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JSC Bank of Georgia (BGEO)

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Tuesday 14 August, 2007

JSC Bank of Georgia

Half-yearly Report

Bank of Georgia
                  

1.67 GEL/US$ 1H 2007 period end
1.70 GEL/US$ 1H 2007 average
1.77 GEL/US$ 1H 2006 period end
1.81 GEL/US$ 1H 2006 average

     JSC BANK OF GEORGIA ANNOUNCES CONSOLIDATED Q2 2007 AND 1H 2007 RESULTS

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*T
Millions, unless otherwise noted            Q2 2007             Growth y-o-y (1)
                                            Unaudited
                                            GEL         US$
Bank of Georgia (Consolidated, IFRS Based)
Total Operating Income (Revenue)(2)            52.2     31.2                 92%
Recurring Operating Costs                      20.4     12.2                 90%
Normalized Net Operating Income(3)             31.7     19.0                 93%
Pre-Bonus Result                               30.9     18.5                188%
Net Income                                     18.7     11.2                172%

Millions, unless otherwise noted            1H 2007             Growth y-o-y (1)
                                            Unaudited
                                            GEL         US$
Bank of Georgia (Consolidated, IFRS Based)
Total Operating Income (Revenue)(2)            93.2     55.8                107%
Recurring Operating Costs                      37.0     22.1                 83%
Normalised Net Operating Income(3)             56.2     33.7                128%
Pre-Bonus Result                               53.4     32.0                204%
Net Income                                     32.4     19.4                193%
Consolidated EPS (Basic), GEL & US$(4)         1.28     0.77                 80%
Consolidated EPS (Diluted), GEL & US$(5)       1.19     0.71                 72%
ROAA(6,)%,annualised                            3.9
ROA (7) %,annualised                            3.4
ROAE(8) %,annualised                           16.6
ROE(9)%,annualised                             16.0
*T

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(1) Compared to the same period in 2006; growth calculations based on
    GEL.
(2) Revenue includes Net Interest Income and Net Non-Interest Income.
(3) Normalized for the 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
*T

About Bank of Georgia
Bank of Georgia, a leading universal Georgian bank with operations in Georgia
and Ukraine, is the largest bank by assets, loans, deposits and equity in
Georgia, with 32% market share by total assets (all data according to the NBG as
of June 30 2007). The major component of the Galt & Taggart Index, the bank has
105 branches and over 530,000 retail and more than 55,000 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.

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Bank of Georgia has, as of the date hereof, the following credit ratings:
Standard & Poor's 'B+/B'                                           Stable
Moody's           'B3/NP' (FC) & 'Ba1/P-3'                         Stable
                   (LC)
FitchRatings      'B+/B'                                           Stable
*T

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For further information, please visit www.bog.ge/ir or contact:
 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 management's current expectations and
are subject to uncertainty and changes in circumstances.

The financial information as of the first half 2007 and first half 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.

Bank of Georgia (LSE: BGEO, GSE: GEB), the leading Georgian universal bank,
announced today its Q2 2007 and 1H 2007 consolidated results (IFRS based,
derived from management accounts), reporting record quarterly Net Income of GEL
18.7 million in Q2 2007, (up 171.8% y-o-y) or US$0.44 per share (up 76.9%
y-o-y).

In 1H 2007, Net Income on the consolidated basis reached GEL 32.4 million (up
193.4% y-o-y), or US$0.77 per share (Basic, up 91.2 % y-o-y).

Q2 2007 Summary
The growth of the bank's Net Normalised Operating Income ('NNOI') by 92.5% y-o-y
to GEL 31.7 million was driven by a 100.1% growth y-o-y of Net Interest Income
to GEL 30.9 million and an 80.4% growth y-o-y in Net Non-Interest Income to GEL
21.3 million. Recurring Operating Costs grew by 90.2% y-o-y, resulting in
Pre-Bonus Result ('PBR') of GEL 30.9 million, up 187.5% y-o-y.

1H 2007 Summary

The bank reported strong consolidated results with a record Net Income of GEL
32.4 million, up 193.4% y-o-y. Total Operating Income (Revenue) grew 107.3%
y-o-y to GEL 93.2 million, driven by a 119.9% increase y-o-y in Net Interest
Income and a 90.1% increase y-o-y in Net Non-Interest Income, outpacing the
82.5% y-o-y growth of Total Recurring Operating Costs to GEL 37.0 million. As a
result of the improved operating leverage, NNOI grew 127.5% y-o-y to GEL 56.2
million. PBR grew 203.9 % y-o-y to a record GEL 53.4 million, as the bank had
Net Non-Recurring Income of GEL 1.9 million largely attributed to the
non-recurring gains from the sale of non-core assets and its Cost of Risk
decreased to 1.1% in 1H 2007 from 2.9% for the same period of the previous year.

