3rd Quarter Results

Bank of Georgia 1.66 GEL/US$ September 2007 period end 1.69 GEL/US$ 9 Month 2007 average 1.74 GEL/US$ September 2006 period end 1.79 GEL/US$ 9 Month 2006 average JSC BANK OF GEORGIA ANNOUNCES CONSOLIDATED Q3 AND YEAR-TO-DATE 2007 RESULTS -0- *T Millions, unless otherwise noted Q3 2007 Growth y-o-y (1) Pro Forma Consolidated(a) Bank of Georgia Consolidated GEL US$ GEL US$ Bank of Georgia (Consolidated, Unaudited, IFRS Based) Total Operating Income (Revenue)(2) 62.5 38.1 56.2 33.9 105% Recurring Operating Costs 26.6 16.2 21.6 13.0 62% Normalized Net Operating Income(3) 35.9 21.9 34.6 20.9 146% Pre-Bonus Result 30.4 18.6 29.5 17.8 167% Net Income 18.2 11.2 17.5 10.6 179% Millions, unless otherwise noted 9 Months 2007 (YTD) Growth y-o-y (1) Pro Forma Consolidated(a) Bank of Georgia Consolidated GEL US$ GEL US$ Bank of Georgia (Consolidated, Unaudited, IFRS Based) Total Operating Income (Revenue)(2) 171.0 103.1 149.4 90.1 107% Recurring Operating Costs 70.8 42.7 58.5 35.3 74% Normalised Net Operating Income(3) 100.2 60.4 90.8 54.8 134% Pre-Bonus Result 91.0 54.9 82.8 50.0 190% Net Income 56.0 33.8 49.9 30.1 188% Consolidated EPS (Basic), GEL & US$(4) 2.18 1.32 1.95 1.17 84% Consolidated EPS (Diluted), GEL & US$(5) 2.05 1.24 1.83 1.10 102% ROAA(6)%, annualised 3.4 3.5% ROA (7)%, annualised 2.7 2.8% ROAE(8)%, annualised 15.5 16.2% ROE(9)%, annualised 14.0 14.3% *T (a) Pro Forma Consolidated Statements include 9 months 2007 financial results of Ukrainian Bank for Restructuring and Development ('UBDP') on a pro forma basis. Bank of Georgia (LSE:BGEO) (GSE:GEB), the leading Georgian universal bank, announced today its Q3 2007 and YTD 2007 consolidated results (IFRS based, derived from management accounts), reporting record quarterly Net Income of GEL 17.5 million in Q3 2007, (up 179.2% y-o-y) or US$0.40 per share (Basic, up 80.7% y-o-y). Net Income on the consolidated basis for the nine months reached GEL 49.9 million (up 188.2% y-o-y), or US$1.17 per share (Basic, up 84.4 % y-o-y). (1) Compared to the same period in 2006; growth calculations based on GEL, except for EPS growth (2) Revenue includes Net Interest Income and Net Non-Interest Income. (3) Normalized for Net Non-Recurring Costs. (4) Basic EPS equals Net Income of the period divided by weighted average outstanding shares for the period. (5) Diluted EPS equals Net Income of the period divided by the number of outstanding ordinary shares as of the period end plus number of ordinary shares in contingent liabilities. (6) Return on Average Total Assets equals annualised Net Income for the period divided by the average Total Assets for the period. (7) Return on Assets equals annualised Net Income for the period divided by the Total Assets at the end of the period (8) Return on Average Total Shareholders' Equity equals annualised Net Income for the period divided by the average Total Shareholders' Equity for the period. (9) Return on Equity equals annualised Net Income for the period divided by the Total Equity at the end of the period Q3 2007 Summary Total Operating Income (Revenue) grew by 105.1% y-o-y to GEL 56.2 million in Q3 2007, a result of the 108.2% growth y-o-y of Net Interest Income to GEL 33.5 million and 100.8% growth y-o-y of Net Non-Interest Income to GEL 22.7 million. The slower growth rate of Recurring Operating Costs up 61.8% y-o-y to GEL 21.6 million resulted in a 146.3% growth of Net Normalised Operating Income ('NNOI') to GEL 34.6 million. The bank's Non-Recurring Costs amounted to GEL 2.0 million and have led to the Pre-Bonus Result ('PBR') of GEL 29.5 million a 167.2% y-o-y. In Q3 2007, Bank of Georgia continued the build-up of its capital and funding base by raising the total of US$158.5 million in debt funding. This includes the debut syndicated loan of US$123.5 million arranged by Citi and Asian Development Bank and US$35 million subordinated loan, structured by Merrill Lynch. Bank of Georgia increased its issued capital from 25.3 million shares as of June 2007 to 27.2 million shares by 30 September 2007. The increase, approved by the General Meeting of Shareholders in June 2007, includes the conversion of the US$25 million subordinated convertible loan provided by a fund affiliated with HBK Investments L.P., into 1,157,407 Bank of Georgia common shares and the 650,000 shares issued for the purpose of the bank Executive Equity Compensation Plan ('EECP'). 9 Months 2007 Summary The bank reported strong consolidated results with Net Income of GEL 49.9 million, up 188.2% y-o-y. Total Operating Income (Revenue) grew 106.5% y-o-y to GEL 149.4 million, as Net Interest Income (GEL 90.4 million grew by 115.4% y-o-y while Net Non-Interest Income (GEL 59.0 million) lagged slightly at a 94.1% growth rate y-o-y. Non-banking operations generated approximately 30.9% (or GEL 18.2 million) of the Total Net Non-Interest Income, up 175.8% y-o-y. Total Recurring Operating Costs increased by 74.3% y-o-y, reflecting the bank's growth across the board and increased number of the personnel. The further improvement of the operating leverage resulted in the NNOI of GEL 90.8 million, up 134.3% y-o-y. PBR grew 189.7 % y-o-y to GEL 82.8 million. The bank's consolidated Total Assets reached GEL 2.4 billion by 30 September 2007, up 180.5% y-o-y and up 98.1% YTD. The bank's corporate, retail and private banking Gross Loans To Clients grew by 110.4%, 144.5% and 88.7% y-o-y and 81.7%, 89.5%, and 52.3% YTD, respectively, to GEL 715.3 million, GEL 533.6 million and GEL 34.3 million, respectively, contributing to the 125.2% y-o-y growth of Net Loans To Clients to GEL 1.3 billion (up 84.0% YTD). As of 30 September 2007, the combined share of retail and private banking in Gross Loans To Clients increased to 43.6% from 42.5% at the year end 2006. The balance sheet growth during the nine months of 2007 resulted in an approximately 6.0% market share gain by assets, and approximately 4.4% market share gain by gross loans. As of 30 September 2007, Bank of Georgia held the market share of approximately 34.0% and 30.8% by total assets and, gross loans, respectively.