGIA Russia Poland Hungary Czech Republic

YE 2005 E

GEORGIA

*US$

CEE & CIS

2005 2004 2003 Poland (2005) Czech (2005) Hungary (2005) Russia (2005) Ukraine (2005) Kazakhstan (2005) Total Loans/GDP (%) 14.22% 9.85% 9.18% 27% 40% 53% 24% 34% 38% Total Deposits/GDP (%) 11.30% 10.03% 8.58% 34% 67% 42% 18% 32% 24% Banking Assets per capita (EUR) 265 151 114 4,240 9,798 2,272 2,477* 798 1,868 Banking Assets/No. of Banks (EUR mln) 60 32.5 20.6 2,239 2,710 1,054 2,465 200 837

GEL/EUR end of period

2.13 2.49 2.59

Source: ECB, EBRD, NBG, Galt & Taggart Securities, Merrill Lynch, National Bank of Ukraine , National Bank of Kazakhstan, National Bank of Poland, Czech National Bank, National Bank of Hungary (Magyar Nemzeti Bank),

October 2006 6 www.bog.ge/ir

The Georgian Banking Sector The Georgian Banking Sector – – Key Trends & Issues 2005 Key Trends & Issues 2005 -

• 2008

2008

• Increasing adoption of the universal banking business model, following the lead of Bank of Georgia
• Significant IT/infrastructure and marketing spend drives increasing retail banking penetration
• Increasing availability of non-deposit funding
• Driven by the S&P sovereign B+/B Positive rating
• Three banks rated
• Bank of Georgia rated ‘B-/B’ Positive by Fitch; ‘B3/NP’ (FC) & ‘Baa3/P-3’ (LC) Stable by Moody’s; ‘B+/B’ Stable by Standard & Poor’s
• TBC Bank rated ‘B-/B’ by Fitch;
• ProcreditBank rated ‘B/B’ by Fitch
• IFIs: EBRD, IFC, DEG, OPIC, BSTDB, FMO – active in Georgia since the mid-1990s
• Syndicated loans
• TBC Bank US$21 mln from EBRD-arranged A/B loan
• ProCredit Bank US$15 mln EBRD-arranged A/B loan
• Unsecured term loans
• Bank of Georgia US$25 mln from Citigroup, US$25 mln from Merrill Lynch
• TBC Bank US$35 mln from Citigroup
• Long-tenor facilities to fund mortgage lending
• Bank of Georgia US$10 mln 10-year facility from WBC
• TBC Bank US$ 15 mln facility from EBRD
• Subordinated Debt
• Bank of Georgia, US$5 mln from Thames River Capital, US$25 mln from a fund advised by HBK Investments L.P.
• TBC Bank, subordinated loan from shareholder
• Cartu Bank, subordinated loan from shareholder
• Domestic bonds
• Bank of Georgia
• ProCredit Bank Georgia
• CLNs/Eurobonds (expected 2H 2006/1H 2007)
• Significant sector-wide growth triggers expected (2007-2008)
• Gradual relaxation of the tough NBG capital adequacy & liquidity ratios
• Strengthened and improved bank supervision and strict AML/KYC regime improve confidence in the banking sector
• Financial sector liberalization under way, facilitating non-residents’ access to Georgian financial assets
• Introduction of the deposit insurance scheme following the further consolidation of the sector

October 2006 7 www.bog.ge/ir

Bank of Georgia Overview

October 2006 8 www.bog.ge/ir

Bank of Georgia Bank of Georgia -

• Our Vision & Mission

Our Vision & Mission

Our vision is to be recognized as the best financial services company in Georgia. Our mission is to create long-term value and deliver by 2007 ROAE of 20%+ by building a relationship-driven, client-facing integrated financial services company based on the core values of excellence in execution, teamwork, integrity and trust.

A leading share of the domestic institutional business The undisputed domestic leader in wealth management, with niche appeal to sophisticated non-resident investors A player in private equity and venture capital The largest Georgian retail bank, offering consumers the broadest range of services through multiple channels A leader in corporate banking, bank of choice for inbound foreign corporates The undisputed leader in investment banking Integrated offering to large corporates through strong client coverage culture A leading player in the non-life sector, cross-selling insurance to corporates A leading life insurance and pensions provider Retail Banking Corporate & Investment Banking Asset & Wealth Management Insurance

Achieved Achieved Achieved Achieved Achieved In Progress In Progress Achieved Planning Stage

October 2006 9 www.bog.ge/ir

Bank of Georgia – An Integrated Business Model

GEL/US$ 1.80

2/3 1/2 1 1 Market Position (June 30, 2006) GEL 5.9 mln GEL 277.6 mln GEL 171.5 mln GEL 16.9 mln** GEL 144 mln (AUM/C) GEL 29.7 mln GEL 2.3 mln GEL 1.5 mln GEL 1.3 mln GEL 0.9 mln 6% 58% 27% 8% Contribution to Group Net Income 1H 06 Earning Assets (June 30, 2006) GEL 15.0 mln N/A N/A Total Assets (June 30, 2006) GEL 7.0 mln GEL 14.5 mln GEL 16.8 mln Revenue 1H 06 GEL 1.8 mln GEL 12.2 mln GEL 7.1 mln Normalized Net Operating Income 1H 06 GEL 1.0 mln GEL 9.8 mln GEL 4.5 mln Pre-Bonus Result 1H 06 GEL 0.7 mln GEL 6.4 mln GEL 3.0 mln Net Income 1H 06

Insurance CIB RB A&WM*

CIB RB A&WM BCI

Bank of Georgia Group

One Firm Strong management Shared expertise Cross-sell synergies Shared services & infrastructure Cost efficiency

* due to immateriality excludes the BCI pension fund, which is consolidated to insurance SBU ** loans to Private Banking clients Note: derived from management accounts based on unaudited Interim Consolidated Financials reviewed by Ernst & Young

October 2006 10 www.bog.ge/ir

Diversified Loan Book And Conservative Provisioning Policy Diversified Loan Book And Conservative Provisioning Policy

BoG a founding shareholder (15%)

• f Credit Bureau

Nine leading banks participating Shares negative data

Consistently conservative provisioning policy

NPLs range from GEL 12 mln to GEL 38 mln Loan loss provisions ranging from GEL 18 mln to GEL 42 mln Provisions/Loan Book ratio above 5% in 1H 2006

