Bank of Georgia Q3 2007 Results Overview of Georgia Q… · January 2008 Bank of Georgia Q3 2007...

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Bank of Georgia Q3 2007 Results Overview January 2008 Standard & Poor’s: ‘B+/B’ Stable Moody’s: ‘B3/NP’ (FC) & ‘Ba1/NP’ (LC); Stable Fitch Ratings: ‘B+/B’ Stable LSE: BGEO GSE: GEB Berlin-Bremen Boerse: B7D1 Reuters: BGEO.L Bloomberg: BGEO.LI

Transcript of Bank of Georgia Q3 2007 Results Overview of Georgia Q… · January 2008 Bank of Georgia Q3 2007...

Page 1: Bank of Georgia Q3 2007 Results Overview of Georgia Q… ·  January 2008 Bank of Georgia Q3 2007 Results Overview Page 3

Bank of Georgia Q3 2007 Results Overview

January 2008

Standard & Poor’s: ‘B+/B’ Stable

Moody’s: ‘B3/NP’ (FC) & ‘Ba1/NP’ (LC); Stable

Fitch Ratings: ‘B+/B’ Stable

LSE: BGEO

GSE: GEB

Berlin-Bremen Boerse: B7D1

Reuters: BGEO.L

Bloomberg: BGEO.LI

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January 2008

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No.1 by assets (circa 34.0%),(1) loans (circa 30.8%),(1) deposits (circa 31.4%)(1)

and equity (circa 33.6%)(1)

6.0% YTD 2007 market share gain in total assets (+10.2 % in 2006)

4.4% YTD 2007 market share gain in gross loans (+8.2 % in 2006)

6.9% YTD 2007 market share gain in total deposits (+5.5 % in 2006)

Leadership in retail banking, with

Introduction To Bank of GeorgiaThe leading universal bank in Georgia

Notes: (1) As of 30 September 2007; based on standalone accounts as reported to the National Bank of Georgia and as published by

the National Bank of Georgia www/nbg.gov.ge

30 November 2007 30 September 2007 31 March 2007 YE 2006

Retail Accounts 655,000+ 595,000+ 450,000+ 425,000+

Cards Outstanding 593,000+ 520,000 340,000+ 285,000+

Branches 116 109 103 100

ATMs 217 185 146 124

Top brand, best distribution network and broadest range of services of any bank

in Georgia

Leading corporate and investment banking franchise

Approximately 64,000 legal entities have opened accounts

Top broker-dealer with circa 63% market share in equities trading by September

2007

Leading card-processing, leasing, insurance, wealth management and asset

management services provider

The only Georgian entity with credit ratings from all three global rating agencies

S&P: „B+/B‟; Stable – at the sovereign ceiling

Moody‟s: „B3/NP (FC)‟ & „Ba1/NP (LC)‟; Stable

Fitch Ratings: „B+/B‟; Stable

Listed on the London Stock Exchange (GDRs) and Georgian Stock Exchange

Market Cap (LSE) US$978mln as of 30 September 2007

Approximately 91% free float

2006 share price performance 383%, 2007 share performance 31%

Issue of the first ever Eurobonds in Georgia

Bloomberg: BKGEO; 5 year, 9%, US$200 mln

B+/Ba2/B+ (composite BB-)

Investment Highlights

A „leveraged play‟ on Georgia‟s

economic growth

Diversified revenue streams and

disciplined capital management

Domestic universal banking strategy

driving profitable growth

Domestic sector consolidator and

aspirations for regional expansion

Sophisticated management team with

Western banking & finance background

and education

Transparency and good governance, circa

85% institutionally owned, majority of

the Board seats held by large shareholders

and an independent director

Strategy

Consolidate leading position in the

domestic banking market

Promote the future growth of the retail

banking business

Further diversify the business, including

funding base and loan portfolio

Continue improving risk management

policies and procedures

Actively pursue sensible regional

expansion opportunities

Market Leader In All

Six Business Lines

• Retail Banking

• Corporate &

Investment Banking

• Insurance

• Wealth

Management

• Asset Management

• Securities

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January 2008

Bank of Georgia Q3 2007 Results Overview

Page 3

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January 2008

Millions, unless otherwise noted 9 Months 2007 9 Months 2006 Growth, Y-O-Y1

Bank of Georgia (Consolidated, IFRS Based) GEL US$ GEL US$

Unaudited Unaudited

Net Interest Income 90.4 54.5 42.0 24.2 115%

Net Non-Interest Income 59.0 35.6 30.4 17.5 94%

Total Operating Income (Revenue)2 149.4 90.1 72.4 41.7 107%

Recurring Operating Costs 58.5 35.3 33.6 19.4 74%

Normalized Net Operating Income3 90.8 54.8 38.8 22.3 134%

Pre-Bonus Result 82.8 50.0 28.6 16.5 190%

Net Income 49.9 30.1 17.3 10.0 188%

Consolidated EPS (Basic), GEL & US$4 1.95 1.17 1.10 0.64 84%

Consolidated EPS (Fully Diluted), GEL & US$5 1.83 1.10 0.95 0.55 102%

ROAA 6, annualised 3.5% 3.2%

ROA, annualised 2.8% 2.7%

ROAE7, annualised 16.2% 20.5%

ROE, annualised 14.3% 16.8%

Net Loans 1,277.2 770.3 567.2 326.8 125%

Total Assets 2,403.3 1,449.9 856.7 493.6 181%

Total Deposits 1,134.7 683.8 483.9 278.8 134%

Total Liabilities 1,938.3 1,169.1 719.7 414.7 169%

Shareholders‟ Equity 465.0 280.5 137.0 79.0 239%

Book Value Per Share 17.12 10.33 8.19 4.72 109%

Q3 2007 Results Highlights

Page 4

1 Compared to the same period in 2006; growth calculations based on GEL except for the EPS.2 Revenue includes Net Interest Income and Net Non-Interest Income.3 Normalized for Net Non-Recurring Costs.4 Basic EPS equals Net Income of the period divided by weighted average outstanding shares for the period.5 Fully Diluted EPS equals Net Income of the period divided by the number of outstanding ordinary shares as of the period end plus number of ordinary shares in contingent liabilities. 6 Return on Average Total Assets equals annualised Net Income for the period divided by the average Total Assets for the period.7 Return on Average Total Shareholders‟ Equity equals annualised Net Income for the period divided by the average Total Shareholders‟ Equity for the period.

Increasing

Operating

Leverage

Despite Tier I

CAR of 23.2%

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January 2008

4.05.6

1.3

2.9

-

0.01

0.8

5.5

1.8

6.1

0.0

5.0

10.0

15.0

20.0

25.0

September 2006, YTD September 2007, YTD

GEL mln

Net Insurance Income Brokerage Income Asset Management Income Realised Net Investment Gain Other

7.9

20.1

39%

121%

612%

241%

+155%

42.0

90.411.8

18.4

2.7

3.8

7.9

16.6

7.9

20.1

0

20

40

60

80

100

120

140

160

September 2006, YTD September 2007, YTD

Net Interest Income Net Fee & Commission Income

Net Income From Documentary Operations Net Foreign Currency Related Income

Net Other Non-Interest Income

72.4

149.4+106%

+115%

+56%

+40%

+109%

+155%

GEL mln

Q3 2007 Performance

Page 5

*Based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge

Composition of Revenue (GEL mln) Revenue Market Share*

Net Interest Income vs. Net Non-Interest Income

(GEL mln)Net Other Non-Interest Income (GEL mln)

21%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

September 2006, YTD September 2007, YTD

42.0

90.4

30.4

59.0

0

10

20

30

40

50

60

70

80

90

100

September 2006, YTD September 2007, YTD

GEL mln

Net Interest Income Net Non-Interest Income

+115%

+94%

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January 2008

Q3 2007 Performance cont’d

Page 6

Pre-Bonus Result Net Income

Normalised Net Operating IncomeOperating Cost Structure

14.7

27.4

9.3

16.4

4.1

6.7

3.7

6.7

1.8

1.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

September 2006, YTD September 2007, YTD

GEL mln

Personnel Costs Selling, General & Administrative Expenses

Procurement & Operations Support Expenses Depreciation And Amortization

Other Operating Expenses

33.6

58.5

+86%

+76%

+65%

+83%

-29%

+74%

38.8

90.8

0

10

20

30

40

50

60

70

80

90

100

September 2006, YTD September 2007, YTD

GEL mln

+134%

28.6

82.8

0

10

20

30

40

50

60

70

80

90

September 2006, YTD September 2007, YTD

GEL mln

+190%

17.3

49.9

0

10

20

30

40

50

60

September 2006, YTD September 2007, YTD

GEL mln

+188%

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January 2008

Composition of the Balance Sheet

Page 7

Assets, +181% y-o-y (+98% YTD) Liabilities & Shareholders’ Equity

279

55767

142

694

1,277

66

333

108

93

0

500

1,000

1,500

2,000

2,500

YE 2006 30-Sep-07

GEL mln

Other Assets Property, Equipment & Intangible Assets

Loans To Clients, Net Loans & Advances To Credit Institutions

Cash & Equivalents

1,213

2,403+98%

CIB701

RB523

CC19

WM34

+120% y-o-y

+157% y-o-y

+98% y-o-y

-32% y-o-y

Cash & Equivalents Loans & Advances To Credit Institutions

Loans To Clients, Net Property, Equipment & Intangible Other Assets

375465

55

186224

688

560

1,065

0

500

1,000

1,500

2,000

2,500

YE 2006 Sep-07

GEL mln

Equity Other Liabilities Borrowed Funds Client Deposits

1,213

2,403+98%

+137% YTD

CIB283

RB206

WM65

CIB671

RB323

WM64

+57% YTD

-2% YTD

1,938

838

Client Deposits Borrowed Funds Other Liabilities Equity

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January 2008

CIB

GEL 715.3 mln

(+82% YTD)

RB

GEL 533.6 mln

(+90% YTD)

WM

GEL 34.3 mln

(+52% YTD)

CC

GEL 19.4 mln

(+12% YTD)

Consumer Loans

GEL 103.3 mln

(+109% YTD)

Mortgage Loans

GEL 134.8 mln

(+112% YTD)

Micro Loans

GEL 148.5

(+48% YTD)

Other RB Loans

GEL 147.0 mln

(+135% YTD)

Card Overdrafts &

Credit Card Balances

GEL 43.8 mln

(+1036% YTD)

Car Loans

GEL 30.6 mln

(+213% YTD)

POS Loans

GEL 42.9 mln

(+93% YTD)

Legacy Retail Loans

GEL 29.7 mln

(+11% YTD)

Diversified Loan Book...

Page 8

RB & WM

Account for 44%

of Gross Loans

43% Market

Share in Retail

Loans as at 30

September 2007

Total Gross Loans

GEL 1,302 mln

Gross CIB Loans, Q3 2007 (+82% YTD & +110% y-o-y)Gross WM Loans, Q3 2007 (+52% YTD & +89% y-o-y)

Gross Loans, Q3 2007 (+82% YTD & +121% y-o-y) Gross RB Loans, Q3 2007 (+90% YTD & +145% y-o-y)

Mortgage Loans

GEL 22.9 mln

(+33% YTD)

Consumer Loans

GEL 6.0 mln

(+241% YTD)

Car Loans

GEL 3.2 mln

(+39% YTD)

Other WM Loans

GEL 2.2 mln

(+78% YTD)SMEGEL 195.1 mln(+68% YTD)

TradeGEL 139.9 mln(+98% YTD)

Construction & Real EstateGEL 102.4 mln(+50% YTD)

EnergyGEL 105.3 mln(+97% YTD)

Industry & StateGEL 39.6 mln(+19% YTD)

Pharmaceutical & HealthcareGEL 15.1 mln(-42% YTD)

Fast Moving Consumer GoodsGEL 99.1mln(+927% YTD)

OtherGEL 18.8 mln(+72% YTD)

Total Gross RB Loans

GEL 533.6 mln

Total Gross CIB Loans

GEL 715.3 mln

Total Gross WM Loans

GEL 34.3 mln

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14.3%15.3%

16.7%

22.0%

24.3%23.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

September 2006, YTD 2006 September 2007, YTD

Top Ten Borrower Concentration Top Twenty Borrower Concentration

And Conservative Provisioning Policy

Page 9

Loan Book

Collateralisation

90.1% in Q3 2007

Note: NPLs include 90 days overdue loans

NPLs/Gross Loans To Clients NPL Coverage Ratio

Top Ten & Top 20 Borrower Concentration Reserve For Loan Losses To Gross Loans

3.3%

2.3%

1.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

September 2006, YTD 2006 September 2007, YTD

108.2%

129.9%

152.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

160.0%

180.0%

September 2006, YTD 2006 September 2007, YTD

3.6%

3.0%

2.0%

2.8%

2.7%

1.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

September 2006, YTD 2006 September 2007, YTD

Reserve for loan losses to gross loans Cost of Risk, Annualised

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January 2008

Diversified Funding Base

Page 10

Note: Liquidity & Currency Risk Management calculations are based on the National Bank of Georgia requirements

