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Bank of Georgia Hldg (BGEO)

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Tuesday 20 March, 2012

Bank of Georgia Hldg

Final Results

RNS Number : 6712Z
Bank of Georgia Holdings PLC
20 March 2012
 



 

JSC Bank of Georgia Q4 2011 and Full Year 2011 Results and Expected 2011 Dividends

 

                                                                                                                                                                                  

Bank of Georgia Holdings plc. ("BGH") (LSE: BGEO LN), the holding company of JSC Bank of Georgia and its subsidiaries (the "Bank"), Georgia's leading bank, announced today the Bank's Q4 2011 and full-year 2011 consolidated results (IFRS based, derived from management accounts), reporting a Q4 2011 profit for the period from continuing operations of GEL 37.3 million and full-year 2011 profit for the period from continuing operations of GEL 150.9 million, or GEL 4.95 per share for the period on a continuing basis (US$2.96 per share).

 

An excellent business performance 2011

 

·      Strong profitability and further efficiency improvements

Revenue increased by GEL 94.6 million, or 27.3% y-o-y, to GEL 441.2 million in 2011

Single digit growth in operating expenses; up 8.9% y-o-y to GEL 217.6 million in 2011

2011 profit from continuing operations of GEL 150.9 million, up by GEL 68.3 million, or 82.6% y-o-y

Cost to Income ratio improved to 49.3% in 2011 from 57.6% in 2010 

Earnings per share (basic) for the period on a continuing basis increased by 78.1% y-o-y to GEL 4.95 compared to GEL 2.78 in 2010

Return on Average Assets (ROAA) increased to 3.6% compared to 2.5% in 2010

Return on Average Equity (ROAE) increased to 20.4% compared to 13.5% in 2010

 

·      Prudent asset quality with further strengthening of the Bank's Balance Sheet

Cost of risk decreased to 0.9% in 2011 from 2.1% in 2010.  In absolute terms, cost of credit risk decreased by GEL 25.5 million, or 53.5% y-o-y to GEL 22.2 million in 2011

Non-performing loans reduced by 17.3% y-o-y to GEL 97.2 million in 2011 or 3.6% of total loan book

High loan loss reserve coverage of non-performing loans at 118.5 %

Net loan book on a standalone basis increased by 19.8% y-o-y, while client deposits on a standalone basis increased 41.2% y-o-y; in US$ terms, net loan book on a standalone basis increased 27.2% y-o-y, while client deposits grew 49.9% y-o-y

Excellent funding position as net loans to client deposits ratio improved significantly to 102.4% from 118.0% in 2010, reflecting continued strong deposit growth; Net Loans to Customer Funds declined to less than 96%

BIS Tier 1 capital adequacy ratio remained strong at 19.9%  following the EBRD and IFC loan conversion in February 2012, the 31 December 2011 BIS Tier I capital adequacy ratio, on a pro-forma basis, would have been 22.1%

Book Value per Share increased by 17.4% to GEL 26.09 (US$15.62)

 

·      Reshaping business

Strong focus on growing the Bank's strategic businesses in Georgia - Corporate Banking, Retail Banking and Wealth Management 

Further progress in developing growth opportunities offered by the Bank's synergistic businesses: Insurance and Healthcare and Affordable Housing

Disposal of non-strategic businesses: disposal of BG Bank, Ukraine; closure of BG Capital, brokerage business in Ukraine

Full goodwill impairment in non-core Belarus business (BNB); the BNB goodwill impairment amounted to GEL 10.4 million in Q4 2011 and GEL 23.4 million for the full year 2011

 

"I am very pleased to report a strong set of results for 2011 reflecting an excellent performance in all of our core businesses.  Revenue growth of 27.3% substantially exceeded expense growth of 8.9% which, when combined with significantly improved asset quality, led to a 74.8% increase in profit before income tax from the continuing operations. A prudent approach to growing our balance sheet has resulted in the Bank's 41.2% standalone client deposit growth significantly exceeding customer lending growth of 19.8% and reducing our Loan to Client Deposit ratio to close to one hundred percent. Net loans to Customer Funds declined even further to less than 96%. Profitability has continued to remain strong with a post-tax Return on Average Equity of 20.4% and Earnings per Share growing by 78.1% to GEL 4.95.

 

At the end of December 2011, the Bank's NBG Tier 1 capital ratio was 10.5% (BIS 19.9%), and as of 29 February 2012, this was further increased to approximately 15.3% (BIS 22.1% on a pro-forma basis) as a result of the inclusion of 2011 profit in the Tier I capital as of 1 January 2012 as per National Bank of Georgia requirement and previously announced conversion of the convertible loans in February 2012. 

 

The Bank is well positioned to further improve its performance in 2012 and this, combined with both, Georgia's robust macroeconomic outlook and the Bank's strong momentum, profitability and capital ratios, has led the Board to review the Bank's dividend payment. As a result of the Bank's strong financial performance and condition, the BGH Board of Directors intend to recommend to the next Annual General Meeting of Shareholders of BGH, to be held in May/June 2012, annual dividends in the amount of GEL 0.70 per share payable in British Sterling at the then prevailing exchange rate. This proposed dividend payment is the continuation of the Bank's progressive dividend policy and represents a substantial increase from the GEL 0.30 per share paid for 2010 performance. As part of this progressive dividend policy, the Board of BGH will aim to continue to increase the GEL 0.70 annual dividend per share overtime.

 

In December 2011, Bank of Georgia Holdings plc., the UK-incorporated holding company of the Bank made a tender offer to Bank of Georgia shareholders. Following the successful completion of the tender offer, BGH was admitted to trading on the premium segment of the UKLA and to trading on the Main Market of the LSE on 28 February 2012. We are delighted with the very high level of participation and would like to thank our shareholders for their strong support for the move to the premium listing aimed at enhancing investor profile and broadening shareholder base." commented Irakli Gilauri, Chief Executive Officer of Bank of Georgia Holdings plc. and JSC Bank of Georgia.

 

   1.670   GEL/US$ 31 December 2011

            1.773   GEL/US$ 31 December 2010

2.578   GEL/GBP 31 December 2011

2.739   GEL/GBP 31 December 2010

 

Financial Summary

Millions, unless otherwise noted

Full Year

2011


Full Year 2010


Growth y-o-y1

Bank of Georgia (Consolidated, Unaudited IFRS-based)

US$

GBP

GEL


GEL



Revenue2

264.2

173.1

441.2


346.6


27.3%

Operating expenses3

130.3

84.4

217.6


199.8


8.9%

Operating income before cost of credit risk

133.9

86.7

223.6


146.9


52.2%

Cost of credit risk4

13.3

8.6

22.2


47.7


-53.5%

Net operating income

120.6

78.1

201.4


99.2


103.1%

Net non-operating expenses, including goodwill impairment

17.6

11.4

29.3


0.7


NMF

Profit for the period from continuing operations

90.4

58.5

150.9


82.7


82.6%

EPS (Basic)4

2.96

1.92

4.95


2.78


78.1%









Millions, unless otherwise noted

    Q4 2011


       Q4 2010


Growth y-o-y1

Bank of Georgia (Consolidated, Unaudited, IFRS-based)

US$

GBP

GEL


GEL



Revenue2

71.3

46.2

119.1


95.6


24.6%

Operating expenses3

34.5

22.3

57.5


45.4


26.8%

Operating income before cost of credit risk

36.9

23.9

61.6


50.2


22.6%

Cost of credit risk4

5.3

3.4

8.8


17.4


-49.6%

Net operating income

31.6

20.5

52.8


32.8


60.8%

Net non-operating expenses, including goodwill impairment

5.8

3.8

9.7


0.2


NMF

Profit for the period from continuing operations

22.3

14.5

37.3


25.5


46.5%

EPS (Basic)

0.70

0.46

1.18


0.90


18.9%









Standalone Balance Sheet Summary








Total assets

2,713.5

1,757.8

4,531.6


3,857.0


17.5%

Net loans5

1,578.1

1,022.3

2,635.4


2,200.0


19.8%

Customer funds6

1,632.6

1,057.6

2,726.4


1,824.6


49.4%









Consolidated Balance Sheet Summary








Total assets

2,793.6

1,809.6

4,665.3


4,004.9


16.5%

Net loans5

1,566.7

1,014.9

2,616.4


2,366.1


10.6%

Customer funds6

1,637.9

1,061.0

2,735.2


2,026.3


35.0%

Tier I Capital Adequacy Ratio (BIS)7



19.9%


17.5%



Total Capital Adequacy Ratio (BIS)7



28.5%


26.6%



NBG Tier I Capital Adequacy Ratio8



10.5%


13.0%



NBG Total Capital Adequacy Ratio8



16.2%


14.5%



NBG Tier I Capital Adequacy Ratio as of 29 February 20119



15.3%





NBG Total Capital Adequacy Ratio as of 29 February 20119



17.8%





 

 

1 Compared to the respective period in 2010; growth calculations based on GEL values

2Revenue includes net interest income, net fee and commission income, net insurance revenue and other operating non-Interest Income

3 Operating Expenses equal other operating non-interest expenses

4 Cost of credit risk includes impairment charge (reversal of impairment) on: loans to customers, finance lease receivables and other assets

5 Net loans equal to net loans to customers and finance lease receivables

6 Customer funds equal amounts due to customers

7 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. BIS total capital equals total consolidated capital as of the period divided by total consolidated risk weighted assets. Both ratios calculated in accordance with the requirements of Basel Accord I

8 NBG Tier I Capital and Total Capital Adequacy ratios calculated in accordance with the requirements of the National Bank of Georgia (NBG)

9 Capital Adequacy Ratios as of 29 February 2012 reflect the inclusion of 2011 profit and the conversion of the EBRD and IFC convertible loans

 

     

Discussion of Results

 

Revenue

 

GEL millions, unless otherwise noted

2011

2010

Change Y-O-Y

    Loans to customers

439.0

389.4

12.7%

    Investment securities - AFS & HTM

37.7

19.8

90.6%

    Amounts due from  credit institutions

18.1

9.8

84.8%

    Finance lease and receivables

6.6

4.2

57.9%

Interest income

501.4

423.1

18.5%

   Amounts due to customers

167.3

115.0

45.5%

   Amounts due to credit institutions

99.8

91.8

8.6%

Interest expense

267.1

206.8

29.1%

    Net gains (losses) from derivative financial instruments

5.0

(7.8)

NMF

Interest expense adjusted for net gains (losses) from derivative financial instrument

262.1

214.6

22.1%

Net interest income

239.3

208.5

14.8%

    Fee and commission income

93.5

74.3

26.0%

    Fee and commission expense

18.2

10.8

67.9%

Net fee and commission income

75.3

63.4

18.8%

    Net insurance premiums earned

46.4

44.6

4.1%

    Net insurance claims incurred

28.7

27.9

2.7%

Net insurance revenue

17.7

16.7

6.5%

    Other operating non-interest income

108.9

58.0

87.6%

Revenue

441.2

346.6

27.3%




The Bank's 2011 revenue increased to GEL 441.2 million, or 27.3% growth year-on-year, an increase driven by the 14.8% y-o-y growth of net interest income to GEL 239.3 million and 87.6% y-o-y increase in other operating non-interest income to GEL 108.9 million.

 

In 2011, the Bank's interest income growth of 18.5% y-o-y to GEL 501.4 million was primarily attributable to the increase in the Bank's standalone net loans to customers and finance lease receivables (net loan book), which grew by GEL 435.4 million, or 19.8% y-o-y to GEL 2,635.4 million. The growth of the average outstanding amounts of interest earning investment securities resulted in the 90.6% y-o-y, or GEL 17.9 million increase in interest income from investment securities to GEL 37.7 million, while the increases in average volumes of inter-bank deposits prompted the increase in interest income from amounts due from credit institutions from GEL 9.8 million in 2010 to GEL 18.1 million in 2011.

