Lion Finance Group PLC · LSE:BGEO
Lion Finance — Bank of Georgia — 9M 2006 Earnings Presentation
26 slides from Lion Finance's earnings presentation, February 2007
Slide 1: Bank of Georgia Nine Months 2006 Results Overview
FitchRatings: „B/B‟ Stable Moody‟s: „B3/NP‟ (FC) & „Baa3/P-3‟ (LC); Stable Standard & Poor‟s: „B+/B‟ Stable LSE: BGEO GSE: GEB Berlin-Bremen Boerse: B7D1 Bank of Georgia Nine Months 2006 Results Overview February, 2007
Slide 2: Introduction To Bank Of Georgia
Introduction To Bank Of Georgia The leading universal bank in Georgia Top bank in Georgia no. 1 by assets (c.27.9%) (1), loans (c.26.5%)(1) & equity (c.39.9%) (1) A 'leveraged play' on Georgia’s no. 2 by deposits (c.24.5%)(1) economic growth 10.2% market share gain in total assets to c.27.9%, 8.2% m
Slide 3: Georgian Banking Sector
Georgian Banking Sector Page 2 February, 2007 www.bog.ge/ir
Slide 4: Georgian Banking Sector
Georgian Banking Sector GEL/US$ Market Share (YE 2006) BoG market Period End share gain since YE 2005= 1.79 (US$m) YE 2005 YE 2006 Since YE 2005 Top 5 Banks Bank of Georgia YE 2005 (%) YE 2006= 1.71 Total Assets 1,421 2,467 73.6% 80.1% 27.9% + 10.2% Gross Loans 965 1,565 62.1% 83.2% 26.5% + 8.2% Dep
Slide 5: Georgian Banking Sector cont’d
Georgian Banking Sector cont’d GEL/US$ Peer Group’s market shares in Gross Loans Gross loan growth Period End +125% +57% +23% +31% +37% +50 +49% since YE 2005 YE 2005= 1.79 30.0% 26.5% YE 2006 = 1.71 25.0% 22.0% 22.2% 20.0% 18.2% 17.6% 15.0% 14.0% 14.0% 11.8% 10.0% 10.4% 9.5% 10.0% 8.8% 7.8% 7.3% YE
Slide 6: Market Potential And High Degree Of Concentration
Market Potential And High Degree Of Concentration Market Shares of Top 5 Banks by Assets Gross loans to GDP (%, 2005) 100% Slovenia, Estonia, Latvia 56% 83% 80% 78% Hungary, Bosnia.-Herz 52% 80% 66% 65% Bulgaria 43% 64% Czech Republic 39% 60% 50% 49% 42% 41% Slovakia 36% 40% 35% Ukr., Lith., T urkey
Slide 7: The Georgian Economy
The Georgian Economy Page 6 February, 2007 www.bog.ge/ir
Slide 8: The Georgian Economy
The Georgian Economy High GDP growth Stable currency Strong fiscal performance Low level of dependence on a single source of energy supply Increasing consumer spending with very low levels of consumer indebtedness Significant government spending on infrastructure, driving productivity growth Reasona
Slide 9: The Georgian Economy At A Glance
The Georgian Economy At A Glance 2003 2004 2005 2006E Economic Activity Nominal GDP (US$m) 3,995 5,166 6,401 7,669 Nominal GDP (GELm) 8,582 9,846 11,629 14,068 Real GDP Growth (y-o-y; %) 11.1 5.9 9.3 8.0 GDP per Capita (US$) 877 1,139 1,416 1,688 Population (e-o-p; m) 4.555 4.535 4.521 4.544 Unemplo
Slide 10: Trade Structure
Trade Structure WTO member Import Structure by Country, Jan-Nov 2006 Export Structure by Country, Jan-Nov 2006 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+
Slide 11: Key Drivers Of Economic Growth
Key Drivers Of Economic Growth Export-led growth with sufficient diversity Rapidly increasing domestic consumption Agricultural product exports of US$143m in 2005 Consumer spending in 2005 - US$3.2bn Ferroalloy exports of US$305m in 2005 and US$150m Total estimated pent-up housing demand of up to in
Slide 12: Business Overview
Business Overview Page 11 February, 2007 www.bog.ge/ir
Slide 13: Bank of Georgia – Development Milestones
Bank of Georgia – Development Milestones Development period 2000-3Q 2004 4Q 2004 2005 2006-2007 YTD New management takes over (1) IFRS Consolidated FY 2003 FY 2004 FY 2005 September 2006 Growth since YE 2003(2) The bank has tripled Total Assets (e-o-p) US$110.9m US$199.0m US$ 256.9m US$493.5m 345% i
Slide 14: Bank of Georgia - Our Vision & Mission