Client Deposits, Q3 2007 (+90% YTD & +128% y-o-y)Funding Sources, Q3 2007

Liquidity Risk Management, Q3 2007 Currency Risk Management, Q3 2007

812.3

117.1

404.7 460.6

139.5

10.4

855.0

63.1

308.8

526.8

78.4 -

(42.7) 11.3

107.2 40.9

102.0 112.4

-100

0

100

200

300

400

500

600

700

800

900

Up To 1 Month, Consolidated

1-3 Month 3 Month - 1 Year 1-5 Years Over 5 Years Past Due

GEL mln

Assets Liabilities Accumulated Liquidity Gap

5.5%

2.1%

4.9%

7.5%

1.8%

9.2%

15.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

2003 2004 2005 2006 Q1 2007 Q2 2007 Q3 2007

Open Currency Position As % Of Regulatory Capital

International Borrowings, 28.6%

Equity, 19.3%Corporate Current Accounts, 19.8%

Individual Time & Demand

Deposits, 9.3%

Corporate Time & Demand

Deposits, 8.1%

Individual Current Accounts, 7.1%

Interbank Loans, 2.9%

Other liabilities, 4.9%

Current

Accounts, 61%

Time

Deposits, 30%

Demand

Deposits, 9%

Total Client Deposits

GEL 1,065 mln

Total Liabilities GEL 1,938 mln

Total Equity GEL 465 mln

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January 2008

Page 11

Business Overview

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January 2008

Bank of Georgia Q3 2007 Business Unit Results

Page 12

Total Operating Income (Revenue) Pre-Bonus Result Net Income

(GEL, ‘000) 9M ‘07 Y-O-Y

Growth

9M ‘06 9M ‘07 Y-O-Y

Growth

9M ‘06 9M 07 Y-O-Y

Growth

9M 06

CIB 49,057 80% 27,251 33,827 124% 15,126 22,058 136% 9,363

RB 65,326 121% 29,621 31,982 268% 8,698 20,891 298% 5,250

WM 3,476 115% 1,613 2,061 278% 545 1,361 304% 337

Corporate Centre 4,381 -40% 7,337 -169 -105% 3,134 -4,863 -420% 1,519

Subtotal 122,240 86% 65,822 67,701 146% 27,503 38,447 140% 16,469

Galt & Taggart Securities 18,703 939% 1,800 15,117 980% 1,400 10,926 870% 1,126

AM 2,403 425% 458 -1,258 43% -878 -1,152 31% -878

Insurance 6,032 41% 4,275 1,260 125% 561 645 11% 582

Subtotal 27,138 1405% 6,533 15,119 1148% 1,083 10,419 912% 830

Total 149,379 107% 72,355 82,821 190% 28,588 49,868 188% 17,301

Ukraine 21,585 NMF N/A 8,130 NMF N/A 6,097 NMF N/A

Total, Pro Forma, including

Ukraine

170,964 NMF NMF 90,950 NMF NMF 55,965 NMF NMF

Total Operating Income (Revenue) Pre-Bonus Result Net Income

(US$ ‘000) 9M ‘07 Y-O-Y

Growth

9M ‘06 9M ‘07 Y-O-Y

Growth

9M ‘06 9M 07 Y-O-Y

Growth

9M 06

CIB 29,522 89% 15,661 20,378 134% 8,693 13,288 147% 5,381

RB 39,353 131% 17,024 19,266 285% 4,999 12,585 317% 3,017

WM 2,094 126% 927 1,242 296% 313 820 323% 194

Corporate Centre 2,639 -40% 4,420 -102 -105% 1,888 -2,930 -420% 915

Subtotal 73,639 95% 37,829 40,784 158% 15,806 23,763 151% 9,465

Galt & Taggart Securities 11,267 989% 1,034 9,107 1032% 805 6,582 917% 647

AM 1,448 450% 263 -758 50% -505 -694 38% -505

Insurance 3,634 48% 2,457 759 135% 322 389 16% 334

Subtotal 16,348 1487% 3,755 9,108 1217% 622 6,277 971% 447

Total 89,987 116% 41,583 49,892 204% 16,429 30,041 202% 9,942

Ukraine 13,003 NMF N/A 4,898 NMF N/A 3,673 NMF N/A

Total, Pro Forma, including

Ukraine

102,990 NMF NMF 54,790 NMF NMF 33,714 NMF NMF

In 2007 non-banking

Total Operating

Income contribution of

18.2% vs. 9.0% in 2006

In 2007 non-banking

Pre-Bonus

contribution of 18.3%

vs. 3.8% in 2006

In 2007 non-banking

Net Income

contribution of 20.9%

vs. 4.8% in 2006

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January 2008

Bank of Georgia Q3 2007 Business Unit Results cont’d

Page 13

Total Assets Total Liabilities

(GEL, ‘000) 9M ‘07Y-O-Y Growth 9M‘06 9M ‘07 Y-O-Y Growth 9M ‘06

CIB 1,235,060 168% 460,989 1,081,302 166% 407,160

RB 919,474 211% 295,583 628,656 141% 261,330

WM 70,084 185% 24,561 83,924 282% 21,963

Corporate Centre 15,112 -58% 35,767 60,136 366% 12,892

Subtotal 2,239,730 174% 816,809 1,853,927 164% 703,345

Galt & Taggart Securities 51,442 305% 12,704 14,230 265% 3,897

AM 57,822 451% 10,486 30,926 1747% 1,674

Insurance 54,339 228% 16,584 39,258 266% 10,735

Subtotal 163,603 984% 39,774 84,414 418% 16,306

Total 2,403,333 181% 856,674 1,938,341 169% 719,651

Ukraine 410,681 NMF N/A 341,350 NMF N/A

Total Pro Forma Including

Ukraine

2,814,014 NMF NMF 2,279,691 NMF NMF

Total Assets Total Liabilities

(GEL, ‘000) 9M ‘07Y-O-Y Growth 9M ‘06 9M ‘07 Y-O-Y Growth 9M ‘06

CIB 744,012 181% 264,936 651,387 178% 234,000

RB 553,900 226% 169,875 378,654 152% 150,190

WM 42,219 199% 14,116 50,557 301% 12,622

Corporate Centre 9,104 -58% 21,546 36,227 366% 7,766

Subtotal 1,349,235 187% 469,430 1,116,823 176% 404,221

Galt & Taggart Securities 30,989 324% 7,301 8,572 283% 2,240

AM 34,833 478% 6,026 18,630 1836% 962

Insurance 32,734 243% 9,531 23,649 283% 6,170

Subtotal 98,556 1046% 22,289 50,852 2403% 9,371

Total 1,447,791 194% 492,341 1,167,675 182% 413,593

Ukraine 247,398 NMF N/A 205,633 NMF N/A

Total Pro Forma Including

Ukraine

1,695,189 NMF NMF 1,373,308 NMF NMF

In 2007 6.8% of Total

Assets attributed to

non-banking Assets vs.

4.6% in 2006

In 2007 4.4% of Total

Liabilities attributed to

non-banking liabilities

vs. 2.3% in 2006

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January 2008

Corporate & Investment Banking (CIB)

Major new corporate client acquisitions include the UAE-based Rakeen Development, Energo Pro, a leading energy distribution company in Georgia,

and GPC, the country‟s third largest pharmacy chain.

Increased the number of corporate clients using the bank‟s payroll services from 480 at the end of 2006 to over 675 by the end of September 2007. By

30 September 2007, the number of individual clients serviced through the corporate payroll programs administered by the bank increased from

approximately 83,500 at the beginning of the year to over 135,000.

Approximately 16,000 legal entities opened accounts at the bank during the nine months in 2007, bringing the total to over 60,000.

Retail Banking (RB)

Increased the number of retail current accounts from approximately 420,000 at the beginning of the year to more than 595,000 by 30 September, 2007.

Increased the number of branches (service centers) from 100 at the beginning of the year to 109 by 30 September 2007.

The purchase of commercial space previously rented by seven existing branches resulted in the implied cost savings of GEL 0.3 million per annum.

Bought and leased premises for 34 new branches, 28 of which remain to be fitted out and are expected to be operational by Q2 2008.

Stepped up the issuance of credit cards, as the number of credit cards issued reached 46,227 in Q3 2007, compared to approximately 17,000 issued in Q2

2007 and approximately 5,800 issued in Q1 2007. As of 30 September 2007, the number of credit cards outstanding amounted to approximately 69,224,

up from 356 at the beginning of the year.

Increased the issuance of debit cards, with over 229,000 debit cards issued during the nine months of 2007, compared to approximately 158,231 debit

cards issued during the first nine months of 2006. The number of debit cards outstanding increased from approximately 285,000 at the beginning of the

year to approximately 459,000 by the end of September 2007.

Continued to make gains in merchant acquiring as the installed POS terminal footprint grew to 1,093.

Total number of cards serviced by Georgian Card grew from 370,000 at the beginning of the year to 706,249 by 30 September 2007, while the number

of transaction authorisations processed by Georgian Card during the nine months of 2007 grew 181.0% y-o-y to approximately 12.2 million.

Continued investing in the electronic banking channels, as the number of ATMs grew to 185 by 30 September 2007 (up from 124 at the beginning of the

year), number of mobile banking users reached 30,184, and number of registered Internet banking users grew 177.3% YTD to over 101,200.

POS express consumer lending, commenced by the bank in 2006 to complement the branch-based general-purpose consumer lending, resulted in the 840

express loan POS contracts signed with merchants (of which 548 outlets were served by 30 September 2007). POS express loan originations have

reached GEL 63.6 million during nine months of 2007 (up 387.9% y-o-y), while POS express loans outstanding amounted to GEL 42.9 million at the

end of September 2007, up 308.1% y-o-y and up 93.4% YTD.

Stepped up mortgage loan originations to GEL 103.8 million during the nine months of 2007 (up 203.1% y-o-y) resulting in mortgage loans outstanding

by 30 September 2007 of GEL 134.8 million, up 150.3% y-o-y and up 111.8% YTD.

Car loan originations of GEL 27.2 million (up 275.6% y-o-y) resulted in car loans outstanding by 30 September 2007 of GEL 30.6 million, up 259.0%

y-o-y and up 213.2% YTD.

Business Unit Highlights

Page 14

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January 2008

Insurance

Major new corporate client acquisitions include Airzena Georgian Airlines for aviation insurance and Energo Pro, for property insurance.

Wealth Management (WM)

The number of private banking clients grew from 873 at the beginning of the year to 1,187 at the end of September 2007.

Private banking mortgage loan originations of GEL 10.8 million (up 0.5% y-o-y) during nine months of 2007 resulted in mortgage loans outstanding

of GEL 22.9 million as at 30 September 2007, up and 61.6% y-o-y and up 32.8% YTD.

Private Banking car loan originations of GEL 2.0 million, up 5.8% y-o-y during nine months of 2007 resulted in car loans outstanding of GEL 3.2

million as at 30 September 2007, up 104.3% y-o-y and up 39.0% YTD.

Deborah Fairlamb appointed as Kyiv-based group head of Wealth Management.

Galt & Taggart Securities

Assets Under Custody grew 36.3% y-o-y to GEL 313.2 million as at 30 September 2007.

Proprietary book grew 244.9% YTD to GEL 25.4 million as at 30 September 2007.

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

Fully staffed Galt & Taggart Securities Ukraine.

Asset Management (AM)

The market capitalisation of Galt & Taggart Capital reached GEL 82.9 million as at 30 September 2007, an increase of 54% YTD and an increase of

384% since the company was admitted to trading on the Georgian Stock Exchange in November 2006.

Galt & Taggart Capital acquired a 51% equity interest in Planeta Forte, the leading operator of 47 newspaper kiosks in Tbilisi, allowing the

development of the cross-sell opportunities between the bank‟s Retail Banking operations as well as GTC portfolio companies.

Keren Shivta Capital management and BST, the Israel-based real estate investors signed an MOU pursuant to which they will invest US$4.8 million

in SB Real Estate. The proceeds will be invested in the development of the existing properties, as well as used for disciplined small-sized

acquisitions.

Assets Under Management at the Aldagi BCI Pension Fund grew 186.1% y-o-y (up 71.8% YTD) to GEL 0.9 million at the end of 1H 2007, while

the number of Aldagi BCI Pension Fund members stood at 3,440 at the end of September 2007, up from 1,560 members at the end of September

2006.

Business Unit Highlights cont’d

Page 15

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www.bog.ge/ir

January 2008

29,621

65,326

8,698

31,982

5,250

20,891

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

September 2006, YTD September 2007, YTD

GEL thousands

Total Operating Income (Revenue) Pre-Bonus Result (PBR) Net Income

4,275

6,032

561

1,260

582 645

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

September 2006, YTD September 2007, YTD

GEL thousands

Total Operating Income (Revenue) Pre-Bonus Result (PBR) Net Income

27,251

49,057

15,126

33,827

9,363

22,058

0

10,000

20,000

30,000

40,000

50,000

60,000

September 2006, YTD September 2007, YTD

GEL thousands

Total Operating Income (Revenue) Pre-Bonus Result (PBR) Net Income

Bank of Georgia Q3 2007 Business Unit Results cont’d

Page 16

CIB Revenue, PBR & Net Income

WM Revenue, PBR & Net Income

AM Revenue, PBR & Net Income

RB Revenue, PBR & Net Income

Insurance Revenue, PBR & Net Income

Galt & Taggart Securities Revenue, PBR & Net Income

1,613

3,476

545

2,061

337

1,361

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

September 2006, YTD September 2007, YTD

GEL thousands

Total Operating Income (Revenue) Pre-Bonus Result (PBR) Net Income

458

2,403

-878 -1,258-878 -1,152

-1500

-1000

-500

0

500

1000

1500

2000

2500

3000

September 2006, YTD September 2007, YTD

GEL thousands

Total Operating Income (Revenue) Pre-Bonus Result (PBR) Net Income

1,800

18,703

1,400

15,117

1,126

10,926

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

September 2006, YTD September 2007, YTD

GEL thousands

Total Operating Income (Revenue) Pre-Bonus Result (PBR) Net Income

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www.bog.ge/ir

January 2008

11,858

70,084

57,829

83,924

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

YE 2006 Sep-07

GEL thousands

Total Assets Total Liabilities

373,462

919,474

263,057

628,565

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

YE 2006 Sep-07

GEL thousands

Total Assets Total Liabilities

535,026

1,235,060

455,616

1,081,302

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

YE 2006 Sep-07

GEL thousands

Total Assets Total Liabilities

Bank of Georgia Q3 2007 Business Unit Results

cont’d

Page 17

CIB Total Assets & Liabilities RB Total Assets & Liabilities

WM Total Assets & Liabilities Insurance Total Assets & Liabilities

AM Total Assets & Liabilities Galt & Taggart Securities Total Assets & Liabilities

38,408

54,339

24,680

39,258

-

10,000

20,000

30,000

40,000

50,000

60,000

YE 2006 Sep-07

GEL thousands

Total Assets Total Liabilities

22,196

57,822

7,973

30,926

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

YE 2006 Sep-07

GEL thousands

Total Assets Total Liabilities

19,975

51,442

6,642

14,230

-

10,000

20,000

30,000

40,000

50,000

60,000

YE 2006 Sep-07

GEL thousands

Total Assets Total Liabilities

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www.bog.ge/ir

January 2008

10.2

34.5

64.1

87.3

114.0122.1

177.5183.3

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

2005 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 07 Q3 07

GEL mln

Page 18

Retail Banking – No. 1 Retail Bank In Georgia

Total retail loans GEL 534 mln Total retail deposits GEL 323 mln

(1) Monthly average

Notes:

(1) Deposits include current accounts, demand deposits and time deposits

New Retail

Sub-brand

www.kandidati.ge

30 September 2007 YE 2006

POS Contracts Signed 840 454

Exclusive 752 310

Outlets Operating 224 89

Outlets Served 548 251

Number of Consumer Loans Outstanding* 44,849 23,338

Volume of Consumer Loans Outstanding (GEL mln)* 103.3 49.5

Relationship With Car Dealers 27 21

Exclusive 10 10

Presence In Outlets 6 4

Credit Cards Outstanding 69,224 356

1

* Does not includes WM Consumer Loans

RB Loan Portfolio & Client Deposits (30 September 2007)

Retail Loan Portfolio & Client Deposits Growth(1)Leadership in Consumer Lending

Retail Loans Originated

Micro Loans, 28%

Mortgage Loans, 25%

Consumer Loans, 19%

Card Overdrafts & Credit Card

Balances, 8%

Car Loans, 6%

POS Loans, 8%

Legacy Retail Loans, 6%

Current

Accounts &

Demand

Deposits, 40%

Time

Deposits, 60%

218

534

177

323

0

100

200

300

400

500

600

1-Jan-06 1-Jan-07

GEL mln

RB Loans RB Deposits

Growth, % +90% YTD+145% y-o-y

+57% YTD+82% y-o-y

September 2006 September 2007

Page 19: Bank of Georgia Q3 2007 Results Overview of Georgia Q… ·  January 2008 Bank of Georgia Q3 2007 Results Overview Page 3

www.bog.ge/ir

January 2008

Page 19

RB & WM - Continuous Increase In Loan Origination Capacity

* Does not include Legacy Retail Loans and Card Overdrafts

Micro Loans Originated

Mortgage Loans Originated Consumer Loans Originated

Other Retail And WM Loans

Originated*

45.0

114.6

908

1,941

-

500

1,000

1,500

2,000

2,500

0

20

40

60

80

100

120

September 2006, YTD September 2007, YTD

GEL mln

Volume of mortgage loans originated (LHS)

