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JSC Bank of Georgia (BGEO)

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Monday 18 April, 2011

JSC Bank of Georgia

1st Quarter Results

1st Quarter Results

Bank of Georgia

1.71 GEL/US$ 31 March 2011
1.77 GEL/US$ 31 December 20101.77 GEL/US$ 31 December 2010
1.75 GEL/US$ 31 March 2010 1.75 GEL/US$ 31 March 2010

JSC BANK OF GEORGIA ANNOUNCES Q1 2011 RESULTS,
REPORTS GEL 30.6 MILLION CONSOLIDATED NET INCOME EXCLUDING EXTRAORDINARY ITEM

  Consolidated
Millions, unless otherwise noted Q1 2011   Growth q-o-q1   Growth y-o-y2
Bank of Georgia (Consolidated, Unaudited, IFRS-based) US$   GEL
Total Operating Income (Revenue)3 53.4 91.1 -4.3% 20.1%
Recurring Operating Costs 27.7 47.3 -7.2% 2.2%
Normalized Net Operating Income4 25.7 43.8 -1.0% 48.0%
Profit/(Loss) before provisions 24.3 41.5 -3.2% 57.6%
Net Provision Expenses 3.0 5.2 -52.4% -30.0%
Net Income/(Loss)5 17.9 30.6 19.0% 82.4%
 
Total Assets 2,373.7 4,049.2 -1.2% 29.6%
Net Loans 1,314.2 2,241.9 -5.4% 26.1%
Client Deposits 1,158.9 1,976.9 -1.7% 41.8%
Tier I Capital Adequacy Ratio (BIS)6 18.0%
Total Capital Adequacy Ratio (BIS)7 28.8%
Tier I Capital Adequacy Ratio (NBG) 12.7%
Total Capital Adequacy Ratio (NBG) 15.6%
Standalone
Millions, unless otherwise noted Q1 2011 Growth q-o-q1 Growth y-o-y2
Bank of Georgia (Consolidated, Unaudited, IFRS-based) US$ GEL
Total Operating Income (Revenue)3 45.8 78.2 -2.6% 31.7%
Recurring Operating Costs 20.1 34.2 -0.2% 11.3%
Normalized Net Operating Income4 25.8 44.0 -4.4% 53.7%
Profit/(Loss) before provisions 24.9 42.5 -7.2% 55.3%
Net Provision Expenses 3.3 5.6 -41.6% -54.7%
Net Income/(Loss) 5 18.5 31.5 5.5% 145.7%
 
Total Assets 2,306.7 3,935.0 -0.3% 29.7%
Net Loans 1,298.5 2,215.1 0.6% 30.3%
Client Deposits 1,152.8 1,966.5 8.7% 57.1%
 

Bank of Georgia (LSE: BGEO, GSE: GEB) (the “Bank”), Georgia’s leading bank, announced today its Q1 2011 consolidated results (IFRS based, derived from management accounts), reporting a Q1 2011 Net Income excluding Extraordinary Item of GEL 30.6 million, or GEL 0.97 per share.

In Q1 2011, the Bank’s Extraordinary Item of GEL 13.7 million was related to the disposal of BG Bank Ukraine. The Extraordinary Item included GEL 31.2 million accumulated FX loss on investment, GEL 5.7 million realized loss at disposal and GEL 23.2 million income tax benefit related to the disposal. The FX loss of GEL 31.2 million that was related to the Ukrainian Hryvna devaluation has already been recorded in the Shareholders’ Equity in 2008, 2009 and 2010, respectively. For the presentation purposes, GEL 31.2 million of accumulated FX loss recorded in the previous years has been moved from Revaluation Reserves to P&L in Q1 2011 with no effect on the Total Shareholders’ Equity. This reclassification was the main driver of the increase in Revaluation Reserves item under Shareholders’ Equity and consequently a negative impact on the P&L through the Extraordinary Item in Q1 2011. The accounting treatment of the one-off Extraordinary Item related to BG Bank disposal in Q1 2011 carries limited economic value for the Bank, therefore, Q1 2011 consolidated results and result discussions in this report exclude the Extraordinary Item. For the results discussion on a comparable basis please refer to Bank of Georgia standalone results, which do not include the BG Bank’s results for all the periods discussed

Q1 2011 highlights

  • Q1 2011 consolidated Return on Average Equity (ROAE)8 grew to 17.7%, up from the consolidated ROAE of 16.7% in Q4 2010 as a result of strong Q1 2011 Net Income (excluding Extraordinary Item) of GEL 30.6 million.
  • Consolidated Net Interest Margin (NIM) declined from 7.9% in Q4 2010 to 7.1% in Q1 2011 due to excess liquidity. NIM adjusted for excess liquidity stood at 8.3% in Q1 2011.
    • Cost of funds declined to 7.5% in Q1 2011 from 7.9% in Q4 2010 and 8.6% in Q1 2010, a result of the deposit yield decline to 6.6% in Q1 2011 from 7.2% in Q4 2010 and 7.9% in Q1 2010.
  • Loan yield declined to 19.3% in Q1 2011 from 19.6% in Q4 2010 and 20.1% in Q1 2010.
  • Q1 2011 consolidated operating leverage grew to 20.0% on a y-o-y basis, while standalone operating leverage stood at 20.2% on a y-o-y basis during the same period.
  • Q1 2011 standalone Profit Before Provisions grew 55.3% y-o-y to GEL 42.5 million, down 7.2% q-o-q
  • Consolidated loan book quality improved as consolidated NPLs declined from GEL 117.6 million in Q4 2011 to GEL 90.3 million in Q1 2011. Consolidated NPL coverage ratio stood at 132.2% in Q1 2011 compared to 151.0% in Q4 2010.
  • Standalone Net Loan Book increased by 0.6% q-o-q to GEL 2,215.1 million, up 30.3% y-o-y. In nominal terms, Standalone Net Loan Book grew 3.6% q-o-q.
  • Standalone Client Deposits increased 8.7% q-o-q to GEL 1,966.5 million, up 57.1% y-o-y. In nominal terms, Standalone Client Deposits increased 10.5% q-o-q.
  • Net Loans to Client Deposits Ratio declined to 113.4% in Q1 2011, on a consolidated basis from 117.8% in Q4 2010 and 127.5% in Q1 2010.

“Seasonally economically inactive quarter and 3.9% appreciation of Georgian Lari in Q1 2011 resulted in only 0.6% q-o-q net loan book growth on a standalone basis. In nominal terms (constant GEL/US$ exchange rate), the standalone Bank of Georgia net loan book grew 3.6% q-o-q in Q1 2011. As we continue to observe strong FX inflow into the Georgian economy, the client deposit growth rate reached 8.7% in Q1 2011. However, in nominal terms, the growth was even greater at 10.5%.

Consolidated book value grew by GEL 45.0 million in Q1 2011, driven by GEL 16.9 consolidated net income after extraordinary item and by GEL 25.0 million increase in revaluation reserves that was primarily driven by BG Bank disposal. Therefore, the book value per share increased by 6.5% q-o-q to GEL 23.52 in Q1 2011. The book value per share in US dollar terms increased by 10.6% q-o-q US$ 13.79 in Q1 2011, as Lari continued to appreciate during the quarter.

The decline of the consolidated Net Interest Margin to 7.1% from 7.9% in Q4 2010 was driven by excess liquidity, which continued to increase during Q1 2011. NIM normalized for excess liquidity remained essentially flat at 8.3% in Q1 2011 compared to the Q4 2011 normalized NIM as the contraction of cost of funds from 7.9% in Q4 2010 to 7.5% in Q1 2011 offset the decline of loan yield from 19.6% in Q4 2010 to 19.3% in Q1 2011. The decrease of cost of funds during the quarter was driven by the decline of deposit yields from 7.2% in Q4 2010 and 7.9% in Q1 2010 to 6.6% in Q1 2011.

Despite the decline of consolidated NIM, Q1 2011 operating leverage both on a consolidated and standalone basis, exceeded 20% level on a year-on-year basis. Consolidated revenue grew 20.1%y-o-y, while costs were largely flat compared to the same period last year, mostly due to the BG Bank disposal. On a standalone basis, revenue grew 31.7% y-o-y, while costs grew 11.3% y-o-y for the same period. Pre-provision profit grew by 57.6% y-o-y on a consolidated and 55.3% y-o-y on a standalone basis.

We observed further decline in NPLs in Q1 2011 on consolidated basis, which translated into significant improvements in cost of risk. On a consolidated basis cost of risk declined to 0.8% in Q1 2011 from 1.8% in Q4 2010. Improvements in efficiency and cost of risk combined with the BG Bank’s disposal, resulted in the Q1 2011 Net Income growth by 82.4% on a year-on-year and 19.0% growth on quarter-on-quarter basis, boosting basic EPS growth from GEL 0.82 in Q4 2010 to GEL 0.97 in Q1 2011. In US dollar terms, the EPS growth was even sharper as it grew 23.6% q-o-q from US$0.46 to US$0.57”, commented Giorgi Chiladze, Deputy Chief Executive Officer, Finance.

Q1 2011 summary of the Bank’s consolidated results

In Q1 2011, the Bank’s Total Operating Income (Revenue) increased 20.1% y-o-y to GEL 91.1 million, driven by 25.7% y-o-y growth of Net Interest Income to GEL 56.9 million and 11.7% y-o-y growth of Net Non-Interest Income to GEL 34.2 million. On a quarterly basis, Revenue was down by 4.3% due to the exclusion of revenues generated by BG Bank following its disposal, 1.0% q-o-q decline in Net Interest Income, a result of excess liquidity that kept growing during the quarter and the 9.3% q-o-q decline of Net Non-Interest Income. The decline in Non-Interest income was related to both BG Bank disposal and the seasonality slowdown of business activity in the first quarter of the year compared to the preceding quarter. The strong client deposit growth rate on a standalone basis (8.7% q-o-q) during the quarter, which outpaced the standalone Net Loan Book growth rate (0.6% q-o-q) resulted in the further increase in excess liquidity of the Bank on a consolidated basis, bringing down the Q1 2011 Net Interest Margin (NIM) to 7.1% from the NIM of 7.9% in Q4 2010.