Coverage ratio continuously above 100% since YE 2005 Diversified loan book

1,000+ CIB clients, more than 50% of total loan book 130,000+ RB clients, more than 40% of total loan book

Top ten borrowers accounted for slightly above 10% of total loan book in 1H ‘06 Loans to group companies and related parties amounted to circa GEL 13 mln, above 3%

• f total loan book in 1H ‘06

October 2006 11 www.bog.ge/ir

Bank of Georgia Bank of Georgia -

• Development Milestones

Development Milestones

2000 - Q3 2004 Q4 2004 2005 1H 2006

New Management Team Takes Over

GEL 279.2 mln GEL 171.7 mln GEL 177.4 mln GEL 48.6 mln GEL 361.4 mln GEL 192.1 mln GEL 251.5 mln GEL 54.2 mln GEL 456.0 mln GEL 317.5 mln GEL 270.5 mln GEL 90.6 mln GEL 707.3 mln + 153% since Q3 ‘04 GEL 477.7 mln + 178% since Q3 ‘04 GEL 434.2 mln + 146% since Q3 ‘04 GEL 106.0 mln + 118% since Q3 ‘04

Total Assets (e-o-p) Total Loan Book (e-o-p) Client Deposits (e-o-p) Equity (e-o-p)

6 15 Galt & Taggart GLC EuroPace Retail Banking Corporate Banking Trade Finance Foreign Exchange Investment Banking Insurance Leasing Pensions Private Banking KfW US$ 3.5 mln guarantee facility EBRD US$ 10 mln GEL 2.0 mln Bond Placement Commerzbank US$ 3.8 mln

Number of Western- Trained Professionals

TUB BCI Georgian Card 20 IntellectBank, acquisition of assets & liabilities Merchant banking acquistions Retail Banking Corporate Banking Trade Finance Foreign Exchange Investment Banking Insurance Leasing Pensions Private Banking POS Consumer Loans Merchant Banking

Key Acquisitions

Retail Banking Corporate Banking Trade Finance Foreign Exchange Investment Banking Retail Banking Corporate Banking Trade Finance Foreign Exchange Investment Banking Insurance

Key Business Lines

BSTDB DEG AKA Bank EBRD IFC World Business Capital US$ 10 mln loan with OPIC guarantee Citigroup US$ 25 mln unsecured term loan Thames River Capital US$ 5 mln subordinated loan** Merrill Lynch US$ 25 mln unsecured term loan** Fund advised by HBK US$25 mln convertible subordinated loan**

Key Lenders

The bank has doubled in size under new management Unique management team composition for a CIS bank Stellar acquisition and integration track record Increasingly diversified revenue stream An established borrower in international markets

Divested Invested

Unprecedented level of institutional interest. Institutional ownership >67% unique for a CIS bank. *on behalf of institutional clients ** August/September 2006 * * *

Noonday

*

October 2006 12 www.bog.ge/ir

Superior Retail Footprint & Consumer Reach Superior Retail Footprint & Consumer Reach

200,000+ debit cards 330,000+ current accounts 350,000+ client relationships Product/Client Ratio 2.06 (estimate)

Visa/MasterCard Merchant Acquiring Licenses

• 398 POS terminals installed as at 30

June, 2006

POS

Full transactional functionality 128-bit SSL encryption Online payments (13 vendors)

Internet Banking

24/7 19 operators Fully functional enterprise class IP call center supplied by Cisco Systems, scalable to up to 200 operators

Call Center

Balances

• Transactions & notifications

SMS Banking

28 Flagship (full service) branches

• 44 Service centers
• 48 on fiber optic network

100* Branches

+68 ATMs expected in 2H 2006 Utility & other payments (13 vendors)

96ATMs

The largest supermarket chain with 15 outlets, 55% owned by BoG and its shareholders Exclusive POS acquiring In-store promotion of BoG products ATMs in most stores Co-branded cards/cashback 3,000 retail clients expected in 2006

As of September 30, 2006

100 mln + passenger trips per year

• Sole servicing bank and fare collections
• perator
• Small service centers to be opened in all

23 subway stations

Product “Pull”

78,308 employees served through

Payroll Services

Estimated 40% market share

Up to 20,000 Georgian National Team Fan Club members

As of September 30, 2006

Chemebi Launched a new consumer insurance brand Property, car, health, travel and life insurance packages 30,000 clients as at 30 June, 2006 Additional 20,000 clients expected by YE 2006 Co-branded loyalty/discount cards (BoG/Chemebi/Aversi) Aversi 80 outlets, 60%+ market share Up to 20,000 retail clients expected in 2006 Co-branded cards/loalty program Exclusive POS acquiring ATMs at all selected location In-store distribution of the Chemebi consumer insurance products Travel agency with 20% market share by sales and number of tickets sold (including subagents) 84% owned by BoG Full exlusivity on banking and insurance cross-selling Contracts with 70 subagents, selling airline tickets Network of nine outlets Three more outlets to be opened in Q3 ‘06 600,000 +active mobile subscribers; 50% market share

• Co-branded loyalty debit cards distributed to post-

paid subscribers

• Up to 5,000 new retail clients expected in 2006
• ut of total of 379

* 20 branches will be opened at the end of September 2006

2005/Ongoing Investment Focus Service Delivery Channels 2006/2007 Investment Focus Attractive Customer Acquisition Channels

October 2006 13 www.bog.ge/ir

Results Overview, Consolidated, IFRS, 1H Results Overview, Consolidated, IFRS, 1H ’ ’06 Reviewed 06 Reviewed

Net Fees & Commission and Non-Interest Income Net Interest Income

GEL/US$ Period Average: 1H ’05=1.83 1H ’06=1.81

18.3 25.9 0.0 5.0 10.0 15.0 20.0 25.0 30.0 1H '05 1H '06

GEL mln

+41.2% 19.6 10.8 0.0 5.0 10.0 15.0 20.0 25.0 1H '05 1H '06

GEL mln

+82.2%

Other Non-Interest Expense Net Income

18.7 24.2 0.0 5.0 10.0 15.0 20.0 25.0 30.0 1H '05 1H '06

GEL mln

+29.2% 11.0 6.2 0.0 2.0 4.0 6.0 8.0 10.0 12.0 1H '05 1H '06

GEL mln

+78.7%

October 2006 14 www.bog.ge/ir

Balance Balance Sheet Highlights, Consolidated, IFRS, 1H Sheet Highlights, Consolidated, IFRS, 1H ‘ ‘06 06 Reviewed Reviewed

