Final Results

Final Results

Bank of Georgia

JSC BANK OF GEORGIA REPORTS Q4 2010 AND FULL YEAR 2010 RESULTS

Millions, unless otherwise noted   Q4 2010   Growth q-o-q1
Bank of Georgia (Consolidated, Unaudited, IFRS-based) US$   GEL
Total Operating Income (Revenue)3 53.6 95.1 5.2%
Recurring Operating Costs 29.3 52.0 3.4%
Normalised Net Operating Income4 24.3 43.1 7.4%
Net Non-Recurring Income / (Costs) (0.8) (1.4) -16.8%
Profit/(Loss) before provisions 23.5 41.7 8.4%
Net Provision Expenses 6.1 10.8 -24.1%
Net Income/(Loss) 14.5 25.7 23.4%
 
YTD 2010 Growth y-o-y2
US$ GEL
Total Operating Income (Revenue)3 194.0 343.9 7.8%
Recurring Operating Costs 110.7 196.3 7.5%
Normalised Net Operating Income4 83.3 147.6 8.2%
Net Non-Recurring Income / (Costs) (2.7) (4.8) -95.6%
Profit/(Loss) before provisions 80.6 142.8 NMF
Net Provision Expenses 25.4 44.9 -66.2%
Net Income/(Loss) 46.7 82.9 NMF
 
Total Assets 2,312.1 4,098.9 40.7%
Net Loans 1,336.2 2,368.7 41.1%
Client Deposits 1,134.5 2,011.2 58.1%
Tier I Capital Adequacy Ratio (BIS)5 18.2%
Total Capital Adequacy Ratio (BIS)6 29.0%
Tier I Capital Adequacy Ratio (NBG) 13.0%
Total Capital Adequacy Ratio (NBG) 14.5%

 

Bank of Georgia (LSE:BGEO), (GSE:GEB) (the “Bank”), Georgia’s leading bank, announced today its Q4 2010 and full year (or YTD) 2010 consolidated results (IFRS based, derived from management accounts), reporting a Q4 2010 Net Income of GEL 25.7 million, or 0.82 per share and full year 2010 Net Income of GEL 82.9 million, or 2.65 per share.

Q4 2010 and full year 2010 highlights

  • The Balance Sheet growth in 2010 resulted in the market share gain of 3.2% by assets, 4.1% by loans and 3.9% by client deposits. As of 31 December 2010, Bank of Georgia held market shares of 36.2% by total assets, 35.9% by total loans, and 32.2% by total client deposits in Georgia.
  • Q4 2010 consolidated Return on Average Equity Excluding Minority Interest (“ROAE (EMI)”) grew to 16.2% from the consolidated ROAE (EMI), of 13.0% in Q3 2010, while EPS (Earnings per Share) grew to GEL 0.82 (US$ 0.46) in Q4 2010 from GEL 0.66 (US$ 0.37) EPS in Q3 2010.
  • Q4 2010 Normalized Net Operating Income (NNOI) grew 7.4% q-o-q to GEL 43.1 million, up 40.1% y-o-y, while Consolidated Profit Before Provisions increased 8.4% q-o-q to GEL 41.7 million, compared to the Loss Before Provisions of GEL 76.1 million in Q4 2009.
  • Q4 2010 standalone Profit Before Provisions grew 71.6% y-o-y to GEL 44.9 million, up 17.4% q-o-q.
  • Full year Net Cash Flow from operating activities before changes in operating assets and liabilities on a standalone basis increased 65.6% y-o-y to GEL 220.5 million in 2010
  • Q4 2010 consolidated normalized operating leverage grew to 11.4% on a y-o-y basis; Standalone operating leverage increased to 31.1% on a y-o-y basis during the same period.
  • Consolidated Cost/Income ratio on a normalized basis declined to 54.7% in Q4 2010, down from 55.6% in Q3 2010 and 60.2% in Q4 2009; Standalone Cost/Income ratio declined to 44.0% in Q4 2010, down from 49.0% in Q3 2010 and 58.0% in Q4 2009
  • Consolidated Loan Book quality improved as consolidated NPLs declined from GEL 131.5 million in Q3 2010 to GEL 117.6 million in Q4 2010. Consolidated NPL coverage ratio stood at 151.0% in Q4 2010 compared to 141.4% in Q3 2010
  • Consolidated Net Loan Book increased by 14.9% q-o-q to GEL 2,368.7 million, up 41.1% y-o-y, driven by:
    • Corporate Banking (CB) Net Loan Book growth of 21.9% q-o-q to GEL 1,190.7 million, up 44.0% y-o-y;
    • Retail Banking (RB) and Wealth Mananagement (WM) Net Loan Book growth of 4.0% q-o-q to GEL 1,063.1 million, up 24.4% y-o-y;
  • Consolidated Client Deposits grew 21.3% q-o-q to GEL 2,011.2 million and up 58.1% y-o-y, driven by:
    • Corporate Banking (CB) Client Deposits 25.8% q-o-q increase to GEL 1,006.0 million and up 71.2% y-o-y;
    • Retail Banking (RB) Client Deposits 9.4% q-o-q increase to GEL 540.9 million and up 43.8% y-o-y;
    • Wealth Management (WM) Client Deposits 19.6% q-o-q increase to GEL 261.6 million and up 60.4% y-o-y.
  • Extended approximately GEL 908.6 million in Q4 2010 on a standalone basis, (up 106.8% y-o-y and up 87.0% q-o-q), in new loans to an estimated 44,887 clients (through credit cards, mortgages, consumer and other loans) and to small-and-medium sized companies and corporate clients
  • Net Loans to Client Deposits Ratio declined to 117.8% in Q4 2010, on a consolidated basis from 124.3% in Q3 2010 and 131.9% in Q4 2009

“Strong performance during the quarter and for the year ended 31 December 2010 reflect the robust loan growth, the increased efficiency and improved asset quality that translated into the consolidated ROAE (EMI) of 16.2% in Q4 2010, an increase from the same ratio of 13.0% in Q3 2010 and the growth of consolidated EPS to GEL 0.82, up 23.3% q-o-q. The healthy revenue growth combined with cost containment measures resulted in the decline of consolidated Cost / Income Ratio normalized for the non-recurring items to 54.7% in Q4 2010 from 55.6% in Q3 2010, as the Bank kept its Recurring Cost growth in single digits for the full year. On a standalone basis Cost/Income Ratio dropped to 44.0% from 49.0% in Q3 2010. The Bank also benefited from the improved asset quality, lowering the cost of risk to 1.8% annual rate for the quarter.

On the balance sheet side, deposit growth accelerated in Q4 as client deposit growth of 21.3% q-o-q outpaced 13.3% growth of the gross loan book during the quarter. As a result, Interest Expense grew faster (6.3% q-o-q) than Interest Income (3.6% q-o-q), predominantly an effect of increased liquidity in the fourth quarter 2010 that drove the Q4 2010 NIM down to 7.8% from 8.2% in Q3 2010. Net Interest Income still increased by 1.1% q-o-q. The 0.5% decrease of Loan Yield Excluding Provisions to 19.5% during the quarter was mostly a result of the solid growth of the Bank’s net corporate loan book in Georgia, which at 21.9% q-o-q growth outpaced the 7.0% growth of higher yielding Retail net loan book. The strong growth of the deposit base in 2010 brought the Bank’s Net Loans to Client Deposits ratio to 117.8%, down from 131.9% in 2009”, commented Giorgi Chiladze, Deputy Chief Executive Officer, Finance.

Q4 2010 summary of the Bank’s consolidated results

In Q4 2010, the Bank’s Total Operating Income (Revenue) increased 5.2% q-o-q to GEL 95.1 million, (up 22.9% y-o-y). Net Interest Income grew to GEL 57.1 million, up 1.1% q-o-q and up 24.0% y-o-y. On a quarterly basis, Interest Expense growth of 6.3% q-o-q outpaced the 3.6% q-o-q growth of Interest Income, due to the 21.3% q-o-q Client Deposit growth as compared to 14.9% q-o-q growth of the consolidated Net Loan Book, which in turn, resulted in the decline of Q4 2010 NIM to 7.8% from the NIM of 8.2% in Q3 2010. On a year-on-year basis, Interest Income in Q4 2010 grew by 28.5% compared to 33.3% y-o-y growth of Interest Expense, as the Bank’s consolidated Client Deposits y-o-y growth of 58.1% outpaced the 41.1% y-o-y growth of the Bank’s consolidated Net Loan Book during the year. In Q4 2010, the Bank generated Net Non-Interest Income of GEL 38.0 million, up 12.0% q-o-q and up 21.3% compared to Q4 2009. The quarterly growth of Net Non-Interest Income in Q4 2010 was driven by the 3.0% q-o-q increase of Net Fee and Commission Income to GEL 14.1 million (up 12.1% y-o-y), 33.1% q-o-q growth of Net Income from Documentary Operations to GEL 3.3 million (up 41.6% y-o-y) and 17.5% q-o-q growth of Net Foreign Currency Related Income to GEL 9.4 million (up 66.5% y-o-y). Net Other Non-Interest Income increased by 14.8% q-o-q, predominantly driven by the increase in Brokerage Income to GEL 1.3 million, up 169.9% q-o-q.

Total Consolidated Recurring Operating Costs for the quarter increased by 3.4% q-o-q to GEL 52.0 million, (up 11.5% y-o-y), the growth mostly attributed to the subsidiaries of Bank of Georgia. Personnel Costs, grew 1.8% q-o-q to GEL 27.5 million, representing 28.9% of the Bank’s Revenue, down from 29.8% in Q3 2010. Bank of Georgia’s standalone Recurring Operating Costs’ contribution to the Consolidated Total Recurring Operating Costs decreased from 69.4% in Q3 2010 to 67.5% in Q4 2010. The increased operating leverage during the quarter resulted in the 7.4% q-o-q increase of NNOI to GEL 43.1 million (up 40.1% y-o-y), translating into the improved Normalized Cost/Income ratio, which stood at 54.7% in Q4 2010 compared to the Normalized Cost/Income ratio of 55.6% in Q3 2010 and 57.9% in Q2 2010.

Reflecting continued improvement of credit quality in Georgia, the Bank’s Consolidated Net Provision Expense for the quarter declined to GEL 10.8 million, down from Net Provision Expense of GEL 14.2 million and GEL 12.6 million in Q3 2010 and Q2 2010, respectively. Consolidated Cost of Risk for the quarter stood at 1.8% a decrease from 2.6% in Q3 2010.