The bank's consolidated Total Assets reached GEL 1.9 billion by 30 June 2007, up
168.0% y-o-y and up 58.1% YTD. The bank's corporate, retail and private banking
Gross Loans To Clients grew by 105.5%, 156.1% and 93.3% y-o-y and 45.0%, 55.9%,
45.2% YTD, respectively, to GEL 570.6 million, GEL 439.1 million and GEL 32.7
million, respectively, contributing to the 130.0% y-o-y growth of Net Loans To
Clients to GEL 1.0 billion (up 49.3% YTD). The balance sheet growth in 1H 2007
resulted in an approximately 4.3% market share gain by assets and approximately
3.6% market share gain by gross loans, resulting in the market share of
approximately 32.2% and 30.0% by total assets and gross loans, respectively, as
at 30 June 2007.(8) The bank's non-deposit funding base grew 317.9% y-o-y and
133.6% YTD to GEL 522.2 million as at 30 June 2007, largely due to the US$200
million debut Eurobond placement in Q1 2007. Client Deposits (GEL 828.0 million
as at 30 June 2007) increased by 86.1% y-o-y and 47.9% YTD. As a result, the
bank's market share by Total Deposits grew by 3.2% to 27.7% as at 30 June 2007.

Consolidated ROAE of 16.6% remained flat compared to the consolidated ROAE of
16.5% as of 31 December 2006, while consolidated ROAA reached 3.9% in 1H 2006,
compared to 3.4% as of the year-end 2006. The equity book value per share stood
at GEL 15.97 as at 30 June 2007, up 131.4% y-o-y and up 7.3% YTD.

(1) 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 101.7% y-o-y to GEL 31.5 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 (71.0% y-o-y),
lagged the growth rate of the allocated Revenues. PBR grew 180.9% y-o-y to GEL
22.8 million, contributing 42.7% to the consolidated PBR. Earnings grew 133.5%
y-o-y, contributing 47.4% to the consolidated Net Income. Gross Loans grew
105.5% y-o-y and 45.0% YTD to GEL 570.6 million, driven by the increased lending
to corporate clients and rapid growth of the SME loan book. Allocated Client
Deposits grew 85.9% y-o-y and 74.2% YTD to GEL 492.6 million, primarily due to
the growth of current account balances. Allocated Total CIB Assets amounted to
GEL 968.9 million, up 146.2% y-o-y and up 81.1% YTD, while allocated Total CIB
Liabilities reached GEL 786.6 million, up 127.4% y-o-y and up 72.6% YTD.

Highlights

    --  Major new corporate client acquisitions include Heidelberg Cement
        Georgia and Coca-Cola Bottlers Georgia Group Companies.

    --  Increased the number of corporate clients using the bank's payroll
        services from 480 at the end of 2006 to over 621 by the end of 1H 2007.
        By 30 June 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 120,000.

    --  More than 10,000 legal entities opened accounts at the bank in 1H 2007,
        bringing the total to over 57,000.

Retail Banking (RB)

Discussion Of Results

Allocated Revenues grew 162.6% y-o-y to GEL 42.1 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 (102.6% y-o-y, driven
primarily by the branch and headcount expansion) lagged the growth rate of the
allocated Revenues. PBR grew 440.6% y-o-y to GEL 21.9 million, contributing
40.9% to the consolidated PBR. Earnings grew 361.4% y-o-y to GEL 14.7 million,
contributing 45.6% to the consolidated Net Income. Gross Loans grew 156.1% y-o-y
and 55.9% YTD to GEL 439.1 million, driven by the increased lending activity due
to high demand from customers. Allocated Client Deposits grew 66.7% y-o-y and
32.7% YTD to GEL 272.9 million, driven primarily by the growth of current
account balances and time deposits. Allocated Total RB Assets amounted to GEL
740.6 million, up 207.2% y-o-y and up 98.3% YTD, while allocated Total RB
Liabilities reached GEL 498.7 million, up 133.7% y-o-y and up 89.6% YTD.

Highlights

    --  Increased the number of retail current accounts from approximately
        420,000 at the beginning of the year to more than 530,000 by 30 June,
        2007.

    --  Increased the number of branches (service centers) from 100 at the
        beginning of the year to 105 by 30 June 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 or leased premises for 24 new branches, which are currently being
        fitted out and are expected to be operational by YE 2007 and in Q2 2008.

    --  Stepped up the issuance of credit cards, as the number of credit cards
        issued reached approximately 17,000 in Q2 2007, compared to
        approximately 5,800 credit cards issued in Q1 2007. As of 30 June 2007,
        the number of credit cards outstanding amounted to approximately 23,000
        up from nil same period last year and approximately 6,000 as at 31 March
        2007.

    --  More than doubled the issuance of debit cards with over 160,000 debit
        cards issued in 1H 2007 as compared to approximately 69,000 debit cards,
        issued in 1H 2006. The number of debit cards outstanding increased from
        approximately 285,000 at the beginning of the year to approximately
        408,000 by the end of 1H 2007.

    --  Continued to make gains in merchant acquiring as the installed POS
        terminal footprint grew to 616.

    --  Total number of cards serviced by Georgian Card grew from 370,000 at the
        beginning of the year to 575,000 by 30 June 2007, while the number of
        transaction authorisations processed by Georgian Card in 1H 2007 grew
        164% y-o-y to approximately 7.2 million (compared to approximately 2.9
        million in 1H 2006).

    --  Continued investing in the electronic banking channels, as the number of
        ATMs grew to 166 by 30 June 2007 (up from 124 at the beginning of the
        year), number of mobile banking users reached 18,808, and number of
        registered Internet banking users grew 55.0% YTD to over 56,500.