GEL/US$ Period End: 2004 = 1.83 2005 = 1.79 1H’06 = 1.77

Loans (e-o-p) Total Assets (e-o-p)

363.2 460.6 715.6 2004 2005 1H '06

GEL mln +55.4% 169.6 294.0 462.1 20.1 17.9 24.1

2004 2005 1H '06 Net Loans Provisions

GEL mln +57.2%

Shareholders’ Equity (e-o-p) Deposits (e-o-p)

106.9 90.2 54.0 2004 2005 1H '06

GEL mln +18.6% 249.9 264.3 423.1 21.1 15.8 0.8

2004 2005 1H '06 Client Deposits Interbank Deposits

0.8 GEL mln +60.1%

October 2006 15 www.bog.ge/ir

Retail Banking Overview Retail Banking Overview

2006: Updating the brand

RB Client Funds* Retail Loans Issued Over 330,000** current accounts as at September 3o, 2006 Product/Client Ratio 2.06 (estimate)

Old Logo:

29.3 22.6 19.0 17.9 12.3 10.1 14.1 12.0 12.8 13.3 13.1 16.0 13.9 9.4 9.2 5.9 4.1 2.1 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 GEL mln

40 80 120 160 200 2004 2005 Q1 '06 Q2 '06 2,000 22,000 42,000 62,000 82,000 102,000 122,000 Current Account Balances Demand Deposits Time Deposits Cards Outstanding (RHS)

GEL mln

New Logo:

New Retail Sub-brand

• www. sb24.ge

Consumer, Mortgage, Micro & Other Loans***

Leadership in Consumer Finance −

Since January 2006

− Contracts for 257 POS signed, of which

−178 exclusive −42 outlets operating as of August 31, 2006 −21,189 consumer loans issued in the aggregate amount of GEL 47.3 mln

23.1 29.0 37.8 37.8 45.5 45.2 1 9.9 45.3 49.9 60.5 26.4 24.6 26.5 28.6 5.5 1 6.6

2004 2005 Q1 '06 Q2 '06

Volume of Consumer Loans Volume of Mortgage Loans Volume of Micro Loans Other

GEL mln

6 8 .4 13 0 .8 15 0 .9 17 2 .2

www.kandidati.ge * Including Private Banking client funds **Including IntellectBank *** Including consumer and mortgage loans to Private Banking clients Note: derived from manangement accounts

October 2006 16 www.bog.ge/ir

CIB Performance Review CIB Performance Review

Integrated client coverage in 10 key sectors

Loan Portfolio

16.8 19.2 4.4 10.9 8.8 14.7 5.2 8.3 0.0 5.0 10.0 15.0 20.0 25.0 12.31.2004 12.31.2005 Q1 '06 Q2 '06 Net Normalized Operating Income Pre-Bonus Result GEL mln

Normalized Net Operating Income & Pre-Bonus Result

• Construction & Real

Estate

• Energy
• Fast Moving

Consumer Goods

• Financial Institutions
• Foreign

Organizations & Diplomatic Missions

• Pharmaceuticals &

Healthcare

• Retail & Wholesale

Trade

• State & Industry
• Telecommunications,

Media & Technology

• Transport &

Logistics

50 100 150 200 250 300 12.31.2004 12.31.2005 Q1 '06 Q2 '06 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Corporate Loan Portfolio (LHS) % of Total Loan Portfolio (RHS) 119.1 182.0 232.1 GEL mln 281.6

Recent High-Profile Client Wins

Sole Servicing Bank

Tbilisi Municipality

Since 2006

Sole Servicing Bank

Since 2006

Sole Servicing Bank

Since 2005

Sole Servicing Bank

Since 2005 Since 2006

Sole Servicing Bank

• Dedicated

coverage of 503 corporate

• 1,112 SME clients
• Additional 42,000

corporate clients without dedicated coverage banker

Note: derived from management accounts

October 2006 17 www.bog.ge/ir

BCI Performance Review BCI Performance Review

Gross Premiums Written & Total Claims Reimbursed, Y-O-Y Growth Market Share By Gross Premiums Written, 1H ‘06

Georgian Insurance Market

Quarterly Net Income

258,549 223,316 163,923 114,687 162,062 346,295

50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 1 2 3 4

GEL

Q1 '05 Q1 '06 Q2 '05 Q2 '06 Q3 '05 Q4 '05 Q1 ’05 Q1 ’06 Q2 ’05 Q2 ’06 Q3 ’05 Q4 ‘05

Aldagi 27% GPIH 22% Other 21% BCI 19% Imedi L 11%

Market Size in 2005 GPW GEL 55 mln Claims Reimbursed GEL 18 mln Market Size in 1H ‘06 GPW GEL 36 mln Claims Reimbursed GEL 9 mln GPW Breakdown By Product in 1H 2006

BCI

* GEL 3 mln municipal program ** Net Loss Ratio – Claims Reimbursed by Companies/Total Premiums Written

Gross Premiums Written, 1H 05 Claims Paid, 1H 05 Gross Premiums Written, 1H 06 Claims Paid, 1H 06

9% Net Loss Ratio** 24% 30%

51.0% 48.5% 45.0% 34.9% 22.8% 23.0% 22.0% 18.9% 17.5% 16.1% 14.1% 13.2% 11.4% Carriers Liability Financial Risks Life Professional Indemnity Casko Cargo Property Personal Accident & Travel Civil Liability Pension Aviation Health MTPL Voluntary Health Casko nal Accident & Travel MTLP Voluntary Pension Life Property

BCI Market Share By Products, 1H ‘06

Note: derived from management accounts

Health – 29.28% Property – 19.03% Casko – 15.76% Civil Liability – 9.06% Aviation – 6.38% Cargo – 4.14% Financial Risks- 3.49% Personal Accident & Travel – 3.16% MTPL Voluntary – 3.12% Pension – 2.60% Life – 1.22% Professional Liability – 1.07% Carriers Liability – 0.95% Fire – 0.31% Performance Bond – 0.21% MTPL Compulsory – 0.12% Marine Vessels – 0.09%

October 2006 18 www.bog.ge/ir

Asset & Wealth Management Performance Review Asset & Wealth Management Performance Review