Number of mortgage loans originated (RHS)

+155%

49.5

132.5

18,621

42,517

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

0

20

40

60

80

100

120

140

September 2006, YTD September 2007, YTD

GEL mln

Volume of consumer loans originated (LHS)

Number of consumer loans originiated (RHS)

+168%

81.1

162.7

7,108

12,988

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

20

60

100

140

180

September 2006, YTD September 2007, YTD

GEL mln

Volume of micro loans originated (LHS)

Number of micro loans originated (RHS)

+101%

20.3

90.8

19,582

101,283

-

20,000

40,000

60,000

80,000

100,000

120,000

0

20

40

60

80

100

September 2006, YTD September 2007, YTD

GEL mln

Volume of other RB & WM loans originated (LHS)

Number of other RB & WM loans originated (RHS)

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www.bog.ge/ir

January 2008

RB Cross-Selling Gaining Momentum

Page 20

Product/Client Ratio

Cards Penetration Rate Current Accounts & Deposits Penetration Rate

RB Loans Penetration Rate

0.6% 0.5% 0.5% 0.6% 0.63%

11.6%

15.8%17.6%

21.4%

25.9%

0.9%

1.8% 1.9% 2.0% 2.1%

34.0%

28.0% 27.5%29.1%

31.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Sep-06 Dec-06 Mar-07 Jun-07 Sep-07

Mortgage Loan Penetration Rate Consumer Loan Penetration Rate

Micro Loan Penetration rate Other Loans Penetration Rate

61.9%68.0%

72.1%

79.0%85.3%

0.1% 1.3%4.5%

12.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Sep-06 Dec-06 Mar-07 Jun-07 Sep-07

Debit Cards Penetration Rate Credit Cards Penetration Rate

4.8% 4.4% 4.7% 4.7% 5.1%

65.8%70.7% 73.5%

83.5%91.2%

37.0%30.6%

23.1% 20.2% 19.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sep-06 Dec-06 Mar-07 Jun-07 Sep-07

Demand & Term Deposits Penetration Rate Universal Current Accounts Penetration Rate

Standard Current Accounts Penetration Rate

2.18 2.20 2.22 2.41

2.74

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Sep-06 Dec-06 Mar-07 Jun-07 Sep-07

Number of clients (RHS) Number of products (RHS) Product/Client Ratio (LHS)

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www.bog.ge/ir

January 2008

Leadership In Card Processing

Page 21

Client Banks Number of Cards Serviced by Georgian Card

Transaction Authorisations By Georgian Card Georgian Card’s Revenue & Assets

• 56% ownership of

Georgian Card

• Migration to TietoEnator

Transmaster in 2005

• Enhanced functionality

and new product support

63 90 121 203

286 337

437 460

28 49

66

72

84

119

138

247

0

100

200

300

400

500

600

700

800

YE 2005 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07

'000s

Bank of Georgia Other Banks

186

275

370

456

13991

575

706

1,105

1,776 2151

2,954 2,914

4,224

5,027

0

1,000

2,000

3,000

4,000

5,000

6,000

Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 2007

'000s

3.4

2.5 2.6

3.1

3.3

0.8

1.4

0.50.4

1.7

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Dec-05 Dec-06 Mar-07 Jun-07 Sep-07

GEL mln

Total Assets (LHS) Revenue (RHS)

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www.bog.ge/ir

January 2008

Page 22

Superior Retail Footprint & Consumer Reach

• Visa/MasterCard

Merchant Acquiring

Licenses

• 1,401 POS terminals

• Full transactional

functionality

• 128-bit SSL

encryption

• Online payments (13

vendors)

• 24/7

• 21 operators

• Fully functional

enterprise class IP

call center supplied

by Cisco

Systems, scalable to

up to 200 operators

• Balances

• Transactions &

notifications

• Utility & other

payments (20

vendors)

POS Call Center SMS Banking

• 33 flagship (full

service) branches

• 103 on fiber optic

network

• 34 new branches

being bought or fitted

out in 2007/Q2 2008

116 Branches 217 ATMsInternet

Banking

502,000+ debit cards/655,000+ current accountsAs of 30 November 2007:

Hypo+/Auto+/Micro Loan+/Deposits

Product „Pull‟MeloMoney/Student Loan+/

Traveler+/Ski+

Approximately 140,000+employees served through

Payroll Services

Estimated 40% market share

2005/Ongoing

Investment Focus

Service Delivery

Channels

Alternative

Customer

Acquisition

Channels

2006/2007

Investment Focus

Chemebi

• Consumer Insurance brand

since 2006

• 60,000+ clients

Aversi

• 100+ outlets

• Co-branded

cards/Exclusive POS

acquiring

• The largest supermarket

chain with 17 outlets

• 55% owned by BoG

• Exclusive POS acquiring

• Co-branded cards/In-

store promotion of BoG

products

• Travel agency with

20% market share

• 11 outlets

• 49 subagents

• 84% owned by BoG

• Full exclusivity on

banking & insurance

cross-selling

• 46% market share

with 1mln+ active

mobile subscribers

• Co-branded loyalty

debit cards

• 54% market share

• Project launched

jointly with Nokia &

Magti in March 2007

• Selling 3G Nokia

handsets on credit

• 100 mln+ passenger

trips per year

• Sole servicing bank &

fair collection

operator

• Small service centers

have been opened in

all 23 subway stations

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www.bog.ge/ir

January 2008

Extensive Distribution Network Of 116 Branches

Page 23

As of November 30, 2007

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www.bog.ge/ir

January 2008Page 24

Corporate & Investment BankingOverview

No.1 corporate and investment bank in Georgia

Circa 35% market share based on customer deposits(1)

Circa 30% market share based on corporate loans(1)

Integrated client coverage in key sectors

60,000+ clients of which 4,221 served by dedicated

relationship bankers

High-profile clients include

Tbilisi Municipality

Millennium Challenge Georgia

Tbilisi Metro

Rompetrol

TAV Urban

Lukoil

Georgian Railway

Magti GSM

Geocell

Port of Poti

Port of Batumi

Iberia Refreshments (Pepsi Bottler),

Madneuli

Beeline

Saqcementi (Heidelberg Cement Georgia)

GOGC

Coca-Cola Bottlers Georgia Group Companies

Rakeen Development

EnergoPro

Circa 45% market share in trade finance and

documentary operations(2)

Second largest leasing company in Georgia(2) –

Georgian Leasing Company (GLC)

Galt & Taggart Securities – investment banking

relationship platform for key corporate clientsNotes:

(1) As of June 2007, source: National Bank of Georgia

(2) Management estimates (based on the NBG data)

Corporate Loan Portfolio & Client Deposits (30 September 2007)

Total corporate loans GEL 715 mln

Corporate Loan Portfolio & Client Deposits Growth(1)

Note: (1)Client Deposits include current accounts, demand deposits and time deposits

Construction &

Real Estate

Energy

Fast Moving

Consumer

Goods

Financial

Institutions

Foreign

Organizations &

Diplomatic

Missions

Pharmaceuticals

& Healthcare

Retail &

Wholesale

Trade

State & Industry

Telecommunica

tions, Media &

Technology

Transport &

Logistics

SME

Integrated client

coverage in the

following key

sectors

Total corporate deposits GEL 671 mln

SME, 27%

Trade, 20%

Construction & Real Estate, 14%

Energy, 15%

Industry & State , 6%

Pharmaceuticals & Healthcare, 2%

Fast Moving Consumer

Goods, 14%

Other, 3%

Current

Accounts &

Demand

Deposits, 81%

Time

Deposits, 19%

340

715

276

671

0

100

200

300

400

500

600

700

800

1-Jan-06 1-Jan-07

GEL mln

CIB Loans CIB Deposits

Growth, % +82% YTD+110% y-o-y

+137% YTD+143% y-o-y

September 2006 September 2007

Page 25: Bank of Georgia Q3 2007 Results Overview of Georgia Q… ·  January 2008 Bank of Georgia Q3 2007 Results Overview Page 3

www.bog.ge/ir

January 2008

21.8

31.2

10.9

20.5

6.2

10.2 12.4

24.4

(6.6) (6.4) (4.7) (6.3) (1.0)(2.3)

(4.1) (7.0)

-10

-5

0

5

10

15

20

25

30

35

GE

L m

ln

Aldagi BCI* GPIH Imedi L Others

Gro

ss P

rem

ium

s W

rit

ten

Cla

ims

Reim

bu

rse

d

9M '06 9M '07

Page 25

Aldagi BCI (Insurance)Size of the Georgian

Insurance MarketOverview

Notes:(1) Source: State Insurance Supervision Service of Georgia

(2)Converted at GEL/US$ 1.658

(3) GDP 2007E

Georgian Insurance by GPW (30 September 2007)

Market Shares (%) Product Breakdown (%)

Source: State Insurance Supervision Service of Georgia

Gross Premiums Written & Total Claims Reimbursed

Small insurance market (US$52 mln GPW in 9M „07)(1)(2), but

rapidly growing due to low insurance services penetration of circa

0.5% of GDP(3)

Acquisition of BCI in November 2004 (GEL 3.9 mln)

Acquisition of EuroPace in October 2005

Acquisition of Aldagi in December 2006 (GEL13.2m)

Launch of Chemebi brand in February 2006 as umbrella for five

consumer product lines – motor, health, life, property and travel

insurance

Strict reinsurance policies with major reinsurers

Hannover Re, Munich Re, AIG, Lloyds and SCOR

GEL mln 1H‘07 YE‘06 YE‘05

GPW 48.7 70 55

Claims

Reimbursed

12.6 23 18

*Pro forma combined for 9M 2006

** Net Loss Ratio equals Claims Reimbursed by Companies divided by Total Premiums Written

Source: State Insurance Supervision Service of Georgia

Aldagi BCI Market Share by Product (9M ’07)

Net loss ratio**24%14% 22%

36%

24%

12%

28%Aldagi BCI

GPIH

Imedi L

Others39%

15%

14%

9%

6%

4%

4%

3%2%

6%

Other

Health

PropertyCasco

Financial Risks

Aviation & Cargo

Civil

Liability

Life

Personal Accident &

TravelPensions

78%71%

65%

55% 52%45% 44% 41%

36% 35%

27% 26%

13%

21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Av

iati

on

Pro

fess

iona

l Ind

emni

ty

Carr

iers

Lia

bil

ity

Pers

on

al A

ccid

ent &

Tra

vel

Civ

il L

iab

ilit

y

Cas

co

Pro

per

ty

Car

go

Lif

e

MT

PL

Vo

lun

tary

Hea

lth

Pen

sio

n

Mari

ne V

esse

ls

Fin

an

cia

l Ris

ks

Perso

na

l A

ccid

en

t &

Tra

vel

Lif

e

Pro

perty

Ca

sco

MT

PL

Vo

lun

tary

Pen

sio

ns

Hea

lth

Page 26: Bank of Georgia Q3 2007 Results Overview of Georgia Q… ·  January 2008 Bank of Georgia Q3 2007 Results Overview Page 3

www.bog.ge/ir

January 2008

0

200

400

600

800

0 5,000 10,000 15,000

Insu

ran

ce P

rem

ium

Per

Cap

ita

(US

$)

GDP Per Capita (US$)

Population: 10 million

Bulgaria

SerbiaGeorgia

(2006E)

Ukraine Romania

Poland

Slovakia

Croatia

Hungary

Czech Republic

Russia

Georgian Insurance Market vs. EU & CEE/CIS

Page 26

Life Insurance Density* and Penetration**, 2006 GDP per

Capita, PPP

(2006E, US$)

Penetration*

(2006)

Density**

(2006, US$)

Greece 23,500 1.8% 489

Czech Republic 21,600 3.8% 520

Hungary 17,300 3.4% 376

Poland 14,100 3.5% 310

Russia 12,100 2.3% 151

Bulgaria 10,400 2.6% 101

Turkey 8,900 1.6% 89

Ukraine 7,600 2.8% 60

Georgia 3,800 0.5% 9

*Gross Premium Written As % of GDP

**Gross Premiums Written Per Capita

Source: Swiss Re, Sigma No 4/2007, Georgian State Pension Supervision Agency, Galt & Taggart Securities estimates, CIA World

Factbook

Source: Swiss Re, Sigma No 4/2007, Georgian State Pension Supervision Agency

*Life Insurance Premium Written Per Capita

** Life Insurance Premiums as % of GDP

Source: Swiss Re, Sigma No 5/2006, Georgian State Pension Supervision Agency, Galt & Taggart Securities’ estimates

Insurance Premiums Per Capita vs. GDP Per Capita

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

0

50

100

150

200

250

300

350

400

Slo

ven

ia

Gre

ece

Czech

Rep

ub

lic

Hu

nga

ry

Po

lan

d

Slo

va

kia

Cro

ati

a

Ro

ma

nia

Bu

lga

ria

Tu

rkey

Serb

ia

Ru

ssia

Uk

rain

e

Ka

za

kh

stan

Geo

rgia

US$

Life Insurance Density (LHS) Life Insurance Penetration (RHS)

Density US$0.2

Penetration 0.01%

Page 27: Bank of Georgia Q3 2007 Results Overview of Georgia Q… ·  January 2008 Bank of Georgia Q3 2007 Results Overview Page 3

www.bog.ge/ir

January 2008

06.7

48.2

48.3

63.4

66.4

0

460

873943

1,081 1,187

0

200

400

600

800

1000

1200

1400

0

20

40

60

80

2004 2005 2006 Q1 2007 Q2 2007 Q3 2007

US$ mln

Private Banking Client Assets (LHS) Private Banking Clients (RHS)

Nil

Mortgage

Loans, 67%

Consumer

Loans, 18%

Car Loans, 9%

Other, 6%

Page 27

Wealth Management (WM) Performance Review

Private Banking Loans and Deposits (30 September 2007)

Total PB loans GEL 34 mln Total PB deposits GEL 64 mln

Private Banking Products Penetration

Private Banking Products Penetration

Notes: (1) Converted at exchange rates of GEL/US$, 1.793 (2005),1.714 (2006), 1.700 (Q1 2007) and

1.670 (Q2 2007), 1.66 (Q3 2007)

(2) PB Client Assets include: Balances on OneCard Accounts, Credit Balances on Other

Cards, Credit Balances On Regular Current Accounts, Demand & Time Deposits, Brokerage

