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JSC Bank of Georgia (BGEO)

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Thursday 25 February, 2010

JSC Bank of Georgia

Final Results

Final Results

Bank of Georgia

JSC Bank of Georgia Q4 2009 and Full -Year 2009 Consolidated Results   Tbilisi, 25 February, 2010

1.69 GEL/US$ December 2009 period end

1.67 GEL/US$ 2009 average

1.68 GEL/US$ Q4 2009 average

1.68 GEL/US$ September 30 2009

1.67 GEL/US$ December 2008 period end

1.49 GEL/US$ 2008 average

1.56 GEL/US$ Q4 2008 average

JSC BANK OF GEORGIA REPORTS Q4 2009 AND FULL YAER 2009 RESULTS

Millions, unless otherwise noted   Q4 2009   Growth q-o-q1
 
Bank of Georgia (Consolidated, Unaudited, IFRS-based) US$ GEL
Total Operating Income (Revenue)2 47.1 79.5 0.2%
Recurring Operating Costs 27.9 47.0 4.5%
Normalised Net Operating Income3 19.3 32.5 -5.5%
Net Non-Recurring Income / (Costs) (64.4) (108.6) NMF
Profit/(Loss) before provisions (45.2) (76.2) NMF
Net Provision Expenses 16.4 27.6 -8.0%
Net Income/(Loss) (60.7) (102.4) NMF
 
Total Assets 1,743.1 2,938.5 -1.4%
Net Loans 997.1 1,680.9 1.3%
Client Deposits 757.3 1,276.7 8.0%
Tier I Capital Adequacy Ratio (BIS)4 22.2%
Total Capital Adequacy Ratio (BIS)5 33.7%
Tier I Capital Adequacy Ratio (NBG) 19.7%
Total Capital Adequacy Ratio (NBG) 16.8%
 
YTD 2009 Growth y-o-y1
 
Bank of Georgia (Consolidated, Unaudited, IFRS-based1) US$ GEL
Total Operating Income (Revenue)2 190.4 321.1 -5.4%
Recurring Operating Costs 108.5 182.9 -4.2%
Normalised Net Operating Income3 81.9 138.1 -7.0%
Net Non-Recurring Income / (Costs) (65.9) (111.0) NMF
Profit before provisions 16.1 27.1 -78.8%
Net Provision Expenses 77.3 130.4 1.3%
Net Income/(Loss) (58.7) (99.0) NMF

Bank of Georgia (LSE:BGEO)(GSE:GEB) (the “Bank”), Georgia’s leading bank, announced today its Q4 2009 and full year 2009 consolidated results (IFRS-based, derived from management accounts), reporting a Q4 2009 Net Loss of GEL 102.4 million.

The Q4 2009 Normalized Net Operating Income (“NNOI”) of GEL 32.5 million generated by the Bank on a consolidated basis was offset by:

  • Net Non-Recurring Operating Costs of GEL 108.6 million, driven by the goodwill write-off associated with BG Bank and mark down of real estate and certain investments;
  • Net Provision Expense of GEL 27.6 million, which includes provision charge of GEL 17.4 million of Bank of Georgia and provision charge of GEL 8.1 million of BG Bank.

For the full-year 2009 the Bank reported NNOI of GEL 138.1 million, Net Non-Recurring Cost of GEL 111.0 million, Net Provision Expense of GEL 130.4 million, and Net Loss of GEL 99.0 million, mainly a result of Net Non-Recurring Operating Costs incurred in Q4 2009 and Net Provision Expense prompted by the challenging econonimc environement in the first half of the year. On a standalone basis Bank of Georgia reported Net Income of GEL 30.8 million, up 25.1% y-o-y.

Q4 2009 highlights

  • Consolidated gross loan portfolio grew 1.7% q-o-q to GEL 1,864.2 million, mostly driven by Bank of Georgia’s standalone gross loan portfolio growth of 5.2% q-o-q
  • Consolidated Client Deposits grew 8.0% q-o-q to GEL 1,276.7 million, driven by:
    • Wealth Management Client Deposits grew 24.1% q-o-q to GEL 163.1 million, up 68.6% y-o-y
    • Retail Banking Client Deposits grew 14.9% q-o-q to GEL 380.5 million, up 19.3% y-o-y
    • Corporate Banking Client Deposits declined 1.2% q-o-q to GEL 587.6 million, down 6.7% y-o-y
    • BG Bank’s Client Deposits grew 18.6% q-o-q to GEL 138.9 million, up 9.0% y-o-y
  • Consolidated Net Provision Expenses of GEL 27.6 million improved 8.0% q-o-q, driven by:
    • 1.9% decline in Net Provision Expenses of Bank of Georgia (Standalone) to GEL 17.4 million, while BG Bank’s Net Provision Expense of GEL 8.1 million declined by 37.2% q-o-q
  • Increased equity interest in BNB from 70% to 99.98% as a result of the buyout of minority stake in BNB and the participation in the increase of BNB’s capital by approximately EUR 10.4 million
  • Launched Solo, a comprehensive personal banking service for the affluent client base in Georgia
  • Launched American Express acquiring and issuing business on exclusive basis, as part of the mass affluent retail strategy

Q4 2009 summary of the Bank’s consolidated results

In Q4 2009, the Bank’s Total Operating Income (Revenue) grew 0.2% to GEL 79.5 million, an 8.2 % y-o-y decline driven by 1.1% q-o-q decrease of Net Interest Income to GEL 48.4 million, a result of the increase of interest expense associated with the deposit growth in Georgia during the quarter. Net Interest Margin (NIM) declined to 8.9% in Q4 2009 from 9.1% NIM in Q3 2009. The Bank generated Net Non-Interest Income of GEL 31.1 million, a 2.9% growth y-o-y, up 2.3% q-o-q. The Bank’s Net Income from Documentary Operations amounted to GEL 2.3 million, practically unchanged compared to Q3 2009 and up 62.1% y-o-y. Net Foreign Currency Related Income declined 19.1% q-o-q to GEL 5.2 million, a 64.9% decrease y-o-y. The considerable year-on-year decline of Net Foreign Currency Related Income was due to exceptionally high FX income of BG Bank in Q4 2008. Net Fees and Commission Income grew to GEL 12.2 million, an increase of 1.1% q-o-q (up 11.5 % y-o-y). The 19.0% q-o-q growth of Other Non-Interest Income to GEL 11.4 million was mostly driven by Net Investment Gains of GEL 451 thousand compared to the loss of GEL 526 thousand in Q3 2009 and Other Net Other Non-Interest income gains.

NNOI in Q4 2009 decreased 5.5% q-o-q to GEL 32.5 million, (down 16.0 % y-o-y), as Total Consolidated Recurring Operating Costs for the quarter increased by 4.5 % q-o-q to GEL 47.0 million. On a quarterly basis, the rise of operating costs were attributed to the end-of the year marketing expenses in Q4 2009 and increased client acquisition costs prompted by the increase in lending activity. On a year-on-year basis, the Q4 2009 Total Consolidated Recurring Operating Costs declined by 2.0%. The moderate decline was due to one-time reversal of GEL 7.5 million associated with bonus expenses in Q4 2008. Taking into account the one-time reversal, Total Consolidated Recurring Costs declined by 15.2% y-o-y (on a like-for-like basis). Personnel Costs, the largest recurring cost item, were up by 2.0% q-o-q. In Q4 2009, Personnel Costs declined 25.5% y-o-y on a like-for-like basis. Normalized Cost/Income ratio (Costs exclude Net Non-Recurring Costs) increased to 59.1% in Q4 2009 from 56.7% in Q3 2009 and 55.4% in Q4 2008 (64.0% in Q4 2008 on a like-for-like basis).