On 31 December 2010, the Bank’s Consolidated Total Assets reached GEL 4,098.9 million, up 13.4% from 30 September and up 40.7% from 31 December 2009, driven by 14.9% q-o-q growth of the Consolidated Net Loans to GEL 2,368.7 million, up 41.1% y-o-y. In Q4 2010 Loan Loss Reserves of GEL 177.5 million declined to 7.0% of consolidated gross loan book from 8.3% in Q3 2010. Consolidated NPLs of GEL 117.6 million improved considerably by 10.6% q-o-q, representing 4.6% of the consolidated gross loan book as of 31 December 2010, down from the same ratio of 5.9% in Q3 2010. The consolidated NPL Coverage ratio for the quarter stood at 151.0%, reflecting the conservative approach to provisioning maintained by the Bank during 2010.

Client Deposits grew by GEL 352.7 million during the quarter, resulting in the 21.3% q-o-q growth of the Bank’s Total Client Deposits to GEL 2,011.0 million as of 31 December 2010, a 58.1% increase from 31 December 2009. As of 31 December 2010, the Bank’s consolidated Net Loans to Client Deposits ratio declined to 117.8%, down from 124.3% in Q3 2010 and 131.9% as of 31 December 2009.

The Bank’s consolidated Book Value per Share on 31 December 2010 stood at GEL 22.10 (US$ 12.46), compared to GEL 21.69 (US$ 12.01) as at 30 September 2010 and GEL 19.12 (US$ 11.34) as of 31 December 2009.

Full year 2010 summary of the Bank’s consolidated results

The Bank reported the full year 2010 Net Income of GEL 82.9 million. In 2010, the Bank’s Total Operating Income (Revenue) increased 7.8% y-o-y to GEL 343.9 million, attributable to 6.9% y-o-y increase in Net Interest Income to GEL 210.5 million and 9.2% y-o-y increase in Net Non-Interest Income of GEL 133.4 million. In 2010, Net Foreign Currency Related Income increased by 20.3% y-o-y to GEL 33.7 million, predominantly due to increased business activity in Georgia during the year. The Bank’s Net Fees and Commission Income increased 3.5% y-o-y to GEL 49.1 million, while Net Income from Documentary Operations grew by 16.3% y-o-y to GEL 10.0 million. Full year 2010 Net Other Non-Interest Income increased 6.7% y-o-y to GEL 40.7 million, with the Bank’s insurance subsidiary contributing the full year 2010 Net Insurance Income of GEL 17.2 million, up 3.4% y-o-y.

In 2010 Consolidated Recurring Operating Costs increased 7.5% y-o-y to GEL 196.3 million, driven by the 15.3% y-o-y increase in Personnel Costs to GEL 103.8 million, a result of the increase of personnel from 4,781 at year-end 2009 to GEL 5,610 at the year-end 2010 and administrative costs associated with the growth of business across the board during 2010. Recurring Operating Costs/Average Total Assets ratio improved from 7.1% in 2009 to 5.8% in 2010, while Total Employee Compensation Expenses / Average Total Assets ratio of 3.1% at the year end 2010 was an improvement from the same ratio of 3.5% prior year. NNOI in 2010 reached GEL 147.6 million, up by 8.2% y-o-y.

In 2010, Bank’s Net Provision Expense dropped to GEL 44.9 million from GEL 133.1 million in 2009, in line with the improvements in asset quality and Georgia’s economic recovery during the year. The Bank had Net Provision Expense of GEL 38.3 million in Georgia and GEL 5.2 million in Ukraine. The Bank reported Net Income of GEL 82.9 million in 2010 compared to the Net Loss of GEL 98.9 million in 2009.

JSC Bank of Georgia (standalone) results

Bank of Georgia on a standalone basis reported Q4 2010 Net Income of GEL 30.0 million, (up 26.7% q-o-q), which compares to the standalone Net Income of GEL 7.8 million in Q4 2009.

In Q4 2010, Total Operating Income (Revenue) on a standalone basis grew by 6.9% q-o-q to GEL 80.1 million, (up 28.5% y-o-y), driven by 4.4% q-o-q increase of Net Interest Income to GEL 54.8 million, (up 22.4% y-o-y) and 12.5% q-o-q growth of Net Non-Interest Income to GEL 25.3 million, (up 44.1% y-o-y). The growth of the Bank’s standalone Revenue items is the result of the increase of the Bank’s loan book on both quarterly and full year basis, while increased lending and overall business activity translated into the 3.1% q-o-q growth of Net Fees and Commission Income to GEL 11.8 million, (up 36.3% y-o-y) and 34.0% q-o-q increase in Net Income from Documentary Operations to GEL 3.2 million, (up 44.3% y-o-y). In Q4 2010 the Bank’s Net Foreign Currency Related Income on a standalone basis grew 19.3% q-o-q to GEL 9.7 million, up 5.1% y-o-y.

Bank of Georgia’s standalone Q4 2010 NNOI grew to GEL 45.0 million, an increase of 12.4% on a quarterly and 57.1% on a yearly basis, a result of improved operational efficiency and cost containment measures implemented by the Bank. In Q4 2010, Total Recurring Operating Costs increased by 0.5% q-o-q to GEL 35.1 million (up 4.2% y-o-y), as the Bank’s standalone Personnel Costs declined by 3.8% q-o-q, predominatly due to the decrease in bonus related expenses resulting in the decrease of Personnel Cost/Income ratio to 23.5% in Q4 2010 from the same ratio of 26.1% in Q3 2010. As a result, Bank of Georgia achieved standalone positive operating leverage of 10.9% on a consecutive q-o-q basis and 31.1% on a y-o-y basis. Bank of Georgia’s standalone Cost/Income ratio decreased to 44.0% in Q4 2010 from 49.0% in Q3 2010 and from 58.0% in Q4 2009. Due to the combination of Loan Book growth and increased efficiency, Profit Before Provisions grew by 71.6% y-o-y to GEL 44.9 million, up 17.4% q-o-q. The Bank’s Net Provision Expense on a standalone basis decreased from GEL 9.9 million in Q3 2010 to GEL 9.5 million in Q4 2010.

On a full year basis, Bank of Georgia reported strong standalone results with a record Net Income of GEL 91.0 million, which almost tripled compared to the standalone Net Income of GEL 30.8 million in 2009. Revenue grew 12.2% y-o-y to GEL 283.5 million, driven by 7.1% y-o-y increase of Net Interest Income and 26.2% increase of Net Non-Interest Income, and more than offset the 9.0% y-o-y growth of Recurring Operating Costs to GEL 133.2 million, in line with the increased lending and expansion of business activity during the year. As a result of improved operating leverage, NNOI grew 15.2% y-o-y to GEL 150.3 million. Net Non-Recurring Costs of GEL 5.1 million remained largely flat compared to previous year. Net Provision Expense in 2010 amounted to GEL 38.3 million, compared to GEL 89.6 million Net Provision Expense in 2009, reflecting the improved credit quality on the back of improved economic environment in Georgia.

As of 31 December 2010, Bank of Georgia’s Total Assets on a standalone basis reached GEL 3.9 billion, up 12.1% q-o-q, up 38.9% y-o-y. Bank of Georgia’s standalone Net Loan Book increased 14.4% q-o-q (up 37.1% y-o-y) to GEL 2,205.6 million driven by 21.9% q-o-q increase of the Corporate Net Loan Book to GEL 1,190.7 million up 44.0% y-o-y and 7.0% q-o-q growth of Retail Net Loan Book to GEL 974.3 million, (up 32.2% y-o-y). Standalone NPLs stood at GEL 81.2 million and represented 3.5% of the total gross loan book, a decrease from the same ratio of 4.7% in Q3 2010, when the NPLs amounted to GEL 96.5 million on a standalone basis.

As of the year-end 2010, the Bank’s Client Deposits in Georgia amounted to GEL 1,808.5 million, representing an increase of GEL 296.1 million, or 19.6% during Q4 2010, up GEL 681.7 million, or 60.5% y-o-y. The growth of Client Deposits was primarily driven by the Corporate Client Deposits, up 25.8% q-o-q and 71.2% y-o-y, while Retail and Wealth Management Deposits grew 9.4% q-o-q and 43.8% y-o-y and 19.6% q-o-q and 60.4% y-o-y, respectively.

As of 31 December 2010 Bank of Georgia on a standalone basis held its record high market share of 36.2%, 35.9%, and 32.2% by total assets, gross loans, and client deposits, respectively in Georgia. Since the year-end 2009, the Bank gained market shares of 3.2% by assets, 4.1% by gross loans and 3.9% by client deposits7.

The business segment discussion set forth below is derived from IFRS-based management reports. Business segment results of RB, CB and WM represent Bank of Georgia’s standalone performance and do not include intercompany eliminations.

In 2010 the Bank introduced new model for standalone segment reporting. The comparative numbers for Q4 2009 business segment reporting have been adjusted respectively.

Retail Banking (RB)

GEL millions, unless otherwise noted   Q4 2010   Q3 2010   Q4 2009   Change Q-O-Q   Change Y-O-Y
Total operating income (Revenue) 46.8 42.0 38.7 11.5% 21.0%
Total recurring operating costs 22.9 23.0 22.2 -0.5% 3.0%
Net income / (Loss) 16.0 12.9 9.0 24.3% 78.1%
Loans to clients, gross 1,023.3 980.6 806.7 4.4% 26.9%
Loans to clients, net 974.3 911.0 737.1 7.0% 32.2%
Client deposits 540.9 494.2 376.1 9.4% 43.8%

Discussion of results

In Q4 2010, RB Revenues increased 11.5% q-o-q (up 21.0% y-o-y) to GEL 46.8 million, driven predominantly by the 15.7% q-o-q and 15.0% y-o-y growth of RB Net Interest Income increased to GEL 33.9 million. RB Interest Income growth rate of 9.5% q-o-q to GEL 59.9 million outpaced the 2.3% q-o-q growth rate of RB Interest Expense to GEL 25.9 million as result of the increase of RB Loan Book during the year and the effect of the deposit rate cuts in 2010. On a quarterly basis, RB Interest Income increased despite Christmas promotion campaigns by competitors entailing interest rate cuts on retail loans. RB Loan Yield Excluding Provisions grew 22.6% in Q3 2010 to 23.4% in Q4 2010. RB Net Non-Interest Income during the quarter increased by 1.9% q-o-q (up 40.2% y-o-y) to GEL 12.9 million, mostly driven by 2.1% q-o-q increase of RB Net Fee and Commission Income to GEL 9.8 million (up 37.3%- y-o-y). The year-on-year growth was a result of the successful diversification of fee income sources in 2010. RB Recurring Operating Costs decreased by 0.5% q-o-q to GEL 22.9 million (up 3.0% y-o-y), following the decrease in RB personnel costs due to decline in bonuses, translating into a positive operating leverage for the quarter. RB Net Provision Expense in Q4 2010 amounted to GEL 4.8 million, compared to the Net Provision Expense of GEL 2.7 million in Q3 2010. RB Net Income for Q4 2010 amounted to GEL 16.0 million, contributing 53.2% to the standalone Net Income.

