Liberty Capital Presentation

8/8/2019 Liberty Capital Presentation

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Investor Presentation

June 2010


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Executive Summary

Liberty Investments is an investment company founded in August 2009 by Dinu Patriciu

and Lado Gurgenidze

Invest in selected undervalued financial services companies, typically obscure due to

their small size, or operating in emerging/frontier markets

Acquisition of 91% of Liberty Bank was completed within one month from incorporation,

in September 2009

Raise additional capital from institutional and HNW investors and list the Company on the

London Stock Exchange within three years from inception

Liberty Bank is listed on the GSE (ticker code: BANK; Bloomberg ticker code: BANK.GG)

June 20Page 2 www.libertycapital.ge

Objective:

Exit/Liquidity Event:


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Investment Thesis Summary


We invest in financial institutions in selected emerging/frontier markets

A geographic and sector matrix approach

Geographic focusSmaller frontier markets (with GDP of less than US$100 bn) have largely

been overlooked or de-emphasised since 2008 by multinational banks, and

this trend will likely continue for the next few years

We focus on countries with good governance, low levels of corruption,

sound macroeconomic policies and outlook, low taxes/small fiscal footprint,

transparency and stability of the legal framework and low banking

assets/GDP ratios

Sector focus

The banking sector in selected emerging/frontier markets

Very selectively - private banking, wealth management and trust &

corporate services providers serving clients in EMEA

Opportunistic but highly disciplined investments in other segments ofthe financial services sector


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Investment Thesis Summary contd

The banking sector is a priority

Banks are among the earliest and biggest beneficiaries of economic reforms

in emerging/frontier marketsThe banks we invest in have to have a reasonable chance of attaining a top

five position in their home market, or already are among the top five thisgives the banks a natural entitlement to a share of local deposits, as well asdefendable earning power

We will seek to attain majority control or a meaningful minority stake in such

banks, because we are confident that we can add value by leveraging LadoGurgenidzes experience in building in 2004-2007 a similar institution fromvery humble beginnings (and creating about US$1 billion shareholder value in

the process) and help the investee banks with product innovation, delivery

channel modernisation, HR, risk management and IR to rapidly scale up the

footprint and gain market share, ensuring profitable organic growth

No more than 1-2 investments a year, to give us the time to provide sufficientattention to each investee company, initiate a transformation, build or enhance

the local team, etc



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Making A Difference


How do we intend to make a difference? We believe we can contribute in the following ways:

Strategic re-engineering. Small financial services companies, whether public or private, typically lack the resources

to embark upon business models which require aggressive scale. As such, they often engage in strategic self-censorship and pursue less ambitious strategies, thus leaving much low-hanging fruit untouched. We think we canadd a much-needed fresh look and genuinely international dimension to our investee companies strategic thinking

Scaling up the business. Even with resources available, the objective of scaling up the business over a 2-3 year

timeframe typically entails a set of operational challenges. This is particularly true for the financial services industry,

and more so now than before the crisis. Having led one of the most successful (and rapid) independent scaling-up

efforts in universal banking in CEE, we believe we can meaningfully contribute in helping the incumbent

management teams to scale up their business 3x-5x in the medium term in their traditional markets and beyond

Innovation. In some cases, we may bring to bear our experience in designing innovative products and, in particular,

innovative approaches to developing alternative distribution and service delivery channels. This experience would

be applicable primarily but not exclusively in the frontier markets

Synergistic growth. Where appropriate, we will seek to convince the investee banks to systemically realign their

businesses with one another to take full advantage of cross-referral and other revenue opportunities. Such

realignments may or may not result in cross-shareholding or mergers, although we will pursue such opportunities

when appropriate

Access to funding. Some of the prospective investee companies may benefit from our experience in raising equity

and debt capital, and from our wide-ranging relationships with the buy-side (especially with the GEM-and-EMEA-

focused hedge funds and real-money accounts)

Corporate governance. In almost all cases we will actively seek board representation. Occasionally, we will resort to

shareholder activism if we are convinced that our efforts in this direction will help extract value and set the

companies on the right path. And in case of companies with attractive platform characteristics or indemonstrableneed of a turnaround,we will seek voting and managerial control