    --  POS express consumer lending, commenced by the bank in 2006 to
        complement the branch-based general-purpose consumer lending, resulted
        in the 734 express loan POS contracts signed with merchants (of which
        454 outlets were served by 30 June 2007). POS express loan originations
        have reached GEL34.8 million in 1H 2007 (up 960.4% y-o-y), while POS
        express loans outstanding amounted to GEL 32.0 million at the end of 1H
        2007, up 966.2% y-o-y and up 44.1% YTD.

    --  Stepped up mortgage loan originations to GEL 64.0 million in 1H 2007 (up
        235.6% y-o-y) resulting in mortgage loans outstanding by 30 June 2007 of
        GEL 105.7 million, up 136.1% y-o-y and up 66.1% YTD.

    --  Car loan originations of GEL 16.0 million (up 263.0% y-o-y) resulted in
        car loans outstanding by 30 June 2007 of GEL 22.2 million, up 235.4%
        y-o-y and up 127.9% YTD.

Insurance

Discussion Of Results

Standalone Revenues of Aldagi BCI, the bank's wholly-owned insurance subsidiary,
grew 12.0% y-o-y on a pro forma basis to GEL 5.8 million, impacted by the growth
in both corporate and consumer lines of business, with pro forma standalone
Gross Premiums Written up 4.2% y-o-y to GEL 17.0 million. Pro forma standalone
Operating Costs were GEL 3.4 million, up 4.6% y-o-y, and pro forma standalone
Net Claims Incurred were GEL 2.3 million, up 39.2% y-o-y, reflecting the growth
of the business. Pro forma PBR grew 42.1% y-o-y to GEL 1.4 million while pro
forma earnings grew 14.7% y-o-y, to GEL 0.8 million in 1H 2007. Total Insurance
Assets amounted to GEL 43.3 million, while Total Insurance Liabilities reached
GEL 39.5 million as at 30 June 2007.

Highlights

    --  Completed the merger of BCI and Aldagi on 22 June 2007. Combined market
        share of Aldagi and BCI by Gross Premiums Written amounted in 1H 2007 to
        approximately 36%.

Corporate Center (CC)

Significant decreases in the Allocated Revenues and Net Income of the Corporate
Center is a result of a significant increase in the elimination adjustment in Q2
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 3.1 million, representing 0.2% of the
consolidated Total Assets. Allocated Total CC Liabilities reached GEL 65.8
million, representing 4.3% of the consolidated Total Liabilities.

Wealth Management (WM)

Discussion Of Results

Allocated Revenues grew 145.0% y-o-y, impacted by the growth of Net Interest
Income (driven primarily by the growth of the Private Banking loan book) to GEL
2.1 million in 1H 2007. Allocated Recurring Costs of GEL 0.6 million grew 72.3%
y-o-y. PBR grew 1301.0% y-o-y to GEL 1.3 million, contributing 2.4% to the
consolidated PBR. Earnings grew 1065.4% y-o-y, contributing 2.7% to the
consolidated Net Income. Gross Loans grew 93.3% y-o-y and 45.2 YTD to GEL 32.7
million, while Allocated Client Deposits increased by 247.6% y-o-y and decreased
by 13.7% YTD to GEL 56.4 million. Allocated Total WM Assets amounted to GEL 55.1
million, up 136.2% y-o-y and 364.4% YTD, while allocated Total WM Liabilities
reached GEL 73.2 million, up 247.2% y-o-y and 26.6% YTD.

Highlights

    --  The number of private banking clients grew from 873 at the beginning of
        the year to 943 at the end of 1H 2007.

    --  Private banking mortgage loan originations of GEL 7.3 million (up 7.3%
        y-o-y) in 1H 2007 resulted in mortgage loans outstanding of GEL 22.9
        million as at 30 June 2007, up and 110.5% y-o-y and up 32.7% YTD.

    --  Private Banking car loan originations of GEL 1.4 million in 1H 2007
        resulted in car loans outstanding of GEL 3.1 million as at 30 June 2007,
        up 133.6% y-o-y and up 36.2% YTD.

Galt & Taggart Securities

Discussion Of Results

The growth of standalone Revenues to GEL 11.8 million in 1H 2007 (up 880.7%
y-o-y) was driven primarily by increases in commissions from brokerage, (GEL 1.4
million, up 85.0% y-o-y), commissions from custody and safekeeping, (GEL 0.1
million, up 967.9% y-o-y) and securities trading gains (GEL 8.8 million, up
2264.7% y-o-y). Standalone Recurring Operating Costs increased 742.5% y-o-y to
GEL 1.0 million. The lower growth rate of the Operating Costs (GEL 1.2 million,
up 473.8% y-o-y), compared to the standalone Revenue growth rate, resulted in
the y-o-y increase of 953.6% of the standalone NNOI to GEL 10.5 million.
Standalone PBR reached GEL 10.5 million in 1H 2007, (up 907.5% y-o-y).
Standalone Earnings grew 851.5% y-o-y, reaching GEL 7.7 million in 1H 2007.
Standalone Assets grew to GEL 52.7 million as at 30 June 2007, up 336.1% y-o-y
and 163.9% YTD, mostly as a result of the dramatic growth of the proprietary
book. Standalone Liabilities reached GEL 20.3 million by 30 June 2007, up 118.0%
y-o-y and up 206.3% YTD.