On a full year basis, RB posted Net Income of GEL 32.9 million, an increase from GEL 3.9 million in 2009 mostly attributed to the decline in Net Provision Expense to GEL 29.6 in 2010 from GEL 70.1 million in 2009, reflecting the improved credit quality. Despite the RB Revenue growth for past three consecutive quarters in 2010, the full year 2010 RB Revenues of GEL 158.8 million fell short by 1.0% of RB Revenues in 2009, due to 7.0% lower 2010 Net Interest Income (GEL 113.2 million) compared to the prior year. RB Net Non-Interest Income grew 18.0% y-o-y to GEL 45.6 million, driven by 25.4% y-o-y growth of Net Fee and Commission income to GEL 35.2 million and 9.0% y-o-y growth of Net Other Non-Interest Income to GEL 1.1 million. Full year 2010 RB Recurring Operating Costs grew by 5.3% y-o-y to GEL 87.1 million, leading to the 8.2% y-o-y decrease of RB Profit Before Provisions to GEL 68.4 million.

RB Net Loans increased 7.0% q-o-q to GEL 974.3 million (up 32.2% y-o-y), as a result of the growth in the retail lending activity during 2010. RB Client Deposits grew 9.4% q-o-q and 43.8% y-o-y to GEL 540.9 million, driven primarily by the growth of time deposits.

Highlights

  • Issued 76,249 debit cards, up 72.0% q-o-q, in Q4 2010 bringing the total debit cards outstanding to 496,240, up 5.4% q-o-q.
  • Issued 32,619 credit cards of which 24,950 American Express cards in Q4 2010. A total of 58,711 American Express cards were issued since the launch in November 2009. The total number of credit cards outstanding amounted to 106,809 as of 31 December 2010.
  • Increased number of branches from 137 in Q3 2010 to 142 and number of ATMs from 388 to 405 in Q4 2010.
  • Became an exclusive partner for Diners Club acquiring business in Georgia.
  • Outstanding number of RB clients reached 739,522, up 1.4% q-o-q up 1.0% y-o-y.
  • Acquired 501 new clients in Solo business line, mass affluent sub-brand, in 2010, of which 176 new clients joined in Q4 2010. As of 31 December, the number of Solo clients reached 2,303. Introduced Premium Deposit for Solo Clients.
  • Launched, for the first time in Georgia, SMS Loans, available for the payroll clients through ATMs followed by the approval by the SMS. As of 31 December 2010, number of SMS loans issued amounted to 3,881 and aggregate SMS loans outstanding reached GEL 5.9 million.
  • Re-entered Point of Sales (POS) market; As of 31 December 2010, 99 desks at 177 contracted merchants. POS loans outstanding reached GEL 6.5 million.
  • Introduced Car Trade-in (Auto Loans) and Test drive (for the first time in Georgia) that led Car loan originations growth 33.3% q-o-q to GEL 9.2 million resulting in Car loans outstanding in the amount of GEL 49.8 million as of 31 December 2010, down 11.9% y-o-y.
  • RB Loan Yield Excluding Provisions amounted to 23.4% in Q4 2010 (22.6% in Q3 2010) and RB Deposit Yield amounted to 9.5% in Q4 2010 (10.3% in Q3 2010).
  • Consumer loan originations of GEL 72.6 million (up 4.1% q-o-q and up 84.6% y-o-y) resulted in consumer loans outstanding in the amount of GEL 162.6 million as of 31 December 2010, up 42.6% y-o-y.
  • Micro loan originations of GEL 102.9 million (up 31.5% q-o-q and up 157.4% y-o-y) resulted in micro loans outstanding in the amount of GEL 238.4 million as of 31 December 2010, up 141.1% y-o-y.

Corporate Banking (CB)

GEL millions, unless otherwise noted   Q4 2010   Q3 2010   Q4 2009   Change Q-O-Q   Change Y-O-Y
Total operating income (Revenue) 32.5 31.5 23.0 3.2% 41.5%
Total recurring operating costs 10.8 10.7 10.2 1.1% 5.7%
Net income 14.5 10.9 0.1 33.4% NMF
Loans to clients, gross 1,259.8 1,038.9 880.2 21.3% 43.1%
Loans to clients, net 1,190.7 976.5 826.6 21.9% 44.0%
Client deposits 1,006.0 799.4 587.6 25.8% 71.2%

Discussion of results

CB Revenues increased 3.2% q-o-q to GEL 32.5 million (up 41.5% y-o-y), driven by the 28.1% q-o-q increase of Net Non Interest Income to GEL 12.2 million (up 51.2% y-o-y), a result of the 34.0% q-o-q growth of Income from Documentary Operations to GEL 3.2 million (up 44.3% y-o-y) and increase of CB Net Foreign Currency Related Income to GEL 6.9 million up 31.3% q-o-q (up 68.6% y-o-y). CB Net Fee and Commission Income increased 12.1% to GEL 1.8 million (up 31.4%- y-o-y), reflecting the growth of CB loan book. CB Net Interest Income declined by 7.5% q-o-q (up 36.3% y-o-y), driven by the 8.5% q-o-q growth CB Interest Expense (up 28.3% y-o-y) which more than offset 0.7% q-o-q increase of CB Interest Income (up 31.7% y-o-y). The 1.1% q-o-q increase of CB Recurring Operating Costs to GEL 10.8 million (up 5.7% y-o-y), resulted in a positive operating leverage for the quarter. CB Net Provision Expense for the quarter amounted to GEL 4.8 million, a decline compared to GEL 7.2 million Net Provision Expense in Q3 2010. CB Net Income for Q4 2010 amounted to GEL 14.5 million, contributing 48.4% to the standalone Net Income for the quarter.

On a full year basis, CB Revenues increased 35.8% y-o-y to GEL 120.5 million, driven predominantly by the 34.3% y-o-y increase in CB Net Interest Income to GEL 82.0 million and 57.5% y-o-y growth of Net Foreign Currency Related Income to GEL 21.4 million. CB Net Income from Documentary Operations increased 14.7% y-o-y to GEL 9.8 million and Net Fee and Commission Income grew 33.0% y-o-y to GEL 6.0 million during the year. In 2010, CB Recurring Operating Costs grew by 18.6% y-o-y to GEL 41.5 million, resulting in a 51.6% y-o-y increase of CB Profit Before Provisions. The full year 2010 Net Provision Expense for CB reached GEL 11.3 million as compared to GEL 15.9 million in 2009.

CB gross loans increased 21.3% q-o-q to GEL 1,259.8 million (up 43.1% y-o-y), while CB Client Deposits grew 71.2% y-o-y to GEL 1,006.0 million, up 25.8% q-o-q.

Highlights

  • Major new client acquisitions include Azot Fertilizer Plant, one of the largest companies in Georgia, EnergoPro, one of the largest electricity distribution companies in Georgia; Bridge Building Co., major subcontractor of Georgian Railways which is implementing Tbilisi railway bypass project of US$250 million.
  • CB Loan Yield Excluding Provision amounted to 16.2% in Q4 2010 (17.6% in Q3 2010) and CB Deposit Yield amounted to 6.2% in Q4 2010 (5.8% in Q3 2010).
  • Increased the number of corporate clients using the Bank’s payroll services from 1,657 as of Q3 2010 to 1,737 in Q4 2010. As of 31 December 2010, the number of individual clients serviced through the corporate payroll programs administered by the Bank amounted to approximately 174,000.
  • More than 8,300 new corporate accounts opened at the Bank in Q4 2010, bringing the total to over 179,400.

Wealth Management (WM)

GEL millions, unless otherwise noted   Q4 2010   Q3 2010   Q4 2009   Change Q-O-Q   Change Y-O-Y
Total operating income (Revenue) 0.7 1.4 0.6 -49.1% 15.5%
Total recurring operating costs 1.4 1.2 1.2 15.5% 14.0%
Net income / (Loss) (0.5) (0.1) (1.2) NMF -59.9%
Loans to clients, gross 39.8 41.1 47.6 -3.2% -16.4%
Loans to clients, net 37.6 38.4 42.5 -2.2% -11.6%
Client deposits 261.6 218.7 163.1 19.6% 60.4%

Discussion of results

WM Client Deposits continued to grow reaching GEL 261.1 million, up 19.6% q-o-q and up 60.4 y-o-y, while WM Net Loan Book decreased 2.2% q-o-q to GEL 37.6 million. WM Client Deposits from non-resident clients continued to grow during the quarter, reaching GEL 170.7 million by the year end 2010 (up 26.2% q-o-q). Client Deposits from non-resident clients accounted for 65.3% and 61.9% of Total WM Client Deposits as of 31 December 2010 and 30 September 2010, respectively.

Insurance

GEL millions, unless otherwise noted   Q4 2010   Q3 2010   Q4 2009   Change Q-O-Q   Change Y-O-Y
Total operating income (Revenue) 5.5 4.2 4.9 32.3% 13.4%
Total recurring operating costs 4.2 2.5 3.7 69.2% 13.5%
Net income 1.8 1.3 (0.3) 32.5% NMF
Gross premiums written 11.5 15.0 7.4 -22.9% 55.9%

Discussion of results

Standalone Revenue of Aldagi BCI (ABCI), the Bank’s wholly-owned insurance subsidiary, increased by 32.3% q-o-q to GEL 5.5 million, up 13.4% y-o-y, with standalone Gross Premiums Written down 22.9% q-o-q to GEL 11.5 million. Standalone Operating Costs of GEL 4.2 million were up 13.5% y-o-y and up 69.2% q-o-q, with quarterly growth attributable to lower Operating Costs in Q3 2010 due to reclassifications between Other Operating Income and Other Operating Expenses. ABCI’s Combined Ratio, decreased from 86.1% in Q3 2010 to 85.4% in Q4 2010. ABCI’s Q4 2010 Net Income of GEL 1.8 million, was a 32.5% increase q-o-q and compares to the Net Loss of GEL 0.3 million in Q4 2009.

Full year standalone Revenue of GEL 20.3 million and full year Gross Premiums Written of GEL 62.3 million remained largely flat compared to prior year. ABCI’s 2010 standalone Net Income of GEL 5.0 million was a 35.1% increase from the 2009 standalone Net Income of GEL 3.7 million. On a full year basis, Combined Ratio decreased from 89.2% in 2009 to 87.4% in 2010. Total Assets amounted to GEL 83.8 million, while Total Liabilities reached GEL 61.8 million as at 31 December 2010.