Galt & Taggart Total Assets PB Clients and Client Assets

7.1 7.6 9.4 10.0 13.2 17.7 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 '06 100 200 300 400 500 600 700 800 Private Banking Client Assets* (LHS) PB Clients (RHS)

GEL mln

GEL 16.9 mln 1H ‘06

PB Client Loans

* Does not include private banking client funds & securities held at Galt & Taggart Securities

GEL 8.4 mln YE ‘05

GEL ‘000 1,933 6,578 918 12,090 3,039 3,828 2,000 4,000 6,000 8,000 10,000 12,000 14,000 1

Q1 '05 Q1 '06 Q2 '05 Q2 '06 Q3 '05 Q4 '05

Q1 ’05 Q1 ’06 Q2 ’05 Q2 ’06 Q3 ’05 Q4 ‘05

Galt & Taggart Assets Under Management & Custody Galt & Taggart Revenue and Net Income

GEL mln GEL ‘000 22 85 24 144 34 68 20 40 60 80 100 120 140 160 1

Q1 '05 Q1 '06 Q2 '05 Q2 '06 Q3 '05 Q4 '05

13 36 86 628 1,268 811 550 281 229

• 56
• 69
• 57
• 100

100 300 500 700 900 1100 1300 1500 Revenue Net Income

2001 2002 2003 2004 2005 1H '06

Note: derived from management account

October 2006 19 www.bog.ge/ir

Georgian Card Performance Review Georgian Card Performance Review

Transactions Processed

41 47 53 87 121 12 16 24 31 49 66 60 20 40 60 80 100 120 140 160 180 200 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06

Bank of Georgia Other Banks

'000s

Cards Outstanding, e-o-p

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Total Transactions Processed (LHS) Authorizations Per Card Per Month (RHS) '000 353,339 155,821 208,548 243,268 182,339* 244,436

• 50,000

100,000 150,000 200,000 250,000 300,000 350,000 400,000 Q1 '05 Q2 '05 Q3 '05 Q4 '05 GEL Q1 05 Q2 05 Q2 05 Q2 06 Q3 05 Q4 05

Revenue Client Banks

* Significant tariff reduction occurred in Q4 ‘05 Note: derived from management accounts

October 2006 20 www.bog.ge/ir

Peer Group Peer Group – – Total Assets & Market Shares Total Assets & Market Shares

13% 10% 8.3% 13% 15% 18% 23% 11% 7% 8.3% 12% 13% 23% 25% 0% 5% 10% 15% 20% 25% 30% TBC Bank Bank of Georgia United Georgian Bank ProCredit Bank Bank Republic Cartu Bank Other Banks YE 2005 31-Aug-06 +2% +5%

• 2%
• 1%

0%

• 3%
• 2%

Change since YE 2005 Bank of Georgia 577 461 390 330 212 249 330 868 798 468 429 294 259 404 100 200 300 400 500 600 700 800 900 1000 TBC Bank Bank of Georgia United Georgian Bank ProCredit Bank Bank Republic Cartu Bank Other Banks YE 2005 31-Aug-06 GEL mln Change since YE 2005 +51% +73% +20% +30% +39% +4% +23% Bank of Georgia

Total Sector Assets GEL 3,519 mln (August 31, 2006) Change Since YE ’05 + 38%

Peer Group Total Assets Peer Group Market Shares

Notes: (1) Bank of Georgia total assets from standalone accounts as reported to the NBG (2) Other banks’ total assets from standalone accounts as reported to the NBG (3) Bank of Georgia market shares calculated based on its standalone assets as reported to the NBG

October 2006 21 www.bog.ge/ir

Peer Group Peer Group – – Gross Loans & Market Shares Gross Loans & Market Shares

Peer Group Gross Loans

10% 7.8% 10% 14% 18% 18% 22% 9% 7.6% 8% 12% 15% 23% 25% 0% 5% 10% 15% 20% 25% 30% TBC Bank Bank of Georgia United Georgian Bank ProCredit Bank Cartu Bank Bank Republic Other Banks YE 2005 31-Aug-06 +3.0% +5%

• 3%
• 2%
• 2%
• 0.2%
• 1%

Change since YE 2005 Bank of Georgia 177 136 172 242 305 318 380 221 186 185 304 367 562 614 100 200 300 400 500 600 700 TBC Bank Bank of Georgia United Georgian Bank ProCredit Bank Cartu Bank Bank Republic Other Banks YE 2005 31-Aug-06 GEL mln +61% +77% +20% +26% +7% +37% +25% Change since YE 2005 Bank of Georgia

Total Sector Gross Loans GEL 2,439 mln (August 31, 2006) Change since YE ‘05 + 41%

Peer Group Market Shares

Notes: (1) Bank of Georgia gross loans from standalone accounts as reported to the NBG (2) Other banks’ total assets from standalone accounts as reported to the NBG (3) Bank of Georgia market shares calculated based on its standalone assets as reported to the NBG

October 2006 22 www.bog.ge/ir

Peer Group Peer Group – – Deposits & Market Shares Deposits & Market Shares

Peer Group Deposits

12% 27% 19% 18% 10.6% 9% 5% 10% 4% 26% 23% 15% 10.9% 11% 0% 5% 10% 15% 20% 25% 30% TBC Bank Bank of Georgia United Georgian Bank Bank Republic ProCredit Bank Cartu Bank Other Banks YE 2005 31-Aug-06

• 1%

+4%

• 3%

+0.4% +2%

• 1%
• 2%

Change since YE 2005 Bank of Georgia 181 76 142 163 283 285 408 213 78 225 227 313 470 547 100 200 300 400 500 600 TBC Bank Bank of Georgia United Georgian Bank Bank Republic ProCredit Bank Cartu Bank Other Banks YE 2005 31-Aug-06 GEL mln +34% +65% +11% +40% +58% +3% +18% Change since YE 2005 Bank of Georgia

Total Sector Deposits GEL 2,073 mln (August 31, 2006) Change Since YE ‘05 + 35%

Peer Group Market Shares

Notes: (1) Bank of Georgia total deposits from standalone accounts as reported to the NBG (2) Other banks’ total assets from standalone accounts as reported to the NBG (3) Bank of Georgia market shares calculated based on its standalone assets as reported to the NBG

October 2006 23 www.bog.ge/ir

Peer Group Peer Group – – Shareholders Shareholders’ ’ Equity & Market Shares Equity & Market Shares