Highlights

    --  Assets Under Custody grew 162.7% y-o-y and 11.1% YTD to GEL 377.0
        million as of 30 June 2007.

    --  Proprietary book grew 1946.9% YTD to GEL 29.4 million as at 30 June
        2007.

    --  Continued to hold the leading position by the equities trading volume in
        Georgia, with an approximately 62% market share.

    --  Successfully introduced Teliani Valley, Georgia's leading winery, to the
        Georgian Stock Exchange (GSE: WINE).

    --  Acted as sole placement agent on a GEL 6 million capital increase of JSC
        Populi, the leading Georgian supermarket chain.

    --  Launched a fully-fledged Ukrainian research platform in April 2007, with
        six analysts covering various sectors.

Asset Management

Highlights

    --  The market capitalization of Galt & Taggart Capital reached GEL 92.9
        million as at 30 June 2007, an increase of 73.7% YTD and an increase of
        182.4% since the company was admitted to trading on the Georgian Stock
        Exchange in November 2006.

    --  Galt & Taggart Capital participated in the capital increase of JSC
        Populi to fund the rapid expansion of its retail footprint and purchased
        a 25.0% equity interest in Teliani Valley.

    --  SB Real Estate made several real estate investments in Tbilisi and on
        the Black Sea coast.

    --  Assets Under Management at the Aldagi BCI Pension Fund grew 217.6% y-o-y
        (up 61.1% YTD) to GEL 0.9 million at the end of 1H 2007, while the
        number of Aldagi BCI Pension Fund members stood at 3,004 at the end of
        1H 2007, up from 1,285 members at the end of 1H 2006.

Comments

'I am very pleased with our 1H 2007 results. We have successfully funded our
loan book growth, gained market share by assets, loans and deposits and
ascertained market leadership in all of our businesses', commented Lado
Gurgenidze, Chairman of the Supervisory Board.

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                                       SEGMENT RESULTS
                                   Change y-o-y      1H 2007        Share      1H 2006   Share
Total Operating Income (Revenue)
----------------------------------------------------------------------------------------------
Corporate & Investment Banking           101.7%       31,512        33.8%       15,621   34.7%
Retail Banking                           162.6%       42,143        45.2%       16,046   35.7%
Wealth Management                        145.0%        2,137         2.3%          872    1.9%
Galt & Taggart Securities                845.5%       11,850        12.7%        1,253    2.8%
Asset Management                            NMF        1,718         1.8%            0    0.0%
Insurance                                 38.3%        4,364         4.7%        3,155    7.0%
Corporate Center                            NMF        (516)        -0.6%        8,025   17.8%
----------------------------------------------------------------------------------------------
Total Operating Income (Revenue)         107.3%       93,207       100.0%       44,973  100.0%
----------------------------------------------------------------------------------------------

Total Recurring Operating Costs
----------------------------------------------------------------------------------------------
Corporate & Investment Banking            71.0%        5,326        14.4%        3,114   15.4%
Retail Banking                           102.6%       17,891        48.4%        8,831   43.6%
Wealth Management                         72.3%          650         1.8%          377    1.9%
Galt & Taggart Securities                362.6%        1,337         3.6%          289    1.4%
Asset Management                            NMF        2,062         5.6%            0    0.0%
Insurance                                 29.8%        2,970         8.0%        2,288   11.3%
Corporate Center                          25.7%        6,733        18.2%        5,357   26.4%
----------------------------------------------------------------------------------------------
Total Recurring Operating Costs           82.5%       36,970       100.0%       20,257  100.0%
----------------------------------------------------------------------------------------------

Pre-Bonus Result
----------------------------------------------------------------------------------------------
Corporate & Investment Banking           180.9%       22,776        42.7%        8,110   46.2%
Retail Banking                           440.6%       21,850        40.9%        4,042   23.0%
Wealth Management                       1301.0%        1,280         2.4%           91    0.5%
Galt & Taggart Securities                990.1%       10,512        19.7%          964    5.5%
Asset Management                            NMF        (374)        -0.7%            0    0.0%
Insurance                                 58.2%        1,372         2.6%          867    4.9%
Corporate Center                            NMF      (4,049)        -7.6%        3,489   19.9%
----------------------------------------------------------------------------------------------
Pre-Bonus Result                         203.8%       53,366       100.0%       17,563  100.0%
----------------------------------------------------------------------------------------------

Net Income
----------------------------------------------------------------------------------------------
Corporate & Investment Banking           133.5%       15,337        47.4%        6,569   59.6%
Retail Banking                           361.4%       14,749        45.6%        3,197   29.0%
Wealth Management                       1065.4%          864         2.7%           74    0.7%
Galt & Taggart Securities                905.9%        7,713        23.8%          767    7.0%
Asset Management                            NMF        (393)        -1.2%            -    0.0%
Insurance                                 14.1%          762         2.4%          668    6.1%
Corporate Center                        2619.7%      (6,679)       -20.6%        (246)   -2.2%
----------------------------------------------------------------------------------------------
Net Income                               193.4%       32,352       100.0%       11,028  100.0%
----------------------------------------------------------------------------------------------

