#1May 2010 LUSHOƆCML ¿563N BANK OF GEORGIA GROWTH AT THE RIGHT PRICE LSE: BGEO/GSE:GEB JSC Bank of Georgia investor presentation#2Introduction 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 equity (39.3%) (1) Assets of GEL 3.1 bn, Net Loans of GEL 1.8 bn, Client Deposits of GEL 1.4 bn and Equity of GEL 611.7 million Leading retail banking, with top brand, best distribution network and broadest range of services of any bank in Georgia Number of Retail Clients Retail Accounts Cards Outstanding Branches ATMs March 2010 December 2009 September 2009 732,900+ 730,800+ 700,000+ 996,500+ 999,000+ 895,000+ 570,600+ 537,000+ 569,000+ 140 141 140 379 382 394 Leading corporate bank with approximately 85,500 legal entities and over 157,600 current accounts Leading card-processing, leasing, insurance, wealth management and brokerage services provider Banking operations in Ukraine and Belarus, with BG Bank (Ukraine) and BNB (Belarus) accounting for less than 10% of BoG's consolidated total assets The only Georgian entity with credit ratings from all three global rating agencies S&P: 'B/B' at the sovereign ceiling Fitch Ratings: 'B/B' Moody's: 'B3/NP (FC)' & 'Ba3/NP (LC)' Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange Market Cap (LSE) US$ 396 mln as of 14 April 2010 Approximately 95% free float Issue of the first ever Eurobonds in Georgia Bloomberg: BKGEO; 5 year, 9%, US$200 mln B/Ba2/B (composite B+) Ownership Structure Management & Employees**, 6.2% Local Shares Held by Domestic and Foreign Retail Shareholders, 2.5% Institutional Shareholders*, 91.3% (1) All data according to the NBG as of 31 March 2010 LOLO BANK OF GEORGIA www.bog.ge/ir * 5.8% of total shares outstanding held in local shares ** Includes GDRs held as part of EECP May 2010 Page 2#3May 2010 LUSHOƆCML ¿563N BANK OF GEORGIA The Georgian Economy#4Baku-Supsa oil pipeline Caspian Sea Kazakhstan Trans-Caspian gas pipeline (proposed) Azerbaijan Sangachal Türkmenbasy Terminal Georgia's Economy – Basic Facts Area: 69,700 sq km - Population: 4.4 million (as of January 1, 2009) Life expectancy: 76.5 years Official language: Georgian Literacy: 100% Capital: Tbilisi Currency (code): Lari (GEL) GDP (2009A): US$10.7 billion GDP real growth rate 2009A: -3.9% GDP real growth rate 2010F: 2% GDP per capita 2009A (market): US$ 2,450 GDP per capita 2009F (PPP): US$ 4,747 Current account deficit 2009: US$ 1.1bn, 11.9% of GDP Budget Deficit 2009E: 9.5% of GDP White Stream (proposed) Nabucco gas pipeline to Central Europe (planned) Russia Georgia Supsa Baku-Tbilisi-Ceyhan oil pipeline Armenia Baku-Tbilisi-Erzurum Erzurum gas pipeline Iran Turkey Cehyan Iraq Syria Budget Deficit 2010F: 7.3 % of GDP Inflation rate (October, 12-month rate) 2009: 3.2% External public debt / GDP 2009E: 27% Sovereign ratings: Fitch B+/Stable S&P B/B Lobko BANK OF GEORGIA www.bog.ge/ir Turkmenistan May 2010 Page 4#5Q1 2010 Net remittances increased by 24.4% y-o-y Q1 2010-selected macro economic data Quarterly net remittances 300 250 US$ mln 236 225 273 228 216 Exports and imports of goods US$ mln 2,000 1,792 1,611 1,497 1,405 1,500 1,000 182 1,263 1,130 965 1,020 1,020 Trade balance 200 deficit decreased 184 by 8.7% compared to Q1 150 2009 and 37% compared to Q1 100 2008 146 176 467 443 500 329 257 295 307 314 339 219 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 (500) 50 (1,000) (746) (724) (681) (823) (1,076) (949) (1,500) 0 (1,325) Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009. Q2 2009 Q3 2009 Q4 2009 Q1 2010 (1,168) Export (1,240) Import TBD Q1 2010 tax revenue increased by CPI 13% y-o-y 12% Q1 2010 VAT 11.0% revenue 10.0% increased 15% 10% 9.2% 9.2% 8.8% y-o-y 8.2% 8% 6.2% 5.5% 6% 4% 2% 0% 2005 2006 2007 2008 ■CPI (e-o-p) ■CPI (average) Source: National Statistics Office of Georgia, Government of Georgia LOLO BANK OF GEORGIA www.bog.ge/ir 3.0% Quarterly tax revenue by categories GEL mln 1200 1,123 81 1,130 65 1,000 1000 116 105 44 100 5.8% 192 188 800 171 275 600 259 252 2.2% 400 1.7% 475 200 433 497 2009 Mar-10 0 Q1 2008 VAT PIT Q1 2009 CIT Q1 2010 Excise Other May 2010 Page 5#6Key drivers of economic growth Export-led growth with sufficient diversity . . Agricultural product exports of US$282m in 2009 Ferroalloy exports of US$426m in 2008 Aircraft, rail car, vessels and vehicles exports of US$122m in 2008 and US$107m in 2009 Fertilizers exports of US$105m in 2008 and US$60m 2009 Machinery exports of US$29m in 2008 and US$30m in 2009 Oil and gas pipelines Russia-Georgia-Armenia pipeline - 5.8 bcm/year Shah-Deniz (BTE) gas pipeline - 6.6 bcm/year Iran-Azerbaijan-Georgia (IAG) gas pipeline - 3.5 bcm/year Baku-Supsa oil pipeline - 5.75 mt/year Baku-Tbilisi-Ceyhan (BTC) oil pipeline - 50 mt/year Huge untapped hydro-power resources - only 18% of Georgia's hydro potential is being utilized; current export capacity of c. 150 MW Increasing domestic consumption • Consumer spending in 2008 - US$3.8bn estimated average household size of 3.5, far higher than in most CEE/CIS peers new construction has not caught up with the cumulative deterioration of the Soviet-built housing stock less than 18,000 households (out of the estimated total of 1.3 million) have mortgages Consumer debt per capita (including mortgages) stood at US$92 as of 31 December 2009 Organized retail trade (supermarkets, hypermarkets, consumer electronics & white goods, etc) account for a low share of total Debt /GDP under 30%; Retail loans/GDP under 10% ■ FDI expected at US$0.8 bn in 2010 Economic growth is supported by ■ Free industrial zones created around Poti (port), Kutaisi (second largest city) etc. (Tax rates in zones largely 0%) ■ Net transfers from abroad Increasing consumer spending ■ Sustained government spending Source: Ministry of Economic Development, Ministry of Finance, National Statistics Office of Georgia LOLEJN BANK OF GEORGIA www.bog.ge/ir May 2010 Page 6#7GDP breakdown: trade, logistics, services GDP Breakdown, 2009 LOLE BANK OF GEORGIA Health, social and community work, 5.6% Agriculture, hunting and forestry; fishing, 8.3% Education, 4.2% Mining and quarrying, 0.6% Public administration, 13.7% Real estate, renting and business activities, 3.5% Financial intermediation, 2.5% Source: National Bank of Georgia www.bog.ge/ir Transport & Communication, 10.6% Manufacturing, 7.3% Utilities & household processing, 5.3% Construction, 5.3% Trade (Retail & Wholesale), 12.4% Hotels and restaurants, 2.0% May 2010 Page 7#8Libertarian economic policies kick-start modernization Tax and tax rates slashed Now only 6 taxes, down from 21 Flat personal income tax of 20% (to come down to 15% by 2013) Corporate income tax 15% By 2012, no taxes on dividends, interest income, or world-wide income "Liberty Act": Referendum is required for an increase in tax rates Budget expenditure capped at 30% of GDP, effective FY 2012 Budget deficit capped at 3% of GDP, effective FY2012 Public debt capped at 60% of GDP, effective FY2012 Budget earmarks are limited Red tape and import duties cut Customs code harmonized with EU. Customs procedures reduced from 15 to 7 Capital controls abolished since 1990s Corruption significantly reduced In the World Bank's Ease of Doing Business survey in 2009 Georgia was 11th (out of 183), from 112th in 2005 In the 2009 Transparency International Corruption Index Georgia was 66th (4.1 score), just below Turkey (61st, 4.4), the same as Croatia and above Brazil (75th, 3.7), China (79th, 3.6), India (84th, 3.4) and Russia & Ukraine (146th=2.2) According to the International Republican Institute survey, 98% of Georgians didn't have to pay a bribe in the past 12 months In Forbes Tax Misery & Reform Index, Georgia was 4th best behind Hong Kong, UAE & Qatar Loka BANK OF GEORGIA Ambition: Create a fast-growing free enterprise economy that attracts investment and become regional logistical and banking hub www.bog.ge/ir May 2010 Page 8#9GDP per capita is low, leaving much room to climb GDP per capita across countries US$ 45,000 40,000 35,000 30,000 25,000 20,000 13,980 15,000 12,530 10,580 10,000 7,770 8,230 5,190 3,850 5,000 2,520 2,450 39,000 Ukraine Georgia China Belarus Romania Russia Poland Hungary Estonia Western Europe average (EU US$ 15+) 4,500 4,000 3,500 2,984 3,012 2,921 3,000 2,737 2,641 2,555 2,500 2,000 1,500 1,000 500 0 Bulgaria 2003 Source: IMF, National Bank of Georgia Labkon BANK OF GEORGIA www.bog.ge/ir Turkey 2002 Romania 2003 Georgia 2008 Russia 2003 Serbia 2004 May 2010 Page 9#10Strong economic growth before crisis ... starting again? Gross domestic product (GDP) USD billion 14 12 11.1% 10 8 6 4.0 10 4 2 0 -2 2003A 12.8 12.3% 9.6% 9.4% 10.2 7.8 5.9% 6.4 5.1 15% 13% 11.0 10.7 11% 9% 7% 5% 2% % 3% 1% -1% -3% 3.9% -5% 2004A 2005A 2006A 2007A 2008A 2009A 2010F Nominal GDP (LHS) Real GDP Growth (RHS) GDP per capita USD 6,000 5,000 4900 4,863 4,664 4,747 4,000 4,038 3,644 3,242 2,966 3,000 2,921 2920 2,315 2,450 2,000 1,764 1,484 1,188 919 1,000 0 2003 Source: National Statistics Office of Georgia Lobko BANK OF GEORGIA www.bog.ge/ir 2004 2005 2006 2007 2008 2009 2010F Nominal GDP per capita ■GDP per capita PPP May 2010 Page 10#11US$ mln US$ mln Current Account Deficit Exports and Imports* Remittances Exports of goods & services CAGR (04-09): 14% Imports of goods & services CAGR ('04-'09): 16% 7,499.0 8,000 7,000 5,916.9 6,000 755.4 5,000 4,412.9 3,688.4 4,000 3,317.9 