The Bank’s Net Non-Recurring Cost amounted to GEL 108.6 million in Q4 2009. The table below provides the breakdown of the Bank’s Net Non-Recurring Costs for the quarter.

Net Non-Recurring Costs

GEL mln    
Goodwill Impairment associated with BG Bank 68.02
Losses related to Real Estate 21.85
Losses related to Investments 13.03
Other 5.73
Total 108.63

The Bank’s Net Provision Expense for the quarter stabilized at GEL 27.6 million, and compares to the Net Provision Expense of GEL 30.0 million in Q3 2009, and GEL 10.9 million in Q4 2008. The 8.0% improvement of Net Provision Expense for the quarter reflects the improving market environement in Georgia.

Full Year 2009 summary of the Bank’s consolidated results

During 2009 the Bank’s Total Operating Income (Revenue) decreased 5.4% y-o-y to GEL 321.1 million, due to 9.8% y-o-y decrease in Net Interest Income to GEL 199.2 million, which more than offset a 2.7% y-o-y increase in Net Non-Interest Income to GEL 121.9 million. The decline of Net Interest Income reflects the 14.9% contraction of the consolidated gross loan book from GEL 2,189.4 million at the end of 2008 to GEL 1,864.2 million by the end of 2009 and increase in deposits during the year. NIM for the year declined slightly from 9.7% in 2008 to 9.2% in 2009 despite the loan book contraction and high liquidity in the second half of 2009. Net Foreign Currency Related Income declined by 42.6% y-o-y to GEL 27.6 million, mostly due to decrease in volumes resulting from approximately 29% decline in Georgia’s overall trade volumes and lower FX volatility throughout the year compared to 2008. The Bank’s Net Fees and Commission Income of GEL 47.0 million remained flat compared to the previous year, while Net Income from Documentary Operations grew by 34.3% y-o-y to GEL 8.6 million. Net Other Non-Interest Income reached GEL 38.7 million, up 125.9% y-o-y, largely driven by the increased profitability of the Bank’s insurance subsidiary, resulting in the Net Insurance Income of GEL 18.0 in 2009, up 99.9% y-o-y. Income from the Bank’s brokerage and investment banking business grew y-o-y 62.5% to GEL 5.5 million. Net Investment Gains in 2009 amounted to GEL 228 thousand, compared to the loss of GEL 5.3 million in 2008.

Total Recurring Operating Costs decreased by 4.2% y-o-y to GEL 182.9 million, mostly due to a 13.6% y-o-y decline of Personnel Costs, a result of the cost optimization measures, including headcount reduction implemented by the Bank in Georgia and Ukraine. The modest decline of the SG&A expenses to GEL 43.8 million (down 1.9% y-o-y), was a result of the increased marketing efforts in Georgia in light of the challenging environment for banking operations.

Net Provision Expense in 2009 reached GEL 130.4 million and compares to GEL 128.7 million Net Provision Expense booked by the Bank for the full-year 2008. The Bank had Net Provision Expense of GEL 41.4 million in Ukraine and GEL 88.7 million in Georgia. The Bank reported consolidated Net Loss of GEL 99.0 million in 2009.

On 31 December 2009, the Bank’s Consolidated Total Assets stood at GEL 2.9 billion, down 9.8% from 31 December 2008 and down 1.4% from Q3 2009, mostly due to the contraction of the net loan book in 2009. The lending activity stepped up by the Bank towards the end of the year prompted 1.7% q-o-q increase of the gross loan book to GEL 1,864.2 million as of 31 December 2009, a decline of 14.9% y-o-y.

In Q4 2009 loan loss reserves amounted to GEL 183.3 million or 9.8% of consolidated gross loan book, up from 5.0% in Q4 2008, the increase due to the decline of the gross loan book in Georgia and increased reserves in Georgia and Ukraine. Consolidated Net Loans increased by 1.3% q-o-q (down 19.2% y-o-y) to GEL 1,680.9 million. Consolidated NPLs of GEL 140.0 million remained flat compared to the previous quarter and represented 7.5% of the consolidated gross loans as at 31 December 2009, compared to 7.6% in Q3 2009.

Since the end of Q2 2009, the Bank witnessed an inflow of client deposits in Georgia leading to an 8.0% q-o-q increase of consolidated Client Deposits during Q4 2009 to GEL 1,276.7 million as of 31 December 2009, a 7.0% increase since Q4 2008. Since year-end 2008 client deposits in Georgia increased from GEL 1,045.2 million to GEL 1,131.1 million and in Ukraine increased from GEL 127.4 million to GEL 138.9 million as of 31 December 2009.

JSC Bank of Georgia (Standalone)

Bank of Georgia’s on a standalone basis reported Q4 2009 Net Income of GEL 7.8 million, as compared to Net Income of GEL 10.8 million in Q3 2009. The decrease in Net Income for the quarter was a result of the increase in Net Non-Recurring Costs to GEL 3.3 million in Q4 2009.

In Q4 2009 Total Operating Income amounted to GEL 62.6 million, up 1.8% q-o-q (down 10.0% y-o-y). Net Interest Income increased 1.3% q-o-q to GEL 45.1 million reflecting the 5.2% q-o-q growth of the standalone gross loan book and was down 12.4% y-o-y, mostly due to the increased cost associated with the desposit growth in Georgia in 2009 and decrease of the loan book during the year in Georgia. Net Non-Interest Income amounted to GEL 17.5 million, up 3.3% q-o-q (down 5.2% y-o-y). The q-o-q increase of Net Non-Interest Income was mainly attributed to the 6.8% q-o-q growth of Net Fees and Commission Income to GEL 8.6 million, and a 3.4% increase of the Net Foreign Currency Related Income to GEL 6.2 million. On a standalone basis, Bank of Georgia’s Total Recurring Operating Costs increased 8.9% q-o-q to GEL 32.8 million. mostly due to increase in SG&A costs to GEL 7.9 million, up 22.9% q-o-q, driven by increased marketing costs.

The Bank’s Net Provision Expense on a standalone basis during the quarter stood at GEL 17.4 million, attributed mostly to the Bank’s retail banking loans and compares to Net Provision Expense of GEL 17.7 million in Q3 2009.

Bank of Georgia’s 2009 Total Operating Income on a standalone basis amounted to GEL 253.1 million, down 8.8% y-o-y, a result of 6.6% y-o-y decline of Net Interest Income to GEL 185.5 million, mostly due to 12.4% gross loan book contraction and deposit growth in 2009 and 14.2% y-o-y decline of Net Non-Interest Income to GEL 67.6 million. The decline of Net Non-Interest Income was mostly due to 33.2% y-o-y decrease of Foreign Currency Related Income to GEL 24.2 million due to decreased FX transaction volumes. The Total Recurring Operating Costs of the Bank on a standalone basis in 2009 declined by 0.9%, driven predominantly by 12.2% y-o-y decline of Personnel Costs and other cost containment measures implemented by the Bank.

Net Provision Expense decreased from GEL 114.6 million in 2008 to GEL 88.7 million in 2009. Bank of Georgia on a standalone basis posted 2009 Net Income of GEL 30.8 million, up 25.1% y-o-y.

As of 31 December 2009 Bank of Georgia’s Total Assets on a standalone basis stood at GEL 2.9 billion, up 4.3% q-o-q and down 3.9% y-o-y. Gross Loans increased 5.2% q-o-q to GEL 1.7 billion, down 12.4% y-o-y. NPLs stood at GEL 111.3 million and represented 6.4% of the total gross loan book, decrease from the same ratio of 7.0% in Q3 2009, when the NPLs amounted to GEL 115.9 million on a standalone basis.