119 33 90 87 81 45 25 135 41 45 120 107 89 57 20 40 60 80 100 120 140 160 Bank of Georgia TBC Bank Cartu Bank ProCredit Bank United Georgian Bank Bank Republic Other Banks YE 2005 31-Aug-06 GEL mln +33% +23% +10% +28% +83% +25% +14% Change since YE 2005 Bank of Georgia

Total Sector Equity GEL 595 mln (August 31, 2006) Change since YE ‘05 + 24%

Peer Group Shareholders’ Equity Peer Group Market Shares

25% 6.9% 5% 9.3% 17% 18.1% 18.7% 23% 7.0% 8% 9.6% 15% 17.9% 20.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Bank of Georgia TBC Bank Cartu Bank ProCredit Bank United Georgian Bank Bank Republic Other Banks YE 2005 31-Aug-06 +1.5%

• 0.2%
• 2%

+0.3% +3% +0.1%

• 2%

Change since YE 2005 Bank of Georgia

Notes: (1) Bank of Georgia total equity from standalone accounts as reported to the NBG (2) Other banks’ total assets from standalone accounts as reported to the NBG (3) Bank of Georgia market shares calculated based on its standalone assets as reported to the NBG

October 2006 24 www.bog.ge/ir

Supportive Shareholders & Lenders Supportive Shareholders & Lenders

• Senior Executives currently own 749,098 shares.

In addition, Senior Executives are entitled to receive approximately 558,000 shares pursuant to the equity compensation program

• New management share ownership plan has

been introduced and 114 professionals equitized

BoG Shareholder Structure Institutional Shareholders Key Lenders Custodians/Nominees

• 48 non-resident individual shareholders
• Approximately 1,600 domestic retail

shareholders

Noonday

Brokers Capable of Trading BoG Shares

Bank of Georgia Shareholding 6-Oct-06 Shares % Bank Austria Creditanstalt (nominees) 4,166,242 24.90% Firebird Avrora Fund 1,463,682 8.7% Firebird Republics Fund 1,430,145 8.5% Victor Gelovani 1,300,000 7.8% East Capital Holding 846,864 5.1% East Capital Bering Russia Fund 771,172 4.6% East Capital Bering Ukraine Fund 570,000 3.4% Firebird Global Master Fund 668,795 4.0% East Capital Financial Institutions AB II 511,435 3.1% Galt &Taggart Securities (including nominees) 785,925 4.7% Bryum Limited 390,837 2.3% Lado Gurgenidze 359,576 2.1% SEB Vilniaus Bankas (nominees) 308,634 1.8% Sulkhan Gvalia 242,998 1.5% Tariel Gvalia 237,000 1.4% Sub-Total 14,053,305 84.0% Retail Free Float 2,684,329 16.0% Total 16,737,634 100.0%

October 2006 25 www.bog.ge/ir

Leadership In Innovation Leadership In Innovation

• The first Georgian bank to adopt a CIB integrated client coverage model
• The first Georgian bank to introduce packaged Retail Banking products
• The first Georgian bank to introduce bancassurance
• The first Georgian bank to launch Private Banking
• The first successful live migration to a new card processing platform in

Georgia

• The first co-branded cards in Georgia
• The first LBO transaction in Georgia
• The first cross-border M&A transaction advisory by a Georgian investment

bank

• The first corporate bond issue in Georgia
• The first structured equity transaction in Georgia
• The first research coverage of a Georgian company by a non-resident

brokerage house

• The first Georgian entity to be rated by three rating agencies

October 2006 26 www.bog.ge/ir

Share Price Performance Share Price Performance

Regional peers trade at significantly higher multiples

2004 Share Price Appreciation 175% 2005 Share Price Appreciation 52% 2006 YTD Share Price Appreciation 127%

1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 US$ New management team commences turnaround. September 2004 share price US$ 2.0 MCAP US$ 21 mln; P/BV 0.8x as at September 2004 2005 YE share price of US$ 4.7 MCAP US$ 68.7 mln P/BV (BV as at YE 05) 1.4x YTD 2006 share price growth 127% Share price as at October 3, 2006 US$ 10.6 MCAP US$ 176.3 mln P/BV (BV as at September 30, 2006) 2.3x

September 30, December 31, December 31, 2006 2005 2004 Shares Outstanding 16.7 14.7 11.3 Price per share (US$) 10.6 4.7 3.1 Price per share (GEL) 18.4 8.3 5.6 MCAP (US$ mln) 176.3 68.7 35.0 MCAP (GEL mln) 306.4 122.9 63.3

MCAP/BV 2.3 1.4 1.2

Inflows of Debt/Equity Funds in BoG vs. Total FDI

134 539 489 100 200 300 400 500 600 2004 2005 2006 FDI (US$ mln) US$ 9.4 mln US$ 17.6 mln US$ 76.6 mln

BoG

Note: 2006 data for FDI as of March 31, 2006 2006 data for BoG as of August 31, 2006

Annual Trading Volume (GEL mln) GSE OTC 21.4 6.9 22.6 6.1 29.6 2005 27.4 50.0 35.2 40.2 Total 2004 28.3 1H 2006 2006 YTD 41.3 69.8

October 2006 27 www.bog.ge/ir

Investment Case Investment Case

• A “leveraged play” on Georgia’s economic growth
• Winning strategy for medium-term profitable growth
• Financial sector consolidator: seven acquisitions in the last 21 months
• Strong retail “pull” due to core franchise strength
• Diversified revenue streams being built through product innovation in the context of an

integrated business model

• Disciplined capital management
• Sophisticated management team and strong staff, comprising more than 15 individuals

with Western banking & finance background and education Selected Prior Employers of Bank of Georgia Management Team Members

• Results-oriented corporate culture stressing teamwork, initiative and accountability
• Transparency and good governance
• Emphasis on investor relations, retail-lot liquidity and international stock exchange

listing

• Zealous focus on creating attractive exit opportunities by 2008
• The only investable banking stock in Georgia (and the Caucasus)

October 2006 28 www.bog.ge/ir

Ample Ample Exit Opportunities Exit Opportunities

Selected Potential Buyers

October 2006 29 www.bog.ge/ir

Contact Information Contact Information

Lado Gurgenidze Chairman of the Supervisory Board + 995 32 444 103 lgurgenidze@bog.ge Irakli Gilauri Chief Executive Officer + 995 32 444 109 igilauri@bog.ge Nicholas Enukidze Group Financial Director +44 7725 462596 +380 67 408 3212 nicholas.enukidze@bog.ge Macca Ekizashvili Head of Investor Relations + 995 99 900 108 ir@bog.ge