Basic EPS Contribution             Change y-o-y Contribution        Share Contribution   Share
----------------------------------------------------------------------------------------------
Corporate & Investment Banking            41.6%         0.61        47.4%         0.43   59.6%
Retail Banking                           179.7%         0.58        45.6%         0.21   29.0%
Wealth Management                           NMF         0.03         2.7%         0.00    0.7%
Galt & Taggart Securities                509.8%         0.31        23.8%         0.05    7.0%
Asset Management                            NMF       (0.02)        -1.2%            -    0.0%
Insurance                                -30.8%         0.03         2.4%         0.04    6.1%
Corporate Center                            NMF       (0.26)       -20.6%       (0.02)   -2.2%
----------------------------------------------------------------------------------------------
Total                                     78.0%         1.28       100.0%         0.72  100.0%
----------------------------------------------------------------------------------------------
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                                    SEGMENT RESULTS CONT'D
Total Assets                      Change y-o-y       1H 2007        Share      1H 2006   Share
----------------------------------------------------------------------------------------------
Corporate & Investment Banking           146.2%      968,859        50.5%      393,503   55.0%
Retail Banking                           207.2%      740,564        38.6%      241,069   33.7%
Wealth Management                        136.2%       55,125         2.9%       23,342    3.3%
Galt & Taggart Securities                223.4%       52,722         2.7%       16,302    2.3%
Asset Management                            NMF       53,239         2.8%            -    0.0%
Insurance                                193.3%       44,189         2.3%       15,064    2.1%
Corporate Center                         -88.1%        3,135         0.2%       26,254    3.7%
----------------------------------------------------------------------------------------------
Total Assets                             168.0%    1,917,833       100.0%      715,534  100.0%
----------------------------------------------------------------------------------------------

Loans to Clients, Gross
----------------------------------------------------------------------------------------------
Corporate & Investment Banking           105.5%      570,618        53.9%      277,634   58.5%
Retail Banking                           156.1%      439,112        41.5%      171,478   36.1%
Wealth Management                         93.3%       32,712         3.1%       16,919    3.6%
Galt & Taggart Securities                   NMF            -         0.0%            -    0.0%
Asset Management                            NMF            -         0.0%            -    0.0%
Insurance                                   NMF            -         0.0%            -    0.0%
Corporate Center                          93.3%       16,756         1.6%        8,670    1.8%
----------------------------------------------------------------------------------------------
Total Loans to Clients                   123.1%    1,059,197       100.0%      474,701  100.0%
----------------------------------------------------------------------------------------------

Total Liabilities
----------------------------------------------------------------------------------------------
Corporate & Investment Banking           127.4%      786,613        52.0%      345,949   56.8%
Retail Banking                           133.7%      498,748        32.9%      213,405   35.1%
Wealth Management                        247.3%       73,233         4.8%       21,085    3.5%
Galt & Taggart Securities                144.1%       20,342         1.3%        8,332    1.4%
Asset Management                            NMF       28,734         1.9%            -    0.0%
Insurance                                319.6%       40,346         2.7%        9,616    1.6%
Corporate Center                         538.7%       65,810         4.3%       10,304    1.7%
----------------------------------------------------------------------------------------------
Total Liabilities                        148.7%    1,513,826       100.0%      608,691  100.0%
----------------------------------------------------------------------------------------------

Client Deposits
----------------------------------------------------------------------------------------------
Corporate & Investment Banking            85.9%      492,580        59.5%      264,986   59.6%
Retail Banking                            66.7%      272,899        33.0%      163,666   36.8%
Wealth Management                        247.6%       56,448         6.8%       16,238    3.6%
Galt & Taggart Securities                   NMF        6,054         0.7%            -    0.0%
Asset Management                            NMF            -         0.0%            -    0.0%
Insurance                                   NMF            -         0.0%            -    0.0%
Corporate Center                            NMF            -         0.0%            -    0.0%
----------------------------------------------------------------------------------------------
Total Client Deposits                     86.1%      827,981       100.0%      444,889  100.0%
----------------------------------------------------------------------------------------------

Book Value Per Share               Change y-o-y Contribution        Share Contribution   Share
----------------------------------------------------------------------------------------------
Corporate & Investment Banking           135.3%         7.21        45.1%         3.06   44.5%
Retail Banking                           436.8%         9.56        59.9%         1.78   25.9%
Wealth Management                           NMF        -0.72        -4.5%         0.15    2.1%
Galt & Taggart Securities                149.5%         1.28         8.0%         0.51    7.5%
Asset Management                            NMF         0.97         6.1%            -    0.0%
Insurance                                -56.7%         0.15         1.0%         0.35    5.1%
Corporate Center                            NMF        -2.48       -15.5%         1.03   14.9%
----------------------------------------------------------------------------------------------
Total Client Deposits                    132.2%        15.97       100.0%         6.88  100.0%
----------------------------------------------------------------------------------------------
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                                     INCOME STATEMENT DATA
Period Ended                                    1H 2007                1H 2006        Change(3)
Consolidated, IFRS Based                   US$(1)         GEL     US$(2)        GEL    Y-O-Y
000s, unless otherwise noted               (Unaudited)            (Unaudited)