On a year-on-year basis, the Bank’s 11.7% y-o-y growth of Q1 2011 Net Non-Interest Income was driven by the growth of most of the non-interest income items compared to the same period last year. Net Fees and Commission Income grew 16.2% y-o-y to GEL 12.0 million (down 14.6% q-o-q), Net Income from Documentary Operations grew by 60.9% y-o-y to GEL 3.5 million, (up 7.4% q-o-q) and Net Foreign Currency Related Income increased 30.2% y-o-y to GEL 9.6 million, (up 1.3% q-o-q). Net Other Non-Interest Income amounted to GEL 9.2 million, down 15.2% y-o-y, as the decline in net investment gains more than offset the 12.0% y-o-y growth of Net Insurance Income to GEL 4.7 million (down 6.0% q-o-q) and 61.8% y-o-y growth of Brokerage Income to GEL 0.4 million (down 72.3% q-o-q).

Total Consolidated Recurring Operating Costs for the quarter decreased by 7.2% q-o-q to GEL 47.3 million, (up 2.2% y-o-y), with the decline partially attributed to the BG Bank disposal. Personnel Costs on a consolidated basis decreased 5.1% q-o-q to GEL 25.7 million, representing 28.2% of the Bank’s Revenue, down from 30.8% in Q1 2010. Normalized Net Operating Income of GEL 43.8 million was up 48.0% y-o-y (down 1.0% q-o-q), resulting in the improved consolidated Normalized Cost/Income Ratio of 51.9% compared to the Normalized Cost/Income ratio of 53.5% in Q4 2010 and 61.0% in Q1 2010.

The Bank’s consolidated Net Provision Expense for the quarter declined to GEL 5.2 million, down from Net Provision Expense of GEL 10.8 million and GEL 7.4 million in Q4 2010 and Q1 2010, respectively. Consolidated Cost of Risk for the quarter stood at 0.8% a decrease from 1.8% in Q4 2010.

On 31 March 2011, the Bank’s consolidated Total Assets stood at GEL 4,049.2 million, up 29.6% y-o-y and down 1.2% from 31 December 2010 when Total Assets included BG Bank’s assets. Reflecting the disposal of BG Bank, the Bank’s consolidated Net Loan Book was down by 5.4% q-o-q to GEL 2,241.9 million, up 26.1% y-o-y, while consolidated Client Deposits of GEL 1,976.9 million were 1.7% lower than at 31 December 2010, and 41.8% higher than consolidated Client Deposits on 31 March 2010. In Q1 2011 Loan Loss Reserves of GEL 119.3 million declined to 5.1% of consolidated Gross Loan Book from 7.0% in Q4 2010. Consolidated NPLs of GEL 90.3 million improved considerably by 23.2% q-o-q, reflecting the exclusion of BG Bank’s NPLs in Q1 2011. As of 31 March 2011, consolidated NPLs represented 3.8% of the consolidated gross Loan Book down from the same ratio of 4.6% in Q4 2010. The consolidated NPL Coverage ratio for the quarter stood at 132.2%.

The Bank’s consolidated Book Value per Share on 31 March 2011 stood at GEL 23.52 (US$ 13.79), compared to GEL 22.10 (US$ 12.46) as at 31 December 2010 and GEL 19.53 (US$ 11.17) as of 31 March 2010.

JSC Bank of Georgia (standalone) results

Bank of Georgia on a standalone basis reported Q1 2011 Net Income before Extraordinary Item of GEL 31.5 million, an increase of GEL 18.7 million, or 145.7%, compared to the standalone Net Income in Q1 2010. Q1 2011 Net Income grew by GEL 1.6 million, or 5.5%, compared to the Q4 2010 standalone Net Income.

In Q1 2011 all revenue items contributed to the 31.7% year-on-year growth of the standalone Total Operating Income (Revenue) to GEL 78.2 million. The growth was driven by 29.7% y-o-y increase of Net Interest Income to GEL 55.2 million, a result of the standalone loan book (net) growth of 30.3% y-o-y. On a quarterly basis, standalone Net Interest Income grew 0.4% as the 6.0% q-o-q growth of Interest Income more than offset the 11.9% q-o-q growth of Interest Expense. The rise in interest expense during the quarter, was a result of strong q-o-q growth of standalone Client Deposits, which grew 8.7%-q-o-q outpacing the 0.6% q-o-q growth rate of standalone net loan book. As a result, the increased excess liquidity during the quarter led to the decline of standalone NIM to 7.2% in Q1 2011 from the standalone NIM of 8.0% in Q4 2010.

Standalone Net Non-Interest Income increased 36.9% y-o-y to GEL 23.0 million, driven by the 17.1% y-o-y growth of Net Fees and Commission Income to GEL 10.0 million, 64.4% y-o-y increase of Net Income from Documentary Operations to GEL 3.4 million and 60.1% y-o-y increase of Net Foreign Currency Related Income to GEL 9.0 million. Reflecting the seasonal slowdown of the overall business activity in the first quarter in 2011 compared the fourth quarter 2010, the standalone Net Non-Interest Income declined by 9.2% q-o-q, predominantly affected by the 15.3% decline of the Net Fees and Commission Income in Q1 2011. The 9.2% q-o-q decline of Net Non-Interest Income more than offset the 0.4% q-o-q growth of Net Interest Income resulting the 2.6% q-o-q decline in standalone Revenue compared to the prior quarter.

As a result of continued cost discipline in procurement process and operating expenses, Bank of Georgia’s standalone Q1 2011 Recurring Operating Costs of GEL 34.2 million grew 11.3% y-o-y, or by one third of the rate of the standalone Revenue growth for the same period. On a quarterly basis, standalone Operating Costs declined by 0.2%. Normalized Net Operating Income (NNOI) for the quarter reached GEL 44.0 million, up by GEL 15.4 million, or 53.7% y-o-y.

The improved efficiency and Revenue growth on a yearly basis translated into the standalone positive operating leverage of 20.2% y-o-y. Bank of Georgia’s standalone Cost/Income ratio stood at 45.6% in Q1 2011 compared to 42.9% in Q4 2010 and 53.9% in Q1 2010. Due to the combination of Loan Book growth and improved operating performance, Profit Before Provisions grew by 55.3% y-o-y to GEL 42.5 million, down 7.2% q-o-q. The Bank’s Net Provision Expense on a standalone basis decreased from GEL 9.5 million in Q4 2010 to GEL 5.6 million in Q1 2011.

As of 31 March 2011, Bank of Georgia’s standalone Total Assets stood at GEL 3.9 billion, up 29.7% y-o-y and down 0.3% q-o-q, predominantly due to the reduction in net Investments in Other Business Entities by GEL 175.9 million mostly related to the BG Bank’s disposal. Bank of Georgia’s standalone Net Loan Book increased 30.3% y-o-y to GEL 2,215.1 million driven by 35.9% y-o-y increase of the Corporate Net Loan Book to GEL 1,209.5 million and 25.5% y-o-y growth of Retail Net Loan Book to GEL 969.6 million. On a quarterly basis, standalone Net Loan Book increased by 0.6%, while in nominal terms, the q-o-q growth reached 3.6%. Standalone NPLs stood at GEL 87.6 million and represented 3.8% of the total gross loan book, an increase from the same ratio of 3.5% in Q4 2010, when the NPLs amounted to GEL 81.2 million on a standalone basis.

As of the Q1 2011, the standalone Client Deposits amounted to GEL 1,966.5 million, representing an increase of GEL 158.0 million, or 8.7% during Q1 2011, up GEL 715.0 million, or 57.1% y-o-y. In nominal terms, the standalone Client Deposits growth amounted to 10.5% q-o-q. The growth was primarily driven by the Retail and Wealth Management Client Deposits, which grew 12.7% q-o-q and 47.0% y-o-y and 11.1% q-o-q and 61.0% y-o-y, respectively. The CB Client Deposits were up 6.0% q-o-q and 62.5% y-o-y.

As of 31 December 2010 Bank of Georgia on a standalone basis held market shares of 36.2%, 35.9%, and 32.2% by total assets, gross loans, and client deposits, respectively in Georgia. Since 31 December 2009, the Bank gained market shares of 3.2% by assets, 4.1% by gross loans and 3.9% by client deposits9.

The business segment discussion set forth below is derived from IFRS-based management reports. Business segment results of RB, CB and WM represent Bank of Georgia’s standalone performance and do not include intercompany eliminations.

Retail Banking (RB)

GEL millions, unless otherwise noted   Q1 2011   Q4 2010   Q1 2010   Change Q-O-Q   Change Y-O-Y
Total operating income (Revenue) 42.5 46.9 32.8 -9.4% 29.7%
Total recurring operating costs 21.9 22.5 20.2 -2.9% 8.1%
Net income / (Loss) 21.3 15.9 2.1 34.6% NMF
Loans to clients, gross 1,008.9 1,023.3 846.6 -1.4% 19.2%
Loans to clients, net 969.6 974.3 772.5 -0.5% 25.5%
Client deposits 609.5 540.9 414.7 12.7% 47.0%
 

Discussion of results

In Q1 2011, RB Revenues decreased 9.4% q-o-q (up 29.7% y-o-y) to GEL 42.5 million, driven predominantly by the 7.8% q-o-q decline and 33.3% y-o-y growth of RB Net Interest Income to GEL 31.4 million. RB Interest Expense grew 8.3% q-o-q to GEL 28.1 million, while RB Interest Income declined 0.8% q-o-q to GEL 59.5 million as RB client deposits continued to grow during the quarter as compared to the RB loan book which remained largely flat. RB Loan Yield Excluding Provisions grew from 23.4% in Q4 2010 to 23.5% in Q1 2011. RB Net Non-Interest Income during the quarter decreased by 13.8% q-o-q (up 20.5% y-o-y) to GEL 11.1 million, mostly driven by 13.4% q-o-q decrease of RB Net Fee and Commission Income to GEL 8.5 million, up 17.5%- y-o-y. The decline was attributed to the seasonality effect. The year-on-year growth was a result of the successful diversification of fee income sources in 2010. Continuing the trend of previous quarter, RB Recurring Operating Costs decreased by 2.9% q-o-q to GEL 21.9 million (up 8.1% y-o-y). RB Net Provision Reversal in Q1 2011 amounted to GEL 4.4 million, compared to the Net Provision Expense of GEL 4.8 million in Q4 2010. RB Net Income for Q1 2011 amounted to GEL 21.3 million, contributing 67.7% to the standalone Net Income.