(8) The bank's non-deposit funding base grew 231.7% y-o-y and 207.6% YTD to GEL 687.5 million as at 30 September 2007. Client Deposits (GEL 1,065 million as at 30 September 2007) increased by 127.6% y-o-y and 90.3% YTD. As a result, the bank's market share by Total Deposits grew 6.9% to 31.4% as at 30 September 2007. Consolidated ROAE of 16.2% decreased slightly compared to the consolidated ROAE of 16.5% as of 31 December 2006, while consolidated ROAA reached 3.5% during the nine months of 2007, compared to 3.4% in 2006. The equity book value per share stood at GEL 17.12 as at 30 September 2007, up 109.2% y-o-y and up 15.1% YTD. Bank of Georgia also announced certain changes in the organizational structure, following the acquisition of the Ukrainian Bank of Development and Partnership ('UBDP'), a mid-sized Ukrainian Bank in Q3 2007. The consolidated results for Q3 2007 have been presented also on a pro porma basis, and UBDP standalone results have been shown in a separate Strategic Business Unit ('SBU'), the bank's fifth, Ukraine SBU. The bank's Wealth Management BU now includes Galt & Taggart Bank, formerly Cascade Bank, one of the smallest banks in Georgia acquired by Bank of Georgia in July 2007. (8) Market share data are derived from the information published by the National Bank of Georgia (www.nbg.gov.ge) and represent an aggregation of standalone financial information filed by Georgian banks. Strategic Business Unit and Business Unit Overview Corporate & Investment Banking (CIB) Discussion Of Results Allocated Revenues grew 80.0% y-o-y to GEL 49.1 million, impacted by the growth of Net Interest Income and Net Non-Interest Income. Operating leverage of CIB has improved, as the growth rate of allocated Recurring Costs (37.1% y-o-y), lagged the growth rate of the allocated Revenues. PBR grew 123.6% y-o-y to GEL 33.8 million, contributing 40.8% to the consolidated PBR. Earnings grew 135.6% y-o-y to GEL 22.1 million, contributing 44.2% to the consolidated Net Income. Gross Loans grew 110.4% y-o-y and 81.7% YTD to GEL 715.3 million, driven by the increased lending to corporate clients and rapid growth of the SME loan book. Allocated Client Deposits grew 143.1% y-o-y and 137.3% YTD to GEL 670.8 million, primarily due to the growth of current account balances. Allocated Total CIB Assets amounted to GEL 1,235 million, up 167.9% y-o-y and up 130.8% YTD, while allocated Total CIB Liabilities reached GEL 1,081 million, up 165.6% y-o-y and up 137.3% YTD. Highlights -- Major new corporate client acquisitions include the UAE-based Rakeen Development, Energo Pro, a leading energy distribution company in Georgia, and GPC, the country's third largest pharmacy chain. -- Increased the number of corporate clients using the bank's payroll services from 480 at the end of 2006 to over 675 by the end of September 2007. By 30 September 2007, the number of individual clients serviced through the corporate payroll programs administered by the bank increased from approximately 83,500 at the beginning of the year to over 135,000. -- Approximately 16,000 legal entities opened accounts at the bank during the nine months in 2007, bringing the total to over 60,000. Retail Banking (RB) Discussion Of Results Allocated Revenues grew 120.5% y-o-y to GEL 65.3 million, impacted by the growth of Net Interest Income and Net Non-Interest Income. Operating leverage of RB has improved, as the growth rate of allocated Recurring Costs (66.7% y-o-y, driven primarily by the branch and headcount expansion) lagged the growth rate of the allocated Revenues. PBR grew 267.7% y-o-y to GEL 32.0 million, contributing 38.6% to the consolidated PBR. Earnings grew 297.9% y-o-y to GEL 20.9 million, contributing 41.9% to the consolidated Net Income. Gross Loans grew 144.5% y-o-y and 89.5% YTD to GEL 533.6 million, driven by the increased lending activity due to high demand from customers. Allocated Client Deposits grew 82.3% y-o-y and 57.0% YTD to GEL 322.8 million, driven primarily by the growth of current account balances and time deposits. Allocated Total RB Assets amounted to GEL 919.5 million, up 211.1% y-o-y and up 146.2% YTD, while allocated Total RB Liabilities reached GEL 628.6 million, up 140.5% y-o-y and up 138.9% YTD. Highlights -- Increased the number of retail current accounts from approximately 420,000 at the beginning of the year to more than 595,000 by 30 September, 2007. -- Increased the number of branches (service centers) from 100 at the beginning of the year to 109 by 30 September 2007. -- The purchase of commercial space previously rented by seven existing branches resulted in the implied cost savings of GEL 0.3 million per annum. -- Bought and leased premises for 34 new branches, 28 of which remain to be fitted out and are expected to be operational by Q2 2008. -- Stepped up the issuance of credit cards, as the number of credit cards issued reached approximately 46,227 in Q3 2007, compared to approximately 17,000 issued in Q2 2007 and approximately 5,800 issued in Q1 2007. As of 30 September 2007, the number of credit cards outstanding amounted to 69,224, up from 356 at