3rd Quarter Results

RNS Number : 0238Q
Bank of Georgia Holdings PLC
01 November 2012
 



                                                               

      

                                                                                             London, 1 November 2012

                                                                                            

 

   Bank of Georgia Holdings plc announces Q3 2012 and nine months ended 30 September 2012 results

                                                                                                                                                                                  

Bank of Georgia Holdings plc (LSE: BGEO LN) (the "Bank"), the holding company of JSC Bank of Georgia and its subsidiaries, Georgia's leading bank, announced today the consolidated results for Q3 2012 and nine months ended 30 September 2012 (IFRS based, derived from management accounts). The Q3 2012 profit for the period was GEL 46.6 million, (US$ 28.1 million/GBP 17.4 million) or GEL 1.35 per share (US$ 0.81 per share/GBP 0.50 per share).

 

The Bank reported nine months ended 30 September 2012 profit of GEL 132.7 million (US$ 80.0 million/GBP 49.4 million), or GEL 3.94 per share (US$2.37 per share/GBP1.46 per share). Unless otherwise mentioned, all comparisons are with the nine months ended 30 September 2011.

 

Strong performance trends continued in the third quarter of 2012

 

·  Positive operating leverage maintained with strong profitability

Net interest margin of 7.8% in the first nine months of 2012, compared to 7.9% in 2011;

§ Q3 NIM declined, as expected, to 7.3% in Q3 2012, largely reflecting the impact of the Eurobond issued in July 2012.

Revenue increased by GEL 51.7 million, or 16.2%, y-o-y, to GEL 370.0 million; excluding the benefit of last year's one-off currency hedge gains, revenue increased by 24.3%;

§ Q3 2012 revenue grew 24.9% y-o-y to GEL 131.0 million.

Positive operating leverage maintained, as operating expenses increased at a lower rate than revenue, up 7.0% y-o-y to GEL 167.2 million; excluding last year's one-off gains, operating leverage was 17.3%;

§ Q3 2012 operating expenses down 1.1% q-o-q to GEL 58.1 million.

Cost to Income ratio improved to 45.2% from 49.1% in the first nine months of 2012, 44.4% in Q3 2012.

Profit before tax from continuing operations of GEL 158.7 million, up by GEL 29.8 million, or 23.1%.

Profit for the period increased by GEL 31.3 million, or 30.9%, to GEL 132.7 million.

Earnings per share (basic) increased by 17.1% to GEL 3.94.

Return on Average Assets (ROAA) increased to 3.6%, compared to 3.3%.

Return on Average Equity (ROAE) increased to 19.4%, from 18.9%.

·  Strong balance sheet and capital position maintained

Cost of Funding declined to 7.5% in the nine months of 2012 compared to 7.8%  in the same period last year.

§ Q3 2012 Cost of Funding of 7.1%, down from 7.5% in Q2 2012 and 7.8% in Q3 2011.

Net loan book increased by 19.6% y-o-y (17.1% year-to-date), while client deposits increased 24.4% y-o-y (5.3% year-to-date).

§ In US$ terms net loan book increased by 19.8% (17.9% year-to-date), reflecting the stable currency position

Cost of Risk increased to 1.2% in the first nine months of 2012 from 0.9% for the same period last year. In absolute terms, cost of credit risk increased by GEL 15.2 million to GEL 28.6 million, largely reflecting the absence of last year's net releases and recoveries and higher retail provisions in the third quarter of 2012.

Non-performing loans (NPLs) decreased 5.7% to GEL 102.7 million. NPLs accounted for 3.2% of gross loan book at 30 September 2012, compared to 4.1% at 30 September 2011 and 3.7% on 31 December 2011.

High provisions coverage of non-performing loans maintained at 105.2%.

Strong funding and liquidity position with a Net Loans to Customer Funds ratio of 109.6%, down from 110.2% twelve months ago. NBG liquidity ratio of 42.0%, compared to 31.2% a year ago and to 30% minimum requirement by the NBG.

BIS Tier 1 capital adequacy ratio improved significantly to 20.3%.

Book Value per Share increased by 14.5% y-o-y to GEL 28.81 (US$17.36/GBP10.72).

Balance Sheet leverage stable at 4.5 times as of 30 September 2012, compared to 4.6 times at 30 September 2011 and 4.2 times at 30 June 2012.

 

 

 

·  Business highlights

o   Strong performances from each of the Bank's businesses in Georgia - Corporate Banking and Retail Banking reported continued loan growth and improving efficiencies.

o   Retail Banking continues to deliver strong franchise growth, supported by the opening of 25 Express branches in the first nine months of 2012.

o   Corporate Banking has delivered strong, well-diversified balance sheet growth over the last 12 months; customer lending grew 23.3% and customer deposits grew 19.3%.

o   Wealth Management continued to expand its client franchise with deposits increasing by 65.8% to GEL 595.3 million over the last 12 months.

o   Excellent progress in developing the Bank's synergistic businesses: Insurance and Healthcare business expansion through acquisition of Imedi L International, the third largest insurance company in Georgia; Affordable Housing completed its pilot project of an 123 apartment building; a second 522 apartment building project is in progress.

 

 

"I am very pleased that our third quarter performance has reinforced the strong results of the preceding two quarters of the year. This reflects a solid performance by each of our businesses. Despite the combination of a seasonally quiet quarter and the pre-election period, we experienced growing demand for credit, as reflected in the 4.8% q-o-q growth of our loan book, and have further improved our efficiency by bringing the Cost to Income ratio down by a further 1.1 percentage points to 44.4%. The effects of our recently issued Eurobond, are as expected: the Q3 2012 NIM declined to 7.3%, from 9.0% in Q2 2012 as a result of the additional interest expense. Balance sheet leverage increased to 4.5 times from 4.2 times at the end of previous quarter.

In the first nine months of 2012 we have delivered strong net profit growth of 30.9% to GEL 132.7 million on the back of double digit revenue growth, improved efficiency, as reflected in positive operating leverage, a reduced cost of funding and healthy growth rates of our loan book and deposit balances. The cost of credit risk in the third quarter of 2012 increased to GEL 14.6 million, compared to GEL 6.6 million in the preceding quarter. This increase largely reflected the impact of a number of job reductions made in a large payroll client during the first half of the year and lower level of recoveries in the third quarter. Corporate banking provisions were at a low level in the first nine months of 2012.

In September 2012, Bank of Georgia Holdings hosted its inaugural Investor Day in Tbilisi. It was gratifying for the entire Bank of Georgia management team to see the interest and enthusiasm in the Bank of Georgia story as demonstrated by the attendance of nearly fifty investors and analysts who traveled to attend our event from different parts of the world.

We have also recently announced management changes that reflect the evolving needs of our growing company. Following his success in the transformation of Aldagi BCI into the country's leading insurance and healthcare company, Nikoloz Gamkrelidze has a new important role to play in the further development of the group in his new role of Group CFO. Murtaz Kikoria, a seasoned banker and manager who has spent 4 years with the Bank of Georgia group, brings invaluable experience as the new CEO of Aldagi BCI in its next stage of development.

The macroeconomic environment in Georgia remained robust with GDP growth reaching 7.5% in the first half of 2012. Foreign direct investment (FDI) and net remittances have remained strong, and Georgia continues to benefit from a substantial increase in tourist revenues, with visitor numbers increasing by 56% in the first nine months of the year to 3.2 million.

Following the parliamentary elections in early October, Georgia is currently in the process of what has been a smooth transition to a new Government. This has not changed the business priorities and strategies of Bank of Georgia and business trends in October have been consistent with our year-to-date performance.

With the parliamentary elections behind us, an enhanced management team and strong business fundamentals in place we look to continuing to deliver value to our shareholders," commented Irakli Gilauri, Chief Executive Officer of Bank of Georgia Holdings PLC and JSC Bank of Georgia.



 

 

1.6593 GEL/US$ 30 September 2012                        

1.6451  GEL/US$ 30 June 2012

1.6610  GEL/US$ 30 September 2011

2.6881 GEL/GBP 30 September 2012

2.5677 GEL/GBP 30 June 2012

2.5990 GEL/GBP 30 September 2011

 

FINANCIAL SUMMARY

 

BGH (Consolidated, Unaudited, IFRS-based)

Income Statement Summary

        Nine months ended

Change

GEL thousands, unless otherwise noted

30 Sep 12

30 Sep 11

Y-O-Y1





Revenue2

             369,967

          318,304

16.2%

Operating expenses

             167,187

          156,305

7.0%

Operating income before cost of credit risk

             202,781

          161,998

25.2%

Cost of credit risk4

               28,593

            13,427

112.9%

Net operating income

             174,188

          148,571

17.2%

Net non-operating expenses, including goodwill impairment

               15,445

            19,630

-21.3%

Profit for the period from continuing operations

             132,677

          113,605

16.8%

EPS (Basic)

                   3.94

                3.36

17.1%

 

 

BGH (Consolidated, Unaudited, IFRS-based)

 Balance Sheet Summary

30 Sep 12

30 Sep 11

Change




Y-O-Y1





Total assets

          5,530,517

       4,359,408

26.9%

Net loans5

          3,063,390

       2,560,696

19.6%

Customer funds6

          2,795,794

       2,322,935

20.4%

Tier I Capital Adequacy Ratio (BIS)7

20.3%

17.9%

13.4%

Total Capital Adequacy Ratio (BIS)7

25.8%

26.1%

-1.2%

NBG Tier I Capital Adequacy Ratio8

13.4%

10.8%

24.6%

NBG Total Capital Adequacy Ratio8

15.9%

15.0%

5.8%

Leverage9

                     4.5

                  4.6

-2.9%

  

BGH (Consolidated, Unaudited, IFRS-based)

Income Statement Summary

Q3 2012

Q3 2011

Change

Q2 2012

Change




Y-O-Y1


Q-O-Q10







Revenue2

130,981

104,896

24.9%

129,142

1.4%

Operating expenses3

58,114

52,780

10.1%

58,754

-1.1%

Operating income before cost of credit risk

72,867

52,115

39.8%

70,388

3.5%

Cost of credit risk4

14,645

5,165

183.5%

6,568

123.0%

Net operating income

58,222

46,950

24.0%

63,820

-8.8%

Net non-operating expenses, including goodwill impairment

3,051

927

NMF

7,994

-61.8%

Profit for the period

46,643

37,613

24.0%

46,331

0.7%

EPS (Basic)

1.35

1.23

9.6%

1.33

1.3%

 

 

 These management accounts are neither audited nor reviewed by auditors.

           

 

1 Compared to the respective period in 2011; growth calculations based on GEL values

2 Revenue includes net interest income, net fee and commission income, net insurance revenue, net healthcare revenue and other operating non-interest income

3 Operating expenses equal other operating non-interest expenses

4 Cost of credit risk includes impairment charge (reversal of impairment) on: loans to customers, finance lease receivables and other assets

5 Net loans equal to net loans to customers and finance lease receivables

6 Customer funds equal amounts due to customers

7 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. BIS total capital equals total consolidated capital as of the period divided by total consolidated risk weighted assets. Both ratios calculated in accordance with the requirements of Basel Accord I

8 NBG Tier I Capital and Total Capital Adequacy ratios calculated in accordance with the requirements of the National Bank of Georgia (NBG)

9  Leverage (Times) equals Total Liabilities divided by Total Equity

10 Compared to the previous quarter

 

 



 

DISCUSSION OF RESULTS

 

This summary compares the financial results for the nine months ended 30 September 2012 with the comparable period in 2011.

 

Revenue


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Loans to customers

374,888


323,173


16.0%

Investment securities: available-for-sale11

25,931


27,919


-7.1%

Amounts due from credit institutions

13,672


13,385


2.1%

Finance lease and receivables

6,374


3,466


83.9%

Interest income

420,866


367,943


14.4%

Amounts due to customers

156,199


117,575


32.9%

Amounts due to credit institutions

55,550


76,227


-27.1%

Interest expense

211,749


193,802


9.3%

Net interest income before net (losses) gains from derivative financial instruments

209,116


174,141


20.1%

Net (losses) gains from derivative financial instruments 

(1,539)


5,076


NMF

Net interest income

207,578


179,217


15.8%

Fee and commission income

81,251


67,353


20.6%

Fee and commission expense

15,886


14,118


12.5%

Net fee and commission income

65,365


53,235


22.8%

Net insurance premiums earned

58,220


34,881


66.9%

Net insurance claims incurred

36,341


20,721


75.4%

Net insurance revenue

21,880


14,160


54.5%

Healthcare revenue

38,625


2,070


NMF

Cost of healthcare services

22,405


924


NMF

Net healthcare revenue

16,221


1,146


NMF

Net gains from securities 

2,235


532


NMF

Net gains from foreign currencies

38,694


34,865


11.0%

Other operating income

17,996


14,464


24.4%

Revenue adjusted for gains or losses from BYR hedge

369,967


297,619


24.3%

Gains (losses) from BYR hedge

-


20,685


NMF

Revenue

369,967


318,304


16.2%

 

11Investment securities available-for-sale primarily consist of Georgian government treasury bills and bonds and National Bank of Georgia's Certificates of deposit

 

The Bank's revenue increased to GEL 370.0 million in the nine months ended 30 September 2012, or 16.2% growth year-on-year, driven by strong growth of all revenue items. Net interest income for the period reached GEL 207.7 million, a 15.8% increase year-on-year, despite net losses of GEL 1.5 million from derivative financial instruments that compare to the net gains from derivative financial instruments of GEL 5.1 million during the same period last year. Net interest income before net gains from financial instruments grew 20.1% to GEL 209.1 million, as interest expense growth of 9.3% y-o-y significantly lagged behind the 14.4% y-o-y growth of interest income, which was driven by strong customer lending growth during the period.