October 2006 30 www.bog.ge/ir

Appendix I Appendix I

The Georgian Economy

October 2006 31 www.bog.ge/ir

The Georgian Economy At A Glance The Georgian Economy At A Glance

In GEL mln, unless otherwise noted 2003A 2004A 2005E 2006F 2007F CAGR 04-07 Demographic Parameters Number of Households, thousands 1,220 1,200 1,212 1,231 1,239 Population, of which 4.55 4.54 4.56 4.58 4.60 0.5% Economically active 2.11 2.11 2.13 2.14 2.16 0.7% % of Total Population 46.5% 46.6% 46.7% 46.8% 46.9% Macroeconomic Parameters Nominal GDP 8,560 9,506 11,149 12,412 14,649 15.5% Real GDP Growth, % 11.1 6.2 9.3 10.2 10.5 GDP Per Capita (GEL) 1,883 2,096 2,446 2,710 3,182 14.9% CPI, GEL, e-o-p, % 6.9 7.5 6.1 5.1 8.7 GDP Deflator, y-o-y, % 3.2 5.9 5.5 4.5 7.1 GEL/US$, avg 2.14 1.91 1.81 1.79 1.80

• 2.0%

GEL/US$, e-o-p 2.05 1.83 1.79 1.78 1.79

• 0.7%

Consolidated State Budget Revenues 1,320 2,282 2,507 3,029 3,807 18.6% Consolidated State Budget Deficit 202 130 524 385 425 48.4% As % of GDP 2.36% 1.37% 4.70% 3.10% 2.90% Debt to Exports Ratio 143.27 112.22 89.1 N.A. N.A. Exports, FOB (US$ mln) 465.3 648.4 867.1 N.A. N.A. 36.5% NBG Currency Reserves, (US$ mln) 190.9 382.9 474.2 N.A. N.A. 57.6% Debt to GDP Ratio 44.42 33.17 27.71 N.A. N.A.

Source: State Statistics Department; National Bank of Georgia; Galt & Taggart Securities’ estimates

October 2006 32 www.bog.ge/ir

The Georgian Economy cont The Georgian Economy cont’ ’d d

• High GDP growth
• Stable currency
• Strong fiscal performance
• Increasing consumer spending with very low levels of consumer

indebtedness

• Unprecedented government spending on infrastructure, resulting in

increased productivity

• Reasonable interest rate environment
• Increased foreign investor activity
• Progressive new tax code
• The majority of customs duties abolished
• Massive deregulation and liberalization
• Dramatically reduced corruption
• Improving corporate governance practices
• No currency or capital controls since the mid-1990s

October 2006 33 www.bog.ge/ir

STILL A LAGGARD AMONG EMERGING MARKETS STILL A LAGGARD AMONG EMERGING MARKETS

18,340 20,590 8,560 12,994 16,823 14,108 3,320 10,186 11,041 7,213 3,586

GEORGIA

Note: Estimated real GPW to GDP in Russia was only about 1,7% in 2003; 2005 data for Georgia and GDP per capita (PPP); 2003 data for all other countries Source: Global Insight; Global Stock Market Factbook 2004; National Banks; McKinsey; International Monetary Fund

Banking assets/GDP

Ukraine Russia Mexico India Argentina Hungary Poland Brazil Korea Czech Rep

Stock Market Capitalization/ GDP

Percent

Insurance Premiums/ GDP US$

Percent Percent

GDP per Capita (PPP)

5 9 53 20 44 31 50 18 54 48 21

88 157 78 55 66 49 53 28 44 40 22 4 10 3 3 3 3 2 3 3 1 3

October 2006 34 www.bog.ge/ir

1.0 1.5 2.0 2.5 3.0 3.5 4.0 Azerbaijan Russia India Kazakhstan China Ukraine Romania Turkey Moldova Brazil Bosnia and Herzegovina Lebanon Georgia United Arab Emirates Bulgaria Macedonia Greece Croatia Poland Hungary Latvia Slovenia Israel Slovak Republic Armenia Lithuania Czech Republic Estonia Georgia

Is Poised To Catch Up With Peers As Is Poised To Catch Up With Peers As The Economy Continues To Liberalize The Economy Continues To Liberalize

• Georgia is well ahead of many of its peers in the Heritage Foundation’s 2006 Index Of Economic Freedom
• Georgia is ahead of most CIS ecomonies in the 2005 EBRD Transition Indicators

Source: EBRD

Source: The Heritage Foundation

Source: Heritage Foundation

• Georgia is a leader of global top 10 reformers in 2006 and has leapt from 112th position to 37th in the World Bank’s league