the beginning of the year. -- Increased the issuance of debit cards, with over 229,000 debit cards issued during the nine months of 2007, compared to approximately 158,231 debit cards issued during the first nine months of 2006. The number of debit cards outstanding increased from approximately 285,000 at the beginning of the year to approximately 459,000 by the end of September 2007. -- Continued to make gains in merchant acquiring as the installed POS terminal footprint grew to 1,093. -- Total number of cards serviced by Georgian Card grew from 370,000 at the beginning of the year to 706,249 by 30 September 2007, while the number of transaction authorisations processed by Georgian Card during the nine months of 2007 grew 181.0% y-o-y to approximately 12.2 million. -- Continued investing in the electronic banking channels, as the number of ATMs grew to 185 by 30 September 2007 (up from 124 at the beginning of the year), number of mobile banking users reached 30,184, and number of registered Internet banking users grew 177.3% YTD to over 101,200. -- POS express consumer lending, commenced by the bank in 2006 to complement the branch-based general-purpose consumer lending, resulted in the 840 express loan POS contracts signed with merchants (of which 548 outlets were served by 30 September 2007). POS express loan originations have reached GEL 63.6 million during nine months of 2007 (up 387.9% y-o-y), while POS express loans outstanding amounted to GEL 42.9 million at the end of September 2007, up 308.1% y-o-y and up 93.4% YTD. -- Stepped up mortgage loan originations to GEL 103.8 million during the nine months of 2007 (up 203.1% y-o-y) resulting in mortgage loans outstanding by 30 September 2007 of GEL 134.8 million, up 150.3% y-o-y and up 111.8% YTD. -- Car loan originations of GEL 27.2 million (up 275.6% y-o-y) resulted in car loans outstanding by 30 September 2007 of GEL 30.6 million, up 259.0% y-o-y and up 213.2% YTD. Insurance Discussion Of Results Revenues of Aldagi BCI, the bank's wholly-owned insurance subsidiary, grew 41.1% y-o-y on to GEL 6.0 million, impacted by the growth in both corporate and consumer lines of business, with Gross Premiums Written up 190.6% y-o-y to GEL 30.4 million. Operating Costs were GEL 4.5 million, up 20.3% y-o-y. PBR grew 124.7% y-o-y to GEL 1.3 million, while earnings grew 10.8% y-o-y to GEL 0.6 million during the nine months of 2007. Total Insurance Assets amounted to GEL 54.3 million, while Total Insurance Liabilities reached GEL 39.3 million as at 30 September 2007. Highlights -- Major new corporate client acquisitions include Airzena Georgian Airlines for aviation insurance and Energo Pro, for property insurance. Corporate Center (CC) Significant decrease in the Allocated Revenues and Net Income of the Corporate Center is a result of a significant increase in the elimination adjustment in Q2 and Q3 2007, driven by the adjustments of securities trading gains of Galt & Taggart Securities, eliminated for the consolidation purposes as per IFRS requirements. Allocated Total CC Assets amounted to GEL 15.1 million, representing 0.6% of the consolidated Total Assets. Allocated Total CC Liabilities reached GEL 60.1 million, representing 3.1% of the consolidated Total Liabilities. Wealth Management (WM) Discussion Of Results Allocated Revenues grew 115.4% y-o-y, impacted by the growth of Net Interest Income (driven primarily by the growth of the Private Banking loan book) to GEL 3.5 million during nine months of 2007. Allocated Recurring Costs of GEL 1.1 million grew 52.1% y-o-y. PBR grew 277.8% y-o-y to GEL 2.1 million, contributing 2.5% to the consolidated PBR. Earnings grew 303.3% y-o-y to GEL 1.3 million, contributing 2.7% to the consolidated Net Income. Gross Loans grew 88.7% y-o-y and 52.3% YTD to GEL 34.3 million, while Allocated Client Deposits increased by 326.5% y-o-y and decreased by 2.2% YTD to GEL 64.0 million. Allocated Total WM Assets amounted to GEL 70.1 million, up 185.3% y-o-y and 491.0% YTD, while allocated Total WM Liabilities reached GEL 83.9 million, up 282.1% y-o-y and 45.1% YTD. Highlights -- The number of private banking clients grew from 873 at the beginning of the year to 1,187 at the end of September 2007. -- Private banking mortgage loan originations of GEL 10.8 million (up 0.5% y-o-y) during nine months of 2007 resulted in mortgage loans outstanding of GEL 22.9 million as at 30 September 2007, up and 61.6% y-o-y and up 32.8% YTD. -- Private Banking car loan originations of GEL 2.0 million, up 5.8% y-o-y during nine months of 2007 resulted in car loans outstanding of GEL 3.2 million as at 30 September 2007, up 104.3% y-o-y and up 39.0% YTD. -- Deborah Fairlamb appointed as Kyiv-based group head of Wealth Management. Galt & Taggart Securities Discussion Of Results The growth of Revenues to GEL 18.7 million during the nine months of 2007 (up 939.1% y-o-y) was driven primarily by increases in commissions from brokerage and securities trading gains. Recurring Operating Costs increased 735.9% y-o-y to GEL 3.3 million, largely reflecting the rapid growth pace of the operations in Galt & Taggart Ukraine. The relatively high growth rate of the Recurring Operating Costs notwithstanding, PBR increased 979.5% y-o-y to GEL 15.1 million. Earnings grew 870.6% y-o-y, reaching GEL 10.9 million during nine months of 2007 and contributing 21.9% to the consolidated Net Income. Assets grew to GEL 51.4 million as at 30 September 2007, up 304.9% y-o-y and 157.5% YTD, mostly as a result of the dramatic growth of the proprietary book. Liabilities reached GEL 14.2 million by 30 September 