Highlights

  • Opened service center for handling claims and completed the reorganization of claims handling operations
  • Purchased Kutaisi regional clinic, one of the leading health service providers in Western Georgia

Belaruskiy Narodniy Bank, Belarus (BNB)

GEL millions, unless otherwise noted   Q4 2010   Q3 2010   Q4 2009   Change Q-O-Q   Change Y-O-Y
Total operating income (Revenue) 3.6 3.2 2.2 14.9% 68.4%
Total recurring operating costs 3.1 2.5 2.0 25.4% 57.9%
Net income 0.5 0.8 (0.9) -29.5% NMF
Loans to clients gross 76.8 51.7 24.4 48.6% 214.5%
Loans to clients, net 75.6 50.4 23.5 50.2% 221.4%
Client deposits 29.6 18.4 20.4 61.2% 44.8%

Discussion of results

In Q4 2010 BNB’s Total Operating Income increased to GEL 3.6 million, up 14.9% q-o-q, mostly driven by the 14.9% q-o-q growth of Net Interest Income to GEL 2.5 million (up 60.0% y-o-y) and the 14.8% q-o-q increase in Net Non-Interest Income to GEL 1.1 million (up 91.3% y-o-y) a result of the 42.2% q-o-q growth of Net Fee and Commisions Income to GEL 540 thousand (up 21.8% y-o-y) and growth in Net Income From Documentary Operations to GEL 40 thousand, up 55.1% q-o-q. BNB’s Interest Income increased by 25.9% q-o-q to GEL 3.1 million and Interest Expense increased by 128.2% to GEL 0.5 million. In Q4 2010, BNB’s Recurring Costs increased 25.4% q-o-q to GEL 3.1 million as the bank positions itself for growth. BNB’s Net Provision Reversal for the quarter amounted to GEL 200 thousand as compared to the Net Provision Expense of GEL 32 thousand in Q3 2010. BNB posted Net Income of GEL 540 thousand as compared to Net Income of GEL 766 thousand in Q3 2010 and Net Loss of GEL 914 thousand in Q4 2009.

In Q4 2010 BNB’s Gross Loans increased by 48.6% q-o-q to GEL 76.8 million, up 214.5% y-o-y. On 31 December 2010 Total Assets stood at GEL 126.5 million, up 8.9% q-o-q and up 58.1% y-o-y. Client Deposits amounted to GEL 29.6 million, up 61.2% q-o-q, an increase of 44.8% y-o-y. Total Liabilities of BNB stood at GEL 65.1million, up 19.7% q-o-q up 207.3% y-o-y.

Highlights

  • Increased the number of corporate clients by 24.1% y-o-y to 1,457 as of 31 December 2010.
  • Increased the number of corporate clients using the BNB’s payroll services by 92.0% y-o-y to 211 as of 31 December 2010.
  • Launched Call Center in November 2010.
  • Opened a new branch on central square in Minsk and revamped one existing branch according to the new brand standard.

BG Capital

In Q4 2009 BG Capital posted Revenue of GEL -0.7 million, that compares to GEL 1.1 million in Q4 2009. Recurring Operating Costs of BG Capital were down 16.8% q-o-q to GEL 1.6 million, down 32.6% y-o-y. Net Loss for the quarter reached GEL 2.3 million, compared to the Net Loss of GEL 2.4 million in Q3 2010 and Net Loss of GEL 1.6 million in Q4 2009.

BG Capital enjoyed a rebound in brokerage activity as international investors increased activity in the region during Q4. The brokerage also maintained its leadership position in investment banking in the region by successfully completing the first ever IPO of a Ukrainian coal mine, through its placement of Sadovaya Group on the Warsaw Stock Exchange. Over the quarter BG Capital also completed a local bond issue, signed a number of new corporate brokerage contracts and significantly expanded its pipeline, as the investment banking division continues to expand its operations

Comment:

“Bank of Georgia grew at much faster pace than banking sector in Georgia due to its strong franchise and solid balance sheet. In Georgia, we have achieved 37.1% growth in loans and 60.5% growth in client deposits, which translated into 4.1% market share gain in loans and 3.9% market share gain in client deposits, bringing our market shares at all time record high level of 35.9% in Loans and 32.2% in deposits.

We also achieved positive operating leverage (both consolidated and standalone) for the third consecutive quarter, which serves as a continued evidence that we are successfully implementing our strategy of growth at the right price with strong emphasis on efficiency. Q4 2010 standalone Operating Leverage stood at 31.1% on a year-on-year basis, which improved efficiency both on consolidated and standalone basis, bringing standalone cost income ratio to 44.0% in Q4 2010, translating into the consolidated 16.2% ROAE (EMI) in Q4 2010.

Having successfully executed our strategy for the year, we beat the 2010 Net Income target of GEL 72.3 million announced in November 2009 by 14.7%, posting 2010 Net Income of GEL 82.9 million. Additionally, I am pleased to note that Aldagi BCI, the Bank’s key wholly-owned subsidiary also performed well, delivering strong quarterly and full year results and increasing its contribution to the Bank’s Net Income for the quarter and for the full year.

The expected real GDP growth in 2010 is at 6.5%, and in 2011 we expect the continued growth as we are observing improving economic environment in Georgia. Bank of Georgia is well positioned to capture this growth and to achieve its target of 20% Return on Average Equity in coming years,” commented Irakli Gilauri, Chief Executive Officer.

STANDALONE Q4 2010 SEGMENT INCOME STATEMENT DATA

  CB   RB   WM   CC/ Eliminations   Total
GEL millions, unless otherwise noted Q4 '10   Q4 '09 Q4 '10   Q4 '09 Q4 '10   Q4 '09 Q4 '10   Q4 '09 Q4 '10   Q4 '09
Interest Income 45.6 34.6 59.9 49.0 7.0 4.7 (5.7) (2.9) 106.8 85.3
Interest Expense 25.3 19.7 25.9 19.5 6.5 4.3 (5.7) (2.9) 52.0 40.6
Net Interest Income 20.3 14.9 33.9 29.5 0.5 0.4 (0.0) 0.0 54.8 44.8
Net Non-Interest Income 12.2 8.1 12.9 9.2 0.2 0.3 - - 25.3 17.5
Total Operating Income (Revenue) 32.5 23.0 46.8 38.7 0.7 0.6 - - 80.1 62.3
Total Recurring Operating Costs 10.8 10.2 22.9 22.2 1.4 1.2 - - 35.1 33.7
Normalized Net Operating Income / (Loss) 21.7 12.8 23.9 16.5 (0.7) (0.6) - - 45.0 28.7
Net Non-Recurring Income / (Costs) 0.2 0.8 (0.3) (3.2) (0.0) (0.1) - - (0.2) (2.5)
Net Provision Expense / (Reversal) 4.8 14.8 4.8 2.8 (0.1) 0.7 - - 9.5 18.2
Net Income / (Loss) 14.5 0.1 16.0 9.0 (0.5) (1.2) - - 30.0 7.8

STANDALONE 2010 SEGMENT INCOME STATEMENT DATA

  CB   RB   WM   CC/ Eliminations   Total
GEL millions, unless otherwise noted YTD '10   YTD '09 YTD '10   YTD '09 YTD '10   YTD '09 YTD '10   YTD '09 YTD '10   YTD '09
Interest Income 175.4 139.3 209.9 199.4 25.3 15.1 (19.1) (7.3) 391.5 346.5
Interest Expense 93.4 78.2 96.7 77.6 22.3 12.8 (19.1) (7.3) 193.2 161.4
Net Interest Income 82.0 61.1 113.2 121.7 3.1 2.3 - - 198.3 185.2
Net Non-Interest Income 38.5 27.7 45.6 38.6 1.2 1.3 - - 85.3 67.6
Total Operating Income (Revenue) 120.5 88.8 158.8 160.4 4.2 3.6 - - 283.5 252.8
Total Recurring Operating Costs 41.5 35.0 87.1 82.8 4.5 4.5 - - 133.2 122.2
Normalized Net Operating Income / (Loss) 79.0 53.8 71.6 77.6 (0.3) (0.9) - - 150.3 130.5
Net Non-Recurring Income / (Costs) (1.5) (2.6) (3.3) (3.2) (0.4) (0.2) - - (5.1) (6.0)
Net Provision Expense / (Reversal) 11.3 15.9 29.6 70.1 (2.6) 3.6 - - 38.3 89.6
Net Income / (Loss) 56.4 31.1 32.9 3.9 1.6 (4.1) - - 91.0 30.8

STANDALONE Q4 2010 SEGMENT BALANCE SHEET DATA

  CB   RB   WM   CC/ Eliminations   Total
GEL millions, unless otherwise noted Q4 '10   Q4 '09 Q4 '10   Q4 '09 Q4 '10   Q4 '09 Q4 '10   Q4 '09 Q4 '10   Q4 '09
Loans To Clients, Gross 1,259.8 880.2 1,023.3 806.7 39.8 47.6 - - 2,322.9 1,734.5
Loans To Clients, Net 1,190.7 826.6 974.3 737.1 37.6 42.5 - - 2,202.6 1,606.3
Total Assets 1,768.9 1,171.7 1,796.8 1,288.0 43.8 48.6 338.2 334.1 3,947.7 2,842.4
Client Deposits 1,006.0 587.6 540.9 376.1 261.6 163.1 - - 1,808.5 1,126.8
Total Liabilities 1,607.5 990.5 1,241.9 949.8 261.6 163.1 - - 3,111.1 2,103.4
Total Shareholders Equity 283.4 210.6 209.4 186.6 5.7 7.7 338.2 334.1 836.6 739.0
Total Liabilities And Shareholders’ Equity 1,890.9 1,201.1 1,451.3 1,136.4 267.3 170.7 338.2 334.1 3,947.7 2,842.4

CONSOLIDATED Q4 2010 INCOME STATEMENT

Period ended   Q4 2010   Q3 2010   Q4 2009   Change4   Change4
Consolidated, IFRS - based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
 