& Asset Management Accounts, Pensions

Private Banking Clients and Client Assets

80% 83% 82%66%

64%

42%

92%106%

120%

134%

6%12%

13%

14%

14%

63% 83% 80%

64%

80%

16%22% 22%

13%

16%

0%

20%

40%

60%

80%

100%

120%

140%

160%

2005 2006 31-Mar-07 30-Jun-07 Sep-07

OneCard Penetration Rate All Other Cards Penetration Rate

Demand & Term Deposits Penetration Rate Internet Banking Penetration Rate

SMS Banking Penetration Rate

40%

56%51%

80%

99%

19%25%

22%

31%33%

3% 5% 4% 4% 4%3% 4% 3%

12% 12%

0%

20%

40%

60%

80%

100%

120%

2005 2006 31-Mar-07 30-Jun-07 Sep-07

Loan Penetration Rate

Insurance Products (Non-Life) Penetration Rate

Life & Pensions Penetration Rate

Brokerage & Asset Management Accounts Penetration Rate

Current

Accounts &

Demand

Deposits, 62%

Time

Deposits, 36%

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January 2008

Galt & Taggart Capital (GSE: GTC)

MCAP GEL 83 mln as of 30 September 2007

Consumer goods, retail, business support services, TMT

SB Real Estate

15+ properties, mostly undeveloped

NAV >US$15 mln

Significant synergies with RB

BCI Pension Fund

Aspirations for

Retail asset management (manufacturing and open

architecture distribution) in Georgia and Ukraine

Listed private equity focusing on the Caucasus/Caspian

Asset Management Review

Page 28

Asset Management Overview GTC Share Price Performance & MCAP

BCI Pension Fund Selected Portfolio Companies

132

475

931

1,049

2,154

3,440

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

100

200

300

400

500

600

700

800

900

2005 2006 Sep-07

GEL '000s

AUM (LHS) Number of Participants (RHS)

100

150

200

250

300

350

400

450

500

9/11/06 14/12/06 1/18/07 2/21/07 3/27/07 4/26/07 5/25/07 6/15/07 7/6/2007 8/24/2007

GTC Rebased Share Price Rebased Galt & Taggart Index

MCAP GEL 32.9 mln

MCAP GEL 53.7 mln

MCAP GEL 94.4 mlnMCAP GEL 121.8mln

MCAP GEL 113.1 mln

November

2006

January

2007

March

2007April

2007May

2007

June

2007

MCAP GEL 118.4mln

MCAP GEL 109.1 mln

MCAP GEL 92.9 mln

July

2007December

2006

August

2007

September

2007February

2007

MCAP GEL 86.5 mln

MCAP GEL 85.9 mln

MCAP GEL 82.9 mln

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January 2008

12

38

200

226

189

0

50

100

150

200

250

2004 2005 2006 1H 2007 Sep-07

US$ mln1

Galt & Taggart Securities

Page 29

Total Assets, Proprietary Book & Equity

Revenue, Pre-Bonus Result & Net Income

Galt & Taggart Securities Overview

Georgia & Ukraine, pan-CIS ambitions

Agency brokerage, research, sales & trading

M&A and Corporate Finance advisory

DCM, ECM and corporate broking

Registrar and custody services

15 FTEs in Georgia and 28 FTEs in Ukraine

Client Assets Under Custody

Note: (1) Converted at exchange rates of GEL/US$ 1.825 (2004), 1.793 (2005) , 1.714 (2006) , 1.700 (Q1

2007), 1.670 (Q2 2007), 1.66 (Q3 2007)

GEL 1,800,000

Rights Issue

Sole Placement Agent

March 2007

Placement of

12,495,519 shares

&

Introduction to the

Georgian Stock

Exchange

Sole Placement Agent

May 2007

Placement of

12,495,519 shares

&

Introduction to the

Georgian Stock

Exchange

Sole Placement Agent

May 2007 1,800

18,703

1,400

15,117

1,126

10,926

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Jan-06 Jan-07

GEL 000s

Revenue Pre-Bonus Result Net Income

September 2006 September 2007

12,517

19,975

51,442

8,690

13,333

37,212

2,206 7,353

25,357

0

10,000

20,000

30,000

40,000

50,000

60,000

Sep-06 Q4 2006 Sep-07

GEL 000s

Total Assets Shareholders' Equity Proprietary Book

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January 2008

Selected Transactions 2006

Page 30

February 2006

Acquisition of assets

and liabilities of

Sole Adviser

Acquisition of a 100%

equity interest in

December 2006

Sole Adviser

JSC Aldagi

GEL 13,200,000

US$159,843,723

November 2006

Initial Public Offering

on the

London Stock Exchange

8,880,207 shares in the form of

Global Depositary Receipts

Selling Agent

GEL 5,000,000

Private placement of

15% one-year zero

coupon bonds

December 2006

Sole Underwriter

GEL 6,155,625

Placement of 10,259,375

Shares & Admission to

trading on the Georgian

Stock Exchange

Sole Placement Agent

November 2006 October 2006

US$25,000,000

Subordinated

Convertible Loan

Facility From

Sole Adviser

GEL 2,570,052

Block Trade

December 2006

Broker

Admission to trading on

the Georgian Stock

Exchange

April 2006

Coordinator & Market-maker

August 2006

US$5,000,000

10-year Subordinated

Loan Facility from

Sole Adviser

GEL 2,046,328

Placement of 25%

of share capital to

May 2006

Sole Placement Agent

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January 2008

Contact

Page 31

Irakli Gilauri

Chief Executive Officer

+995 32 444 109

[email protected]

Macca Ekizashvili

Head of Investor Relations

+995 32 444 256

[email protected]

Nick Enukidze

Acting Chairman of the Supervisory Board

+ 995 32 444 800

[email protected]

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January 2008

Page 32

Appendices

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January 2008

Bank of Georgia Overview

Page 33

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January 2008

Bank of Georgia Development Milestones

Page 34

Development Period 2000-3Q 2004 4Q2004 2005 2006 2007 Growth

Since

YE 2003

New Management Team Takes OverIFRS Consolidated (1) FY 2003 FY 2004 FY 2005 FY 2006 30 September 2007

Total Assets (e-o-p) US$111 mln US$199 mln US$257 mln US$725 mln US$1,450 mln 1206%

Loan Book (e-o-p) US$73 mln US$104 mln US$175 mln US$433 mln US770 mln 955%

Client Deposits (e-o-p) US$57 mln US$138 mln US$151 mln US$338 mln US$642 mln 1026%

Equity (e-o-p) US$26 mln US$30 mln US$51 mln US$216 mln US$280 mln 977%

MCAP (e-o-p) US$20 mln US$35 mln US$69 mln US$567mln US$978 mln 4790%

Number of Western-

Trained Professionals0 6 15 20+ 25+

Key Acquisitions TUB Galt & Taggart IntellectBank, acquisition of assets & liabilities Merchant Banking Acquisitions

BCI GLC Merchant banking acquisitions

Georgian Card Europace Galt & Taggart Ukraine established 98.8% of UBDP acquired

9.9% of UBDP acquired

Aldagi

Key Business Lines Retail Banking Retail Banking Retail Banking Retail Banking Retail Banking

Corporate Banking Corporate Banking Corporate Banking Corporate Banking Corporate Banking

Trade Finance Trade Finance Trade Finance Trade Finance Trade Finance

Foreign Exchange Foreign Exchange Foreign Exchange Foreign Exchange Foreign Exchange

Investment Banking Investment Banking Investment Banking Investment Banking Investment Banking

Insurance Insurance Insurance Insurance

Leasing Leasing Leasing

Pensions Pensions Pensions

Private Banking Private Banking

POS Consumer Loans POS Consumer Loans

Merchant Banking Merchant Banking

Asset Management

Key Lenders BSTDB KfW US$3.5 mln guarantee facility World Business Capital US$10 mln loan with OPIC guarantee FMO US$12.5 mln loan*

US$200 mln debut

Regulation S 5-year

unsecured Eurobond

US$123.5 mln syndicated

loan arranged by Citi and

ADB

Merrill Lynch US$35 mln

subordinated loan

HBK Investments US$15

mln subordinated debt

DEG EBRD US$10 mln facility Citigroup US$25 mln unsecured term loan

AKA Bank GEL 2.0 mln bond placement Thames River Capital US$5 mln subordinated loan

EBRD Commerzbank US$ 3.8 mln Merrill Lynch US$25 mln convertible subordinated loan

IFC HBK Investments US$25 mln convertible subordinated loan

Institutional Ownership 28% 37% 50% 85% 85%Notes: (1) Converted at exchange rates of GEL/US$ of 2.075 (2003), 1.825 (2004), 1.793 (2005) and 1.714 (2006)

(2) Growth rates calculated using amounts in US$

* Signed in December 2006, disbursed in January 2007

The bank has tripled

in size under new

management

Unique management team composition for a CIS bank

Stellar acquisition and integration track record

Increasingly

diversified revenue

stream

An established

borrower in

international

markets

Unprecedented level

of institutional

interest. Institutional

ownership c. 85%

unique for a CIS

bank

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January 2008

Page 35

Bank Of Georgia – Our Vision & Mission

Objectives set in October 2004 Status YE 2006

Retail Banking

The largest Georgian retail bank, offering consumers the

broadest range of services through multiple channels Achieved

Corporate &

Investment

Banking

A leader in corporate banking, bank of choice for inbound

foreign corporates Achieved

The undisputed leader in investment banking Achieved

Integrated offering to large corporates through strong client

coverage culture Achieved

Insurance

A leading player in the non-life sector, cross-selling insurance

to corporates Achieved

A leading life insurance and pensions provider Achieved

Asset & Wealth

Management

The undisputed domestic leader in wealth management, with

niche appeal to sophisticated non-resident investors Achieved

A leading player in domestic private equity and venture capital Achieved

Our mission is to create long-term value by building a relationship-driven, client-facing integrated financial

services company based on the core values of excellence in execution, teamwork, integrity and trust

One FirmStrong

management

Shared expertise

Cross-sell

synergies

Shared services

& infrastructure

Cost efficiency

Our vision is to be recognized as the best financial services company in Georgia

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January 2008

Bank of Georgia Price Performance

Page 36

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January 2008

Page 37

Ownership Structure & Share Price Performance

Bank of Georgia Share Price Performance Bank of Georgia GDR Price Performance

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Sep

-04

Oct-

04

No

v-0

4

Dec-

04

Jan

-05

Feb

-05

Mar-

05

Ap

r-0

5

May

-05

Jun

-05

Jul-

05

Au

g-0

5

Sep

-05

Oct-

05

No

v-0

5

Dec-

05

Jan

-06

Feb

-06

Mar-

06

Ap

r-0

6

May

-06

Jun

-06

Jul-

06

Au

g-0

6

Sep

-06

Oct-

06

No

v-0

6

US$

New management team commences turnaround. September 2004 share price US$2.0MCAP US$20 mln; P/BV 0.8x as at September 2004

2005 YE share price of US$4.7MCAP US$68.7 mln

Reg S offering of the GDRs on the LSEMCAP US$270 mln

Ownership structure, September 2007

The second highest

free float (91%) of

all emerging

EMEA banks

Broadly owned by

over 100

institutional

accounts

Highly dispersed

ownership – no

single fund owns

more than 5.4% of

the shares

84.4%

8.8%

6.9%

Non-Resident Institutional

Shareholders

Management &

Employees

Individuals

30-Sep-07 GDRs* Local Shares Total %

Institutional Shareholders 17,217,597 5,688,425 22,906,022 84.4%

Individual Shareholders - 1,866,727 1,866,727 6.9%

Management and Employees 1,499,500 881,850 2,381,350 8.8%

Fully Vested 67,583 856,169 923,752 3.4%

Awarded but unvested 403,550 25,681 429,231 1.6%

Employee Benefit Trust 1,028,367 - 1,028,367 3.8%

Total Shares Outstanding 18,717,097 8,437,002 27,154,099 100%

Adjusted for Galt & Taggart Securities' Proprietary Book (1) (42,622) (306,283) (348,905) -1.3%

Adjusted Total Shares Outstanding 18,759,719 8,743,285 26,805,194

Dilution Projections

EuroPace Hold Back - 95,000 95,000

Diluted Shares 18,759,719 8,838,285 26,900,194

Galt & Taggart Securities' Proprietary Book 42,622 306,283 348,905

Fully Diluted Shares 18,802,341 9,144,568 27,249,099

1 Treated as treasury shares as per IFRS

* Bank of New York acts as depositary bank of the Bank of Georgia GDR holders following the initial public offering of the bank's shares

in the form of GDRs on the London Stock Exchange in late November and early December 2006

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

No

v-0

6

Dec

-06

Jan

-07

Feb

-07

Mar

-07

Ap

r-0

7

May

-07

Jun

-07

Jul-

07

Au

g-0

7

Sep

-07

Oct-

07

No

v-0

7

Dec

-07

US$ Listing on the London Stock Exchnage on 29 November 2006Offer price US$18; MCAP US$440 mln

BUY/US$31

BUY/US$34BUY/US$38.8

BUY/US$35.8

BUY/US$41.8

BUY/US$36

BUY/US$43

BUY/US$46.8

IPO Price

HOLD/US$47.2

HOLD/US$42.8

BUY/US$35.8

BUY/US$47.9

HOLD/US$42.8

BUY/US$47.9

7BUY/US$44.7

BUY/US$47.9

BUY/US$45.2

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January 2008

-10% 0% 10% 20% 30% 40% 50% 60% 70%

MSCI EM Banks Index

Ukrainian Banks Index

MSCI EM Russia Price Index (US$)

MSCI EM Eastern Europe Price Index (US$)

MSCI EM EMEA Price Index (US$)

Bank of Georgia

MSCI EM Turkey Price Index (US$)

Bank of Georgia

-50% -30% -10% 10% 30% 50% 70% 90% 110%

Kazkommertzbank

Halyk

Forum Bank

VTB

Rosbank

Vozrozhdenie

Bank of Moscow

Sberbank

Bank of Georgia

Rodovid

Ukrsotsbank

Raiffeisen Aval Bank

Ukrgazbank

Bank of Georgia

Page 38

2006-2007 Price Performance

-10% 90% 190% 290% 390% 490%

MSCI EM Turkey Price Index (US$)

MSCI EM EMEA Price Index (US$)

MSCI EM Banks Index

Ukrainian Banks Index

MSCI EM Eastern Europe Price Index (US$)

MSCI EM Russia Price Index (US$)

Bank of Georgia Price (US$)Bank of Georgia Price (US$)

Bank of Georgia Price vs. Selected MSCI Indices, 2006

Source: Galt & Taggart Securities

Bank of Georgia Price vs. CIS Banks 2007 Price

Performance

Bank of Georgia Price vs. Selected MSCI Indices, 2007

Source: Bloomberg

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www.bog.ge/ir

January 2008

Analyst Coverage

Page 39

Analyst Email RecommendationDate of

Recommendation

David Nangle [email protected] BUY/US$45.2 18 December 2007

Analyst Email RecommendationDate of

Recommendation

Andrzej Nowaczek [email protected] BUY/US$44.7 13 November 2007

Analyst Email RecommendationDate of

Recommendation

Milena Ivanova [email protected] BUY/US$47.9 5 November 2007

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January 2008

Our Team

Page 40

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January 2008

Our Team

Page 41

Supervisory Board

Nicholas Enukidze, 37, Acting Chairman

ABN AMRO, Concorde Capital, Global One

MBA, University of Maryland

Ian Hague, 46, Member

Firebird Management LLC, United Nations Secretariat

MA, Monterey Institute of International Studies

Allan Hirst, 58, Member

Citigroup

MBA, University of Texas

Jyrki Talvitie, 41, Member

UralSib, BNP Paribas, Bank of New York

MBA, London Business School; LLM, University of Helsinki

Group Management

Nicholas Enukidze, 37, Acting Chairman

ABN AMRO, Concorde Capital, Global One

MBA, University of Maryland

Irakli Gilauri, 31, Chief Executive Officer

EBRD

MSc, Cass Business School of City University

Macca Ekizashvili, 33, Head of Investor Relations

IFC

MBA, George Washington University

Thea Jokhadze, CFA, 31, Head of Debt Capital Markets (Group Head of Funding)

