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Bank of Georgia (BGEO)

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Thursday 21 December, 2006

Bank of Georgia


Bank of Georgia
                                    CANADA OR JAPAN

               Bank of Georgia Announces Acquisition Of Aldagi By

                    Its Wholly-Owned Insurance Subsidiary BCI

JSC Bank of Georgia (LSE:BGEO) (GSE:GEB), a leading universal bank in Georgia,
announced today that BCI, its wholly-owned insurance subsidiary, has acquired a
100% equity interest in Aldagi, a leading insurance company in Georgia. The
consideration was GEL13.2 million (US$7.6 million1), of which GEL2.2 million
(US$1.3 million1) is payable after 12 months, subject to holdback provisions.

Aldagi is the leading insurance company in Georgia by Gross Premiums Written
('GPW'), with a 23% market share as at September 30 2006, according to
information published by State Insurance Supervision Service of Georgia. As a
result of this transaction, BCI's pro forma market share in Georgia exceeds 40%.
The overall size of the Georgian insurance (life and non-life) market measured
by GPW, is estimated at approximately GEL68.5 million (US$39.5 million1) based
on the annualized aggregate GPW of GEL51.4 million (US$29.6 million1) for the
nine months ended 30 September 2006. Both BCI and Aldagi, which is expected to
be merged into BCI by June 2007, are licensed to carry out life and non-life
insurance activities.

Lado Gurgenidze, Chairman of the Supervisory Board of Bank of Georgia,
commented, 'I am delighted that the BCI team under Irakli Gilauri's leadership,
has completed the acquisition of Aldagi, thereby creating the market leader in
the Georgian insurance market. Given the current penetration rate estimated at
approximately 0.5%2 of GDP, the insurance sector in Georgia is poised for rapid
growth over the next few years. The acquisition price of Aldagi of GEL13.2
million (US$7.6 million1) results in P/GPW ratio of 0.94, and is significantly
lower than the asking multiples for similar companies in Ukraine and elsewhere
in the CIS. Based on our track record of the timely and successful integration
of our previous acquisitions, in both banking and insurance sectors, I have full
confidence in our team's ability to realize material financial and operational
synergies in the forthcoming integration of Aldagi'.

1 GEL/US$=1.736

2 As of year-end 2005

About Bank of Georgia

Bank of Georgia, a leading universal Georgian bank, is the largest bank by total
assets, gross loans and total equity in the country. The bank has 98 branches
and over 380,000 retail clients. 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, BCI, as well as asset & wealth management

Bank of Georgia has 'B+/B' rating with a stable outlook from Standard & Poor's;
'B3/NP' (FC) and 'Baa3/P-3' (LC) ratings with a stable outlook from Moody's; and
a 'B-/B' credit rating with a positive outlook from FitchRatings.

For further information, please visit or contact:

Bank of Georgia          Bank of Georgia          Bank of Georgia          Shared Value Limited
Lado Gurgenidze          Irakli Gilauri           Macca Ekizashvili        Larisa Kogut-Millings
Chairman of the          Chief Executive Officer  Head of Investor
Supervisory Board                                 Relations
+995 32 444 103          +995 32 444 109          +995 32 444 256          +44 (0) 20 7321 5037      

This press release is not an offer of securities for sale in the United States.
The securities referred to herein have not been and will not be registered under
the US Securities Act of 1933, as amended (the 'Securities Act'), and may not be
offered or sold in the United States or to US persons unless the securities are
registered under the Securities Act or an exemption from the registration
requirements of the Securities Act is available. No public offering of the
securities will be made in the United States. Other selling restrictions are