Interest Income 64,513 114,369 61,095 110,362 52,794 89,000 3.6% 28.5%
Interest Expense 32,305 57,270 29,821 53,869 25,478 42,951 6.3% 33.3%
Net Interest Income 32,208 57,099 31,274 56,493 27,316 46,049 1.1% 24.0%
Fees & Commission Income 9,833 17,432 8,752 15,809 9,249 15,592 10.3% 11.8%
Fees & Commission Expense 1,854 3,287 1,149 2,075 1,765 2,976 58.4% 10.5%
Net Fees & Commission Income 7,979 14,145 7,603 13,734 7,484 12,616 3.0% 12.1%
Income From Documentary Operations 1,930 3,421 1,628 2,940 1,683 2,837 16.4% 20.6%
Expense On Documentary Operations 90 159 271 490 317 534 -67.6% -70.2%
Net Income From Documentary Operations 1,840 3,262 1,356 2,450 1,366 2,303 33.1% 41.6%
Net Foreign Currency Related Income 5,323 9,436 4,445 8,030 3,362 5,667 17.5% 66.5%
Net Insurance Income / (Loss) 2,535 4,494 2,421 4,373 2,172 3,661 2.8% 22.8%
Brokerage And Investments Banking Income 714 1,266 260 469 1,126 1,898 169.9% -33.3%
Asset Management Income 27 47 30 55 94 158 -14.5% -70.3%
Net Investment Gains / (Losses) 102 181 266 480 347 585 -62.3% -69.1%
Other 2,901 5,143 2,393 4,323 2,625 4,425 19.0% 16.2%
Net Other Non-Interest Income 6,279 11,131 5,370 9,700 6,363 10,727 14.8% 3.8%
Net Non-Interest Income 21,420 37,974 18,774 33,914 18,575 31,313 12.0% 21.3%
Total Operating Income (Revenue) 53,629 95,073 50,048 90,407 45,890 77,362 5.2% 22.9%
Personnel Costs 15,492 27,465 14,930 26,969 13,336 22,481 1.8% 22.2%
Selling, General & Administrative Expenses 6,138 10,881 5,381 9,720 6,211 10,471 11.9% 3.9%
Procurement & Operations Support Expenses 1,909 3,384 2,124 3,837 2,261 3,811 -11.8% -11.2%
Depreciation And Amortization 3,841 6,809 3,845 6,945 4,100 6,911 -2.0% -1.5%
Other Operating Expenses 1,936 3,432 1,546 2,792 1,732 2,920 22.9% 17.5%
Total Recurring Operating Costs 29,316 51,971 27,825 50,263 27,639 46,594 3.4% 11.5%
Normalized Net Operating Income / (Loss) 24,313 43,102 22,223 40,144 18,251 30,768 7.4% 40.1%
Net Non-Recurring Income / (Costs) (773) (1,371) (912) (1,647) (63,379) (106,844) -16.8% -98.7%
Profit / (Loss) Before Provisions 23,540 41,731 21,311 38,497 (45,128) (76,076) 8.4% NMF
Net Provision Expense 6,084 10,785 7,864 14,206 17,990 30,327 -24.1% -64.4%
Pre-Tax Income / (Loss) 17,456 30,946 13,447 24,291 (63,117) (106,403) 27.4% NMF
Income Tax Expense / (Benefit) 2,959 5,246 1,915 3,460 (2,439) (4,112) 51.6% NMF
Net Income / (Loss) 14,497 25,700 11,532 20,831 (60,678) (102,291) 23.4% NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.806 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

4 Change calculations based on GEL values

CONSOLIDATED 2010 INCOME STATEMENT

Period ended   YTD 2010   YTD 2009   Change3
Consolidated, IFRS based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited)
 
Interest Income 239,212 424,075 224,871 379,087 11.9%
Interest Expense 120,476 213,580 108,103 182,240 17.2%
Net Interest Income 118,736 210,495 116,768 196,847 6.9%
Fees & Commission Income 33,979 60,238 34,637 58,391 3.2%
Fees & Commission Expense 6,308 11,182 6,526 11,002 1.6%
Net Fees & Commission Income 27,671 49,056 28,111 47,389 3.5%
Income From Documentary Operations 6,572 11,650 6,352 10,708 8.8%
Expense On Documentary Operations 908 1,609 1,229 2,072 -22.3%
Net Income From Documentary Operations 5,664 10,041 5,123 8,636 16.3%
Net Foreign Currency Related Income 18,982 33,652 16,597 27,980 20.3%
Net Insurance Income / (Loss) 9,728 17,245 9,893 16,678 3.4%
Brokerage And Investments Banking Income 1,112 1,972 3,257 5,491 -64.1%
Asset Management Income 111 197 466 786 -74.9%
Net Investment Gains / (Losses) 1,575 2,792 215 362 NMF
Other 10,406 18,447 8,776 14,795 24.7%
Net Other Non-Interest Income 22,932 40,653 22,608 38,112 6.7%
Net Non-Interest Income 75,249 133,402 72,439 122,117 9.2%
Total Operating Income (Revenue) 193,985 343,897 189,206 318,964 7.8%
Personnel Costs 58,529 103,760 53,372 89,974 15.3%
Selling, General & Administrative Expenses 22,166 39,296 25,308 42,664 -7.9%
Procurement & Operations Support Expenses 7,916 14,034 8,074 13,611 3.1%
Depreciation And Amortization 15,200 26,947 14,819 24,982 7.9%
Other Operating Expenses 6,914 12,257 6,698 11,292 8.5%
Total Recurring Operating Costs 110,725 196,294 108,271 182,523 7.5%
Normalized Net Operating Income / (Loss) 83,260 147,603 80,935 136,441 8.2%
Net Non-Recurring Income / (Costs) (2,700) (4,786) (64,817) (109,268) -95.6%
Profit / (Loss) Before Provisions 80,560 142,817 16,119 27,173 NMF
Net Provision Expense 25,353 44,946 78,941 133,079 -66.2%
Pre-Tax Income / (Loss) 55,207 97,871 (62,822) (105,906) NMF
Income Tax Expense / (Benefit) 8,458 14,995 (4,151) (6,998) NMF
Net Income / (Loss) 46,749 82,876 (58,671) (98,908) NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

3 Change calculations based on GEL values

CONSOLIDATED Q4 2010 BALANCE SHEET

Period ended   Q4 2010   Q3 2010   Q4 2009   Change4   Change4
Consolidated, IFRS based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
   
Cash And Cash Equivalents 117,489 208,285 75,317 136,052 93,126 156,992 53.1% 32.7%
Loans And Advances To Credit Institutions 338,492 600,078 265,813 480,165 157,502 265,517 25.0% 126.0%
Mandatory Reserves With NBG / NBU / NBRB 50,980 90,378 47,986 86,682 24,790 41,791 4.3% 116.3%
Other Accoutns With NBG / NBU / NBRB 45,513 80,686 41,881 75,654 26,151 44,085 6.7% 83.0%
Balances With And Loans To Other Banks 241,998 429,014 175,946 317,829 106,561 179,641 35.0% 138.8%
Investment Securities: AFS & Trading Securities 8,899 15,776 7,124 12,869 12,870 21,697 22.6% -27.3%
Investment Securities: HTM, Treasuries And Equivalents 158,116 280,308 164,803 297,701 147,821 249,196 -5.8% 12.5%
Loans To Clients, Gross 1,436,293 2,546,261 1,244,095 2,247,333 1,098,503 1,851,857 13.3% 37.5%
Less: Reserve For Loan Losses (100,140) (177,529) (102,953) (185,974) (102,996) (173,630) -4.5% 2.2%
Loans To Clients, Net 1,336,153 2,368,732 1,141,142 2,061,359 995,508 1,678,227 14.9% 41.1%
Insurance Related Assets 16,174 28,674 18,620 33,635 15,827 26,681 -14.7% 7.5%
Investment Property 64,022 113,498 62,801 113,443 47,164 79,509 0.0% 42.7%
Investments In Other Business Entities, Net 4,083 7,238 3,237 5,847 5,719 9,641 23.8% -24.9%
Property And Equipment Owned, Net 164,763 292,092 161,602 291,918 166,352 280,437 0.1% 4.2%
Intangible Assets Owned, Net 12,521 22,197 12,568 22,703 11,667 19,669 -2.2% 12.9%
Goodwill 39,030 69,192 38,282 69,152 39,016 65,773 0.1% 5.2%
Tax Assets, Current And Deferred 14,313 25,374 14,418 26,044 13,930 23,484 -2.6% 8.0%
Prepayments And Other Assets 38,071 67,493 35,823 64,711 21,714 36,606 4.3% 84.4%
Total Assets 2,312,126 4,098,937 2,001,549 3,615,599 1,728,217 2,913,429 13.4% 40.7%
 
Client Deposits 1,134,499 2,011,240 918,132 1,658,513 754,817 1,272,470 21.3% 58.1%
Deposits And Loans From Banks 121,361 215,148 143,396 259,030 13,325 22,463 -16.9% NMF
Borrowed Funds 571,019 1,012,302 487,990 881,506 541,775 913,324 14.8% 10.8%
Issued Fixed Income Securities 12,027 21,321 2,002 3,616 392 660 NMF NMF
Insurance Related Liabilities 20,918 37,083 24,341 43,970 20,314 34,246 -15.7% 8.3%
Tax Liabilities, Current And Deferred 23,007 40,787 19,582 35,373 14,969 25,235 15.3% 61.6%
Accruals And Other Liabilities 38,583 68,400 29,908 54,025 27,651 46,614 26.6% 46.7%
Total Liabilities 1,921,413 3,406,281 1,625,350 2,936,033 1,373,242 2,315,012 16.0% 47.1%
 
Share Capital - Ordinary Shares 17,681 31,345 17,346 31,333 18,570 31,306 0.0% 0.1%
Share Premium 269,231 477,293 263,210 475,463 284,007 478,779 0.4% -0.3%
Treasury Shares (850) (1,507) (877) (1,585) (995) (1,677) -4.9% -10.1%
Revaluation And Other Reserves 20,109 35,649 25,536 46,129 14,466 24,387 -22.7% 46.2%
Retained Earnings 21,559 38,219 23,376 42,227 81,583 137,533 -9.5% -72.2%
Net Income / (Loss) For The Period 46,749 82,876 31,652 57,176 (58,671) (98,908) 44.9% NMF
Shareholders' Equity Excluding Minority Interest 374,478 663,875 360,243 650,743 338,961 571,420 2.0% 16.2%
Minority Interest 16,235 28,781 15,956 28,823 16,014 26,997 -0.1% 6.6%
Total Shareholders' Equity 390,713 692,656 376,199 679,566 354,975 598,417 1.9% 15.7%
Total Liabilities And Shareholders Equity 2,312,126 4,098,937 2,001,549 3,615,599 1,728,217 2,913,429 13.4% 40.7%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.806 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

4 Change calculations based on GEL values

STANDALONE Q4 2010 INCOME STATEMENT

Period ended   Q4 2010   Q3 2010   Q4 2009   Change4   Change4
Standalone, IFRS-based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
 