In Q4 2009, the Bank’s Client Deposits in Georgia stood at GEL 1.13 billion as compared to GEL 1.06 billion in Q3 2009 and GEL 1.04 billion on 31 December 2008. The growth of Client Deposits during the period was mostly driven by the increase of Wealth Management client deposits that reached GEL 163.1 million as of 31 December 2009, up 68.6% y-o-y and up 24.1% q-o-q. Deposits from the Bank’s non-resident clients amounted to GEL 98.6 million, contributing 60.5% to the Wealth Management client deposits as of 31 December 2009. Retail Banking client deposits amounted to GEL 380.5 million, up 19.3% y-o-y and up 14.9% q-o-q. Corporate Banking client deposits stood at GEL 587.6 million, down 6.7% y-o-y and down 1.2% q-o-q.

As of 31 December 2009 Bank of Georgia on a standalone basis held market share of 33.0%, 31.8%, 28.3% and 38.6% by total assets, gross loans, client deposits and shareholders’ equity, respectively in Georgia1.

BG Bank (Ukraine)

In Q4 2009 BG Bank’s Revenue amounted to GEL 3.8 million, down by 28.2% q-o-q and down 78.5% y-o-y. Recurring Costs stood at GEL 4.3 million, compared to GEL 3.9 million in Q3 2009 and down 48.7% y-o-y, a result of the cost-control measures that have been implemented by BG Bank in 2009. In line with the Bank’s strategy of shifting the focus away from retail banking, such cost-control measures include the branch network optimization and headcount reduction by 21%. BG Bank’s Net Provision Expense for the quarter amounted to GEL 8.1 million as compared to GEL 12.9 million in Q3 2009 and GEL 26.4 million booked in Q4 2008. In Q4 2009 BG Bank recorded Net Loss of GEL 8.9 million.

In 2009 BG Bank’s Revenue decreased to GEL 20.1 million, down 35.8% y-o-y. Recurring Costs stood at GEL 18.4 million, down 29.3% y-o-y. BG Bank’s Net Provision Charge for 2009 reached GEL 41.4 million as compared to GEL 17.9 net provision charge in same period in 2008. As a result, BG Bank recorded Net Loss of GEL 32.5 million for the full-year 2009 as compared to Net Loss of GEL 10.0 million in 2008.

BG Bank’s Total Assets decreased by 20.4% y-o-y to GEL 197.6 million (down 2.2% q-o-q), due to the growth in loan loss reserves by GEL 43.2 million over 12 month period. In Q4 2009 gross Loans to Clients decreased 5.6% y-o-y to GEL 183.5 million (down 1.5% q-o-q) and loan loss reserves increased 15.2% q-o-q to GEL 57.8 million or 31.5% of BG Bank’s Gross Loan Book. As at 31 December 2009, BG Bank’s NPLs stood at GEL 25.7 million, or 14.0% of BG Bank’s Gross Loan book. The NPL coverage ratio stood at 224.8% as of 31 Decemebr 2009.

BG Bank’s Client Deposits continued the growth trend started in the previous quarter and increased by 18.6% q-o-q to GEL 138.9 million, up 9.0% y-o-y. BG Bank’s Total Liabilities stood at GEL 166.5 million in Q4 2009, down 8.9% y-o-y and up by 3.7% q-o-q.

Belaruskiy Narodniy Bank, Belarus (BNB)

In December 2009, the Bank completed the buyout of the minority stake in BNB, increasing its equity interest in BNB from 70% to 99.8%. In addition, the Bank participated in the increase of BNB’s capital by approximately EUR 10.43 million bringing BNB in line with the minimum regulatory capital requirement set by the National Bank of the Republic of Belarus by 1 January 2010.

In Q4 2009 BNB’s Total Operating Income increased to GEL 2.2 million, up 4.2% q-o-q. BNB’s Recurring Costs of GEL 2.0 million, grew by 37.0% q-o-q to support BNB’s growth of its operations. BNB posted Net Loss of GEL 780.6 thousand as compared to Net Income of GEL 617.0 thousand in Q3 2009, Net income of GEL 196.8 thousand in Q2 2009 and Net Loss of GEL 299.4 thousand in Q4 2008.

In 2009 BNB’s Total Operating Income reached GEL 8.4 million, while Total Recurring Operating Costs stood at GEL 6.4 million. NNOI equaled GEL 2.0 million, while Net Income in 2009 amounted to GEL 694.0 thousand.

On 31 December 2009 BNB’s Total Assets stood at GEL 80.0 million, up 40.3% q-o-q and Gross Loans to Clients equaled GEL 25.1 million, down 5.0% q-o-q. Client Deposits amounted to GEL 20.5 million, up 14.3% q-o-q, while Total Liabilities stood at GEL 21.1 million, down 5.6% q-o-q.

BG Capital

BG Capital countinued to gain market share in Ukraine in 4Q09 securing its place among the top three traders in Ukrainian stocks on both local and international exchanges. BG Capital's investment banking business followed up the sucess of its Sintal placement in October 2009 by closing GEL 25 million bond issuance for Georgian Railways in December. BG Capital also increased its operational development with BG Bank, and sucessfully launched a Large Client group that will allow both stucrutures to attract high quality corporate clients by jointly offering commercial and investment banking services. BG Capital's Commodities Advisory division also saw the sucessful closure of its first grain delivery between Ukraine and Georgia. BG Capital moved to a new HQ building in Kiev where it will be co-located with BG Bank’s private banking unit enabling better utilization of synergies between two business units.

Insurance

Aldagi BCI, the Bank’s wholly-owned insurance subsidiary, reported Q4 2009 Net Loss of GEL 0.3 million (as compared to Net Income of GEL 0.3 million in Q3 2009 and Net Loss of GEL 3.6 million in Q4 2008). Revenue declined by 0.5% q-o-q to GEL 4.8 million. The notable improvement of Aldagi BCI’s in claims management resulted in the 88.4% y-o-y increase in Net Insurance Income to GEL 18.0 million. In 2009 Aldagi BCI’s Gross Premiums Written grew 2.3% y-o-y to GEL 62.5 million. Net Premiums Earned increased 35.9% y-o-y, reaching GEL 50.4 million.

Comment:

“Bank of Georgia’s 2009 performance demonstrates the Bank’s ability to realign its business to changing operating environment. We succeeded in tackling challenges such as deleveraging, tight liquidity in the first half of the year and asset quality deterioration and made necessary steps to strengthen our balance sheet by recovering both deposits and liquidity. We fully wrote down Ukrainian goodwill, marked down investments and real estate. At the same time, we prudently provisioned our loan books in Georgia and Ukraine and pleased to note stabilized NPLs in the second half of the year in Georgia. Strong capital and operating profitability played the crucial role in overcoming these challenges.

In 2009, we further strengthened our management team and continued to focus on our strategy to become more efficient, deposit funded lending machine. In line with our strategic objective of increasing operational efficiency through technological enhancements, we invested in Temenos T24, a new core banking software, which is now in the process of implementation. Wealth Management business demonstrated its potential as our international wealth management services launched in Isreal and Ukraine in 2009 and currently balances on deposits from international clinets reached nearly GEL 100 million. We have maintained Georgia’s leading retail business infrastructure during the downturn, launched premier banking services for mass affluent clients and started Americal Express issuing and acquiring business in Georgia on an exclusive basis.

Going forward we clearly understand our challenges, which are cost control and the loan book growth. Georgian economy has shown signs of recovery and we are well positioned with high liquidity and strong equity to capitalize on opportunities that lie ahead,” commented Irakli Gilauri, Chief Executive Officer.