 

The Bank's interest income growth more than offset the interest expense growth, which, adjusted for net gains (losses) from interest rate swap contracts was up by GEL 47.5 million, or 22.1% y-o-y, to GEL 262.1 million. The interest expense growth in 2011 was attributed to the strong deposit inflow during the year, and especially in the fourth quarter 2011, as standalone customer funds (client deposits and promissory notes issued) reached GEL 2,726.4, up 49.4% y-o-y. The currency-blended loan yields of the Bank were 18.3% and 17.3% in 2010 and 2011, respectively, while currency-blended customer deposit yields comprised 7.5% and 8.0% during the same periods, respectively. In 2011, the increase in deposit yields was attributed to the growth of the share of the higher yielding GEL denominated client deposits in total client deposits for the period from 28.9% at the end of 2010 to 40.8% at the end of 2011.

 

As a result of the foregoing, the Bank's net interest income increased by 14.8% y-o-y, to GEL 239.3 million in 2011. Correspondingly, the 2011 Net Interest Margin (NIM) was 7.1% compared to 8.0% in 2010. The change in margin was primarily attributable to the increased liquidity, growth of interest-bearing liabilities, the increase of the share of GEL denominated client deposits in the total client deposits and the decline in the loan yields, mainly on corporate banking loans, to 14.4% in 2011 from 16.2% in 2010, when the rates on loans remained high following the increase of rates in 2009 as a result of the crisis.

 

GEL millions, unless otherwise noted

2011

2010

Change Y-O-Y

Net interest income

         239.3

          208.5

14.8%

Net Interest Margin

7.1%

8.0%

-12.0%

Average interest earning assets*

      3,382.8

       2,595.5

                  30.3%

Average interest bearing liabilities*

3,292.7

2,606.6

26.3%

    *monthly averages are used for calculation of average interest earning assets and average interest bearing liabilities

 

The increase in overall business activity in Georgia in 2011 was predominantly driven by the growth of the non-interest revenue items (including net foreign currency gains from the Belarusian Ruble (BYR) hedge), accounting for 45.8% of the revenue in 2011 compared to 39.8% in 2010.

 

Net fee and commission income grew 18.8% y-o-y to GEL 75.3 million, reflecting the overall improvement of the economic environment in Georgia and increased foreign trade turnover of Georgian businesses. Reflecting the continued growth of the insurance business and improvements in claims management net insurance revenue grew 6.5% y-o-y to GEL 17.7 million in 2011.

 

GEL millions, unless otherwise noted

2011

2010

Change Y-O-Y

    Fee and commission income

93.5

74.3

26.0%

    Fee and commission expense

18.2

10.8

67.9%

Net fee and commission income

75.3

63.4

18.8%

   Net insurance premiums earned

46.4

44.6

4.1%

   Net insurance claims incurred

28.7

27.9

2.7%

Net insurance revenue

17.7

16.7

6.5%

 

  

 

The Bank's other operating non-interest income excluding the foreign currency gains from the BYR hedge, increased by 44.3% y-o-y to GEL 83.8 million in 2011, a result of the 52.1% y-o-y growth of net gains from foreign currencies to GEL 51.3 million, reflecting the increase in volumes of foreign currency conversions by the Bank during the period and 32.5% y-o-y increase in other operating income to GEL 29.1 million. The other operating income growth was predominantly driven by the increase in healthcare revenues as part of the Bank's insurance business and by the increase in revenues generated by the Bank's non-core subsidiaries. The net effect of GEL 25.1 million related to the BYR hedge resulted in the increase of other operating non-interest income to GEL 108.9 million in 2011.

 

 

GEL millions, unless otherwise noted

2011

2010

Change Y-O-Y

Net gains from trading securities and investment securities available-for-sale

1.4

2.0

-31.1%

Net gains from foreign currencies

51.3

33.7

52.1%

Net gains from revaluation of investment property

2.0

0.4

NMF

Other operating income

29.1

21.9

32.5%

Other operating non-interest income

83.8

58.0

44.3%

Net gains from foreign currencies, BYR hedge

25.1

-

NMF

Other operating non-interest income adjusted for foreign currency gains from the BYR hedge

108.9

58.0

87.6%

 

 

Fourth quarter 2011 comparison with fourth quarter 2010 and third quarter 2011

 

GEL millions, unless otherwise noted

Q4 2011

Q3 2011

Q4 2010

Change Q-O-Q

Change Y-0-Y

Interest income

133.4

128.7

116.1

3.6%

14.9%

Interest expense

                 73.2

                  68.0    

                  61.1

7.8%

19.9%

Net losses (gains) from derivative financial instruments

(0.1)

                2.6

                1.5

NMF

NMF

Interest expense adjusted for net (losses) gains from derivative financial instruments

73.3

65.4

59.6

12.2%

23.1%

Net interest income

60.1

63.3

56.0

-5.2%

6.3%

Net fee and commission income

                 22.1

                 19.3

                  19.0

14.7%

16.4%

Net insurance revenue

                   3.6

                  5.1

                    4.2

-29.3%

-14.9%

Other operating non-interest income

                 33.3

                 18.6

15.9

79.7%

109.9%

Revenue

               119.1

               106.3

95.6

12.1%

24.6%

 

On a year-on-year basis, Q4 2011 revenue growth of 24.6% y-o-y to GEL 119.1 million was largely driven by the growth of net interest income and other operating non-interest income during the quarter. Q4 2011 net interest income of GEL 60.1 million grew 6.3% y-o-y, as interest income growth of 14.9% y-o-y more than offset the 23.1% y-o-y growth of interest expense to GEL 73.3 million (adjusted for the impact of changes in the fair value of interest rate swap contracts). The Bank's other operating non-interest income of GEL 33.3 million in Q4 2011 grew 109.9% y-o-y reflecting the gains from foreign currencies, partially related to the gains from the BYR hedge, which amounted to GEL 4.8 million in Q4 2011. The increase in revenue from the healthcare business also contributed to the growth. On a quarterly basis, the 5.2% q-o-q decline in net interest income was due to the 12.2% q-o-q growth of the interest expense (adjusted for net gains or losses from the change in fair value of interest rate swap contracts) that compares to 3.6% q-o-q growth of interest income, reflecting a 17.7% q-o-q increase in customer funds that outpaced the 2.2% q-o-q increase in net loan book in Q4 2011. The healthy growth of non-interest items, such as net fee and commission income (up 14.7% q-o-q to GEL 22.1 million) and other operating non-interest income (up 79.7% to GEL 33.3 million) strongly contributed to the Q4 2011 revenue growth of 12.1% compared to the prior quarter.

 

 

Net operating income, cost of credit risk, profit for the period

 

GEL millions, unless otherwise noted

2011

2010

Change Y-O-Y

Salaries and other employee benefits

119.1

104.6

13.9%

General and administrative expenses

61.9

61.0

1.5%

Depreciation and amortization

27.3

28.0

-2.5%

Other operating expenses

9.3

6.3

49.1%

Other operating non-interest expenses

217.6

199.8

8.9%

Operating income before cost of credit risk

223.6

146.9

52.2%

Cost of credit risk

22.2

47.7

-53.5%

Net operating income

201.4

99.2

103.1%

Impairment of goodwill, property and equipment

23.4

0.4

 

NMF

Net other non-operating expenses

5.9

0.3

NMF

Net non-operating expenses

29.3

0.7

NMF

Profit before income tax expense from continuing operations

172.1

98.4

74.8%

Income tax expense

21.1

15.8

33.9%

Profit for the period from continuing operations

150.9

82.7

82.6%

Net loss from discontinued operations

15.2

-

NMF

Net profit for the period

135.7

82.7

64.2%

 

In 2011, the Bank's other operating non-interest expenses increased by GEL 17.9 million, or 8.9% y-o-y, to GEL 217.6 million. The increase was primarily due to 13.9% y-o-y increase in salaries and other employee benefits as the Bank's headcount and the bonus pool increased to reflect the growth of the Bank's business during 2011. General and administrative expenses for the year grew moderately by 1.5% y-o-y to GEL 61.9 million, reflecting the cost efficiency measures undertaken by the Bank and the effect of disposal of BG Bank in the beginning of 2011. As a result, the Cost to Income ratio of the Bank improved to 49.3% in 2011 from 57.6% in 2010.

 

As a result of the foregoing factors, the Bank's operating income before cost of credit risk increased by GEL 76.7 million, or 52.2% y-o-y, to GEL 223.6 million in 2011.

 

Cost of credit risk decreased by GEL 25.5 million, or 53.5% y-o-y, to GEL 22.2 million in 2011, a result of improvements in the economy generally reflected in the improvement of the Bank's loan portfolio quality, and the disposal of BG Bank in the beginning of 2011. Allowance for loan impairment was GEL 115.1 million or 4.2% of total gross loans as of 31 December 2011, compared to 6.9% as of same date previous year.

 

The Bank's non-performing loans (NPLs) amounted to GEL 97.2 million as of 31 December 2011 compared to GEL 117.6 million as of 31 December 2010, down by 17.3% y-o-y. The Bank's NPLs to total gross loans ratio improved to 3.6% in 2011 from 4.6% as of 31 December 2010.

In 2011 net operating income amounted to GEL 201.4 million, up 103.1% y-o-y. The Bank's non-operating expense for the period amounted to GEL 29.3 million, consisting of GEL 23.4 million goodwill associated with the BNB, Belarus, and GEL 5.9 million of net other non-operating expenses incurred from the buy-back of Eurobonds by the Bank and expenses incurred for the purposes of the Tender Offer, announced by the Bank's holding company, BGH in December 2011 that was successfully completed in February 2012. 2011 profit before income tax expense from continuing operations of GEL 172.1 million was up by 74.8% y-o-y. The 2011 income tax expense reached GEL 21.1 million and the Bank's 2011 profit for the period from continuing operations stood at GEL 150.9 million, up by GEL 68.3 million, or 82.6% y-o-y.

 

The 2011 impairment of goodwill charge of GEL 23.4 million fully comprised BNB goodwill impairment. As a result, the goodwill associated with BNB has been fully written-off as of 31 December 2011.

 

 

Fourth quarter 2011 comparison with fourth quarter 2010 and third quarter 2011

GEL millions, unless otherwise noted

Q4 2011

Q3 2011

Q4 2010

Change Q-O-Q

Change Y-0-Y

Other operating non-interest expenses

57.5

54.1

                45.4

6.3%

26.8%

Operating income before cost of credit risk

                 61.6

                  52.1

                  50.2

18.2%

22.6%

Cost of credit risk

8.8

 5.2

                17.4

69.8%

-49.6%

Net operating income

                 52.8

                 47.0

                  32.8

12.5%

60.8%

Net non operating expenses

                 9.7

                 0.9

                  0.2

NMF

NMF

Income tax expense

                   5.8

                 8.4

                    7.1

-31.2%

-19.2%

Net profit from continuing operations

 37.3

  37.6

25.5

-0.8%

46.5%

Net loss from discontinued operations

3.0

-

-

NMF

NMF

Net profit for the period

34.4

37.6

25.5

-8.7%

34.9%

 

 

The Bank's Q4 2011 net operating income grew 12.5% q-o-q, as the revenue growth rate of 12.1% q-o-q during the quarter outpaced the expense growth rate of 6.3% q-o-q during the same period. Profit for the period from continuing operations of GEL 37.3 million, declined by 0.8% q-o-q impacted by the GEL 3.6 million increase in the Bank's cost of credit risk to GEL 8.8 million. The increase in cost of credit risk during the quarter is largely due to the GEL 1.7 million q-o-q increase in impairment of receivables of ABCI, as a result of change in IFRS disclosure requirements, effective 2011. The increase in cost of credit risk is also attributed to the growth of loan impairment charge of BNB by GEL 2.1 million q-o-q in Q4 2011.