2007, up 265.2% y-o-y and up 114.3% YTD. Highlights -- Proprietary book grew 244.9% YTD to GEL 25.4 million as at 30 September 2007. -- Continued to hold the leading position by the equities trading volume in Georgia, with an approximately 62% market share. -- Fully staffed Galt & Taggart Securities Ukraine. Asset Management Highlights -- The market capitalization of Galt & Taggart Capital reached GEL 82.9 million as at 30 September 2007, an increase of 54% YTD and an increase of 384% since the company was admitted to trading on the Georgian Stock Exchange in November 2006. -- Galt & Taggart Capital acquired a 51% equity interest in Planeta Forte, the leading operator of 47 newspaper kiosks in Tbilisi, allowing the development of the cross-sell opportunities between the bank's Retail Banking operations as well as GTC portfolio companies. -- Keren Shivta Capital management and BST, the Israel-based real estate investors signed an MOU pursuant to which they will invest US$4.8 million in SB Real Estate. The proceeds will be invested in the development of the existing properties, as well as used for disciplined small-sized acquisitions. -- Assets Under Management at the Aldagi BCI Pension Fund grew 186.1% y-o-y (up 71.8% YTD) to GEL 0.9 million at the end of 1H 2007, while the number of Aldagi BCI Pension Fund members stood at 3,440 at the end of September 2007, up from 1,560 members at the end of September 2006. Comments 'I am very pleased with our Q3 and YTD 2007 results. It's a pleasure to watch the team working so well together. We are beginning to see our investment in bringing the separate pieces together into a coherent diversified group pay off. I am also delighted that the three-year anniversary of our team's commencing the turnaround of Bank of Georgia has been marked by our first major cross-boarder acquisition - the purchase of UBDP', commented Lado Gurgenidze, Chairman of the Supervisory Board. SEGMENT RESULTS -0- *T Change y-o-y September - 2007, YTD Share September - 2006, YTD Share Total Operating Income (Revenue) ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Corporate & Investment Banking 80.02% 49,057 32.84% 27,251 37.66% Retail Banking 120.54% 65,326 43.73% 29,621 40.94% Wealth Management 115.44% 3,476 2.33% 1,613 2.23% Galt & Taggart Securities 939.12% 18,703 12.52% 1,800 2.49% Asset Management 424.46% 2,403 1.61% 458 0.63% Insurance 41.09% 6,032 4.04% 4,275 5.91% Corporate Center -40.29% 4,381 2.93% 7337 10.14% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Total Operating Income (Revenue) 106.45% 149,379 100.00% 72,355 100.00% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Ukraine NMF 21,585 12.63% n.a. NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Pro Forma Total Operating Income (Revenue) NMF 170,964 NMF n.a. NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Total Recurring Operating Costs ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Corporate & Investment Banking 37.13% 8,144 13.91% 5,939 17.68% Retail Banking 66.66% 28,040 47.90% 16,824 50.08% Wealth Management 52.12% 1,103 1.88% 725 2.16% Galt & Taggart Securities 735.91% 3,339 5.70% 399 1.19% Asset Management 170.76% 3,617 6.18% 1336 3.98% Insurance 20.26% 4,467 7.63% 3,714 11.06% Corporate Center 111.29% 9,835 16.80% 4655 13.86% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Total Recurring Operating Costs 74.28% 58,545 100.00% 33,593 100.00% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Ukraine NMF 12,220 17.27% n.a. NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Pro Forma Total Recurring Operating Costs NMF 70,765 NMF n.a. NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Pre-Bonus Result ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Corporate & Investment Banking 123.64% 33,827 40.84% 15,126 86.12% Retail Banking 267.68% 31,982 38.62% 8,698 49.53% Wealth Management 277.83% 2,061 2.49% 545 3.11% Galt & Taggart Securities 979.47% 15,117 18.25% 1,400 7.97% Asset Management 43.32% -1,258 -1.52% -878 -5.00% Insurance 124.66% 1,260 1.52% 561 3.19% Corporate Center NMF -169 -0.20% 3134 17.85% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Pre-Bonus Result 189.71% 82,821 100.00% 28,588 100.00% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Ukraine NMF 8,130 8.94% n.a NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Pro Forma Pre-Bonus Result NMF 90,951 NMF n.a NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Net Income ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Corporate & Investment Banking 135.58% 22,058 44.23% 9,363 54.12% Retail Banking 297.90% 20,891 41.89% 5,250 30.35% Wealth Management 303.32% 1,361 2.73% 337 1.95% Galt & Taggart Securities 870.58% 10,926 21.91% 1,126 6.51% Asset Management 31.23% -1,152 -2.31% -878 -5.07% Insurance 10.85% 645 1.29% 582 3.37% Corporate Center -420.07% -4,863 -9.75% 1,519 8.78% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Net Income 188.24% 49,868 100.00% 17,301 100.00% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Ukraine NMF 6,097 10.89% n.a. NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Pro Forma Net Income NMF 55,965 NMF n.a. NMF ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Basic EPS Contribution Change y-o-y Contribution Share Contribution Share ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Corporate & Investment Banking 42.82% 0.87 44.23% 0.61 54.12% Retail Banking 141.22% 0.83 41.89% 0.34 30.35% Wealth Management 144.50% 0.05 2.73% 0.02 1.95% Galt & Taggart Securities 488.40% 0.43 21.91% 0.07 6.51% Asset Management -20.45% -0.05 -2.31% -0.06 -5.07% Insurance -32.80% 0.03 1.29% 