Investor Presentaiton
Summary
Operating environment in Georgia is improving and 2010 looks promising for Bank of Georgia:
Consumer confidence and economic activity is increasing with a 7.5% q-o-q and 46.2% y-o-y increase in client deposits in Q2 2010; Q2 2010 Net
remittances increased by 14.6% y-o-y; GDP real growth rate: 7-7.5% y-o-y Q2 2010F; 4.5% 2010F; growth mainly driven by donor money inflows
and credit growth in1H 2010; VAT collection up by 20%+ y-o-y in recent months, 1H 2010 trade turnover up by 18% y-o-y to GEL 2.9 bln, NBG
reserves still on high level at around USD 2 bln, exceeding M2 by 1.5 times
Strong operating leverage achieved 16.4% on q-o-q and 4.2% on y-o-y basis driven by:
Improvement in NIM from 8.0% to 8.3%, as our cost of funds decreased from 8.6% to 8.3%, as a result of deposit rate cuts
Solid growth of higher yielding retail loan book
Increase of Net Interest Income as lending activities picked up
Cost of Funds down from 8.6% in Q1 2010 to 8.3% in Q2 2010
As a result Consolidated Cost/Income ratio decreased from 65.3% in Q1 to 55.5% in Q2 2010, standalone Cost/Income ratio decreased from 53.9% in Q1 2010
to 49.9% in Q2 2010
As of 31 July 2010, the outstanding Eurobonds maturing in February 2012 amounted to US$149 million, out of original US$ 200 million, in August 2010 the
Bank has signed agreements for US$ 50 million 5-year credit facilities with EBRD
Loan book growth to be funded through deposit inflows locally and internationally. WM Representative Office opened in London
Management target for 2010
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The growth rate of balance sheet in Q3 lower than Q2 due to seasonality effect as business activities in July and August is usually low
Growth expected to resume in Q4
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Higher yielding retail loan book expected to grow faster in 2nd half of the year
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Confident to deliver previously announced management target for 2010
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
LOLO
BANK OF GEORGIA
www.bog.ge/ir
September 2010
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