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Top-Down Approach/Macro Screening Of Suitable Frontier Markets


The Millennium Challenge Country Eligibility Criteria (http://www.mcc.gov/mcc/countries/index.shtml)

Indicator Category Source

Civil Liberties Ruling Justly Freedom House

Political Rights Ruling Justly Freedom House

Voice and Accountability Ruling Justly World Bank Institute

Government Effectiveness Ruling Justly World Bank Institute

Rule of Law Ruling Justly World Bank Institute

Control of Corruption Ruling Justly World Bank Institute

Immunization Rates Investing in People World Health Organization

Public Expenditure on Health Investing in People World Health Organization

Girls' Primary Education Completion Rate Investing in People UNESCO

Public Expenditure on Primary Education Investing in People UNESCO and national sources

Business Start Up Economic Freedom IFC

Inflation Economic Freedom IMF WEO

Trade Policy Economic Freedom Heritage Foundation

Regulatory Quality Economic Freedom World Bank Institute

Fiscal Policy Economic Freedom National sources, cross-checked with IMF WEO

Natural Resource Management Investing in People CIESIN/Yale

Land Rights and Access Economic Freedom IFAD / IFC

Eligible CountriesAlbania

Armenia

Benin

Burkina Faso

Cape Verde

Colombia

El Salvador

Georgia

Ghana

Guyana

Honduras

Indonesia

Jordan

Kenya

Kyrgyz Republic

Lesotho

Liberia

Madagascar

Malawi

Mali

Moldova

Mongolia

Morocco

Mozambique

Namibia

Nicaragua

Niger

ParaguayPeru

Philippines

Rwanda

So Tomand Principe

Senegal

Tanzania

Timor-Leste

Uganda

Ukraine

Vanuatu

Zambia

Source: Millennium Challenge Corporation

The countries where we are currently invested are shown in red font. The countries in which we have looked at specific opportunities in 2009-2010 are shown in italics.


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Top-Down Approach/Screening For Economic Liberty


The World Bank Doing Business Rankings (www.doingbusiness.org)

Selection criteria

Starting a business

Dealing with construction

permits

Employing workersRegistering property

Getting credit

Protecting investors

Paying taxes

Trading across borders

Enforcing contractsClosing a business

2010Rank

Economy2010Rank

Economy2010Rank

Economy2010Rank

Economy2010Rank

Economy

1 Singapore 42 Slovak Republic 83 Dominica 124 Paraguay 165 Togo

2 New Zealand 43 Armenia 84 El Salvador 125 Nigeria 166 Mauritania

3 Hong Kong, China 44 Bulgaria 85 Pakistan 126 Bhutan 167 Lao PDR

4 United States 45 Botswana 86 Dominican Republic 127 Micronesia, Fed. Sts. 168 Cte d'Ivoire5 United Kingdom 46 Taiwan, China 87 Maldives 128 Morocco 169 Angola