 

The 16.8% y-o-y growth in net non-interest income12 to GEL 162.4 million, mostly benefited from the increases in net insurance revenue by GEL 7.7 million to GEL 21.9 million, net healthcare revenue by GEL 15.1 million to GEL 16.2 million, and net fee and commission income from GEL 53.2 million to GEL 65.4 million. Net non-interest income accounted for 43.9% of revenue, compared to 43.7% last year. Adjusted  for the impact of last year's one-off currency (Belarusian Ruble) hedge gains, total revenue increased by 24.3% y-o-y.

 

Net Interest Margin


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Net interest income

207,578


179,217


15.8%

Net Interest Margin

7.8%


7.9%


-1.0%

Average13 interest earning assets

3,534,866


3,024,805


16.9%

Average13 interest bearing liabilities

3,795,788


3,240,265


17.1%

 

  

12Net non-interest income equals sum of net fee and commission income, net insurance revenue, net healthcare revenue, net gains from securities, net gains from foreign   currencies and other operating income

 

13Monthly averages are used for calculation of average interest earning assets and average interest bearing liabilities

 

 

 

The slight decline in Net Interest Margin over the last twelve months, was attributable to the carrying cost of the Bank's US$ 250 million Eurobond issued in Q3 2012, which more than offset the effects of decreased deposit rates in the first half of the year and a slight increase in loan yield from 17.5% in the nine months 2011 to 17.6% in the nine months to 2012. The 16.9% y-o-y growth of average interest earning assets to GEL 3,534.9 was attributed to a 19.6% y-o-y increase in the net loan book and the increase in the lower-yielding liquid assets as a result of the Eurobond that have not yet been deployed to support customer lending.

 

In the nine months of 2012 the Bank's cost of funding decreased to 7.5% from 7.8% in the same period last year, the decline  reflecting a significant reduction in the cost of deposits in the second quarter of 2012.

 

The currency-blended deposit costs of the Bank were 7.5% and 7.3% in the first nine months of 2012 and 2011 respectively, while the currency-blended loan yields totalled 17.6% and 17.5% during the respective periods.

 

Net fee and commission income


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Fee and commission income

81,251


67,353


20.6%

Fee and commission expense

15,886


14,118


12.5%

Net fee and commission income

65,365


53,235


22.8%

 

Strong growth of the Bank's fee and commission income, in line with increased business activity, drove the 22.8% y-o-y increase in net fee and commission income to GEL 65.4 million. This increase was driven by healthy growth in the Bank's settlement operations, the Bank's card business, guarantees and letters of credit, and cash operations businesses that benefited from the overall improvement of the economic environment in Georgia and the increased foreign trade turnover of Georgian businesses.

 

Net insurance revenue and net healthcare revenue

 


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Net insurance premiums earned

58,220


34,881


66.9%

Net insurance claims incurred

36,341


20,721


75.4%

Net insurance revenue

21,880


14,160


54.5%

Healthcare revenue

38,625


2,070


NMF

Cost of healthcare services, of which:

22,405


924


NMF

Salaries and other employee benefits

18,172


803


NMF

Other Operating expenses

4,233


121


NMF

Net healthcare revenue

16,221


1,146


NMF

 

 

Net insurance revenue increased by GEL 7.7 million, or 54.5% to GEL 21.9 million, with the organic growth of Aldagi BCI supported by the acquisition of Georgia's third largest insurance company, Imedi L International (Imedi L). Net insurance revenue growth was driven by 66.9% y-o-y growth in net insurance premiums earned to GEL 58.2 million. The growth in net insurance premiums earned was due to an increase in the size of the insurance policies portfolio which reflected overall growth in both the life and non-life insurance businesses. The growth also reflects the inclusion of Imedi L results for Q3 2012. The increase in net insurance claims incurred mostly reflected the acquisition of Imedi L.

 

The growth of the healthcare business, following the expansion of the healthcare operations by Aldagi BCI as a result of recent acquisitions, resulted in net healthcare revenue of GEL 16.2 million in the first nine months of 2012, an increase of 14 times from the same period last year. The integration of the business was completed in July 2012, while legal integration is expected to be completed by the year-end 2012.   

 

Other operating non-interest income


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Net gains from trading securities and investment securities available-for-sale

2,235


532


NMF

Net gains from foreign currencies

38,694


35,865


11.0%

   Dealing

23,987


33,702


-28.8%

   Translation differences

14,706


1,163


NMF

Other operating income

17,996


14,464


24.4%

Other operating non-interest income adjusted  for gains or losses from BYR hedge

58,924


49,861


18.2%

Gains (losses) from BYR hedge

-


20,685


-100.0%

Other operating non-interest income

58,924


70,546


-16.5%

 

 

Other operating non-interest income, adjusted for one-off gains from the BYR currency hedge, in the first nine months of 2012 grew 18.2% to GEL 58.9 million, reflecting the growth of foreign currency translation differences, net gains from securities and an increase in other operating income, predominantly due to growth from income from the Bank's non-core subsidiaries. Affordable Housing contributed GEL 3.0 million gross profit to the other operating income in Q3 2012. Overall, other operating non-interest income declined by 16.5% y-o-y, due to the one-off gain of GEL 20.7 million on the BYR currency hedge in 2011.

 

Net operating income, cost of credit risk, profit for the period

 


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Salaries and other employee benefits

90,173


86,266


4.5%

Selling and administrative expenses

51,763


45,773


13.1%

Depreciation and amortisation

21,303


19,519


9.1%

Other operating expenses

3,948


4,748


-16.8%

Other operating non-interest expenses

167,187


156,305


7.0%

Operating income before cost of credit risk 

202,781


161,998


25.2%

Cost of credit risk

28,593


13,427


112.9%

Net operating income

174,188


148,571


17.2%

Net non-operating expenses

15,445


19,630


-21.3%

Profit before income tax expense from  continuing operations 

158,743


128,942


23.1%

Income tax expense 

26,066


15,336


70.0%

Profit for the period from continuing operations

132,677


113,605


16.8%

Net loss from discontinued operations

-


12,247


-100.0%

Profit for the period

132,677


101,358


30.9%

 

 

The Bank's other operating non-interest expenses increased by GEL 10.9 million, or 7.0% y-o-y, to GEL 167.2 million. This is less than half the rate of revenue growth over the same period and reflects the Bank's focus on delivering positive operating leverage on an ongoing basis. Adjusted for the one-off currency hedge gain in 2011, operating leverage was 17.3 percentage points. The increase in expenses primarily reflected a 4.5% increase in salaries and other employee benefits as the Bank's headcount increased to reflect the growth of Bank of Georgia's and its subsidiaries' businesses over the last twelve months. Selling and administrative expenses for the reporting period grew by 13.1% to GEL 51.8 million, reflecting new branch openings and sales force increases. The Cost to Income ratio improved to 45.2% in the nine months ended 30 September 2012, from 49.1% in the same period last year, benefiting from ongoing cost efficiency measures undertaken by the Bank. When adjusted for the one-off revenue gains in 2011, the Cost to Income ratio improved substantially from 52.5% in the first nine months of 2011, reflecting underlying significant cost efficiency improvements.

 

The Bank's operating income before the cost of credit risk increased by GEL 40.8 million, or 25.2%, to GEL 202.8 million.

 

The cost of credit risk increased by GEL 15.2 million to GEL 28.6 million in the first nine months of 2012, largely reflecting the absence of last year's releases and recoveries and higher retail provision in the third quarter, reflecting a number of job reductions made in a large payroll client during the first half of the year. This represents an annualised cost of risk of 1.2%, up from 0.9% in the same period last year. The allowance for loan impairment was GEL 108.1 million or 3.4% of total gross loans as of 30 September 2012, compared to 4.6% as of 30 September 2011.

 

 

The Bank's non-performing loans (NPLs), defined as the principal and interest on loans overdue for more than 90 days and additional potential losses estimated by management, decreased to GEL 102.7  million as of 30 September 2012 from GEL 108.9 million a year earlier. The Bank's NPLs to total gross loans ratio improved to 3.2% as of 30 September 2012 from 4.1% a year ago. The Bank maintained a conservative NPL Coverage ratio at 105.2%, which compares to 112.2% as of 30 September 2011 and 114.7% as of 31 December 2011.

 

The Bank's net operating income totalled GEL 174.2 million, up GEL 25.6 million, or 17.2% year-on-year. Adjusted for the one-off gain in 2011, the net operating income in the first nine- months of 2012 was up 36.2% y-o-y. In the first nine months of 2012, the Bank's net non-operating expense declined to GEL 15.4 million from GEL 19.6 million in the first nine months of 2011. The non-operating expenses in the first nine months of 2012 were largely incurred for the purposes of tender offer and premium listing.

 

As a result of the foregoing, profit before income tax from continuing operations in the first nine months of 2012 totalled GEL 158.7 million, an increase of GEL 29.8 million, or 23.1% y-o-y. After income tax expense of GEL 26.1 million, the Bank's profit for the period stood at GEL 132.7 million, up by GEL 19.1 million, or 16.8% compared to the same period last year, while profit for the period adjusted for the net loss from discontinued operations in 2011, grew 30.9% y-o-y, or by GEL 31.3 million.

 

Balance Sheet highlights

 

As of 30 September 2012, the Bank's total assets stood at GEL 5,530.5 million, an increase of 18.5% since 31 December 2011 and an increase of 26.9% compared to 30 September 2011. Total liabilities amounted to GEL 4,522.6 million, up 17.4% year-to-date and 26.2% y-o-y, while shareholders' equity reached GEL 1,007.9 million, a 24.0% increase since the beginning of the year and 29.9% increase from the same period last year. The year-to-date changes reflect 19.6% y-o-y growth of the Bank's loan book and the changes in the funding structure on the back of strong growth of client deposits that grew 24.4% y-o-y. As of 30 September 2012, customer funds accounted for 61.8% of the Bank's total liabilities.

 

On a quarterly basis, the Bank's total assets growth of 12.1% q-o-q was largely driven by the 4.8% q-o-q increase of the loan book to GEL 3,063.4 million and the 35.2% increase in liquid assets as a result of the US$250 million Eurobond that was issued by the Bank in the beginning of Q3 2012. Both retail banking and corporate banking contributed to the net loan book growth. Retail banking lending increased by GEL 157.6 million, or 13.6%, over the last twelve months to GEL 1,317.5 million by 30 September 2012 and corporate banking lending grew by GEL 322.4 million, or 23.3% year-on-year, to GEL 1,709.1 million. Loans denominated in foreign currencies (primarily in US$) accounted for 68.8% of the Bank's net loan book as of 30 September 2012, compared to 68.9% as of 30 September 2011 and to 67.9% as of 30 June 2012.

 

The Bank's liquid assets, mostly comprised of cash and cash equivalents, National Bank CDs, Georgian government treasury bills and bonds and interbank deposits, grew by 33.4% y-o-y to GEL 1,530.8 million as of 30 September 2012. The growth was largely driven by the GEL 398.3 million, or 35.2%, increase in liquid assets during Q3 2012, attributed to the Eurobonds issued by the Bank.

