GROWTH AT THE RIGHT PRICE LSE: BGEO / GSE:GEB JSC Bank of Georgia Q1 2010 results overview May 2010
Introduction to Bank of Georgia The leading universal bank in Georgia No.1 by assets (34.3%), (1) gross loans (32.7%), (1) client deposits (29.9%) (1) and Investment highlights equity (39.3%) (1) Undisputed leader of Georgian financial services industry with Leading retail banking, with top brand, best distribution network and broadest market-leading retail and corporate range of services of any bank in Georgia banking franchise March December March Strongly positioned to benefit from 2010 2009 2009 US$4.5 bln international assistance Retail Accounts 996,000+ 999,000+ 875,000+ package pledged to Georgia by Cards Outstanding 570,000+ 537,000+ 645,000+ international donors in the aftermath Branches 140 141 142 of Russia-Georgia conflict in August ATMs 3 79 3 82 420 2008 Leading corporate bank with approximately 85,500 legal entities and over 157,600 Disciplined capital management, low current accounts leverage, conservative liquidity Leading card-processing, leasing, insurance, wealth management and asset management position, no exposure to sub-prime services provider Sophisticated management team with The only Georgian entity with credit ratings from all three global rating agencies Western banking & finance S&P: ‘B/B’ – at the sovereign ceiling background Fitch Ratings: ‘B/B’ Transparency and good governance, Moody’s: ‘B3/NP (FC)’ & ‘Ba3/NP (LC)’ over 89% institutionally owned. Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange Market Cap (LSE) US$ 313 mln as of 25 February 2010 Supervisory Board includes two large Approximately 95% free float institutional shareholders and two Issue of the first ever Eurobonds in Georgia independent directors Bloomberg: BKGEO; 5 year, 9%, US$200 mln B/Ba2/B (composite B+) (1) All data according to the NBG as of 31 March 2009 Page 2 May 2010
JSC Bank of Georgia Q1 2010 results overview May 2010
Q1 2010 P&L results highlights Growth 1 Millions unless otherwise noted Q1 2010 Q4 2009 Growth Q1 2009 Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ Q-O-Q GEL US$ Y-O-Y (Unaudited) (Unaudited) (Unaudited) Net Interest Income 45.3 25.9 46.0 27.3 -1.7% 52.4 31.4 -13.7% Net Non-Interest Income 30.6 17.5 31.3 18.6 -2.2% 29.3 17.5 4.6% Total Operating Income (Revenue) 2 75.9 43.4 77.4 45.9 -1.9% 81.7 48.9 -7.1% Recurring Operating Costs 46.3 26.4 46.6 27.6 -0.7% 44.6 26.7 3.6% Normalized Net Operating Income 3 29.6 16.9 30.8 18.3 -3.7% 37.1 22.2 -20.1% Net Non-Recurring Income (Costs) (3.3) (1.9) (106.8) (63.4) NMF (0.2) (0.1) NMF Profit Before Provisions 26.4 15.1 (76.1) (45.1) NMF 36.8 22.1 -28.5% Net Provision Expense 7.4 4.2 30.3 18.0 -75.7% 32.1 19.2 -77.0% Net Income/ (Loss) 16.8 9.6 (102.3) (60.7) NMF 5.1 3.0 229.8% Tier I Capital Adequacy Ratio (BIS) 22.1% 22.4% 22.2% Total Capital Adequacy Ratio (BIS) 32.3% 33.8% 31.7% Tier I Capital Adequacy Ratio (NBG) 17.7% 19.7% 16.4% Total Capital Adequacy Ratio (NBG) 15.9% 16.8% 17.4% 1 Compared to the same period in 2008; growth calculations based on GEL values. 2 Revenue includes Net Interest Income and Net Non-Interest Income. 3 Normalized for Net Non-Recurring Costs. Page 4 May 2010
31 March 2010 Balance Sheet results highlights Millions, unless otherwise noted Q1 2010 YE 2009 Q1 2009 Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$ GEL US$ (Unaudited) (Unaudited) 1,777.3 1,015.9 1,678.2 995.5 1,911.6 1,144.7 Net Loans 3,124.1 1,785.8 2,913.4 1,728.2 3,186.8 1,908.2 Total Assets 1,472.7 841.8 1,294.9 768.1 1,185.9 710.1 Total Deposits 912.0 521.3 913.3 541.8 1,162.8 696.3 Borrowed Funds 2,512.4 1,436.2 2,315.0 1,373.2 2,474.9 1,482.0 Total Liabilities 611.7 349.6 598.4 355.0 711.8 426.3 Shareholders’ Equity 19.5 11.2 19.1 11.3 22.8 13.6 Book Value Per Share, GEL & US$ Change Change Q1 10/YE 09 Q1 10/Q1 09 5.9% -7.0% Net Loans 7.2% -2.0% Total Assets 13.7% 24.2% Total Deposits -0.1% -21.6% Borrowed Funds 8.5% 1.5% Total Liabilities 2.2% -14.1% Shareholders’ Equity 2.2% -14.2% Book Value Per Share, Page 5 May 2010