table measuring the ease of doing business – ahead of both Italy and Spain

Source: World Bank

E c o n o m y E a s e o f D o i n g B u s in e s s R a n k E c o n o m y E a s e o f D o in g B u s in e s s R a n k E c o n o m y E a s e o f D o in g B u s in e s s R a n k E c o n o m y E a s e o f D o in g B u s in e s s R a n k E c o n o m y S in g a p o r e 1 F iji 3 1 S lo v e n ia 6 1 T u r k e y 9 1 B r a z il N e w Z e a la n d 2 M a u r itiu s 3 2 P a la u 6 2 M a c e d o n ia , F Y R 9 2 S u r in a m e U n ite d S ta te s 3 A n tig u a a n d B a r b u d a 3 3 K a z a k h s ta n 6 3 C h in a 9 3 E c u a d o r C a n a d a 4 A r m e n ia 3 4 U r u g u a y 6 4 G h a n a 9 4 C r o a tia H o n g K o n g , C h in a 5 F r a n c e 3 5 P e r u 6 5 B o s n ia a n d H e r z e g o v in a 9 5 C a p e V e r d e U n ite d K in g d o m 6 S lo v a k ia 3 6 H u n g a r y 6 6 R u s s ia 9 6 P h ilip p in e s D e n m a r k 7 G e o r g ia 3 7 N ic a r a g u a 6 7 E th io p ia 9 7 W e s t B a n k a n d G a z a A u s tr a lia 8 S a u d i A r a b ia 3 8 S e r b ia 6 8 Y e m e n 9 8 U k r a in e N o r w a y 9 S p a in 3 9 S o lo m o n I s la n d s 6 9 A z e r b a ij a n 9 9 B e la r u s I r e la n d 1 0 P o r tu g a l 4 0 M o n te n e g r o 7 0 N e p a l 1 0 0 S y r ia J a p a n 1 1 S a m o a 4 1 E l S a lv a d o r 7 1 A r g e n tin a 1 0 1 B o liv ia I c e la n d 1 2 N a m ib ia 4 2 D o m in ic a 7 2 Z a m b ia 1 0 2 G a b o n S w e d e n 1 3 M e x ic o 4 3 G r e n a d a 7 3 M o ld o v a 1 0 3 T a jik is ta n F in la n d 1 4 S t. V in c e n t a n d th e G r e n a d in e s 4 4 P a k is ta n 7 4 V ie tn a m 1 0 4 I n d ia S w itz e r la n d 1 5 M o n g o lia 4 5 P o la n d 7 5 C o s ta R ic a 1 0 5 I n d o n e s ia L ith u a n ia 1 6 K u w a it 4 6 S w a z ila n d 7 6 M ic r o n e s ia 1 0 6 G u y a n a E s to n ia 1 7 T a iw a n , C h in a 4 7 U n ite d A r a b E m ir a te s 7 7 U g a n d a 1 0 7 B e n in T h a ila n d 1 8 B o ts w a n a 4 8 J o r d a n 7 8 N ig e r ia 1 0 8 B h u ta n P u e r to R ic o 1 9 R o m a n ia 4 9 C o lo m b ia 7 9 G r e e c e 1 0 9 H a iti B e lg iu m 2 0 J a m a ic a 5 0 T u n is ia 8 0 M a la w i 1 1 0 M o z a m b iq u e G e r m a n y 2 1 T o n g a 5 1 P a n a m a 8 1 H o n d u r a s 1 1 1 C Ã ´te d 'I v o ir e N e th e r la n d s 2 2 C z e c h R e p u b lic 5 2 I ta ly 8 2 P a r a g u a y 1 1 2 T a n z a n ia K o r e a 2 3 M a ld iv e s 5 3 K e n y a 8 3 G a m b ia 1 1 3 C a m b o d ia L a tv ia 2 4 B u lg a r ia 5 4 S e y c h e lle s 8 4 L e s o th o 1 1 4 C o m o r o s M a la y s ia 2 5 O m a n 5 5 S t. K itts a n d N e v is 8 5 M o r o c c o 1 1 5 I r a q I s r a e l 2 6 B e liz e 5 6 L e b a n o n 8 6 A lg e r ia 1 1 6 S e n e g a l S t. L u c ia 2 7 P a p u a N e w G u in e a 5 7 M a r s h a ll I s la n d s 8 7 D o m in ic a n R e p u b lic 1 1 7 U z b e k is ta n C h ile 2 8 V a n u a tu 5 8 B a n g la d e s h 8 8 G u a te m a la 1 1 8 M a u r ita n ia S o u th A fr ic a 2 9 T r in id a d a n d T o b a g o 5 9 S r i L a n k a 8 9 I r a n 1 1 9 M a d a g a s c a r A u s tr ia 3 0 K ir ib a ti 6 0 K y r g y z R e p u b lic 9 0 A lb a n ia 1 2 0 E q u a to r ia l G u in e a

October 2006 35 www.bog.ge/ir

Liberal Trade Regime Liberal Trade Regime

• WTO member since 2001
• Trade turnover grew by 66%

during 2005

• Georgia has no quantitative

restrictions (quotas) on trade

• Limited number of export/import

licenses; the number of permits for import & export reduced from 14 to 8 in 2005

• Trade relations with most of

Georgia’s trade partners are based

• n the Most Favored Nation

status, providing lower tariffs for WTO members

• In 2005, Georgia became one of

the two beneficiaries of the new EU Generalized Systems of Preferences (GSP) Plus scheme in the CIS and one of the 15 beneficiaries in the world. As of January ’06, Georgia obtained a GSP+ status with Turkey

• Most customs duties were

abolished 5 August 2006

4.2 2.5 1.6 1.1 1.1 1.0

1 2 3 4 5

2000 2001 2002 2003 2004 2005 100 200 300 400 500 600 Russia Turkey Azerbaijan Ukraine Germany USA Turkmenistan Bulgaria France UK US$ m ln EU, 33% Others, 25% CIS, 42%

Foreign Trade Largest Trade Partners, 2005 Foreign Trade Structure, 2005

Source: Department of Statistics of the Ministry of Economic Development of Georgia US$ bn US$ mln

October 2006 36 www.bog.ge/ir

Appendix II Appendix II

1H 2006 Audited Financial Statements

October 2006 37 www.bog.ge/ir

Consolidated 1H 2006 Results, IFRS, Reviewed Consolidated 1H 2006 Results, IFRS, Reviewed

INCOME STATEMENT DATA

1H 06 y-o-y growth 1H 06 12/31/2005 1H 05 12/31/2004 12/31/2003 JSC Bank of Georgia, Consolidated, IFRS, Audited

GEL '000s, unless otherwise noted

Interest income Loans to customers 69.7% 36,351 47,247 21,427 31,432 30,004 Debt securities owned

• 73.1%

430 2,664 1,601 1,654 2,295 Amounts due from credit institutions 36.0% 1,227 1,525 902 672

• Net investment in lease

250.0% 385 396 110

• 59.7%

38,393 51,832 24,040 33,758 32,299 Interest expense Amounts owed to customers 85.1% 7,665 9,162 4,141 6,819 5,347 Amounts owed to credit institutions 205.8% 4,783 3,893 1,564 3,100 2,533 Debt securities issued NMF 50 26

• 119.1%

12,498 13,081 5,705 9,919 7,880 Net interest income 41.2% 25,895 38,751 18,335 23,839 24,419 Impairment of interest earning assets 95.6% 7,085 6,228 3,622 20,511 4,105 Net interest income after impairment of interest earning assets 76.0% 25,895 32,523 14,713 3,328 20,314 Fees and commissions income 67.5% 11,912 16,753 7,112 13,059 11,751 Fees and commissions expense 56.3% (1,665) (2,385) (1,065) (2,745) (2,895) Net fees and commissions income 69.5% 10,247 14,368 6,047 10,314 8,856 Gains less losses from foreign currencies: 74.5% 4,602 6,507 2,638 4,848 3,868 Net insurance premiums earned 110.5% 3,749 4,028 1,781

