Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q4 2020 Earnings Presentation
91 slides from Lion Finance's earnings presentation, Feb 25, 2021
Slide 1: Investor Presentation: 4Q20 and FY20 Financial Results
Click to edit Master title style INVESTOR PRESENTATION 4Q20 and FY20 Financial Results 25 February 2021 www.bankofgeorgiagroup.com
Slide 2: Disclaimer - Forward-Looking Statements
Click DISCLAIMER to edit Master – FORWARD title styleLOOKING STATEMENTS 2 This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capi
Slide 3: Contents
Click CONTENTS to edit Master title style 3 RESPONSE TO COVID-19 AND TRACKING THE RECOVERY GROUP OVERVIEW AND STRATEGY 4Q20 AND FY20 RESULTS GEORGIAN MACRO OVERVIEW APPENDICES
Slide 4: Virus cases reducing and government gradually lifting restrictions
VIRUS CASES REDUCING AND GOVERNMENT GRADUALLY Click to edit Master title style 4 LIFTING RESTRICTIONS GOVERNMENT SAFETY MEASURES COVID-19 STATISTICS IN GEORGIA Source: www.stopcov.ge at 13:00, 24 February 2021 Georgia was among the first countries to introduce strict virus 269,438 2,718 containmen
Slide 5: Government's support measures
Click GOVERNMENT’S to edit Master SUPPORT title style MEASURES 5 FISCAL STIMULUS GOVERNMENT SUPPORT IN RELATION TO PARTIAL SECOND-ROUND LOCKDOWN (DEC-20 – 1H21) The Government implemented a series of support Business support measures GEL 515mln measures designed to mitigate the negative economic i
Slide 6: National Bank of Georgia's supervisory plan
Click NATIONAL to edit Master BANK title OF GEORGIA’S style SUPERVISORY PLAN 6 In March 2020, the NBG introduced an updated Supervisory Plan for the banking sector aimed at alleviating the negative financial and economic challenges created by the COVID-19 pandemic. The measures were mainly focused o
Slide 7: Bank of Georgia's business continuity plan
Click BANKto edit Master title OF GEORGIA’S style CONTINUITY PLAN BUSINESS 7 The Group has introduced a number of resilience protocols and a comprehensive Business Continuity Plan, which focused on four main pillars: Operating continuity (customers and employees), supporting public health and commun
Slide 8: Tracking Georgia's economic recovery
Click -80% -60% -40% 0% 20% -100% 40% 60% -20% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 TRACKING Jul-20 Aug-20 +8.8% Remmitances Sep-20 Oct-20 Nov-20 Dec-20 Jan-20 to edit Master Feb-20 Mar-20 Apr-20 May-20 GEORGIA’S Jun-20 Exports Jul-20 Aug-20 -12.0% Sep-20 Oct-20 Nov-20 Dec-20 style % change y/y
Slide 9: Georgia's economic outlook in 2021
Click to edit Master GEORGIA’S titleOUTLOOK ECONOMIC style IN 2021 9 GEORGIA'S ECONOMIC GROWTH FORECAST Our brokerage and investment arm, Galt & Source: Geostat, Galt & Taggart Taggart’s forecast: 12% Baseline scenario – Georgia’s economy 10% expected to rebound to 5.0% growth in 7.4% 2021, assu
Slide 10: Contents
Click CONTENTS to edit Master title style 10 RESPONSE TO COVID-19 AND TRACKING THE RECOVERY GROUP OVERVIEW AND STRATEGY 4Q20 AND FY20 RESULTS GEORGIAN MACRO OVERVIEW APPENDICES
Slide 11: Bank of Georgia Group at a glance
Click BANKto OF editGEORGIA Master title GROUP style AT A GLANCE 11 A LEADING BANKING GROUP IN GEORGIA Top Systemically important financial institution in Georgia A leading market position by assets, loans and deposits RETAIL CORPORATE AND Strongest retail banking franchise: BANKING INVESTMENT
Slide 12: Strong institutional investors support
Click to edit STRONG Master title style INSTITUTIONAL INVESTORS SUPPORT 12 TOP SHAREHOLDERS As of 31 Dec 2020 SHAREHOLDER STRUCTURE As of 31 Dec 2020 Rank Shareholder name Ownership 1 JSC Georgia Capital* 19.90% Unvested and unawarded shares 2% for management and employees 2 Fidelity Investments 6.1
Slide 13: Track record of delivering strong results
Click to edit TRACK Master RECORD OFtitle style STRONG RESULTS DELIVERING 13 Key medium-term targets remain unchanged Nominal Real 25.2% 26.4% 26.1% 27.0% 21.4% 18.9% ROAE 13.0% Loan book growth 17.4% 20%+ c.15% 15.9% 19.0% 22.0% 10.2% 2017 2018* 2019** 2020 2017 2018 2019 2020 ROBUST CAPITAL MANAGE
Slide 14: Strategic focus: Bank of the future
Click to edit Master STRATEGIC FOCUS title style 14 BANK OF THE FUTURE
Slide 15: The most popular financial mobile app