6 Denmark 47 Hungary 88 Serbia 129 Brazil 170 Equatorial Guinea

7 Ireland 48 Portugal 89 China 130 Lesotho 171 Cameroon

8 Canada 49 Chile 90 Zambia 131 Tanzania 172 Benin

9 Australia 50 Antigua and Barbuda 91 Grenada 132 Malawi 173 Guinea

10 Norway 51 Mexico 92 Ghana 133 India 174 Niger

11 Georgia 52 Tonga 93 Vietnam 134 Madagascar 175 Eritrea

12 Thailand 53 Slovenia 94 Moldova 135 Mozambique 176 Burundi

13 Saudi Arabia 54 Fiji 95 Kenya 136 Algeria 177 Venezuela, R.B.

14 Iceland 55 Romania 96 Brunei 137 Iran, Islamic Rep. 178 Chad

15 Japan 56 Peru 97 Palau 138 Ecuador 179 Congo, Rep.

16 Finland 57 Samoa 98 Marshall Islands 139 West Bank and Gaza 180 Sao Tomao and Principe

17 Mauritius 58 Belarus 99 Yemen, Rep. 140 Gambia, the 181 Guinea-Bissau

18 Sweden 59 Vanuatu 100 Jordan 141 Honduras 182 Congo, Dem. Rep.

19 Korea, Rep. 60 Mongolia 101 Guyana 142 Ukraine 183 Central African Republic

20 Bahrain 61 Kuwait 102 Papua New Guinea 143 Syrian Arab Republic

21 Switzerland 62 Spain 103 Croatia 144 Philippines

22 Belgium 63 Kazakhstan 104 Solomon Islands 145 Cambodia

23 Malaysia 64 Luxembourg 105 Sri Lanka 146 Cape Verde

24 Estonia 65 Oman 106 Egypt, Arab Rep. 147 Burkina Faso

25 Germany 66 Namibia 107 Ethiopia 148 Sierra Leone

26 Lithuania 67 Rwanda 108 Lebanon 149 Liberia

27 Latvia 68 Bahamas, the 109 Greece 150 Uzbekistan

28 Austria 69 Tunisia 110 Guatemala 151 Haiti

29 Israel 70 St. Vincent and the Grenadines 111 Seychelles 152 Tajikistan

30 Netherlands 71 Montenegro 112 Uganda 153 Iraq

31 France 72 Poland 113 Kosovo 154 Sudan

32 Macedonia, FYR 73 Turkey 114 Uruguay 155 Suriname

33 United Arab Emirates 74 Czech Republic 115 Swaziland 156 Mali

34 South Africa 75 Jamaica 116 Bosnia and Herzegovina 157 Senegal

35 Puerto Rico 76 St. Kitts and Nevis 117 Nicaragua 158 Gabon

36 St. Lucia 77 Panama 118 Argentina 159 Zimbabwe

37 Colombia 78 Italy 119 Bangladesh 160 Afghanistan

38 Azerbaijan 79 Kiribati 120 Russian Federation 161 Bolivia

39 Qatar 80 Belize 121 Costa Rica 162 Comoros

40 Cyprus 81 Trinidad and Tobago 122 Indonesia 163 Djibouti

41 Kyrgyz Republic 82 Albania 123 Nepal 164 Timor-Leste

Source: World Bank



8/17

Top-Down Approach/2010 Index Of Economic Freedom

The Index Of Economic Freedom World Rankings (http://www.heritage.org/index/ranking.aspx)