0.04 3.37% Corporate Center -294.04% -0.19 -9.75% 0.10 8.78% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- Total 74.74% 1.98 100.00% 1.13 100.00% ------------------------------------------ ------------ --------------------- --------- --------------------- ---------- *T SEGMENT RESULTS CONT'D -0- *T Total Assets Change y-o-y September - 2007, YTD Share September - 2006, YTD Share ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Corporate & Investment Banking 167.92% 1,235,060 51.39% 460,989 53.81% Retail Banking 211.07% 919,474 38.26% 295,583 34.50% Wealth Management 185.35% 70,084 2.92% 24561 2.87% Galt & Taggart Securities 304.93% 51,442 2.14% 12,704 1.48% Asset Management 451.42% 57,822 2.41% 10486 1.22% Insurance 227.66% 54,339 2.26% 16,584 1.94% Corporate Center -57.75% 15,112 0.63% 35767 4.18% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Total Assets 180.54% 2,403,333 100.00% 856,674 100.00% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Ukraine NMF 410,681 14.59% n.a. NMF ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Pro Forma Total Assets NMF 2,814,014 NMF n.a. NMF ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Loans to Clients, Gross ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Corporate & Investment Banking 110.36% 715,338 54.91% 340,050 57.79% Retail Banking 144.45% 533,644 40.96% 218,303 37.10% Wealth Management 88.69% 34,316 2.63% 18,186 3.09% Galt & Taggart Securities NMF - 0.00% - NMF Asset Management NMF - 0.00% - NMF Insurance NMF - 0.00% - NMF Corporate Center 63.16% 19,412 1.49% 11,897 2.02% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Total Loans to Clients 121.38% 1,302,711 100.00% 588,437 100.00% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Ukraine NMF 333,884 20.40% n.a. NMF ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Pro Forma Loans to Clients NMF 1,636,594 NMF n.a. NMF ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Total Liabilities ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Corporate & Investment Banking 165.57% 1,081,302 55.78% 407,160 56.58% Retail Banking 140.53% 628,565 32.43% 261,330 36.31% Wealth Management 282.12% 83,924 4.33% 21963 3.05% Galt & Taggart Securities 265.15% 14,230 0.73% 3,897 0.54% Asset Management 1747.43% 30,926 1.60% 1674 0.23% Insurance 265.70% 39,258 2.03% 10,735 1.49% Corporate Center 366.46% 60,136 3.10% 12892 1.79% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Total Liabilities 169.34% 1,938,341 100.0% 719,651 100.00% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Ukraine NMF 341,350 14.97% n.a. NMF ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Pro Forma Total Liabilities 2,279,691 NMF n.a. ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Client Deposits ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Corporate & Investment Banking 143.14% 670,781 62.97% 275,879 58.95% Retail Banking 82.26% 322,798 30.31% 177,107 37.84% Wealth Management 326.46% 63,998 6.01% 15,007 3.21% Galt & Taggart Securities NMF 7,581 0.71% - 0.00% Asset Management NMF - 0.00% - 0.00% Insurance NMF - 0.00% - 0.00% Corporate Center NMF - 0.00% - 0.00% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Total Client Deposits 127.60% 1,065,158 100.0% 467,993 100.00% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Ukraine NMF 263,455 19.83% n.a. NMF ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Pro Forma Client Deposits NMF 1,328,614 NMF n.a. NMF ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Book Value Per Share Change y-o-y Contribution Share Contribution Share ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Corporate & Investment Banking 71.42% 5.67 33.07% 3.30 39.28% Retail Banking 409.69% 10.72 62.56% 2.10 25.00% Wealth Management -419.70% -0.51 -2.98% 0.16 1.90% Galt & Taggart Securities 153.57% 1.37 8.00% 0.54 6.43% Asset Management 83.17% 0.99 5.78% 0.54 6.43% Insurance 54.74% 0.56 3.24% 0.36 4.27% Corporate Center -218.12% -1.66 -9.68% 1.40 16.69% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- Book Value Per Share 103.66% 17.13 100.0% 8.41 100.00% ---------------------------- ---------------- ---------------------- ----------- --------------------- ---------- *T INCOME STATEMENT DATA -0- *T Period Ended 9 Months, 2007 9 Months, 2007 9 Months, 2006 Change(3) Consolidated, IFRS Based US$ GEL US$(1) GEL US$(2) GEL Y-O-Y 000s, unless otherwise noted (Pro Forma Consolidated) (Unaudited) (Unaudited) Interest Income 119,549 198,213 99,637 165,198 36,766 63,807 158.90% Interest Expense 55,285 91,663 45,115 74,800 12,586 21,843 242.44% Net Interest Income 64,264 106,550 54,522 90,398 24,180 41,964 115.42% Fee & Commission Income 15,759 26,129 13,023 21,592 8,072 14,010 54.12% Fee & Commission Expense 2,344 3,886 1,908 3,163 1,253 2,175 45.44% Net Fee & Commission Income 13,415 22,242 11,115 18,429 6,819 11,835 55.72% Income From Documentary Operations 3,215 5,330 3,215 5,330 2,085 3,618 47.34% Expense On Documentary Operations 907 1,503 907 1,503 513 890 68.84% Net Income From Documentary Operations 2,308 3,827 2,308 3,827 1,572 2,727 40.32% Net Foreign Currency Related Income 10,647 17,653 9,999 16,579 4,566 7,924 109.24% Net Insurance Income 3,380 5,605 3,380 5,605 2,319 4,025 39.25% Brokerage Income 1,735 2,877 1,735 2,877 752 1,304 120.54% Asset Management Income 9 14 9 14 - - NMF(4) Realised Net Investment Gains (Losses) 3,321 5,506 3,321 5,605 446 774 611.73% Other 4,035 6,689 3,706 6,144 1,039 1,803 240.73% Net Other Non-Interest Income 12,480 20,691 12,151 20,146 4,555 7,906 154.82% Net Non-Interest Income 38,850 64,414 35,574 58,981 17,512 30,392 94.07% Total