CONSOLIDATED Q4 2009 INCOME STATEMENT DATA

Period ended   Q4 2009   Q3 2009     Q4 2008  
Consolidated, IFRS based US$1   GEL US$2   GEL Growth4 US$3   GEL Growth4
000s Unless otherwise noted (Unaudited) (Unaudited) Q-O-Q (Unaudited) Y-O-Y
Interest Income 55,611 93,749 55,874 93,707 0.0% 59,258 98,784 -5.1%
Interest Expense 26,918 45,379 26,703 44,783 1.3% 25,433 42,396 7.0%
Net Interest Income 28,693 48,370 29,172 48,924 -1.1% 33,826 56,388 -14.2%
Fees & Commission Income 9,015 15,197 9,002 15,097 0.7% 5,978 9,965 52.5%
Fees & Commission Expense 1,788 3,015 1,819 3,050 -1.1% (575) (959) -414.5%
Net Fees & Commission Income 7,226 12,182 7,183 12,047 1.1% 6,553 10,924 11.5%
Income From Documentary Operations 1,683 2,837 1,669 2,799 1.4% 1,323 2,205 28.7%
Expense On Documentary Operations 317 534 286 480 11.3% 470 784 -31.9%
Net Income From Documentary Operations 1,366 2,303 1,383 2,319 -0.7% 852 1,421 62.1%
Net Foreign Currency Related Income 3,107 5,237 3,858 6,471 -19.1% 8,938 14,900 -64.9%
Net Insurance Income / (Loss) 2,971 5,008 2,935 4,923 1.7% 1,910 3,184 57.3%
Brokerage And Investments Banking Income 1,126 1,898 1,138 1,908 -0.5% 254 423 348.3%
Asset Management Income 94 158 125 210 -24.8% 1,093 1,822 -91.3%
Net Investment Gains / (Losses) 268 451 (314) (526) NMF (2,059) (3,432) NMF
Other 2,280 3,844 1,807 3,030 26.9% 576 960 NMF
Net Other Non-Interest Income 6,738 11,359 5,691 9,545 19.0% 1,774 2,957 284.1%
Net Non-Interest Income 18,437 31,081 18,116 30,382 2.3% 18,117 30,202 2.9%
Total Operating Income (Revenue) 47,130 79,451 47,288 79,306 0.2% 51,943 86,590 -8.2%
Personnel Costs 13,506 22,768 13,306 22,315 2.0% 13,832 23,057 -1.3%
Selling, General & Administrative Expenses 6,913 11,654 6,278 10,529 10.7% 6,387 10,648 9.4%
Procurement & Operations Support Expenses 1,757 2,962 1,762 2,955 0.2% 2,040 3,401 -12.9%
Depreciation And Amortization 3,579 6,034 3,762 6,310 -4.4% 3,827 6,380 -5.4%
Other Operating Expenses 2,115 3,565 1,700 2,851 25.0% 2,670 4,450 -19.9%
Total Recurring Operating Costs 27,870 46,983 26,808 44,960 4.5% 28,756 47,936 -2.0%
Normalized Net Operating Income / (Loss) 19,260 32,468 20,479 34,346 -5.5% 23,187 38,654 -16.0%
Net Non-Recurring Income / (Costs) (64,434) (108,623) (1,136) (1,906) NMF (17,984) (29,980) NMF
Profit / (Loss) Before Provisions (45,174) (76,155) 19,343 32,440 NMF 5,203 8,674 NMF
Net Provision Expense 16,377 27,609 17,889 30,001 -8.0% 6,528 10,882 153.7%
Pre-Tax Income / (Loss) (61,552) (103,764) 1,454 2,439 NMF (1,324) (2,208) NMF
Income Tax Expense / (Benefit) (829) (1,397) (113) (189) NMF (652) (1,087) NMF
Net Income / (Loss) (60,723) (102,367) 1,567 2,628 NMF (672) (1,121) NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6771 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 2009

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

CONSOLIDATED 2009 INCOME STATEMENT DATA

  2009   2008  
Period ended US$1   GEL US$2   GEL Growth3
Consolidated, IFRS based (Unaudited) y-o-y
000s Unless otherwise noted
Interest Income 227,688 383,836 242,315 403,939 -5.0%
Interest Expense 109,543 184,668 109,838 183,100 0.9%
Net Interest Income 118,145 199,168 132,477 220,839 -9.8%
Fees & Commission Income 34,403 57,996 31,364 52,284 10.9%
Fees & Commission Expense 6,549 11,041 3,090 5,152 114.3%
Net Fees & Commission Income 27,853 46,955 28,273 47,132 -0.4%
Income From Documentary Operations 6,352 10,708 5,206 8,679 23.4%
Expense On Documentary Operations 1,229 2,072 1,349 2,249 -7.9%
Net Income From Documentary Operations 5,123 8,636 3,857 6,430 34.3%
Net Foreign Currency Related Income 16,342 27,550 28,775 47,968 -42.6%
Net Insurance Income / (Loss) 10,692 18,025 5,409 9,017 99.9%
Brokerage And Investments Banking Income 3,257 5,491 2,027 3,379 62.5%
Asset Management Income 466 786 1,717 2,862 -72.5%
Net Investment Gains / (Losses) 135 228 (3,194) (5,324) NMF
Other 8,432 14,214 4,329 7,216 97.0%
Net Other Non-Interest Income 22,983 38,744 10,288 17,150 125.9%
Net Non-Interest Income 72,301 121,885 71,194 118,680 2.7%
Total Operating Income (Revenue) 190,445 321,053 203,671 339,519 -5.4%
Personnel Costs, Of Which: 53,542 90,261 62,639 104,419 -13.6%
Selling, General & Administrative Expenses 26,010 43,847 26,809 44,690 -1.9%
Procurement & Operations Support Expenses 7,570 12,762 7,973 13,291 -4.0%
Depreciation And Amortization 14,299 24,105 12,317 20,532 17.4%
Other Operating Expenses 7,081 11,937 4,781 7,970 49.8%
Total Recurring Operating Costs 108,502 182,912 114,518 190,902 -4.2%
Normalized Net Operating Income / (Loss) 81,944 138,141 89,152 148,617 -7.0%
Net Non-Recurring Income / (Costs) (65,872) (111,047) (12,431) (20,723) 435.9%
Profit / (Loss) Before Provisions 16,072 27,094 76,721 127,894 -78.8%
Net Provision Expense 77,329 130,361 77,203 128,698 1.3%
Pre-Tax Income / (Loss) (61,257) (103,267) (482) (804) NMF
Income Tax Expense / (Benefit) (2,541) (4,283) (587) (978) NMF
Net Income / (Loss) (58,716) (98,984) 104 174 NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