420.5 3,182.4 3,000 2,492.8 2,551.6 2,187.5 1,865.3 1,646.9 2,000 315.4 1,288.5 212.7 1,000 165.8 0 2003 *Export and Import of goods and services Source: Central Bank of Georgia Current Account Deficit 917.9 5,266.8 766.5 3,199.2 2004 2005 2006 2007 2008 2009 Donor inflows (DI) Total private capital inflows (TPCI) CAD CAD as % of GDP CAD+TPCI+DI as % of GDP 5,000 15.0% 4,000 7.8% 10.1% 10.0% 3,000 2.6% 2.9% 4.2% 2.3% 3.1% 5.0% 2,971.6 2,000 1,261.5 0.0% 682.8 1,000 2,043.8 342.4 389.4 0 98.3. (383.3) 160.3 -6.9% 176.7 (353:5) (709.2) 1,240.6 261.7 (1,174.6) 942.0 1,092.6 -5.0% 276.2 (2,009.1) (1,274.3) (2,915.3) -10.0% -1,000 -9.6% -11.1% -11.9% -15.0% -2,000 -15.1% -3,000 -20.0% -19.7% -4,000 2003 2004 2005 2006 2007 -22.8% 2008 -25.0% 2009 Donor Inflows include both public and private sectors. Donor inflows in 2009 adjusted according to the banking sector foreign debt outflows Source: Central Bank of Georgia, Minister of Finance of Georgia Loka BANK OF GEORGIA www.bog.ge/ir May 2010 Page 11#12...so FX reserves rose, while inflows funded investment FX reserves, $ mln Record high for Georgia 2003-2009 2500 CAGR 48.6% 2000 Fx reserves FX/M2 1500 1.3 1.1 1.0 1000 0.8 0.8 US$0.93 bn US$1.48 bn 0.8 US$0.49 bn US$ 1.36 bn 500 US$0.38 bn US$0.19 bn 0 2003 2004 2005 2006 2007 NBG Interventions 1.9 1.8 US$ 2.11 bn 2.5 2.0 US$ 2,20 bn 1.5 1.0 0.5 555 0.0 2008 2009 Mar '10 Inflation NBG Interventions 600.0 400.0 200.0 Average Lari/US$ 140 2.5 432.4 120 4288 113.5 103.8 106.8 103.3 103.2 10.0% 100 2.0 11.0% 8.8% 82% 80 9.2% 9.2% 5.8% 5.5% 156.7 124.0 1.5 0.0 (42.9) 2004 2005 2006 2007 2008 2009 Mar '10 (200.0) (182.7) (400.0) (341.2) (600.0) (660.8) (800.0) 0.0 155 60 6.2% 4 2 40 2.2% 0 1.0 20 0 6 120 86 + NO 24 16 14 -2 -4 0.5 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Mar-10 Real effective rate, Jan05-100 (LHS) CPI (e-o-p) CPI (average) Loka Source: National Bank of Georgia, Ministry of Finance of Georgia BANK OF GEORGIA www.bog.ge/ir May 2010 Page 12#13FDI picking up again... Quarterly FDI inflows US$ mln 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 89.4 105.9 178.9 146.C 306.9 280. 456.7 421.4 401.5 489.1 702.9 $37.7 605.4 34.7 286.2 129.8 151.8 223.6 0.0 ន Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 '05 '05 '05 '05 '06 '06 '06 '06 '07 '07 '07 '07 '08 '08 '08 '08 '09 '09 '09 '09 Cumulative net FDI breakdown by origin 2004-2009 FDI Inflows US$ mln 2,500.0 2,000.0 15.3% 1,500.0 9.7% 1,000.0 7.0% 1,190.4 500.0 499.1 449.8 0.0 2004 2005 2006 19.8% 12.2% 25.0% 20.0% 15.0% 2,014.8 10.0% 7.1% 7.3% 1,564.0 5.0% 759.1 800 0.0% 2007 2008 2009 2010F Net FDI Net FDI as % of GDP FDI breakdown by sectors, 2009 Other, 1.3% Banking system, 6.0% Country US$ '000s UK 743,438 % 11.9% UAE 583,076 9.4% USA 484,902 7.8% Turkey 515,407 8.3% Real estate, 17.4% Industry, 26.9% Netherlands 500,328 8.0% British Virgin Islands 416,323 6.7% Kazakhstan 307,651 4.9% Czech Republic 290,804 4.7% Hotels & Restaurants, 17.7% Construction, 10.5% Cyprus 296,459 4.8% Subtotal 4,138,387 66.5% Other countries 2,084,856 33.5% Total 6,223,243 100.0% Transports and Communications, 20.2% Source: National Statistics Office of Georgia Labkon BANK OF GEORGIA www.bog.ge/ir May 2010 Page 13#14Net remittances Net remittances US$ mln 1000.0 900.0 800.0 5.4% 700.0 4.9% 600.0 4.2% 500.0 400.0 300.0 200.0 420.5 315.4 100.0 212.7 0.0 2004A 2005A Net remittances by countries, Q1 2010 Other countries, 13.1% 7.4% 8.0% 7.2% 7.2% Germany, 1.1% Kazakhstan, 0.2%- 7.0% 6.0% Israel, 1.0% UK, 0.7%- 5.0% Turkey, 2.9% 4.0% 917.9 Ukraine, 6.6% 755.4 766.5 3.0% 2.0% Spain, 3.0% 1.0% Greece, 8.0% 0.0% 2006A 2007A 2008A 2009 Net remittances as % of GDP (RHS) Net remittances (LHS) Cumulative net remittances, 2007 Q1 2010 Country Russia USA Greece Spain Ukraine Turkey UK Israel Kazakhstan Germany Other countries Total Russia, 55.2% USA, 8.3% Cumulative net remittances by countries, 2007-Q1 2010 Germany, 0.7% Kazakhstan, 1.0%- Israel, 0.9%- UK, 0.8%- Other countries, 10.5% US$ '000s % of total 1,601,669 61.1% 254,739 9.7% 143,656 5.5% Turkey, 2.1%- 73,086 2.8% Ukraine, 4.9% 127,481 4.9% 54,815 2.1% Spain, 2.8% 21,417 0.8% Greece, 5.5% 24,063 0.9% 27,031 1.0% 18,335 0.7% 275,143 10.5% USA, 9.7% 2,621,437 100.0% Source: National Bank of Georgia, National Statistics Office of Georgia Labkon BANK OF GEORGIA www.bog.ge/ir Russia, 61.1% May 2010 Page 14#15...and more donor money to continue to flow EU member states, 3.8% US$ 173 mln Norway, 0.9% US$40 mln Switzerland, 0.4% US$19 mln Other, 0.6% US$29 mln Japan, 4.4% US$200 mln European Community, 14.1% US$638 mln United States, 22.0% US$1,000 mln Financial institutions & organizations, 53.7% US$2,438 