10 components of

economic freedom

Business Freedom

Trade Freedom

Fiscal FreedomGovernment Size

Monetary Freedom

Investment Freedom

Financial Freedom

Property Rights

Freedom from Corruption

Labor Freedom

World

Rank Country

Freedom

Score

Change From Previous

Year

World

Rank Country Freedom Score Change From Previous Year

1 Hong Kong 89.7 (0.3) 41 Mexico 68.3 2.5

2 Singapore 86.1 (1.0) 42 Kuwait 67.7 2.1

3 Australia 82.6 - 43 Oman 67.7 0.7

4 New Zealand 82.1 0.1 44 Israel 67.7 0.15 Ireland 81.3 (0.9) 45 Peru 67.6 3.0

6 Switzerland 81.1 1.7 46 United Arab Emirates 67.3 2.6

7 Canada 80.4 (0.1) 47 The Bahamas 67.3 -3.0

8 United States 78.0 (2.7) 48 Malta 67.2 1.1

9 Denmark 77.9 (1.7) 49 Saint Vincent and the Grenadines 66.9 2.6

10 Chile 77.2 (1.1) 50 Latvia 66.2 -0.4

11 United Kingdom 76.5 (2.5) 51 Hungary 66.1 -0.7

12 Mauritius 76.3 2.0 52 Jordan 66.1 0.7

13 Bahrain 76.3 1.5 53 Albania 66.0 2.3

14 Luxembourg 75.4 0.2 54 Costa Rica 65.9 -0.5

15 The Netherlands 75.0 -2.0 55 Trinidad and Tobago 65.7 -2.3

16 Estonia 74.7 -1.7 56 Macedonia 65.7 4.5

17 Finland 73.8 -0.7 57 Jamaica 65.5 0.3

18 Iceland 73.7 -2.2 58 Colombia 65.5 3.2

19 Japan 72.9 0.1 59 Malaysia 64.8 0.2

20 Macau 72.5 0.5 60 Panama 64.8 0.1

21 Sweden 72.4 1.9 61 Slovenia 64.7 1.8

22 Austria 71.6 0.4 62 Portugal 64.4 (0.5)

23 Germany 71.1 0.6 63 Romania 64.2 1.0

24 Cyprus 70.9 0.1 64 France 64.2 0.9

25 Saint Lucia 70.5 1.7 65 Saudi Arabia 64.1 (0.2)

26 Georgia 70.4 0.6 66 Thailand 64.1 1.1

27 Taiwan 70.4 0.9 67 Turkey 63.8 2.2

28 Botswana 70.3 0.6 68 Montenegro 63.6 5.4

29 Lithuania 70.3 0.3 69 Madagascar 63.2 1.0

30 Belgium 70.1 -2 70 Dominica 63.2 0.6

31 South Korea 69.9 1.8 71 Poland 63.2 2.9

32 El Salvador 69.9 0.1 72 South Africa 62.8 (1.0)

33 Uruguay 69.8 0.7 75 Bulgaria 62.3 (2.3)

34 Czech Republic 69.8 0.4 76 Uganda 62.2 (1.3)

35 Slovakia 69.7 0.3 77 Namibia 62.2 (0.2)36 Spain 69.6 -0.5 78 Cape Verde 61.8 0.5

37 Norway 69.4 -0.8 79 Belize 61.5 (1.5)

38 Armenia 69.2 -0.7 80 Kyrgyz Republic 61.3 (0.5)

39 Qatar 69.0 3.2 81 Paraguay 61.3 0.3

40 Barbados 68.3 -3.2 82 Kazakhstan 61.0 0.9

Source: Heritage Foundation

The countries where we are currently invested are shown in red font. The countries in which we have looked at specific opportunities in 2009-2010 are shown in italics


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Selected Target Markets The Macro Screen Overlap

June 20www.libertycapital.gePage 9

Nepal

Iraq

Latvia

Lithuania

Countries with GDP

per capita of less

than US$10,000ranked among top

80 in the three

indices used for the

macro screen

World Bank

Doing Business

Index Of Economic Freedom

Kenya

Mali Mozambique

Niger

UkraineParaguay

GeorgiaArmenia

Uganda

Namibia

Kyrgyzstan

GhanaTanzania

Botswana

MacedoniaEstonia

South Africa

Albania

Cape Verde

Colombia

El Salvador

Jordan

Peru

Zambia

Guyana

Benin

Honduras

Indonesia

Moldova

Mongolia

MoroccoNicaragua

Senegal

Timor-Leste

Jamaica

Thailand

Madagascar

Paraguay

Liberia

Madagascar

Malawi

Rwanda

Burkina

Faso

Lesotho

Philippines

Vanuatu

Azerbaijan

Tonga

Fiji

Samoa

Tunisia

Maldives

Egypt

EthiopiaSwaziland

Bangladesh

Kiribati

Zambia

Sri Lanka

Guatemala

Bhutan

Haiti

Vietnam

Solomon Islands

EcuadorPapua New GuineaAlgeria Ecuador

Sierra Leone

Sudan

Gambia

Honduras

Tajikistan

Surinam

Zimbabwe

Montenegro

Belize


Romania

Bahrain


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Established in September 2009

Current Group Structure


100%

77.3%

100%Established in October 2009

100%In progress

Subject to regulatory approval

US$15,000,000

Acquisition of a 91.218%

equity interest in

September 2009

Mandatory Tender Offer For The

Minority Interest In

November 2009

Corporate Broker

GEL 18.7 million

February 2010

Corporate Broker

Capital Increase

Established in September 2009

Lib t B k At A Gl


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Liberty Bank At A Glance

Page 11June 20www.libertycapital.ge

The leading bank by number of clients, serving approximately 1.2 million individuals and over 20,000

legal entities

The largest retail network comprising 179 branches and sales outlets 1,350 mobile sales force

Sixth largest bank by total assets, with a 4.8% market share*Exclusive provider of state pension services

Sole provider of welfare payment services

Providing payroll services to approximately 100,000 individuals employed at over 2,900 organisations

Robust in-house card processing platform, servicing 1.2 mln cards, with estimated capacity of over 5

mlncards

A new experienced team running the bank since October 2009, comprising Lado Gurgenidze and 20

experienced professionals

Risk controls & procedures have been established

ALCO has been established

Aggressive credit risk management efforts are underwayAdequate provisioning of legacy exposures provisions of GEL 5.6 mln and write-offs of GEL 8.5 mlnmade since the acquisition