CONSOLIDATED Q4 2009 BALANCE SHEET DATA

Period ended   31-Dec-09   30-Sep-09   31-Dec-08   Change   Change
Consolidated, IFRS based       31-Dec 31-Dec-09
000s Unless otherwise noted US$ GEL US$ GEL US$ GEL /Sep 30 /Dec 31, 2008
(Unaudited) (Unaudited)
Cash And Cash Equivalents 108,812   183,436 98,714 165,553 238,507 397,591 10.8% -53.9%
Loans And Advances To Credit Institutions 159,231 268,432 228,380 383,016 59,768 99,633 -29.9% 169.4%
Mandatory Reserves With NBG / NBU / NBRB 24,791 41,792 22,795 38,230 23,787 39,653 9.3% 5.4%
Other Accoutns With NBG / NBU / NBRB 26,151 44,086 52,408 87,893 25,791 42,993 -49.8% 2.5%
Balances With And Loans To Other Banks 108,289 182,554 153,177 256,893 10,190 16,987 -28.9% 974.7%
Investment Securities: Available-For-Sale & Trading 13,002 21,919 17,909 30,036 20,238 33,737 -27.0% -35.0%
Treasuries And Equivalents 147,821 249,196 21,826 36,605 4,963 8,274 NMF NMF
Other Fixed Income Instruments - - 40,043 67,156 8,741 14,571 NMF NMF
Loans To Clients, Gross 1,105,848 1,864,239 1,093,003 1,833,075 1,313,372 2,189,391 1.7% -14.9%
Less: Reserve For Loan Losses (108,751) (183,332) (103,588) (173,727) (65,245) (108,764) 5.5% 68.6%
Loans To Clients, Net 997,098 1,680,907 989,415 1,659,348 1,248,127 2,080,627 1.3% -19.2%
Insurance Related Assets 15,378 25,925 27,177 45,578 25,189 41,990 -43.1% -38.3%
Investments In Other Business Entities, Net 51,138 86,208 45,010 75,486 38,398 64,009 14.2% 34.7%
Property And Equipment Owned, Net 166,430 280,567 178,840 299,933 181,034 301,784 -6.5% -7.0%
Intangible Assets Owned, Net 12,115 20,424 7,271 12,194 10,930 18,220 67.5% 12.1%
Goodwill 38,851 65,495 80,931 135,729 80,527 134,238 -51.7% -51.2%
Tax Assets, Current And Deferred 13,040 21,982 7,695 12,906 7,670 12,786 70.3% 71.9%
Prepayments And Other Assets 20,144 33,959 33,761 56,621 30,862 51,447 -40.0% -34.0%
Total Assets 1,743,060 2,938,450 1,776,973 2,980,161 1,954,953 3,258,907 -1.4% -9.8%
 
Client Deposits 757,306 1,276,666 705,097 1,182,519 715,731 1,193,124 8.0% 7.0%
Deposits And Loans From Banks 26,313 44,359 25,877 43,398 47,362 78,952 2.2% -43.8%
Borrowed Funds 541,595 913,021 547,746 918,625 682,525 1,137,770 -0.6% -19.8%
Issued Fixed Income Securities 392 660 405 680 - - -2.9% NMF
Insurance Related Liabilities 19,796 33,372 31,114 52,182 33,237 55,406 -36.0% -39.8%
Tax Liabilities, Current And Deferred 15,616 26,325 13,610 22,825 14,633 24,394 15.3% 7.9%
Accruals And Other Liabilities 29,489 49,713 24,696 41,418 30,241 50,412 20.0% -1.4%
Total Liabilities 1,390,507 2,344,116 1,348,546 2,261,647 1,523,730 2,540,058 3.6% -7.7%
 
Share Capital - Ordinary Shares 18,570 31,306 18,660 31,295 18,748 31,253 0.0% 0.2%
Share Premium 284,108 478,950 280,198 469,920 281,183 468,732 1.9% 2.2%
Treasury Shares (995) (1,677) (1,078) (1,808) (1,211) (2,018) -7.2% -16.9%
Retained Earnings 78,169 131,777 84,908 142,399 82,540 137,594 -7.5% -4.2%
Revaluation And Other Reserves 15,418 25,992 13,033 21,857 15,717 26,201 18.9% -0.8%
Net Income For The Period (58,716) (98,984) 2,017 3,383 104 174 NMF NMF
Shareholders Equity Excluding Minority Interest 336,555 567,364 397,737 667,045 397,082 661,936 -14.9% -14.3%
Minority Interest 15,998 26,970 30,689 51,468 34,141 56,913 -47.6% -52.6%
Total Shareholders Equity 352,553 594,334 428,426 718,514 431,223 718,849 -17.3% -17.3%
 
Total Liabilities And Shareholders Equity 1,743,060 2,938,450 1,776,973 2,980,161 1,954,953 3,258,907 -1.4% -9.8%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6771 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 2009

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

STANDALONE Q4 2009 INCOME STATEMENT DATA

Period ended   Q4 2009   Q3 2009   Growth3   Q4 2008   Growth
Consolidated, IFRS based US$1   GEL US$2   GEL Q-O-Q US$4   GEL Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
Interest Income 50,626 85,346 50,461 84,628 0.8% 55,928 93,232 -8.5%
Interest expense 23,880 40,256 23,911 40,101 0.4% 25,300 42,175 -4.5%
Net interest income 26,747 45,089 26,550 44,527 1.3% 30,629 51,058 -11.7%
Fee & commission income 6,832 11,517 6,176 10,358 11.2% 6,883 11,474 0.4%
Fee & commission expenses 1,717 2,895 1,361 2,283 26.8% 1,587 2,645 9.4%
Net fee & commission income 5,115 8,622 4,815 8,075 6.8% 5,297 8,829 -2.3%
Income from documentary operations 1,639 2,763 1,668 2,798 -1.3% 1,323 2,205 25.3%
Expense on documentary operations 317 534 286 480 11.2% 470 783 -31.9%
Net income from documentary operations 1,322 2,229 1,382 2,318 -3.8% 853 1,421 56.8%
Net income from FX & translation operations 3,680 6,203 3,577 5,998 3.4% 4,552 7,588 -18.3%
Net other non-interest income 290 488 352 590 -17.3% 402 670 -27.1%
Net non-interest income 10,406 17,543 10,126 16,982 3.3% 11,103 18,509 -5.2%
Total operating income (revenue) 37,153 62,632 36,676 61,509 1.8% 41,732 69,567 -10.0%
Personnel cost 9,255 15,602 8,770 14,707 6.1% 8,628 14,383 8.5%
Selling, general & administrative expense 4,712 7,943 3,852 6,461 22.9% 4,411 7,353 8.0%
Procurement & operations support expenses 1,695 2,858 1,503 2,521 13.4% 1,940 3,234 -11.6%
Depreciation and amortization 3,131 5,279 3,109 5,214 1.2% 2,913 4,856 8.7%
Other operating expenses 643 1,084 699 1,173 -7.6% (27) (46) NMF
Recurring operating costs 19,437 32,766 17,934 30,077 8.9% 17,865 29,780 10.0%
Normalized net operating income 17,716 29,866 18,742 31,432 -5.0% 23,867 39,786 -24.9%
Net non-recurring income / (costs) (1,977) (3,333) (583) (978) 240.8% (7,398) (12,332) -73.0%
Profit / (loss) before provisions 15,739 26,533 18,159 30,454 -12.9% 16,469 27,454 -3.4%
Net provision expense 10,304 17,371 10,561 17,712 -1.9% (2,691) (4,487) NMF
Pre-tax income / (loss) 5,435 9,162 7,598 12,743 -28.1% 19,161 31,941 -71.3%
Income tax expense / (benefit) 815 1,374 1,140 1,911 -28.1% 1,873 3,123 -56.0%
Net income / (loss) 4,620 7,788 6,458 10,831 -28.1% 17,287 28,818 -73.0%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6771 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 2009