mln Asian Development. Bank, 6.6% US$ 300 mln European Investment Bank, 7.3% US$329.6 mln EBRD, 20.4% US$926.84 mln IFC, 7.7% US$350 mln World Bank, 11.7% US$ 530 mln COEB, 0.03% US$1.32 mln 500 kv. power transmission line (EBRD, EIB, KfW) East-West highway improvement project (WB, Japan) Adjara bypass road (ADB) Vaziani-Gombori-Telavi road (WB) Total pledged funds (October 2008): South Georgia road (MCG) Secondary and local roads (WB) Rehabilitation of infrastructure facilities in Batumi (KfW) Regional and municipal infrastructure development projects (ADB, EBRD) US$4.5 bn US$750 mln Entered into contractual commitment for US$ 3 bn of which circa US$ 1.4 bn disbursed as of YE 2009 IMF's Stand-By arrangement (September 2008): In addition... Approved access to US$1,189 million under SBA by IMF until June 2011 (August 2009) The U.S. committed US$124 million investment in energy infrastructure development (February 2010) US$70 million from ADB for infrastructure repairs in 2009 Source: Ministry of Finance of Georgia Lobko BANK OF GEORGIA www.bog.ge/ir May 2010 Page 15#16-1,200.0 Fiscal indicators: The worst seems past Overall fiscal balance of the state budget, 2004-2009F GEL mln 0.0 2006 2007 2008 2009F 0.0% 2010F 2011F -468.9 -400.0 -815.7 -2.0% -935.7 -1,258.6 -1,390.1 -4.5% -800.0 -3.4% -4.8% -4.0% -1,720.5 -1,600.0 -2,000.0 Fiscal revenue performance GEL mln 700.0 600.0 500.0 400.0 573.2 505.1 499.5 -6.6% -9.4% Overall fiscal balance Overall fiscal balance as % of GDP + 300.0 200.0 305.5 303.5 266.4 280.6 100.0 263.1 319.6 266.0 290.8 379.4 0.0 January February March April May June July August September ■2007 2008 2009 2010 Source: National Bank of Georgia, National Statistics Office of Georgia Labkon BANK OF GEORGIA www.bog.ge/ir -7.3% October November December 446.2 -6.0% -8.0% -10.0% May 2010 Page 16#17Public debt Georgia's economy is quite unleveraged compared to other emerging market economies Georgia's public debt is 35.6% of GDP in 2009 down from 56% in 2003 Paris club rescheduling in 2001 and 2004 The external debt is all multilateral or bilateral and significant share is highly concessional This explains why the government debt service burden is low Eurobonds debut issuance of US$500 mln in April 2008, maturity date 2013 Breakdown of public debt US$ billion 5.0 60.0% 4.5 4.0- 52.7% 40.4% 3.5 3.0 32.6% 2.5 50.0% 1.0 40.0% 0.97 41.1% 30.0% 0.83 0.85 0.85 2.0 0.89 26.3% 28.7% 3.38 20.0% 1.5- 2.48 1.0 1.86 1.73 1.7 1.79 10.0% 0.5 0.0 2004A 2005A External public debt 2006A 2007A Internal public debt 2008A 0.0% 2009 A External public debt service US$ mln 200 8.8% 180 10 140 160 120 100 880 7.3% 7.1% 60 110.6 103.8 40 20 0 2004A 152.2 2005 A 2006A Total public debt as % of GDP Source: "The Georgian Economy Overview", Government of Georgia Presentation, Public debt as % of GDP, 2009 Russia Turkey 10.0% 9.0% Bulgaria 8.0% Ukraine 7.0% Lithuania 5.5% 6.0% Slovak Republic 5.0% Georgia 173.3 4.0% Poland 3.4% 2.9% 3.0% Latvia 102.1 118.7 2.0% Kazakhstan 1.0% Hungary 0.0% Estonia 2007A 2008A 2009F Czech Republic 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: World Bank, International Monetary Fund External debt service External debt service as % of budget revenue Source: "The Georgian Economy Overview", Government of Georgia Presentation, June 2009. Labkon BANK OF GEORGIA www.bog.ge/ir May 2010 Page 17#18Trade structure WTO member since Import structure by country, Q1 2010 2000 No quantitative restrictions on trade Simplified customs regime since August 2006, new customs code becomes effective in January 2007 One of the two beneficiaries of the Kazakhstan, 1.6% Armenia, 0.9% Turkmenistan, 1.1% USA, 4.3% United Arab Emirates, 3.4% China, 6.6% Others, 13.2% EU Countries, 27.1% Export structure by country, Q1 2010 China, 1.3%- United Arab Emirates, 1.4% Kazakhstan, 1.1%- Russia, 0.8%- USA, 8.1% Other, 11.6% Turkey, 15.6% Armenia, 9.3% EU Countries. 24.2% Russia, 6.9% Ukraine, 10.5% Turkey, 15.6% Azerbaijan, 8.9% Import structure by product, Q1 2010 EU GSP+ Scheme in the CIS since 2006, granting local companies the right to export 7,200 categories of goods duty-free FAs of November 2007 Georgia has entered into a free trade agreement with Turkey US-Georgia charter on strategic partnership envisions an update of Bilateral Investment Treaty, expansion of Georgian access to the General System of Preferences and the possibility of entry into Free Trade Agreement Sugar, 1.8% Paper, 2.1%- Ferrous Metal Products, 3.4% Oil & Gas, 17.9% Others, 32.6% Mechanical Equipment & Electrical Machinery, 15.2% Vehicles, 9.6% Ferrous Metals, 2.5% Plastic, 2.8% Cereals, 3.9% Pharmaceuticals, 4.5% Apparel & footwear, 