Corporate Banking and Private Banking have been enhanced and re-launche d and integrated client

coverage introduced

RB product lineup redesign underway

Branch footprint normalisation effort underway

Consolidated Total Assets, Net Loans and Client Deposits grew 11.3%, 20.4% and 14.4% q-o-q,

respectively, in Q1 2010

Standalone Total Assets, Net Loans and Client Deposits grew 30.6%, 39.9% and 49.9% , respectively,

YTD 2010 (May)

Leading Retail Footprint A Turnaround in Progress

Investment HighlightsKey Figures*

*As of 31 May 2010

Source: the National Bank of Georgia

GEL mln, unless otherwise noted *

Consolidated

M ar 10 D ec 09 Sep 09 YE 2008 YE 2007

Total Assets 362 325 281 318 283

Net Loans, of which 101 84 78 109 114

Retail loans 66 56 46 81 75

Corporate loans 33 27 32 28 39

Private Banking loans 1.2 0.7 0.4 N/A N/A

Total Liabilities 333 315 263 303 222

Ac count Balances, of which 271 254 202 199 204

Retail client account balances 91 77 80 114 107

Corporate client account balances 124 111 63 68 94

Private Banking client account balances 16 15 13 N/A N/A

Shareholders Equity 29 11 17 15 59

*Not audited or reviewed (except for 2007 and 2008 figures), IFRS-based. Audited IFRS results may vary significantly from these preliminary figures

As of 31 May 2010

Shares outstanding* 3,060,446,927

Shares owned by Liberty

Capital 2,409,047,026

% owned by Liberty Capital 78.7%Treasury shares 9.1%

ESOP 5.7%

Free Float* 6.4%

Exchange GSE

Ticker Code BANK

Share price GEL 0.034

MCap** GEL 94.7 mln

* including treasury shares

** net of treasury shares

GEL/US$ Exchange Rate (e-o-p) of 1.7847 as at 31

May 2010

Source: The Georgian Stock Exchange

GEL mln, unless otherwise noted *

Consolidated

Q1 10 Q4 09 Q3 09 2008 2007

Revenue 12 11 NMF 55 49

Net Income/(Loss) 0.1 (3) NMF (46) 3

GEL/US$ Exchange Rate, e-o-p 1.75 1.69 1.68 1.67 1.59

Total Assets Growth May '10-September 09

Liberty Bank (Standalone) 52.1%

The Georgian Banking Sector 11.8%

Net Loan Book Growth May '10-September 09



Client Deposits Growth May '10-September 09



GSE+OTC Trading Volume GEL Shares

July '09 200 6,250

August '09 98,014 1,444,852

September '09 300,796 3,077,545

October '09 128,119 1,605,407

November '09 242,089 3,910,182

December '09 244,261 3,748,464

January '10 1,519,989 35,608,902

February 10 24,406,336 1,450,727,143

March 10 592,548 26,830,620

April 10 989,269 43,034,141

May 10 120,560 3,493,095

June '10 422,899 12,264,678

Total 29,065,080 1,585,751,279

June 10 M ar 10 Dec 09 Sep 09 YE 2008 YE 2007

Numbe r of debi t cards o uts tanding 1, 202, 647 1, 189, 421 885, 938 N/A N/A N/A

Number of ATMs 171 137 136 134 135 N/A

Number of employees , of which 3,765 3,857 3,804 3,700 3,880 4,121

Full-time employees 1,860 1,946 1,890 1,790 1,907 2,162

Number of POS terminals 533 491 510 503 548 N/A

A 91.218% equity interest purchase in September 2009 for GEL 25 mln (US$15 mln) by Liberty

Capital, a wholly-owned subsidiary of Liberty Investments Hold ing B.V.Dinu Patriciu (one of the most accomplished entrepreneurs and investors in CEE) and Lado

Gurgenidze (Georgias most successful banker, who led the Bank of Georgia turnaround in 2004 -2007) are the ultimate beneficial shareholders

Regulatory waiver (applicable to CAR and other prudential ratios) of GEL 108 mln t hrough