 






Change




Change

 GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y


30 Jun 12


Q-O-Q











Amounts due to credit institutions, of which:

1,454,045


1,099,722


32.2%


875,928


66.0%

  Borrowed funds

1,091,314


799,530


36.5%


667,693


63.4%

  Inter-bank loans and deposits

362,730


300,192


20.8%


208,235


74.2%

Customer Funds

2,795,794


2,322,935


20.4%


2,846,263


-1.8%

  Client deposits

2,688,540


2,161,094


24.4%


2,742,601


-2.0%

  Promissory notes

107,254


161,841


-33.7%


103,662


3.5%

Net Loans / Customer Funds

109.6%


110.2%




102.7%



Liquid assets

1,530,830


1,147,577


33.4%


1,132,509


35.2%

Liquid assets as percent of total assets

27.7%


26.3%




22.9%



Liquid assets as percent of total liabilities

33.8%


32.0%




28.5%



NBG liquidity ratio

42.0%


31.2%




35.2%



 

The customer lending growth was sufficiently funded by a GEL 527.4 million growth of client deposits on a year-on-year basis. Compared to the prior quarter, client deposits decreased by 2.0% to GEL 2,688.5 million, reflecting more aggressive liability management after the Eurobond issuance. Since the beginning of the year client deposits are up 5.3% and client funds, comprising client deposits and promissory notes, reached GEL 2,795.8 million, an increase of 2.2% year-to-date.

 

In line with its efforts to improve its funding costs, the pricing of the Eurobond issued by the Bank enabled it to partially repay more expensive outstanding debt, thus decreasing Cost of Funding from 7.5% in Q2 2012 to 7.1% in Q3 2012. In the first nine months of 2012, the Cost of Funding decreased to 7.5%, from 7.8% for the same period last year. As a result of the Eurobond placement, amounts due to credit institutions grew to GEL 1,454.0 million from GEL 1,099.7 million as of 30 September 2011 and from GEL 875.9 million as of 30 June 2012.

 

As a result of the foregoing, in Q3 2012 the Bank's Net Loans to Customer Funds ratio increased to 109.6% from 102.7% in Q2 2012 and was down from 110.2% in Q3 2011, reflecting the increased levels of customer account balances during the year. Client deposits denominated in foreign currencies accounted for 70.0% of the Bank's client deposits as of 30 September 2012, compared to 66.1% as of 30 September 2011.

 

The growth in shareholders' equity over the last twelve months predominantly reflects the inclusion of the current year's profit and the conversion of loan notes by EBRD and IFC into shareholders' equity in February 2012.

 

The Bank continues to maintain a strong liquidity position, considerably in excess of conservative regulatory requirements. The liquidity ratio, as per NBG requirements, stood at 42.0% against the required minimum of 30%, while liquid assets accounted to 27.7% of total assets and 33.8% of total liabilities as of the end of September 2012.

 

The Bank's Book Value per share on 30 September 2012 stood at GEL 28.81/(US$17.36/GBP10.72) compared to GEL 25.16 (US$15.15/GBP9.68) as of 30 September 2011 and GEL 25.98 (US$15.56/GBP10.08) as of 31 December 2011.

 

 

DISCUSSION OF RESULTS - QUARTERLY ANALYSIS

 

 

Revenue






Change




Change

 GEL thousands, unless otherwise noted

Q3 2012


Q3 2011


Y-O-Y


Q2 2012


Q-O-Q











Loans to customers

129,923


111,707


16.3%


126,541


2.7%

Investment securities: available-for-sale14

8,125


9,567


-15.1%


7,983


1.8%

Amounts due from credit institutions

4,049


5,716


-29.2%


5,411


-25.2%

Finance lease and receivables

2,241


1,744


28.5%


2,121


5.7%

Interest income

144,338


128,734


12.1%


142,055


1.6%

Amounts due to customers

52,435


41,947


25.0%


49,931


5.0%

Amounts due to credit institutions

21,502


26,012


-17.3%


15,339


40.2%

Interest expense

73,937


67,959


8.8%


65,269


13.3%

Net interest income before net (losses) gains from derivative financial instruments

70,401


60,775


15.8%


76,786


-8.3%

Net (losses) gains from derivative financial instruments 

(485)


2,584


NMF


(285)


70.2%

Net interest income

69,916


63,359


10.3%


76,501


-8.6%

Fee and commission income

29,773


23,717


25.5%


27,355


8.8%

Fee and commission expense

5,942


4,452


33.5%


5,538


7.3%

Net fee and commission income

23,831


19,265


23.7%


21,818


9.2%

Net insurance premiums earned

25,837


11,758


119.7%


19,896


29.9%

Net insurance claims incurred

15,915


6,694


137.7%


12,613


26.2%

Net insurance revenue

9,922


5,064


95.9%


7,283


36.2%

Healthcare revenue

16,038


547


NMF


12,327


30.1%

Cost of healthcare services

9,014


391


NMF


7,909


14.0%

Net healthcare revenue

7,025


156


NMF


4,419


59.0%

Net gains from securities 

1,282


(200)


NMF


157


NMF

Net gains from foreign currencies

12,502


11,507


8.6%


11,833


5.7%

Other operating income

6,503


5,113


27.2%


7,132


-8.8%

Revenue adjusted for gains or losses from BYR hedge

130,981


104,264


25.6%


129,142


1.4%

Gains (losses) from BYR hedge

-


631


-100.0%


-


NMF

Revenue

130,981


104,896


24.9%


129,142


1.4%

 

 

14primarily consist of Georgian government treasury bills and bonds and National Bank of Georgia's Certificates of deposits 

 

The Bank's Q3 2012 revenue of GEL 131.0 million grew 1.4% q-o-q and 24.9% y-o-y. On a year-on-year basis, the growth was driven by a 10.3% increase in net interest income and healthy growth in non-interest income items, strongly benefiting from 23.7%  y-o-y increase in net fee and commission income, 95.9% rise in net insurance revenue and the strong net healthcare revenue growth from GEL 0.2 million in Q3 2011 to GEL 7.0 million in Q3 2012. In Q3 2012, net interest income before net gains from derivative financial instruments grew by 15.8% compared to Q3 2011, when net gains from derivative financial instruments amounted to GEL 2.6 million compared to net losses of GEL 0.5 million in Q3 2012. The growth of net interest income reflects the strong growth of interest income on the back of customer lending growth and the slower growth rate of interest expense, reflecting the reduced cost of funding over the past twelve months.

 

On a quarterly basis, the Bank's revenue growth was affected by the carrying cost of the Eurobond issued in Q3 2012 that raised the interest expense on amounts due to credit institutions by 40.2% q-o-q, more than offsetting the 1.6% q-o-q growth of interest income, resulting in the 8.6% decline of net interest income to GEL 69.9 million. The strong performance of our insurance and healthcare business largely drove the increase in revenue in Q3 2012 compared to the prior quarter.

 

Net Interest Margin






Change




Change

GEL thousands, unless otherwise noted

Q3 2012


Q3 2011


Y-O-Y


Q2 2012


Q-O-Q











Net interest income

69,916


63,359


10.3%


76,501


-8.6%

Net Interest Margin

7.3%


7.9%


-8.0%


9.0%


-18.9%

Average15 interest earning assets

3,815,503


3,172,043


20.3%


3,422,197


11.5%

Average15 interest bearing liabilities

4,196,393


3,315,122


26.6%


3,524,065


19.1%

 

 

15monthly averages are used for calculation of average interest earning assets and average interest bearing liabilities

The Q3 2012 Net Interest Margin was largely affected by the carrying cost of the US$250 million Eurobond, which led to the decline of NIM to 7.3% in Q3 2012 from 9.0% in Q2 2012, when the NIM peaked as a result of substantial deposit rate cuts and increased loan yields. The q-o-q decline of NIM also reflects the 19.1% q-o-q growth rate of average interest bearing liabilities outpacing the 11.5% q-o-q growth of average interest earning assets. Compared to the same period in 2011, NIM declined 63 basis points from 7.9%, reflecting the higher interest expense in Q3 2012 and 26.6% y-o-y increase of average interest bearing liabilities compared to a 20.3% y-o-y increase of average interest earning assets. In Q3 2012, the loan yield amounted to 17.0%, compared to 17.2% in Q3 2011 and 18.0% in Q2 2012, which benefited from strong loan origination commission income generated on a number of corporate loans in the first half of the year.

 

Net insurance revenue and net healthcare revenue






Change




Change

 GEL thousands, unless otherwise noted

Q3 2012


Q3 2011


Y-O-Y


Q2 2012


Q-O-Q











Net insurance premiums earned

25,837


11,758


119.7%


19,896


29.9%

Net insurance claims incurred

15,915


6,694


137.7%


12,613


26.2%

Net insurance revenue

9,922


5,064


95.9%


7,283


36.2%

Healthcare revenue

16,038


547


NMF


12,327


30.1%

Cost of healthcare services, of which:

9,014


391


NMF


7,909


14.0%

Salaries and other employee benefits

5,921


385


NMF


6,769


-12.5%

Other costs

3,093


6


NMF


1,140


171.3%

Net healthcare revenue

7,025


156


NMF


4,419


59.0%

 

The net insurance and healthcare business posted strong results in Q3 2012, with net insurance revenue of GEL 9.9 million for the quarter increasing by 95.9% y-o-y and by 36.2% q-o-q. Reflecting the growth of the healthcare business, largely attributed to benefits from the integration from the recently acquired Imedi L, Q3 2012 net healthcare revenue grew 59.0% q-o-q to GEL 7.1 million, driven by 30.1% q-o-q growth of healthcare revenue and 12.5% decline in costs of associated with salaries and other employee benefits.

  

 

 

 

Net operating income, cost of credit risk, profit for the period






Change




Change

GEL thousands, unless otherwise noted

Q3 2012


Q3 2011


Y-O-Y


Q2 2012


Q-O-Q











Salaries and other employee benefits

32,340


30,030


7.7%


32,000


1.1%

General and administrative expenses

18,002


15,191


18.5%


17,997


0.0%

Depreciation and amortisation

7,384


6,578


12.2%


7,155


3.2%

Other operating expenses

390


981


-60.3%


1,602


-75.7%

Other operating non-interest expenses

58,114


52,780


10.1%


58,754


-1.1%

Operating income before cost of credit risk 

72,867


52,115


39.8%


70,388


3.5%

Cost of credit risk

14,645


5,165


NMF


6,568


NMF

Net operating income

58,222


46,950


24.0%


63,820


-8.8%

Net non-operating expenses

3,051


927


NMF


7,994


-61.8%

Profit before income tax expense from  continuing operations 

55,171


46,024


19.9%


55,826


-1.2%

Income tax expense 

8,528


8,410


1.4%


9,495


-10.2%

Profit for the period from continuing operations

46,643


37,613


24.0%


46,331


0.7%

Net loss from discontinued operations

-


-


NMF


54


-100.0%

Profit for the period

46,643


37,613


24.0%


46,276


0.8%

 

 

On a year-on-year basis, in Q3 2012 the Bank maintained positive operating leverage as operating non-interest expenses grew at 10.1%, or less than a half the rate of the revenue growth over the same period, driving the operating income before the cost of credit risk growth of 39.8% y-o-y to GEL 72.9 million. Benefiting from the 1.1% decline in operating expenses quarter-on-quarter, the Q3 2012 operating income before cost of credit risk grew by 3.5% q-o-q, reflecting the lower quarterly growth rates of revenue as a result of the negative carry cost of Eurobonds during the quarter, as discussed above.

 

The cost of credit risk increased to GEL 14.6 million, up from GEL 5.2 million in Q3 2011 and GEL 6.6 million in Q2 2012, reflecting the decline in reversals and recoveries that are characteristic to summer months as well as the pre-election considerations. The increase in provisions during the quarter was also associated with consumer and credit card lending.

 

As a result of the foregoing, in Q3 2012, the Bank's net operating income totalled GEL 58.2 million, up GEL 11.3 million, or 24.0% year-on-year. The Bank's net non-operating expenses for the period declined to GEL 3.1 million from GEL 8.0 million in Q2 2012, and included the write-offs of certain overhead project costs associated with IT related projects.  Profit before income tax from continuing operations in the third quarter of 2012 therefore totalled GEL 55.2 million, an increase of GEL 9.1 million, or 19.9%. After income tax expense of GEL 8.5 million, the Bank's Q3 2012 profit for the period stood at GEL 46.6 million, compared to GEL 37.6 million in the third quarter of 2011 and GEL 46.3 million in the second quarter of 2012.

 

 



 

SEGMENT RESULTS

 

 

Strategic Businesses Segment Result Discussion

 

Segment result discussion is presented for the Bank of Georgia's retail banking (RB), corporate banking (CB) and wealth management (WM) operations in Georgia, excluding inter-company eliminations.