3.7% Source: National Statistics Office of Georgia www.bog.ge/ir LOLE BANK OF GEORGIA. Page 18 Ukraine, 6.0% Canada, 6.8% Azerbaijan, 13.6% Export structure by product, Q1 2010 Others, 25.3% Ferrous Metals, 23.6% Vessels & Aircraft, 1.5% Pharmaceuticals, 1.9% Oil & Gas, 4.0%- Equipment & Rail Cars, 2.6% Fertilizers, 5.1%- Cement, 1.1%- Vehicles, 12.4% Beverages, Spirits Gems & Preciou res, 7.1% Stones, 7.0% & Vinegar, 8.3% May 2010 Page 18#19May 2010 LUSHOƆCML ¿563N BANK OF GEORGIA Management target for 2010#20Targeted financial performance 2010 Target pre-provision profit for 2010 GEL mln 160 127.9 135.6 5.73 135.0 13.03 120 106.8 21.85 80 40 0 2007 Profit before provisions Losses related to Real Estate Other 68.02 27.0 2008 2009 2010F Goodwill Impairment associated with BG Bank Losses related to investments Target net provision expense for 2010 Assumptions 2010 real GDP growth of 2%* in Georgia 2010 inflation rate of 3.2%* in Georgia The GEL/US$ exchange rate remains stable during 2010 ☑Geo-political stability is sustained in the region Target net income for 2010 GEL mln 160.0 120.0 80.0 133.1 128.7 GEL mln 100.0 75.6 80.0 60.0 40.0 20.0 0.2 10 72.3 2007 2008 2009 2010F 50.0 (20.0) (40.0) 40.0 17.0 (60.0) (80.0) 0.0 (100.0) 2007 2008 2009 2010F * IMF Estimates (98.9) Lobko BANK OF GEORGIA www.bog.ge/ir May 2010 Page 20#21May 2010 LUSHOƆCML ¿563N BANK OF GEORGIA Strategy#22Strategic objectives: grow at the right price More efficient Deposit funding Lending machine International operations, Divesting of non-core assets Lon www.bog.ge/ir BANK OF GEORGIA Enhance operational efficiency through technological improvements: Temenos T24, core banking software, acquired in October ‘09 is in the process of implementation; Deployment of Softscape, talent management solution, and CRIF, credit scoring solution, is under way Wealth Management services launched in Israel and Ukraine Deposits from international clients reach GEL 100 mln in '09, c. 8% of total deposits Premier Banking launched for the affluent client base supported by the exclusivity of Amex Card issuing and acquiring business in Georgia Despite high rate of bank debt growth in '05-'09, ample room for growth with total loans/GDP under 30%; retail loans/GDP under 10% Lending rates decreased from 16-18% to 14.5-16.5% as lending stepped up to top borrowers in Georgia Emphasis on micro loans, SMEs, consumer loans and mortgages in Georgia Scale down operations of BG Bank; leverage on corporate banking and brokerage to build trade finance business in Ukraine to capture growing (c.U$1 bn) trade between Georgia and Ukraine Focus on high margin, unattended SME sector in Belarus; explore the possibility of third party investor, such as IFIs, in BNB First stage of restructuring of equity investment business completed Controlling stake in investment management company sold in Oct '09 Challenges in 2010: Cost control combined with Loan book growth May 2010 Page 22#23May 2010 LUSHOƆCML ¿563N BANK OF GEORGIA Intention to pay dividends#24Intention to pay dividends for 2010 # of Shares outstanding 31,252,553 27,154,918 25,202,009 31,306,071 YE 2006 YE 2007 YE 2008 YE 2009 The new dividend policy will serve to further increase capital management discipline as we consider investing in our growth going forward Estimated dividend payout for 2010 performance GEL 9.4 million The Bank intends to propose the establishment of a progressive dividend policy at the 2010 AGM The intention is to recommend GEL 0.30 dividend per share in 2011 in respect of 2010 financial year performance Dividend payment is subject to management achieving 2010 financial targets outlined above The Bank anticipates increasing the dividend payment in the future The new dividend policy is to set dividend payments while taking into consideration the need to maintain proper balance between the ability to finance growth and preserving progressive dividend Loka BANK OF GEORGIA www.bog.ge/ir Page 24 May 2010 Page 24#25May 2010 LUSHOƆCML ¿563N BANK OF GEORGIA Governance#26A move to classical two-tier board structure Supervisory Board ⚫ 7 non-executive SB members; non-executive Chairman . Management Board Chief Executive Officer and 8 Deputies . SB members Nicholas Enukidze, Chairman experience: MD at Concorde, Ukrainian investment bank; ABN AMRO Corporate finance in Moscow and London, Global One Communications, VA. USA • Ian Hague, Firebird Management LLC Allan Hirst, Independent Director experience: 25 years at Citibank, including CEO of Citibank, Russia; various senior capacities at Citibank ⚫ Kaha Kiknavelidze, Independent Director currently managing partner of Rioni Capital, London based investment