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

STANDALONE 2009 INCOME STATEMENT DATA

Period ended   2009   2008   Growth3
Consolidated, IFRS based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited)
Interest Income 205,563 346,537 215,504 359,245 -3.5%
Interest expense 95,541 161,064 96,358 160,628 0.3%
Net interest income 110,021 185,474 119,146 198,617 -6.6%
Fee & commission income 25,239 42,548 26,672 44,462 -4.3%
Fee & commission expenses 5,706 9,620 5,374 8,958 7.4%
Net fee & commission income 19,533 32,928 21,298 35,504 -7.3%
Income from documentary operations 6,305 10,629 5,206 8,679 22.5%
Expense on documentary operations 1,228 2,070 1,349 2,249 -7.9%
Net income from documentary operations 5,077 8,559 3,858 6,431 33.1%
Net income from FX & translation operations 14,341 24,177 21,725 36,215 -33.2%
Net other non-interest income 1,146 1,932 402 670 188.5%
Net non-interest income 40,097 67,596 47,282 78,820 -14.2%
Total operating income (revenue) 150,119 253,070 166,429 277,436 -8.8%
Personnel cost 35,497 59,841 40,895 68,172 -12.2%
Selling, general & administrative expense 15,840 26,703 14,249 23,754 12.4%
Procurement & operations support expenses 6,332 10,675 7,039 11,735 -9.0%
Depreciation and amortization 11,757 19,820 9,666 16,114 23.0%
Other operating expenses 2,541 4,283 1,623 2,706 58.3%
Recurring operating costs 71,967 121,322 73,473 122,480 -0.9%
Normalized net operating income 78,151 131,748 92,955 154,956 -15.0%
Net non-recurring income / (costs) (4,026) (6,787) (8,000) (13,336) -49.1%
Profit / (loss) before provisions 74,125 124,961 84,955 141,620 -11.8%
Net provision expense 52,623 88,712 68,754 114,613 -22.6%
Pre-tax income / (loss) 21,502 36,248 16,201 27,007 34.2%
Income tax expense / (benefit) 3,225 5,437 1,429 2,383 128.2%
Net income / (loss) 18,277 30,811 14,771 24,624 25.1%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

STANDALONE Q4 2009 BALANCE SHEET DATA

Period ended   31-Dec-09   30-Sep-09   31-Dec-08   Change   Change
Consolidated, IFRS based (Unaudited) (Unaudited) 31-Dec 31-Dec-09
000s Unless otherwise noted US$   GEL US$   GEL US$   GEL /Sep 30 /Dec 31, 2008
Cash 83,818.5 141,301 74,865.7 125,557 93,298.4 155,528 12.5% -9.1%
Balances with NBG 34,440.8 58,060 71,885.6 120,559 44,329.7 73,898 -51.8% -21.4%
Balances With And Loans To Other Banks 110,934.6 187,014 158,404.1 265,660 149,501.5 249,219 -29.6% -25.0%
Treasuries And Equivalents 147,820.4 249,196 21,826.4 36,605 4,963.4 8,274 580.8% 2911.8%
Other Fixed Income Instruments - - 39,136.8 65,636 8,740.8 14,571 NMF NMF
Loans To Clients, Gross 1,030,555 1,737,309 984,619 1,651,305 1,189,616 1,983,090 5.2% -12.4%
Reserve For Loan Losses (77,517) (130,678) (73,597) (123,430) (58,868) (98,133) 5.9% 33.2%
Loans To Clients, Net 953,038.0 1,606,631 911,022.1 1,527,875 1,130,747.9 1,884,957 5.2% -14.8%
Investments In Other Business Entities, Net 198,109.6 333,973 181,484.0 304,367 177,138.4 295,290 9.7% 13.1%
Property And Equipment Owned, Net 134,326.6 226,448 142,965.0 239,767 139,239.4 232,112 -5.6% -2.4%
Intangible Assets Owned, Net 9,039.5 15,239 3,891.4 6,526 8,034.2 13,393 133.5% 13.8%
Goodwill 13,494.0 22,748 13,846.0 23,221 13,646.1 22,748 -2.0% 0.0%
Tax Assets, Current And Deferred 3,616.7 6,097 - - 3,973.6 6,624 NMF -8.0%
Prepayments And Other Assets 13,740.2 23,163 21,920.0 36,762 18,463.4 30,778 -37.0% -24.7%
Total Assets 1,702,378.9 2,869,870 1,641,247.2 2,752,536 1,792,076.8 2,987,392 4.3% -3.9%
 
Deposits And Loans From Banks 20,324.1 34,262 6,913.2 11,594 35,853.7 59,768 195.5% -42.7%
Client Deposits 670,979.8 1,131,138 630,570.0 1,057,529 626,991.6 1,045,195 7.0% 8.2%
Borrowed Funds 541,595.1 913,021 545,180.5 914,322 682,525.4 1,137,770 -0.1% -19.8%
Tax Liabilities, Current And Deferred 14,642.3 24,684 11,526.1 19,330 12,063.6 20,110 27.7% 22.7%
Accruals And Other Liabilities 16,508.5 27,830 12,995.4 21,796 16,288.5 27,153 27.7% 2.5%
Total Liabilities 1,264,049.8 2,130,935 1,207,185.2 2,024,571 1,373,722.9 2,289,996 5.3% -6.9%
 
Share Capital - Ordinary Shares 18,570.5 31,306 18,660.0 31,295 18,747.8 31,253 0.0% 0.2%
Share Premium 283,878.6 478,562 284,740.9 477,539 281,745.7 469,670 0.2% 1.9%
Treasury Shares (848.2) (1,430) (890.2) (1,493) (676.4) (1,128) -4.2% 26.8%
Retained Earnings 89,514.6 150,904 95,706.6 160,509 75,752.2 126,279 -6.0% 19.5%
Revaluation And Other Reserves 28,937.0 48,782 22,116.8 37,092 28,013.2 46,698 31.5% 4.5%
Net Income / (Loss) For The Period 18,276.7 30,811 13,728.0 23,023 14,771.4 24,624 33.8% 25.1%
Total Shareholders Equity 438,329.2 738,935 434,062.0 727,965 418,353.9 697,396 1.5% 6.0%
 
Total Liabilities And Shareholders Equity 1,702,378.9 2,869,870 1,641,247.2 2,752,536 1,792,076.8 2,987,392 4.3% -3.9%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6771 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 2009

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

BG BANK (UKRAINE) 2009 INCOME STATEMENT DATA

Period ended   2009   2008   Growth3
Consolidated,IFRS based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited)
Interest Income 19,732 33,264 27,848 46,423 -28.3%
Interest Expense 10,461 17,635 15,560 25,938 -32.0%
Net Interest Income 9,271 15,628 12,289 20,485 -23.7%
Fees & Commission Income 1,987 3,349 2,975 4,960 -32.5%
Fees & Commission Expense 289 487 699 1,165 -58.2%
Net Fees & Commission Income 1,697 2,861 2,276 3,794 -24.6%
Income From Documentary Operations 44 74 - - NMF
Expense On Documentary Operations (0) (0) - - NMF
Net Income From Documentary Operations 44 74 - - NMF
Net Foreign Currency Related Income 896 1,510 4,158 6,931 -78.2%
Net Other Non-Interest Income - - 20 33 NMF
Net Non-Interest Income 2,637 4,445 6,454 10,759 -58.7%
Total Operating Income (Revenue) 11,908 20,074 18,742 31,244 -35.8%
Personnel Costs 6,934 11,689 9,554 15,927 -26.6%
Selling, General & Administrative Expenses 1,841 3,104 5,355 8,927 -65.2%
Procurement & Operations Support Expenses 1,082 1,823 - - NMF
Depreciation And Amortization 593 1,001 576 960 4.2%
Other Operating Expenses 489 825 152 254 224.9%
Total Recurring Operating Costs 10,939 18,441 15,638 26,068 -29.3%
Normalized Net Operating Income / (Loss) 969 1,633 3,105 5,176 -68.5%
Net Non-Recurring Income / (Costs) (915) (1,543) - - NMF
Profit / (Loss) Before Provisions 53 90 3,105 5,176 -98.3%
Net Provision Expense 24,570 41,421 10,712 17,857 132.0%
Pre-Tax Income / (Loss) (24,517) (41,330) (7,607) (12,681) 225.9%
Income Tax Expense / (Benefit) (5,216) (8,793) (1,585) (2,642) 232.8%
Net Income / (Loss) (19,301) (32,537) (6,022) (10,039) 224.1%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

