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 1H 2007 Results Overview October 2007
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 September 2007 31 March 2007 YE 2006 • Securities driving profitable growth Retail Accounts 595,000+ 450,000+ 425,000+ Domestic sector consolidator and Cards Issued 520,000 340,000+ 285,000+ aspirations for regional expansion Branches 109 103 100 ATMs 185 146 124 Sophisticated management team with 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 57,000 legal entities have opened accounts 85% institutionally owned, majority of Top broker-dealer with circa 62% market share in equities trading in 1H 2007 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$1,036 mln as of 31 July 2007 banking business Approximately 91% free float Further diversify the business, including 2006 share price performance 383%, YTD 2007 share performance 49% Issue of the first ever Eurobonds in Georgia funding base and loan portfolio Bloomberg: BKGEO; 5 year, 9%, US$200 mln Continue improving risk management B+/Ba2/B (composite BB-) policies and procedures Actively pursue sensible regional Notes: (1) As of 30 September 2007; based on standalone accounts as reported to the National Bank of Georgia and as published by expansion opportunities the National Bank of Georgia www/nbg.gov.ge Page 2 October 2007 www.bog.ge/ir
Bank of Georgia 1H 2007 Results Overview Page 3 October 2007 www.bog.ge/ir
1H 2007 Results Highlights Growth, Y-O-Y 1 Millions, unless otherwise noted 1H 2007 1H 2006 Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ Unaudited Unaudited Net Interest Income 56.9 34.1 25.9 14.6 120% Increasing Net Non-Interest Income 36.3 21.7 19.1 10.8 90% Operating Total Operating Income (Revenue) 2 93.2 55.8 45.0 25.4 107% Leverage Recurring Operating Costs 37.0 22.1 20.3 11.4 83% Normalized Net Operating Income 3 56.2 33.7 24.7 13.9 128% Pre-Bonus Result 53.4 32.0 17.6 9.9 204% Net Income 32.4 19.4 11.0 6.2 193% Consolidated EPS (Basic), GEL & US$ 4 1.28 0.77 0.71 0.40 80% Consolidated EPS (Fully Diluted), GEL & US$ 5 1.19 0.71 0.69 0.39 72% ROAA 6 , annualised 3.9% 3.5% ROA, annualised 3.4% 3.1% ROAE 7 , annualised 16.6% 22.0% ROE, annualised 16.0% 20.6% Despite Tier I CAR of 24.7% Net Loans 1,036 620.6 450.5 254.1 130% Total Assets 1,918 1,149 715.5 403.6 168% Total Deposits 882.5 528.6 458.2 258.4 93% Total Liabilities 1,514 906.8 608.7 343.3 149% Shareholders‟ Equity 404.0 242.0 106.8 60.3 278% Book Value Per Share 15.97 9.57 6.90 3.89 131% 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 October 2007 www.bog.ge/ir
1H 2007 Performance Composition of Revenue (GEL mln) Revenue Market Share* GEL mln 38% 40% 100 +107% 93.2 95 90 35% 85 80 +120% 75 30% 70 65 56.9 25% 60 55 20% 50 45.0 20% 45 40 35 15% 25.9 +60% 30 11.5 25 2.0 +25% 20 10% 10.3 15 7.2 +122% 1.6 10 4.7 12.4 5% 5 +121% 5.6 0 1H 2006 1H 2007 0% Net Interest Income Net Fee & Commission Income Net Interest Income Net Fee & Commission Income 1H 2006 1H 2007 Net Income From Documentary Operations Net Foreign Currency Related Income Net Income From Documentary Operations Net Foreign Currency Related Income Net Other Non-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 14 +120% 56.9 60.0 12.4 +121% 12 50.0 36.3 +205% 4.3 40.0 +90% 10 30.0 25.9 8 19.1 +699% 20.0 3.1 5.6 6 10.0 - 1.4 +84% 1.5 4 0.4 - 0.0 0.8 +18% 1H 2006 1H 2007 2 3.5 3.0 Net Interest Income Net Non-Interest Income 0 1H 2006 1H 2007 Other Realised Net Investment Gain Asset Management Income Brokerage Income Net Insurance Income *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 Net Insurance Income Brokerage Income Realised Net Investment Gain Other Page 5 October 2007 www.bog.ge/ir
1H 2007 Performance cont’d Operating Cost Structure Normalised Net Operating Income GEL mln GEL 'mln 60 +128% 56.2 40 37.0 +83% 35 50 +74% 30 17.5 40 25 20.3 30 20 24.7 10.0 +103% 15 9.9 20 10 4.9 10 4.5 +108% 5 2.2 68% 4.2 2.5 0 0.9 0 0.7 +29% 1H 2006 1H 2007 1H 2006 1H 2007 Personnel Costs Selling, General & Administrative Expenses Personnel Costs Selling, General & Administrative Costs Procurement & Operations Support Expenses Depreciation & Amortization Other Operating Expenses Procurement & Operations Support Expenses Depreciation & Amortization Other Operating Expenses Pre-Bonus Result Net Income GEL mln GEL mln 35.0 +193% 32.4 60 53.4 +204% 28.0 50 40 21.0 30 14.0 11.0 17.6 20 7.0 10 0.0 0 1H 2006 1H 2007 1H 2006 1H 2007 Page 6 October 2007 www.bog.ge/ir
Composition of the Balance Sheet Liabilities & Shareholders’ Equity Assets, +168% y-o-y (+58% YTD) GEL million GEL million 2,000 +58% 1,918 2,000 +58% 1,918 1,900 97 1,900 828 1,800 CIB +74% YTD 1,800 493 1,700 250 1,700 +111% y-o-y 1,600 1,036 1,600 1,500 CIB 558 1,500 RB +33% YTD 1,400 273 1,400 1,300 1,213 1,300 1,213 1,200 +164% y-o-y WM -14% YTD 1,200 108 56 1,514 560 1,100 66 RB 1,100 CIB 430 283 694 1,000 1,000 +104% y-o-y 900 RB 900 206 WM 522 800 32 800 838 +120% y-o-y WM 700 700 65 CC 600 16 600 224 500 500 164 119 55 400 400 67 300 300 200 404 417 200 375 279 100 100 0 0 YE 2006 1H 2007 YE 2006 1H 2007 Cash & Equivalents Loans & advances to credit institutions Client Deposits Borrowed Funds Other Liabilities Equity Cash & Equivalents Loans & Advances To Credit Institutions Client Deposits Borrowed funds Other liabilities Shareholders' equity Loans & advances to clients, gross Property, Equipment And Intangible Assets Loans To Clients, Net Property, Equipment & Intangible Other Assets Other assets Page 7 October 2007 www.bog.ge/ir
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