 

Retail banking

 


               

Nine months ended                

Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Net interest income

126,679


105,772


19.8%

Net fees and commission income

39,175


35,893


9.1%

Net gains from foreign currencies

10,954


9,532


14.9%

Other operating non-interest income

3,367


1,921


NMF

Operating income from other segments

2,195


1,244


76.4%

Revenue

182,369


154,362


18.1%

Other operating non-interest expenses

82,028


80,885


1.4%

Operating income before cost of credit risk

100,341


73,477


36.6%

Cost of credit risk

23,257


(2,680)


NMF

Net non-operating expenses (income)

5,120


(4,923)


NMF

Profit before income tax expense

71,964


81,080


-11.2%

Net loans, standalone

1,317,506


1,159,861


13.6%

Client deposits, standalone

745,109


685,935


8.6%

Loan yield

21.3%


21.3%



Cost of deposits

6.2%


6.7%



Cost / income ratio

45.0%


52.4%



 

Retail banking provides consumer loans, mortgage loans, overdrafts, credit card facilities and other credit facilities as well as funds transfer and settlement services and handling customer deposits for both individuals and legal entities, encompassing the mass affluent segment, retail mass markets, SME and micro businesses.

 

In the first nine months of 2012 retail banking revenue grew 18.1% y-o-y to GEL 182.4 million, with growth driven by a 19.8% increase in net interest income to GEL 126.7 million reflecting the strong growth of the retail net loan book by GEL 157.6 million, or 13.6% y-o-y, to GEL 1,317.5 million as of 30 September 2012 and a reduction in the cost of deposits from 6.7% in the nine months of 2011 to 6.2% in the nine months of 2012. Net fees and commission income increased 9.1% y-o-y to GEL 39.2 million, benefiting from the growth of the Bank's card operations, while net gains from foreign currencies were up 14.9% y-o-y to  GEL 11.0 million.

 

The strong performance of retail banking revenue and the modest growth of retail banking expenses (up 1.4% y-o-y) resulted in a 36.6% y-o-y growth in operating income before cost of credit risk during the period. Retail banking profit before income tax expense amounted to GEL 72.0 million, a decrease of 11.2% y-o-y. The decrease was largely due to a  cost of credit risk of GEL 23.3 million, reflecting the impact of a number of job reductions by a large payroll client in the first half of the year . The growth of retail banking cost of risk was attributed to the consumer and credit card portfolio, while this year's retail non-operating expenses grew as a result of the allocation of BGH IPO costs to business segments.

 

Deposits from retail clients increased by GEL 59.2 million, or 8.6% y-o-y, to GEL 745.1 million as of 30 September 2012. On a quarter-on-quarter basis, deposits from retail clients grew by 1.4%, despite interest rate reductions that led to the decrease in the cost of retail deposits from 6.2% in Q2 2012 to 5.9% in Q3 2012. The cost of retail deposits has decreased by 33 basis points since 30 September 2011.

 

Highlights

 

§ Under its express banking strategy, launched contactless Express cards for the first time in Georgia. Express cards also serve as a metro and bus transport payment card and offer loyalty programs to clients. Since the launch on 5 September 2012, approximately 124,200 Express cards have been issued as of the date of this report.

§ Increased its branch network, adding 25 Express branches since 31 December 2011 bringing the total Express branches and Metro branches to 58 (of which 24 Metro branches).

§ Increased number of Self Service Terminals from 85 to 155 as of 30 September 2012. Self Service Terminals are used for bank transactions such as credit card and consumer loan payments, cash deposits, utility bill payments and mobile telephone top-ups.

§ Issued 196,779 debit cards, including Express cards, in Q3 2012 bringing the total debit cards outstanding to 766,132 up 49.6% y-o-y (up 43.1% year-to-date).

§ Issued 17,490 credit cards of which 14,419 were American Express cards in Q3 2012. A total of 138,039 American Express cards have been issued since the launch in November 2009. The total number of credit cards outstanding amounted to 130,102 (of which 99,217 were American Express Cards), up 11.6% since September 2011 and up 1.8% year-to-date.

§ Outstanding number of Retail Banking clients exceeded 979,700 up 14.9% y-o-y and 10.2% year-to-date.

§ Acquired 322 new clients in the Solo business line, the Bank's mass affluent sub-brand in Q3 2012. As of 30 September 2012, the number of Solo clients reached 4,610.

§ Increased Point of Sales (POS) footprint: as of 30 September 2012, 221 desks at 434 contracted merchants, up from 156 desks and 303 merchants as of 30 September 2011. GEL 36.0 million POS loans were issued in the first nine months of 2012, compared to GEL 22.5 million POS loans issued in during the same period last year. POS loans outstanding amounted to GEL 23.2 million, up from GEL 15.5 million as of 30 September 2011.

§ POS terminals outstanding reached 3,528, up 27.4% y-o-y. The volume of transactions through the Bank's POS terminals grew 38.8% y-o-y to GEL 237.4 million, while number of POS transactions increased to 3.1 million in the first nine months of 2012 from 2.1 million during the same period last year.

§ Consumer loan originations of GEL 322.3 million resulted in consumer loans outstanding totalling of GEL 343.8 million as of 30 September 2012, up 28.2% y-o-y and up 19.3% year-to-date.

§ Micro loan originations of GEL 254.8 million resulted in micro loans outstanding totalling GEL 260.3 million as of 30 September 2012, up 8.0% y-o-y and up 6.5% year-to-date.

§ SME loan originations of GEL 108.5 million resulted in SME loans outstanding totalling GEL 98.2 million as of 30 September 2012, up 59.7% y-o-y and up 32.7% year-to-date.

§ Mortgage loans originations of GEL 99.9 million resulted in mortgage loans outstanding of GEL 393.2 million as of 30 September 2012, up 6.8% y-o-y and up 4.8% year-to-date.

§ RB loan yield amounted to 21.7% in Q3 2012 (20.6% in Q3 2011) and RB deposit cost declined to 5.9% in Q3 2012 (6.3% in Q3 2011).

 

 

Corporate banking


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Net interest income

61,524


58,766


4.7%

Net fees and commission income

23,298


14,220


63.8%

Net gains from foreign currencies

23,464


20,699


13.4%

Other operating non-interest income

2,403


2,810


-14.5%

Operating income from other segments

4,427


6,852


-35.4%

Revenue

115,116


103,347


11.4%

Other operating non-interest expenses

38,932


39,763


-2.1%

Operating income before cost of credit risk

76,184


63,584


19.8%

Cost of credit risk

3,035


19,658


-84.6%

Net non-operating expenses (income)

6,196


(3,273)


NMF

Profit before income tax expense

66,953


47,199


41.9%

Net loans, standalone

1,709,096


1,386,649


23.3%

Client deposits, standalone

1,327,008


1,112,743


19.3%

Loan yield

14.2%


14.5%



Cost of deposits

7.4%


6.9%



Cost / income ratio

33.8%


38.5%



 

 

Corporate banking business in Georgia comprises of loans and other credit facilities to the country's large corporate clients as well as other legal entities, excluding SME and micro businesses. The services include fund transfers and settlements

services, currency conversion operations, trade finance services and documentary operations as well as handling savings and term deposits for corporate and institutional customers. Corporate banking business also includes finance lease facility provided by the Bank's leasing operations (Georgian Leasing Company).

 

The 11.4% y-o-y growth of corporate banking revenue in the nine months of 2012 was driven by a 4.7% y-o-y growth in net interest income to GEL 61.5 million and strong growth of net fees and commission income, up by 63.8% y-o-y to GEL 23.3 million, in line with the Bank's focus on further developing its fee generating business for corporate clients. Net gains from foreign currencies rose to GEL 23.5 million, or 13.4% y-o-y, reflecting the increase in volumes of foreign currency conversions by the Bank's corporate clients. Further improvements in operating efficiency resulted in a 2.1% decline in corporate banking operating costs to GEL 38.9 million, translating into an improved corporate banking Cost to Income ratio of 33.8%, down from 38.5% in the first nine months of 2011.

 

The improved credit quality of corporate clients and higher provision reversals and recoveries during the period, resulted in a significant decline of the corporate banking cost of credit risk to GEL 3.0 million in the nine months of 2012, from GEL 19.7 million in the same period last year, reflecting the improving credit quality of the Bank's corporate clients.

 

As a result, corporate banking posted profit before income tax expense of GEL 67.0 million, an increase of 41.9% from the same period last year.

 

Corporate banking net loans increased by GEL 322.4 million, or 23.3% y-o-y, to GEL 1,709.1 million during the period, while corporate banking client deposits increased by 19.3% y-o-y to GEL 1,327.0 million.

 

Highlights

 

§ CB loan yield amounted to 14.2% in the nine months of 2012 (14.5% in the first nine months of 2011) and CB deposit cost amounted to 7.4%  (6.9% in the nine months of 2011). The increase in corporate banking deposit cost is attributed to the strong inflow of costly GEL denominated deposits in Q4 2011 and Q1 2012. The subsequent reduction of the deposit rates have been partially reflected in Q3 2012 corporate banking deposit costs, which came down from 8.3% in Q1 2012 to 7.3% in Q2 2012 and 6.8% in Q3 2012.

§ Increased the number of corporate clients using the Bank's payroll services from 2,196 as of 30 September 2011 to 3,332 as of 30 September 2012. As of 30 September 2012, the number of individual clients serviced through the corporate payroll programs administered by the Bank amounted to 203,427.

§ Since its launch in June 2012, Bank of Georgia Research has initated research coverage of Georgian Electricity Sector, Georgian Oil and Gas Corporation, Georgian Railway. The Bank of Georgia research platform is aimed at supporting the growth of CB's fee generating business.

§ Substantially increased the aggregate trade finance limits from international partner credit intitutions by more than US$144.0 million equivalent to US$279.2 million equivalent in various currencies (US$, EUR, CHF). The number of partner credit institutions that opened trade finance lines with the Bank increased from 10 to 13.

 

Asset and Wealth Management


Nine months ended


Change

GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y







Net interest income

10,943


3,969


175.7%

Net fees and commission income

362


475


-23.9%

Net gains from foreign currencies

550


228


141.2%

Other operating non-interest income

68


71


-4.7%

Operating income from other segments

-


-


NMF

Revenue

11,922


4,743


151.4%

Other operating non-interest expenses

3,585


3,074


16.6%

Operating income before cost of credit risk

8,337


1,669


NMF

Cost of credit risk

254


(1,002)


NMF

Net non-operating expenses (income)

175


(365)


NMF

Profit before income tax expense

7,909


3,036


160.5%

Net loans, standalone

53,387


26,579


100.9%

Client deposits, standalone

595,285


359,090


65.8%

Loan yield

11.1%


12.9%



Cost of deposits

9.0%


10.1%



Cost / income ratio

30.1%


64.8%



 

 

The Bank's wealth management business provides private banking services to resident and non-resident clients by ensuring an individual approach and exclusivity in providing banking services such as holding the clients' savings and term deposits, fund transfers, currency exchange and settlement operations. In addition, wealth management involves providing wealth and asset management services to its clients through a wide range investment opportunities and specifically designed investment products.

 

In the first nine months of 2012, wealth management revenue grew by 151.4% y-o-y to GEL 11.9 million, a result of the 175.7% y-o-y growth of the net interest income to GEL 10.9 million. Profit of the wealth management business grew from GEL 3.0 million in the first nine months of 2011 to GEL 7.9 million, reflecting strong revenue growth substantially in excess of the 16.6% increase in operating costs to GEL 3.6 million. Client deposits of the wealth management business grew by GEL 236.2 million, or 65.8% y-o-y, to GEL 595.3 million.

 

§ Expanded the representative office network by opening its third representative office, for Eastern Europe, in Budapest in September 2012.

§ The Asset and Wealth Management (AWM) business currently serves over 1,200 clients from more than 50 countries. Client funds attracted by AWM have grown more than three times since the end of 2009 to GEL 618.5 million as of 30 September 2012, of which approximately GEL 40 million has been attracted from clients in Hungary.