RB Net Loans remained flat during Q1 2011 amounting GEL 969.6 million, up 25.5% y-o-y. The constrained growth of the RB loan book has been largely attributed to the decline in mortgage lending compared to the previous quarters, affected by the limited supply of new housing, a result of financial difficulties of the top real estate developers in the country. The mortgage loans issued in Q1 2011 amounted to GEL 27.8 million, down from GEL 35.0 million mortgage loans issued in Q4 2010 and GEL 55.2 million in Q3 2010. RB Client Deposits grew 12.7% q-o-q and 47.0% y-o-y to GEL 609.5 million, driven primarily by the growth of time deposits.

Highlights

  • Issued 42,316 debit cards, down 44.5% q-o-q, in Q1 2011 bringing the total debit cards outstanding to 509,636, up 2.7% q-o-q.
  • Issued 11,469 credit cards of which 8,788 American Express cards in Q1 2011. A total of 67,499 American Express cards were issued since the launch in November 2009. The total number of credit cards outstanding amounted to 105,354 as of 31 March 2011.
  • Increased number of branches from 142 in Q4 2010 to 143 and number of ATMs from 405 to 408 in Q1 2011.
  • Outstanding number of RB clients reached 845,391, up 2.6% q-o-q up 4.2% y-o-y.
  • Acquired 402 new clients in Solo business line, mass affluent sub-brand, in Q1 2011, of which 112 new clients joined in Q1 2011. As of 31 December, the number of Solo clients reached 2,683. Introduced Premium Deposit for Solo Clients.
  • Number of SMS Loans available for the payroll clients through ATMs, launched in Q4 2010, amounted to 6,234 and aggregate SMS loans outstanding reached GEL 10 million as of 31 March 2011.
  • Increased Point of Sales (POS) footprint: As of 31 March 2011, 108 desks at 218 contracted merchants, up from 99 desks and 177 merchants at the end of Q4 2010 when the Bank re-entered POS market in Q4 2010. POS loans outstanding reached GEL 7.4 million.
  • RB Loan Yield Excluding Provisions amounted to 23.5% in Q1 2011 (23.4% in Q4 2010) and RB Deposit Yield amounted to 7.0% in Q1 2011 (8.1% in Q1 2010).
  • Consumer loan originations of GEL 65.4 million (down 10.0% q-o-q and up 36.2% y-o-y) resulted in consumer loans outstanding in the amount of GEL 168.9 million as of 31 March 2011, up 44.7% y-o-y.
  • Micro loan originations of GEL 93.5 million (down 9.2% q-o-q and up 81.2% y-o-y) resulted in micro loans outstanding in the amount of GEL 248.7 million as of 31 March 2011, up 106.1% y-o-y.
  • Mortgage loans originations of GEL 27.8 million (down 20.6% q-o-q and up 7.6% y-o-y) resulted in mortgage loans outstanding in the amount of GEL 346.8 million as of 31 March 2011, down 2.5% y-o-y and down 6.4% q-o-q.

The total RB loan originations and card issuance declined compared to Q4 2010 due to the seasonality effect.

Corporate Banking (CB)

GEL millions, unless otherwise noted   Q1 2011   Q4 2010   Q1 2010   Change Q-O-Q   Change Y-O-Y
Total operating income (Revenue) 33.8 32.6 25.3 3.6% 33.7%
Total recurring operating costs 11.4 10.4 9.5 9.2% 19.7%
Net income 9.2 14.5 8.4 -36.5% 9.7%
Loans to clients, gross 1,286.9 1,259.8 951.0 2.2% 35.3%
Loans to clients, net 1,209.5 1,190.7 890.0 1.6% 35.9%
Client deposits 1,066.2 1,006.0 656.1 6.0% 62.5%
 

Discussion of results

CB Revenues increased 3.6% q-o-q to GEL 33.8 million (up 33.7% y-o-y), driven by the 8.5% q-o-q increase of Net Interest Income to GEL 22.2 million (up 23.0% y-o-y), as CB Interest Expense grew 20.8% q-o-q to GEL 30.5 million (up 41.7% y-o-y) and CB Interest Income grew 15.3% q-o-q to GEL 52.7 million (up 33.2% y-o-y). Due to seasonality effect, CB Net Non-Interest income decreased 4.5% q-o-q (up 60.2% y-o-y) a result of the 25.9% q-o-q decline in CB Net Fee and Commission Income to GEL 1.3 million (up 13.3% y-o-y) and 5.8% q-o-q decline in CB Net Foreign Currency related income to GEL 6.5 million (up 72.6% y-o-y. CB Income from Documentary Operations increased by 1.4% q-o-q to GEL 3.3 million (up 55.7% y-o-y). CB Recurring Operating Costs amounted to GEL 11.4 million, a 9.2% increase q-o-q and 19.7% increase y-o-y). CB Net Provision Expense for the quarter amounted to GEL 10.2 million, an increase compared to GEL 4.8 million Net Provision Expense in Q4 2010. CB Net Income for Q1 2011 amounted to GEL 9.2 million, contributing 29.2% to the standalone Net Income for the quarter.

CB gross loans increased 2.2% q-o-q to GEL 1,286.9 million (up 35.3% y-o-y), while CB Client Deposits grew 62.5% y-o-y to GEL 1,066.2 million, up 6.0% q-o-q.

Highlights

  • CB Loan Yield Excluding Provisions amounted to 16.7% in Q1 2011 (16.2% in Q4 2010) and CB Deposit Yield amounted to 6.0% in Q1 2011 (6.2% in Q1 2010).
  • Increased the number of corporate clients using the Bank’s payroll services from 1,737 as of Q4 2010 to 1,890 in Q1 2011. As of 31 March 2011, the number of individual clients serviced through the corporate payroll programs administered by the Bank amounted to 161,418.

Wealth Management (WM)

GEL millions, unless otherwise noted Q1 2011 Q4 2010 Q1 2010 Change Q-O-Q Change Y-O-Y
Total operating income (Revenue) 1.9 0.7 1.3 154.1% 44.8%
Total recurring operating costs 1.0 1.4 1.0 -26.8% -3.5%
Net income / (Loss) 1.0 (0.5) 2.3 NMF NMF
Loans to clients, gross 37.7 39.8 40.6 -5.2% -7.1%
Loans to clients, net 36.1 37.6 37.9 -4.0% -4.8%
Client deposits 290.8 261.6 180.7 11.1% 61.0%

Discussion of results

WM Client Deposits continued to grow reaching GEL 290.8 million, up 11.1% q-o-q and up 61.0% y-o-y, while WM Net Loan Book decreased 4.0% q-o-q to GEL 36.1 million. WM Client Deposits from non-resident clients continued to grow during the quarter, reaching GEL 197.7 million by Q1 2011, (up 15.8% q-o-q). Client Deposits from non-resident clients accounted for 69.5% and 62.9% of Total WM Client Deposits as of 31 March 2011 and 31 March 2010 respectively.

Insurance

GEL millions, unless otherwise noted Q1 2011 Q4 2010 Q1 2010 Change Q-O-Q Change Y-O-Y
Total operating income (Revenue) 5.0 5.5 4.6 -8.8% 9.9%
Total recurring operating costs 3.4 4.2 3.1 -20.3% 7.6%
Net income 1.2 1.8 1.1 -30.5% 15.3%
Gross premiums written 18.7 11.5 19.0 62.4% -1.4%

Discussion of results

Standalone Revenue of Aldagi BCI (ABCI), the Bank’s wholly-owned insurance subsidiary, grew 9.9% y-o-y to GEL 5.0 million, (down 8.8% q-o-q), with standalone Gross Premiums Written up 62.4% q-o-q to GEL 18.7 million. Standalone Operating Costs of GEL 3.4 million were down 20.3% q-o-q (up 7.6% y-o-y). ABCI’s Combined Ratio, decreased from 88.5% in Q1 2010 to 85.9% in Q1 2011. ABCI’s Q1 2011 Net Income of GEL 1.2 million was a 30.5% decrease q-o-q up 15.3% y-o-y.

Total Assets amounted to GEL 94.3 million, while Total Liabilities reached GEL 71.1 million as at 31 March 2011.

Highlights

  • ROAE for the quarter amounted to 21.4% in Q1 2011, unchanged from the ROAE of the same period last year.
  • Launched new retail health insurance product integrated with ABCI’s outpatient clinics.
  • Rolled out insurance Agency Network with 300 agents.
  • Recruited CEO, Ekaterina Shavgulidze for its healthcare business in line with the strategy of vertically integrating health insurance business. Before joining Aldagi BCI, Ekaterina worked as CFO for Central Asia for AstraZeneca. Ekaterina holds MBA degree from Wharton Business School.

Belaruskiy Narodniy Bank, Belarus (BNB)

GEL millions, unless otherwise noted Q1 2011 Q4 2010 Q1 2010 Change Q-O-Q Change Y-O-Y
Total operating income (Revenue) 4.2 3.6 2.9 14.5% 42.2%
Total recurring operating costs 3.1 3.1 1.8 -0.9% 74.6%
Net income 0.8 0.5 0.5 44.3% 39.6%
Loans to clients gross 84.1 76.8 32.3 9.5% 160.1%
Loans to clients, net 83.2 75.6 31.0 9.9% 167.8%
Client deposits 37.1 29.6 11.6 25.5% NMF

Discussion of results

In Q1 2011 BNB’s Total Operating Income increased to GEL 4.2 million, up 14.5% q-o-q (up 42.2% y-o-y), mostly driven by the 31.2% q-o-q increase in Net Non-Interest Income to GEL 1.5 million (up 135.6% y-o-y) a result of the 79.7 % q-o-q increase of Net Foreign Currency Related income to GEL 908 thousand and 25.9% q-o-q increase in Net Income from Documentary Operations to GEL 51 thousand. BNB’s Net Fee and Commissions Income declined 12.6% q-o-q to GEL 472 thousand (up 104.5% y-o-y). ) BNB’s Net Interest Income increased 7.1% q-o-q to GEL 2.7 million (up 17.2% y-o-y) as Interest Income increased by 4.5% q-o-q to GEL 3.2 million and Interest Expense decreased by 8.1% to GEL 0.5 million. In Q1 2011, BNB’s Recurring Costs decreased 0.9% q-o-q to GEL 3.1 million. BNB’s Net Provision Expense for the quarter amounted to GEL 71 thousand as compared to the Net Provision Reversal of GEL 200 thousand in Q4 2010. BNB posted Net Income of GEL 753 thousand as compared to Net Income of GEL 521 thousand in Q4 2010 and Net Income of GEL 539 thousand in Q1 2010.