Operating Income (Revenue) 103,115 170,964 90,096 149,379 41,691 72,355 106.45% Personnel Costs 18,819 31,201 16,545 27,431 8,490 14,735 86.16% Selling, General & Administrative Costs 11,265 18,678 9,886 16,392 5,375 9,329 75.71% Procurement & Operations Support Expenses 5,026 8,334 4,065 6,741 2,350 4,078 65.29% Depreciation & Amortization 4,524 7,501 4,047 6,710 2,116 3,672 82.73% Other Operating Expenses 3,046 5,051 767 1,272 1,025 1,779 -28.51% Total Recurring Operating Costs 42,681 70,765 35,311 58,545 19,356 33,593 74.28% Normalized Net Operating Income 60,434 100,199 54,785 90,834 22,335 38,763 134.33% Net Non-Recurring Income (Costs) (79) (132) (83) (138) (184) (320) NMF(4) Profit Before Provisions & Bonuses 60,354 100,068 54,702 90,696 22,151 38,443 135.92% Provisions For Loan Losses 8,343 13,833 7,761 12,867 6,552 11,371 13.16% Recovery Of Loans 2,842 4,711 2,842 4,711 407 706 567.81% Provisions For (Recovery Of) Other Assets (3) (5) -170 (281) -467 (810) -65.27% Net Provision Expense 5,498 9,116 4,749 7,874 5,679 9,855 -20.10% Pre-Bonus Result 54,856 90,951 49,953 82,821 16,472 28,588 189.71% Bonuses & Share Based Compensation Expenses 12,332 20,446 12,332 20,446 3,818 6,626 208.58% Pre-Tax Income 42,524 70,505 37,621 62,376 12,654 21,962 184.02% Income Tax Expenses 8,770 14,540 7,544 12,508 2,686 4,661 168.36% Net Income 33,755 55,965 30,077 49,868 9,969 17,301 188.24% Weighted Average Shares Outstanding (000s) 25,638 15,672 Diluted Number of Shares Period End (000s) 27,249 18,282 EPS (Basic) 1.17 1.95 0.64 1.10 76.20% EPS (Diluted) 1.10 1.83 0.55 0.95 93.38% *T (1) Converted to U.S. dollars for convenience using a period-end exchange rate of GEL 1.6580 per U$S1.00 , such rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia as at 30 September 2007 (2) Converted to U.S. dollars for convenience using a period-end exchange rate of GEL 1.7355 per U$S1.00 , such rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia as at 30 September 2006 (3)Growth calculations based on GEL values (4) Not meaningful BALANCE SHEET DATA -0- *T 30-Sep-07 30-Sep-07 Growth(2) 30-Sep-06 Consolidated, IFRS Based US$(1) GEL US$(1) GEL Y-O-Y US$(3) GEL 000s, unless otherwise noted (Pro Forma Consolidated) (Unaudited) (Unaudited) Cash & Cash Equivalents 63,624 105,489 56,280 93,312 128.06% 23,576 40,916 Loans & Advances To Credit Institutions 228,686 379,161 201,004 333,265 153.01% 75,898 131,721 Mandatory Reserve With NBG 56,174 93,136 45,548 75,518 54.50% 28,165 48,880 Other Accounts With NBG 55,064 91,296 55,064 91,296 951.96% 5,001 8,679 Balances With & Loans To Other Banks 117,448 194,729 100,393 166,452 124.44% 42,733 74,163 Available-For-Sale Securities 6,211 10,298 6,211 10,298 74.46% 3,401 5,903 Treasuries & Equivalents 39,104 64,834 35,435 58,751 NMF(4) 295 512 Other Fixed Income Instruments 151,159 250,621 144,272 239,203 NMF(4) - - Gross Loans To Clients 987,089 1,636,594 785,712 1,302,711 121.38% 339,059 588,437 Less: Reserve For Loan Losses -20,275 (33,615) (15,401) (25,535) 20.00% (12,261) (21,280) Net Loans To Clients 966,815 1,602,979 770,311 1,277,176 125.19% 326,798 567,157 Investments In Other Business Entities, Net 87,899 145,736 87,899 145,736 21395.06% 391 678 Property & Equipment Owned, Net 86,309 143,101 84,042 139,341 164.78% 30,322 52,624 Intangible Assets Owned, Net 1,768 2,932 1,768 2,932 81.43% 931 1,616 Goodwill 26,149 43,355 26,149 43,355 81.14% 13,791 23,935 Tax Assets - Current & Deferred 2,026 3,360 2,026 3,360 NMF(4) - - Prepayments & Other Assets 37,484 62,149 34,141 56,605 79.07% 18,214 31,611 Total Assets 1,697,235 2,814,015 1,449,538 2,403,334 180.54% 493,618 856,673 Client Deposits 801,335 1,328,614 642,436 1,065,158 127.60% 269,659 467,993 Deposits & Loans From Banks 74,530 123,570 41,348 68,556 330.20% 9,182 15,936 Borrowed Funds 416,764 690,995 414,667 687,518 231.71% 119,428 207,267 Insurance Related Liabilities 19,856 32,922 19,856 32,922 712.27% 2,335 4,053 Issued Fixed Income Securities 7,906 13,108 - - NMF(4) 650 1,128 Tax Liabilities - Current & Deferred 15,630 25,914 12,360 20,493 428.02% 2,236 3,881 Accruals & Other Liabilities 38,943 64,568 38,416 63,694 228.44% 11,175 19,393 Total Liabilities 1,374,965 2,279,691 1,169,084 1,938,341 169.34% 414,666 719,651 Ordinary Shares 44,188 73,263 16,378 27,154 62.23% 9,644 16,738 Share Premium 183,117 303,607 183,117 303,607 407.15% 34,495 59,866 Treasury Shares (1,074) (1,781) (1,074) (1,781) 787.55% -116 (201) Retained Earnings 47,309 78,438 37,746 62,583 71.71% 21,000 36,446 Revaluation & Other Reserves 11,335 18,794 10,570 17,525 NMF(4) 3,215 5,580 Net Income For The Period 33,755 55,965 30,077 49,868 188.24% 9,969 17,301 Shareholders' Equity Excluding Minority Interest 318,629 528,287 276,813 458,956 238.14% 78,207 135,729 Minority Interest 3,641 6,037 3,641 6,037 366.73% 745 1,293 Total Shareholders' Equity 322,270 534,324 280,454 464,993 239.36% 78,952 137,022 Total Liabilities & Shareholders' Equity 1,697,235 2,814,015 1,449,538 2,403,334 180.54% 493,618 856,673 Shares Outstanding 27,154,099 16,737,634 Book Value Per Share 10.33 17.12 109.18% 4.72 8.19 *T (1) Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6580 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 2007 (2) Compared to the same period in 2006; growth calculations based on GEL values (3) Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7335 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 2006 (4) Not meaningful KEY RATIOS -0- *T September 2007, YTD 2006 September 2006, YTD Profitability Ratios ROAA,(1) Annualised 3.5% 3.4% 3.2% ROA, Annualised 2.8% 2.2% 