 Interest Income                           59,377      99,130       21,655   38,393      158.2%
 Interest Expense                          25,267      42,183        7,049   12,498      237.5%
Net Interest Income                        34,110      56,946       14,605   25,895      119.9%
 Fee & Commission Income                    7,834      13,079        4,675    8,288       57.8%
 Fee & Commission Expense                     932       1,555          612    1,085       43.4%
Net Fee & Commission Income                 6,903      11,524        4,063    7,204       60.0%
 Income From Documentary Operations         1,807       3,016        1,237    2,194       37.5%
 Expense On Documentary Operations            601       1,003          327      580       72.9%
Net Income From Documentary Operations      1,206       2,013          910    1,613       24.8%
Net Foreign Currency Related Income         6,197      10,346        2,626    4,656      122.2%
 Net Insurance Income                       2,110       3,523        1,689    2,995       17.6%
 Brokerage Income                             911       1,521          467      828       83.8%
 Asset Management Income                        -           -            -        -      NMF(4)
 Realised Net Investment Gains (Losses)     1,840       3,072          217      384      699.4%
 Other                                      2,552       4,261          788    1,398      204.8%
Net Other Non-Interest Income               7,414      12,377        3,161    5,605      120.8%
Net Non-Interest Income                    21,719      36,261       10,760   19,078       90.1%
Total Operating Income (Revenue)           55,829      93,207       25,366   44,973      107.3%
 Personnel Costs                           10,460      17,462        5,656   10,028       74.1%
 Selling, General & Administrative Costs    5,934       9,906        2,749    4,873      103.3%
 Procurement & Operations Support Expenses  2,693       4,496        1,216    2,157      108.5%
 Depreciation & Amortization                2,540       4,241        1,427    2,530       67.6%
 Other Operating Expenses                     518         866          378      670       29.3%
Total Recurring Operating Costs            22,145      36,970       11,425   20,257       82.5%
Normalized Net Operating Income            33,685      56,237       13,940   24,716      127.5%
Net Non-Recurring Income (Costs)            1,157       1,932         -690  (1,223)         NMF
Profit Before Provisions & Bonuses         34,842      58,169       13,251   23,493      147.6%
Provisions For Loan Losses                  4,409       7,360        4,162    7,380       -0.3%
Recovery Of Loans                           1,462       2,442          166      295      728.6%
Provisions For (Recovery Of) Other Assets     -69       (116)         -652  (1,155)      -90.0%
Net Provision Expense                       2,877       4,803        3,345    5,930      -19.0%
Pre-Bonus Result                           31,965      53,366        9,906   17,563      203.9%
Bonuses & Share Based Compensation
 Expenses                                   7,736      12,915        1,875    3,324      288.5%
Pre-Tax Income                             24,230      40,452        8,031   14,239      184.1%
 Income Tax Expenses                        4,851       8,099        1,811    3,211      152.2%
Net Income                                 19,379      32,352        6,220   11,028      193.4%

Weighted Average Shares Outstanding (000s)             25,258                15,499
Diluted Number of Shares Period End (000s)             27,248                15,925
EPS (Basic)                                  0.77        1.28         0.40     0.71       80.0%
EPS (Diluted)                                0.71        1.19         0.39     0.69       71.5%
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(1) Converted to U.S. dollars for convenience using a period-end
    exchange rate of GEL 1.6695 per U$S1.00 , such rate being the
    official Georgian Lari to U.S. dollar period-end exchange rate as
    reported by the National Bank of Georgia as at 30 June 2007
(2) Converted to U.S. dollars for convenience using a period-end
    exchange rate of GEL 1.7730 per U$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 June 2006
(3) Growth calculations based on GEL values
(4) Not meaningful
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                                                  BALANCE SHEET DATA
                                             30-Jun-07       Growth(2)     31-Dec-06      Growth(4)     30-Jun-06
Consolidated, IFRS Based                   US$(1)        GEL    YTD     US$(3)        GEL   Y-O-Y    US$(5)        GEL
000s, unless otherwise noted                (Unaudited)                    (Audited)                   (Unaudited)

Cash & Cash Equivalents                    58,055     96,922    -10.1%  62,917    107,809      5.3%  51,897     92,014
Loans & Advances To Credit Institutions   149,545    249,666    279.9%  38,349     65,711    289.8%  36,126     64,052
 Mandatory Reserve With NBG                39,254     65,534      6.6%  35,869     61,461     66.2%  22,238     39,428
 Other Accounts With NBG                   46,072     76,918  32492.4%     138        236    377.8%   9,080     16,098
 Balances With & Loans To Other Banks      64,219    107,214   2571.0%   2,343      4,014   1157.5%   4,809      8,526
Available-For-Sale Securities               4,244       7085     28.0%   3,230      5,534    210.3%   1,288      2,283
Treasuries & Equivalents                   34,288     57,244    -69.4% 109,276    187,244    NMF(6)       -          -
Other Fixed Income Instruments            140,610    234,748   5292.8%   2,540      4,353       NMF       -          -
 Gross Loans To Clients                   634,440  1,059,197     48.1% 417,310    715,061    123.1% 267,739    474,701
 Less: Reserve For Loan Losses            -13,878    -23,170      9.7% -12,330    -21,128     -4.2% -13,635    -24,174
Net Loans To Clients                      620,561  1,036,027     49.3% 404,980    693,933    130.0% 254,104    450,527
Investments In Other Business Entities,
 Net                                       14,255     23,799   1844.4%     714      1,224   2484.0%     519        921
Property & Equipment Owned, Net            71,093    118,690     77.6%  39,001     66,828    144.7%  27,360     48,510
Intangible Assets Owned, Net                1,779      2,970     -5.7%   1,838      3,150     63.5%   1,024      1,816
Goodwill                                   25,880     43,206      7.3%  23,507     40,279     84.4%  13,218     23,436
Tax Assets - Current & Deferred             1,273      2,125       NMF       -          -    587.7%     174        309
Prepayments & Other Assets                 27,165     45,350     21.7%  21,746     37,261     43.2%  17,860     31,666
Total Assets                            1,148,747  1,917,832     58.1% 708,098  1,213,326    168.0% 403,572    715,534