 

 

Synergistic Businesses

 

 

Insurance and Healthcare (Aldagi BCI)  





Change


Nine months ended 30 Sep 2012


Nine months ended 30 Sep 2011


Y-O-Y

GEL thousands, unless otherwise noted

Healthcare

Elimination

Total


Insurance

Healthcare

Elimination

Total


Insurance

Healthcare

Total














Gross premiums written

105,169

-

-

105,169


49,445

-

-

49,445


112.7%

NMF

112.7%

Net insurance revenue

21,880

-

-

21,880


14,160

-

-

14,160


54.5%

NMF

54.5%

Net healthcare revenue

-

16,221

-

16,221


-

1,146

-

1,146


NMF

NMF

NMF

Net interest income

(170)

(22)

-

(192)


831

235

-

1,066


NMF

NMF

NMF

Net fees and commission income

85

-

-

85


-

-

-

-

 

 

NMF

NMF

NMF

Net (losses) gains from foreign currencies

350

(978)

-

(629)


(532)

-

-

(532)


NMF

NMF

18.2%

Other operating non-interest income

377

(865)

-

(488)


448

579

-

1,027


-15.9%

NMF

NMF

Operating income from other segments

(2,232)

1,631

(327)

(928)


(885)

1,685

(1,522)

(722)


152.3%

-3.2%

28.5%

Revenue

20,290

15,987

(327)

35,949


14,022

3,645

(1,522)

16,145


44.7%

NMF

122.7%

Other operating non-interest expenses

12,237

12,299

-

24,536


9,104

2,807

(95)

11,816


34.4%

NMF

107.7%

Operating income before cost of credit risk

8,052

3,688

(327)

11,413


4,918

838

(1,427)

4,329


63.7%

NMF

163.6%

Cost of credit risk

1,097

-

-

1,097


460

-

-

460


138.4%

NMF

138.4%

Profit before income tax expense

6,956

3,688

-

10,644


4,458

838

-

5,296


56.0%

NMF

101.0%

 

 

 

Aldagi BCI, the Bank's wholly-owned subsidiary, provides life and non-life insurance and healthcare products and services in Georgia. A leader in the Georgian life and non-life insurance markets, with a market share of  33.3% based on gross insurance premium written, Aldagi BCI cross-sells its insurance products with the Bank's retail banking,  corporate banking and wealth management products. Aldagi BCI's healthcare business consists of My Family Clinic, Georgia's leading healthcare provider, operating a chain of healthcare centers in Georgia, in line with the Bank's strategy of vertically integrating its insurance and healthcare businesses.

 

In the nine months of 2012, insurance and healthcare revenue increased to GEL 35.9 million from GEL 16.1 million in the same period last year, reflecting the growth of  both the insurance and healthcare businesses through organic growth as well as through recent acquisitions, mainly Imedi L in May 2012. The Bank's insurance operations performance benefited from triple digit growth in gross premiums written during the period and improvements in insurance claims management as a result of the successful integration with Imedi L. Insurance operating costs growth of 34.4% y-o-y compares to the 44.7%. y-o-y growth of revenue, which resulted in a strong increase of 63.7% y-o-y in operating income before cost of credit risk of the insurance operation. Net healthcare revenue grew from GEL 1.1 million in the nine months of 2011 to GEL 16.2 million in nine months 2012, driving the growth of operating income in the healthcare business from GEL 0.8 million in the first nine months of last year to GEL 3.7 million this year.

 

As a result, Aldagi BCI posted nine month revenue of GEL 35.9 million, up 122.7% y-o-y, and profit before tax of GEL 10.6 million, up 101% y-o-y.

 

 

Highlights

 

§ Completed the integration of business with Imedi within three months of its acquisition.

§ Increased market share by GPW to 33.3% as of 30 June 2012 from 18.6% at the YE 2011.

§ Increased number of insurance clients from 227,000 as of end of September 2011 to 620,000 as of 30 September 2012.

§ As of Q3 2012, Aldagi BCI operated 23 hospitals with a total of 931 beds. Expected to open additional 6 hospitals with 295 beds by the YE 2012.

§ In October 2012, Murtaz Kikoria replaced Nikoloz Gamkrelidze as Chief Executive Officer of Aldagi BCI. Prior to this appointment, Murtaz Kikoria served as Deputy CEO, Finance at JSC Bank of Georgia.

 

 

Affordable Housing


          Nine months ended


Change

 


30 September 12


30 September 11


Y-O-Y,


SBRE

Mortgages

Total


SBRE

Mortgages

Total


SBRE

Mortgages

Total

Net interest income

(1)

222

221


-

13

13


NMF

NMF

NMF

Net fees and commission income

140

-

140


-

-

-


NMF

NMF

NMF

Net (losses) gains from foreign currencies

(24)

-

(24)


27

-

27


NMF

NMF

NMF

Other operating non-interest income

3,820

-

3,820


1,014

-

1,014


NMF

NMF

NMF

Intersegment operating income (expense)

98

-

98


599

-

599


-83.6%

NMF

-83.6%

Revenue

4,034

222

4,255


1,640

13

1,653


145.9%

NMF

157.4%

Other operating non-interest expenses

2,478

-

2,478


1,575

-

1,575


57.3%

NMF

57.3%

Operating income before cost of credit risk

1,556

222

1,777


65

13

78


NMF

NMF

NMF

Cost of credit risk

-

157

157


-

22

22


NMF

NMF

NMF

Net non-operating expenses (income)

2

-

2


-

-

-


NMF

NMF

NMF

Profit before income tax expense

1,554

65

1,619


65

(9)

56


NMF

NMF

NMF

 

 

The Affordable Housing business consists of the Bank's wholly-owned subsidiary SBRE, which holds investment properties repossessed by the Bank from defaulted borrowers. With the aim to improve liquidity of these repossessed real estate assets and stimulate the Bank's mortgage lending business capitalising on the market opportunity in the affordable housing segment in Georgia, the Bank develops and leases such real estate assets through SBRE. SBRE outsources the construction and architecture works and focuses on project management and sales of apartments and mortgages through its well-established branch network and sales force, thus representing a synergistic business for the Bank's mortgage business.

 

In Q3 2012, SBRE completed its pilot apartment project, recognising accumulated profit of GEL 3.0 million, which compares to a net loss of GEL 1.3 million in Q2 2012.

 

Highlights

 

§ Pilot project of 123 apartment building with a total buildable area of 15,015 square meters completed; 115 of the units pre-sold. The total sales from the pilot project amounted to US$8.4 million. Project IRR estimated at 43%.

§ Total mortgage loans extended under pilot project of the Affordable Housing amounted to GEL equivalent of US$3.5 million. Number of mortgages sold 70.

§ Construction of a second project of 522 apartment building with a total buildable area of 63,247 square meters in progress. 190 already pre-sold. The total sales from this project amounted to US$14.9 million. Number of mortgages sold 106.

§ Total mortgage loans extended under the second Affordable Housing project amounted to US$6.8 million.

§ Drew down the second tranche in the amount of US$5 million of the US$20 million financing raised from FMO.

§ Cash balance of SBRE as of 30 September 2012 amounted to GEL 28.5 million.

 

Non-Core Businesses

 

The Bank's non-core businesses that accounted for 4.0% of total assets and 6.6% of total revenue in the first nine months of 2012, comprise BNB, our Belarus banking operation, and Liberty Consumer, a Georgia focused investment company in which the Bank holds a 67% stake. In order for the Bank to focus on its strategic businesses, the Bank has announced its intention to exit from its non-core operations. In line with its intention of exiting from its non-core operations, the Bank continued to sell and/or liquidate non-performing assets held by Liberty Consumer. As of 30 September 2012, the Bank still held Teliani Valley, a Georgian wine producer, through Liberty Consumer. The Bank intends to sell this remaining asset in due course. The Bank's 2011 consolidated results include the results of the operation of BG Bank, Ukraine for two months ended 28 February 2011. The Bank sold, its 80% equity interest in BG Bank in February 2011.

 

BNB


Nine months ended


Change


GEL thousands, unless otherwise noted

30 Sep 12


30 Sep 11


Y-O-Y









Net interest income

8,590


10,480


-18.0%


Net fees and commission income

2,601


888


193.0%


Other operating non-interest income

4,665


25,953


-82.0%


Revenue

15,856


37,321


-57.5%


Other operating non-interest expenses

7,430


10,559


-29.6%


Operating income before cost of credit risk

8,426


26,762


-68.5%


Cost of credit risk

1,386


1,341


3.3%


Net non-operating expenses

303


15,360


-98.0%


Profit before income tax expense

6,737


10,061


-33.0%


 

 

Through BNB, the Bank provides retail banking and corporate banking services in Belarus. BNB reported strong results and continued to be profitable in the first nine months of 2012, despite the substantially weakened economic environment compared to the prior year. BNB's performance in the nine months ended 30 September 2012 resulted in a return on average equity invested in the business of 16.4%, up from 4.1% as of year-end 2010 but down 35.4% from as of year-end 2011 being affected by hyperinflation. As of 30 September 2012, BNB's total assets stood at GEL 158.6 million, loan book at GEL 87.5 million, client deposits at GEL 93.0 million and equity at GEL 43.3 million, representing 2.9%, 2.9% and 3.5% of the Bank's total assets, loan book and client deposits, respectively.

    

    



 

   FINANCIAL STATEMENTS

 

CONSOLIDATED INCOME STATEMENT

 


Sep-12

Sep-11

Change

GEL thousands, unless otherwise noted

YTD

YTD

Y-O-Y


Unaudited

Unaudited






Loans to customers

374,888

323,173

16.0%

Investment securities: available-for-sale

25,931

27,919

-7.1%

Amounts due from credit institutions

13,672

13,385

2.1%

Finance lease receivables

6,375

3,466

83.9%

Interest income

420,866

367,943

14.4%

Amounts due to customers

(156,199)

(117,575)

32.9%

Amounts due to credit institutions

(55,550)

(76,227)

-27.1%

Interest expense

(211,749)

(193,802)

9.3%

Net interest income before interest rate derivative financial instruments

209,116

174,141

20.1%

Net (losses) gains from interest rate derivative financial instruments

(1,538)

5,076

NMF

Net interest income

207,578

179,217

15.8%

Fee and commission income

81,251

67,353

20.6%

Fee and commission expense

(15,886)

(14,118)

12.5%

Net fee and commission income

65,365

53,235

22.8%

Net insurance premiums earned

58,220

34,881

66.9%

Net insurance claims incurred

(36,340)

(20,721)

75.4%

Net insurance revenue

21,880

14,160

54.5%

Healthcare revenue

38,625

2,070

NMF

Cost of healthcare services

(22,405)

(924)

NMF

Net healthcare revenue

16,221

1,146

NMF

Net gains from trading securities and investment securities

2,235

532

NMF

Net gains from foreign currencies, of which:

38,694

55,550

-30.3%

- dealing

23,987

33,702

-28.8%

- translation differences

14,706

21,848

-32.7%

Other operating income

17,995

14,464

24.4%

Other operating non-interest income

58,923

70,546

-16.5%

Revenue

369,967

318,304

16.2%

Salaries and other employee benefits

(90,173)

(86,266)

4.5%

General and administrative expenses

(51,763)

(45,773)

13.1%

Depreciation and amortization

(21,303)

(19,519)

9.1%

Other operating expenses

(3,947)

(4,748)

-16.8%

Other operating non-interest expenses

(167,186)

(156,306)

7.0%

Operating income  before cost of credit risk

202,781

161,998

25.2%

Impairment charge on loans to customers

(25,289)

(17,022)

48.6%

Impairment charge of impairment  on finance lease receivables

(209)

(122)

71.3%

Impairment (charge) reversal on other assets and provisions

(3,095)

3,717

NMF

Cost of credit risk

(28,593)

(13,427)

112.9%

Net operating income

174,188

148,571

17.2%

Net non-operating expense

(15,445)

(19,629)

-21.3%

Profit before income tax expense from continuing operations

158,743

128,942

23.1%

Income tax expense

(26,066)

(15,337)

70.0%

Profit for the period from continuing operations

132,677

113,605

16.8%

Net loss from discontinued operations

-

(12,247)

-100.0%

Profit for the period

132,677

101,358

30.9%

Attributable to:




- shareholders of the Group

129,209

100,559

28.5%

- non-controlling interests

3,468

799

NMF





Earnings per share (basic)

3.94

3.36

17.1%

Earnings per share (diluted)

3.92

3.18

23.1%

 

 

 

CONSOLIDATED INCOME STATEMENT

 


Q3 2012

Q3 2011

Change

Q2 2012

Change

GEL thousands, unless otherwise noted

Quarter

Quarter

Y-O-Y

Quarter

Q-O-Q


Unaudited

Unaudited


Unaudited








 Loans to customers

129,923

111,707

16.3%

126,541

2.7%

 Investment securities: available-for-sale

8,125

9,567

-15.1%

7,983

1.8%

 Amounts due from credit institutions

4,049

5,716

-29.2%

5,411

-25.2%

 Finance lease receivables

2,241

1,744

28.5%

2,120

5.7%

Interest income

144,338

128,734

12.1%

142,055

1.6%

Amounts due to customers

(52,435)

(41,947)

25.0%

(49,931)

5.0%

Amounts due to credit institutions

(21,502)

(26,012)

-17.3%

(15,338)

40.2%

Interest expense

(73,937)

(67,959)

8.8%

(65,269)

13.3%

Net interest income before interest rate derivative financial instruments

70,401

60,775

15.8%

76,786

-8.3%

Net gains (losses) from interest rate derivative financial instruments

(485)

2,584

NMF

(285)

70.2%

Net interest income

69,916

63,359

10.3%

76,501

-8.6%

Fee and commission income

29,773

23,717

25.5%

27,355

8.8%

Fee and commission expense

(5,942)

(4,452)

33.5%

(5,537)