2.7% ROAE,(2) Annualised 16.2% 16.5% 20.5% ROE, Annualised 14.3% 7.1% 16.8% Interest Income To Average Interest Earning Assets, (3) Annualised 14.4% 16.7% 15.2% Cost Of Funds, (4) Annualised 7.3% 5.8% 5.1% Net Spread (5) 7.1% 10.9% 10.1% Net Interest Margin (6) Annualised 7.9% 11.1% 10.0% Net Interest Margin, Normalised, (7) Annualised 7.9% 10.6% 9.5% Loan Yield (8) 20.6% 17.4% 15.4% Interest Expense To Interest Income 45.3% 33.5% 34.2% Net Non-Interest Income To Average Total Assets, Annualised 4.2% 5.8% 5.7% Net Non-Interest Income To Revenue (9) 39.5% 40.4% 42.0% Net Fee And Commission Income To Average Interest Earning Assets, (10)Annualised 1.6% 3.1% 2.8% Net Fee And Commission Income To Revenue 12.3% 16.5% 16.4% Operating Leverage (11) 11.3% 18.8% NMF Total Operating Income (Revenue)/Total Assets, Annualised 8.3% 9.2% 11.3% Recurring Earning Power (12) Annualised 6.4% 7.7% 7.2% Net Income To Revenue 33.4% 23.9% 23.9% Efficiency Ratios Operating Cost To Average Total Assets, (13) Annualised 4.1% 6.8% 6.3% Cost To Average Total Assets (14) Annualised 5.6% 8.2% 7.6% Cost / Income (15) 53.0% 56.7% 56.0% Cost /Income Normalised (16) 52.9% 55.9% 55.6% Cost / Income, Bank of Georgia, Standalone (18) 48.8% 51.2% 52.5% Cash Cost/Income(17) 48.5% 51.4% 51.0% Total Employee Compensation Expense To Revenue (19) 32.1% 29.7% 29.5% Total Employee Compensation Expense To Cost 60.5% 52.5% 52.7% Total Employee Compensation Expense To Average Total Assets, Annualised 3.4% 4.3% 4.0% Liquidity Ratios Net Loans To Total Assets (20) 53.1% 57.2% 66.2% Average Net Loans To Average Total Assets 52.6% 61.3% 62.0% Interest Earning Assets To Total Assets 79.4% 78.4% 81.6% Average Interest Earning Assets To Average Total Assets 81.1% 77.3% 78.2% Liquid Assets To Total Assets (21) 30.6% 25.0% 20.9% Net Loans To Client Deposits 119.9% 124.0% 121.2% Average Net Loans To Average Client Deposits 125.4% 113.4% 106.8% Net Loans To Total Deposits (22) 112.7% 123.8% 117.2% Net Loans To Total Liabilities 65.9% 82.8% 78.8% Total Deposits To Total Liabilities 58.5% 66.8% 67.2% Client Deposits To Total Deposits 94.0% 99.8% 96.7% Client Deposits To Total Liabilities 55.0% 66.7% 65.0% Current Account Balances To Client Deposits 57.2% 54.4% 55.7% Demand Deposits To Client Deposits 9.6% 6.4% 3.9% Time Deposits To Client Deposits 33.1% 39.2% 40.4% Total Deposits To Total Assets 47.2% 46.2% 56.5% Client Deposits To Total Assets 44.3% 46.1% 54.6% Client Deposits To Total Equity (times) (23) 2.29 1.49 3.42 Due From Banks / Due To Banks (24) 486% 7597% 827% Leverage (times) (25) 4.17 2.20 5.25 *T KEY RATIOS CONT'D -0- *T September 2007, YTD 2006 September 2006, YTD Asset Quality NPLs (in GEL) (26) 16,711 16,266 19,671 NPLs to Gross Loans (27) 1.3% 2.3% 3.3% Cost of Risk, Annualised (28) 1.0% 2.7% 2.8% Cost of Risk, Normalised, Annualised(29) 1.0% 2.2% 2.2% Reserves for Loan Losses to Gross Loans (30) 2.0% 3.0% 3.6% NPL Coverage ratio (31) 152.8% 129.9% 108.2% Equity to Average Net Loans to Clients 46.8% 78.8% 30.9% Total Equity To Net Loans 36.4% 54.0% 24.2% Capital Adequacy: Equity To Total Assets 19.3% 30.9% 16.0% BIS Tier I Capital Adequacy Ratio (32) 23.2% 44.9% 18.0% BIS Total Capital Adequacy Ratio (33) 23.3% 41.8% 19.3% NBG Tier I Capital Adequacy Ratio (34) 14.0% 23.2% 8.0% NBG Total Capital Adequacy Ratio (35) 16.9% 28.5% 12.8% Per Share Values: Basic EPS (GEL) (36) 1.95 1.62 1.10 Basic EPS (US$) 1.17 $0.89 0.64 Diluted EPS (GEL) (37) 1.83 0.98 0.95 Diluted EPS (US$) 1.10 $0.54 0.55 Book Value Per Share (GEL) (38) 17.12 14.87 8.19 Book Value Per Share (US$) 10.33 $8.14 4.72 Ordinary Shares Outstanding - Weighted Average, Basic 25,637,740 16,505,701 15,672,016 Ordinary Shares Outstanding - Period End 27,154,099 25,202,009 16,737,634 Ordinary Shares Outstanding - Diluted 27,249,100 27,229,418 18,281,710 Selected Operating Data: Full Time Employees (FTE) 3,992 2,226 1,956 FTEs, Bank of Georgia Standalone 2,388 1,601 1,479 Total Assets per FTE (GEL Thousands) 602 558 438 Total Assets per FTE, Bank of Georgia Standalone (GEL Thousands) 1,006 776 579 Branches 109 100 92 ATMs 185 124 91 Plastic Cards (Thousands) 529 286 203 POS Terminals 1,093 471 328 *T Note: All annualized numbers presented throughout have been annualised by dividing Income Statement component by the number of months in the period multiplied by twelve. NOTES TO KEY RATIOS -0- *T 1 Return On Average Total Assets (ROAA) equals Net Income of the period divided by quarterly Average Total Assets for the same period; 2 Return On Average Total Equity (ROAE) equals Net Income of the period divided by quarterly Average Total Equity for the same period; 3 Average Interest Earning Assets are calculated on a quarterly basis; Interest Earning Assets include: Loans And Advances To Credit Institutions, Treasuries And Equivalents, Other Fixed Income Instruments and Net Loans to Clients; 4 Cost Of Funds equals Interest Expense of the period divided by quarterly Average Interest Bearing Liabilities; Interest Bearing Liabilities Include: Client Deposits, Deposits And Loans From Banks, Borrowed Funds and Issued Fixed Income Securities; 5 Net Spread equals Interest Income To Average Interest Earning Assets less Cost Of Funds; 6 Net Interest Margin equals Net Interest Income of the period divided by quarterly Average Interest Earning Assets of the same period; 7 Net Interest Margin Normalised equals Net Interest Income of the period, less provisions for the interest income generated by non-performing loans through the date of their write-offs, plus provisions for (less recovery of) other assets, divided by quarterly average Gross Loans To Clients over the same period. 