Pace Global Services, CMS Energy Corp

MA degree, Johns Hopkins University, School of Advanced International Studies

Gvantsa Shengelia, 37, Head of Compliance

Deutsche Bank, Morgan Stanley

MA Degree in Economic Geography, Tbilisi State University

Avto Namicheishvili, 33, Group General Counsel

Begiashvili & Co Limited

LLM, Central European University

David Vakhtangishvili, 29, Chief Financial Officer

Ernst & Young LLC

BBA, ESM-Tbilisi, 1st Level CPA, US

Alexander Oleshko, 31, Chief Information Officer

Private Bank, Premier Bank, Control Pay BV, Superweb

BA University of Dnepropetrovsk

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January 2008

Our Team Cont’d

Page 42

Commercial Banking, Georgia

Irakli Gilauri, 31, Chief Executive Officer

EBRD

MSc, Cass Business School of City University

Ramaz Kukuladze, 35, Deputy Chief Executive Officer

BCI, AbsolutBank, TbilCreditBank

MA degree, Bank Academy of ESM Tbilisi, MBA degree from Instituto de Empresa expected in July 2008

Lekso Liparteliani, 33, Co-Head of Corporate & Investment Banking

Galt & Taggart Securities, State Department for Statistics of Georgia

PhD in Mathematics, Tbilisi State University

Gvantsa Shengelia, 37, Head of Compliance

Deutsche Bank, Morgan Stanley

MA Degree, Tbilisi State University

Constantin Tsereteli, 35, Co-Head of Retail Banking

Constanta Foundation, World Vision

MA Degree in Legal Studies, Tbilisi State University; MA Degree in Medieval Studies, Central European University; Diploma in

Byzantine Studies, University of Oxford

Mikheil Gomarteli, 32, Co-Head of Retail Banking

Bank of Georgia

MA Degree in Economics, Tbilisi State University

Vasil Khodeli, 31, Co-Head of Corporate & Investment Banking

Bank of Georgia, TbilInterBank

MA Degree in Economics, Tbilisi State University

Deborah Fairlamb, 40, Group Head of Wealth Management

UBS, Merrill Lynch

BA in Literature, University of Delaware

Irakli Burdiladze, 33, Chief Operating Officer

GMT Group

MA Degree, Johns Hopkins University, School of Advanced International Studies

David Vakhtangishvili, 29, Chief Financial Officer

Ernst & Young LLC

BBA, ESM – Tbilisi, 1st Level CPA, US

Galt & Taggart Asset ManagementBidzina Bejuashvili, 37, Chief Executive Officer

JP Morgan Chase, UniCredit, RZB

MA Degree in Economics, Boston University

Eli Enoch, 34, CEO, Galt & Taggart Capital

Caucasus Financial Services, World Congress of Georgian Jews. TKTel

MBA, Tel Aviv University

Irakli Gogia, 25, Chief Financial Officer, Galt & Taggart Capital

Deloitte & Touche, Ernst & Young

BBA, ESM-Tbilisi

Giorgi Nadareishvili, 37, CEO, SB Real Estate

Klacken Corporation

BA Degree in International Relations, Institute of Foreign Languages,

Real Estate Sales Certificate, permitting to buy and sell real estate in New York State

Archil Mamatelashvili, 34, CEO, Caucasian Energy Fund

Energo Pro S.A., Ministry of Energy of Georgia

MBA, Weatherhead School of Management of Case Western Reserve University/IMC Graduate School of Business

Commercial Banking, UkraineGenady Matuzenko, 39, CEO, Chairman of the Management Board

Tax Administration, Blitz-Information Publishing Company, Bank Forum

BA Degree in Applied Economics, Kyiv National Shevchenko University

Igor Gordeev, 44, Deputy CEO

Oschadbank, Bank Forum, Legbank

BA in Banking Management, KROK Economics and Law University

Sulkhan Gvalia, 33, Deputy CEO & Chief Risk Officer

TbilUniversalBank

BA Degree, MA in Law, Tbilisi State University

Dmytro Perepolkin, 29, Chief Operating Officer

Concorde Capital, Five years in Consulting and Technology

MBA, California State University

Aleksey Teslenko, 27, Deputy CEO

Finance & Credit, Legbank

MA in Banking Management, Kyiv National Economic University

Giorgi Vakhtangishvili, Deputy CFO of Bank of Georgia responsible for Ukraine

BBA from ESM-Tbilisi

Ernst & Young LLC

Head of Coverage to join in February 2008

Investment BankingDmitry Kasatkin, 37, Chief Executive Officer

ABN AMRO, PriceWaterHouseCoopers

MBA, California State University

Tamar Metivishvili, 26, Chief Financial Officcer

PriceWaterHouseCoopers, Ernst & Young Audit LLC

MBA, ESM – Tbilisi

Sergiy Lesyk, 35, Global Head of Equities

Millennium Capital, Nomura, PriceWaterHouseCoopers

MA Degree, Moscow State University

Giorgi Paresishvili, 34, Global Co-Head of Sales

Credit Suisse First Boston

MBA, University of Michigan (Ross) Business School

Lucas Romriell, 29, Head of Regional Development

Concorde Capital, UralSib

BA Degree in Russian Studies, University of Colorado

Alexander Lisnichenko, 31, Equity Sales

Kraft Foods, Nestle, Mondi Business Paper

MBA, Creighton University

InsuranceNikoloz Gamkrelidze, 27, Chief Executive Officer

BCI Health Clinic, World Bank

MSc in Health Management, Imperial College, London

Katerina Lotuashvili, 32, Director, Retail Insurance

AON Limited, GPIH

MSc in Insurance Risk Management, Cass Business School of City University

Kesenia Semiokhina, 33, Operations Department Director

GPIH

LLM, Tbilisi State University

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January 2008

Ukraine Update

Page 43

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www.bog.ge/ir

January 2008

Comprehensive understanding of UBDP business processes

Design and enhance organisation structure

Start implementing CIB coverage model

Establish close cooperation with Galt & Taggart

Establish close cooperation with Bank of Georgia CIB team to service Georgia-Ukraine trade and investment flow

Kick-off rebranding

Aggressive hiring

UBDP Update

Page 44

Bank of Georgia Team Leading The Transition

Sulkhan Gvalia Spearheading integration of UBDP with Bank of Georgia group;

Deputy CEO of Bank of Georgia since January 2005;

One of the founders of TbilUniversalBank (“TUB”), acquired by Bank of Georgia in December 2004

Went through all aspects of integration of Bank of Georgia and TUB and Bank of Georgia and

Intellectbank in February 2006.

Dmytro Perepolkin Led the acquisition of UBDP from Bank of Georgia side;

Spearheaded the establishment of Galt & Taggart Ukraine in 2006-2007;

Worked as a Senior Associate at Concorde Capital (Kyiv, Ukraine) prior to joining Galt & Taggart

Ukraine

Giorgi Vakhtangishvili

Ognjen Nastic

Deputy CFO of Bank of Georgia responsible for Ukraine. Joined from Ernst & Young LLC, Kyiv Office;

Spearheading of transformation of budgeting, management and IFRS reporting and audit functions of

UBDP

Head of IT Ukraine

Leads integration of IT systems

Name Confidential Group Head of Coverage to be based in Kyiv, to be announced in February 2008;

UK education, work experience at global universal bank in Moscow and London

Tasks of UBDP Team in 2007

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January 2008

UBDP IFRS, Unaudited, Income Statement

Page 45

Period Ended 9 Months, 2007

IFRS Based US$ GEL

Thousands, unless otherwise noted (Unaudited)

Interest Income 19,913 33,015

Interest Expense 10,170 16,863

Net Interest Income 9,742 16,152

Fees & Commission Income 2,736 4,537

Fees & Commission Expense 437 724

Net Fees & Commission Income 2,300 3,813

Income From Documentary Operations - -

Expense On Documentary Operations - -

Net Income From Documentary Operations - -

Net Foreign Currency Related Income 648 1,074

Net Insurance Income - -

Brokerage Income - -

Asset Management Income - -

Realized Net Investment Gains (Losses) - -

Other 329 545

Net Other Non-Interest Income 329 545

Net Non-Interest Income 3,277 5,433

Total Operating Income (Revenue) 13,019 21,585

Recurring Operating Costs

Personnel Costs 2,274 3,771

Selling, General & Administrative Expenses 1,379 2,286

Procurement & Operations Support Expenses 961 1,593

Depreciation And Amortization 477 791

Other Operating Expenses 2,279 3,779

Total Recurring Operating Costs 7,370 12,220

Normalized Net Operating Income (Loss) 5,649 9,366

Net Non-Recurring Income (Costs) 4 6

Profit Before Provisions And Bonuses 5,653 9,372

Provision For Loan Losses 583 966

Recovery Of Loans - -

Provisions For (Recovery Of) Other Assets 167 276

Net Provision Expense 749 1,242

Pre-Bonus Result 4,903 8,130

Guaranteed Compensation Expense - -

EECP Expenses - -

Cash Bonuses (Accrued) - -

Bonuses & Share-Based Compensation Expenses - -

Pre-Tax Income 4,903 8,130

Income Tax Expense (Benefit) 1,226 2,032

Net Income 3,678 6,097

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January 2008

UBDP IFRS, Unaudited Balance Sheet

Page 46

30-Sep-07

IFRS Based US$ GEL

Thousands, unless otherwise noted (Unaudited)

Cash And Cash Equivalents 7,344 12,177

Loans And Advances To Credit Institutions 27,682 45,896

Mandatory Reserves With NBG 10,626 17,619

Other Accoutns With NBG - -

Balances With And Loans To Other Banks 17,055 28,277

Available-For-Sale Securities - -

Treasuries And Equivalents 3,669 6,083

Other Fixed Income Instruments 6,886 11,418

Loans To Clients, Gross 201,377 333,884

Less: Reserve For Loan Losses (4,874) (8,080)

Net Loans To Clients 196,504 325,803

Investments In Other Business Entities, Net - -

Property And Equipment Owned, Net 2,268 3,760

Intangible Assets Owned, Net - -

Goodwill - -

Tax Assets, Current And Deferred - -

Prepayments And Other Assets 3,344 5,544

Total Assets 247,697 410,681

Client Deposits 158,900 263,455

Deposits And Loans From Banks 33,181 55,015

Borrowed Funds 2,097 3,477

Issued Fixed Income Securities 7,906 13,108

Insurance Related Liabilities - -

Tax Liabilities, Current And Deferred 3,270 5,421

Accruals And Other Liabilities 527 874

Total Liabilities 205,881 341,350

Share Capital - Ordinary Shares 27,810 46,109

Share Premium - -

Treasury Shares - -

Retained Earnings 9,563 15,855

Revaluation And Other Reserves 766 1,270

Net Income For The Period 3,678 6,097

Shareholders Equity Excluding Minority Interest 41,816 69,331

Minority Interest - -

Total Shareholders Equity 41,816 69,331

Total Liabilities And Shareholders Equity 247,697 410,681

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January 2008

Page 47

Georgian Banking Sector – Key Trends 2006/2007

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January 2008

Page 48

Georgian Banking Sector – Key Trends 2006/2007

GEL/US$

Period End

YE 2005= 1.79

YE 2006= 1.71

Sep - 2007=1.66

19 banks as at 3 October 2007

Minimum capital requirement GEL 12 mln and growing

Consolidation underway

No state ownership since 1995

Very open to foreign ownership

All leading banks have meaningful foreign capital participation

Significant IT/infrastructure and marketing spend drives increasing retail banking penetration

Increasing adoption of the universal banking business model, following the lead of Bank of Georgia

Increasing availability of non-deposit funding key to sustained growth

Four top banks are rated

Domestic bonds, Eurobonds, CLNs, unsecured term loans, syndicated loans, subordinated debt

A small structural funding gap exists

Real estate boom competes for consumer savings

The economy and consumers significantly underlent (all-in consumer debt per capita US$99 at 30 June 2007)

Growth Market Share (YE 2006) Market Share (September 2007)

US$ mln YE 2005 YE 2006 Sep - 07 As % of GDP* 2006 Y-O-Y 2007 YTD Top 5 Banks Bank of Georgia Top 5 Banks Bank of Georgia

Total Assets 1,421 2,467 4,025 30.8% 65.9% 57.9% 80.1% 27.9% 80.7% 34.0%

Gross Loans 965 1,565 2,492 19.5% 55.0% 54.1% 83.2% 26.5% 82.7% 30.8%

Deposits 858 1,359 2,050 17.0% 51.4% 46.0% 82.2% 24.5% 82.2% 31.4%

Equity 267 524 781 6.5% 87.4% 44.1% 78.3% 39.9% 74.0% 33.6%

Net Income 35 54 53 0.7% 50.5% NMF 80.8% 23.6% 83.2% 39.7%

Note: All data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge

* YE 2006 Total Assets/2006 GDP, YE 2006 Gross Loans/2006 GDP, YE 2006 Deposits/2006 GDP, YE 2006 Deposits/2006 GDP, YE 2006 Equity/2006 GDP, YE 2006 Net

Income/2006 GDP

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January 2008

17.8%

27.9%

32.2%

34.0%

0% 20% 40%

YE 2005

YE 2006

1H 2007

Sep-07

Bank of Georgia Market Share Evolution

Page 49

Note: All data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge

Total Assets Loans Deposits Equity

18.2%

26.5%

30.0%

30.8%

0% 20% 40%

YE 2005

YE 2006

1H 2007

Sep-07

19.0%

24.5%

27.7%

31.4%

0% 20% 40%

YE 2005

YE 2006

1H 2007

Sep-07

18.7%

39.9%

36.4%

33.6%

0% 10% 20% 30% 40%

YE 2005

YE 2006

1H 2007

Sep-07

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January 2008

27.9%

22.5%

11.1% 10.2%8.3% 7.3%

12.6%

34.0%

24.9%

7.7% 7.5% 6.6% 5.8%

13.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

BoG TBC VTB ProCredit Bank Republic Cartu Other Banks

YE 2006

Sep-07

Peer Group’s Market Share In Total Assets

Page 50

GEL/US$

Period End

YE 2005= 1.79

YE 2006 = 1.71

Sep - 2007=1.66

Peer Group’s market shares in Total Assets, September 2007

+75%+92% +10% +15% +26% +26% +68%Total asset growth YTD 2007

+65%+161% +21% +31% +65% +23% +58%Total asset growth in 2006

17.8%

22.6%

15.3%

12.9%

8.3%9.8%

13.2%

27.9%

22.5%

11.1%10.2%

8.3%7.3%

12.6%

0%

5%

10%

15%

20%

25%

30%

Bank of Georgia TBC Bank UGB ProCredit Bank Republic Cartu Other Banks

YE 2005

YE 2006

Notes:

(1) All data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge

(2) Change in peer group total assets calculations based on GEL values

Incremental market share YTD 200744% 29% 2% 3% 4% 3% 15%

Incremental market share in 200643% 22% 5% 6% 8% 3% 24%

Peer Group’s market shares in Total Assets, YE 2006

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January 2008

26.5%

22.2%

14.0%11.8%

8.8%7.3% 9.5%

30.8%

26.1%

9.4% 8.5% 7.8%6.1%

11.2%

0%

5%

10%

15%

20%

25%

30%

35%

BoG TBC VTB ProCredit Bank Cartu Republic Other Banks

YE 2006

Sep-07

18.2%

22.0%

17.6%

14.0%

10.0%

7.8%

10.4%

26.5%

22.2%

14.0%

11.8%

8.8%7.3%

9.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Bank of Georgia TBC Bank UGB ProCredit Cartu Bank Republic Other Banks

YE 2005

YE 2006

Peer Group’s Market Share In Gross Loans

Page 51

GEL/US$

Period End

YE 2005= 1.79

YE 2006 = 1.71

Sep - 2007=1.66

Peer Group’s market shares in Gross Loans, September 2007

+81%+79% +4% +12% +37% +30% +81%Gross Loan growth YTD 2007

+56%+125% +23% +30% +37% +44% +43%Gross Loan growth in 2006

Incremental market share YTD 200739% 33% 1% 3% 6% 4% 14%

Incremental market share in 200627% 15% 5% 5% 4% 4% 5%

Peer Group’s market shares in Gross Loans, YE 2006

Notes:

(1) All data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge

(2) Change in peer group total assets calculations based on GEL values

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January 2008

24.5% 24.8%

12.0%9.6%

11.3%

3.6%

14.2%

31.4%

24.3%

9.9%7.8% 8.8%

2.3%

15.5%

0%

5%

10%

15%

20%

25%

30%

35%

BoG TBC VTB ProCredit Bank Republic Cartu Other Banks

YE 2006

Sep-07

19.0%

26.5%

18.4%

9.2%10.6%

4.9%

11.3%

24.5% 24.8%

12.0%

9.6%11.3%

3.6%

14.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Bank of Georgia TBC Bank UGB ProCredit Bank Republic Cartu Other Banks

YE 2005

YE 2006

Peer Group’s Market Share In Gross Loans

Page 52

GEL/US$

Period End

YE 2005= 1.79

YE 2006 = 1.71

Sep - 2007=1.66

Peer Group’s market shares in Deposits, September 2007

+43%+87% +21% +18% +14% -7% +59%Deposit growth YTD 2007

+41%+96% -1% +58% +61% +11% +90%Deposit growth in 2006

Incremental market share YTD 200746% 23% 5% 4% 3% NMF 18%

Incremental market share in 200635% 21% NMF 10% 13% 1% 20%

Peer Group’s market shares in Deposits, YE 2006

Notes:

(1) All data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge

(2) Change in peer group total assets calculations based on GEL values

Page 53: Bank of Georgia Q3 2007 Results Overview of Georgia Q… ·  January 2008 Bank of Georgia Q3 2007 Results Overview Page 3

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January 2008

The Georgian Financial Services Sector – Overview Cont’d

Page 53

All other segments of the financial services sector small

and dominated by banks, very open to foreign

ownership

Insurance

GPW of GEL 86 mln (0.5% of GDP) in 9M 2007

YOY growth rate of 26%

Health insurance growing rapidly

No mandatory insurance growth drivers

No salary schemes

Bank-owned insurance companies account for 73%+ of

GPW

Top three insurance companies account for 71%+ of

GPW

Aldagi BCI, wholly-owned by BoG, has market share of

approximately 36%

Leasing

Small, non-bank funding constrained

Two bank-owned companies dominate the market

Georgian Leasing Company, wholly-owned by BoG,

has market share of approximately 25%

Broker-Dealers

2007 equities trading volume US$109mln

Negligible local-currency fixed income issuance

volumes

Institutional investors increasingly active in the market,

drive the volume

Galt & Taggart Securities, wholly-owned by BoG,

accounted for 63% of the equities trading volume

during nine months of 2007

Tough regulatory regime with pronounced safety

bias suppresses sector ROE

CAR and prudential Liquidity requirements

much higher than BIS

Mandatory reserves 13% on FX and on GEL

liabilities

Banking Sector Equity & ROE

Banking Sector Assets & ROA

1,116 1,336 1,697

2,548

4,228

5,599

6,674

4611,242

1,918 2,403

3.9% 3.9%

1.9%

3.1%2.8%

2.4%

2.7%3.0%

2.2%

3.4%

2.8%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2002 2003 2004 2005 2006 1H 2007 September 2007, YTD

GEL million

Banking Sector Assets (LHS) BoG Assets (LHS)

Banking Sector ROA (Annualised) (RHS) BoG ROA (Annualised) (RHS)

316 354 373

479

898

1,043

1,294

91

371 404 465

13.8%15.0%

7.9%

15.2%15.9%

12.2% 12.1%

14.9%

7.4%

16.0%

14.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0

200

400

600

800

1000

1200

1400

2002 2003 2004 2005 2006 1H 2007 September 2007, YTD

GEL million

Banking Sector Equity (LHS) BoG Equity (LHS)

Banking Sector ROE (Annualised) (RHS) BoG ROE (Annualised) (RHS)

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January 2008

Page 54

Market Potential And High Degree Of Concentration

Market Shares of Top 5 & Top 3 Banks by Assets (2006)

Note: data for Georgia as at 30 June 2007

Sources: National Bank of Georgia, CA IB

Gross Loans to GDP (%, 2006)

Banking Assets to GDP (%, 2006)

The highest degree

of market

concentration in

CEE benefits

large, entrenched

domestic players

Deposits to GDP (%, 2006)

80% 80%

65% 63% 61% 58% 57%48%

41%34%

64%58% 55%

51%

41% 40%

51%

34% 36%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Geo

rgia

Ka

za

kh

stan

Czech

Rep

ub

lic

Ro

ma

nia

Tu

rkey

Hu

nga

ry

Bu

lga

ria

Po

lan

d

Ru

ssia

Uk

rain

e

Top 5 (%) Top 3 (%)

Geo

rg

ia

Source: National Bank of Georgia, National Bank of Ukraine, data from Deutsche Bank

Source: National Bank of Georgia, National Bank of Ukraine, Deutsche BankSource: National Bank of Georgia, National Bank of Ukraine, Deutsche Bank

12%

17%

23%

27%

28%

29%

29%

34%

39%

42%

45%

50%

51%

52%

62%

89%

132%

0% 20% 40% 60% 80% 100% 120% 140%

Armenia

Georgia

Mexico

Argentina

Azerbaijan

Russia

Colombia

Brazil

Poland

Ukraine

Hungary

Chile

Kazakhstan

Turkey

Czech Republic

South Africa

Israel

20%

20%

31%

37%

42%

43%

48%

62%

69%

79%

84%

85%

85%

98%

99%

123%

162%

0% 20% 40% 60% 80% 100% 120% 140% 160% 180%

Armenia

Azerbaijan

Georgia

Mexico

Colombia

Argentina

Russia

Poland

Ukraine

Brazil

Turkey

Hungary

Kazakhstan

Chile

Czech Republic

South Africa

Israel

9%

15%

17%

20%

22%

24%

29%

34%

35%

37%

44%

51%

58%

61%

75%

89%

104%

0% 20% 40% 60% 80% 100% 120%

Armenia

Azerbaijan

Argentina

Georgia

Mexico

Colombia

Russia

Poland

Czech Republic

Brazil

Turkey

Ukraine

Hungary

Kazakhstan

Chile

South Africa

Israel

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January 2008

733698

659632

504445

378

268 252

0

100

200

300

400

500

600

700

800

Tu

rkey

Uk

rain

e

Hu

nga

ry

Bu

lga

ria

Ru

ssia

Po

lan

d

Ro

ma

nia

Ka

za

kh

stan

Geo

rgia

Geo

rg

ia

Georgian Banking Sector vs. Peer Countries

Page 55

Debit Cards Per Thousands Of People (2006)Market Shares of Top 5 & Top 3 Banks by Loans (2006)

Loans/Deposits (2006)

Source: CA IB

Source: CA IB

Banking Sector Equity As % Of Balance Sheet (2006)

Source: CA IB

146% 143%135%

127% 123%116%

94%87% 83%

71% 70%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Hu

nga

ry

Ru

ssia

Uk

rain

e

Ka

za

kh

stan

Geo

rgia

Eu

ro a

rea

Ro

ma

nia

Po

lan

d

Bu

lga

ria

Tu

rkey

Czech

Rep

ub

lic

Geo

rg

ia

21.2%

13.5%12.0% 11.8%

10.4% 10.2% 10.1%8.7%

7.5%5.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Geo

rgia

Ka

za

kh

stan

Uk

rain

e

Ro

ma

nia

Bu

lga

ria

Czech

Rep

ub

lic

Tu

rkey

Hu

nga

ry

Po

lan

d

Eu

ro a

rea

Geo

rg

ia

83%74%

64% 64%58% 57%

52% 48% 47%41%

66%

55%49% 52%

39%43%

33%37%

41%

29%

0%10%20%30%40%50%60%70%80%90%

Geo

rgia

Ka

za

kh

stan

Czech

Rep

ub

lic

Ro

ma

nia

Tu

rkey

Bu

lga

ria

Hu

nga

ry

Po

lan

d

Ru

ssia

Uk

rain

e

Top 5 (%) Top 3 (%)

Geo

rg

ia

Note: data for Georgia as at 30 June 2007

Sources: National Bank of Georgia, CA IB

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January 2008

The Georgian Banking Sector In The Regional Context

Page 56

1,440

4,228

7,432

3,735

5,424

4,567

13,005

37,389

531

14,685

0 20,000 40,000

Ukraine

Turkey

South Africa

Russia

Poland

Kazakhstan

Hungary

Greece

Georgia

Czech Republic

Georgia

740

1,602

5,747

1,434

3,412

1,524

5,895

26,008

292

8,472

0 10,000 20,000 30,000

Ukraine

Turkey

South Africa

Russia

Poland

Kazakhstan

Hungary

Greece

Georgia

Czech Republic

Georgia

1,039

4,628

6,217

2,093

2,975

2,714

7,241

26,501

337

5,726

0 10,000 20,000 30,000

Ukraine

Turkey

South Africa

Russia

Poland

Kazakhstan

Hungary

Greece

Georgia

Czech Republic

Georgia

Banking Assets Per Capita

YE 2006E (US$)

Gross Loans Per Capita

YE 2006E (US$)

Deposits Per Capita

YE 2006E (US$)

Source: Galt & Taggart Securities

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January 2008

Page 57

The Georgian Economy

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January 2008

Page 58

The Georgian Economy – Key Numbers0% Import tariff on almost all goods

0 Score in difficulty of the hiring index in the 2008 Survey of Doing Business

0 Score in difficulty of the firing index in the 2008 Survey of Doing Business

0.71 Energy consumption per unit of GDP (TOE/US$) estimated for 2006 - one of the lowest in the region

#1 Reformer in the world in 2006 (according to World Bank)

1.2 Million visitors estimated for 2007 compared to 983,114 in 2006, 560,021 in 2005, 368,312 in 2004 and 313,442 in 2003

2 Number of IPOs on the GSE in 2006-2007 with three more in the pipeline

4.4 Million people, plus approximately another 1 mln living and working abroad

7% Remittances as % of GDP estimated in 2007

8.8% YOY CPI in 2006

9.4% Stock market capitalisation as % of GDP, but only 3.5% net of Bank of Georgia

12% Real GDP growth estimated in 2007

12% Flat personal income tax

13.8% Net FDI as % of GDP estimated in 2007

15% Corporate income tax effective 1 January 2008 (reduced from 20%)

18th Global Rank in the 2008 Ease of Doing Business Survey by World Bank

19.9% Nominal appreciation of the Lari against US$ since 1 Jan 2004

31% Banking sector assets as % of GDP at YE 2006

35th Global Rank in 2007 in the Heritage Foundation Economic Freedom Index

50+ Institutional investors with local brokerage and custody accounts (at least 45 of them with Galt & Taggart)

80%+ Share of top five banks by assets

US$111 Average wage in 2006, similar to Russia in 2000 and Kazakhstan in 2001

US$123 All-in consumer debt per capita at 30 September 2007

229% Increase in budget revenues since 2003

US$233 Million assets of institutional and private investors under custody at the Bank of Georgia group

922% Bank of Georgia share price appreciation since October 2004

US$2,200 Approximate GDP per capita 2007E (similar to Russia in 2001 and Kazakhstan in 2003); US$3,891 on a PPP-adjusted basis

7,200 Categories of goods Georgia can export duty- and tariff-free to EU & Turkey under the GSP+ regime

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January 2008

Page 59

The Georgian Economy cont’d

Source: Ministry of Economic Development, State Statistics Department, the National Bank of Georgia

Gross Domestic Product Components of GDP, 9M 2007

GEL/US$ Exchange Rate & CPI

0%

2%

4%

6%

8%

10%

12%

14%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2003 2004 2005 2006 2007E 2008F

US

$ m

ln

GDP (LHS) Real GDP Growth (RHS)

+160% Trade, 13.1%

Public Adminsitration,

11.7%

Transport & Communications,

11.4%

Agriculture, 9.7%

Manufacturing, 8.3%

Education & Healthcare, 7.4%

Construction, 6.7%

Financial Intermediation,

2.3%

Other, 29.4%

Contribution To Growth Growth, Y-O-Y Share in GDP

Public Adminsitration 58.6% 81.1% 8.3%

Trade 24.8% 20.5% 13.1%

Transport & Communications 16.6% 15.1% 11.7%

Manufacturing 13.5% 17.2% 9.7%

Construction 12.9% 20.8% 6.7%

Education & Healthcare 11.6% 16.4% 7.4%

Financial Intermediation 6.9% 36.8% 2.3%

Agriculture 1.7% 1.6% 11.4%

Composition of GDP, 9M 2007

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

2003 2004 2005 2006 2007E 2008F

GEL/US$ average exchange rate (LHS) CPI, period average (RHS)

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January 2008

The Georgian Economy cont’d

Page 60

FDI, 2003-2008F

Source: IMF, Georgian National Investment Agency, the National Bank of Georgia, Galt & Taggart Securities’ estimates

Privatization, 2000-2008F

FDI Breakdown, 2002-2008FBudget Deficit, 2000-2008F

336490 539

1,144

1,400

1,000

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

200

400

600

800

1,000

1,200

1,400

1,600

2003 2004 2005 2006 2007E 2008F

FDI, US$ mln (LHS) FDI as % of GDP (RHS)

-300

-200

-100

0

100

-4%

-3%

-2%

-1%

0%

1%

2003 2004 2005 2006 2007E 2008F

GE

L m

ln

Budget Deficit as % of GDP (LHS) Budget Deficit (RHS)