Interest Income 60,254 106,819 56,030 101,212 50,626 85,346 5.5% 25.2%
Interest Expense 29,335 52,006 26,973 48,724 24,059 40,559 6.7% 28.2%
Net Interest Income 30,919 54,813 29,057 52,489 26,567 44,786 4.4% 22.4%
Fees & Commission Income 8,803 15,606 8,065 14,569 6,832 11,517 7.1% 35.5%
Fees & Commission Expense 2,174 3,855 1,757 3,174 1,717 2,895 21.5% 33.2%
Net Fees & Commission Income 6,629 11,752 6,308 11,395 5,115 8,622 3.1% 36.3%
Income From Documentary Operations 1,900 3,369 1,595 2,882 1,639 2,763 16.9% 21.9%
Expense On Documentary Operations 86 153 267 482 317 534 -68.2% -71.4%
Net Income From Documentary Operations 1,814 3,216 1,329 2,401 1,322 2,229 34.0% 44.3%
Net Foreign Currency Related Income 5,482 9,718 4,510 8,148 3,492 5,886 19.3% 65.1%
Net Other Non-Interest Income 335 593 286 517 476 802 14.8% -26.0%
Net Non-Interest Income 14,259 25,278 12,434 22,460 10,404 17,540 12.5% 44.1%
Total Operating Income (Revenue) 45,178 80,091 41,491 74,949 36,971 62,326 6.9% 28.5%
Personnel Costs 10,594 18,782 10,810 19,527 9,255 15,602 -3.8% 20.4%
Selling, General & Administrative Expenses 3,863 6,848 3,207 5,794 4,712 7,943 18.2% -13.8%
Procurement & Operations Support Expenses 1,471 2,607 1,719 3,105 1,695 2,858 -16.0% -8.8%
Depreciation And Amortization 3,144 5,574 3,127 5,649 3,665 6,178 -1.3% -9.8%
Other Operating Expenses 712 1,263 447 808 643 1,084 56.4% 16.5%
Total Recurring Operating Costs 19,784 35,074 19,310 34,882 19,970 33,665 0.5% 4.2%
Normalized Net Operating Income / (Loss) 25,394 45,018 22,180 40,067 17,001 28,661 12.4% 57.1%
Net Non-Recurring Income / (Costs) (91) (161) (1,026) (1,854) (1,492) (2,515) -91.3% -93.6%
Profit / (Loss) Before Provisions 25,303 44,856 21,154 38,213 15,510 26,146 17.4% 71.6%
Net Provision Expense 5,386 9,549 5,457 9,858 10,825 18,249 -3.1% -47.7%
Pre-Tax Income / (Loss) 19,916 35,307 15,697 28,355 4,685 7,897 24.5% NMF
Income Tax Expense / (Benefit) 2,987 5,296 2,581 4,662 50 83 13.6% NMF
Net Income / (Loss) 16,929 30,011 13,116 23,693 4,635 7,814 26.7% NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.806 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

4 Change calculations based on GEL values

STANDALONE 2010 INCOME STATEMENT

Period ended   YTD 2010   YTD 2009   Change3
Standalone, IFRS-based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited)
 
Interest Income 220,814 391,459 205,563 346,537 13.0%
Interest Expense 108,983 193,206 95,721 161,367 19.7%
Net Interest Income 111,830 198,253 109,841 185,171 7.1%
Fees & Commission Income 30,648 54,333 25,239 42,548 27.7%
Fees & Commission Expense 7,135 12,649 5,706 9,620 31.5%
Net Fees & Commission Income 23,514 41,685 19,533 32,928 26.6%
Income From Documentary Operations 6,436 11,411 6,305 10,629 7.3%
Expense On Documentary Operations 899 1,594 1,228 2,070 -23.0%
Net Income From Documentary Operations 5,537 9,816 5,077 8,559 14.7%
Net Foreign Currency Related Income 17,670 31,325 14,153 23,860 31.3%
Net Other Non-Interest Income 1,384 2,454 1,333 2,246 9.2%
Net Non-Interest Income 48,104 85,279 40,096 67,593 26.2%
Total Operating Income (Revenue) 159,935 283,532 149,937 252,764 12.2%
Personnel Costs 40,052 71,003 35,497 59,841 18.7%
Selling, General & Administrative Expenses 13,727 24,334 15,840 26,703 -8.9%
Procurement & Operations Support Expenses 6,304 11,176 6,332 10,675 4.7%
Depreciation And Amortization 12,556 22,259 12,290 20,719 7.4%
Other Operating Expenses 2,496 4,425 2,541 4,283 3.3%
Total Recurring Operating Costs 75,134 133,197 72,500 122,221 9.0%
Normalized Net Operating Income / (Loss) 84,801 150,336 77,437 130,543 15.2%
Net Non-Recurring Income / (Costs) (2,863) (5,075) (3,541) (5,969) -15.0%
Profit / (Loss) Before Provisions 81,938 145,260 73,896 124,574 16.6%
Net Provision Expense 21,579 38,256 53,144 89,590 -57.3%
Pre-Tax Income / (Loss) 60,359 107,005 20,752 34,984 NMF
Income Tax Expense / (Benefit) 9,054 16,051 2,460 4,146 NMF
Net Income / (Loss) 51,305 90,954 18,292 30,837 194.9%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

3 Change calculations based on GEL values

STANDALONE Q4 2010 BALANCE SHEET

Period ended   Q4 2010   Q3 2010   Q4 2009   Change4   Change4
Standalone, IFRS-based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
 
Cash And Cash Equivalents 86,021 152,499 62,116 112,205 79,477 133,983 35.9% 13.8%
Loans And Advances To Credit Institutions 332,320 589,137 256,555 463,440 132,187 222,841 27.1% 164.4%
Mandatory Reserves With NBG / NBU / NBRB 48,886 86,665 45,983 83,064 21,071 35,521 4.3% 144.0%
Other Accoutns With NBG / NBU / NBRB 30,997 54,951 17,771 32,102 13,370 22,539 71.2% 143.8%
Balances With And Loans To Other Banks 252,437 447,520 192,801 348,275 97,746 164,780 28.5% 171.6%
Investment Securities: HTM, Treasuries And Equivalents 158,116 280,308 164,803 297,701 147,820 249,196 -5.8% 12.5%
Loans To Clients, Gross 1,310,295 2,322,891 1,140,736 2,060,626 1,028,881 1,734,488 12.7% 33.9%
Less: Reserve For Loan Losses -67,869 (120,318) -74,626 (134,804) -76,069 (128,238) -10.7% -6.2%
Loans To Clients, Net 1,242,426 2,202,572 1,066,110 1,925,822 952,812 1,606,251 14.4% 37.1%
Investment Property 44,717 79,274 42,743 77,210 15,667 26,412 2.7% 200.1%
Investments In Other Business Entities, Net 190,750 338,161 184,194 332,728 182,540 307,725 1.6% 9.9%
Property And Equipment Owned, Net 128,598 227,978 128,124 231,444 134,327 226,448 -1.5% 0.7%
Intangible Assets Owned, Net 9,613 17,043 9,784 17,673 8,502 14,332 -3.6% 18.9%
Goodwill 12,832 22,748 12,593 22,748 13,499 22,756 0.0% 0.0%
Tax Assets, Current And Deferred 3,721 6,597 3,652 6,597 3,928 6,622 0.0% -0.4%
Prepayments And Other Assets 17,685 31,352 18,944 34,221 15,327 25,838 -8.4% 21.3%
Total Assets 2,226,799 3,947,669 1,949,618 3,521,790 1,686,086 2,842,403 12.1% 38.9%
 
Client Deposits 1,020,133 1,808,491 837,240 1,512,390 668,392 1,126,775 19.6% 60.5%
Deposits And Loans From Banks 112,339 199,155 135,490 244,749 7,367 12,419 -18.6% NMF
Borrowed Funds 566,069 1,003,527 487,991 881,506 541,775 913,324 13.8% 9.9%
Issued Fixed Income Securities 12,027 21,321 2,002 3,616 - - NMF NMF
Tax Liabilities, Current And Deferred 22,185 39,329 18,869 34,085 14,188 23,918 15.4% 64.4%
Accruals And Other Liabilities 22,144 39,256 16,450 29,715 16,018 27,003 32.1% 45.4%
Total Liabilities 1,754,896 3,111,079 1,498,041 2,706,061 1,247,740 2,103,440 15.0% 47.9%
 
Share Capital - Ordinary Shares 17,681 31,345 17,346 31,333 18,570 31,306 0.0% 0.1%
Share Premium 268,876 476,664 263,592 476,153 283,879 478,563 0.1% -0.4%
Treasury Shares (776) (1,375) (778) (1,406) (848) (1,429) -2.2% -3.8%
Revaluation And Other Reserves 31,427 55,715 36,580 66,079 28,413 47,899 -15.7% 16.3%
Retained Earnings 103,389 183,288 101,100 182,627 90,038 151,786 0.4% 20.8%
Net Income / (Loss) For The Period 51,305 90,954 33,737 60,943 18,292 30,837 49.2% 194.9%
Shareholders' Equity 471,903 836,590 451,577 815,729 438,346 738,963 2.6% 13.2%
Total Liabilities And Shareholders Equity 2,226,799 3,947,669 1,949,618 3,521,790 1,686,086 2,842,403 12.1% 38.9%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.806 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

4 Change calculations based on GEL values

STANDALONE 2010 CASH FLOW STATEMENT

Period ended   YTD 2010   YTD 2009
Standalone, IFRS-based US$1   GEL US$2   GEL
000s Unless otherwise noted
Interest received 219,413 388,976 198,405 334,471
Interest paid (102,144) (181,081) (108,772) (183,367)
Fees and commissions received 37,525 66,524 32,702 55,129
Fees and commissions paid (7,784) (13,799) (6,811) (11,482)
Other operating income received 39,515 70,052 25,999 43,829
Salaries and benefits paid (38,816) (68,813) (35,167) (59,285)
Selling and administrative expenses (21,794) (38,636) (25,854) (43,585)
Other operating expenses (1,550) (2,747) (1,526) (2,573)
Cash flows from operating activities before changes in operating assets and liabilities 124,366 220,476 78,976 133,137

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

BG BANK (UKRAINE) Q4 2010 INCOME STATEMENT

Period ended   Q4 2010   Q4 2009   Change3
Standalone, IFRS-based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited)
 