fund; previously Executive Director of Oil and Gas research team for UBS Jyrki Talvitie, East Capital David Morrison, Independent Director experience: senior partner at Sullivan & Cromwell LLP prior to retirement Al Breach, Advisor to SB, to replace Irakli Gilauri as SB member subject to the next AGM experience: Head of Research, Strategist & Economist at UBS: Russia and CIS economist at Goldman Sachs MB members . . • · . . Irakli Gilauri, CEO; formerly EBRD banker in Tbilisi and London, MS from CASS Business School, London Giorgi Chiladze, Finance; formerly CEO of BTA Bank (Georgia); Program Trading Desk at Bear Sterns, NYC Archil Gachechiladze, Corporate Banking; formerly Deputy CEO of TBC Bank, Georgia; Lehman Brothers Private Equity, London; MBA from Cornell University Avto Namicheishvili, Legal; previously partner at Begiashvili &Co, law firm in Georgia. LLM from CEU, Hungary Irakli Burdiladze, COO; previously CFO at GMT Group, Georgian real estate developer. Masters degree from Johns Hopkins University Sulkhan Gvalia, Risk; founder of TUB, Georgian bank acquired by BOG in 2004 Murtaz Kikoria, acting CEO of BG Bank; formerly senior banker at EBRD; Head of Banking Supervision at the National Bank of Georgia. Mikheil Gomarteli, Retail Banking; 10 years work experience at BOG Nick Shurgaia, International Business; previously CEO of VTB Georgia, Senior Banker at EBRD, London; MBA from LBS Vasil Revishvili, Head of Wealth Management; previously Head of the Investment Risk Unit and Senior Investment Manager at Pictet Asset Management in London and Geneva. MS in Finance from London Business School LOCAL SEO BANK OF GEORGIA www.bog.ge/ir Page 26 May 2010 Page 26#27May 2010 LUSHOƆCML ¿563N BANK OF GEORGIA Q1 2010 results highlights#28Total assets Assets increased by 7.2% Total assets Loan book, gross BNB, 1.7% 88.5% of total loan book collateralized q-o-q in Q1 2010 GEL mln 4,000 Gross loans 3,500 3,400.7 3,147.7 3,154.3 3,258.9 3,186.8 3,124.1 BG Bank, 9.4% increased by 5.7% 2,907.8 2,980.2 3,000 2,913.4 q-o-q in Q12010 2,500 2,000 ☑Standalone Gross 1,500 loans grew 6.0% q-o-q in Q1 2010 1,000 2,106.7 1,855.7 2,189.4 2,059.7 2,046.8 1.904.7 1,833.1 1,851.9 1,957.3 500 RB & WM, 45.3% 0 Liquid funds Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 increased by GEL 73.3 mln, 10.6%, Gross loans to GEL 767.1 mln Corporate loan book breakdown, BoG Standalone in Q1 2010 Pharmaceuticals GEL 317.7 mln of excess liquidity at and Healthcare, 2% 97% of total corporate loan book collateralized Q1 2010 Other, 6% Industry & State, 17% Trade, 32% Construction & Real Estate, 19% Energy, 9% FMCG, 15% Lobko BANK OF GEORGIA www.bog.ge/ir CB, 43.6% Retail loan book breakdown, BoG Standalone Micro loans, 14% 91% of total retail loan book collateralized Credit cards and overdrafts, 16% Mortgage loans, 43% Consumer and other, 27% May 2010 Page 28#29Loan portfolio quality Loan quality under the following stress tests Armed conflict with Russia in August 2008 17% devaluation of Lari against US$ in one day in November 2008 Political crisis in Georgia peak in Spring 2009 NPLS, BOG Standalone NPLs Consolidated GEL m In 180 554.4% 160 140 120 30.1 23.9 28.6 600% 32.1 500% 400% 100 80 80 17.2 51.3 61.4 75.4 69.2 300% 208.4% 7.7 60 138.3% 200% 169.1% 128-3% 124.2% 124.1% 104.2% 40 41.6 67.6 106.6% 100% 20 22.4 11.3 35.9 10.9 22.7 54.5 46.3 8.1 9.7 12.0 67.4 0 0% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 RB &WM CB Other* - NPL coverage ratio *Other NPLs include BNB and BG Bank Loan loss reserve, Consolidated GEL min 160 GEL m In 7.5% 8% 7.5% 9.5% 7.4% 9.4% 200 10% 6.8% 6.9% 180.0 140 74% 7% 180 155.1 173.7 173.6 9.2% 9% 7.0% 8.1% 120 6.7% 6.4% 5.5% 6% 160 8% 8.6% 135.2 4.9% 140 129.0 7.8% 7.6% 7.6% 7% 100 5% 120 6.6% 6% 4.7% 6.3% 108.8 80 4% 100 5% 5.1% 3.2% 111.3 118.7 5.0% 136.8 115.9 80 4% 60 3% 87.4 60 3% 44.4 40-1.9% 2.0% 39.6 2.9% 56.6 2% 1.3% 40 2.1 2.1% 2% 1.1% 1.7% 20 1% 20.2% 1% 1.5% 1.0% 32.1 23.3 19.0 0 0% 0 0% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Loan loss reserves INPLS % of Gross loans Loan loss reserve as % of gross loans Lobko BANK OF GEORGIA www.bog.ge/ir Reserve For Loan Losses To Gross Loans, BoG Consolidated Consolidated NPLs to Gross Loans, BoG Consolidated May 2010 Page 29#30Total Client deposits grew by 23.1 y-o-y% in Liabilities Client deposits GEL mln Q1 2010 (9.6% q- 2,000 0-q Wealth Management deposits +93..7% GEL mln 120.0 WM client deposits grew 1,395 1,394 10.8% q-o-q in 1,326 100.0 1,272 1,202 1,300 228.4 1,193 1,183 142.9 Q1 '10 1,133 233.2 145.7 81.6 81.6 1,025 180.7 RB client deposits 229.4 174.1 125.0 80.0 76.5 76.5 154.0 163.1 70.4 59.2% y-o-y 70.4 96.7 116.0 131.4 