In Q1 2011 BNB’s Gross Loans increased by 9.5% q-o-q to GEL 84.1 million, up 160.1% y-o-y. On 31 March 2011, Total Assets stood at GEL 119.2 million, down 5.7% q-o-q and up 49.2% y-o-y. Client Deposits amounted to GEL 37.1 million, up 25.5% q-o-q. Total Liabilities of BNB stood at GEL 60.4 million, down 7.3% q-o-q up 191.3% y-o-y.

Highlights

  • Increased the number of corporate clients by 28.8% y-o-y to 1,555 as of 31 March 2011.
  • Increased the number of corporate clients using the BNB’s payroll services by 22.7% q-o-q to 259 as of 31 March 2011.
  • Two new branches opened in densely populated Minsk areas.
  • Vitebsk branch has been relocated to newly renovated building in the city’s historic centre.
  • Expanded the functionality of BNB-issued cards and on-line banking.
  • Two types of new car loan launched to meet soaring demand ahead of scheduled vehicle import tariff hike.

Comment:

“Continued foreign currency inflow puts pressure on the Georgian Lari to appreciate, while the National Bank of Georgia’s balance sheet is getting stronger as net FX reserves continued to grow during the seasonally economically inactive quarter. Year-to-date Georgian Lari appreciated 7.1% against the US$. Strong macro fundamentals and growth trends of Georgian economy is translating into significant rerating of Georgia sovereign risk observed during the new Georgia Eurobond issuance in April 2011. The successful placement of new Georgia US$ 500 million 10-year benchmark Eurobonds in April 2011 was a clear demonstration of the increased investor confidence towards the country. The deal was 5.3 times oversubscribed by 149 accounts, which in turn translated into 7.125% yield or 357 bps over 10-year UST or 37.5 bps lower yield than the existing Georgia shorter term 2013 Eurobonds. The pricing also resulted in 148 bps tighter spread than the existing bond due 2013, which was traded at 494 bps over swaps prior to the new placement. The achieved pricing on the new 10-year Eurobond is materially inside the other recent and similarly rated sovereign issuance from the region.

Two noticeable trends are worth highlighting from bank’s performance in Q1 2011. Firstly, by achieving 17.7% ROAE in Q1 2011, we are getting closer to our target 20% plus ROAE. Secondly, structural improvement of the liability side of the balance sheet continues to demonstrate positive trends. Deposit growth rate continues to outpace loan book growth rate, which resulted in continuation of decreasing trend of net loan deposit ratio, which amounted to 113% in Q1 2011. This trend provides us with the opportunity to replace more expensive wholesale funding currently yielding 9.0% with cheaper deposits yielding 6.6%.

We continue our efficient growth path by achieving 20% plus operating leverage y-o-y in Q1 2011, while quality of loan book continues to improve with cost of risk decreasing to 0.8% in Q1 2011 on a consolidated basis from 1.8% in Q4 2010,” commented Irakli Gilauri, Chief Executive Officer.

1 Compared to Q4 2010; growth calculations based on GEL values.

2 Compared to the respective period in 2010

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

4 Normalized for Net Non-Recurring Income/(Costs).

5 Net income/(Loss) excludes Extraordinary Item.

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

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

8 ROAE excluding minority interest and Extraordinary Item.

9 All data according to the NBG as of 31 December 2010


About Bank of Georgia
Bank of Georgia is the leading Georgian bank offering a broad range of corporate banking, retail banking, wealth management, brokerage and insurance services to its clients in Georgia, brokerage services in Ukraine and banking services in Belarus. Bank of Georgia is the largest bank in Georgia by assets, loans, deposits and equity, with 36% market share by total assets (all data according to the NBG as of 31 December 2010). The Bank has 143 branches and more than 1.2 million retail and 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 ‘B1/NP’ (FC) & ‘Ba3/NP’ (LC)

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

Irakli Gilauri   Giorgi Chiladze   Macca Ekizashvili
Chief Executive Officer Deputy CEO, Finance Head of Investor Relations
+995 32 444 109 +995 32 444 249 +44 (0) 203 178 4052

igilauri@bog.ge

gchiladze@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 Q1 2010 and Q1 2011 contained in this news report is unaudited, derived from IFRS-based management reports and reflects the best estimates of management. The Bank’s actual results may differ from the amounts reflected herein as a result of various factors


STANDALONE Q1 2011 SEGMENT INCOME STATEMENT DATA

  CB   RB   WM   CC/ Eliminations   Total
GEL millions, unless otherwise noted Q1 '11   Q1 '10 Q1 '11   Q1 '10 Q1 '11   Q1 '10 Q1 '11   Q1 '10 Q1 '11   Q1 '10
Interest Income 52.7 39.6 59.5 45.7 8.4 5.9 (7.1) (3.7) 113.4 87.5
Interest Expense 30.5 21.5 28.1 22.2 6.7 4.9 (7.1) (3.7) 58.2 44.9
Net Interest Income 22.2 18.0 31.4 23.6 1.7 1.0 - - 55.2 42.6
Net Non-Interest Income 11.6 7.3 11.1 9.2 0.2 0.3 - - 23.0 16.8
Total Operating Income (Revenue) 33.8 25.3 42.5 32.8 1.9 1.3 - - 78.2 59.4
Total Recurring Operating Costs 11.4 9.5 21.9 20.2 1.0 1.0 - - 34.2 30.8
Normalized Net Operating Income / (Loss) 22.4 15.8 20.7 12.6 0.9 0.2 - - 44.0 28.6
Net Non-Recurring Income / (Costs) (0.7) (0.5) (0.7) (0.7) (0.02) (0.02) - - (1.4) (1.2)
Net Provision Expense / (Reversal) 10.2 5.4 (4.4) 9.4 (0.3) (2.5) - - 5.6 12.3
Net Income / (Loss) 9.2 8.4 21.3 2.1 1.0 2.3 - - 31.5 12.8
 

STANDALONE Q1 2011 SEGMENT BALANCE SHEET DATA

  CB   RB   WM   CC/ Eliminations   Total
GEL millions, unless otherwise noted Q1 '11   Q1 '10 Q1 '11   Q1 '10 Q1 '11   Q1 '10 Q1 '11   Q1 '10 Q1 '11   Q1 '10
Loans To Clients, Gross 1,286.9 951.0 1,008.9 846.6 37.7 40.6 - - 2,333.5 1,838.2
Loans To Clients, Net 1,209.5 890.0 969.6 772.5 36.1 37.9 - - 2,215.1 1,700.5
Total Assets 1,917.3 1,307.8 1,813.8 1,360.7 41.6 46.4 162.2 318.3 3,935.0 3,033.1
Client Deposits 1,066.2 656.1 609.5 414.7 290.8 180.7 - - 1,966.5 1,251.5
Total Liabilities 1,698.7 1,138.8 1,208.9 961.8 290.8 180.7 - - 3,198.5 2,281.3
Total Shareholders’ Equity 317.7 214.0 250.7 207.9 5.9 11.7 162.2 318.3 736.5 751.9
Total Liabilities And Shareholders’ Equity 2,016.5 1,352.8 1,459.6 1,169.7 296.7 192.4 162.2 318.3 3,935.0 3,033.1
 

CONSOLIDATED Q1 2011 INCOME STATEMENT

Period ended   Q1 2011   Q4 2010   Q1 2010   Change4   Change4
Consolidated, IFRS - based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
Interest Income 68,891 117,521 64,737 114,766 54,320 95,027 2.4% 23.7%
Interest Expense 35,540 60,628 32,307 57,273 28,454 49,777 5.9% 21.8%
Net Interest Income 33,351 56,893 32,431 57,493 25,866 45,250 -1.0% 25.7%
Fees & Commission Income 9,384 16,009 9,663 17,130 7,554 13,215 -6.5% 21.1%
Fees & Commission Expense 2,357 4,020 1,748 3,099 1,656 2,897 29.7% 38.8%
Net Fees & Commission Income 7,028 11,989 7,915 14,031 5,898 10,318 -14.6% 16.2%
Income From Documentary Operations 2,253 3,844 1,930 3,421 1,519 2,657 12.4% 44.7%
Expense On Documentary Operations 200 341 90 159 274 480 114.5% -29.0%
Net Income From Documentary Operations 2,053 3,503 1,840 3,262 1,244 2,177 7.4% 60.9%
Net Foreign Currency Related Income 5,601 9,554 5,321 9,433 4,196 7,340 1.3% 30.2%
Net Insurance Income / (Loss) 2,731 4,659 2,794 4,954 2,377 4,159 -6.0% 12.0%
Brokerage And Investments Banking Income 206 351 714 1,266 124 217 -72.3% 61.8%
Asset Management Income 35 60 27 47 24 42 27.7% 42.9%
Net Investment Gains / (Losses) 71 121 102 181 1,126 1,969 -33.1% -93.9%
Other Operating Income 2,323 3,962 2,553 4,526 2,517 4,404 -12.5% -10.0%
Net Other Non-Interest Income 5,365 9,153 6,190 10,974 6,168 10,791 -16.6% -15.2%
Net Non-Interest Income 20,047 34,199 21,266 37,700 17,507 30,626 -9.3% 11.7%
Total Operating Income (Revenue) 53,398 91,092 53,696 95,193 43,373 75,876 -4.3% 20.1%
Personnel Costs 15,058 25,688 15,262 27,057 13,365 23,381 -5.1% 9.9%
Selling, General & Administrative Expenses 5,564 9,491 5,781 10,249 5,604 9,803 -7.4% -3.2%
Procurement & Operations Support Expenses 2,001 3,413 1,909 3,384 2,005 3,507 0.9% -2.7%
Depreciation And Amortization 3,581 6,109 3,841 6,810 3,802 6,651 -10.3% -8.1%
Other Operating Expenses 1,508 2,572 1,936 3,432 1,667 2,917 -25.1% -11.8%
Total Recurring Operating Costs 27,711 47,273 28,730 50,932 26,443 46,259 -7.2% 2.2%
Normalized Net Operating Income / (Loss) 25,687 43,819 24,967 44,261 16,930 29,617 -1.0% 48.0%
Net Non-Recurring Income / (Costs) (1,341) (2,287) (769) (1,364) (1,867) (3,266) 67.7% -30.0%
Profit / (Loss) Before Provisions 24,346 41,532 24,197 42,897 15,063 26,351 -3.2% 57.6%
Net Provision Expense 3,020 5,151 6,110 10,831 4,207 7,360 -52.4% -30.0%
Pre-Tax Income / (Loss) 21,327 36,381 18,088 32,066 10,856 18,991 13.5% 91.6%
Income Tax Expense / (Benefit) 3,415 5,826 3,601 6,384 1,278 2,236 -8.7% 160.6%
Net Income / (Loss) before Extraordinary Item 17,911 30,555 14,487 25,682 9,578 16,755 19.0% 82.4%
Extraordinary loss (8,033) (13,704) - - - - NMF NMF
Net Income / (Loss) after Extraordinary Item 9,878 16,851 - - - - NMf NMF
 