BG BANK (UKRAINE) Q4 2009 INCOME STATEMENT DATA

Period ended   Q4 2009   Q3 2009   Growth
Consolidated, IFRS based US$   GEL US$   GEL Q-O-Q
000s Unless otherwise noted (Unaudited) (Unaudited)
Interest Income 2,802 4,724 4,942 8,288 -43.0%
Interest Expense 159 267 2,573 4,315 -93.8%
Net Interest Income 2,644 4,457 2,369 3,973 12.2%
Fees & Commission Income (266) (448) 1,132 1,898 -123.6%
Fees & Commission Expense (381) (643) 420 704 -191.3%
Net Fees & Commission Income 116 195 712 1,194 -83.7%
Income From Documentary Operations 44 74 - - NMF
Expense On Documentary Operations - (0) - - -
Net Income From Documentary Operations 44 74 - - NMF
Net Foreign Currency Related Income (567) (956) 50 84 NMF
Net Other Non-Interest Income - - - - -
Net Non-Interest Income (407) (687) 762 1,278 NMF
Total Operating Income (Revenue) 2,237 3,771 3,131 5,252 -28.2%
Personnel Costs 1,561 2,631 1,542 2,586 1.8%
Selling, General & Administrative Expenses 349 588 433 727 -19.0%
Procurement & Operations Support Expenses 330 556 110 185 NMF
Depreciation And Amortization 129 217 177 297 -27.0%
Other Operating Expenses 164 276 81 136 102.8%
Total Recurring Operating Costs 2,533 4,269 2,344 3,931 8.6%
Normalized Net Operating Income / (Loss) (296) (499) 788 1,321 NMF
Net Non-Recurring Income / (Costs) (716) (1,206) 3 6 NMF
Profit / (Loss) Before Provisions (1,012) (1,705) 791 1,327 NMF
Net Provision Expense 4,807 8,103 7,698 12,910 -37.2%
Pre-Tax Income / (Loss) (5,818) (9,808) (6,907) (11,584) NMF
Income Tax Expense / (Benefit) (541) (913) (3,612) (6,058) NMF
Net Income / (Loss) (5,277) (8,896) (3,295) (5,526) NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

BNB (BELARUS) 2009 INCOME STATEMENT DATA

Period ended   2009   2008   Growth
Consolidated, IFRS based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited)
Interest Income 4,218 7,111 4,292 7,154 -0.6%
Interest Expense 1,247 2,102 1,494 2,490 -15.6%
Net Interest Income 2,971 5,009 2,798 4,664 7.4%
Fees & Commission Income 1,040 1,754 1,137 1,895 -7.4%
Fees & Commission Expense 161 271 162 269 0.6%
Net Fees & Commission Income 880 1,483 975 1,626 -8.8%
Income From Documentary Operations 2 4 - - NMF
Expense On Documentary Operations 1 2 - - NMF
Net Income From Documentary Operations 1 2 - - NMF
Net Foreign Currency Related Income 1,049 1,768 1,834 3,058 -42.2%
Net Other Non-Interest Income 100 169 200 334 -49.4%
Net Non-Interest Income 2,030 3,422 3,010 5,017 -31.8%
Total Operating Income (Revenue) 5,001 8,431 5,808 9,681 -12.9%
Personnel Costs 1,902 3,206 1,742 2,904 10.4%
Selling, General & Administrative Expenses 472 796 1,048 1,747 -54.4%
Procurement & Operations Support Expenses 631 1,064 - - NMF
Depreciation And Amortization 310 522 552 920 -43.3%
Other Operating Expenses 482 813 360 601 35.4%
Total Recurring Operating Costs 3,797 6,401 3,703 6,173 3.7%
Normalized Net Operating Income / (Loss) 1,204 2,030 2,105 3,509 -42.1%
Net Non-Recurring Income / (Costs) 61 102 - - NMF
Profit / (Loss) Before Provisions 1,265 2,132 2,105 3,509 -39.2%
Net Provision Expense 657 1,108 774 1,289 -14.1%
Pre-Tax Income / (Loss) 607 1,024 1,331 2,219 -53.9%
Income Tax Expense / (Benefit) 196 330 358 596 -44.7%
Net Income / (Loss) 412 694 973 1,623 -57.2%

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

BNB (BELARUS) Q4 2009 INCOME STATEMENT DATA

Period ended   Q4 2009   Q3 2009   Growth
Consolidated, IFRS based (Unaudited) (Unaudited)
000s Unless otherwise noted US$   GEL US$   GEL Q-O-Q
Interest Income 1,237 2,085 1,179 1,977 5.4%
Interest Expense 273 460 321 538 -14.4%
Net Interest Income 963 1,624 858 1,439 12.8%
Fees & Commission Income 321 542 281 471 15.1%
Fees & Commission Expense 60 101 38 63 60.4%
Net Fees & Commission Income 262 441 243 408 8.1%
Income From Documentary Operations - - 0 1 NMF
Expense On Documentary Operations 1 1 - - NMF
Net Income From Documentary Operations (0.5) (1) 0 1 NMF
Net Foreign Currency Related Income 20 33 164 276 -87.9%
Net Other Non-Interest Income 54 91 (14) (24) NMF
Net Non-Interest Income 335 564 394 660 -14.6%
Total Operating Income (Revenue) 1,298 2,188 1,252 2,100 4.2%
Personnel Costs 557 940 440 738 27.3%
Selling, General & Administrative Expenses 172 291 114 191 52.5%
Procurement & Operations Support Expenses 206 348 148 249 39.7%
Depreciation And Amortization 82 138 48 80 72.6%
Other Operating Expenses 161 271 115 193 40.8%
Total Recurring Operating Costs 1,179 1,987 865 1,450 37.0%
Normalized Net Operating Income / (Loss) 119 201 387 649 -69.1%
Net Non-Recurring Income / (Costs) 18 31 31 52 -40.6%
Profit / (Loss) Before Provisions 137 232 418 701 -67.0%
Net Provision Expense 759 1,280 (103) (173) NMF
Pre-Tax Income / (Loss) (622) (1,048) 521 874 NMF
Income Tax Expense / (Benefit) (159) (268) 153 257 NMF
Net Income / (Loss) (463) (781) 368 617 NMF

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6858 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 31 December 2009

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6670 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 2008

4 Change calculations based on GEL values

KEY RATIOS

Profitability Ratios   Full Year 2009   Full Year 2008
ROAA 1, Annualied -3.3% 0.0%
ROAE2, Annualied -14.1% 0.0%
Interest Income To Average Interest Earning Assets 3, Annualied 17.6% 17.7%
Cost Of Funds 4, Annualied 8.4% 7.9%
Net Spread 5 9.2% 9.8%
Net Interest Margin 6, Annualised 9.2% 9.7%
Loan Yield 7, Annualised 13.3% 13.8%
Interest Expense To Interest Income 48.1% 45.3%
Net Non-Interest Income To Average Total Assets, Annualised 4.0% 3.7%
Net Non-Interest Income To Revenue 8 38.0% 35.0%
Net Fee And Commission Income To Average Interest Earning Assets 9, Annualised 2.2% 1.6%
Net Fee And Commission Income To Revenue 14.6% 11.0%
Operating Leverage 10 -44.3% -33.1%
Total Operating Income (Revenue) To Total Assets, Annualised 10.9% 10.4%
Recurring Earning Power 11, Annualised 0.9% 4.0%
Net Income To Revenue -30.8% 0.1%
 