8 Loan Yield equals Interest Income, less Net Provision Expense divided by quarterly Average Gross Loans To Clients; 9 Revenue equals Total Operating Income; 10 Net Fee And Commission Income includes Net Income From Documentary Operations of the period; 11 Operating Leverage equals percentage change in Revenue less percentage change in Total Costs; 12 Recurring Earning Power equals Profit Before Provisions and Bonuses of the period divided by average Total Assets of the same period; 13 Operating Cost equals Total Recurring Operating Costs; 14 Cost includes Total Recurring Operating Costs, Net Non-Recurring Costs (Income) and Bonuses & Share Based Compensation Expenses; 15 Cost/Income Ratio equals Costs of the period divided by Total Operating Income (Revenue); 16 Cost/Income Normalised equals Recurring Operating Costs plus Bonuses & Share Based Compensation Expenses divided by Total Operating Income (Revenue) for the same period. 17 Cash Cost equals Cost minus Depreciation & Amortisation; 18 Cost/Income, Bank of Georgia, standalone, equals to non-consolidated Total Costs of the bank of the period divided by non-consolidated Revenue of the bank of the same period; 19 Total Employee Compensation Expense includes Personnel Costs and Bonuses & Share-Based Compensation Expenses; 20 Net Loans equal Net Loans To Clients; 21 Liquid Assets include: Cash And Cash Equivalents, Other Accounts With NBG, Balances With And Loans To Other Banks, Treasuries And Equivalents and Other Fixed Income Securities as of the period end and are divided by Total Assets as of the same date; 22 Total Deposits include Client Deposits and Deposits And Loans from Banks; 23 Total Equity equals Total Shareholders' Equity; 24 Due From Banks/Due To Banks equals Loans And Advances To Credit Institutions divided by Deposits And Loans From Banks; 25 Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date; 26 NPLs (in GEL) equals total gross non-performing loans as of the period end; non-performing loans are loans that have debts in arrears for more than 90 calendar days; 27 Gross Loans equals Gross Loans To Clients; 28 Cost Of Risk equals Net Provision For Loan Losses of the period, less recovery of other assets, divided by quarterly average Gross Loans To Clients over the same period; 29 Cost of Risk Normalised equals Net Provision For Loan Losses of the period, less provisions for the interest income generated by non-performing loans through the date of their write-off, plus provisions for (less recovery of) other assets, divided by quarterly average Gross Loans to Clients over the same period. 30 Reserve For Loan Losses To Gross Loans To Clients equals reserve for loan losses as of the period end divided by gross loans to clients as of the same date; 31 NPL Coverage Ratio equals Reserve For Loan losses as of the period end divided by NPLs as of the same date; 32 BIS Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Capital Accord I; 33 BIS Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Capital Accord I; 34 NBG Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements the National Bank of Georgia; 35 NBG Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of the National Bank of Georgia; 36 Basic EPS equals Net Income of the period divided by the weighted average number of outstanding Ordinary Shares over the same period; 37 Diluted EPS equals Net Income of the period divided by the number of outstanding Ordinary Shares as of the period end plus number of ordinary shares in contingent liabilities; 38 Book Value Per Share equals Total Equity plus Treasury Shares, divided by the total number of outstanding Ordinary Shares. *T About Bank of Georgia Bank of Georgia, the leading universal Georgian bank with operations in Georgia and Ukraine, is the largest bank by assets, loans, deposits and equity in Georgia, with 34% market share by total assets (all data according to the NBG as of September 30 2007). The major component of the Galt & Taggart Index, the bank has 109 branches and over 595,000 retail and more than 60,000 corporate current accounts. The bank offers a full range of retail banking and corporate and investment banking services to its customers across Georgia. The bank also provides a wide range of corporate and retail insurance products through its wholly-owned subsidiary, Aldagi BCI, as well as asset & wealth management services. Bank of Georgia has, as of the date hereof, the following credit ratings: -0- *T Standard & Poor's 'B+/B' Stable Moody's 'B3/NP' (FC) & 'Ba1/P-3' (LC) Stable FitchRatings 'B+/B' Stable *T For further information, please visit www.bog.ge/ir or contact: -0- *T Lado Gurgenidze Irakli Gilauri Macca Ekizashvili Chairman of the Supervisory Board Chief Executive Officer Head of Investor Relations +995 32 444 103 +995 32 444 109 +995 32 444 256 lgurgenidze@bog.ge igilauri@bog.ge ir@bog.ge *T This news report is presented for general informational purposes only and should not be construed as an offer to sell or the solicitation of an offer to buy any securities. Certain statements in this news report are forward-looking statements and, as such, are based on the managements current expectations and are subject to uncertainty and changes in circumstances. The financial information as of the nine months 2007 and nine months 2006 contained in this news report is unaudited and reflects the best estimates of management. The bank's actual results may differ significantly from the amounts reflected herein as a result of various factors.

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