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7059 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 March 2011

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7728 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 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7494 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 March 2010

4 Change calculations based on GEL values

CONSOLIDATED Q1 2011 BALANCE SHEET

Period ended   Q1 2011   Q4 2010   Q1 2010   Change4   Change4
Consolidated, IFRS based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
Cash And Cash Equivalents 91,443 155,992 117,489 208,285 101,688 177,893 -25.1% -12.3%
Loans And Advances To Credit Institutions 394,975 673,788 338,492 600,078 184,193 322,227 12.3% 109.1%
Mandatory Reserves With NBG / NBU / NBRB 170,592 291,013 50,980 90,378 25,485 44,583 NMF NMF
Other Accounts With NBG / NBU / NBRB 22,232 37,925 45,513 80,686 9,447 16,527 -53.0% 129.5%
Balances With And Loans To Other Banks 202,151 344,850 241,998 429,014 149,261 261,117 -19.6% 32.1%
Investment Securities: AFS & Trading Securities 213,055 363,450 8,899 15,776 10,146 17,750 NMF NMF
Investment Securities: HTM, Treasuries - - 158,116 280,308 142,451 249,203 -100.0% -100.0%
Loans To Clients, Gross 1,384,180 2,361,272 1,436,293 2,546,261 1,118,824 1,957,270 -7.3% 20.6%
Less: Reserve For Loan Losses (69,959) (119,343) (100,140) (177,529) (102,880) (179,979) -32.8% -33.7%
Loans To Clients, Net 1,314,221 2,241,929 1,336,153 2,368,732 1,015,943 1,777,291 -5.4% 26.1%
Insurance Related Assets 20,404 34,807 16,174 28,674 18,641 32,610 21.4% 6.7%
Investment Property 59,396 101,324 64,022 113,498 54,522 95,381 -10.7% 6.2%
Investments In Other Business Entities, Net 3,942 6,725 4,083 7,238 4,484 7,844 -7.1% -14.3%
Property And Equipment Owned, Net 165,887 282,986 164,763 292,092 158,054 276,499 -3.1% 2.3%
Intangible Assets Owned, Net 13,526 23,074 12,521 22,197 12,662 22,151 4.0% 4.2%
Goodwill 40,593 69,248 39,030 69,192 39,344 68,828 0.1% 0.6%
Tax Assets, Current And Deferred 13,520 23,064 14,313 25,374 13,616 23,820 -9.1% -3.2%
Prepayments And Other Assets 42,712 72,862 38,071 67,493 30,063 52,592 8.0% 38.5%
Total Assets 2,373,673 4,049,249 2,312,126 4,098,937 1,785,806 3,124,089 -1.2% 29.6%
Client Deposits 1,158,853 1,976,887 1,134,499 2,011,240 797,096 1,394,439 -1.7% 41.8%
Deposits And Loans From Banks 79,905 136,310 121,361 215,148 44,725 78,242 -36.6% 74.2%
Borrowed Funds 566,135 965,769 571,019 1,012,302 521,304 911,970 -4.6% 5.9%
Issued Fixed Income Securities 56,573 96,508 12,027 21,321 0 - NMF -
Insurance Related Liabilities 25,281 43,127 20,918 37,083 24,415 42,712 16.3% 1.0%
Tax Liabilities, Current And Deferred 14,429 24,615 23,007 40,787 15,602 27,295 -39.6% -9.8%
Accruals And Other Liabilities 40,131 68,459 38,583 68,400 33,015 57,757 0.1% 18.5%
Total Liabilities 1,941,307 3,311,675 1,921,413 3,406,281 1,436,158 2,512,415 -2.8% 31.8%
Share Capital - Ordinary Shares 18,379 31,353 17,681 31,345 17,901 31,316 -2.0% -1.9%
Share Premium 280,702 478,850 269,231 477,293 274,190 479,668 0.3% -0.2%
Treasury Shares (828) (1,413) (850) (1,507) (913) (1,597) -6.2% -11.5%
Revaluation And Other Reserves 35,557 60,657 20,109 35,649 11,874 20,773 71.9% 195.0%
Retained Earnings 71,867 122,598 21,559 38,219 27,095 47,400 NMF 158.6%
Net Income / (Loss) For The Period 9,878 16,851 46,749 82,876 9,578 16,755 -79.7% 0.6%
Shareholders' Equity Excluding Minority 415,555 708,896 374,478 663,875 339,725 594,315 6.8% 19.3%
Minority Interest 16,811 28,678 16,235 28,781 9,923 17,359 -0.4% 65.2%
Total Shareholders' Equity 432,366 737,574 390,713 692,656 349,648 611,674 6.5% 20.6%
Total Liabilities And Shareholders’ Equity 2,373,673 4,049,249 2,312,126 4,098,937 1,785,806 3,124,089 -1.2% 29.6%
 

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7059 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 March 2011

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7728 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 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7494 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 March 2010

4 Change calculations based on GEL values

STANDALONE Q1 2011 INCOME STATEMENT

Period ended   Q1 2011   Q4 2010   Q1 2010   Change4   Change4
Standalone, IFRS-based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
Interest Income 66,491 113,427 60,377 107,035 49,997 87,465 6.0% 29.7%
Interest Expense 34,106 58,182 29,335 52,006 25,642 44,859 11.9% 29.7%
Net Interest Income 32,385 55,245 31,041 55,030 24,355 42,607 0.4% 29.7%
Fees & Commission Income 8,195 13,980 8,803 15,606 6,349 11,106 -10.4% 25.9%
Fees & Commission Expense 2,361 4,028 2,174 3,855 1,491 2,608 4.5% 54.4%
Net Fees & Commission Income 5,834 9,952 6,629 11,752 4,858 8,498 -15.3% 17.1%
Income From Documentary Operations 2,198 3,749 1,900 3,369 1,472 2,576 11.3% 45.6%
Expense On Documentary Operations 178 304 86 153 274 480 99.1% -36.6%
Net Income From Documentary Operations 2,019 3,445 1,814 3,216 1,198 2,096 7.1% 64.4%
Net Foreign Currency Related Income 5,280 9,007 5,482 9,718 3,215 5,624 -7.3% 60.1%
Other Operating Income 326 557 335 593 314 549 -6.2% 1.5%
Net Other Non-Interest Income 326 557 335 593 314 549 -6.2% 1.5%
Net Non-Interest Income 13,460 22,961 14,259 25,278 9,584 16,766 -9.2% 36.9%
Total Operating Income (Revenue) 45,844 78,206 45,300 80,308 33,939 59,373 -2.6% 31.7%
Personnel Costs 10,928 18,642 10,364 18,374 8,847 15,476 1.5% 20.5%
Selling, General & Administrative Expenses 3,883 6,623 3,657 6,484 3,459 6,051 2.1% 9.5%
Procurement & Operations Support Expenses 1,685 2,874 1,471 2,607 1,629 2,849 10.3% 0.9%
Depreciation And Amortization 2,935 5,006 3,144 5,574 3,141 5,495 -10.2% -8.9%
Other Operating Expenses 639 1,090 712 1,263 510 892 -13.7% 22.2%
Total Recurring Operating Costs 20,069 34,236 19,349 34,302 17,586 30,764 -0.2% 11.3%
Normalized Net Operating Income / (Loss) 25,775 43,969 25,951 46,006 16,354 28,609 -4.4% 53.7%
Net Non-Recurring Income / (Costs) (833) (1,421) (91) (161) (697) (1,220) NMF 16.5%
Profit / (Loss) Before Provisions 24,942 42,548 25,860 45,845 15,656 27,389 -7.2% 55.3%
Net Provision Expense 3,267 5,573 5,386 9,549 7,036 12,309 -41.6% -54.7%
Pre-Tax Income / (Loss) 21,675 36,975 20,474 36,296 8,620 15,080 1.9% 145.2%
Income Tax Expense / (Benefit) 3,211 5,478 3,636 6,445 1,293 2,262 -15.0% 142.2%
Net Income / (Loss) before Extraordinary item 18,464 31,497 16,838 29,850 7,327 12,818 5.5% 145.7%
Extraordinary loss (8,033) (13,704) - - - - NMF NMF
Net Income / (Loss) after Extraordinary item 10,431 17,793 - - - - NMF NMF
 

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7059 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 March 2011

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7728 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 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7494 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 March 2010