Client Deposits                           495,945    827,981     47.9% 326,610    559,646     86.1% 250,924    444,889
Deposits & Loans From Banks                32,650     54,510   6201.7%     505        865    308.9%   7,518     13,330
Borrowed Funds                            312,803    522,225    133.6% 130,444    223,516    317.9%  70,490    124,978
Insurance Related Liabilities              15,261     25,478    230.9%   4,493      7,699    356.4%   3,148      5,582
Issued Fixed Income Securities                790      1,319     22.9%     626      1,073     -1.0%     752      1,333
Tax Liabilities - Current & Deferred        7,837     13,084     60.8%   4,749      8,138    363.2%   1,593      2,825
Accruals & Other Liabilities               41,466     69,228     84.5%  21,903     37,531    339.4%   8,886     15,754
Total Liabilities                         906,754  1,513,825     80.5% 489,331    838,468    148.7% 343,311    608,691

Ordinary Shares                            15,157     25,304      0.4%  14,708     25,202     63.4%   8,735     15,488
Share Premium                             149,460    249,523    -10.1% 161,914    277,440    567.5%  21,085     37,383
Treasury Shares                              -732     -1,222     21.7%    -586     -1,004    688.4%     -87       -155
Retained Earnings                          37,541     62,675     69.5%  21,578     36,974     49.2%  23,699     42,019
Revaluation & Other Reserves               17,120     28,582    443.7%   3,068      5,257       NMF       -          -
Net Income For The Period                  19,378     32,352     20.8%  15,624     26,772    193.4%   6,220     11,028
Shareholders' Equity Excluding Minority
 Interest                                 237,924    397,214      7.2% 216,306    370,641    275.6%  59,652    105,763
Minority Interest                           4,069      6,793     61.1%   2,461      4,217    529.0%     609      1,080
Total Shareholders' Equity                241,993    404,007      7.8% 218,767    374,858    278.1%  60,261    106,843
Total Liabilities & Shareholders'
 Equity                                 1,148,747  1,917,832     58.1% 708,098  1,213,326    168.0% 403,572    715,534
Shares Outstanding                                25,304,087                   25,202,009                   15,537,891
Book Value Per Share                         9.57      15.97      7.4%    8.68      14.87    131.4%    3.89       6.90
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(1) Converted to U.S. dollars for the convenience using a period-end
    exchange rate of GEL 1.6695 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 June 2007
(2) Compared to 31 December 2006; growth calculations based on GEL
    values
(3) Converted to U.S. dollars for the convenience using a period-end
    exchange rate of GEL 1.7135 per US$1.00, such exchange rate being
    the official Georgia Lari to U.S. dollar period-end exchange rate
    as reported by the National Bank of Georgia on 31 December 2006
(4) Compared to the same period in 2006; growth calculations based on
    GEL values
(5) Converted to U.S. dollars for the convenience using a period-end
    exchange rate of GEL 1.7730 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 June 2006
(6) Not meaningful
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                                      KEY RATIOS
                                                                1H 2007    2006 1H 2006
Profitability Ratios
ROAA,(1) Annualised for 1H                                         3.9%    3.4%    3.5%
ROA, Annualised                                                    3.4%    2.2%    3.1%
ROAE,(2) Annualised for 1H                                        16.6%   16.5%   22.0%
ROE, Annualised                                                   16.0%    7.1%   20.6%
Interest Income To Average Interest Earning Assets, (3)
 Annualised for 1H                                                14.6%   16.7%   15.6%
Cost Of Funds, (4) Annualised for 1H                               7.2%    5.8%    4.9%
Net Spread (5)                                                     7.5%   10.9%   10.7%
Net Interest Margin (6) Annualised for 1H                          8.4%   11.1%   10.5%
Net Interest Margin, Normalised, (7) Annualised for 1H             8.4%   10.6%    9.4%
Loan Yield (8)                                                    21.0%   17.4%   15.9%
Interest Expense To Interest Income                               42.6%   33.5%   32.6%
Net Non-Interest Income To Average Total Assets, Annualised for
 1H                                                                4.4%    5.8%    6.0%
Net Non-Interest Income To Revenue (9)                            38.9%   40.4%   42.4%
Net Fee And Commission Income To Average Interest Earning
 Assets, (10) Annualised for 1H                                    1.7%    3.1%    2.9%
Net Fee And Commission Income To Revenue                          12.4%   16.5%   16.0%
Operating Leverage (11)                                           13.9%   18.8%     NMF
Total Operating Income (Revenue)/Total Assets, Annualised for
 1H                                                                9.7%    9.2%   12.6%
Recurring Earning Power (12) Annualised for 1H                     7.0%    7.7%    7.4%
Net Income To Revenue                                             34.7%   23.9%   24.5%

