Bank of Georgia Investor Presentation May 2012 Contents Bank of - PDF document

Bank of Georgia Investor Presentation May 2012

Contents Bank of Georgia Over Bank of Georg a Overview view Ban B ank o k f G of Georg eorgia i 2011 a 2011 2011 an 2011 and Q1 d Q1 Q1 2012 Q1 2012 2012 R 2012 Resu esults l ts Over O verview i ew Business Segment Discussion Business Segment Discussion Georgian Macro Georgian Macro Page 2 May 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir

The leading bank in Georgia Leading market position: No. 1 bank in Georgia by assets (35.6%), loans Sustainable growth combined with strong capital, (34.5%), client deposits (36.9%) and equity (35.4%) 1 liquidity and strong profitability Underpenetrated market with stable growth perspectives: Average real Change (US$ mln) 2 Q1 2012 2011 2010 2011/2010 GDP growth for 2004-2011 of 13.8% CAGR. IMF estimates 6.0% growth for Total Assets 2,750.8 2,793.6 2,258.8 23.7% 2012. Gross loans/GDP grew from 9.8% to c.31.9% over the period, still below Loans to customers, net Loans to customers net 1 634 8 1,634.8 1 566 7 1,566.7 1 334 5 1,334.5 17 4% 17.4% regional average; Total deposits/GDP grew from 10.0% in 2004 to 30.3% in Customer funds 3 1,581.5 1,637.9 1,142.9 43.3% 2011 Shareholders’ equity 617.3 486.6 391.1 24.4% Revenue 70.4 264.2 195.5 35.1% Strong brand name recognition and retail banking franchise: Offers the Profit 5 24.0 90.4 46.6 93.8% broadest range of financial products to the retail market through a branch Liquid assets 4 /total liabilities 31.1% 34.7% 30.9% network of 164 branches and 431 ATMs to approximately one million customers ROAA 5 3.5% 3.5% 2.4% as of March 2012 as of March 2012 ROAE 5 OA 5 18 2% 18.2% 20 6% 20.6% 13.5% 13 % Tier I Capital Adequacy Ratio (BIS) 6 23.2% 19.9% 17.5% The only Georgian company with credit ratings from all three global rating Total Capital Adequacy Ratio (BIS) 6 29.7% 28.5% 26.6% agencies: S&P: ‘BB-’, Moody's: ‘B1/Ba3’ (foreign and local currency), Fitch Leverage ratio 3.5x 4.7x 4.8x Ratings: ‘BB-’; outlooks are ‘Stable’ Bank of Georgia Holdings plc. (BGH) (LSE: BGEO) a UK-incorporated High standards of transparency and governance: First and still the only holding company of JSC Bank of Georgia As of 31 March 2012 BGH’s holding company of JSC Bank of Georgia. As of 31 March 2012, BGH s entity from Georgia to list on the London Stock Exchange since 2006 (in the tit f G i t li t th L d St k E h i 2006 (i th shareholder structure was as follows: form of GDRs since 2006 and premium listing since February 2012) Experienced management with deep understanding of local market and a 2.6%7.1% Selected Institutional Shareholders strong track record: East Capital Institutional Investors Firebird Management LLC 2004 31 March 2012 Change Management & Employees* International Finance Corporation Market capitalisation (US$ mln) Market capitalisation (US$ mln) 45 2 45.2 616.6 616 6* 13 6x 13.6x Management Trust (Unvested Management Trust (Unvested European Bank for Reconstruction and Development and unawarded share options) 199.0 2,750.8 13.8x Total assets (US$ mln) 90.3% Prosperity Capital Management Limited Market share by total assets 19% 36% 89% OP-Pohjola Group Central Cooperative Artio International Equity Fund * Market capitalisation for Bank of Georgia Holdings plc., the Bank’s holding company, as of 11 May 2012 * Includes shares held by and share options allocated for the Bank’s Supervisory and Management 1 Market data based on standalone accounts as published by the National Bank of Georgia (NBG) as of 31 December 2011 Board members and certain other employees of the Bank and its subsidiaries www.nbg.gov.ge 2 US$/GEL 1.66 as at 31 March 2012 3 Amounts due to customers • BGEO to become FTSE All Share Index component in June 2012; 4 Liquid assets include cash and cash equivalents, cash placed with credit institutions and NBG CDs and Georgian government treasuries 5 Profit from continuing operations used for the calculation of ROAA and ROAE Candidate for inclusion in the FTSE 250 6 Capital Adequacy ratios as of 31 March 2012 include EBRD and IFC loan conversions and are presented on a consolidated basis Page 3 May 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir

Leveraged play on the growing Georgian economy through an LSE premium listed company With one third of the Georgian market by assets, loans and client deposits, Bank of Georgia is a uniquely placed growth bank in an underpenetrated, highly capitalised and profitable banking market that has been growing in terms of assets at 33% CAGR 2003-2011 Strategic business Strategic business Synergist Synergistic business c business Non-core business Non-core business Growth opportunities Intention to exit from Well established brand to support Strategic Business the non-core business over time Retail Insurance and Healthcare BNB • Largest g retail franchise: 926,800+ , retail • • Strongly positioned to benefit from the Belarus banking operation accounting for clients, 164 branches, 431 ATMs, 703,000 growth of insurance and healthcare sectors 2.2% total assets as of 31 December 2011 cards outstanding as of 31 March 2012 through insurance subsidiary ABCI, one of • • The Bank owns 80%, the remainder owned Market shares of c.37% by retail loans and the leading providers of life and non-life by IFC/World Bank c.32% by retail deposits as of year end 2011 insurance in Georgia with c.33.4%* market • Assets of US$ 56.0 mln and equity of Corporate share by gross premiums written y g p • US$ 21.9 mln as of 31 December 2011 $ Largest corporate bank with more than 8,900 • Vertical integration with healthcare business • corporate clients; 41% market share by Fully written off goodwill (GEL 23.4 mln) to boost insurance business growth and its corporate deposits as of year end 2011 Liberty Consumer contribution to the Bank’s income Wealth Management (WM) • The Bank’s equity interest of 67%, or Affordable Housing • WM client deposits 2009-2011 CAGR • GEL 17.0 mln Stimulate mortgage lending and improve growth of 66.9%; Outstanding WM client growth of 66 9%; Outstanding WM client • liquidity of the repossessed real estate assets Legacy asset management investments in the deposits of GEL 454.2 mln at 31 December through housing development; pilot project Georgian consumer-driven businesses such 2011 successfully completed as wine production, supermarket chain, etc. *As of 30 September 2011 per NBG. Includes market share of newly acquired insurance company Imedi L International Page 4 May 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir

Strong profitability and excellent capital adequacy g p f y p q y ROE c.20% ROE c.20% Growth c.20% Growth c.20% TIER I TIER I c.20% c.20% P Profit from continuing operations up fit f ti i ti Conservative National Bank of Georgia C i N i l B k f G i Strong growth across the board supported 82.6% to GEL 150.9 mln in 2011 vs. (NBG) regulation by synergistic business 2010 • Risk weighting of FX assets at 175%, Loan book growth 15.7%** in 2011 Other non-interest income surged Bank’s leverage at 3.5x as of 31 March Customer funds grew 3.2** times 87.6% to GEL 108.9 mln in 2011 2012 compared to the loan book growth rate of Operational efficiency/scale: O ti l ffi i / l S Strong internal cash generation to i l h i 49.5%** • support loan growth without Cost to income ratio improved to 49% • Consumer driven franchise with robust compromising capital ratios in 2011 from 58% in 2010 sales force to increase cross selling with • BIS Tier I of 23.2% and BIS Total Prudent risk management: synergistic businesses Capital ratio of 29.7% as of 31 March • • Cost of risk* of 0.7% in 2011 Increase in contribution from synergistic y g 2012 2012 business in the group’s profit 2011 ROAE of 20.6%; compared to • NBG Tier I 15.2% and NBG Total 2010 ROAE of 13.5% Capital of 18.2% as of 31 March 12 * Impairment of interest earning assets of the period to average interest earning assets ** Excluding BG Bank in 2012 Page 5 May 2012 www.bogh.co.uk www.bankofgeorgia.ge/ir