4 Change calculations based on GEL values

STANDALONE Q1 2011 BALANCE SHEET

Period ended   Q1 2011   Q4 2010   Q1 2010   Change4   Change4
Standalone, IFRS-based US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
Cash And Cash Equivalents 79,908 136,315 86,021 152,499 72,796 127,350 -10.6%   7.0%
Loans And Advances To Credit Institutions 391,767 668,315 332,320 589,137 179,742 314,441 13.4% 112.5%
Mandatory Reserves With NBG / NBU / NBRB 170,437 290,748 48,886 86,665 23,101 40,413 NMF NMF
Other Accounts With NBG / NBU / NBRB 17,756 30,291 30,997 54,951 9,002 15,748 -44.9% 92.3%
Balances With And Loans To Other Banks 203,574 347,276 252,437 447,520 147,639 258,280 -22.4% 34.5%
Investment Securities: AFS & Trading Securities 206,040 351,483 - - - - NMF -
Investment Securities: HTM, Treasuries - - 158,116 280,308 142,451 249,203 -100.0% -100.0%
Loans To Clients, Gross 1,367,891 2,333,485 1,310,295 2,322,891 1,050,756 1,838,192 0.5% 26.9%
Less: Reserve For Loan Losses (69,405) (118,399) (67,869) (120,318) (78,727) (137,725) -1.6% -14.0%
Loans To Clients, Net 1,298,485 2,215,086 1,242,426 2,202,572 972,029 1,700,468 0.6% 30.3%
Investment Property 47,181 80,485 44,717 79,274 21,633 37,844 1.5% 112.7%
Investments In Other Business Entities, Net 95,098 162,227 190,750 338,161 181,931 318,270 -52.0% -49.0%
Property And Equipment Owned, Net 133,916 228,448 128,598 227,978 123,457 215,976 0.2% 5.8%
Intangible Assets Owned, Net 11,972 20,423 9,613 17,043 9,653 16,887 19.8% 20.9%
Goodwill 13,335 22,748 12,832 22,748 13,003 22,748 0.0% 0.0%
Tax Assets, Current And Deferred 7,971 13,597 3,721 6,597 3,485 6,097 106.1% 123.0%
Prepayments And Other Assets 21,012 35,844 17,685 31,352 13,636 23,856 14.3% 50.3%
Total Assets 2,306,684 3,934,972 2,226,799 3,947,669 1,733,817 3,033,139 -0.3% 29.7%
Client Deposits 1,152,770 1,966,511 1,020,133 1,808,491 715,416 1,251,549 8.7% 57.1%
Deposits And Loans From Banks 71,057 121,216 112,339 199,155 33,702 58,958 -39.1% 105.6%
Borrowed Funds 557,624 951,250 566,069 1,003,527 521,304 911,970 -5.2% 4.3%
Issued Fixed Income Securities 56,573 96,508 12,027 21,321 - - NMF -
Tax Liabilities, Current And Deferred 12,986 22,152 22,185 39,329 14,651 25,631 -43.7% -13.6%
Accruals And Other Liabilities 23,932 40,826 22,144 39,256 18,949 33,150 4.0% 23.2%
Total Liabilities 1,874,942 3,198,464 1,754,896 3,111,079 1,304,023 2,281,258 2.8% 40.2%
Share Capital - Ordinary Shares 18,379 31,353 17,681 31,345 17,901 31,316 0.0% 0.1%
Share Premium 280,477 478,465 268,876 476,664 273,609 478,651 0.4% 0.0%
Treasury Shares (746) (1,272) (776) (1,375) (817) (1,430) -7.5% -11.0%
Revaluation And Other Reserves 29,927 51,052 31,427 55,715 21,890 38,294 -8.4% 33.3%
Retained Earnings 93,274 159,117 103,389 183,287 109,885 192,232 -13.2% -17.2%
Net Income / (Loss) For The Period 10,431 17,793 51,305 90,954 7,327 12,818 -80.4% 38.8%
Total Shareholders' Equity 431,742 736,508 471,903 836,590 429,794 751,881 -12.0% -2.0%
Total Liabilities And Shareholders’ Equity 2,306,684 3,934,972 2,226,799 3,947,669 1,733,817 3,033,139 -0.3% 29.7%
 

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7059 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 March 2011

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7728 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 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7494 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 March 2010

4 Change calculations based on GEL values

ALDAGI BCI Q1 2011 INCOME STATEMENT AND KEY RATIOS

Period ended   Q1 2011   Q4 2010   Q1 2010   Change4   Change4
Aldagi BCI US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
Insurance premiums written, gross 10,982 18,734 6,506 11,534 10,866 19,009 62.4% -1.4%
Change in unearned premium provision, gross (1,982) (3,380) 2,500 4,431 (2,622) (4,587) NMF -26.3%
Insurance premium revenue, gross 9,000 15,354 9,006 15,966 8,244 14,422 -3.8% 6.5%
Insurance premiums ceded to reinsurers (2,129) (3,632) (1,477) (2,618) (2,707) (4,735) 38.8% -23.3%
Change in unearned premium provision, reinsurers share 574 978 (554) (982) 1,486 2,600 NMF -62.4%
Insurance premiums revenue ceded to reinsurers (1,556) (2,654) (2,031) (3,600) (1,220) (2,135) -26.3% 24.3%
Net insurance premiums revenue 7,445 12,700 6,975 12,366 7,024 12,287 2.7% 3.4%
Insurance claims paid, gross (4,281) (7,303) (4,221) (7,483) (4,390) (7,680) -2.4% -4.9%
Change in loss provision, gross (70) (119) 212 375 (255) (446) NMF -73.2%
Insurance claims expenses, gross (4,351) (7,422) (4,009) (7,107) (4,645) (8,126) 4.4% -8.7%
Insurance claims recovered from reinsurers 175 299 122 216 462 809 38.5% -63.0%
Change in loss provision, reinsurers share 149 254 (306) (542) 85 149 NMF 69.8%
Insurance claims expenses recovered from reinsurers 324 553 (184) (326) 548 958 NMF -42.3%
Net insurance claims expenses (4,027) (6,869) (4,193) (7,433) (4,097) (7,168) -7.6% -4.2%
Net commission income / (expense) (418) (714) (294) (522) (549) (960) 36.7% -25.7%
Net underwriting profit/(loss) 2,999 5,117 2,488 4,410 2,377 4,159 16.0% 23.0%
Net income / (expense) from pension benefit plan 10 17 4 7 7 13 153.7% 28.6%
Other operating income / (loss) (33) (56) 198 351 172 302 NMF NMF
Total operating income (revenue) 2,976 5,077 2,690 4,768 2,557 4,474 6.5% 13.5%
Personnel costs (1,157) (1,973) (1,122) (1,989) (1,015) (1,776) -0.8% 11.1%
Selling, general administrative expenses (608) (1,038) (671) (1,190) (568) (994) -12.8% 4.4%
Operating taxes (25) (42) (27) (48) (17) (29) -12.4% 44.2%
Depreciation and amortization expenses (116) (198) (67) (118) (55) (97) 67.3% 104.5%
Other operating expenses - - - - (15) (26) - -100.0%
Total recurring operating costs (1,906) (3,251) (1,887) (3,345) (1,670) (2,921) -2.8% 11.3%
Normalized net operating income 1,071 1,826 803 1,423 887 1,552 28.4% 17.6%
Interest income 198 337 143 253 70 122 33.4% 176.7%
Interest expense (305) (521) (231) (409) (196) (344) 27.3% 51.6%
Non-recurring income / (costs) (100) (171) 108 192 - - NMF -
Profit / (loss) before provisions 863 1,472 823 1,459 761 1,331 0.9% 10.6%
Provisions expense for / (recovery of) bad debts 20 34 (213) (377) 82 144 NMF -76.5%
Pre-tax income / (loss) 843 1,438 1,036 1,836 678 1,187 -21.7% 21.2%
Income tax expense / (benefit) 126 216 43 75 128 224 186.0% -3.5%
Net income / (loss) 717 1,222 993 1,761 551 963 -30.6% 26.9%
 
Profitability Ratios:
ROAA5 5.3% 8.3% 5.1%
ROEA6 21.4% 32.7% 21.4%
Loss (Claims) Ratio, Net7 54.1% 60.1% 58.3%
Expense Ratio8 31.8% 25.3% 30.2%
Combined Ratio, Net9 85.9% 85.4% 88.5%
Gross Profit Margin(note) 33.3% 27.6% 28.8%
Net Profit Margin(note) 8.0% 11.0% 6.7%
Liquidity Ratios:
Net IPR/UPR 90.8% 81.1% 83.3%
Working Capital 42,681 38,505 39,362
 

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7059 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 March 2011

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7728 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 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7494 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 March 2010

4 Change calculations based on GEL values

5 Return On Total Assets Annualized (ROAA) equals Net Income of the period divided by Average Total Assets for the same period

6 Return On Total Equity Annualized (ROEA) equals Net Income of the period divided by Average Total Equity for the same period