Efficiency Ratios
Operating Cost To Average Total Assets, (13) Annualised for 1H     4.5%    6.8%    6.3%
Cost To Average Total Assets (14) Annualised for 1H                5.8%    8.2%    7.8%
Cost / Income (15)                                                51.4%   56.7%   55.2%
Cost /Income Normalised (16)                                      53.5%   55.9%   52.4%
Cash Cost/Income(17)                                              46.9%   51.4%   49.5%
Cost / Income, Bank of Georgia, Standalone (18)                   48.3%   51.2%   52.2%
Total Employee Compensation Expense To Revenue (19)               32.6%   29.7%   29.7%
Total Employee Compensation Expense To Cost                       63.3%   52.5%   53.8%
Total Employee Compensation Expense To Average Total Assets,
 Annualised for 1H                                                 3.7%    4.3%    4.2%

Liquidity Ratios
Net Loans To Total Assets (20)                                    54.0%   57.2%   63.0%
Average Net Loans To Average Total Assets                         52.7%   61.3%   60.5%
Interest Earning Assets To Total Assets                           82.3%   78.4%   75.9%
Average Interest Earning Assets To Average Total Assets           81.6%   77.3%   77.2%
Liquid Assets To Total Assets (21)                                30.2%   25.0%   16.6%
Net Loans To Client Deposits                                     125.1%  124.0%  101.3%
Average Net Loans To Average Client Deposits                     129.7%  113.4%  101.0%
Net Loans To Total Deposits (22)                                 117.4%  123.8%   98.3%
Net Loans To Total Liabilities                                    68.4%   82.8%   74.0%
Total Deposits To Total Liabilities                               58.3%   66.8%   75.3%
Client Deposits To Total Deposits                                 93.8%   99.8%   97.1%
Client Deposits To Total Liabilities                              54.7%   66.7%   73.1%
Current Account Balances To Client Deposits                       56.4%   54.4%   56.8%
Demand Deposits To Client Deposits                                10.0%    6.4%    6.6%
Time Deposits To Client Deposits                                  33.7%   39.2%   36.6%
Total Deposits To Total Assets                                    46.0%   46.2%   64.0%
Client Deposits To Total Assets                                   43.2%   46.1%   62.2%
Client Deposits To Total Equity (times) (23)                       2.05    1.49    4.16
Due From Banks / Due To Banks (24)                                 458%   7597%    481%
Leverage (times) (25)                                               3.7     2.2     5.7
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                                          KEY RATIOS CONT'D
                                                                   1H 2007          2006       1H 2006
Asset Quality
NPLs (in GEL) (26)                                                  18,012        16,266        26,957
NPLs to Gross Loans (27)                                              1.7%          2.3%          5.7%
Cost of Risk (28)                                                     1.1%          2.7%          2.9%
Cost of Risk, Normalised(29)                                          1.1%          2.2%          2.4%
Reserves for Loan Losses to Gross Loans (30)                          2.2%          3.0%          5.1%
NPL Coverage ratio (31)                                             128.6%        129.9%         89.7%
Equity to average net loans to clients                               46.1%         78.8%         27.7%
Total Equity To Net Loans                                            39.0%         54.0%         23.7%

Capital Adequacy:
Equity To Total Assets                                               21.1%         30.9%         14.9%
BIS Tier I Capital Adequacy Ratio (32)                               24.7%         44.9%         16.1%
BIS Total Capital Adequacy Ratio (33)                                24.5%         41.8%         19.0%
NBG Tier I Capital Adequacy Ratio (34)                               15.8%         23.2%          8.9%
NBG Total Capital Adequacy Ratio (35)                                19.2%         28.5%          9.1%

Per Share Values:
Basic EPS (GEL) (36)                                                  1.28          1.62          0.71
Basic EPS (US$)                                                      $0.77         $0.89         $0.40
Diluted EPS (GEL) (37)                                                1.19          0.98          0.69
Diluted EPS (US$)                                                    $0.71         $0.54         $0.39
Book Value Per Share (GEL) (38)                                      15.97         14.87          6.90
Book Value Per Share (US$)                                           $9.56         $8.14         $3.89
Ordinary Shares Outstanding - Weighted Average, Basic           25,258,491    16,505,701    15,499,175
Ordinary Shares Outstanding - Period End                        25,304,087    25,202,009    15,537,891
Ordinary Shares Outstanding - Diluted                           27,248,162    27,229,418    15,924,560

Selected Operating Data:
Full Time Employees (FTE)                                            2,796         2,226         1,557
FTEs, Bank of Georgia Standalone                                     2,103         1,601         1,326
Total Assets per FTE (GEL Thousands)                                   686           558           460
Total Assets per FTE, Bank of Georgia Standalone (GEL
 Thousands)                                                            912           776           540
Branches                                                               105           100            72
ATMs                                                                   166           124            51
Plastic Cards (Thousands)                                              432           286           121
POS Terminals                                                          616           471           237


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.
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                                       NOTES TO KEY RATIOS

 1 Return On Average Total Assets (ROAA) equals Net Income of the period divided by quarterly
    Average Total Assets for the same period;
 2 Return On Average Total Equity (ROAE) equals Net Income of the period divided by quarterly
    Average Total Equity for the same period;
 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