 

Net non-operating expense of GEL 9.7 million in Q4 2011 includes GEL 10.4 million impairment of BNB goodwill, which more than offset GEL 4.8 million foreign currency gain from the BYR hedge. The Bank's net loss from discontinued operations in Q4 2011 amounted to GEL 3.0 million, comprised of the impairment of amounts receivable from the sale of BG Bank in February 2011. Net outstanding carrying value of the receivable as of 31 December 2011 after the impairment comprises GEL 3.7 million. As a result of the foregoing, the Q4 2011 net profit for the period declined 8.7% q-o-q to GEL 34.4 million.

 

On a year-on-year basis, the Bank's net operating income growth of 60.8% y-o-y was a result of the 22.6% y-o-y growth of operating income before cost of credit risk to GEL 61.6 million and the improvement of the cost of credit risk by 49.6% y-o-y. Net profit for the period of GEL 34.4 million was up by 34.9% compared to the same period previous year.

 

Balance Sheet highlights

 

As of 31 December 2011, the Bank had total assets of GEL 4,665.3 million, a 7.0% increase compared to 30 September 2011 and 16.4% increase compared to 31 December 2010. Net loan book on a standalone basis grew by GEL 435.4 million, or 19.8% y-o-y, to GEL 2,635.4 million. The growth of total assets during 2011 was also attributed to the increase in the amounts due from credit institutions, mainly consisting of cash placed on the overnight deposits with banks that grew by GEL 173.1 million, or 148.6% y-o-y to GEL 289.5 million. The Bank's investment securities available-for-sale, consisted of the NBG CDs and Georgian Government treasury bills and bonds, increased by 42.3% y-o-y to GEL 419.6 million as of the year-end 2011. Loans denominated in US$ (or other foreign currency) accounted for 74.0% of the Bank's net loan book as of 31 December 2011, compared to 77.1% as of 31 December 2010.

 

The strong deposit inflow during 2011 enabled the Bank to further enhance its general funding and liquidity position. Customer funds on a standalone basis stood at GEL 2,726.4 million, up 17.5% q-o-q and up 49.4% y-o-y, the growth driven by client deposits growth of 18.0% q-o-q and 41.2% y-o-y.  In addition to client deposits, customer funds include promissory notes, which reached GEL 181.1 million as of 31 December 2011. The healthy deposit growth allowed the Bank decrease its reliance on more expensive wholesale funding as amounts due to credit institutions declined from GEL 1,138.9 million at the end of 2010 to GEL 921.2 million at the end of 2011. As a result, customer funds represented 71.0% of total liabilities as of 31 December 2011, an improvement from 61.2% as of the YE 2010.  By the end of 2011, the Bank's Net Loan to Client Deposit ratio improved to 102.4% reflecting the continuous deposit inflow during the year. Client deposits denominated in US$ (or other foreign currency) accounted for 59.2% of the Bank's client deposits as of 31 December 2011, compared to 71.1% as of 31 December 2010. The Bank continues to maintain a strong liquidity position, considerably in excess of the conservative regulatory requirements. The liquidity ratio, as per the NBG requirement, stood at 37.8% against the required minimum of 30%, while liquid assets accounted to 28.7% of total assets and 34.8% of total liabilities as of the end of 2011. As of 31 December 2011, the Bank had total liabilities of GEL 3,852.7 million, up 7.5% q-o-q and up 16.3% y-o-y.

 

Liquidity and Funding position

GEL millions, unless otherwise noted


2011

2010

Change Y-O-Y

Amounts due to credit institutions, of which


               921.2

                1,138.9

-19.1%

   Wholesale funding


 863.0

   1,003.9 

-14.0%

Customer funds, of which


            2,735.2

               2,026.3

35.0%

    Client deposits


               2,554.1

               2,004.7

27.4%

    Promissory notes


                  181.1

                    21.6

NMF

Net Loans / Customer Funds


95.7%

116.8%

-18.1%

Net Loans / Client Deposits


102.4%

118.0%

-13.2%

Liquid assets


               1,326.3

               1,011.7

31.1%

Liquid assets as percent of total assets


28.4%

25.3%

12.5%

Liquid assets as percent of total liabilities


34.8%

30.9%

12.3%

 

 

As of 31 December 2011, the Bank had shareholders' equity of GEL 775.7 million, compared to shareholders' equity of GEL 663.3 million as of 31 December 2010. The growth was mostly attributed to the increase of the Bank's net profit for the period from GEL 82.7 million in 2010 to GEL 135.7 million in 2011. In October 2011, the Bank issued 1.5 million ordinary shares for the purpose of the Senior Executive Compensation Plan. The Bank's Book Value per share on 31 December 2011 stood at GEL 26.09 (US$15.62) compared to GEL 22.23 (US$12.54) as of 31 December 2010.

 

 

Strategic Businesses Segment Result Discussion

 

Segment result discussion presented for the Banks Retail Banking, Corporate Banking and Wealth Management operations on a standalone basis for the Bank's corporate banking, retail banking and wealth management operations in Georgia and the results exclude the inter-company eliminations.

               

Retail Banking (RB)


GEL millions, unless otherwise noted




Period end

2011

2010

Change

Net interest income

141.5

116.4

21.6%

Net fees and commission income

             49.8

             42.1

18.3%

Net gains from foreign currencies

             12.2

               9.2

32.6%

Other operating non-interest income

               6.0

               1.2

NMF

Operating income from other segments

               1.6

               0.5

NMF

Revenue

           211.0

           169.4

24.6%

Other operating non-interest expenses

           109.4

             97.9

11.7%

Operating income before cost of credit risk

           101.7

             71.6

42.0%

Cost of credit risk

            (3.1)

             29.1

NMF

Profit for the period from continuing operations

           110.4

             40.0

NMF

Net loans, standalone

1,221.4

969.5

26.0%

Total assets

        2,164.2

        1,746.2

23.9%

Client deposits, standalone

707.1

535.3

32.1%

Total liabilities

        1,268.0

        1,176.9

7.7%

 

 

 

Retail Banking provides consumer loans, mortgage loans, overdrafts, credit card facilities and other credit facilities as well as funds transfer and settlement services and handling customer deposits for both individuals and legal entities, encompassing the mass affluent segment, retail mass markets, SME and micro businesses.  

 

In 2011 Retail Banking Revenue grew 24.6% y-o-y to GEL 211.0 million, the growth driven by a 21.6% increase in net interest income to GEL 141.5 million reflecting the strong growth of retail net loan book by GEL 251.9 million , or 26.0% y-o-y, to GEL 1,221.4 million as of 31 December 2011.  Net fees and commission income increased 18.1% y-o-y to GEL 49.8 million, while net gains from foreign currencies amounted to GEL 12.2 million, up 32.6% y-o-y.

 

In 2011, deposits from retail clients increased by GEL 171.8 million, or 32.1% y-o-y, to GEL 707.1 million as of 31 December 2011.

 

 

Highlights

 

§ Completed the Bank's brand restyling with new corporate-endorsed brand architecture that unites the group's banking sub-brands and the non-banking business under one umbrella.

§ Launched new-look corporate website, redesigned to reflect the Bank's brand restyling.

§ Launched Express Banking - small-format service points in December 2011. Transactional banking at Express branches to free flagship branches for higher value-added services and products. As of 31 December 2011 nine Express branches operational in key locations in Tbilisi.

§ Issued 263,143 debit cards in 2011 bringing the total debit cards outstanding to 535,385, up 7.9% y-o-y.

§ Issued 61,980 credit cards of which 48,382 were American Express cards in 2011. A total of 105,132 American Express cards have been issued since the launch in November 2009. The total number of credit cards outstanding amounted to 127,820, up 19.7% since December 2010. In June 2011, Bank of Georgia announced a winner of an American Express Global Network Services Marketing Award in the category of Outstanding Loyalty and Engagement Program for its membership Rewards Campaign.

§ Signed merchant and ATM acquiring agreement with Diners Club International in April 2011. Bank of Georgia became an exclusive partner for Diners Club International acquiring business in Georgia and an ATM processer for Diners Club International and Discover card transactions.

§ Outstanding number of Retail Banking clients reached 888,794 up 7.9% y-o-y.

§ Acquired 1,726 new clients in Solo business line, the Bank's mass affluent sub-brand, in 2011. As of 31 December 2011, the number of Solo clients reached 3,728.

§ Number of SMS Loans available for the payroll clients through ATMs, launched in Q4 2010, amounted to 11,586 and aggregate SMS loans outstanding reached GEL 36.7 million as of 31 December 2011.

§ Increased Point of Sales (POS) footprint: As of 31 December 2011, 179 desks at 369 contracted merchants, up from 99 desks and 177 merchant at the end of 2010. POS loans outstanding amounted to GEL 24.7 million, up from GEL 6.5 million at the end of 2010.

§ POS terminals outstanding reach 2,828, up 21.4% y-o-y. The volume of transactions through the Banks' POS terminals grew 97.5% y-o-y to GEL 246.6 million, while number of POS transactions increased from 1.5 million to 3.0 million in 2011.

§ RB Loan Yield Excluding Provisions amounted to 21.0% in 2011 (21.4% in 2010) and RB Deposit Yield amounted to 6.7% in 2011 (7.5% in 2010).

§ Consumer loan originations of GEL 425.3million (up 66.9% y-o-y) resulted in consumer loans outstanding in the amount of GEL 288.2 million as of 31 December 2011, up 77.6% y-o-y.

§ Micro and SME loan originations of GEL 449.0 million (up 47.5% y-o-y) resulted in micro and SME loans outstanding in the amount of GEL 318.5 million as of 31 December 2011, up 33.7% y-o-y.

§ Mortgage loans originations of GEL 168.1 million (up 3.8% y-o-y) resulted in mortgage loans outstanding in the amount of GEL 375.0 million as of 31 December 2011, up 1.2% y-o-y.

 

 

Corporate Banking (CB)


GEL millions, unless otherwise noted




Period end

2011

2010

Change

Net interest income

           72.8

             74.8

-2.7%

Net fees and commission income

           20.3

             16.6

22.3%

Net gains from foreign currencies

           29.0

             21.4

35.5%

Other operating non-interest income

            6.6

            (2.1)

NMF

Operating income from other segments

            6.6

             12.5

-47.2%

Revenue

          135.4

           123.1

10.0%

Other operating non-interest expenses

            54.7

             43.8

24.9%

Operating income before cost of credit risk

           80.8

             79.3

1.9%

Cost of credit risk

           25.6

             12.8

100.0%

Profit for the period from continuing operations

            60.1

             68.7

-12.5%

Net loans, standalone

       1,378.1

1,192.8

15.5%

Total assets

      2,215.7

        1,745.4

26.9%

Client deposits, standalone

      1,384.0

       1,006.0

37.6%

Total liabilities

      1,996.0

        1,552.4

28.6%

 

Corporate Banking business in Georgia comprises of loans and other credit facilities to the country's large corporate clients as well as other legal entities, excluding SME and micro businesses. The services include fund transfers and settlements services, currency conversion operations, trade finance service, currency conversion operations, trade finance services and documentary operations as well as handling savings and term deposits for corporate and institutional customers. Corporate banking business also includes finance lease facility provided by the Bank's leasing operations (Georgian Leasing Company).

 

The growth of Corporate Banking revenue in 2011 was driven by non-interest income growth during the year. Net fees and commission income grew 22.3% y-o-y to GEL 20.3 million, while net gains from foreign currencies rose to GEL 29.0 million, or 35.5% y-o-y, reflecting the increase in volumes of foreign currency conversions by the Bank's corporate clients. The 2.7% y-o-y decline of net interest income of corporate banking was predominantly attributable to the additional carrying cost of the strong deposit inflows on the Bank's corporate client accounts, which rose by 37.6% y-o-y, or by GEL 378.0 million, to GEL 1,384.0 million as of 31 December 2011 on a standalone basis. Corporate Banking standalone net loans increased by GEL 185.3 million, or 15.5% y-o-y, to GEL 1,378.1 million during the period. Impairment charge on interest earning corporate banking assets increased to GEL 25.6 million in 2011 from GEL 12.8 million in 2010.