Interest Income 3,602 6,386 2,802 4,724 35.2%
Interest Expense 2,810 4,981 296 499 NMF
Net Interest Income 792 1,405 2,506 4,225 -66.8%
Fees & Commission Income 302 536 (265) (447) NMF
Fees & Commission Expense 100 177 (381) (643) NMF
Net Fees & Commission Income 202 358 116 195 83.4%
Income From Documentary Operations 3 6 44 74 -92.5%
Expense On Documentary Operations - - - - -
Net Income From Documentary Operations 3 6 44 74 -92.5%
Net Foreign Currency Related Income 239 424 (492) (829) NMF
Net Other Non-Interest Income 1 1 - - NMF
Net Non-Interest Income 445 788 (332) (559) NMF
Total Operating Income (Revenue) 1,237 2,193 2,175 3,666 -40.2%
Personnel Costs 1,326 2,352 1,561 2,632 -10.7%
Selling, General & Administrative Expenses 293 519 287 484 7.3%
Procurement & Operations Support Expenses 181 322 369 622 -48.3%
Depreciation And Amortization 118 210 129 217 -3.2%
Other Operating Expenses 132 234 164 276 -15.4%
Total Recurring Operating Costs 2,051 3,636 2,510 4,231 -14.1%
Normalized Net Operating Income / (Loss) (814) (1,443) (335) (565) NMF
Net Non-Recurring Income / (Costs) 599 1,062 (2,492) (4,201) NMF
Profit / (Loss) Before Provisions (215) (381) (2,827) (4,766) NMF
Net Provision Expense 570 1,010 4,882 8,230 -87.7%
Pre-Tax Income / (Loss) (785) (1,391) (7,710) (12,997) NMF
Income Tax Expense / (Benefit) (251) (445) (983) (1,658) NMF
Net Income / (Loss) (534) (946) (6,726) (11,339) NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

3 Change calculations based on GEL values

BG BANK (UKRAINE) 2010 INCOME STATEMENT

Period ended   YTD 2010   YTD 2009   Change3
Standalone, IFRS-based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited)
 
Interest Income 16,644 29,507 19,732 33,264 -11.3%
Interest Expense 10,809 19,162 10,599 17,867 7.2%
Net Interest Income 5,836 10,346 9,133 15,396 -32.8%
Fees & Commission Income 1,072 1,900 1,987 3,349 -43.3%
Fees & Commission Expense 342 606 289 487 24.3%
Net Fees & Commission Income 730 1,294 1,698 2,862 -54.8%
Income From Documentary Operations 74 131 44 74 77.2%
Expense On Documentary Operations - - - - -
Net Income From Documentary Operations 74 131 44 74 77.0%
Net Foreign Currency Related Income 436 773 971 1,637 -52.8%
Net Other Non-Interest Income 16 29 - - NMF
Net Non-Interest Income 1,256 2,227 2,713 4,573 -51.3%
Total Operating Income (Revenue) 7,092 12,573 11,846 19,969 -37.0%
Personnel Costs 5,565 9,865 6,934 11,689 -15.6%
Selling, General & Administrative Expenses 1,350 2,392 1,779 2,999 -20.2%
Procurement & Operations Support Expenses 885 1,568 1,121 1,889 -17.0%
Depreciation And Amortization 467 829 593 1,001 -17.2%
Other Operating Expenses 613 1,087 489 825 31.8%
Total Recurring Operating Costs 8,880 15,742 10,916 18,403 -14.5%
Normalized Net Operating Income / (Loss) (1,788) (3,169) 929 1,567 NMF
Net Non-Recurring Income / (Costs) 636 1,127 (2,692) (4,537) NMF
Profit / (Loss) Before Provisions (1,152) (2,042) (1,762) (2,971) -31.3%
Net Provision Expense 2,945 5,221 24,646 41,548 -87.4%
Pre-Tax Income / (Loss) (4,097) (7,264) (26,408) (44,519) NMF
Income Tax Expense / (Benefit) (1,003) (1,778) (5,658) (9,538) NMF
Net Income / (Loss) (3,094) (5,486) (20,750) (34,981) NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

3 Change calculations based on GEL values

BNB (BELARUS) Q4 2010 INCOME STATEMENT

Period ended   Q4 2010   Q4 2009   Change3
Standalone, IFRS-based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited)
 
Interest Income 1,721 3,051 1,206 2,033 50.1%
Interest Expense 302 536 273 460 16.5%
Net Interest Income 1,419 2,515 933 1,572 60.0%
Fees & Commission Income 388 688 318 536 28.5%
Fees & Commission Expense 83 148 55 92 60.9%
Net Fees & Commission Income 305 540 263 444 21.8%
Income From Documentary Operations 26 47 0 0 NMF
Expense On Documentary Operations 4 6 1 1 NMF
Net Income From Documentary Operations 23 40 (0) (1) NMF
Net Foreign Currency Related Income 285 505 32 54 NMF
Net Other Non-Interest Income 13 24 49 83 -71.3%
Net Non-Interest Income 626 1,110 344 580 91.3%
Total Operating Income (Revenue) 2,045 3,625 1,277 2,152 68.4%
Personnel Costs 894 1,585 557 940 68.7%
Selling, General & Administrative Expenses 338 600 187 316 89.9%
Procurement & Operations Support Expenses 257 455 196 331 37.7%
Depreciation And Amortization 116 205 69 117 75.3%
Other Operating Expenses 162 287 166 280 2.3%
Total Recurring Operating Costs 1,767 3,132 1,176 1,983 57.9%
Normalized Net Operating Income / (Loss) 278 493 100 169 191.9%
Net Non-Recurring Income / (Costs) 16 29 18 31 -7.3%
Profit / (Loss) Before Provisions 294 522 118 200 161.1%
Net Provision Expense (113) (200) 759 1,280 NMF
Pre-Tax Income / (Loss) 407 721 (641) (1,080) NMF
Income Tax Expense / (Benefit) 102 181 (99) (167) NMF
Net Income / (Loss) 305 540 (542) (914) NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

3 Change calculations based on GEL values

BNB (BELARUS) 2010 INCOME STATEMENT

Period ended   YTD 2010   YTD 2009   Change3
Standalone, IFRS-based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited)
 
Interest Income 5,991 10,621 4,187 7,059 50.5%
Interest Expense 719 1,274 1,247 2,102 -39.4%
Net Interest Income 5,272 9,347 2,940 4,957 88.6%
Fees & Commission Income 1,101 1,951 1,037 1,748 11.6%
Fees & Commission Expense 228 405 155 262 54.6%
Net Fees & Commission Income 872 1,546 881 1,486 4.1%
Income From Documentary Operations 61 108 2 4 NMF
Expense On Documentary Operations 8 14 1 2 NMF
Net Income From Documentary Operations 53 93 1 2 NMF
Net Foreign Currency Related Income 893 1,582 1,061 1,789 -11.6%
Net Other Non-Interest Income 56 99 96 161 -38.7%
Net Non-Interest Income 1,873 3,321 2,039 3,438 -3.4%
Total Operating Income (Revenue) 7,146 12,668 4,980 8,395 50.9%
Personnel Costs 2,918 5,173 1,902 3,206 61.4%
Selling, General & Administrative Expenses 775 1,375 487 821 67.5%
Procurement & Operations Support Expenses 728 1,290 621 1,047 23.2%
Depreciation And Amortization 367 651 297 501 29.9%
Other Operating Expenses 514 912 488 822 10.9%
Total Recurring Operating Costs 5,303 9,401 3,795 6,397 47.0%
Normalized Net Operating Income / (Loss) 1,843 3,267 1,185 1,998 63.5%
Net Non-Recurring Income / (Costs) 189 336 61 102 NMF
Profit / (Loss) Before Provisions 2,032 3,603 1,246 2,100 71.6%
Net Provision Expense 276 489 657 1,108 -55.8%
Pre-Tax Income / (Loss) 1,756 3,113 588 992 NMF
Income Tax Expense / (Benefit) 393 697 256 431 61.7%
Net Income / (Loss) 1,363 2,416 333 561 NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.773 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2010

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.686 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

3 Change calculations based on GEL values

KEY RATIOS

Ratios presented on a consolidated basis, unless otherwise noted

  Q4 2010   Q3 2010   Q4 2009
       
Profitability Ratios      
ROAA 1, Annualized 2.7% 2.4% -13.6%
ROAE2, Annualized 15.0% 12.5% -59.5%
ROAE2 Excluding Minority Interest(s), Annualized 16.2% 13.0% -60.0%
ROA, Annualized 2.5% 2.3% -14.0%
ROE, Annualized 14.8% 12.3% -68.4%
ROE Excluding Minority Interests, Annualized 16.0% 12.8% -67.5%
Interest Income / Average Int. Earning Assets Excl. Cash, Annualized3 18.8% 19.3% 19.6%
Interest Income / Average Int. Earning Assets Incl. Cash, Annualized3 15.6% 16.1% 16.5%
Cost Of Funds 4, Annualied 7.8% 7.9% 7.8%
Net Spread Excl. Cash, Annualized 5 11.0% 11.4% 11.8%
Net Spread Incl. Cash, Annualized 5 7.8% 8.2% 8.6%
Net Interest Margin 6, Annualised 7.8% 8.2% 8.5%
Loan Yield Excl. Provisions7, Annualised 19.5% 20.0% 19.7%
Loan Yield Incl. Provisions7, Annualised 17.6% 17.4% 13.0%
Deposit Yield, Annualised 7.2% 7.3% 8.7%
Interest Expense To Interest Income 50.1% 48.8% 48.3%
Net Non-Interest Income To Average Total Assets, Annualised 4.1% 3.8% 4.2%
Net Non-Interest Income To Revenue 8 39.9% 37.5% 40.5%
Net Fee And Commission Income To Average Interest Earning Assets 9, Annualised 1.9% 2.0% 2.3%
Net Fee And Commission Income To Revenue 14.9% 15.2% 16.3%
Operating Leverage, Y-O-Y 10 88.1% 3.2% -107.6%
Operating Leverage, Y-O-Y, Normalized 10 11.4% 2.2% -
Operating Leverage, Consecutive Q-O-Q 10 2.4% -2.6% -229.8%
Operating Leverage, Consecutive Q-O-Q, Normalized 10 1.8% 4.4% -6.1%
Standalone Operating Leverage, Y-O-Y 31.1% 3.6% N/A
Standalone Operating Leverage, Y-O-Y, Normalized 24.3% 5.9% N/A
Standalone Operating Leverage, Consecutive Q-O-Q 10.9% 1.4%

-15.2%

Standalone Operating Leverage, Consecutive, Q-O-Q, Normalized 6.3% 1.0%

-10.6%

Total Operating Income (Revenue) To Total Assets, Annualised 9.3% 10.0% 10.6%
Recurring Earning Power 11, Annualised 4.5% 4.4% -10.1%
Net Income To Revenue 27.0% 23.0% -132.2%
 