7 Claims Ratio, net (same as Loss Ratio) equals Net Claims Incurred divided by Net Premiums Earned

8 Expense Ratio equals total expenses of ALDAGI-BCI divided by Net Premiums Earned

9 Combined Ratio equals Claims Ratio plus Expense Ratio

ALDAGI BCI Q1 2011 BALANCE SHEET

Period ended   Q1 2011   Q4 2010   Q1 2010   Change4   Change4
Aldagi BCI US$1   GEL US$2   GEL US$3   GEL Q-O-Q Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited) (Unaudited)
Cash and cash equivalents 2,319 3,956 3,320 5,886 3,185 5,573 -32.8% -29.0%
Amounts due from credit institutions 7,231 12,335 5,894 10,450 5,533 9,680 18.0% 27.4%
Investment securities:
- Held-to-maturity 12 21 12 21 - - -0.1% -
- Available-for-sale 2,674 4,561 2,598 4,606 2,538 4,439 -1.0% 2.7%
Insurance premiums and other receivables, net 14,891 25,402 11,256 19,954 13,463 23,552 27.3% 7.9%
Premises and equipment, net 5,006 8,540 4,122 7,308 4,414 7,721 16.9% 10.6%
Intangible assets, net 1,659 2,830 992 1,758 384 672 60.9% NMF
Goodwill 463 790 297 526 286 500 50.2% 58.0%
Investments in associates 30 50 101 179 334 584 -71.8% -91.4%
Investments in non-consolidated subsidiaries 7,602 12,969 6,130 10,868 4,687 8,199 19.3% 58.2%
Current income tax assets 37 62 45 79 49 86 -21.5% -27.5%
Deferred income tax assets 9,411 16,054 9,056 16,054 9,177 16,054 0.0% 0.0%
Deferred acquisition costs 841 1,434 919 1,629 764 1,337 -12.0% 7.3%
Prepayments and other assets 3,098 5,285 2,501 4,434 1,741 3,045 19.2% 73.6%
Total assets 55,273 94,291 47,243 83,752 46,555 81,442 12.6% 15.8%
Insurance contracts 21,083 35,966 18,314 32,466 20,183 35,309 10.8% 1.9%
Reinsurance premium payable 4,198 7,161 2,604 4,617 4,233 7,405 55.1% -3.3%
Pension benefit obligations 3,117 5,318 2,792 4,949 2,326 4,068 7.5% 30.7%
Borrowed funds 8,311 14,178 6,983 12,379 6,215 10,872 14.5% 30.4%
Salaries and other employee benefits payable 1,405 2,396 1,101 1,952 828 1,448 22.7% 65.4%
Current income tax liabilities 63 107 17 30 - - NMF -
Deferred income tax liabilities 383 653 277 492 363 634 32.8% 2.9%
Accruals and other liabilities 3,107 5,301 2,751 4,878 1,955 3,421 8.7% 55.0%
Total liabilities 41,666 71,079 34,839 61,763 36,102 63,157 15.1% 12.5%
Share capital - ordinary shares 4,246 7,243 4,086 7,243 4,140 7,243 0.0% 0.0%
Share premium / (deficit) 6,193 10,565 5,959 10,565 6,039 10,565 0.0% 0.0%
Revaluation and other reserves 264 450 254 450 353 617 0.0% -27.1%
Retained earnings / (accumulated losses) 1,455 2,482 (1,402) (2,485) (1,420) (2,485) NMF NMF
Net profit / (loss) for the period 701 1,196 2,802 4,967 541 947 -75.9% 26.4%
Shareholders equity excluding minority interest 12,859 21,936 11,698 20,739 9,652 16,886 5.8% 29.9%
Minority interest 748 1,276 705 1,250 800 1,400 2.1% -8.8%
Total shareholders’ equity 13,607 23,212 12,403 21,989 10,452 18,286 5.6% 26.9%
Total liabilities and shareholders’ equity 55,273 94,291 47,243 83,752 46,555 81,442 12.6% 15.8%
 

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7059 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 March 2011

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7728 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 2010

3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7494 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 March 2010

4 Change calculations based on GEL values

BNB (BELARUS) Q1 2011 INCOME STATEMENT

Period ended     Q1 2011     Q1 2010     Change3
Standalone, IFRS-based US$1   GEL US$2   GEL Y-O-Y
000s Unless otherwise noted (Unaudited) (Unaudited)
Interest Income 1,869 3,187 1,487 2,602 22.5%
Interest Expense 289 493 173 302 63.2%
Net Interest Income 1,580 2,695 1,315 2,300 17.2%
Fees & Commission Income 723 1,233 164 287 NMF
Fees & Commission Expense 446 761 32 56 NMF
Net Fees & Commission Income 277 472 132 231 104.5%
Income From Documentary Operations 51 87 1 1 NMF
Expense On Documentary Operations 21 36 - - -
Net Income From Documentary Operations 30 51 1 1 NMF
Net Foreign Currency Related Income 532 908 209 366 148.2%
Other Operating Income 14 25 11 20 22.6%
Net Other Non-Interest Income 14 25 11 20 22.6%
Net Non-Interest Income 853 1,456 353 618 135.6%
Total Operating Income (Revenue) 2,433 4,151 1,668 2,918 42.2%
Personnel Costs 1,079 1,840 581 1,016 81.1%
Selling, General & Administrative Expenses 263 448 109 191 134.7%
Procurement & Operations Support Expenses 266 453 146 255 77.7%
Depreciation And Amortization 103 176 73 127 38.8%
Other Operating Expenses 109 186 107 188 -1.3%
Total Recurring Operating Costs 1,819 3,103 1,016 1,777 74.6%
Normalized Net Operating Income / (Loss) 614 1,047 652 1,141 -8.2%
Net Non-Recurring Income / (Costs) 3 5 5 8 -41.6%
Profit / (Loss) Before Provisions 617 1,052 657 1,149 -8.4%
Net Provision Expense 41 71 241 421 -83.2%
Pre-Tax Income / (Loss) 575 981 416 728 34.8%
Income Tax Expense / (Benefit) 134 229 108 189 21.1%
Net Income / (Loss) 441 753 308 539 39.6%
 

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7059 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 March 2011

2 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7494 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 March 2010

3 Change calculations based on GEL values

KEY RATIOS

Ratios presented on a consolidated basis, unless otherwise noted

Profitability Ratios   Q1 2011   Q4 2010   Q1 2010
ROAA 1, Annualized 3.0% 2.8% 2.2%
ROAE2, Annualized 17.1% 15.0% 11.1%
ROAE2, Annualized, excluding minority interest 17.7% 16.7% 12.2%
ROA, Annualized 3.0% 2.5% 2.1%
ROE, Annualized 16.6% 14.8% 11.0%
ROE, Annualized, excluding minority interest 17.2% 16.4% 11.9%
Interest Income / Average Int. Earning Assets Excl. Cash, Annualized3 18.6% 18.9% 19.4%
Interest Income / Average Int. Earning Assets Incl. Cash, Annualized3 14.8% 15.8% 16.8%
Cost Of Funds 4, Annualized 7.5% 7.9% 8.6%
Net Spread Excl. Cash, Annualized 5 11.0% 11.0% 10.7%
Net Spread Incl. Cash, Annualized 5 7.2% 7.9% 8.1%
Net Interest Margin 6, Annualized 7.1% 7.9% 8.0%
Loan Yield Excl. Provisions7, Annualized 19.3% 19.6% 20.1%
Loan Yield Incl. Provisions7, Annualized 18.4% 17.7% 18.6%
Deposit Yield, Annualized 6.6% 7.2% 7.9%
Interest Expense To Interest Income 51.6% 49.9% 52.4%
Net Non-Interest Income To Average Total Assets, Annualized 3.3% 4.1% 4.0%
Net Non-Interest Income To Revenue 8 37.5% 39.6% 40.4%
Net Fee And Commission Income To Average Interest Earning Assets 9, Annualized 1.5% 1.9% 1.8%
Net Fee And Commission Income To Revenue 13.2% 14.7% 13.6%
Operating Leverage, Y-O-Y 10 20.0% 89.0% -17.5%
Operating Leverage, Y-O-Y, Normalized 10 17.9% 13.7% -10.8%
Operating Leverage, Consecutive Q-O-Q 10 0.9% 6.7% 65.8%
Operating Leverage, Consecutive Q-O-Q, Normalized 10 2.9% 6.2% -1.2%
Total Operating Income (Revenue) To Total Assets, Annualized 9.0% 9.3% 9.7%
Recurring Earning Power 11, Annualized 4.1% 4.6% 3.5%
Net Income To Revenue 33.5% 27.0% 22.1%
       
Efficiency Ratios      
Operating Cost To Average Total Assets 12, Annualized 4.6% 5.5% 6.1%
Cost To Average Total Assets 13, Annualized 4.9% 5.6% 6.5%
Cost / Income 14 54.4% 54.9% 65.3%
Cost / Income, Normalized 15 51.9% 53.5% 61.0%
Cash Cost / Income 38.0% 39.6% 45.9%
Total Employee Compensation Expense To Revenue 16 28.2% 28.4% 30.8%
Total Employee Compensation Expense To Cost 51.8% 51.7% 47.2%
Total Employee Compensation Expense To Average Total Assets, Annualized 2.5% 2.9% 3.1%
       
Liquidity Ratios      
Net Loans To Total Assets 17 55.4% 57.8% 56.9%
Average Net Loans To Average Total Assets 56.0% 58.0% 56.6%
Interest Earning Assets To Total Assets 72.0% 79.3% 75.2%
Average Interest Earning Assets To Average Total Assets 77.9% 78.1% 74.9%
Liquid Assets To Total Assets 18 29.5% 26.9% 24.6%
Liquid Assets To Total Short-Term Liabilities, NBG Stand-Alone 44.5% 34.7% 38.8%
Liquid Assets To Total Liabilities, IFRS Consolidated 36.0% 32.4% 30.5%
Net Loans To Client Deposits 113.4% 117.8% 127.5%
Average Net Loans To Average Client Deposits 115.0% 122.9% 128.4%
Net Loans To Total Deposits 19 106.1% 106.4% 120.7%
Net Loans To (Total Deposits + Equity) 78.6% 81.1% 85.3%
Net Loans To Total Liabilities 67.7% 69.5% 70.7%
Total Deposits To Total Liabilities 63.8% 65.4% 58.6%
Client Deposits To Total Deposits 93.5% 90.3% 94.7%
Client Deposits To Total Liabilities 59.7% 59.0% 55.5%
Current Account Balances To Client Deposits 44.3% 42.1% 44.1%
Demand Deposits To Client Deposits 11.2% 9.3% 9.0%
Time Deposits To Client Deposits 44.5% 48.6% 46.9%
Total Deposits To Total Assets 52.2% 54.3% 47.1%
Client Deposits To Total Assets 48.8% 49.1% 44.6%
Client Deposits To Total Equity (Times) 20 2.68 2.90 2.28
Due From Banks / Due To Banks 21 494.3% 278.9% 411.8%
Total Equity To Net Loans 32.9% 29.2% 34.4%
Leverage (Times) 22 4.5 4.9 4.1
       
Asset Quality      
NPLs (in GEL) 23 90,303 117,580 168,892
NPLs To Gross Loans To Clients 24 3.8% 4.6% 8.6%
NPL Coverage Ratio 25 132.2% 151.0% 106.6%
Cost of Risk 26, Annualized 0.8% 1.8% 1.6%
Reserve For Loan Losses To Gross Loans To Clients 27 5.1% 7.0% 9.2%
% Of Loans To Clients Collateralized 90.1% 91.2% 93.1%
Equity To Average Net Loans To Clients 32.2% 35.7% 35.7%
       