 

Highlights

§ CB Loan Yield Excluding Provisions amounted to 14.4% in 2011 (16.2% in 2010) and CB Deposit Yield amounted to 7.1% in 2011 (5.6% in 2010). In 2011, the increase in deposit yields was attributed to the growth of the share of the higher yielding GEL denominated CB client deposits in total CB client deposits for the period from 22.2% at the end of 2010 to 32.9% at the end of 2011.

§ Increased the number of corporate clients using the Bank's payroll services from 1,737 as of 31 December 2010 to 2,387 as of 31 December 2011. As of 31 December 2011, the number of individual clients serviced through the corporate payroll programs administered by the Bank amounted to 177,321.

§ Number of corporate banking accounts opened increased from 1,842 in 2010 to 5,192 corporate banking accounts opened in 2011.

 

Wealth Management (WM)


GEL millions, unless otherwise noted




Period end

2011

2010

Change

Net interest income

             5.9

              3.1

90.3%

Net fees and commission income

              0.7

              0.5

40.0%

Net gains from foreign currencies

              0.7

              0.6

16.7%

Other operating non-interest income

              0.1

          (0.1)

NMF

Revenue

              7.4

              4.1

80.5%

Other operating non-interest expenses

              4.1

              4.6

-10.9%

Operating income before cost of credit risk

              3.2

         (0.5)

 NMF

Profit for the period from continuing operations

              3.6

              2.0

80.0%

Net loans, standalone

35.8

37.6

-4.8%

Total assets

            37.6

            43.1

-12.8%

Client deposits, standalone

451.5

261.6

72.6%

Total liabilities

          451.5

          261.6

72.6%

 

 

 

   

The Bank's Wealth Management business provides private banking services to resident and non-resident clients by ensuring an individual approach and exclusivity in providing banking services such as holding the clients' savings and term deposits, fund transfers, currency exchange and settlement operations. In addition, wealth management involves providing wealth and asset management services to its clients through a wide range investment opportunities and specifically designed investment products.

 

In 2011, Wealth Management revenue grew by 80.5% y-o-y to GEL 7.4 million, a result of the 90.3% growth of the net interest income to GEL 5.9 million, 40.0% y-o-y growth in net fees and commission income to GEL 0.7 million and 16.7% y-o-y growth of net gains from foreign currencies to GEL 0.7 million. Profit for the period from continuing operations of the Wealth Management business grew 80.0% y-o-y to GEL 3.6 million. Client deposits of Wealth Management business grew by GEL 189.9 million, or 72.6% y-o-y, to GEL 451.5 million.

 

 

Corporate Center

 Corporate center provides back office services to all segments of the Bank and investments in subsidiaries.

 

Highlights

§ Moved to new Headquarters to meet the growing needs of the Bank's business and provide professional facilities to the Bank's clients and employees. Approximately 600 employees of the Bank, including back-office staff previously spread across 12 offices rented by the Bank, have relocated to the new HQ.

§ Signed a sub-custodian agreement with State Street Bank and Trust Company/ becoming the only bank in Georgia that has an account at Euroclear Bank and the only Bank to offer sub-custody services to global custodians in Georgia.

§ Standard & Poor's and Fitch Ratings raised their respective long-term ratings ratings on Bank of Georgia to 'BB-', noting Bank's business position, capitalization, liquidity, profitability and strong corporate governance and management teams as the drivers for the rating upgrades.

§ Wholesale funding in 2011 declined 14.0% y-o-y to GEL 863.0 million, with long-term IFI (International Financial Institutions, including EBRD, IFC, DEG among others) accounted for 80.7% of wholesale funding as of 31 December 2011. The Bank completed the full repayment, upon maturity, of Eurobonds totalling GEL 92.6 million (US$ 55.5 million) on 8 February 2012 and the conversion of the EBRD and IFC convertible loans with the nominal values totalling GEL 80.8 million (US$ 49.9 million) in February 2012.

§ Has entered into ISDA (International Swaps and Derivatives Association) agreements with Commerzbank in 2011 and Merrill Lynch in 2012 in addition to ISDA agreement signed with IFC in 2009. ISDA enables the Bank to enter into interest rate swaps in order to hedge its US$ interest rate risk on the Bank's long-term borrowings.

§ Signed a five-year Agricultural Finance Facility Agreement with EBRD a synthetic Georgian lari loan denominated in US dollars in the amount of US$14.5 million and a six year US$40.0 million loan facility agreement with FMO and DEG to support the growth of the Bank's SME portfolio.

 

Insurance and Healthcare (ABCI)

 

2011

2010

Change

GEL millions, unless otherwise noted

Insurance

Healthcare

Insurance and Healthcare

Insurance

Healthcare

Insurance and Healthcare

Insurance

Healthcare

Insurance and Healthcare

Gross premiums written

56.4

-

56.4

56.3

-

56.3

0.2%

NMF

0.2%

17.7

-

17.7

16.7

-

16.7

6.0%

NMF

6.0%

Net interest income

1.3

0.3

1.6

0.7

-

0.7

85.7%

NMF

128.6%

(0.8)

-

(0.8)

0.4

(0.1)

0.3

NMF

-100.0%

NMF

Other operating non-interest income

1.3

10.7

12.0

0.3

2.6

2.9

NMF

NMF

NMF

(1.4)

1.3

(0.1)

(2.2)

2.6

0.4

-36.4%

-50.0%

NMF

Revenue

18.3

12.2

30.5

15.8

5.1

20.9

15.8%

139.2%

45.9%

12.4

11.0

23.4

11.0

3.7

14.7

12.7%

197.3%

59.2%

Operating income before cost of credit risk

5.7

1.3

7.0

4.7

1.5

6.2

21.3%

-13.3%

12.9%

 

 

 

 

ABCI, the Bank's wholly-owned subsidiary provides life and non-life insurance and healthcare products and services in Georgia. A leader in the Georgian life and non-life insurance markets, based on a market share of 19.5% of the life and 16.8% of the non-life insurance markets (based on gross premiums written), ABCI cross-sells its insurance products with the Bank's retail and corporate banking products. ABCI's healthcare business consists of My Family Clinic, Georgia's leading healthcare provider, operating a chain of healthcare centers in Georgia, in line with the Bank's strategy of vertically integrating its insurance and healthcare businesses.

 

In 2011, insurance and healthcare revenue grew 45.9% y-o-y to GEL 30.5 million reflecting the 6.0% y-o-y growth of net insurance revenue to GEL 17.7 million and the growth of other operating non-interest income from GEL 2.9 million in 2010 to GEL 12.0 million in 2011. The net insurance revenue growth was attributed to the 0.2% y-o-y growth of gross premiums written to GEL 56.4 million and the improvements in the claims management by ABCI. The increase of other operating non-interest income was predominantly attributed to the non-interest income generated by the healthcare business, which reached GEL 10.7 million in 2011 up from GEL 2.6 million healthcare revenue generated in 2010.  Operating income before cost of credit risk grew 12.9% y-o-y to GEL 7.0 million in 2011.

 

Highlights

 

§ Acquired assets and liabilities of JSC Insurance Company Partner, the twelfth largest insurance company in Georgia. The non-cash transaction involved ABCI acquiring total assets in the amount of GEL 5.3 million and liabilities accounted for GEL 5.7 million. As of 30 June 2011, ABCI had a market share of 16.8% of the non-life market in Georgia based on gross premiums written and JSC Insurance Company Partner had 1.3%.

 

In line with the Bank's strategy of integrating its insurance and healthcare operations, following developments are highlighted below:

 

§ ABCI secured 8.25 years Export Credit Facility in the amount of US$11.9 million from ING Bank N.V. the Netherlands. The facility will be used for the restoration of healthcare facilities in the country to enable My Family Clinic, ABCI's subsidiary and one of the leading health care providers in Georgia, to develop hospitals with aggregate bed count of 160 beds in Western Georgia. Four new healthcare facilities comprising a total of approximately 60 bed became operational by the end of 2011.

§ In December 2011, My Family Clinic had merged with the healthcare business of the Block Georgia group of companies. As a result of the transaction, ABCI retained the controlling equity interest of 51% in My Family Clinic, while Block Georgia group of companies holds the remaining 49%. Following the merger, My Family Clinic became the largest healthcare provider in the country with 21 hospitals and healthcare centers and 3,500 employees.

 

Affordable Housing

The Affordable Housing business consists of the Bank's wholly-owned subsidiary SBRE, which holds investment properties repossessed by the Bank from defaulted borrowers. With the aim to improve liquidity of these repossessed real estate assets and stimulate the Bank's mortgage lending business capitalizing on the market opportunity in the affordable housing segment in Georgia, the Bank develops, sells and/or leases such real estate assets through SBRE. SBRE outsources the construction and architecture works and focuses on project managements and sales of apartments and mortgages through its well-established branch network and sales force, thus representing a synergistic business for the Bank's mortgage business.

 

Highlights

 

§ The pilot project of building and selling small-format apartments largely completed under the original completion timetable, the full completion is expected in Q2 2012. 92 apartments from the total of 132- apartment building have been pre-sold as of 5 March 2012.

§ Secured US$20 million funding, SBRE's first internationally raised debt, from FMO for the development of a new housing project of circa 525 apartments to be launched in Q2 2012.

 

 

Non-Core Businesses

 

The Bank's non-core businesses that accounted for 2.9% of total assets and 13.8% of total revenue in 2011, comprise BNB, Belarus banking operation and Liberty Consumer, a Georgia focused investment company in which the Bank holds a 65% stake.  In order for the Bank to focus on its strategic businesses, the Bank announced its intention to exit from its non-core operations.

 

To this end, in February 2011, the Bank sold 80% equity interest in BG Bank, its subsidiary in Ukraine. The Bank's 2011 consolidated results include results of operation of BG Bank for one month ended 31 January 2011. Net loss from discontinued operations related to the disposal of BG Bank amounted to GEL 15.2 million in 2011.

 

In December 2011, the Bank initiated proceedings and has subsequently completed the closure of BG Capital, Ukraine, the Ukrainian operations of its brokerage subsidiary BG Capital.

 

 

 

 

 

 

 

About JSC Bank of Georgia

Bank of Georgia is the leading Georgian bank, based on total assets (with a 35.6% market share), total loans (with a 34.5% market share) and client deposits (with a 35.6% market share) as of 31 December 2011, all data based on standalone financial information filed by banks in Georgia with the National Bank of Georgia. The Bank offers a broad range of corporate banking, retail banking, wealth management, brokerage and insurance services to its clients. 