7.3%

Net fee and commission income

23,831

19,265

23.7%

21,818

9.2%

Net insurance premiums earned

25,837

11,758

119.7%

19,896

29.9%

Net insurance claims incurred

(15,915)

(6,694)

137.7%

(12,613)

26.2%

Net insurance revenue

9,922

5,064

95.9%

7,283

36.2%

Healthcare revenue

16,038

547

NMF

12,327

30.1%

Cost of healthcare services

(9,013)

(391)

NMF

(7,908)

14.0%

Net healthcare revenue

7,025

156

NMF

4,419

59.0%

Net gains (losses) from trading securities and investment securities

1,282

(200)

NMF

157

NMF

Net gains (losses) from foreign currencies, of which:

12,502

12,139

3.0%

11,833

5.7%

- dealing

6,801

12,590

-46.0%

7,343

-7.4%

- translation differences

5,701

(451)

NMF

4,490

27.0%

Other operating income

6,503

5,112

27.2%

7,132

-8.8%

Other operating non-interest income

20,287

17,052

19.0%

19,121

6.1%

Revenue

130,981

104,896

24.9%

129,142

1.4%

Salaries and other employee benefits:

(32,340)

(30,030)

7.7%

(32,000)

1.1%

Selling and administrative expenses

(18,002)

(15,191)

18.5%

(17,997)

0.0%

Depreciation and amortization

(7,384)

(6,578)

12.2%

(7,155)

3.2%

Other operating expenses

(388)

(982)

-60.3%

(1,602)

-75.7%

Other operating non-interest expenses

(58,114)

(52,781)

10.1%

(58,754)

-1.1%

Operating income before cost of credit risk

72,867

52,115

39.8%

70,388

3.5%

Impairment charge on loans to customers

(12,287)

(5,691)

115.9%

(6,142)

100.1%

Impairment (charge) reversal of impairment  on finance lease receivables

32

49

-34.9%

(131)

NMF

Impairment (charge) reversal on other assets and provisions

(2,390)

477

NMF

(295)

NMF

Cost of credit risk

(14,645)

(5,165)

183.5%

(6,568)

123.0%

Net operating income

58,222

46,950

24.0%

63,820

-8.8%

Net non-operating expense

(3,051)

(926)

NMF

(7,994)

-61.8%

Profit  before income tax expense  from continuing operations

55,171

46,024

19.9%

55,826

-1.2%

Income tax expense

(8,528)

(8,411)

1.4%

(9,495)

-10.2%

Profit for the period from continuing operations

46,643

37,613

24.0%

46,331

0.7%

Net loss (from discontinued operations

-

-

NMF

(55)

-100.0%

Profit  for the period

46,643

37,613

24.0%

46,276

0.8%

Attributable to:






- shareholders of the Group

44,994

36,914

21.9%

45,072

-0.2%

- non-controlling interests

1,649

699

135.9%

1,204

36.9%







Earnings per share (basic)

1.37

1.23

10.8%

1.36

1.0%

Earnings per share (diluted)

1.40

1.17

20.2%

1.35

3.8%

 




 

CONSOLIDATED BALANCE SHEET

 

 


Sep-12

Sep-11

Change

Jun-12

Change

GEL thousands, unless otherwise noted



Y-O-Y


Q-O-Q


Unaudited

Unaudited


Unaudited








Cash and cash equivalents

666,896

492,452

35.4%

374,995

77.8%

Amounts due from credit institutions

487,275

268,338

81.6%

342,145

42.4%

Investment securities

375,853

385,582

-2.5%

414,584

-9.3%

Loans to customers and finance lease receivables

3,063,390

2,560,696

19.6%

2,923,140

4.8%

Investments in associates

3,020

3,938

-23.3%

2,865

5.4%

Investment property

149,904

104,669

43.2%

138,639

8.1%

Property and equipment

412,487

296,066

39.3%

407,428

1.2%

Goodwill

45,463

56,212

-19.1%

45,291

0.4%

Other intangible assets

20,667

20,980

-1.5%

20,313

1.7%

Current income tax assets

7,974

7,632

4.5%

7,996

-0.3%

Deferred income tax assets

15,909

13,870

14.7%

15,893

0.1%

Prepayments

47,748

26,841

77.9%

36,321

31.5%

Other assets

233,931

122,132

91.5%

205,404

13.9%

Total assets

5,530,517

4,359,408

26.9%

4,935,014

12.1%







Amounts due to customers, of which:

2,795,794

2,322,935

20.4%

2,846,263

-1.8%

Client deposits

2,688,540

2,161,094

24.4%

2,742,601

-2.0%

Prommissory notes and CDs issued

107,254

161,841

-33.7%

103,662

3.5%

Amounts due to credit institutions

1,454,045

1,099,722

32.2%

875,928

66.0%

Current income tax liabilities

1,376

246

NMF

910

51.2%

Deferred income tax liabilities

60,270

31,083

93.9%

54,853

9.9%

Provisions

603

320

88.3%

460

31.0%

Other liabilities

210,481

129,433

62.6%

199,206

5.7%

Total liabilities

4,522,569

3,583,739

26.2%

3,977,620

13.7%







Share capital

965

31,368

-96.9%

922

4.7%

Additional paid-in capital

-

474,665

-100.0%

-

NMF

Treasury shares

(68)

(1,602)

-95.8%

(66)

2.4%

Other reserves

15,979

26,117

-38.8%

11,511

38.8%

Retained earnings

945,007

218,337

NMF

899,934

5.0%

Total equity attributable to shareholders of the Group

961,883

748,885

28.4%

912,301

5.4%

Non-controlling interests

46,065

26,784

72.0%

45,093

2.2%

Total equity

1,007,948

775,669

29.9%

957,394

5.3%

Total liabilities and equity

5,530,517

4,359,408

26.9%

4,935,014

12.1%







Book value per share (basic)

28.81

25.16

14.5%

27.37

5.3%

 

 

 

CONSOLIDATED INCOME STATEMENT

 

 


              USD

                   GBP


Sep 12

Sep 11

Change

Sep 12

Sep 11

Change

GEL thousands, unless otherwise noted

YTD

YTD

Y-O-Y

YTD

YTD

Y-O-Y


Unaudited

Unaudited


Unaudited

Unaudited









Loans to customers

225,932

194,565

16.1%

139,462

124,345

12.2%

Investment securities: available-for-sale

15,628

16,809

-7.0%

9,647

10,742

-10.2%

Amounts due from credit institutions

8,240

8,058

2.2%

5,086

5,150

-1.2%

Finance lease receivables

3,841

2,087

84.1%

2,371

1,334

77.8%

Interest income

253,641

221,519

14.5%

156,566

141,571

10.6%

Amounts due to customers

(94,136)

(70,786)

33.0%

(58,108)

(45,239)

28.4%

Amounts due to credit institutions

(33,478)

(45,892)

-27.1%

(20,665)

(29,329)

-29.5%

Interest expense

(127,614)

(116,678)

9.4%

(78,773)

(74,568)

5.6%

Net interest income before interest rate derivative financial instruments

126,027

104,841

20.2%

77,793

67,003

16.1%

Net (losses) gains from interest rate derivative financial instruments

(927)

3,056

NMF

(572)

1,953

NMF

Net interest income

125,100

107,897

15.9%

77,221

68,956

12.0%

Fee and commission income

48,967

40,550

20.8%

30,226

25,915

16.6%

Fee and commission expense

(9,574)

(8,500)

12.6%

(5,910)

(5,432)

8.8%

Net fee and commission income

39,393

32,050

22.9%

24,316

20,483

18.7%

Net insurance premiums earned

35,087

21,000

67.1%

21,659

13,421

61.4%

Net insurance claims incurred

(21,901)

(12,475)

75.6%

(13,520)

(7,973)

69.6%

Net insurance revenue

13,186

8,525

54.7%

8,139

5,448

49.4%

Healthcare revenue

23,278

1,246

NMF

14,369

796

NMF

Cost of healthcare services

(13,502)

(556)

NMF

(8,335)

(355)

NMF

Net healthcare revenue

9,776

690

NMF

6,034

441

NMF

Net gains from trading securities and investment securities

1,347

320

NMF

831

205

NMF

Net gains from foreign currencies, of which:

23,319

33,444

-30.3%

14,394

21,373

-32.7%

- dealing

14,456

20,290

-28.8%

8,924

12,967

-31.2%

- translation differences

8,863

13,153

-32.6%

5,471

8,406

-34.9%

Other operating income

10,845

8,708

24.5%

6,695

5,565

20.3%

Other operating non-interest income

35,511

42,472

-16.4%

21,921

27,144

-19.2%

Revenue

222,966

191,634

16.4%

137,631

122,472

12.4%

Salaries and other employee benefits

(54,344)

(51,936)

4.6%

(33,545)

(33,192)

1.1%

General and administrative expenses

(31,196)

(27,557)

13.2%

(19,256)

(17,612)

9.3%

Depreciation and amortization

(12,839)

(11,751)

9.3%

(7,925)

(7,510)

5.5%

Other operating expenses

(2,379)

(2,859)

-16.8%

(1,469)

(1,827)

-19.6%

Other operating non-interest expenses

(100,758)

(94,103)

7.1%

(62,195)

(60,141)

3.4%

Operating income  before cost of credit risk

122,208

97,531

25.3%

75,436

62,331

21.0%

Impairment charge on loans to customers

(15,241)

(10,248)

48.7%

(9,408)

(6,549)

43.6%

Impairment charge of impairment  on finance lease receivables

(126)

(73)

71.5%

(78)

(47)

65.6%

Impairment (charge) reversal on other assets and provisions

(1,864)

2,237

NMF

(1,150)

1,430

NMF

Cost of credit risk

(17,231)

(8,084)

113.2%

(10,636)

(5,166)

105.9%

Net operating income

104,977

89,447

17.4%

64,800

57,165

13.4%

Net non-operating expense

(9,308)

(11,818)

-21.2%

(5,746)

(7,553)

-23.9%

Profit before income tax expense from continuing operations

95,669

77,629

23.2%

59,054

49,612

19.0%

Income tax expense

(15,709)

(9,233)

70.1%

(9,697)

(5,901)

64.3%

Profit for the period from continuing operations

79,960

68,396

16.9%

49,357

43,711

12.9%

Net loss from discontinued operations

-

(7,373)

-100.0%

-

(4,712)

-100.0%

Profit for the period

79,960

61,023

31.0%

49,357

38,999

26.6%

Attributable to:







- shareholders of the Group

77,870

60,541

28.6%

48,067

38,692

24.2%

- non-controlling interests

2,090

482

NMF

1,290

307

NMF








Earnings per share (basic)

2.37

2.02

17.2%

1.46

1.29

13.2%

Earnings per share (diluted)

2.36

1.92

23.3%

1.46

1.22

19.1%

 


 

 

 

          CONSOLIDATED INCOME STATEMENT


                                         USD



 GBP


Q3 2012

Q3 2011

Change

Q2 2012

Change

Q3 2012

Q3 2011

Change

Q2 2012

Change

GEL thousands, unless otherwise noted

Quarter

Quarter

Y-O-Y

Quarter

Q-O-Q

Quarter

Quarter

Y-O-Y

Quarter

Q-O-Q


Unaudited

Unaudited


Unaudited


Unaudited

Unaudited


Unaudited













 Loans to customers

78,300

67,253

16.4%

76,920

1.8%

48,333

42,981

12.5%

49,282

-1.9%

 Investment securities: available-for-sale

4,897

5,760

-15.0%

4,852

0.9%

3,023

3,681

-17.9%

3,109

-2.8%

 Amounts due from credit institutions

2,440

3,441

-29.1%

3,289

-25.8%

1,506

2,199

-31.5%

2,107

-28.5%

 Finance lease receivables

1,350

1,050

28.7%

1,289

4.8%

835

671

24.3%

826

1.0%

Interest income

86,987

77,504

12.2%

86,350

0.7%

53,695

49,532

8.4%

55,324

-2.9%

Amounts due to customers

(31,600)

(25,254)

25.1%

(30,351)

4.1%

(19,506)

(16,140)

20.9%

(19,446)

0.3%

Amounts due to credit institutions

(12,959)

(15,661)

-17.3%

(9,324)

39.0%

(7,999)

(10,008)

-20.1%

(5,973)

33.9%

Interest expense

(44,559)

(40,915)

8.9%

(39,675)

12.3%

(27,505)

(26,148)

5.2%

(25,419)

8.2%

Net interest income before interest rate derivative financial instruments

42,428

36,589

16.0%

46,675

-9.1%

26,190

23,384

12.0%

29,904

-12.4%

Net (losses) gains from interest rate derivative financial instruments

(292)

1,556

NMF

(173)

68.7%

(181)

994

NMF

(111)