• Other operating income

241.4% 1,014 566 297 152 42 Other non-interest income 98.6% 9,365 11,101 4,716 5,000 3,910 Salaries and other employee benefits 21.3% 13,351 23,219 11,007 12,896 9,060 Administrative expenses 61.6% 8,254 10,883 5,108 9,372 8,006 Depreciation, amortization and impairment 25.6% 2,530 4,230 2,014 2,609 2,231 Net insurance claims incurred 71.5% 813 786 474

• Impairment of other assets and provisions

108.1% (1,155) 280 (555) 1,559 1,493 Other operating expenses

• 41.1%

392 1,860 666 336 705 Other non-interest expense 29.2% 24,185 41,257 18,714 26,772 21,495 Income (loss) before income tax expense 110.5% 14,237 16,735 6,762 (8,130) 11,585 Income tax expense (benefit) 441.5% 3,211 3,108 593 (781) 2,431 Net income (loss) for the year 78.7% 11,026 13,627 6,169 (7,349) 9,154 * * six month numbers are based on the unaudited Interim Consolidated Financials reviewed by Ernst & Young

October 2006 38 www.bog.ge/ir

Consolidated 1H 2006 Results, IFRS, Reviewed Consolidated 1H 2006 Results, IFRS, Reviewed

BALANCE SHEET DATA

YTD Growth 1H 06 12/31/2005 JSC Bank of Georgia, Consolidated, IFRS, Audited*

GEL '000s, unless otherwise noted

Assets Cash and cash equivalents 89.0% 108,160 57,236 Amounts due from credit institutions 43.6% 47,954 33,398 Loans to customers, net 50.6% 447,883 297,376 Net investment in lease 14.9% 4,958 4,314 Total investment securities

• 78.5%

2,283 10,607 Property and equipment, net 35.4% 48,509 35,815 Intangible assets, net 228.6% 25,254 7,685 Income tax assets

• 88.0%

309 2,570 Prepayments 619.6% 3,274 455 Other assets 142.9% 26,999 11,114 Total assets 55.4% 715,583 460,570 Liabilities Amounts owed to credit institutions 75.4% 138,308 78,873 Amounts owed to customers 64.8% 444,889 269,952 Debt securities issued 16.6% 1,333 1,143 Income tax liabilities 35.4% 2,825 2,087 Provisions NMF 975 Other liabilities 32.7% 21,337 16,078 Total liabilities 64.9% 608,692 369,108 Equity Share capital 5.5% 15,538 14,729 Share premium 13.5% 37,382 32,922 Treasury shares 91.4%

• 155
• 81

Retained earnings 27.8% 47,828 37,427 Other reserves

• 1.0%

5,313 5,369 Total equity attributable to shareholders 17.2% 105,906 90,366 Minority interest

• 10.1%

985 1,096 Total equity 16.9% 106,891 91,462 Total liabilities and equity 55.4% 715,583 460,570

* six month numbers are based on the unaudited Interim Consolidated Financials reviewed by Ernst & Young

October 2006 39 www.bog.ge/ir

Consolidated 1H 2006 Results, IFRS, Consolidated 1H 2006 Results, IFRS, Reviewed Reviewed

KEY RATIOS

1H 2006 YE 2005 2004

JSC Bank of Georgia, Consolidated, IFRS, Audited

Profitability ratios: ROAA (annualised*)(1) 3.7% 3.3% NMF ROAE (annualised*)(2) 22.2% 18.5% NMF Net interest margin(3) 11.8% 13.0% 12.1% Interest expense to interest income 32.6% 25.2% 29.4% Net fee and commission income to total operating income(4) 22.5% 22.4% 26.3% Interest income to average interest earning assets(3) 17.5% 17.4% 17.1% Cost of funds (5) 5.3% 4.0% 4.2% Net spread(6) 12.1% 13.4% 12.9% Net non-interest income to total operating income(7) 43.1% 39.7% 39.1% Efficiency ratios: Other non-interest expense to average total assets 8.2% 10.0% 9.0% Salaries and other employee benefits to total operating income (8) (4) 29.3% 36.2% 32.9% Salaries and other employee benefits to other non-interest expense (8) 55.2% 56.3% 48.2% Liquidity ratios: Net loans to total assets 62.6% 64.6% 46.8% Net loans to amounts owed to customers 100.7% 110.2% 67.4% Net loans to total deposits(9) 80.8% 96.8% 61.6% Net loans to total liabilities 73.6% 80.6% 55.2% Interest earning assets to total assets(3) 72.9% 76.9% 66.7% Liquid assets to total assets(10) 15.4% 14.2% 33.7% Total deposits to total assets(9) 77.5% 66.7% 76.0% Amounts owed to customers to total deposits 80.2% 87.9% 91.4% Amounts owed to customers to total equity (times) 4.2 3.0 4.5 Amounts due from credit institutions to amounts owed to credit institutions, except for borrowings from international credit institutions 43.7% 89.9% 107.8% Total equity to net loans 23.9% 30.8% 32.6% Leverage, times(11) 5.7 4.0 5.5 Asset quality (at period end): Allowance for loan impairment to gross loans(3) (12) 5.1% 5.4% 10.1% Impairment of interest earning assets to average gross loans 3.6% 2.5% 12.1% Capital adequacy: Shareholders’ equity to total assets 14.9% 19.9% 15.3% Tier I capital adequacy ratio(13) 16.9% 23.8% 32.2% Total capital adequacy ratio(13) (14) 14.8% 24.7% 33.8%

* Six month average annualised in 2006.

NOTES TO RATIOS 1

2

3

4

5

6

7

8

9

10

11

12

13

14

October 2006 40 www.bog.ge/ir

Caution Regarding Forward Caution Regarding Forward-

• Looking Statements

Looking Statements

This presentation contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives and other statements relating to our business development and financial performance. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market, macroeconomic, governmental, legislative and regulatory trends, (2) movements in local and international currency exchange rates, interest rates and securities markets, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit worthiness

• f our customers, obligors and counterparties and developments in the markets in which

they operate, (6) management changes and changes to our group structure and (7) other key factors that we have indicated could adversely affect our business and financial performance, which are contained elsewhere in this presentation and in our past and future filings and reports, including those filed with the NSCG. We are under no obligation (and expressly disclaim any such obligations) to update or alter our forward-looking statements whether as a result of new information, future events, or otherwise.