 

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

Standard & Poor's

'BB-/B'


FitchRatings

'BB-/B'


Moody's

'B1/NP' (FC) & 'Ba3/NP' (LC)


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

Irakli Gilauri

Macca Ekizashvili

Chief Executive Officer

Head of Investor Relations

+995 322 444 109

+995 322 444 256

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 Q4 2011, Q3 2011 Q4 2010, full year 2011 and full year 2010 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

 



 

 

CONSOLIDATED QUARTERLY INCOME STATEMENT

 

 

 


Q4 2011

Q4 2010

Q3 2011

Change

Change





Y-O-Y

Q-O-Q

GEL thousands, unless otherwise noted

     unaudited









Loans to customers

115,816

104,668

111,707

10.7%

3.7%

Investment securities - AFS & HTM

9,782

6,563

9,567

49.0%

2.2%

Amounts due from credit institutions

4,718

3,908

5,716

20.7%

-17.5%

Finance lease receivables

3,099

942

1,744

229.0%

77.7%

Interest income

133,415

116,081

128,734

14.9%

3.6%

Amounts due to customers

(49,719)

(32,586)

(41,947)

52.6%

18.5%

Amounts due to credit institutions

(23,536)

(28,521)

(26,012)

-17.5%

-9.5%

Interest expense

(73,255)

(61,107)

(67,959)

19.9%

7.8%

Net interest income before net (losses) gains from derivative financial instruments

60,160

54,974

60,775

9.4%

-1.0%

Net (losses) gains from derivative financial instruments

(92)

1,541

2,584

NMF

NMF

Net interest income

60,068

56,515

63,359

6.3%

-5.2%

Fee and commission income

26,188

20,252

23,717

29.3%

10.4%

Fee and commission expense

(4,086)

(1,264)

(4,452)

223.3%

-8.2%

Net fee and commission income

22,102

18,988

19,265

16.4%

14.7%

Net insurance premiums earned

11,515

10,938

11,758

5.3%

-2.1%

Net insurance claims incurred

(7,937)

(6,736)

(6,694)

17.8%

18.6%

Net insurance revenue

3,578

4,202

5,064

-14.9%

-29.3%

Net gains (losses) from trading securities and investment securities available-for-sale

850

(558)

(200)

NMF

NMF

Net gains (losses) from revaluation of investment property

1,984

(2,732)

  -  

NMF

NMF

Net gains (losses) from foreign currencies:






- dealing

11,992

8,759

12,590

36.9%

-4.7%

- translation differences

8,899

(1,088)

(451)

NMF

NMF

Other operating income

9,654

11,523

6,636

-16.2%

45.5%

Other operating non-interest income

33,379

15,904

18,575

109.9%

79.7%

Revenue

119,127

95,609

106,263

24.6%

12.1%

Salaries and other employee benefits

(30,662)

(24,875)

(30,727)

23.3%

-0.2%

General and administrative expenses

(16,169)

(13,411)

(15,191)

20.6%

6.4%

Depreciation and amortization

(7,735)

(7,841)

(6,578)

-1.4%

17.6%

Other operating expenses

(2,972)

753

(1,651)

NMF

80.0%

Other operating non-interest expenses

(57,538)

(45,374)

(54,147)

26.8%

6.3%

Operating income before cost of credit risk

61,589

50,235

52,116

22.6%

18.2%

Impairment charge on loans to customers

6,194

15,877

5,691

-61.0%

8.8%

Impairment charge (reversal) of impairment on finance lease receivables

195

(5,246)

(49)

NMF

NMF

Impairment charge (reversal) on other assets and provisions

2,380

6,765

(477)

-64.8%

NMF

Cost of credit risk

8,769

17,396

5,165

-49.6%

69.8%

Net operating income

52,820

32,839

46,951

60.8%

12.5%

Share of (loss) gain of associates

(283)

255

47

NMF

NMF

Impairment of goodwill, property and equipment

(10,394)

 (435.0)

   -  

NMF

NMF

Other non-operating income

8,072

-  

-

NMF

NMF

Other non-operating expense

(7,103)

(21)

(974)

NMF

NMF

Net non-operating expenses

(9,708)

(201)

(927)

NMF

NMF

Profit before income tax expense from continuing operations

43,112

32,638

46,024

32.1%

-6.3%

Income tax expense

5,789

7,165

8,410

-19.2%

-31.2%

Profit for the period from continuing operations

37,323

25,473

37,614

46.5%

-0.8%

Net loss from discontinued operations

2,972

-

-

NMF

NMF

Net profit for the period

34,351

25,473

37,614

34.9%

-8.7%







Attributable to:






- shareholders of the Bank

31,971

27,075

36,915

18.1%

-13.4%

- non-controlling interests

2,380

(1,602)

699

NMF

240.5%

 

 



 

 

CONSOLIDATED INCOME STATEMENT

 

 


2011

2010

Change




Y-O-Y

GEL thousands, unless otherwise noted

unaudited


Loans to customers

438,989

389,402

12.7%

Investment securities - AFS & HTM

37,701

19,785

90.6%

Amounts due from credit institutions

18,103

9,795

84.8%

Finance lease receivables

6,565

4,159

57.9%

Interest income

501,358

423,141

18.5%

Amounts due to customers

(167,294)

(114,968)

45.5%

Amounts due to credit institutions

(99,763)

(91,829)

8.6%

Interest expense

(267,057)

(206,797)

29.1%

Net interest income before net gains (losses) from derivative financial instruments

234,301

216,344

8.3%

Net gains (losses) from derivative financial instruments

4,984

(7,826)

NMF

Net interest income

239,285

208,518

14.8%

Fee and commission income

93,541

74,265

26.0%

Fee and commission expense

(18,204)

(10,845)

67.9%

Net fee and commission income

75,337

63,420

18.8%

Net insurance premiums earned

46,396

44,561

4.1%

Net insurance claims incurred

(28,658)

(27,898)

2.7%

Net insurance revenue

17,738

16,663

6.5%

Net gains from trading securities and investment securities available-for-sale

1,382

2,006

-31.1%

Net gains from revaluation of investment property

1,984

350

NMF

Net gains from foreign currencies:




- dealing

45,694

33,651

35.8%

- translation differences

30,747

98

NMF

Other operating income

29,052

21,927

32.5%

Other operating non-interest income

108,859

58,032

87.6%

Revenue

441,219

346,633

27.3%

Salaries and other employee benefits

(119,111)

(104,551)

13.9%

General and administrative expenses

(61,942)

(61,000)

1.5%

Depreciation and amortization

(27,254)

(27,963)

-2.5%

Other operating expenses

(9,324)

(6,253)

49.1%

Other operating non-interest expenses

(217,631)

(199,767)

8.9%

Operating income before cost of credit risk

223,588

146,866

52.2%

Impairment charge on loans to customers

23,216

49,886

-53.5%

Impairment charge (reversal) of impairment  on finance lease receivables

317

(5,775)

NMF

Impairment (reversal) charge on other assets and provisions

(1,337)

3,587

NMF

Cost of credit risk

22,196

47,698

-53.5%

Net operating income

201,392

99,168

103.1%

Share of (loss) gain of associates

(487)

255

NMF

Impairment of goodwill, property and equipment

(23,394)

 (435)

NMF

Other non-operating income

8,072

271

NMF

Other non-operating expense

(13,529)

(816)

NMF

Net non-operating expenses

(29,338)

(725)

NMF

Profit before income tax expense from continuing operations

172,054

98,443

74.8%

Income tax expense

21,125

15,776

33.9%

Profit for the period from continuing operations

150,929

82,667

82.6%

Net loss from discontinued operations

15,219

-

NMF

Net profit for the period

135,710

82,667

64.2%





Attributable to:




- shareholders of the Bank

132,531

83,640

58.5%

- non-controlling interests

  3,179

(973)

NMF

 

 

 



 

 

CONSOLIDATED BALANCE SHEET

 

GEL thousands, unless otherwise noted

2011

2010

Change




Y-O-Y

Assets

unaudited


Cash and cash equivalents

628,731

611,584

2.8%

Amounts due from credit institutions

289,530

116,469

148.6%

Investment securities - AFS & HTM

419,576

294,961

42.2%

Loans to customers and finance lease receivables

2,616,361

2,366,116

10.6%

Investments in associates

3,014

5,633

-46.5%

Investment properties

101,686

113,496

-10.4%

Property and equipment

348,110

285,852

21.8%

Goodwill

46,195

69,212

-33.3%

Other intangible assets

21,222

22,390

-5.2%

Current income tax assets

8,487

2,247

277.7%

Deferred income tax assets

14,852

18,178

-18.3%

Prepayments

29,929

23,364

28.1%

Other assets

137,568

75,420

82.4%

Total assets

4,665,261

4,004,922

16.5%

Liabilities




Amounts due to customers (Customer funds), of which

2,735,222

2,026,308

35.0%

   Client deposits

2,554,084

2,004,698

27.4%

   Promissory notes

181,138

21,610

NMF

Amounts due to credit institutions

921,172

1,138,927

-19.1%

Current income tax liabilities

1,174

4,251

-72.4%

Deferred income tax liabilities

36,242

30,901

17.3%

Provisions

386

4,407

-91.2%

Other liabilities

158,462

106,787

48.4%

Total liabilities

3,852,658

3,311,581

16.3%

Equity




Share capital

32,878

31,345

4.9%

Additional paid-in capital

473,732

477,285

-0.7%

Treasury shares

(3,146)

(1,510)

108.3%

Other reserves

14,478

26,816

-46.0%

Retained earnings

254,588

130,314

99.3%

Total equity attributable to shareholders of the Bank

772,530

664,250

16.3%

Non-controlling interests

40,073

29,091

37.8%

Total equity

812,603

693,341

17.2%

Total liabilities and equity

4,665,261

4,004,922

16.5%

 

 

 



 

 

STANDALONE QUARTERLY INCOME STATEMENT OF JSC BANK OF GEORGIA

 


Q4 2011

Q4 2010

Q3 2011

Change

Change





Y-O-Y

Q-O-Q

GEL thousands, unless otherwise noted

 unaudited









Loans to customers

115,359

98,065

111,346

17.6%

3.6%

Investment securities - AFS & HTM

9,787

6,500

9,572

50.6%

2.2%

Amounts due from credit institutions

3,592

1,965

3,999

82.8%

-10.2%

Interest income

128,738

106,530

124,917

20.8%

3.1%

Amounts due to customers

(47,029)

(26,832)

(41,493)

75.3%

13.3%

Amounts due to credit institutions

(22,673)

(26,244)

(25,068)

-13.6%

-9.6%

Interest expense

(69,702)

(53,076)

(66,561)

31.3%

4.7%

Net interest income before net (losses) gains from derivative financial instruments

59,036

53,454

58,356

10.4%

1.2%

Net (losses) gains from derivative financial instruments

(92)

1,090

2,584

 NMF

 NMF

Net interest income

58,944

54,544

60,940

8.1%

-3.3%

Fee and commission income

23,688

18,975

21,718

24.8%

9.1%

Fee and commission expense

(5,148)

(3,449)

(4,641)

49.3%

10.9%

Net fee and commission income

18,540

15,526

17,077

19.4%

8.6%

Net gains from trading securities and investment securities available-for-sale

841

118

29

NMF

NMF

Net gains from revaluation of investment property

312

357

-

-12.6%

-

Net gains (losses) from foreign currencies:






- dealing

12,398

8,705

9,624

42.4%

28.8%

- translation differences

5,322

(640)

2,298

NMF

131.6%

Other operating income

598

803

1,012

-25.5%

-40.9%

Other operating non-interest income

19,471

9,343

12,963

108.4%

50.2%

Revenue

96,955

79,413

90,980

22.1%

6.6%

Salaries and other employee benefits

(22,952)

(15,127)

(20,963)

51.7%

9.5%

General and administrative expenses

(11,255)

(11,328)

(12,412)

-0.6%

-9.3%

Depreciation and amortization

(5,546)

(6,341)

(5,411)

-12.5%

2.5%

Other operating expenses

(1,218)

1,414

(1,085)

NMF

12.3%

Other operating non-interest expenses

(40,971)

(31,382)

(39,871)

30.6%

2.8%

Operating income before cost of credit risk

55,984

48,031

51,109

16.6%

9.5%

Impairment charge on loans to customers

6,474

7,018

8,106

-7.8%

-20.1%

Impairment charge (reversal) on other assets and provisions

291

2,532

(18)

-88.5%

NMF

Cost of credit risk

6,765

9,550

8,088

-29.2%

-16.4%

Net operating income

49,219

38,481

43,021

27.9%

14.4%

Impairment of property and equipment

-

(435)

-

-100.0%

NMF

Other non-operating expense

(6,728)

(21)

(974)

NMF

NMF

Net non-operating expenses

(6,728)

(456)

(974)