September 2012

Capital increase of GEL 18.7 mlne ffected in February 2010, of which GEL 17.2 mln was invested

by Liberty Capital

Tax loss carryforward of GEL 49 mln

Significant untapped lending potential, given the low loan book penetration rate amont retail

clients, Net Loans/Total Deposits ratio of 37.5% and Liquidity ratio of 34.6% as at 31 March 2010

Net Loans/Assets Ratio of 28.1% as at 31 March 2010

Profitable from Q1 2010

Growing much faster than the banking sector


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About Dinu Patriciu

Dinu Patriciu is a Romanian citizen who began his career as an architect. Over the last twenty years he has been at the forefront of regional

business and political life, becoming one of the leading advocates of free market principles and classical liberal values in Romania and South

Eastern Europe.

Between 1990 and 1998 Dinu was the President of ALPHA Construction and Real Estate Investments SA, the first private company founded in

Romania after the collapse of Communism. During this period, he acquired land and developed over 40,000 square meters of high-endcommercial and residential properties in Bucharest.

In 1998 he led an investor buyout of the Romanian company Rompetrol SA, served on the Supervisory Board of the new company from its

establishment, and took over as full time CEO in 2001. Dinu led Rompetrol from a state-owned Romanian oil services company into one of the

top 25 oil operators in the European Union through a program of strategic acquisitions and organic growth. He took control of Rompetrol in

1998 when it was a money-losing asset that had been declared unsalvageable by the World Bank. After several acquisitions in Romania,

Rompetrol embarked on an international expansion program in the Balkan region and beyond, including Moldova, Georgia, and Ukraine, and in

2005 acquired Dyneff Group SA, the largest independent distributor of oil products in France. In August 2007, Dinu Patriciu sold 75% of

Rompetrol to Kazakhstans KazMunayGas (KMG). In June 2009, Dinu Patriciu sold his remaining 25% equity stake to KMG while remaining aMember of theBoard of The Rompetrol Group.

Over the past year, Dinu has focused his attention on the European commercial real estate market with the purchases of AIM-listed Fabian

Romania, which owns GBP 138 million of Romanian assets, and 73.6% of LSE-listed Rutley European Property Limited. Dinu is also Chairman of

the Board of Adevarul Holding, a media group (since 2006), and President of the Dinu Patriciu Foundation, which provides educational

scholarships for promising Romanian students. Forbes ranks Dinu Patriciu the richest man in Romania and the 397th richest person in the world

with assets of US$1.8 billion.



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About Lado Gurgenidze


Lado Gurgenidze is a career banker whoafter a decade spentat several investment banks in Eastern Europeand London returned to his native Georgia in 2004 and

spearheaded, as Executive Chairman and CEO, a turnaround of Bank of Georgia (LSE: BGEO). During Lados three-year tenure, the banks total assets and netincome grew 760% and 1,563%, respectively. As its market share grew from 18% to 34%, Bank of Georgia became the leading universal bank in Georgia and the

region with market capitalisation exceeding US$900 million at the time ofLados departure (up from US$30 million at the time of his arrival). Prior to taking thehelm at Bank of Georgia, Lado served as Head of Europe at Putnam Lovell (now part of Jefferies) and as Head of TechnologyCorporate Finance and Head of M&A,

Emerging Europe at ABN Amro advising such clients as SWIFT, Reuters, Moneyline Telerate, Wirtualna Polska, Marconi, Andrew Corporation, Merloni

Elettrodomestici, News Corp, Global One,Golden Telecom, UPCand Philips.

In 2007-2008, Lado served as Prime Minister of Georgia, leading the Georgian economy through the final stage of free-market reforms, including tax cuts, financial

services sector reform as well as aggressive privatisationand liberalisation policies. In the aftermath of the August 2008conflict with Russia, Lado was instrumental

in stabilising the Georgian economy and its financial sector, as well as securing a US$750 million IMF stand-by arrangement and a $4.5 billion multi-donor aid

package.

Lado put Georgia on the global institutional investor map, leading the first-ever international equity and debt capital markets issues by Bank of Georgia and the

Georgian government as well as the countrys first-ever domestic IPOs. He is responsible for bringing in approximately US$1 billion of portfolio investments andcloseto US$500 millionof FDI.Lado is the only person to have been awarded St Georges VictoryOrder (in 2008) and the Presidential Order of Excellence (in 2010)

the two highest civilian honours in Georgia.