Bank of Georgia - Our Vision & Mission One Firm Our vision is to be recognized as the best financial services company in Georgia Strong Our mission is to create long-term value by building a relationship-driven, client-facing integrated financial management services company based on the core values
Slide 15: Strategy
Strategy Consolidate leading position in the domestic banking market Promote the further growth of the retail banking business Leverage strong position in retail banking for cross-selling other financial services Further diversify the business, including funding base and loan portfolio Continue impr
Slide 16: Retail Banking - No. 1 Retail Bank In Georgia
Retail Banking - No. 1 Retail Bank In Georgia New Retail Retail Loans Issued Retail loan portfolio and client deposits (September 30, 2006) Sub-brand US$ mln (1) Gross Loans Deposits 25.0 22.1 Auto loans 19.8 20.2 3.9% Other 20.0 POS Loans 1.7% 16.5 16.1 16.9 4.8% Current 15.0 12.5 Legacy Retail Acc
Slide 17: Superior Retail Footprint & Consumer Reach
Superior Retail Footprint & Consumer Reach 2005/Ongoing Investment Focus Internet 99 Branches 124ATMs POS Call Center SMS Banking Banking Service Delivery Channels • 14 flagship (full • Utility & other • Visa/MasterCard • Full transactional • 24/7 • Balances service) branches payments (13 Merchant
Slide 18: Corporate & Investment Banking
Corporate & Investment Banking Integrated client Overview Corporate loan portfolio and client deposits (September 30, 2006) coverage in the following key No.1 corporate and investment bank in Gross Loans Deposits sectors Georgia based on customer deposits (circa Other Construction & 28% market share
Slide 19: BCI Insurance
BCI Insurance Size of Georgian Overview Georgian Insurance by GPW (Q3 2006) Insurance Market Small insurance market (US$35m GPW)(1)(2), but rapidly growing Market shares (%) Product Breakdown (%) 2005 due to low insurance services penetration of c. 0.5% of GDP (3) Others Personal Life Other GPW GE
Slide 20: Asset & Wealth Management Performance Review
Asset & Wealth Management Performance Review Private Banking Clients and Client Assets Galt & Taggart Client Assets Under Custody US$m (1) US$m (1) 851 (2) 20 900 140 131.5 767 Private Banking clients 750 120 15 600 100 10.6 80 10 460 450 60 5.5 300 38.0 5 40 Nil 150 20 11.6 0 0 0 2004 2005 30-Sep-0
Slide 21: Key Profit And Loss And Balance Sheet data
Key Profit And Loss And Balance Sheet data Year Ended Nine months ended IFRS Consolidated, (US$m) 2003 2004 2005 September-06 Profit and Loss Interest Income 15.6 18.5 28.9 36.4 Interest Expense 3.8 5.4 7.3 12.6 Net Interest Income (before provision) 11.8 13.1 21.6 23.8 Net Interest Income (after pr
Slide 22: Key Ratios
Key Ratios Year Ended Nine months ended IFRS Consolidated, (US$m) 2003 2004 2005 September-06 Profitability ratios ROAA (annualised) (1) n/a n/a 3.3% 3.5% ROAE (annualised) (5) n/a n/a 18.5% 20.2% Net interest margin(6) n/a 10.9% 11.9% 10.0% Interest income to average IEA(6) n/a 15.5% 15.9% 15.3% In
Slide 23: Appendix
Appendix Page 22 February, 2007 www.bog.ge/ir
Slide 24: Share Price Performance And Ownership Structure
Share Price Performance And Ownership Structure BoG GDR Listing on LSE Facts & Figures Ownership structure Management and Total size of the offer US$159,843,723 Employees, 6.6% Individual Gross Proceeds to the Bank US$134 million Shareholders, 8.5% Headline demand US$653 million (4.7x oversubscribed
Slide 25: Ratios
Ratios Notes on ratio calculations (1) Return on average total assets (5) Return on average total equity (6) Net interest income before impairment of interest earning assets divided by average interest earning assets. Interest earning assets include time deposits with credit institutions with effect
Slide 26: Caution Regarding Forward-Looking Statements
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 strategic initiatives and other statements relating to our business development and financial p