NMF

NMF

Profit before income tax expense from continuing operations

42,491

38,025

42,047

11.7%

1.1%

Income tax expense

5,338

6,463

6,592

-17.4%

-19.0%

Profit for the period from continuing operations

37,153

31,562

35,455

17.7%

4.8%

Net loss from discontinued operations

2,972

-

-

NMF

NMF

Net profit for the period

34,181

31,562

35,455

8.3%

-3.6%







 

 

 

 

 



 

STANDALONE INCOME STATEMENT OF JSC BANK OF GEORGIA

 

 


2011

2010

Change




Y-O-Y

GEL thousands, unless otherwise noted

                unaudited






Loans to customers

434,429

366,298

18.6%

Investment securities - AFS & HTM

37,652

18,927

98.9%

Amounts due from credit institutions

13,776

5,646

144.0%

Interest income

485,857

390,871

24.3%

Amounts due to customers

(161,840)

(96,976)

66.9%

Amounts due to credit institutions

(96,584)

(89,707)

7.7%

Interest expense

(258,424)

(186,683)

38.4%

Net interest income before net gains (losses) from derivative financial instruments

227,433

204,188

11.4%

Net gains (losses) from derivative financial instruments

4,984

(8,080)

NMF

Net interest income

232,417

196,108

18.5%

Fee and commission income

83,378

66,524

25.3%

Fee and commission expense

(18,195)

(13,799)

31.9%

Net fee and commission income

65,183

52,725

23.6%

Net gains from trading securities and investment securities available-for-sale

889

129

NMF

Net gains from revaluation of investment property

312

1,083

-71.2%

Net gains (losses) from foreign currencies:




- dealing

39,874

31,624

26.1%

- translation differences

23,767

(299)

NMF

Other operating income

4,601

3,204

43.6%

Other operating non-interest income

69,443

35,741

94.3%

Revenue

367,043

284,574

29.0%

Salaries and other employee benefits

(86,942)

 (70,597)

23.2%

General and administrative expenses

(46,789)

(40,669)

15.0%

Depreciation and amortization

(21,702)

(23,026)

-5.8%

Other operating expenses

(3,265)

(2,312)

41.2%

Other operating non-interest expenses

(158,698)

(136,604)

16.2%

Operating income before cost of credit risk

208,345

147,970

40.8%

Impairment charge on loans to customers

22,313

39,070

-42.9%

Impairment reversal on other assets and provisions

(3,827)

(814)

NMF

Cost of credit risk

18,486

38,256

-51.7%

Net operating income

189,859

109,714

73.0%

Impairment of property and equipment

-

(435)

-100.0%

Other non-operating income

-

271

-100.0%

Other non-operating expense

(13,154)

(816)

NMF

Net non-operating expenses

(13,154)

(980)

NMF

Profit before income tax expense from continuing operations

176,705

108,734

62.5%

Income tax expense

17,823

16,069

10.9%

Profit for the period from continuing operations

158,882

92,665

71.5%

Net loss from discontinued operations

15,219

-

NMF

Net profit for the period

143,663

92,665

55.0%

 

 

 



 

 

STANDALONE BALANCE SHEET OF JSC BANK OF GEORGIA

 

 

GEL thousands, unless otherwise noted

2011

2010

 Change




 Y-O-Y

Assets

   unaudited


Cash and cash equivalents

608,217

558,922

8.8%

Amounts due from credit institutions

281,114

102,913

173.2%

Investment securities - AFS & HTM

412,043

281,420

46.4%

Loans to customers and finance lease receivables

2,635,364

2,199,958

19.8%

Investments in associates

171,042

   337,875

-49.4%

Investment properties

72,855

  79,274

-8.1%

Property and equipment

237,398

223,647

6.1%

Goodwill

22,748

22,748

0.0%

Other intangible assets

18,464

17,043

8.3%

Current income tax assets

6,696

-

NMF

Prepayments

17,855

16,561

7.8%

Other assets

47,758

16,664

186.6%

Total assets

4,531,554

3,857,025

17.5%

Liabilities




Amounts due to customers (Customer funds), of which:

2,726,435

1,824,560

49.4%

   Client deposits

2,545,297

1,802,950

41.2%

   Promissory notes

181,138

  21,610

NMF

Amounts due to credit institutions

884,098

1,114,558

-20.7%

Current income tax liabilities

-

4,166

-100.0%

Deferred income tax liabilities

31,255

28,708

8.9%

Provisions

386

4,407

-91.2%

Other liabilities

54,836

44,099

24.3%

Total liabilities

3,697,010

3,020,498

22.4%

Equity




Share capital

32,878

31,345

4.9%

Additional paid-in capital

470,506

476,664

-1.3%

Treasury shares

(3,146)

(1,375)

128.8%

Other reserves

41,350

52,631

-21.4%

Retained earnings

292,956

277,262

5.7%

Total equity

834,544

836,527

-0.2%

Total liabilities and equity

4,531,554

3,857,025

17.5%

 

 

 

 

 

 

 

 

 

 

 



 

 

CONSOLIDATED INCOME STATEMENT in US$ and GBP

 

Thousands, unless otherwise noted

US$

GBP


unaudited


 2011

2010

Change

2011

2010

Change




Y-O-Y



Y-O-Y

Loans to customers

 $262,868

 $   219,629

19.70%

 £170,283

 £142,169

19.80%

Investment securities - AFS & HTM

 $  22,575

 $ 11,159

102.30%

 £  14,624

 £7,223

102.50%

Amounts due from credit institutions

 $  10,840

 $   5,525

96.20%

 £7,022

 £3,576

96.40%

Finance lease receivables

 $3,931

 $   2,346

67.60%

 £2,547

 £1,518

67.80%

Interest income

 $238,659

25.80%

 £194,476

 £154,486

25.90%

Amounts due to customers

 $   (100,176)

 $(64,844)

54.50%

-£  64,893

-£  41,974

54.60%

Amounts due to credit institutions

 $ (59,738)

 $(51,793)

15.30%

-£  38,698

-£  33,526

15.40%

Interest expense

 $   (159,914)

 $  (116,637)

37.10%

-£103,591

-£  75,500

37.20%

Net interest income before net gains (losses) from derivative financial instruments

 $140,300

 $   122,022

15.00%

 £  90,885

 £  78,986

15.10%

Net gains (losses) from derivative financial instruments

 $2,984

 $  (4,414)

NMF

 £1,933

-£2,857

NMF

Net interest income

 $143,284

 $   117,608

21.80%

 £  92,818

 £  76,129

21.90%

Fee and commission income

 $  56,013

 $ 41,887

33.70%

 £  36,284

 £  27,114

33.80%

Fee and commission expense

 $ (10,901)

 $  (6,117)

78.20%

-£7,061

-£3,959

78.40%

Net fee and commission income

 $  45,112

 $ 35,770

26.10%

 £  29,223

 £  23,155

26.20%

Net insurance premiums earned

 $  27,782

 $ 25,133

10.50%

 £  17,997

 £  16,269

10.60%

Net insurance claims incurred

 $ (17,160)

 $(15,735)

9.10%

-£  11,116

-£  10,185

9.10%

Net insurance revenue

 $  10,622

 $   9,398

13.00%

 £6,881

 £6,084

13.10%

Net gains from trading securities and investment securities available-for-sale

 $   828

 $   1,131

-26.80%

 £   536

 £   732

-26.80%

Net gains from revaluation of investment property

 $1,188

 $  197

NMF

 £   770

 £   128

NMF

Net gains from foreign currencies:







- dealing

 $  27,362

 $ 18,980

44.20%

 £  17,725

 £  12,286

44.30%

- translation differences

 $  18,411

 $55

NMF

 £  11,927

 £ 36

NMF

Other operating income

 $  17,396

 $ 12,367

40.70%

 £  11,269

 £8,005

40.80%

Other operating non-interest income

 $  65,185

 $ 32,730

99.20%

 £  42,227

 £  21,187

99.30%

Revenue

 $264,203

 $   195,506

35.10%

 £171,149

 £126,555

35.20%

Salaries and other employee benefits

 $ (71,324)

 $(58,968)

21.00%

-£  46,203

-£  38,171

21.00%

General and administrative expenses

 $ (37,091)

 $(34,405)

7.80%

-£  24,027

-£  22,271

7.90%

Depreciation and amortization

 $ (16,320)

 $(15,772)

3.50%

-£  10,572

-£  10,209

3.60%

Other operating expenses

 $   (5,583)

 $  (3,527)

58.30%

-£3,617

-£2,283

58.40%

Other operating non-interest expenses

 $   (130,318)

 $  (112,672)

15.70%

-£  84,419

-£  72,934

15.70%

Operating income before cost of credit risk

 $133,885

 $ 82,834

61.60%

 £  86,730

 £  53,621

61.70%

Impairment charge on loans to customers

 $  13,902

 $ 28,136

-50.60%

 £9,005

 £  18,213

-50.60%

Impairment charge (reversal) of impairment  on finance lease receivables

 $   190

 $  (3,257)

NMF

 £   123

-£2,108

NMF

(Impairment reversal) charge on other assets and provisions

 $  (801)

 $   2,023

NMF

-£   519

 £1,310

NMF

Cost of credit risk

 $  13,291

 $ 26,902

-50.60%

 £8,609

 £  17,415

-50.60%

Net operating income

 $120,594

 $ 55,932

115.60%

 £  78,121

 £  36,206

115.80%

Share of (loss) gain of associates

 $  (292)

 $  144

NMF

-£   189

 £ 93

NMF

Impairment of goodwill, property and equipment

 $ (14,008)

 $ (245)

NMF

-£9,074

-£   159

NMF

Other non-operating income

 $4,834

 $  153

NMF

 £3,131

 £ 99

NMF

Other non-operating expense

 $   (8,101)

 $ (460)

NMF

-£5,248

-£   298

NMF

Net non-operating expenses

 $ (17,567)

 $ (408)

NMF

-£  11,380

-£   265

NMF

Profit before income tax expense from continuing operations

 $103,027

 $ 55,524

85.60%

 £  66,741

 £  35,941

85.70%

Income tax expense

 $  12,650

 $   8,898

42.20%

 £8,194

 £5,760

42.30%

Profit for the period from continuing operations

 $  90,377

 $ 46,626

93.80%

 £  58,547

 £  30,181

94.00%

Net loss from discontinued operations

 $9,113

 $ -  

NMF

 £5,903

 £  -  

NMF

Net profit for the period

 $  81,264

 $ 46,626

74.30%

 £  52,644

 £  30,181

74.40%








Attributable to:







- shareholders of the Bank

 $  79,360

 $ 47,174

68.20%

 £  51,408

 £  30,537

68.30%

- non-controlling interests

 $1,904

 $ (548)

NMF

 £1,236

-£   356

NMF

 

Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.670 per US$1.00 and GEL 1.773 per US$1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.

 

Converted to GBP for the convenience using a period-end exchange rate of GEL 2.578 per GBP 1.00 and GEL 2.739 per GBP 1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.