62.6%

Net interest income

42,136

38,145

10.5%

46,502

-9.4%

26,009

24,378

6.7%

29,793

-12.7%

Fee and commission income

17,943

14,279

25.7%

16,628

7.9%

11,076

9,125

21.4%

10,654

4.0%

Fee and commission expense

(3,581)

(2,681)

33.6%

(3,366)

6.4%

(2,211)

(1,713)

29.0%

(2,157)

2.5%

Net fee and commission income

14,362

11,598

23.8%

13,262

8.3%

8,865

7,412

19.6%

8,497

4.3%

Net insurance premiums earned

15,571

7,079

120.0%

12,094

28.8%

9,612

4,524

112.5%

7,748

24.0%

Net insurance claims incurred

(9,591)

(4,030)

138.0%

(7,667)

25.1%

(5,921)

(2,576)

129.9%

(4,912)

20.5%

Net insurance revenue

5,980

3,049

96.1%

4,427

35.1%

3,691

1,948

89.4%

2,836

30.1%

Healthcare revenue

9,666

329

NMF

7,493

29.0%

5,966

211

NMF

4,801

24.3%

Cost of healthcare services

(5,432)

(235)

NMF

(4,807)

13.0%

(3,353)

(151)

NMF

(3,080)

8.9%

Net healthcare revenue

4,234

94

NMF

2,686

57.6%

2,613

60

NMF

1,721

51.9%

Net gains from trading securities and investment securities

773

(120)

NMF

95

NMF

477

(77)

NMF

61

NMF

Net gains (losses) from foreign currencies, of which:

7,535

7,308

3.1%

7,193

4.7%

4,651

4,671

-0.4%

4,608

0.9%

- dealing

4,099

7,580

-45.9%

4,464

-8.2%

2,530

4,844

-47.8%

2,860

-11.5%

- translation differences

3,436

(272)

NMF

2,729

25.9%

2,121

(174)

NMF

1,749

21.3%

Other operating income

3,918

3,078

27.3%

4,335

-9.6%

2,420

1,968

23.0%

2,779

-12.9%

Other operating non-interest income

12,226

10,266

19.1%

11,624

5.2%

7,548

6,562

15.0%

7,448

1.3%

Revenue

78,938

63,152

25.0%

78,501

0.6%

48,726

40,360

20.7%

50,295

-3.1%

Salaries and other employee benefits:

(19,490)

(18,080)

7.8%

(19,452)

0.2%

(12,031)

(11,554)

4.1%

(12,463)

-3.5%

Selling and administrative expenses

(10,849)

(9,146)

18.6%

(10,940)

-0.8%

(6,697)

(5,845)

14.6%

(7,009)

-4.5%

Depreciation and amortization

(4,450)

(3,960)

12.4%

(4,349)

2.3%

(2,747)

(2,531)

8.5%

(2,787)

-1.4%

Other operating expenses

(235)

(590)

-60.3%

(974)

-75.9%

(144)

(378)

-61.6%

(623)

-76.8%

Other operating non-interest expenses

(35,024)

(31,776)

10.2%

(35,715)

-1.9%

(21,619)

(20,308)

6.5%

(22,882)

-5.5%

Operating income  before cost of credit risk

43,914

31,376

40.0%

42,786

2.6%

27,107

20,052

35.2%

27,413

-1.1%

Impairment charge on loans to customers

(7,405)

(3,426)

116.1%

(3,733)

98.3%

(4,571)

(2,190)

108.8%

(2,392)

91.1%

Impairment (charge) reversal of impairment  on finance lease receivables

19

30

-34.8%

(79)

NMF

12

19

-37.0%

(51)

NMF

Impairment (charge) reversal on other assets and provisions

(1,440)

286

NMF

(179)

NMF

(889)

184

NMF

(115)

NMF

Cost of credit risk

(8,826)

(3,110)

183.8%

(3,992)

121.1%

(5,448)

(1,987)

174.1%

(2,558)

113.0%

Net operating income (loss)

35,088

28,266

24.1%

38,794

-9.6%

21,659

18,065

19.9%

24,855

-12.9%

Net non-operating expense (income)

(1,838)

(558)

NMF

(4,859)

-62.2%

(1,135)

(357)

NMF

(3,113)

-63.5%

Profit (before income tax expense  from continuing operations

33,250

27,708

20.0%

33,935

-2.0%

20,524

17,708

15.9%

21,742

-5.6%

Income tax expense

(5,140)

(5,063)

1.5%

(5,772)

-11.0%

(3,172)

(3,236)

-2.0%

(3,698)

-14.2%

Profit for the period from continuing operations

28,110

22,645

24.1%

28,163

-0.2%

17,352

14,472

19.9%

18,044

-3.8%

Net loss (gain) from discontinued operations

-

-

NMF

(33)

-100.0%

-

-

NMF

(22)

-100.0%

Profit  for the period

28,110

22,645

24.1%

28,130

-0.1%

17,352

14,472

19.9%

18,022

-3.7%

Attributable to:











- shareholders of the Group

27,116

22,224

22.0%

27,398

-1.0%

16,738

14,203

17.8%

17,553

-4.6%

- non-controlling interests

994

421

136.2%

732

35.7%

614

269

128.1%

469

30.8%












Earnings per share (basic)

0.74

11.0%

0.82

0.1%

0.51

0.48

7.2%

0.53

-3.5%

Earnings per share (diluted)

0.84

0.70

20.3%

0.82

2.9%

0.52

0.45

16.2%

0.53

-0.9%



 

 

CONSOLIDATED BALANCE SHEET

 


                                      USD



      GBP


Sep 12

Sep 11

Change

Jun 12

Change

Sep 12

Sep 11

Change

Jun 12

Change

GEL thousands, unless otherwise noted



Y-O-Y


Q-O-Q



Y-O-Y


Q-O-Q


Unaudited

Unaudited


Unaudited


Unaudited

Unaudited


Unaudited













Cash and cash equivalents

401,914

296,479

35.6%

227,947

76.3%

248,092

189,477

30.9%

146,043

69.9%

Amounts due from credit institutions

293,663

161,552

81.8%

207,978

41.2%

181,271

103,247

75.6%

133,250

36.0%

Investment securities

226,513

232,138

-2.4%

252,012

-10.1%

139,821

148,358

-5.8%

161,461

-13.4%

Loans to customers and finance lease receivables

1,846,194

1,541,659

19.8%

1,776,877

3.9%

1,139,612

985,262

15.7%

1,138,428

0.1%

Investments in associates

1,820

2,371

-23.2%

1,742

4.5%

1,123

1,515

-25.9%

1,116

0.7%

Investment property

90,342

63,016

43.4%

84,274

7.2%

55,766

40,273

38.5%

53,993

3.3%

Property and equipment

248,591

178,246

39.5%

247,662

0.4%

153,449

113,915

34.7%

158,674

-3.3%

Goodwill

27,399

33,842

-19.0%

27,531

-0.5%

16,913

21,628

-21.8%

17,639

-4.1%

Other intangible assets

12,455

12,631

-1.4%

12,347

0.9%

7,688

8,072

-4.8%

7,911

-2.8%

Current income tax assets

4,806

4,595

4.6%

4,860

-1.1%

2,966

2,937

1.0%

3,114

-4.7%

Deferred income tax assets

9,588

8,350

14.8%

9,661

-0.8%

5,918

5,337

10.9%

6,190

-4.4%

Prepayments

28,776

16,160

78.1%

22,078

30.3%

17,763

10,327

72.0%

14,145

25.6%

Other assets

140,982

73,529

91.7%

124,857

12.9%

87,026

46,993

85.2%

79,995

8.8%

Total assets

3,333,043

2,624,568

27.0%

2,999,826

11.1%

2,057,408

1,677,341

22.7%

1,921,959

7.0%












Amounts due to customers, of which:

1,684,924

1,398,516

20.5%

1,730,146

-2.6%

1,040,063

893,780

16.4%

1,108,488

-6.2%

Client deposits

1,620,286

1,301,080

24.5%

1,667,134

-2.8%

1,000,163

831,510

20.3%

1,068,116

-6.4%

Prommissory notes and CDs issued

64,638

97,436

-33.7%

63,013

2.6%

39,900

62,270

-35.9%

40,372

-1.2%

Amounts due to credit institutions

876,300

662,084

32.4%

532,447

64.6%

540,919

423,133

27.8%

341,133

58.6%

Current income tax liabilities

829

148

NMF

553

50.0%

512

95

NMF

354

44.5%

Deferred income tax liabilities

36,323

18,713

94.1%

33,343

8.9%

22,421

11,960

87.5%

21,363

5.0%

Provisions

363

193

88.5%

280

29.9%

224

123

82.1%

179

25.2%

Other liabilities

126,850

77,925

62.8%

121,090

4.8%

78,302

49,800

57.2%

77,581

0.9%

Total liabilities

2,725,589

2,157,579

26.3%

2,417,858

12.7%

1,682,441

1,378,891

22.0%

1,549,098

8.6%












Share capital

582

18,885

-96.9%

560

3.8%

359

12,069

-97.0%

359

0.0%

Additional paid-in capital

-

285,771

-100.0%

-

NMF

-

182,634

-100.0%

-

NMF

Treasury shares

(41)

(964)

-95.8%

(40)

1.5%

(25)

(616)

-95.9%

(26)

-2.2%

Other reserves

9,630

15,724

-38.8%

6,997

37.6%

5,944

10,049

-40.8%

4,483

32.6%

Retained earnings

569,521

131,448

NMF

547,039

4.1%

351,552

84,008

NMF

350,483

0.3%

Total equity attributable to shareholders of the Group

579,692

450,864

28.6%

554,557

4.5%

357,830

288,144

24.2%

355,299

0.7%

Non-controlling interests

27,762

16,125

72.2%

27,411

1.3%

17,137

10,306

66.3%

17,562

-2.4%

Total equity

607,454

466,989

30.1%

581,968

4.4%

374,967

298,450

25.6%

372,861

0.6%

Total liabilities and equity

3,333,043

2,624,568

27.0%

2,999,826

11.1%

2,057,408

1,677,341

22.7%

1,921,959

7.0%












Book value per share (basic)

17.36

15.15

14.6%

16.64

4.4%

10.72

9.68

10.7%

10.66

0.5%

 

 

 

 

 

 

 



 

KEY RATIOS YTD

Sep-12

Sep-11




Profitability



ROAA, Annualised1

3.6%

3.3%

ROAE, Annualised2

19.4%

18.9%

Net Interest Margin, Annualised3

7.8%

7.9%

Loan Yield, Annualised4

17.6%

17.5%

Cost of Funds, Annualised5

7.5%

7.8%

Cost of Client Deposits, Annualised

7.5%

7.3%

Cost of Amounts Due to Credit Institutions, Annualised

7.6%

8.7%

Operating Leverage, Y-O-Y6

9.3%

25.6%

Efficiency



Cost / Income7

45.2%

49.1%

Liquidity



NBG Liquidity Ratio8

42.0%

31.2%

Liquid Assets To Total Liabilities9

33.8%

32.0%

Net Loans To Customer Funds

109.6%

110.2%

Leverage (Times)10

4.5

4.6

Asset Quality:



NPLs (in GEL)

102,719

108,884

NPLs To Gross Loans To Clients

3.2%

4.1%

NPL Coverage Ratio11

105.2%

112.2%

Cost of Risk, Annualised12

1.2%

0.9%

Capital Adequacy:



BIS Tier I Capital Adequacy Ratio, Consolidated13

20.3%

17.9%

BIS Total Capital Adequacy Ratio, Consolidated14

25.8%

26.1%

NBG Tier I Capital Adequacy Ratio15

13.4%

10.8%

NBG Total Capital Adequacy Ratio16

15.9%

15.0%

Per Share Values:



Basic EPS (GEL)17

3.94

3.36

Diluted EPS (GEL)

3.92

3.18

Book Value Per Share (GEL), Basic18

28.81

25.16

Ordinary Shares Outstanding - Weighted Average, Basic19

32,830,379

29,918,693

Ordinary Shares Outstanding - Weighted Average, Diluted20

33,241,639

33,393,307

Ordinary Shares Outstanding - Period End, Basic

33,388,904

29,765,803

Treasury Shares Outstanding - Period End

(2,520,479)

(1,602,317)

Selected Operating Data:



Full Time Employees, Group, Of Which:

10,537

5,392

 - Full Time Employees, BOG Stand-Alone

3,635

3,288

 - Full Time Employees, Aldagi BCI Insurance

509

330

 - Full Time Employees, Aldagi BCI Healthcare

5,514

749

 - Full Time Employees, BNB

306

269

 - Full Time Employees, Other

573

756

Total Assets Per FTE, BOG Stand-Alone (in GEL thousands)