0%

10%

20%

30%

40%

50%

60%

70%

80%

-

200

400

600

800

1,000

1,200

1,400

1,600

2002 2003 2004 2005 2006 2007E 2008F

US

$ m

ln

Net FDIOtherBanking BPManufacturingAgricultureBP Investment as % of Total FDI (RHS)

`

13 325 24

67

387

618 603

312

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007E 2008F

US

$ m

ln

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Page 61

Trade StructureWTO member

since 2001

No quantitative

restrictions on

trade

Simplified

customs regime

since August

2006, new

customs code

becomes

effective in

January 2007

One of the two

beneficiaries of

the EU GSP+

Scheme in the

CIS since

2006, granting

duty-free export

for 7,200

various products

As of November

2007 Georgia has

entered into a

free trade

agreement with

Turkey

Import Structure by Country, 9M 2007 Export Structure by Country, 9M 2007

Import Structure by Product, 9M 2007

Source: State Statistics Department

Export Structure by Product, 9M 2007

EU

Countries, 30%

Turkey, 14%

Russia, 12%

Ukraine, 11%

Azerbaijan, 7%

USA, 4%

China, 4%

United Arab

Emirates, 4%

Bulgaria, 3%

Turkmenistan,

3%

Armenia, 1%

Kazakhstan, 1%Others, 7%

EU

Countries, 23%

Turkey, 15%

Azerbaijan, 11%

Armenia, 9%

USA, 9%

Ukraine, 7%

Bulgaria, 6%

Canada, 5%

Russia, 5%

Turkmenistan,

3%

Kazakhstan, 3%

United Arab

Emirates, 2%

China, 1% Other, 25%

Oil & Gas, 18%

Mechanical

Equipment &

Electrical Machinery, 18%

Vehicles, 10%

Ferrous Metal

Products, 7%Cereals, 4%

Pharmaceuticals,

3%

Ferrous

Metals, 3%

Plastic, 3%

Sugar, 2%

Paper, 2%

Others, 32%

Ferrous

Metals, 20%

Beverages,

Spirits &

Vinegar, 12%

Ores, 8%

Vehicles, 6%

Cement, 5%Equipment &

Rail Cars, 5%

Gems &

Precious

Stones, 5%

Oil & Gas, 5%

Fertilizers, 5%

Sugar, 2%

Pharmaceutical,

2%

Vessels &

Aircraft, 2%

Others, 22%

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January 2008

Page 62

Key Drivers Of Economic GrowthExport-led growth with sufficient diversity Rapidly increasing domestic consumption

Economic Growth is Supported by

Source: Ministry of Economic Development, Ministry of Finance, State Statistics Department

Agricultural product exports of US$255 mln in 2006 and estimated at US$273 mln in 2007

Ferroalloy exports of US$464 mln in 2006 and estimated US$635 mln in 2007

Aircraft, rail car, vessels and machinery exports of US$233 mln in 2006 and estimated US$179 mln in 2007

Fertilizers exports of US$78mln in 2006 and estimated US$94 mln in 2007

Machinery exports of US$125 mln in 2006 and estimated US$107 mln in 2007

Oil and gas pipelines: Russia-Georgia-Armenia gas pipeline - 5.8 bcm/year

Shah-Deniz gas pipeline (BTE) - 6.6 bcm/year

The Iran-Azerbaijan-Georgia (IAG) gas pipeline – 3.5 bcm/year

Baku-Supsa oil pipeline – 5.75 mt/year;

Baku-Tbilisi-Ceyhan (BTC) oil pipeline - 50 mt/year

Batumi and Poti ports processed in 2005 7.5 mln tons of cargo and up to 14.0 mln tons of crude oil in 2005

Kulevi oil terminal to be operational in early 2008

Georgian Railway processed 22.7 mln tons of cargo in 2006

The construction of sBaku-Akhalkalaki-Kars railroad has commenced in 2007

Tbilisi and Batumi international airports renovated in 2006-2007

Following the adoption of the free zone legislation the tender regarding the establishment of such zone on the territory adjacent to the Poti Port is conducted

High consumer confidence

Increase in disposable income

Consumer spending is estimated at US$5.4 bn in 2006

Total estimated pent-up housing demand of up to US$1.6 bn

Estimated average household size of 3.7, far higher than in most

CEE/CIS peers

Significant increase in the number of younger households

New construction has not caught up with the cumulative

deterioration of the Soviet-built housing stock

Approximately 12,000 households (or 1% of total) have mortgages

Very low consumer indebtedness.

Consumer debt per capita stood at US$123 as of 30 September 2007

Optimistic expectations about jobs and income

Organised retail trade (supermarkets, hypermarkets, consumer

electronics & white goods, etc) account for a low share of total

Accelerating growth of new store openings as consumers‟ habits

evolve

Estimated US$2.4 bn (31% of GDP) investment in fixed assets in

2006

Investor optimism - Net FDI in 2006 was US$ 1.1bn and has been estimated at US$1.4 bn in 2007

Increased international borrowing by corporates and the banking sector, estimated at US$260 mln in 2006 and US$654 mln as

at 30 September 2007

Net remittances in 2006 were US$618 mln (US$488 mln in 2005) and estimated at US$750 mln in 2007

Increasing consumer spending

Sustained government spending and reasonable fiscal policy

Low taxes and transparent and simple tax code

Further development of the transport & logistics infrastructure

Rampant entrepreneurial acrivity

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January 2008Page 63

The Georgian Economy – Challenges

Key challenges

Expansion of the export base, especially in manufacturing and food processing

Can the FDI inflows be sustained at the current very high level, including into export-driven industries?

Source: Galt & Taggart Securities’ estimates and projections, State Statistics Department, the National Bank of Georgia, ING, December 2006

Note: Exports as % of GDP data for Georgia is as of December 2006, for Czech Republic, Poland, Russia, Romania and Turkey as of 2005, other countries’ data as of 2004

1.3

1.6

2.22.6

3.1

31.9% 31.6%

33.9%

32.8%

30.5%

28.0%

29.0%

30.0%

31.0%

32.0%

33.0%

34.0%

35.0%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2003 2004 2005 2006 2007E

US

$ b

n

Export (LHS) Export as % of GDP (RHS)

CAGR 34%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

50

100

150

200

250

300

350

2004 2005 2006 2007E

US

$ m

ln

Agricultural Export (LHS)

Agricultural Export as % of GDP (RHS)

-9%-7%

-11%

-15%

-20%

8% 10% 8%

15% 14%

-1%

3%

-2%

-0.2%

-6%

-8%

-6%

-4%

-2%

0%

2%

4%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

2003 2004 2005 2006 2007E

Current Account Deficit as % of GDP

Net FDI Inflows as of GDP

Current Account Deficit + Net FDI Inflow as % of GDP

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January 2008

Banks, 82%

Energy , 6%

Consumer, 5%

Listed Private Equity, 4%

Telecoms , 2%

Other, 1%

Equity Market Structures – GTI vs. MSCI Index Composition

Galt & Taggart Index – Sector Split MSCI Emerging Europe - Sector Split

MSCI Russia – Sector Split MSCI Emerging Europe Ex-Russia - Sector Split

Source: ING, December 2006

Energy 55%

Telecoms 10%

Banks 15%

Materials 8%

Other 12%

Source: ING, December 2006

Energy 75%

Materails 8%

Utilities 3%

Telecoms 10%

Banks 4%

Banks 38%

Telecoms 11%Utilities 8%

Pharm 4%

Energy 14%

Materials 8%

Media 4% Other 13%

Source: ING, December 2006

Page 64

Source: Galt & Taggart Securities, September 2007

Banking is

the only

investable

sector in

Georgia, with

Consumer

Goods

(including

export-

driven)

expected to

gain ground

in 2007-2008

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January 2008

Bank of Georgia 9 Months 2007 Financials

Page 65

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Page 66

Income Statement Data

1 Converted to U.S. dollars for convenience using a period-end exchange rate of GEL 1.6580 per U$S1.00 , such rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia as at 30 September 20072 Converted to U.S. dollars for convenience using a period-end exchange rate of GEL 1.7355 per U$S1.00 , such rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia as at 30 September 20063Growth calculations based on GEL values4 Not meaningful

Period Ended 9 Months, 2007 9 Months, 2007 9 Months, 2006 Change3

Consolidated, IFRS Based US$ GEL US$1 GEL US$2 GEL Y-O-Y

000s, unless otherwise noted (Pro Forma Consolidated) (Unaudited) (Unaudited)

Interest Income 119,549 198,213 99,637 165,198 36,766 63,807 158.90%

Interest Expense 55,285 91,663 45,115 74,800 12,586 21,843 242.44%

Net Interest Income 64,264 106,550 54,522 90,398 24,180 41,964 115.42%

Fee & Commission Income 15,759 26,129 13,023 21,592 8,072 14,010 54.12%

Fee & Commission Expense 2,344 3,886 1,908 3,163 1,253 2,175 45.44%

Net Fee & Commission Income 13,415 22,242 11,115 18,429 6,819 11,835 55.72%

Income From Documentary Operations 3,215 5,330 3,215 5,330 2,085 3,618 47.34%

Expense On Documentary Operations 907 1,503 907 1,503 513 890 68.84%

Net Income From Documentary Operations 2,308 3,827 2,308 3,827 1,572 2,727 40.32%

Net Foreign Currency Related Income 10,647 17,653 9,999 16,579 4,566 7,924 109.24%

Net Insurance Income 3,380 5,605 3,380 5,605 2,319 4,025 39.25%

Brokerage Income 1,735 2,877 1,735 2,877 752 1,304 120.54%

Asset Management Income 9 14 9 14 - - NMF4

Realised Net Investment Gains (Losses) 3,321 5,506 3,321 5,506 446 774 611.73%

Other 4,035 6,689 3,706 6,144 1,039 1,803 240.73%

Net Other Non-Interest Income 12,480 20,691 12,151 20,146 4,555 7,906 154.82%

Net Non-Interest Income 38,850 64,414 35,574 58,981 17,512 30,392 94.07%

Total Operating Income (Revenue) 103,115 170,964 90,096 149,379 41,691 72,355 106.45%

Personnel Costs 18,819 31,201 16,545 27,431 8,490 14,735 86.16%

Selling, General & Administrative Costs 11,265 18,678 9,886 16,392 5,375 9,329 75.71%

Procurement & Operations Support Expenses 5,026 8,334 4,065 6,741 2,350 4,078 65.29%

Depreciation & Amortization 4,524 7,501 4,047 6,710 2,116 3,672 82.73%

Other Operating Expenses 3,046 5,051 767 1,272 1,025 1,779 -28.51%

Total Recurring Operating Costs 42,681 70,765 35,311 58,545 19,356 33,593 74.28%

Normalized Net Operating Income 60,434 100,199 54,785 90,834 22,335 38,763 134.33%

Net Non-Recurring Income (Costs) (79) (132) (83) (138) (184) (320) NMF4

Profit Before Provisions & Bonuses 60,354 100,068 54,702 90,696 22,151 38,443 135.92%

Provisions For Loan Losses 8,343 13,833 7,761 12,867 6,552 11,371 13.16%

Recovery Of Loans 2,842 4,711 2,842 4,711 407 706 567.81%

Provisions For (Recovery Of) Other Assets (3) (5) -170 (281) -467 (810) -65.27%

Net Provision Expense 5,498 9,116 4,749 7,874 5,679 9,855 -20.10%

Pre-Bonus Result 54,856 90,951 49,953 82,821 16,472 28,588 189.71%

Bonuses & Share Based Compensation Expenses 12,332 20,446 12,332 20,446 3,818 6,626 208.58%

Pre-Tax Income 42,524 70,505 37,621 62,376 12,654 21,962 184.02%

Income Tax Expenses 8,770 14,540 7,544 12,508 2,686 4,661 168.36%

Net Income 33,755 55,965 30,077 49,868 9,969 17,301 188.24%

Weighted Average Shares Outstanding (000s) 25,638 15,672

Diluted Number of Shares Period End (000s) 27,249 18,282

EPS (Basic) 1.17 1.95 0.64 1.10 76.20%

EPS (Diluted) 1.10 1.83 0.55 0.95 93.38%

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Page 67

Balance Sheet Data30-Sep-07 30-Sep-07 Growth2 30-Sep-06

Consolidated, IFRS Based US$1 GEL US$1 GEL Y-O-Y US$3 GEL

000s, unless otherwise noted (Pro Forma Consolidated) (Unaudited) (Unaudited)

Cash & Cash Equivalents 63,624 105,489 56,280 93,312 128.06% 23,576 40,916

Loans & Advances To Credit Institutions 228,686 379,161 201,004 333,265 153.01% 75,898 131,721

Mandatory Reserve With NBG 56,174 93,136 45,548 75,518 54.50% 28,165 48,880

Other Accounts With NBG 55,064 91,296 55,064 91,296 951.96% 5,001 8,679

Balances With & Loans To Other Banks 117,448 194,729 100,393 166,452 124.44% 42,733 74,163

Available-For-Sale Securities 6,211 10,298 6,211 10,298 74.46% 3,401 5,903

Treasuries & Equivalents 39,104 64,834 35,435 58,751 NMF4 295 512

Other Fixed Income Instruments 151,159 250,621 144,272 239,203 NMF4 - -

Gross Loans To Clients 987,089 1,636,594 785,712 1,302,711 121.38% 339,059 588,437

Less: Reserve For Loan Losses -20,275 (33,615) (15,401) (25,535) 20.00% (12,261) (21,280)

Net Loans To Clients 966,815 1,602,979 770,311 1,277,176 125.19% 326,798 567,157

Investments In Other Business Entities, Net 87,899 145,736 87,899 145,736 21395.06% 391 678

Property & Equipment Owned, Net 86,309 143,101 84,042 139,341 164.78% 30,322 52,624

Intangible Assets Owned, Net 1,768 2,932 1,768 2,932 81.43% 931 1,616

Goodwill 26,149 43,355 26,149 43,355 81.14% 13,791 23,935

Tax Assets - Current & Deferred 2,026 3,360 2,026 3,360 NMF4 - -

Prepayments & Other Assets 37,484 62,149 34,141 56,605 79.07% 18,214 31,611

Total Assets 1,697,235 2,814,015 1,449,538 2,403,334 180.54% 493,618 856,673

Client Deposits 801,335 1,328,614 642,436 1,065,158 127.60% 269,659 467,993

Deposits & Loans From Banks 74,530 123,570 41,348 68,556 330.20% 9,182 15,936

Borrowed Funds 416,764 690,995 414,667 687,518 231.71% 119,428 207,267

Insurance Related Liabilities 19,856 32,922 19,856 32,922 712.27% 2,335 4,053

Issued Fixed Income Securities 7,906 13,108 - - NMF4 650 1,128

Tax Liabilities - Current & Deferred 15,630 25,914 12,360 20,493 428.02% 2,236 3,881

Accruals & Other Liabilities 38,943 64,568 38,416 63,694 228.44% 11,175 19,393

Total Liabilities 1,374,965 2,279,691 1,169,084 1,938,341 169.34% 414,666 719,651

Ordinary Shares 44,188 73,263 16,378 27,154 62.23% 9,644 16,738

Share Premium 183,117 303,607 183,117 303,607 407.15% 34,495 59,866

Treasury Shares (1,074) (1,781) (1,074) (1,781) 787.55% -116 (201)

Retained Earnings 47,309 78,438 37,746 62,583 71.71% 21,000 36,446

Revaluation & Other Reserves 11,335 18,794 10,570 17,525 NMF4 3,215 5,580

Net Income For The Period 33,755 55,965 30,077 49,868 188.24% 9,969 17,301

Shareholders' Equity Excluding Minority Interest 318,629 528,287 276,813 458,956 238.14% 78,207 135,729

Minority Interest 3,641 6,037 3,641 6,037 366.73% 745 1,293

Total Shareholders' Equity 322,270 534,324 280,454 464,993 239.36% 78,952 137,022

Total Liabilities & Shareholders' Equity 1,697,235 2,814,015 1,449,538 2,403,334 180.54% 493,618 856,673

Shares Outstanding 27,154,099 16,737,634

Book Value Per Share 10.33 17.12 109.18% 4.72 8.19

1 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.6580 per US$1.00, such exchange rate being the official Georgian Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 20072 Compared to the same period in 2006; growth calculations based on GEL values3 Converted to U.S. dollars for the convenience using a period-end exchange rate of GEL 1.7335 per US$1.00, such exchange rate being the official Georgia Lari to U.S. dollar period-end exchange rate as reported by the National Bank of Georgia on 30 September 20064 Not meaningful

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Page 68

Key Ratios

Note: All annualised numbers presented throughout have been annualised by dividing Income Statement component by the number of months in the period multiplied by twelve.