93.3 103.7 60.0 (30.4% q-o-q) in Q1 10 FCB client deposits 681.5 656.1 652.7 600 576.2 603.3 594.9 587.6 605.2 520.6 40.0 grew 14.6% y-o-y (20.7% q-o-q) in 363.6 403.4 326.0 319.0 280.4 285.0 331.2 376.1 414.7 20.0 Q1 10 -100 GEL 251 mln of Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 ■RB Client Deposits CB Client Deposits WM Client Deposits Other Retail banking deposits net Borrowed funds repaid in 12 GEL mln months period, resulting in 21.6% 500 decrease y-o-y 403.4 400 363.6 GEL 100 mln y-o- y decline in 300 Shareholders' equity due to 200 2009 loss associated with Ukraine, mark- 100 downs of real estate and investment Loka +47.9% 376.1 331.2 326.0 319.0 280.4 285.0 131.4 163.1 180.7 103.7 96.7 93.3 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Borrowed funds 414.7 GEL mln 1500 1250 1000 903.6 947.8 795.1 750 500 250 -21.6% 1,137.8 1,162.8 1,011.4 918.6 913.3 912.0 0 0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 BANK OF GEORGIA www.bog.ge/ir May 2010 Page 30#31Lobko BANK OF GEORGIA www.bog.ge/ir Risk weighting of FX denominated assets at 150% Equity & Capital adequacy Total Shareholder's equity GEL mln 1000.0 according to the 783.0 National Bank of 746.7 750.0 739.3 718.8 718.5 Georgia standards 711.8 709.9 0% 500.0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2100 BIS capital adequacy ratios, BoG Consolidated 40% US$ 14 34.6% 35% 34.2% 33.8% 32.3% 31.7% 12 30% 25.3% 27.3% 25.2% 25.0% 25.4% 24.7% 23.9% 10 25% 22.5% 22.2% 22.4% 22.1% 8 20% 25.8% 25.8% 15% 6 10% 4 5% 2 0% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 ■Tier I Capital Adequacy Ratio ■Total Capital Adequacy Ratio 1-Jan-09 1-Feb-09- 1-Mar-09 1-Apr-09 1-May-09 1-Jun-09 1-Jul-09 1-Aug-09- 1-Sep-09 1-Oct-09 1-Nov-09 15% 25% NBG capital adequacy ratios, BoG Standalone 20.4% 19.7% 20% 18.3% 18.2% 17.8% 17.7% 16.6% 16.4% 15.8% 10% 16.3% 15.1% 15.5% 16.8% 13.5% 17.4% 18.4% 21.2% 15.9% 611.7 598.4 5% 1-Dec-09 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 ■Tier I Capital Adequacy Ratio ■Total Capital Adequacy Ratio Share price performance 31 March 2010 BV/share 1-Jan-10- 1-Feb-10 1-Mar-10 May 2010 Page 31 1-Apr-10 1-May-10 US$11.1#32Georgia accounts Revenue Revenue for 92.2% of total 400.0 consolidated 350.0 revenues, BG Bank 4.0% and 300.0 BNB 3.8% 250.0 +76.6% 200.0 150.0 +95.9% 219.5 89.2 112.0 100.0 45.3 63.4 130.2 50.0 24.7 66.7 38.8 2005 2006 Net Interest Income Revenue, quarterly 2007 +54.7% 339.5 -6.0% 319.0 118.7 122.1 220.8 196.8 2008 Net Non Interest Income 2009 GEL mln -7.1% 100 86.6 90 86.1 85.9 81.1 81.7 80.6 79.3 80 77.4 75.9 27.1 70 30.3 30.2 29.3 31.3 31.1 30.4 31.3 60 30.6 50 40 30 58.9 55.8 56.4 49.8 52.4 49.5 48.9 46.0 45.3 20 10 0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 ■Net Interest Income Q1 2009 Q2 2009 Net Non-Interest Income Q3 2009 Q4 2009 Q1 2010 Labo BANK OF GEORGIA www.bog.ge/ir Page 32 Revenue by segments Q1 2010 Aldagi BCI 6.0%, GEL4.5 mln (+32.5% y-o-y) Other 5.6%, GEL4.2 mln (+179.1% y-0- Belarus 3.8% GEL2.9 mln (+20.0% y-o-y) y) Ukraine 4.0%, GEL3.1 mln (-44.0% y-o-y) BoG Standalone 80.6%, GEL61.2 mln (-11.2% y-o-y) Composition of revenue Q1 2010 Net foreign currency related income 9.7%, GEL 7.3 mln +29.5% q-o-q) Net fee and commision income 13.6%, GEL 10.3 mln (-18.2% q-o-q) Net income from documentary operations 2.9%, GEL 2.2 mln (-5.5% q-o-q) Net other non- interest income 14.2%, GEL 10.8 mln (+0.6% q-o-q) Net interest income 59.6%, GEL 45.3 mln (-1.7% q-o-q) May 2010 Page 32#33Net Other Revenue cont'd Net fee & commission income Non- Interest GEL mln Income 14 increased by 51.2% y-o-y in 12 Q1 10, mostly 10.2 10.2 due to the 10 increases in 8 brokerage and insurance 6 income 4 Net foreign currency related income GEL mln 12.9 12.0 12.6 16 14.9 13.2 10.9 11.1 11.6 10.3 14 12 10.4 9.4 10 8.8 8 7.1 6.5 6 4 2 2 0 0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Income from documentary operations GEL mln 3 7.3 52 5.7 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Other non-interest income GEL mln 14 2 2 1 1 0 1.4 1.9 1.7 1.4 2.3 1.8 2.3 2.3 2.2 12 10 8 1.4 3.8 Andilli wan 3.7 3.0 0.3 0.2 8:3 0.3 6 4.7 1.0 3.3 1.3 1.9 3.6 1.9 1.8 4 0.6 0.2 0.2 0.4 0.3 1.3 1.6 2 0.1 0.1 5.1 4.9 5.0 3.2 3.0 2.5 1.7 1.6 0 -0.4 -0.4 0.0 -1.1 -2 -3.4 4 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 -6 Net Insurance Income Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Asset Management Income Other Brokerage Income Realized Net Investment Gains -0.5 Loka BANK OF GEORGIA www.bog.ge/ir May 2010 Page 33#34Total Recurring Operating costs decreased by 0.7% q-o-q in Q1 10 Costs Recurring operating costs GEL mln Employees 392 250 Q1 2010 2,825 5,048 Q4 2009 621 