Consolidated Composition of revenue in Q1 2010 Composition of Revenue, Q1 2010 Revenue by segments, Q1 2010 Other Net foreign 5.6%, Net income from Aldagi BCI currency related GEL4.2 mln documentary 6.0%, income 9.7%, (+179.1 % y-o- operations 2.9%, GEL4.5 mln GEL 7.3 mln y ) GEL 2.2 mln (+32.5% y-o-y) +29.5% q-o-q) (-5.5% q-o-q) Belarus Net fee and 3.8%, commision GEL2.9 mln income13.6%, (+20.0% y-o-y) GEL 10.3 mln (-18.2% q-o-q) Ukraine 4.0%, Net interest GEL3.1 mln income 59.6%, Net other non- (-44.0% y-o-y) BoG GEL 45.3 mln interest income Standalone (-1.7% q-o-q) 14.2%, 80.6%, GEL 10.8 mln GEL61.2 mln (+0.6% q-o-q) (-11.2% y-o-y) Total Revenue: GEL 75.9 million in Q1 2009 Page 6 May 2010
Consolidated Analysis of revenue Revenue growth Net foreign currency related income GEL mln 100 GEL mln 16 14.9 90 86.1 85.9 86.6 81.1 81.7 80.6 79.3 77.4 75.9 14 80 13.2 68.1 27.1 30.3 30.2 70 12 29.3 31.3 31.1 30.4 31.3 10.4 60 30.6 10.1 56.2 9.4 52.2 10 25.3 8.8 50 7.3 22.7 41.0 8 7.1 21.3 40 6.5 6.2 6.1 5.7 15.0 6 30 58.9 55.8 56.4 52.4 49.8 49.5 48.9 46.0 45.3 4.3 42.8 20 4 33.5 30.9 26.0 10 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 Net Interest Income Net Non-Interest Income Net fee & commission income & Income from Other non-interest income documentary operations GEL mln GEL mln 12 16 10 14 3.7 1.7 2.3 3.0 4.4 4.4 2.3 8 1.8 2.3 0.3 12 0.2 1.9 1.4 3.3 0.3 2.2 0.6 1.9 6 1.0 1.3 0.6 1.4 4.7 1.9 3.6 0.2 3.3 10 1.8 1.6 2.4 2.6 1.9 4 1.0 0.2 1.9 3.0 1.4 0.2 0.4 0.6 0.1 0.3 8 0.1 1.8 1.0 1.4 1.6 5.1 4.9 1.3 0.1 2.2 4.2 2 3.7 0.5 3.2 3.0 12.9 12.6 0.7 1.3 2.5 2.1 12.0 6 1.6 1.7 11.6 2.1 1.4 11.1 1.0 10.9 10.3 10.2 10.2 0 -0.1 -0.4 -0.4 -0.5 -1.1 -0.1 4 7.6 6.9 -3.4 5.9 -2 5.6 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 -4 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 0 -6 Net Insurance Income Brokerage Income Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Asset Management Income Realized Net Investment Gains 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 Other Net Fee & Commission Income Net Income From Documentary Operations Page 7 May 2010
Consolidated Analysis of recurring operating costs Recurring operating cost structure, Q1 2010 Recurring operating cost structure by segments, Q1 2010 Other operating Depreciation & costs 6.3% Other, 14.7% amortization 14.4%, GEL 2.9 mln GEL 6.8 mln GEL 6.7 mln (-0.1% q-o-q) (+120.8% q-o-q) (-3.8% q-o-q ) Aldagi BCI, 6.4% GEL 2.9 mln Procurment & operations support (-18.9% q-o- q ) costs 7.6%, BNB, 3.8% Personnel costs GEL 1.8 mln GEL 3.5 mln 50.5%, (-10.4% q-o-q ) (-8.0% q-o-q) BoG GEL 23.4 mln standalone, (+4.0% q-o-q) Selling, general & 66.5% BG Bank, 8.6% administrative costs GEL 30.8 mln GEL 4.0 mln 21.2%, (-8.6% q-o-q) (-6.4% q-o-q) GEL 9.8 mln (-6.4% q-o-q) Total recurring operating costs: GEL 46.3 million in Q1 2010 (-0.7% q-o-q), (+3.6% y-o-y) Page 8 May 2010
Consolidated Analysis of recurring operating costs cont’d Employees Personnel costs GEL mln 392 Q1 2010 2,825 30 5,048 28.4 27.3 621 25.7 Q4 2009 2,674 4,781 23.4 25 23.1 23.2 617 22.5 22.3 22.0 Q3 2009 2,669 4,798 707 2,665 Q2 2009 20 4,914 17.8 757 2,692 Q1 2009 4,964 15 786 Q4 2008 2,741 4,977 842 Q3 2008 3,853 10 6,196 836 Q2 2008 3,619 5,911 5 824 3,056 Q1 2008 4,926 821 0 2,692 Q4 2007 4,459 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Group Consolidated BoG Standalone BG Bank Cost/Income ratio Normalized net operating income, Profit before provisions 240% GEL mln 201.8% 60 200% 45.1 40.5 36.8 37.1 38.7 36.6 36.3 34.3 37.1 34.0 40 32.4 33.7 34.3 30.8 29.6 26.4 160% 20 140.5% 8.7 145.2% 116.9% 120% 100.1% 109.2% 0 90.0% 91.5% 89.4% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 76.0% 68.0% 74.7% 80% 65.3% 84.6% 80.4% 61.5% -20 64.5% 55.5% 59.1% 55.6% 53.4% 60.6% 57.8% 59.1% 66.6% 49.9% 62.8% 53.0% 60.8% 60.7% 53.9% 45.1% 56.6% 52.9% 58.0% 50.8% 40% 49.6% 50.5% -40 44.4% 50.1% 46.8% 42.2% 50.0% 41.0% 42.2% 35.7% Normalised Net Opearting Income Profit Before Provisions -60 0% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Cost/Income Ratio, Consolidated -80 (76.1) Cost Income Ratio, Bank of Georgia Standalone Cost/Income Ratio, BG Bank Cost/Income Ratio, BNB Page 9 May 2010
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