Efficiency Ratios
Operating Cost To Average Total Assets 12, Annualised 6.1% 6.0%
Cost To Average Total Assets 13, Annualised 9.7% 6.6%
Cost / Income 14 91.6% 62.3%
Cost / Income, Normalized 15 57.0% 56.2%
Cost / Income, Bank of Georgia, Stand-Alone 16 50.6% 49.2%
Cost / Income, Bank of Georgia, Stand-Alone, Normalized 47.9% 44.5%
Cash Cost / Income 49.5% 56.3%
Total Employee Compensation Expense To Revenue 17 28.1% 30.8%
Total Employee Compensation Expense To Cost 30.7% 49.3%
Total Employee Compensation Expense To Average Total Assets, Annualised 3.0% 3.3%
 
Liquidity Ratios
Net Loans To Total Assets 18 57.2% 63.8%
Average Net Loans To Average Total Assets 58.1% 60.4%
Interest Earning Assets To Total Assets 74.8% 67.6%
Average Interest Earning Assets To Average Total Assets 72.0% 71.8%
Liquid Assets To Total Assets 19 23.2% 15.8%
Liquid Assets To Total Short-Term Liabilities, NBG Stand-Alone 35.6% 27.3%
Liquid Assets To Total Liabilities, IFRS Consolidated 30.8% 21.8%
Net Loans To Client Deposits 131.7% 174.4%
Average Net Loans To Average Client Deposits 154.2% 148.5%
Net Loans To Total Deposits 20 127.2% 163.6%
Net Loans To (Total Deposits + Equity) 87.8% 104.5%
Net Loans To Total Liabilities 71.7% 81.9%
Total Deposits To Total Liabilities 56.4% 50.1%
Client Deposits To Total Deposits 96.6% 93.8%
Client Deposits To Total Liabilties 54.5% 47.0%
Current Account Balances To Client Deposits 38.6% 37.6%
Demand Deposits To Client Deposits 9.5% 9.1%
Time Deposits To Client Deposits 51.9% 53.4%
Total Deposits To Total Assets 45.0% 39.0%
Client Deposits To Total Assets 43.4% 36.6%
Client Deposits To Total Equity (Times) 21 2.15 1.66
Due From Banks / Due To Banks 22 605.1% 126.2%
Total Equity To Net Loans 35.4% 34.5%
Leverage (Times) 23 3.9 3.5

KEY RATIOS CONT’D

Asset Quality   Full Year 2009   Full Year 2008
NPLs (in GEL) 24 139,954 64,306
NPLs To Gross Loans To Clients 25 7.5% 2.9%
Cost of Risk 26, Annualized 6.8% 6.5%
Cost of Risk Normalized 27, Annualized 6.8% 6.5%
Reserve For Loan Losses To Gross Loans To Clients 28 9.8% 5.0%
NPL Coverage Ratio 29 131.0% 169.1%
Equity To Average Net Loans To Clients 33.9% 37.4%
 
Capital Adequacy:
Equity To Total Assets 20.2% 22.1%
BIS Tier I Capital Adequacy Ratio, consolidated 30 22.2% 22.5%
BIS Total Capital Adequacy Ratio, consolidated 31 33.7% 27.3%
NBG Tier I Capital Adequacy Ratio 32 19.7% 16.6%
NBG Total Capital Adequacy Ratio 33 16.8% 13.5%
 
Per Share Values:
Basic EPS (GEL) 34 (3.16) 0.01
Basic EPS (US$) ($1.88) $0.00
Fully Diluted EPS (GEL) 35 (2.85) 0.01
Fully Diluted EPS (US$) ($1.69) $0.00
Book Value Per Share (GEL) 36 18.98 23.00
Book Value Per Share (US$) $11.26 $13.80
Change y-o-y -17.5% 11.9%
Ordinary Shares Outstanding - Weighted Average, Basic 31,277,936 30,931,549
Ordinary Shares Outstanding - Period End 31,306,071 31,252,553
Ordinary Shares Outstanding - Fully Diluted 34,780,685 31,252,553
 
Selected Operating Data:
Full Time Employees (FTE) 4,781 4,979
FTEs, Bank of Georgia Stand-Alone 2,667 2,741
Total Assets Per FTE 37 (GEL Thousands) 615 655
Total Assets Per FTE, Bank of Georgia Stand-Alone (GEL Thousands) 1,102 1,189
Number Of Active Branches 141 151
Number Of ATMs 382 416
Number Of Cards (Thousands) 537 667
Number Of POS Terminals 1,958 2,693

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 Loan Yield equals Interest Income, less Net Provision Expense, divided by quarterly Average Gross Loans To Clients;
8 Revenue equals Total Operating Income;
9 Net Fee And Commission Income includes Net Income From Documentary Operations of the period ;
10 Operating Leverage equals percentage change in Revenue less percentage change in Total Costs;
11 Recurring Earning Power equals Profit Before Provisions of the period divided by average Total Assets of the same period;
12 Operating Cost equals Total Recurring Operating Costs;
13 Cost includes Total Recurring Operating Costs and Net Non-Recurring Costs (Income);
14 Cost/Income Ratio equals Costs of the period divided by Total Operating Income (Revenue);
15 Cost/Income Normalized equals Total Recurring Operating cost (excludes net non-recurring costs) divided by total operating income.
16 Cost/ Income, Bank of Georgia, standalone, equals non-consolidated Total Costs of the bank of the period divided by non-consolidated Revenue of the bank of the same period;
17 Total Employee Compensation Expense includes Personnel Costs;
18 Net Loans equal Net Loans To Clients;
19 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;
20 Total Deposits include Client Deposits and Deposits And Loans from Banks;
21 Total Equity equals Total Shareholders’ Equity;
22 Due From Banks/ Due To Banks equals Loans And Advances To Credit Institutions divided by Deposits And Loans From Banks;
23 Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date;
24 NPLs (in GEL) equals consolidated 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;
25 Gross Loans equals Gross Loans To Clients;
26 Cost Of Risk equals Net Provision For Loan Losses of the period, plus provisions for (less recovery of) other assets, divided by quarterly average Gross Loans To

Clients over the same period;

27 Cost Of Risk Normalized 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;
28 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;
29 NPL Coverage Ratio equals Reserve For Loan losses as of the period end divided by NPLs as of the same date;
30 BIS Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I;
31 BIS Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of Basel Accord I;
32 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;
33 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;
34 Basic EPS equals Net Income of the period divided by the weighted average number of outstanding ordinary shares over the same period;
35 Fully Diluted EPS equals net income of the period divided by the number of outstanding ordinary shares as of the period end plus number of ordinary shares in contingent liabilities;
36 Book Value Per Share equals Equity as of the period end, plus Treasury Shares, divided by the total number of Outstanding Ordinary shares as of the same date
37 Equals total consolidated assets divided by total number of full-time employees

1 Compared to the respective period in 2008 and 2009; growth calculations based on GEL values.

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

3 Normalised for Net Non-Recurring Costs.

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

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

About Bank of Georgia

Bank of Georgia is the leading Georgian bank offering a broad range of corporate and investment banking, retail banking, wealth management and insurance services to its customers in Georgia, Ukraine and Belarus. Bank of Georgia is the largest bank in Georgia by assets, loans, deposits and equity, with 33.0% market share by total assets (all data according to the NBG as of 31 December 2009). The bank has 141 branches and over 999,000 retail and more than 153,000 corporate current accounts.

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

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

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

Nicholas Enukidze   Irakli Gilauri   Macca Ekizashvili
Chairman of the Supervisory Board CEO, Supervisory Board Member Head of Investor Relations
+995 32 444 858 +995 32 444 109 +995 32 444 256

nenukidze@bog.ge

igilauri@bog.ge

ir@bog.ge

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

The financial information as of Q3 2009, Q4 2009, full year 2009 and Q4 2008 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.

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 (non-IFRS, based on National Bank of Georgia requirements) filed by Georgian banks.