1,521

1,326

Number Of Active Branches, Of Which:

187

147

 - Flagship Branches

34

34

 - Standard Branches

95

89

 - Express Branches (including Metro)

58

24

Number Of ATMs

468

410

Number Of Cards Outstanding, Of Which:

896,234

628,497

 - Debit cards

766,132

511,952

 - Credit cards

130,102

116,545

Number Of POS Terminals

3,528

2,769

 

 

 

 

OTHER RATIOS YTD

Sep 12

Sep 11




Profitability Ratios:



ROE, Annualised,

17.9%

18.0%

Interest Income / Average Int. Earning Assets, Annualised21

15.9%

16.3%

Net F&C Inc. To Av. Int. Earn. Ass., Annualised

2.2%

2.1%

Net Fee And Commission Income To Revenue

17.7%

16.7%

Revenue to Total Assets, Annualised

8.9%

9.8%

Recurring Earning Power, Annualised22

5.5%

5.3%

Profit To Revenue

35.9%

31.8%

Efficiency Ratios:



Operating Cost to Av. Total Ass., Annualised23

4.5%

5.1%

Cost to Average Total Assets, Annualised

4.9%

5.9%

Personne Cost to Revenue

24.4%

27.1%

Personnel Cost to Operating Cost

53.9%

55.2%

Personnel Cost to Average Total Assets, Annualised

2.4%

2.8%

Liquidity Ratios:



Liquid Assets To Total Assets

27.7%

26.3%

Net Loans to Total Assets

55.4%

58.7%

Average Net Loans to Average Total Assets

56.4%

57.3%

Interest Earning Assets to Total Assets

77.1%

81.4%

Avererage Interest Earning Assets/Average Total Assets

79.8%

81.4%

Net Loans to Client Deposits

113.9%

118.5%

Average Net Loans to Av. Client Deposits

105.3%

115.9%

Net Loans to Total Deposits

100.4%

104.0%

Net Loans to (Total Deposits + Equity)

75.5%

79.1%

Net Loans to Total Liabilities

67.7%

71.5%

Total Deposits to Total Liabilities

67.5%

68.7%

Client Deposits to Total Deposits

88.1%

87.8%

Client Deposits to Total Liabilties

59.4%

60.3%

Total Deposits to Total Assets

55.2%

56.5%

Client Deposits to Total Assets

48.6%

49.6%

Client Deposits to Total Equity (Times)

2.7

2.8

Total Equity to Net Loans

32.9%

30.3%

Asset Quality:



Reserve For Loan Losses to Gross Loans to Clients24

3.4%

4.6%

% of Loans to Clients collateralised

85.0%

87.9%

Equity to Average Net Loans to Clients

32.9%

30.3%

 

 

 

 

 

KEY RATIOS QUARTERLY

Q3 2012

Q3-2011

Q2-2012





Profitability




ROAA, Annualised1

3.4%

3.5%

4.0%

ROAE, Annualised2

19.2%

20.0%

20.0%

Net Interest Margin, Annualised3

7.3%

7.9%

9.0%

Loan Yield, Annualised4

17.0%

17.2%

18.0%

Cost of Funds, Annualised5

7.1%

7.8%

7.5%

Cost of Client Deposits, Annualised

7.1%

7.4%

7.4%

Cost of Amounts Due to Credit Institutions, Annualised

6.7%

9.6%

7.7%

Operating Leverage, Y-O-Y6

14.8%

25.3%

-3.6%

Efficiency




Cost / Income7

44.4%

50.3%

45.5%

Liquidity




NBG Liquidity Ratio8

42.0%

31.2%

35.2%

Liquid Assets To Total Liabilities9

33.8%

32.0%

28.5%

Net Loans To Customer Funds

109.6%

110.2%

102.7%

Leverage (Times)10

4.5

4.6

4.2

Asset Quality:




NPLs (in GEL)

102,719

108,884

100,121

NPLs To Gross Loans To Clients

3.2%

4.1%

3.3%

NPL Coverage Ratio11

105.2%

112.2%

115.2%

Cost of Risk, Annualised12

1.6%

0.9%

0.9%

Capital Adequacy:




BIS Tier I Capital Adequacy Ratio, Consolidated13

20.3%

17.9%

21.9%

BIS Total Capital Adequacy Ratio, Consolidated14

25.8%

26.1%

28.1%

NBG Tier I Capital Adequacy Ratio15

13.4%

10.8%

15.0%

NBG Total Capital Adequacy Ratio16

15.9%

15.0%

17.8%

Per Share Values:




Basic EPS (GEL)17

1.35

1.23

1.33

Diluted EPS (GEL)

1.35

1.16

1.33

Book Value Per Share (GEL), Basic18

28.81

22.53

27.37

Ordinary Shares Outstanding - Weighted Average, Basic19

33,350,984

29,982,199

33,829,260

Ordinary Shares Outstanding - Weighted Average, Diluted20

33,350,984

33,456,812

33,829,260

Ordinary Shares Outstanding - Period End, Basic

33,388,904

29,765,803

33,332,636

Treasury Shares Outstanding - Period End

(2,520,479)

(1,602,317)

(2,576,747)

Selected Operating Data:




Full Time Employees, Group, Of Which:

10,537

5,392

10,538

 - Full Time Employees, BOG Stand-Alone

3,635

3,288

3,533

 - Full Time Employees, Aldagi BCI Insurance

509

330

654

 - Full Time Employees, Aldagi BCI Healthcare

5,514

749

5,491

 - Full Time Employees, BNB

306

269

277

 - Full Time Employees, Other

573

756

583

Total Assets Per FTE, BOG Stand-Alone (in GEL thousands)

1,521

1,326

1,397

Number Of Active Branches, Of Which:

187

147

179

 - Flagship Branches

34

34

34

 - Standard Branches

95

89

95

 - Express Branches (including Metro)

58

24

50

Number Of ATMs

468

410

459

Number Of Cards Outstanding, Of Which:

896,234

628,497

745,295

 - Debit cards

766,132

511,952

600,431

 - Credit cards

130,102

116,545

144,864

Number Of POS Terminals

3,528

2,769

3,233

 

  

 

OTHER RATIOS QUARTERLY

Q3 2012

Q3 2011

Q2 2012





Profitability Ratios:




ROE, Annualised,

18.6%

19.6%

19.9%

Interest Income / Average Int. Earning Assets, Annualised21

15.0%

16.1%

16.7%

Net F&C Inc. To Av. Int. Earn. Ass., Annualised

2.2%

2.2%

2.3%

Net Fee And Commission Income To Revenue

18.2%

18.4%

16.9%

Operating Leverage, Q-O-Q

2.5%

-12.2%

0.8%

Revenue to Total Assets, Annualised

9.4%

9.5%

10.5%

Recurring Earning Power, Annualised22

5.3%

4.9%

6.0%

Profit To Revenue

35.6%

35.9%

35.8%

Efficiency Ratios:




Operating Cost to Av. Total Ass., Annualised23

4.3%

5.0%

5.0%

Cost to Average Total Assets, Annualised

4.5%

5.1%

5.7%

Personne Cost to Revenue

24.7%

28.6%

24.8%

Personnel Cost to Operating Cost

55.6%

56.9%

54.5%

Personnel Cost to Average Total Assets, Annualised

2.4%

2.8%

2.7%

Liquidity Ratios:




Liquid Assets To Total Assets

27.7%

26.3%

22.9%

Net Loans to Total Assets

55.4%

58.7%

59.2%

Average Net Loans to Average Total Assets

55.0%

59.0%

58.9%

Interest Earning Assets to Total Assets

77.1%

81.4%

79.8%

Avererage Interest Earning Assets/Average Total Assets

79.2%

82.0%

79.8%

Net Loans to Client Deposits

113.9%

118.5%

106.6%

Average Net Loans to Av. Client Deposits

106.0%

119.0%

107.2%

Net Loans to Total Deposits

100.4%

104.0%

99.1%

Net Loans to (Total Deposits + Equity)

75.5%

79.1%

74.8%

Net Loans to Total Liabilities

67.7%

71.5%

73.5%

Total Deposits to Total Liabilities

67.5%

68.7%

74.2%

Client Deposits to Total Deposits

88.1%

87.8%

92.9%

Client Deposits to Total Liabilties

59.4%

60.3%

69.0%

Total Deposits to Total Assets

55.2%

56.5%

59.8%

Client Deposits to Total Assets

48.6%

49.6%

55.6%

Client Deposits to Total Equity (Times)

                 2.7

                2.8

                     2.9

Total Equity to Net Loans

32.9%

30.3%

32.8%

Asset Quality:




Reserve For Loan Losses to Gross Loans to Clients24

3.5%

4.7%

3.9%

% of Loans to Clients collateralised

85.0%

87.9%

86.9%

Equity to Average Net Loans to Clients

32.9%

30.3%

32.8%

 

 

 

  

 

 

 

NOTES TO KEY RATIOS

 

1 Return On Average Total Assets (ROAA) equals Profit for the period from continuing operations divided by monthly Average Total Assets for the same period;

2 Return On Average Total Equity (ROAE) equals Profit for the period from continuing operations attributable to shareholders of the Bank divided by monthly Average Equity attributable to shareholders of the Bank for the same period;

3 Net Interest Margin equals Net Interest Income of the period (adjusted for the gains or losses from revaluation of interest rate derivatives) divided by monthly Average Interest Earning Assets Including Cash for the same period; Interest Earning Assets Including Cash include: Amounts Due From Credit Institutions, Investment Securities (but excluding corporate shares and other equity instruments) and Loans To Customers And Finance Lease Receivables;

4 Loan Yield equals Interest Income From Loans To Customers And Finance Lease Receivables divided by monthly Average Gross Loans To Customers And Finance Lease Receivables;

5 Cost Of Funds equals Interest Expense of the period (adjusted for the gains or losses from revaluation of interest rate derivatives) divided by monthly Average Interest Bearing Liabilities; Interest Bearing Liabilities Include: Amounts Due To Credit Institutions and Amounts Due To Customers;

6 Operating Leverage equals percentage change in Revenue less percentage change in Other Operating Non-Interest Expenses;

7 Cost / Income Ratio equals Other Operating Non-Interest Expenses divided by Revenue;

8 Average liquid assets during the month (as defined by NBG) divided by selected average liabilities and selected average off-balance sheet commitments (both as defined by NBG);

9 Liquid Assets include: Cash And Cash Equivalents, Amounts Due From Credit Institutions and Investment Securities;

10 Leverage (Times) equals Total Liabilities divided by Total Equity;

11 NPL Coverage Ratio equals Allowance For Impairment Of Loans And Finance Lease Receivables divided by NPLs;

12 Cost Of Risk equals Impairment Charge for Loans To Customers And Finance Lease Receivables for the period divided by monthly average Gross Loans To Customers And Finance Lease Receivables over the same period;

13 BIS Tier I Capital Adequacy Ratio equals Tier I Capital divided by Total Risk Weighted Assets, both calculated in accordance with the requirements of Basel Accord I;

14 BIS Total Capital Adequacy Ratio equals Total Capital divided by Total Risk Weighted Assets, both calculated in accordance with the requirements of Basel Accord I;

15 NBG Tier I Capital Adequacy Ratio equals Tier I Capital a divided by Total Risk Weighted Assets, both calculated in accordance with the requirements the National Bank of Georgia instructions;

16 NBG Total Capital Adequacy Ratio equals Total Capital divided by Total Risk Weighted Assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions;

17 Basic EPS equals Profit for the period from continuing operations attributable to shareholders of the Bank divided by the weighted average number of outstanding ordinary shares over the same period;

18 Book Value Per Share equals Total Equity attributable to shareholders of the Bank divided by Net Ordinary Shares Outstanding at period end; Net Ordinary Shares Outstanding equals total number of Ordinary Shares Outstanding at period end less number of Treasury Shares at period end;

19 Weighted average number of ordinary shares equal average of daily outstanding number of shares less daily outstanding number of treasury shares;

20 Weighted average diluted number of ordinary shares equals weighted average number of ordinary shares plus weighted average dilutive number of shares known to the management during the same period;

21 Average Interest Earning Assets are calculated on a monthly basis; Interest Earning Assets Excluding Cash include: Investment Securities (but excluding corporate shares and other equity instruments) and Loans To Customers And Finance Lease Receivables;

22 Recurring Earning Power equals Operating Income Before Cost of Credit Risk for the period divided by monthly average Total Assets of the same period;

23 Operating Cost equals Other Operating Non-Interest Expenses;

24 Reserve For Loan Losses To Gross Loans equals Allowance For Impairment Of Loans And Finance Lease Receivables divided by Gross Loans And Finance Lease Receivables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
QRTEAKEFDSNAFFF
UK 100

Latest directors dealings