 

CONSOLIDATED BALANCE SHEET in US$ and GBP

 

Thousands, unless otherwise noted

US$

GBP


unaudited


2011

2010

 Change

2011

2010

 Change

Assets



 Y-O-Y



 Y-O-Y

Cash and cash equivalents

 $ 376,486

 $ 344,943

9.1%

 £243,883

 £   223,287

9.2%

Amounts due from credit institutions

 $ 173,371

 $   65,690

163.9%

 £112,308

 £ 42,522

164.1%

Investment securities - AFS & HTM

 $ 251,243

 $ 166,363

51.0%

 £162,753

 £   107,689

51.1%

Loans to customers and finance lease receivable

 $  1,566,683

 $  1,334,527

17.4%

 £ 1,014,880

 £   863,861

17.5%

Investments in associates

 $ 1,805

 $ 3,177

-43.2%

 £1,169

 £   2,057

-43.2%

Investment properties

 $   60,890

 $   64,014

-4.9%

 £  39,444

 £ 41,437

-4.8%

Property and equipment

 $ 208,449

 $ 161,225

29.3%

 £135,031

 £   104,364

29.4%

Goodwill

 $   27,662

 $   39,037

-29.1%

 £  17,919

 £ 25,269

-29.1%

Other intangible assets

 $   12,708

 $   12,628

0.6%

 £8,232

 £   8,175

0.7%

Current income tax assets

 $ 5,082

 $ 1,267

NMF

 £3,292

 £  820

NMF

Deferred income tax assets

 $ 8,893

 $   10,253

-13.3%

 £5,761

 £   6,637

-13.2%

Prepayments

 $   17,922

 $   13,178

36.0%

 £  11,609

 £   8,530

36.1%

Other assets

 $   82,376

 $   42,538

93.7%

 £  53,362

 £ 27,536

93.8%

Total assets

 $  2,793,570

 $  2,258,840

23.7%

 £ 1,809,643

 £1,462,184

23.8%

Liabilities







Amounts due to customers, of which

 $  1,637,858

 $  1,142,869

43.3%

 £ 1,060,986

 £   739,799

43.4%

   Client deposits

 $ 1,529,392

 $ 1,130,681

35.3%

 £990,723

 £   731,909

35.4%

   Promissory notes

 $108,466

 $  12,188

NMF

 £  70,263

 £   7,890

NMF

Amounts due to credit institutions

 $ 551,600

 $ 642,373

-14.1%

 £357,320

 £   415,819

-14.1%

Current income tax liabilities

 $703

 $ 2,398

-70.7%

 £   455

 £   1,552

-70.7%

Deferred income tax liabilities

 $   21,702

 $   17,429

24.5%

 £  14,058

 £ 11,282

24.6%

Provisions

 $231

 $ 2,486

-90.7%

 £   150

 £   1,609

-90.7%

Other liabilities

 $   94,888

 $   60,230

57.5%

 £  61,467

 £ 38,987

57.7%

Total liabilities

 $  2,306,982

 $  1,867,785

23.5%

 £ 1,494,436

 £1,209,048

23.6%

Equity







Share capital

 $   19,687

 $   17,679

11.4%

 £  12,753

 £ 11,444

11.4%

Additional paid-in capital

 $ 283,672

 $ 269,196

5.4%

 £183,760

 £   174,255

5.5%

Treasury shares

 $   (1,884)

 $  (852)

121.1%

-£1,220

-£  551

121.4%

Other reserves

 $ 8,669

 $   15,125

-42.7%

 £5,616

 £   9,790

-42.6%

Retained earnings

 $ 152,448

 $   73,499

107.4%

 £  98,754

 £ 47,577

107.6%

Total equity attributable to shareholders of the Bank

 $ 462,592

 $ 374,647

23.5%

 £299,663

 £   242,515

23.6%

Non-controlling interests

 $   23,996

 $   16,408

46.2%

 £  15,544

 £ 10,621

46.4%

Total equity

 $ 486,588

 $ 391,055

24.4%

 £315,207

 £   253,136

24.5%

Total liabilities and equity

 $  2,793,570

 $  2,258,840

23.7%

 £ 1,809,643

 £1,462,184

23.8%

 

 

 

Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.670 per US$1.00  and GEL 1.773 per US$1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.

 

Converted to GBP for the convenience using a period-end exchange rate of GEL 2.578 per GBP 1.00 and GEL 2.739 per GBP 1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.

 

 

 

 

 

 

 

 

 



 

STANDALONE INCOME STATEMENT OF JSC BANK OF GEORGIA in US$ and GBP

 

Thousands, unless otherwise noted

US$

GBP


unaudited


 2011

2010

Change

2011

2010

Change




Y-O-Y



Y-O-Y

Loans to customers

 $   260,137

 $   206,598

25.9%

 £168,514

 £133,734

26.0%

Investment securities - AFS & HTM

 $ 22,546

 $ 10,675

111.2%

 £  14,605

 £6,910

111.4%

Amounts due from credit institutions

 $   8,249

 $   3,184

159.1%

 £5,344

 £2,061

159.3%

Interest income

 $   290,932

 $   220,457

32.0%

 £188,463

 £142,705

32.1%

Amounts due to customers

 $(96,910)

 $(54,696)

77.2%

-£  62,777

-£  35,406

77.3%

Amounts due to credit institutions

 $(57,835)

 $(50,596)

14.3%

-£  37,465

-£  32,752

14.4%

Interest expense

 $  (154,745)

 $  (105,292)

47.0%

-£100,242

-£  68,158

47.1%

Net interest income before net gains (losses) from derivative financial instruments

 $   136,187

 $   115,165

18.3%

 £  88,221

 £  74,547

18.3%

Net gains (losses) from derivative financial instruments

 $   2,984

 $  (4,557)

NMF

 £1,933

-£2,950

NMF

Net interest income

 $   139,171

 $   110,608

25.8%

 £  90,154

 £  71,597

25.9%

Fee and commission income

 $ 49,927

 $ 37,521

33.1%

 £  32,342

 £  24,288

33.2%

Fee and commission expense

 $(10,895)

 $  (7,783)

40.0%

-£7,058

-£5,038

40.1%

Net fee and commission income

 $ 39,032

 $ 29,738

31.3%

 £  25,284

 £  19,250

31.3%

Net gains from trading securities and investment securities available-for-sale

 $  532

 $73

NMF

 £   345

 £ 47

NMF

Net gains from revaluation of investment property

 $  187

 $  611

-69.4%

 £   121

 £   395

-69.4%

Net gains from foreign currencies:







- dealing

 $ 23,877

 $ 17,836

33.9%

 £  15,467

 £  11,546

34.0%

- translation differences

 $ 14,232

 $ (169)

NMF

 £9,219

-£   109

NMF

Other operating income

 $   2,755

 $   1,807

52.5%

 £1,785

 £1,170

52.6%

Other operating non-interest income

 $ 41,583

 $ 20,158

106.3%

 £  26,937

 £  13,049

106.4%

Revenue

 $   219,786

 $   160,504

36.9%

 £142,375

 £103,896

37.0%

Salaries and other employee benefits

 $(52,061)

 $(39,818)

30.7%

-£  33,725

-£  25,775

30.8%

General and administrative expenses

 $(28,017)

 $(22,938)

22.1%

-£  18,149

-£  14,848

22.2%

Depreciation and amortization

 $(12,995)

 $(12,987)

0.1%

-£8,418

-£8,407

0.1%

Other operating expenses

 $  (1,955)

 $  (1,304)

49.9%

-£1,266

-£   844

50.0%

Other operating non-interest expenses

 $(95,028)

 $(77,047)

23.3%

-£  61,558

-£  49,874

23.4%

Operating income before cost of credit risk

 $   124,758

 $ 83,457

49.5%

 £  80,817

 £  54,022

49.6%

Impairment charge on loans to customers

 $ 13,361

 $ 22,036

-39.4%

 £8,655

 £  14,264

-39.3%

(Impairment reversal) charge on other assets and provisions

 $  (2,292)

 $ (459)

NMF

-£1,484

-£   297

NMF

Cost of credit risk

 $ 11,069

 $ 21,577

-48.7%

 £7,171

 £  13,967

-48.7%

Net operating income

 $   113,689

 $ 61,880

83.7%

 £  73,646

 £  40,055

83.9%

Impairment of property and equipment

 $   -

 $ (245)

-100.0%

 £  -  

-£   159

-100.0%

Other non-operating income

 $   -

 $  153

-100.0%

 £  -  

 £ 99

-100.0%

Other non-operating expense

 $  (7,877)

 $ (460)

NMF

-£5,102

-£   298

NMF

Net non-operating expenses

 $  (7,877)

 $ (552)

NMF

-£5,102

-£   358

NMF

Profit before income tax expense from continuing operations

 $   105,812

 $ 61,328

72.5%

 £  68,544

 £  39,697

72.7%

Income tax expense

 $ 10,672

 $   9,063

17.8%

 £6,913

 £5,867

17.8%

Profit for the period from continuing operations

 $ 95,140

 $ 52,265

82.0%

 £  61,631

 £  33,830

82.2%

Net loss from discontinued operations

 $   9,113

 $   -

NMF

 £5,903

 £  -  

NMF

Net profit for the period

 $ 86,027

 $ 52,265

64.6%

 £  55,728

 £  33,830

64.7%

 

 

Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.670 per US$1.00  and GEL 1.773 per US$1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.

 

Converted to GBP for the convenience using a period-end exchange rate of GEL 2.578 per GBP 1.00 and GEL 2.739 per GBP 1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.



STANDALONE BALANCE SHEET OF JSC BANK OF GEORGIA in US$ and GBP

 

 

Thousands, unless otherwise noted

US$

GBP


unaudited


2011

2010

 Change

2011

2010

 Change

Assets



 Y-O-Y



 Y-O-Y

Cash and cash equivalents

 $ 364,202

 $ 315,241

15.5%

 £235,926

 £   204,061

15.6%

Amounts due from credit institutions

 $ 168,332

 $   58,045

190.0%

 £109,043

 £ 37,573

190.2%

Investment securities - AFS & HTM

 $ 246,732

 $ 158,725

55.4%

 £159,830

 £   102,746

55.6%

Loans to customers and finance lease receivable

 $  1,578,062

 $  1,240,811

27.2%

 £ 1,022,251

 £   803,198

27.3%

Investments in associates

 $ 102,420

 $ 190,567

-46.3%

 £  66,347

 £   123,357

-46.2%

Investment properties

 $   43,626

 $   44,712

-2.4%

 £  28,260

 £ 28,943

-2.4%

Property and equipment

 $ 142,154

 $ 126,140

12.7%

 £  92,086

 £ 81,653

12.8%

Goodwill

 $   13,622

 $   12,830

6.2%

 £8,824

 £   8,305

6.2%

Other intangible assets

 $   11,056

 $ 9,613

15.0%

 £7,162

 £   6,222

15.1%

Current income tax assets

 $ 4,010

 $  -  

NMF

 £2,597

 £ -  

NMF

Prepayments

 $   10,692

 $ 9,341

14.5%

 £6,926

 £   6,046

14.6%

Other assets

 $   28,598

 $ 9,399

204.3%

 £  18,525

 £   6,084

204.5%

Total assets

 $  2,713,506

 $  2,175,424

24.7%

 £ 1,757,777

 £1,408,188

24.8%

Liabilities







Amounts due to customers, of which

 $  1,632,596

 $  1,029,080

58.6%

 £ 1,057,578

 £   666,141

58.8%

   Client deposits

 $ 1,524,130

 $ 1,016,892

49.9%

 £987,315

 £   658,251

50.0%

   Promissory notes

 $108,466

 $  12,188

NMF

 £  70,263

 £   7,890

NMF

Amounts due to credit institutions

 $ 529,400

 $ 628,628

-15.8%

 £342,939

 £   406,922

-15.7%

Current income tax liabilities

 $  -  

 $ 2,350

-100.0%

 £  -  

 £   1,521

-100.0%

Deferred income tax liabilities

 $   18,716

 $   16,192

15.6%

 £  12,124

 £ 10,481

15.7%

Provisions

 $231

 $ 2,486

-90.7%

 £   150

 £   1,609

-90.7%

Other liabilities

 $   32,837

 $   24,874

32.0%

 £  21,268

 £ 16,102

32.1%

Total liabilities

 $  2,213,780

 $  1,703,610

29.9%

 £ 1,434,059

 £1,102,776

30.0%

Equity







Share capital

 $   19,687

 $   17,679

11.4%

 £  12,753

 £ 11,444

11.4%

Additional paid-in capital

 $ 281,740

 $ 268,846

4.8%

 £182,508

 £   174,028

4.9%

Treasury shares

 $   (1,884)

 $  (776)

142.8%

-£1,220

-£  502

143.0%

Other reserves

 $   24,760

 $   29,685

-16.6%

 £  16,040

 £ 19,215

-16.5%

Retained earnings

 $ 175,423

 $ 156,380

12.2%

 £113,637

 £   101,227

12.3%

Total equity

 $ 499,726

 $ 471,814

5.9%

 £323,718

 £   305,412

6.0%

Total liabilities and equity

 $  2,713,506

 $  2,175,424

24.7%

 £ 1,757,777

 £1,408,188

24.8%

 

 

 

Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.670 per US$1.00  and GEL 1.773 per US$1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.