Sincehe stepped down as Prime Minister, Lado has been a frequent public speaker on issues of economic libertyand free-market reforms in developing countriesand co-chairs the Emory Center for Alternative Investments. In October 2009, he was invited to join, as Chairman, the supervisory board of Bank of Kigali, thelargest bankin Rwanda.

In September 2009, Lado established, togetherwith Dinu Patriciu, Liberty Investments, an investment company focusing on financial services institutions in frontier

markets with low corruption, low taxes and openeconomies. In the same month, Liberty Investments announced the acquisition of a controlling equity interest in

Liberty Bank, which has the largest client base in Georgia, serving some 1.2 million clients through 179 branches. By June 2010, the first phase of the turnaround

has been completed, withthe rebranded bank returning to profitability and growing much faster than the Georgian banking sector.

Lado is married with four sons. He is a Georgian and British citizen and received his MBA from Goizueta Business School of Emory University in 1993, following

undergraduate studies at Middlebury College andTbilisi State University. In 2006Lado hosted the licensed Georgian version ofThe Apprentice TV show.

Current Commitments

L iberty Cap ital

Past Engagements

UK FSA individual reference number VXG01025 (currently inactive)

Transformation of JSC Bank of Georgia Under Lado Gurgenidzes LeadershipCase Stud


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Transformation of JSC Bank of Georgia Under Lado Gurgenidze s Leadership


US$ mln, unless otherwise noted 30 September 04 30 September 07 Growth

Share price, US$ 2.2* 35* 1,468%

MCap 29 937 3,087%

Assets 152 1,448 854%

Market share, % 18.2% 34%

Net Loan book 86 779 806%

NPLs, % of Loan book 7.5% 1.3%

Deposits 96 684 609%

Equity 26 280 961%

Book value per share, US$ 3 10 233%

Revenue , YTD 16 90 461%

Net income, YTD 2** 30 1,779%

ROAA 1.2% 3.5%

ROAE 5.7% 16.2%

Cost/Income ratio 65% 53%

Employees, FTE 944 3,992 323%

Branches 50 109 118%

ATMs 16 185 1,056%

Accounts, 000 206 659 220%

Cards, 000 30 520 1,633%

GEL/US$ (e-o-p) 1.84 1.66

* 4 October 2004 GSE price of GEL 4.0, converted at GEL/US$ of 1.82; Closing price on the LSE on 16 November 2007 , the day Lados resignation was announced**The new team had to provision heavily immediately upon assuming operational control in October 2004, which resulted in full- year 2004 loss of GEL 9.2 mln

Executive Chairman, CEO of JSC Bank of Georgia (BoG) October 2004-November 2007Transformed BoG from an obscure, loss-making local commercial bank with US$25 mln MCap (GSE), 18% market share and narrow business model into the undisputed

domestic leader universal bank with US$900 mln Mcap (LSE at the time of his depa rture, 91% free float, 85% institutionally owned), 33% market share, emerging

international footprint and US$47 mln net income (2007)

The first Georgian company to list on the LSE US$160 mln IPO in November 2006, 100+ bidsThe first Georgian entity to issue Eurobonds US$200 mln 9% 2012 issued in February 2007, 100+ bids

Assembled a team of experienced professionals, including alumni of ABN Am ro, Credit Suisse, UBS, Merrill Lynch, Nomura, Deutsche Bank, Morgan Stanley, Raiffeisen,UniCredit, JP Morgan, IFC, EBRD, Ernst & Young, Deloitte, PwC etc

Acquired and developed Galt & Taggart Securities into the undisputed domestic leader (60%+ market share) with significant institutional client base and high

profitability (9M 2007 net income US$6.6 mln, 21.9% of the group net income for the period, US$189 mln client assets as at 30 September 2007)

Developed organically the market-leading wealth management business (1,000+ local and international clients, US$50.5 mln client assets as at 30 September 2007)

Developed organically the countrys sole asset management business (Galt & Taggart Asset Management, US$65 mln AUM as at 30 September 2007)Built, through three acquisitions, an insurance market leader with c. 25% market share