Capital Adequacy:      
Equity To Total Assets 18.2% 16.9% 19.6%
BIS Tier I Capital Adequacy Ratio, Consolidated 28 18.0% 17.5% 21.9%
BIS Total Capital Adequacy Ratio, Consolidated 29 28.8% 26.6% 34.6%
BIS Tier I Capital Adequacy Ratio, Stand-alone 28 19.3% 22.9% 27.1%
BIS Total Capital Adequacy Ratio, Stand-alone 29 29.0% 28.4% 33.0%
NBG Tier I Capital Adequacy Ratio 30 12.7% 13.0% 17.7%
NBG Total Capital Adequacy Ratio 31 15.6% 14.5% 15.9%
       
Per Share Values:      
Basic EPS (GEL) 32 0.97 0.82 0.54
Basic EPS (US$) $0.57 $0.46 $0.31
Fully Diluted EPS (GEL) 33 0.93 0.79 0.54
Fully Diluted EPS (US$) $0.55 $0.45 $0.31
Book Value Per Share (GEL) 34 23.52 22.10 19.53
Book Value Per Share (US$) $13.79 $12.46 $11.17
Ordinary Shares Outstanding - Weighted Average, Basic 31,353,349 31,344,860 31,315,960
Ordinary Shares Outstanding - Period End 31,353,349 31,344,860 31,315,960
Ordinary Shares Outstanding - Fully Diluted 34,827,963 34,819,474 34,790,574
       
Selected Operating Data:      
Full Time Employees, Group 5,226 5,610 5,048
Full Time Employees, BOG Stand-Alone 3,150 3,110 2,825
Total Assets Per FTE 35 774 730 618
Total Assets Per FTE, BOG Stand-Alone 1,249.20 1,269.35 1,073.68
Number Of Active Branches 143 142 140
Number Of ATMs 408 405 379
Number Of Cards Outstanding 614,990 603,049 570,637
Number Of POS Terminals 2,404 2,330 2,067
 

KEY RATIOS

Ratios presented on a Standalone basis

Liquidity Ratios   Q1 2011   Q4 2010   Q1 2010
ROAA 1, Annualized 3.2% 3.3% 1.7%
ROAE2, Annualized 16.0% 14.5% 6.9%
ROAE, Annualized, excluding minority interest 16.0% 14.5% 6.9%
ROA, Annualized 3.2% 3.0% 1.7%
ROE, Annualized 17.1% 14.3% 6.8%
ROE, Annualized, excluding minority interest 17.1% 14.3% 6.8%
Interest Income / Average Int. Earning Assets Excl. Cash, Annualized3 18.6% 18.7% 18.5%
Interest Income / Average Int. Earning Assets Incl. Cash, Annualized3 14.7% 15.5% 16.1%
Cost Of Funds 4, Annualized 7.5% 7.7% 8.4%
Net Spread Excl. Cash, Annualized 5 11.1% 11.0% 10.1%
Net Spread Incl. Cash, Annualized 5 7.2% 7.9% 7.7%
Net Interest Margin 6, Annualized 7.2% 8.0% 7.8%
Loan Yield Excl. Provisions7, Annualized 19.6% 19.8% 19.7%
Loan Yield Incl. Provisions7, Annualized 18.6% 18.1% 16.9%
Deposit Yield, Annualized 6.9% 6.7% 7.7%
Interest Expense To Interest Income 51.3% 48.6% 51.3%
Net Non-Interest Income To Average Total Assets, Annualized 2.3% 2.8% 2.3%
Net Non-Interest Income To Revenue 8 29.4% 31.5% 28.2%
Net Fee And Commission Income To Average Interest Earning Assets 9, Annualized 1.3% 1.7% 1.6%
Net Fee And Commission Income To Revenue 12.7% 14.6% 14.3%
Operating Leverage, Y-O-Y 10 20.2% 33.6% -20.0%
Operating Leverage, Y-O-Y, Normalized 10 20.4% 27.0% -17.8%
Operating Leverage, Consecutive Q-O-Q 10 -6.1% 15.6% 6.9%
Operating Leverage, Consecutive Q-O-Q, Normalized 10 -2.4% 11.3% 3.9%
Total Operating Income (Revenue) To Total Assets, Annualized 7.9% 8.1% 7.8%
Recurring Earning Power 11, Annualized 4.3% 5.1% 3.7%
Net Income To Revenue 40.3% 37.2% 21.6%
       
Efficiency Ratios      
Operating Cost To Average Total Assets 12, Annualized 3.5% 3.8% 4.2%
Cost To Average Total Assets 13, Annualized 3.6% 3.8% 4.3%
Cost / Income 14 45.6% 42.9% 53.9%
Cost / Income, Normalized 15 43.8% 42.7% 51.8%
Cash Cost / Income 30.2% 28.8% 35.8%
Total Employee Compensation Expense To Revenue 16 23.8% 22.9% 26.1%
Total Employee Compensation Expense To Cost 52.3% 53.3% 48.4%
Total Employee Compensation Expense To Average Total Assets, Annualized 1.9% 2.0% 2.1%
       
Liquidity Ratios      
Net Loans To Total Assets 17 56.3% 55.8% 56.1%
Average Net Loans To Average Total Assets 55.6% 56.0% 55.8%
Interest Earning Assets To Total Assets 73.3% 77.8% 74.6%
Average Interest Earning Assets To Average Total Assets 78.0% 76.4% 74.0%
Liquid Assets To Total Assets 18 29.4% 25.9% 22.8%
Liquid Assets To Total Short-Term Liabilities, NBG Stand-Alone 44.5% 34.7% 38.8%
Liquid Assets To Total Liabilities, IFRS Stand-Alone 36.1% 32.8% 30.3%
Net Loans To Client Deposits 112.6% 121.8% 135.9%
Average Net Loans To Average Client Deposits 116.5% 126.5% 138.6%
Net Loans To Total Deposits 19 106.1% 109.7% 129.8%
Net Loans To (Total Deposits + Equity) 78.4% 77.4% 82.5%
Net Loans To Total Liabilities 69.3% 70.8% 74.5%
Total Deposits To Total Liabilities 65.3% 64.5% 57.4%
Client Deposits To Total Deposits 94.2% 90.1% 95.5%
Client Deposits To Total Liabilities 61.5% 58.1% 54.9%
Current Account Balances To Client Deposits 45.1% 44.6% 45.1%
Demand Deposits To Client Deposits 11.2% 10.3% 10.0%
Time Deposits To Client Deposits 56.9% 47.1% 70.5%
Total Deposits To Total Assets 53.1% 50.9% 43.2%
Client Deposits To Total Assets 50.0% 45.8% 41.3%
Client Deposits To Total Equity (Times) 20 267.0% 216.2% 166.5%
Due From Banks / Due To Banks 21 551.3% 295.8% 533.3%
Total Equity To Net Loans 33.2% 38.0% 44.2%
Leverage (Times) 22 4.3 3.7 3.0
       
Asset Quality      
NPLs (in GEL) 23 87,593 81,245 136,826
NPLs To Gross Loans To Clients 24 3.8% 3.5% 7.4%
NPL Coverage Ratio 25 135.2% 148.1% 100.7%
Cost of Risk 26, Annualized 1.0% 1.8% 2.8%
Reserve For Loan Losses To Gross Loans To Clients 27 5.1% 5.2% 7.5%
% Of Loans To Clients Collateralized 51.9% 51.2% 48.8%
Equity To Average Net Loans To Clients 33.5% 45.6% 45.8%
       
Capital Adequacy:      
Equity To Total Assets 18.7% 21.2% 24.8%
BIS Tier I Capital Adequacy Ratio, Stand-alone 28 19.3% 22.9% 27.1%
BIS Total Capital Adequacy Ratio, Stand-alone 29 29.0% 28.4% 33.0%
NBG Tier I Capital Adequacy Ratio 30 12.7% 13.0% 17.7%
NBG Total Capital Adequacy Ratio 31 15.6% 14.5% 15.9%
       
Per Share Values:      
Basic EPS (GEL) 32 1.00 0.95 0.41
Basic EPS (US$) $0.59 $0.54 $0.23
Fully Diluted EPS (GEL) 33 0.96 0.92 0.41
Fully Diluted EPS (US$) $0.56 $0.52 $0.23
Book Value Per Share (GEL) 34 23.49 26.69 24.01
Book Value Per Share (US$) $13.77 $15.06 $13.72
Ordinary Shares Outstanding - Weighted Average, Basic 31,353,349 31,344,860 31,315,960
Ordinary Shares Outstanding - Period End 31,353,349 31,344,860 31,315,960
Ordinary Shares Outstanding - Fully Diluted 34,827,963 34,819,474 34,790,574
       
Selected Operating Data:      
Full Time Employees, BOG Stand-Alone 3,150 3,110 2,825
Total Assets Per FTE, BOG Stand-Alone 1,249 1,269 1,073
Number Of Active Branches 143 142 140
Number Of ATMs 408 405 379
Number Of Cards Outstanding 614,990 603,049 570,637
Number Of POS Terminals 2,404 2,330 2,067
 

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; ROAE Excluding Minority Interests equals Net Income Excluding Minority Interest(s) of the period divided by quarterly Average Total Equity Excluding Minority Interest 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 Total Employee Compensation Expense includes Personnel Costs;
17 Net Loans equal Net Loans To Clients;
18 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;
19 Total Deposits include Client Deposits and Deposits And Loans from Banks;
20 Total Equity equals Total Shareholders’ Equity;
21 Due From Banks/ Due To Banks equals Loans And Advances To Credit Institutions divided by Deposits And Loans From Banks;
22 Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date;
23 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;
24 Gross Loans equals Gross Loans To Clients;
25 NPL Coverage Ratio equals Reserve For Loan losses as of the period end divided by NPLs as of the same date;
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 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;
28 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;
29 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;
30 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;
31 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;
32 Basic EPS equals Net Income of the period divided by the weighted average number of outstanding ordinary shares over the same period;
33 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;
34 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
35 Equals total consolidated assets divided by total number of full-time employees