September 2007, YTD 2006 September 2006, YTD

Profitability Ratios

ROAA, 1 Annualised .................................................................................................................................... 3.5% 3.4% 3.2%

ROA, Annualised........................................................................................................................................... 2.8% 2.2% 2.7%

ROAE,2 Annualised ............. ......................................................................................................................... 16.2% 16.5% 20.5%

ROE, Annualised............................................................................................................................................ 14.3% 7.1% 16.8%

Interest Income To Average Interest Earning Assets, 3 Annualised .............................................................. 14.4% 16.7% 15.2%

Cost Of Funds, 4 Annualised ......................................................................................................................... 7.3% 5.8% 5.1%

Net Spread 5.................................................................................................................................................... 7.1% 10.9% 10.1%

Net Interest Margin 6 Annualised ................................................................................................................ 7.9% 11.1% 10.0%

Net Interest Margin, Normalised, 7 Annualised ............................................................................................ 7.9% 10.6% 9.5%

Loan Yield 8.................................................................................................................................................... 20.6% 17.4% 15.4%

Interest Expense To Interest Income.......................................................................................... .................... 45.3% 33.5% 34.2%

Net Non-Interest Income To Average Total Assets, Annualised ................................................................. 4.2% 5.8% 5.7%

Net Non-Interest Income To Revenue 9......................................................................................................... 39.5% 40.4% 42.0%

Net Fee And Commission Income To Average Interest Earning Assets, 10 Annualised ............................... 1.6% 3.1% 2.8%

Net Fee And Commission Income To Revenue..................................................................................... ........ 12.3% 16.5% 16.4%

Operating Leverage 11..................................................................................................................................... 11.3% 18.8% NMF

Total Operating Income (Revenue)/Total Assets, Annualised....................................................................... 8.3% 9.2% 11.3%

Recurring Earning Power 12 Annualised ........................................................................................................ 6.4% 7.7% 7.2%

Net Income To Revenue........................................................................................................ ......................... 33.4% 23.9% 23.9%

Efficiency Ratios

Operating Cost To Average Total Assets, 13 Annualised .............................................................................. 4.1% 6.8% 6.3%

Cost To Average Total Assets 14 Annualised................................................................................................. 5.6% 8.2% 7.6%

Cost / Income 15.............................................................................................................................................. 53.0% 56.7% 56.0%

Cost /Income Normalised 16............................................................................................................................ 52.9% 55.9% 55.6%

Cost / Income, Bank of Georgia, Standalone 18.............................................................................................. 48.8% 51.2% 52.5%

Cash Cost/Income17........................................................................................................................................ 48.5% 51.4% 51.0%

Total Employee Compensation Expense To Revenue 19................................................................................ 32.1% 29.7% 29.5%

Total Employee Compensation Expense To Cost.................................................................................. ........ 60.5% 52.5% 52.7%

Total Employee Compensation Expense To Average Total Assets, Annualised .......................................... 3.4% 4.3% 4.0%

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Page 69

Key Ratios cont’d

Note: All annualised numbers presented throughout have been annualised by dividing Income Statement component by the number of months in the period multiplied by twelve.

Liquidity Ratios September 2007, YTD 2006 September 2006, YTD

Net Loans To Total Assets 20.......................................................................................................................... 53.1% 57.2% 66.2%

Average Net Loans To Average Total Assets................................................................................................ 52.6% 61.3% 62.0%

Interest Earning Assets To Total Assets......................................................................................................... 79.4% 78.4% 81.6%

Average Interest Earning Assets To Average Total Assets............................................................................ 81.1% 77.3% 78.2%

Liquid Assets To Total Assets 21.................................................................................................................... 30.6% 25.0% 20.9%

Net Loans To Client Deposits........................................................................................................................ 119.9% 124.0% 121.2%

Average Net Loans To Average Client Deposits........................................................................................... 125.4% 113.4% 106.8%

Net Loans To Total Deposits 22...................................................................................................................... 112.7% 123.8% 117.2%

Net Loans To Total Liabilities....................................................................................................................... 65.9% 82.8% 78.8%

Total Deposits To Total Liabilities................................................................................................................. 58.5% 66.8% 67.2%

Client Deposits To Total Deposits................................................................................................................. 94.0% 99.8% 96.7%

Client Deposits To Total Liabilities............................................................................................................... 55.0% 66.7% 65.0%

Current Account Balances To Client Deposits............................................................................................... 57.2% 54.4% 55.7%

Demand Deposits To Client Deposits............................................................................................................ 9.6% 6.4% 3.9%

Time Deposits To Client Deposits................................................................................................................. 33.1% 39.2% 40.4%

Total Deposits To Total Assets...................................................................................................................... 47.2% 46.2% 56.5%

Client Deposits To Total Assets..................................................................................................................... 44.3% 46.1% 54.6%

Client Deposits To Total Equity (times) 23..................................................................................................... 2.29 1.49 3.42

Due From Banks / Due To Banks 24............................................................................................................... 486% 7597% 827%

Leverage (times) 25......................................................................................................................................... 4.17 2.20 5.25

Asset Quality

NPLs (in GEL) 26......................................................................................................................................... 16,711 16,266 19,671

NPLs to Gross Loans 27............................................................................................................................... 1.3% 2.3% 3.3%

Cost of Risk, Annualised 28......................................................................................................................... 1.0% 2.7% 2.8%

Cost of Risk, Normalised, Annualised29..................................................................................................... 1.0% 2.2% 2.2%

Reserves for Loan Losses to Gross Loans 30............................................................................................... 2.0% 3.0% 3.6%

NPL Coverage ratio 31 ................................................................................................................................ 152.8% 129.9% 108.2%

Equity to Average Net Loans to Clients..................................................................................................... 46.8% 78.8% 30.9%

Total Equity To Net Loans.......................................................................................................................... 36.4% 54.0% 24.2%

Capital Adequacy:

Equity To Total Assets................................................................................................................................ 19.3% 30.9% 16.0%

BIS Tier I Capital Adequacy Ratio 32.......................................................................................................... 23.2% 44.9% 18.0%

BIS Total Capital Adequacy Ratio 33.......................................................................................................... 23.3% 41.8% 19.3%

NBG Tier I Capital Adequacy Ratio 34....................................................................................................... 14.0% 23.2% 8.0%

NBG Total Capital Adequacy Ratio 35........................................................................................................ 16.9% 28.5% 12.8%

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Page 70

Key Ratios cont’d

Note: All annualised numbers presented throughout have been annualised by dividing Income Statement component by the number of months in the period multiplied by twelve.

Per Share Values: September 2007, YTD 2006 September 2006, YTD

Basic EPS (GEL) 36..................................................................................................................................... 1.95 1.62 1.10

Basic EPS (US$)......................................................................................................................................... 1.17 $0.89 0.64

Diluted EPS (GEL) 37.................................................................................................................................. 1.83 0.98 0.95

Diluted EPS (US$)...................................................................................................................................... 1.10 $0.54 0.55

Book Value Per Share (GEL) 38.................................................................................................................. 17.12 14.87 8.19

Book Value Per Share (US$)...................................................................................................................... 10.33 $8.14 4.72

Ordinary Shares Outstanding - Weighted Average, Basic.......................................................................... 25,637,740 16,505,701 15,672,016

Ordinary Shares Outstanding - Period End................................................................................................. 27,154,099 25,202,009 16,737,634

Ordinary Shares Outstanding – Diluted...................................................................................................... 27,249,100 27,229,418 18,281,710

Selected Operating Data:

Full Time Employees (FTE)....................................................................................................................... 3,992 2,226 1,956

FTEs, Bank of Georgia Standalone............................................................................................................. 2,388 1,601 1,479

Total Assets per FTE (GEL Thousands).................................................................................................... 602 558 438

Total Assets per FTE, Bank of Georgia Standalone (GEL Thousands)..................................................... 1,006 776 579

Branches....................................................................................................................................................... 109 100 92

ATMs............................................................................................................................................................ 185 124 91

Plastic Cards (Thousands)............................................................................................................................ 529 286 203

POS Terminals............................................................................................................................................. 1,093 471 328

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January 2008

Ratio Definitions

Page 71

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Page 72

Ratio Definitions1 Return On Average Total Assets (ROAA) equals Net Income of the period divided by quarterly Average Total Assets for the same period;

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

3 Average Interest Earning Assets are calculated on a quarterly basis; Interest Earning Assets include: Loans And Advances To Credit Institutions, Treasuries And Equivalents, Other Fixed Income Instruments and Net Loans to Clients;

4 Cost Of Funds equals Interest Expense of the period divided by quarterly Average Interest Bearing Liabilities; Interest Bearing Liabilities Include: Client Deposits, Deposits And Loans From Banks, Borrowed Funds and Issued Fixed Income Securities;

5 Net Spread equals Interest Income To Average Interest Earning Assets less Cost Of Funds;

6 Net Interest Margin equals Net Interest Income of the period divided by quarterly Average Interest Earning Assets of the same period;

7 Net Interest Margin Normalised equals Net Interest Income of the period, less provisions for the interest income generated by non-performing loans through the date of their write-offs, plus provisions for (less recovery of) other assets, divided by quarterly average Gross Loans

To Clients over the same period.

8 Loan Yield equals Interest Income, less Net Provision Expense divided by quarterly Average Gross Loans To Clients;

9 Revenue equals Total Operating Income;

10 Net Fee And Commission Income includes Net Income From Documentary Operations of the period;

11 Operating Leverage equals percentage change in Revenue less percentage change in Total Costs;

12 Recurring Earning Power equals Profit Before Provisions and Bonuses of the period divided by average Total Assets of the same period;

13 Operating Cost equals Total Recurring Operating Costs;

14 Cost includes Total Recurring Operating Costs, Net Non-Recurring Costs (Income) and Bonuses & Share Based Compensation Expenses;

15 Cost/Income Ratio equals Costs of the period divided by Total Operating Income (Revenue);

16 Cost/Income Normalised equals Recurring Operating Costs plus Bonuses & Share Based Compensation Expenses divided by Total Operating Income (Revenue) for the same period.

17 Cash Cost equals Cost minus Depreciation & Amortisation;

18 Cost/Income, Bank of Georgia, standalone, equals to non-consolidated Total Costs of the bank of the period divided by non-consolidated Revenue of the bank of the same period;

19 Total Employee Compensation Expense includes Personnel Costs and Bonuses & Share-Based Compensation Expenses;

20 Net Loans equal Net Loans To Clients;

21 Liquid Assets include: Cash And Cash Equivalents, Other Accounts With NBG, Balances With And Loans To Other Banks, Treasuries And Equivalents and Other Fixed Income Securities as of the period end and are divided by Total Assets as of the same date;

22 Total Deposits include Client Deposits and Deposits And Loans from Banks;

23 Total Equity equals Total Shareholders‟ Equity;

24 Due From Banks/Due To Banks equals Loans And Advances To Credit Institutions divided by Deposits And Loans From Banks;

25 Leverage (Times) equals Total Liabilities as of the period end divided by Total Equity as of the same date;

26 NPLs (in GEL) equals total gross non-performing loans as of the period end; non-performing loans are loans that have debts in arrears for more than 90 calendar days;

27 Gross Loans equals Gross Loans To Clients;

28 Cost Of Risk equals Net Provision For Loan Losses of the period, less recovery of other assets, divided by quarterly average Gross Loans To Clients over the same period;

29 Cost of Risk Normalised equals Net Provision For Loan Losses of the period, less provisions for the interest income generated by non-performing loans through the date of their write-off, plus provisions for (less recovery of) other assets, divided by quarterly average Gross

Loans to Clients over the same period.

30 Reserve For Loan Losses To Gross Loans To Clients equals reserve for loan losses as of the period end divided by gross loans to clients as of the same date;

31 NPL Coverage Ratio equals Reserve For Loan losses as of the period end divided by NPLs as of the same date;

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

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

34 NBG Tier I Capital Adequacy Ratio equals Tier I Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements the National Bank of ;

35 NBG Total Capital Adequacy Ratio equals Total Capital as of the period end divided by Total Risk Weighted Assets as of the same date, both calculated in accordance with the requirements of the National Bank of ;

36 Basic EPS equals Net Income of the period divided by the weighted average number of outstanding Ordinary Shares over the same period;

37 Diluted EPS equals Net Income of the period divided by the number of outstanding Ordinary Shares as of the period end plus number of ordinary shares in contingent liabilities;

38 Book Value Per Share equals Total Equity plus Treasury Shares, divided by the total number of outstanding Ordinary Shares.

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Caution Regarding Forward-Looking Statements

This presentation contains statements that constitute “forward-looking statements”,including, but not limited to, statements relating to the implementation of strategicinitiatives and other statements relating to our business development and financialperformance.

While these forward-looking statements represent our judgments and future expectationsconcerning the development of our business, a number of risks, uncertainties and otherfactors could cause actual developments and results to differ materially from ourexpectations.

These factors include, but are not limited to, (1) general market, macroeconomic,governmental, legislative and regulatory trends, (2) movements in local and internationalcurrency exchange rates, interest rates and securities markets, (3) competitive pressures,(4) technological developments, (5) changes in the financial position or credit worthinessof our customers, obligors and counterparties and developments in the markets in whichthey operate, (6) management changes and changes to our group structure and (7) otherkey factors that we have indicated could adversely affect our business and financialperformance, which are contained elsewhere in this presentation and in our past andfuture filings and reports, including those filed with the NSCG.

We are under no obligation (and expressly disclaim any such obligations) to update oralter our forward-looking statements whether as a result of new information, futureevents, or otherwise.