Efficiency Ratios      
Operating Cost To Average Total Assets 12, Annualised 5.5% 5.7% 6.2%
Cost To Average Total Assets 13, Annualised 5.7% 5.9% 20.4%
Cost / Income 14 56.1% 57.4% 198.3%
Cost / Income, Normalized 15 54.7% 55.6% 60.2%
Cash Cost / Income 40.7% 41.5% 45.3%
Standalone Cost/Income 44.0% 49.0% 58.0%
Standalone Cost/Income, Normalized 43.8% 46.5% 54.0%
Standalone Cash Cost/Income 29.8% 31.2% 37.3%
Total Employee Compensation Expense To Revenue 16 28.9% 29.8% 29.1%
Total Employee Compensation Expense To Cost 51.5% 52.0% 14.7%
Total Employee Compensation Expense To Average Total Assets, Annualised 2.9% 3.0% 3.0%
Liquidity Ratios      
Net Loans To Total Assets 17 57.8% 57.0% 57.6%
Average Net Loans To Average Total Assets 57.8% 57.1% 54.4%
Interest Earning Assets To Total Assets 79.3% 78.5% 75.3%
Average Interest Earning Assets To Average Total Assets 78.3% 77.6% 72.0%
Liquid Assets To Total Assets 18 26.9% 25.6% 23.8%
Liquid Assets To Total Short-Term Liabilities, NBG Stand-Alone 34.7% 33.8% 35.6%
Liquid Assets To Total Liabilities, IFRS Consolidated 32.4% 31.6% 30.0%
Net Loans To Client Deposits 117.8% 124.3% 131.9%
Average Net Loans To Average Client Deposits 122.8% 128.2% 131.5%
Net Loans To Total Deposits 19 106.4% 107.5% 129.6%
Net Loans To (Total Deposits + Equity) 81.1% 79.4% 88.6%
Net Loans To Total Liabilities 69.5% 70.2% 72.5%
Total Deposits To Total Liabilities 65.4% 65.3% 55.9%
Client Deposits To Total Deposits 90.3% 86.5% 98.3%
Client Deposits To Total Liabilties 59.0% 56.5% 55.0%
Current Account Balances To Client Deposits 42.1% 43.0% 40.7%
Demand Deposits To Client Deposits 9.3% 10.6% 9.5%
Time Deposits To Client Deposits 48.6% 46.4% 49.7%
Total Deposits To Total Assets 54.3% 53.0% 44.4%
Client Deposits To Total Assets 49.1% 45.9% 43.7%
Client Deposits To Total Equity (Times) 20 2.90 2.44 2.13
Due From Banks / Due To Banks 21 278.9% 185.4% NMF
Total Equity To Net Loans 29.2% 33.0% 35.7%
Leverage (Times) 22 4.9 4.3 3.9
       
Asset Quality      
NPLs (in GEL) 23 117,580 131,506 139,954
NPLs To Gross Loans To Clients 24 4.6% 5.9% 7.6%
NPL Coverage Ratio 25 151.0% 141.4% 124.1%
Cost of Risk 26, Annualized 1.8% 2.6% 6.7%
Reserve For Loan Losses To Gross Loans To Clients 27 7.0% 8.3% 9.4%
% Of Loans To Clients Collateralized 91.2% 91.6% 92.1%
Equity To Average Net Loans To Clients 35.6% 36.4% 40.3%
       
Capital Adequacy:      
Equity To Total Assets 16.9% 18.8% 20.5%
BIS Tier I Capital Adequacy Ratio, Consolidated 28 18.2% 19.9% 22.3%
BIS Total Capital Adequacy Ratio, Consolidated 29 29.0% 32.5% 34.6%
BIS Tier I Capital Adequacy Ratio, Stand-alone 28 22.9% 24.7% 27.6%
BIS Total Capital Adequacy Ratio, Stand-alone 29 28.4% 31.2% 33.6%
NBG Tier I Capital Adequacy Ratio 30 13.0% 15.2% 19.7%
NBG Total Capital Adequacy Ratio 31 14.5% 15.7% 16.8%
       
Per Share Values:      
Basic EPS (GEL) 32 0.82 0.66 (3.27)
Basic EPS (US$) $0.46 $0.37 ($1.94)
Fully Diluted EPS (GEL) 33 0.74 0.60 (2.94)
Fully Diluted EPS (US$) $0.42 $0.33 ($1.74)
Book Value Per Share (GEL) 34 22.10 21.69 19.12
Book Value Per Share (US$) $12.46 $12.01 $11.34
Ordinary Shares Outstanding - Weighted Average, Basic 31,344,860 31,333,253 31,302,331
Ordinary Shares Outstanding - Period End 31,344,860 31,333,253 31,306,071
Ordinary Shares Outstanding - Fully Diluted 34,819,474 34,807,867 34,776,945
       
Selected Operating Data:      
Full Time Employees, Group 5,610 5,313 4,781
Full Time Employees, BOG Stand-Alone 3,110 3,060 2,674
Total Assets Per FTE 35 730.65 680.52 609.38
Total Assets Per FTE, BOG Stand-Alone 1,269.35 1,150.91 1,062.98
Number Of Active Branches 142 137 141
Number Of ATMs 405 388 382
Number Of Cards Outstanding 603,049 565,393 537,039
Number Of POS Terminals 2,330 2,280 1,958

NOTES TO KEY RATIOS

1   Return On Average Total Assets (ROAA) equals Net Income of the period divided by quarterly Average Total Assets for the same period;
2 Return On Average Total Equity (ROAE) equals Net Income of the period divided by quarterly Average Total Equity for the same period; ROAE Excluding Minority Interests equals Net Income Excluding Minority Interest(s) of the period divided by quarterly Average Total Equity Excluding Minority Interest for the same period.
3 Average Interest Earning Assets are calculated on a quarterly basis; Interest Earning Assets include: Loans And Advances To Credit Institutions, Treasuries And Equivalents, Other Fixed Income Instruments and Net Loans to Clients;
4 Cost Of Funds equals Interest Expense of the period divided by quarterly Average Interest Bearing Liabilities; Interest Bearing Liabilities Include: Client Deposits, Deposits And Loans From Banks, Borrowed Funds and Issued Fixed Income Securities;
5 Net Spread equals Interest Income To Average Interest Earning Assets less Cost Of Funds;
6 Net Interest Margin equals Net Interest Income of the period divided by quarterly Average Interest Earning Assets of the same period;
7 Loan Yield equals Interest Income, less Net Provision Expense, divided by quarterly Average Gross Loans To Clients;
8 Revenue equals Total Operating Income;
9 Net Fee And Commission Income includes Net Income From Documentary Operations of the period ;
10 Operating Leverage equals percentage change in Revenue less percentage change in Total Costs;
11 Recurring Earning Power equals Profit Before Provisions of the period divided by average Total Assets of the same period;
12 Operating Cost equals Total Recurring Operating Costs;
13 Cost includes Total Recurring Operating Costs and Net Non-Recurring Costs (Income);
14 Cost/Income Ratio equals Costs of the period divided by Total Operating Income (Revenue);
15 Cost/Income Normalized equals Total Recurring Operating cost (excludes net non-recurring costs) divided by total operating income.
16 Total Employee Compensation Expense includes Personnel Costs;
17 Net Loans equal Net Loans To Clients;
18 Liquid Assets include: Cash And Cash Equivalents, Other Accounts With NBG, Balances With And Loans To Other Banks, Treasuries And Equivalents and Other Fixed Income Securities as of the period end and are divided by Total Assets as of the same date;
19 Total Deposits include Client Deposits and Deposits And Loans from Banks;
20 Total Equity equals Total Shareholders’ Equity;
21 Due From Banks/ Due To Banks equals Loans And Advances To Credit Institutions divided by Deposits And Loans From Banks;
22 Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date;
23 NPLs (in GEL) equals total gross non-performing loans as of the period end; non-performing loans are loans that have debts in arrears for more than 90 calendar days;
24 Gross Loans equals Gross Loans To Clients;
25 NPL Coverage Ratio equals Reserve For Loan losses as of the period end divided by NPLs as of the same date;
26 Cost Of Risk equals Net Provision For Loan Losses of the period, plus provisions for (less recovery of) other assets, divided by quarterly average Gross Loans To Clients over the same period;
27 Reserve For Loan Losses To Gross Loans To Clients equals reserve for loan losses as of the period end divided by gross loans to clients as of the same date;
28 BIS Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I;
29 BIS Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I;
30 NBG Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements the National Bank of Georgia;
31 NBG Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of the National Bank of Georgia;
32 Basic EPS equals Net Income of the period divided by the weighted average number of outstanding ordinary shares over the same period;
33 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;
34 Book Value Per Share equals Equity as of the period end, plus Treasury Shares, divided by the total number of Outstanding Ordinary shares as of the same date
35 Equals total consolidated assets divided by total number of full-time employees

1 Compared to Q3 2010; growth calculations based on GEL values.

2 Compared to the respective period in 2009

3 Revenue includes Net Interest Income and Net Non-Interest Income.

4Normalizedd for Net Non-Recurring Income/(Costs).

5 BIS Tier I Capital Adequacy Ratio equals Consolidated Tier I Capital as of the period end divided by Total Consolidated Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I.

6 BIS Total Capital Adequacy Ratio equals Total Consolidated Capital as of the period end divided by Total Consolidated Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I

About Bank of Georgia

Bank of Georgia is the leading Georgian bank offering a broad range of corporate banking, retail banking, wealth management, brokerage and insurance services to its clients in Georgia, Ukraine and Belarus. Bank of Georgia is the largest bank in Georgia by assets, loans, deposits and equity, with 36.2% market share by total assets (all data according to the NBG as of 31 December 2010). The bank has 142 branches and more than one million retail and corporate current accounts.

Bank of Georgia has, as of the date hereof, the following credit ratings:

Standard & Poor’s   ‘B/B’
FitchRatings ‘B+/B’
Moody’s ‘B3/NP’ (FC) & ‘Ba3/NP’ (LC)

For further information, please visit www.bog.ge/ir or contact:

Irakli Gilauri   Giorgi Chiladze   Macca Ekizashvili
Chief Executive Officer Deputy CEO, Finance Head of Investor Relations
+995 32 444 109 +995 32 444 249 +44 (0) 203 178 4052

igilauri@bog.ge

gchiladze@bog.ge

ir@bog.ge

This news report is presented for general informational purposes only and should not be construed as an offer to sell or the solicitation of an offer to buy any securities. Certain statements in this news report are forward-looking statements and, as such, are based on the management’s current expectations and are subject to uncertainty and changes in circumstances.

The financial information as of Q4 2009, Q3 2010, Q4 2010 and full year 2010 contained in this news report is unaudited, derived from IFRS-based management reports and reflects the best estimates of management. Q3 2010 Consolidated numbers have been reviewed. The Bank’s actual results may differ from the amounts reflected herein as a result of various factors

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