 

Converted to GBP for the convenience using a period-end exchange rate of GEL 2.578 per GBP 1.00 and GEL 2.739 per GBP 1.00, such exchange rates being the official Georgian Lari to U.S. dollar period-end exchange rates as reported by the National Bank of Georgia on 31 December 2011 and 31 December 2010.

 

 

 



 

KEY RATIOS

 

Bank of Georgia Consolidated

Ratios presented on a consolidated basis, unless otherwise noted

 

Profitability Ratios

2011

2010

ROAA 1

3.60%

2.45%

ROAE2

20.4%

13.5%

Interest Income To Average Int. Earning Assets Excl. Cash 3

18.1%

19.2%

Interest Income To Average Int. Earning Assets Incl. Cash 3

14.8%

16.3%

Cost of Funds 4

8.0%

8.2%

Cost of Funds (excluding gains (losses) from interest rate derivatives)

8.1%

7.9%

Net Spread Excl. Cash  5

10.0%

11.3%

Net Spread Incl. Cash 5

6.7%

8.4%

Net Interest Margin 6

7.1%

8.0%

Net Interest Margin (excluding gains (losses) from interest rate derivatives)

6.9%

8.3%

Loan Yield Excl. Provisions7

17.3%

18.3%

Loan Yield Incl. Provisions7  

16.4%

16.0%

Deposit Yield

8.0%

7.5%

Interest Expense To Interest Income

53.3%

48.9%

Net Non-Interest Income To Average Total Assets 8

4.8%

4.1%

Net Non-Interest Income To Revenue

45.8%

39.8%

Net Fee And Commission Income To Average Interest Earning Assets 9

1.8%

1.9%

Net Fee And Commission Income To Revenue

17.1%

18.3%

Operating Leverage, Y-O-Y 10

18.3%

15.1%

Operating Leverage, Y-O-Y, Normalized 10

12.7%

22.6%

Total Operating Income (Revenue) To Total Assets

9.5%

8.7%

Recurring Earning Power 11

5.3%

4.3%

Net Income To Revenue

34.2%

23.8%




Efficiency Ratios



Operating Cost To Average Total Assets 12

5.2%

5.9%

Cost / Income 13

49.3%

57.6%

Cash Cost / Income

36.6%

43.7%

Personnel Cost To Revenue 14

27.0%

30.2%

Personnel Cost To Operating Cost

54.7%

52.3%

Personnel Cost To Average Total Assets

2.8%

3.1%




Liquidity Ratios



Net Loans To Total Assets 15

56.1%

59.1%

Average Net Loans To Average Total Assets

57.5%

57.5%

Interest Earning Assets To Total Assets

80.7%

79.1%

Average Interest Earning Assets To Average Total Assets

80.7%

76.8%

Liquid Assets To Total Assets 16

28.4%

25.3%

Liquid Assets To Total Short-Term Liabilities, NBG Stand-Alone

37.8%

34.7%

Liquid Assets To Total Liabilities, IFRS Consolidated

34.8%

30.9%

Net Loans To Client Deposits

102.4%

118.0%

Net Loans to Customer Funds

95.7%

116.8%

Average Net Loans To Average Client Deposits

114.8%

127.2%

Net Loans To Total Deposits 17

100.2%

110.2%

Net Loans To (Total Deposits + Total Equity)

76.4%

83.3%

Net Loans To Total Liabilities

67.9%

71.4%

Total Deposits To Total Liabilities

67.8%

64.8%

Client Deposits To Total Deposits

97.8%

93.4%

Client Deposits To Total Liabilities

66.3%

60.5%

Total Deposits To Total Assets

56.0%

53.6%

Client Deposits To Total Assets

54.7%

50.1%

Client Deposits To Total Equity (Times)

3.14

2.89

Due From Banks / Due To Banks 18

1298.4%

419.5%

Total Equity To Net Loans

31.1%

29.3%

Leverage (Times) 19

4.7

4.8




Asset Quality



NPLs (in GEL thousands) 20

   97,191

 117,580

NPLs To Gross Loans 21

3.6%

4.6%

NPL Coverage Ratio 22

118.5%

149.8%

Cost of Risk 23

0.9%

2.1%

Reserve For Loan Losses To Gross Loans 24

4.2%

6.9%

% Of Loans To Clients Collateralized

87.0%

91.8%

Equity To Average Net Loans To Clients

33.8%

35.7%




Capital Adequacy:



Equity To Total Assets

17.4%

17.3%

BIS Tier I Capital Adequacy Ratio, Consolidated 25

19.9%

17.5%

BIS Total Capital Adequacy Ratio, Consolidated 26

28.5%

26.6%

NBG Tier I Capital Adequacy Ratio 27

10.5%

13.0%

NBG Total Capital Adequacy Ratio 28

16.2%

14.5%




Per Share Values:



Basic EPS (GEL) 29

4.44

2.78

Basic EPS (US$)

$2.66

$1.57

Basic EPS (GEL), from continuing operations

4.95

2.78

Basic EPS (US$), from continuing operations

$2.96

$1.57

Book Value Per Share (GEL)30

26.09

22.23

Book Value Per Share (US$)

$15.62

$12.54

Ordinary Shares Outstanding - Weighted Average, Basic31

29,866,366

30,037,041

Ordinary Shares Outstanding - Period End

32,877,547

31,344,860

Ordinary Shares Outstanding - Diluted 32

33,501,366

33,511,655




Selected Operating Data:



Full Time Employees, Group, Of Which:

7,301

5,610

 - Full Time Employees, BOG Stand-Alone

3,364

3,110

 - Full Time Employees, Aldagi BCI

2,911

1,046

 - Full Time Employees, BNB

260

255

 - Full Time Employees, Other

766

1,199

Total Assets Per FTE, BOG Stand-Alone (in GEL thousands) 33

1,347

1,240

Number Of Active Branches, Of Which:

158

142

 - Number Of Flagship Branches

34

34

 - Metro Branches

24

24

  Express Branches

9

-

 - All Other Branches

91

84

Number Of ATMs

426

405

Number Of Cards Outstanding

663,205

603,049

Number Of POS Terminals

2,828

2,330

 

 



 

 

NOTES TO KEY RATIOS

 

1

Return On Average Total Assets (ROAA) equals Net Profit for the period from continuing operations divided by monthly Average Total Assets for the same period;

2

Return On Average Total Equity (ROAE) equals Net Profit for the period from continuing operations attributable to shareholders of the Bank divided by monthly Average Equity attributable to shareholders of the Bank for the same period;

3

Average Interest Earning Assets are calculated on a monthly basis; Interest Earning Assets Including Cash include: Amounts Due From Credit Institutions, Investment Securities Held-To-Maturity, Investments Securities Available-For-Sale (but excluding equity instruments - shares, etc.) and Loans To Customers And Finance Lease Receivables; Interest Earning Assets Excluding Cash include all of the above except Amounts Due From Credit Institutions;

4

Cost Of Funds equals Interest Expense of the period (adjusted for the gains or losses from revaluation of interest rate derivatives) divided by monthly Average Interest Bearing Liabilities; Interest Bearing Liabilities Include: Amounts Owed To Credit Institutions and Amounts Owed To Customers;

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 (adjusted for the gains or losses from revaluation of interest rate derivatives) divided by monthly Average Interest Earning Assets Including Cash for the same period;

7

Loan Yield Including Provisions equals Interest Income From Loans To Customers And Finance Lease Receivables, less Impairment Charge for Loans To Customers And Finance Lease Receivables, divided by monthly Average Gross Loans To Customers And Finance Lease Receivables; Loan Yield Excluding Provisions equals Interest Income From Loans To Customers And Finance Lease Receivables divided by monthly Average Gross Loans To Customers And Finance Lease Receivables;

8

Net Non-Interest Income includes: Net Fee And Commission Income, Net Insurance Revenues and Other Operating Non-Interest Income (excluding Net Gains or Losses From Derivative Financial Instruments);

9

Net Fee And Commission Income also includes net commission income from documentary operations (such as income from guarantees and letters of credit);

10

Operating Leverage equals percentage change in Revenue less percentage change in Other Operating Non-Interest Expenses;

11

Recurring Earning Power equals Operating Income Before Cost of Credit Risk for the period divided by monthly average Total Assets of the same period;

12

Operating Cost equals Other Operating Non-Interest Expenses;

13

Cost / Income Ratio equals Operating Cost divided by Revenue;

14

Personnel Cost equals Salaries And Other Employee Benefits;

15

Net Loans equal Net Loans To Customers And Finance Lease Receivables;

16

Liquid Assets include: Cash And Cash Equivalents, Amounts Due From Credit Institutions, Investment Securities Held-To-Maturity and Investment Securities Available-For-Sale (but excluding equity instruments - shares, etc);

17

Total Deposits include Client Deposits and Corresponding Accounts, Times Deposits and Inter-Bank Loans from other banks;

18

Due From Banks equals Cash And Cash Equivalents plus Amounts Due From Credit Institutions (but excluding Cash On Hand); Due To Banks equals Corresponding Accounts, Times Deposits and Inter-Bank Loans from other banks;

19

Leverage (Times) equals Total Liabilities divided by Total Equity;

20

NPLs (in GEL) equals total gross non-performing loans as of the period end; non-performing loans are loans that either have debts in arrears for more than 90 calendar days or, based on the reasonable opinion of the Bank's management, are qualified to be non-performing due to other factors (e.g. restructuring due to the borrower's inability to meet payment obligations);

21

Gross Loans equals Gross Loans To Customers And Finance Lease Receivables;

22

NPL Coverage Ratio equals Allowance For Impairment Of Loans And Finance Lease Receivables divided by NPLs;

23

Cost Of Risk equals Impairment Charge for Loans To Customers And Finance Lease Receivables for the period divided by monthly average Gross Loans To Customers And Finance Lease Receivables over the same period;

24

Reserve For Loan Losses To Gross Loans equals Allowance For Impairment Of Loans And Finance Lease Receivables divided by Gross Loans And Finance Lease Receivables;

25

BIS Tier I Capital Adequacy Ratio equals Tier I Capital divided by Total Risk Weighted Assets, both calculated in accordance with the requirements of Basel Accord I;

26

BIS Total Capital Adequacy Ratio equals Total Capital divided by Total Risk Weighted Assets, both calculated in accordance with the requirements of Basel Accord I;

27

NBG Tier I Capital Adequacy Ratio equals Tier I Capital a divided by Total Risk Weighted Assets, both calculated in accordance with the requirements the National Bank of Georgia instructions;

28

NBG Total Capital Adequacy Ratio equals Total Capital divided by Total Risk Weighted Assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions;

29

Basic EPS equals Net Profit for the period attributable to shareholders' of the Bank divided by the weighted average number of outstanding ordinary shares over the same period;

30

Book Value Per Share equals Total Equity attributable to shareholders of the Bank divided by Net Ordinary Shares Outstanding at period end; Net Ordinary Shares Outstanding equals total number of Ordinary Shares Outstanding less number of Treasury Shares at period end;

31

Weighted average number of ordinary shares equal average of daily outstanding number of shares less daily number of treasury shares;

32

Diluted number of ordinary shares equals weighted average number of ordinary shares plus dilutive number of shares known to the management as of the period end;

33

Equals stand-alone Total Assets of the Bank divided by total number of full-time employees of the Bank.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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