2,674 4,781 617 200 190.9 182.5 Q3 2009 2,669 4,798 707 Q2 2009 2,665 4,914 757 150 Q1 2009 2,692 86.5 4,964 92.5 786 117.4 Q4 2008 2,741 4,977 842 100 Q3 2008 3.853 41.8 63.5 6,196 836 Q2 2008 3,619 5,911 824 50 38.5 Q1 2008 3,056 104.4 30.2 4,926 90.0 75.6 15.3 821 Q4 2007 2,692 4,459 33.3 23.2 0 2005 2006 2007 2008 2009 Personel costs Other Recurring Operating Costs 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Group Consolidated BoG Standalone ■BG Bank Recurring operating costs GEL mln 60 Net non-recurring costs GEL mln 20.0 8.5 3.2 (2.6) 48.9 49.6 50 47.9 0.0 46.3 46.6 46.3 44.5 44.6 45.0 40 40 (20.0) 21.6 21.3 18.7 24.9 23.1 22.7 22.6 24.1 22.9 30 (40.0) 20 (60.0) 27.3 28.4 25.7 23.1 22.0 23.2 22.3 22.5 23.4 10 (80.0) 0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Personnel Costs ■Other Recurring Operating Costs Lobko BANK OF GEORGIA www.bog.ge/ir (100.0) (120.0) Page 34 (0.2) (0.3) (1.9) (33) Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 (30.0) Includes Goodwill impairment of GEL 68 mln associated with BG Bank and Real estates mark down (106.8) May 2010 Page 34#35Consolidated Operating profit, Provision expense Normalized net operating income Net provision expense BoG Consolidated GEL mln 120.0 Related to the armed conflict GEL mln Net provision 45.0 expenses 40.0 38.7 improved by 37.3 36.6 36.3 37.1 34.3 100.0 34.3 75.7% q-o-q 35.0 30.8 29.6 30.0 80.0 Bank of Georgia 25.0 60.0 Standalone Net 20.0 provision 15.0 40.0 expenses declined by 10.0 20.0 32.6% q-o-q 5.0 103.2 in August 2008 ........ 10.9 32.1 40.7 30.0 30.3 7.4 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Net provision expense BG Bank Standalone GEL mln 7.5 7.2 0.0 0.0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Net Income for Q1 2010 was GEL 16.8 mln. Net provision expense BoG Standalone GEL mln 160 120 1420 140 103.9 100 88 80 60 60 40 20 20 62 8.6 6.7 (4.5) 30.0 25.0 20.0 18.2 15.0 10.0 29.6 24.0 18.2 17.7 12.3 5.0 0.4 (1.3) 0.5 0.0 0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 -20 -40 Lobko BANK OF GEORGIA www.bog.ge/ir (5.0) 8.5 12.9 11.0 9.3 بلتنا (1.6) Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 May 2010 Page 35#36Profitability & selected ratios Net Income (Loss) 40.0 31.9 28.3 Net loans/Client deposits 200.0% 20.0 16.8 180.0% 168.7% 160.6% 174.4% 5.1 2.6 160.0% 170.6% 147.8% 0.0 136.9% 140.3% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 140.0% Q1 2010 131.9% 127.5% (20.0) 120.0% (40.0) 100.0% 80.0% (60.0) (59.0) 60.0% (80.0) 40.0% 20.0% (100.0) (102.3) 0.0% (120.0) Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Net interest margin (annualized) Cost Income Ratio* 12% 240% 9.8% 10% 8.9% 9.1% 10.1% 10.0% 9.3% 9.6% 9.8% 200% 8.1% 9.9% 9.1% 9.0% 9.3% 8%- 8.6% 9.0% 9.1% 8.1% 8.5% 160% 7.5% 8.0% 6% 4% 2% 0% Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 -Net Interest Margin, Group Consolidated Lobko BANK OF GEORGIA www.bog.ge/ir 120% 80% 54.8% 56.9% 57.8% 58.8% 55.4% 52.7% 57.5% 56.7% 49.5% 47.3% 40% 49.5% 44.7% 44.8% 46.5% 46.5% 61.0% 51.8% 47.3% 43.1% 47.7% 44.5% 41.4% 48.9% 48.1% 48.9% 0% Q3 2009 Q4 2009 Q1 2010 Q1 2008. Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Net Interest Margin, BoG Standalone Cost/Income Ratio, Consolidated Cost/Income Ratio, Bank of Georgia Standalone -Cash Cost/Income Ratio, Consolidated *Normalized for Total Non- recurring costs May 2010 Page 36#37Summary * Operating environment in Georgia is improving and 2010 looks promising for Bank of Georgia: Consumer confidence and economic activity is increasing with a 11.1% q-o-q increase in client deposits in Q1 2010 and 27.8% y-o-y increase in client deposits in Q1 2010 National Bank of Georgia has highest FX reserves in Georgia's history – US$2+ bn, a 56% increase in FX reserves YTD A 15% y-o-y growth of VAT, a highly correlated measure to GDP, in January, suggests a healthy economic growth trend, that may result in higher than estimated 2% growth of 2010 GDP We came out strong from the downturn and are well positioned to take advantage of our high liquidity and strong capital to achieve growth at the right price.... .....by implementing our strategy to become more efficient, deposit funded lending machine Lobko BANK OF GEORGIA www.bog.ge/ir Page 37 May 2010 Page 37#38Caution Regarding Forward-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 of 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. Lobko BANK OF GEORGIA www.bog.ge/ir Page 38 May 2010 Page 38#39Contact Irakli Gilauri Chief Executive Officer +995 32 444 109 [email protected] Lobko BANK OF GEORGIA www.bog.ge/ir Macca Ekizashvili Head of Investor Relations +995 32 444 256 [email protected] May 2010 Page 39