Built a leading card processing centre serving 1 mln cards

The Rebranding Transformation of JSC Liberty Bank Under Lado Gurgenidzes LeadershipCase Stud


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The Rebranding Transformation of JSC Liberty Bank Under Lado Gurgenidze s Leadership


Note: unaudited, IFRS-based , standalone

* Due to database cleanup and closure of inactive accounts

Executive Chairman & CEO of JSC Liberty Bank September 2009-present

Turned, in eight short months, a heavily loss-making insolvent bank with Cost-Income ratio exceeding 100% into

a profitable and rapidly modernising institution by Q1 2010, and currently trending to a run-rate monthly pre-

provisioning profit of US$ 1 million

Rebranded the bankLaunched several new products

Started branch network modernisation

Completed the central branch/headquarters renovation

Launched a GDR programme with BNY Mellon

GEL mln, unless otherwise noted 30 September 09 31 May '10 Growth

Share price, GEL 0.0176 0.0340 93%

Assets 279 425 52%

Market share by total assets, % 3.5% 4.8%

Net Loan Book 78 118 51%

NPLs, % of Loan Book 17.5% 8.3%Market share by net loans, % 1.7% 2.4%

Deposits 156 304 95%

Market share by client deposits, % 5.8% 8.1%

Equity 16 35 113%

Book value per share, GEL 0.010 0.013 21%

Revenue , YTD 31 21 NMF

Net Income, YTD (7) 1 NMF

ROAA -3.4% 0.8% NMF

ROAE -51.2% 10.6% NMF

Cost/Income ratio 100.3% 83.2%

Employees, FTE 1,790 1,854 4%

Branches 177 179 1%

ATMs 136 166 22%

Accounts, 000* 2,990 2,320 -22%

Cards, 000 1,176 1,199 2%

GEL/US$ (e-o-p) 1.677 1.785

New Products Launched

Liberty Bank Before The Renovation

Liberty Bank After The Renovation

Rebranding

2007

2010

June 2010

June 2010

Contact Information


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Contact Information

Page 16

Lado Gurgenidze

Chief Executive Officer

+995 99 477 [email protected]

Dmitry Kasatkin

Chief Operating Officer

+44 77 860 28 700

[email protected]

June 2010 www.libertycapital.ge

Tamuna Gunia

Head of Investor Relations

[email protected]

Important Information


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Important Information

www.libertycapital.ge

This document is intended solely for use on a confidential basis by those persons to whom it has been

transmitted by Liberty Investments Holding B.V. (the Company), the Companys shareholders, or its or theiraffiliates or subsidiaries, as the case may be. Intended recipients, by their acceptance and retention of this

document, agree to preserve the confidentiality of its contents. This document is proprietary to the Company

and may not be disclosed to any third party, reproduced, in whole or in part, or used for any purpose other thanthat for which it has been submitted without prior written consent of the Company. The information contained

in this document is published for the assistance of the intended recipients, but is not to be relied upon as

authoritative or taken in substitution for the exercise of judgment by any recipient. The Company accepts no

liability whatsoever for any direct or consequential loss arising from any use of this document or its contents.

This document is not, and should not be construed as, an offer to sell or solicitation of an offer to buy any

securities, and should not be used as a basis for investment. The information contained herein is subject to

change at any time and does not constitute investment, tax, legal or other advice or recommendation. The

Company is not authorised in any jurisdiction to give investment advice. The information and opinions contained

in this document have been compiled or arrived at by the Company from sources believed to be reliable and in

good faith, but no representation or warranty, express or implied, is made as to their accuracy, completeness or

correctness. All opinions, estimates or forward-looking statements contained in this document constitute the

Companys judgment as of the date hereof based on the prevailing conditions, are subject to change withoutnotice and should not be interpreted as investment advice. Investing in investment vehicles such as the

Company is always associated with risks. Past performance is not a guide to future performance. The value of

the Company shares and any income generated can go down or up, and investors may not get back the amount

originally invested. Currency fluctuations may affect the value of the shares. There are additional risks and

greater volatility associated with investing in emerging markets and small-cap stocks.

June 20Page 17

Liberty Capital Presentation

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