Click THEto edit POPULAR MOST Master title style MOBILE APP FINANCIAL 15 MBANK/IBANK STATISTICS Number of Active Users* Number of transactions THOUSANDS MILLIONS 714 760 20.6 665 569 620 18.3 12.8 13.6 14.3 17.2 19.5 11.5 12.5 13.3 1.3 1.1 1.0 1.1 1.1 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 4Q19 1Q20 2Q2
Slide 16: Multichannel retail banking performance
Click to edit RETAIL MasterMULTICHANNEL BANKING title style PERFORMANCE* 16 NUMBER OF TRANSACTIONS MILLIONS c.760k 3,020 Share of 93.5% 94.2% 96.0% 95.1% 96.1% mBank/iBank active users** Express Pay terminals digital transactions +33.6% y-o-y -6.1% y-o-y 52.5 51.9 51.9 +6.4% q-o-q -3.5% q-o-q 3.4 46
Slide 17: Products offloading to digital channels
Click to edit Master PRODUCTS title style OFFLOADING TO DIGITAL CHANNELS 17 CARDS LOANS DEPOSITS THOUSANDS THOUSANDS THOUSANDS 9.8 12.2 10 25% 20 100% 60% 12 11.0 10.7 11.0 8.3 8.4 90% 10.4 10.4 15.8 15.9 9.9 50% 8 7.3 20% 14.8 80% 10 9.3 9.4 15 14.2 14.2 8.9 8.6 8.5 13.2 70% 12.1 12.3 40% 11.6 8 6
Slide 18: Payments as a daily touchpoint with customers
Click to edit Master PAYMENTS titleTOUCHPOINTS AS A DAILY style WITH CUSTOMERS 18 NUMBER OF PAYMENT VOLUME OF PAYMENT TRANSACTIONS TRANSACTIONS AT BOG TERMINALS AT BOG TERMINALS MILLIONS 100 GEL MILLIONS 83 2,555 2,671 62 1,937 46 1,406 31 926 c.23k Multifunctional POS terminals 2016 2017 2018 2019
Slide 19: Remittances and potential in Georgian emigrants
Click to edit Master REMITTANCES ANDtitle style IN GEORGIAN EMIGRANTS POTENTIAL 19 MARKET POTENTIAL RECEIVED REMITTANCES AT BOG THOUSANDS c. 1.3 mln 350k 65 63.1 50% Georgians living abroad in need Active customers 45% 55 of daily banking services 46.2 47.6 40% 43.3 44.2 44.2 45 40.5 35% 38.3 30% 35
Slide 20: Loyalty programme
Click to editPROGRAMME LOYALTY Master title style 20 PLUS LOYALTY PROGRAMME – ONE OF THE STRENGTHS OF BANKS OF GEORGIA 1.4mln c.124k 44% active Loyalty loyalty points exchange average increase in sales programme members* operations per month volume during merchant campaigns ADVANCED ANALYTICS PERSON
Slide 21: Customer satisfaction
Click to edit Master CUSTOMER title style SATISFACTION 21 FOCUSE ON INCREASING CUSTOMER SATISFACTION BY NPS 46.0% Engaging with customers proactively and responding in 42.3% real time 38.8% 37.5% 36.6% 34.3% Anticipating customer needs, wants, and future behavior Harnessing strong human relati
Slide 22: Employee empowerment
Click to edit Master EMPLOYEE title style EMPOWERMENT 22 Re-design of employee experiences High-trust environment New talent development strategy Values-based organisation Employees feel more engaged and enabled 74% High-Performing 74% High-Performing Organisations Benchmark Organisations Benchmark
Slide 23: High ESG scores and more focus on ESG going forward
Click HIGHtoESG editSCORES Master AND title MORE style FOCUS ON ESG GOING FORWARD 23 * ENVIRONMENT 3 SOCIAL 2 GOVERNANCE 4 Bank of Georgia falls into the highest scoring range relative to global peers CCC B BB BBB A AA AAA LAGGARD AVERAGE LEADER FTSE4GOOD Index INCLUDED IN THE GLOBAL RESPONSIBLE INV
Slide 24: Data-driven organisation
Click to edit Master DATA-DRIVEN title style ORGANISATION 24 DATA CULTURE Data culture is decision culture DATA IN BANKING DATA BEYOND BANKING Use of analytics for the majority of Use of analytics for data monetisation and decisions in business processes to create additional value for customers, the
Slide 25: Contents
Click CONTENTS to edit Master title style 25 RESPONSE TO COVID-19 AND TRACKING THE RECOVERY GROUP OVERVIEW AND STRATEGY 4Q20 AND FY20 RESULTS GEORGIAN MACRO OVERVIEW APPENDICES
Slide 26: 4Q20 and FY20 key results highlights
Click 4Q20to edit ANDMaster FY20 KEY titleRESULTS style HIGHLIGHTS 26 ROAE Loan growth Deposit growth 4Q20 2020 31 Dec 2020 31 Dec 2020 21.3% 13.0% +18.9% y-o-y +39.1% y-o-y +4.1% q-o-q +8.0% q-o-q CET 1 capital adequacy Liquidity coverage ratio Cost of credit risk 31 Dec 2020 31 Dec 2020 4Q20 2020
Slide 27: Profitability within the targeted level
Click to edit Master PROFITABILITY titleTHE WITHIN style TARGETED LEVEL 27 SOLID QUARTERLY AND FULL YEAR PERFORMANCE TRACK RECORD OF STRONG PROFITABILITY Resilient performance notwithstanding the COVID-19 pandemic: The balance sheet has remained strong with better than 29.9% expected levels of gro
Slide 28: Strong loan and deposit portfolio growth
Click to edit STRONG Master LOAN ANDtitle stylePORTFOLIO GROWTH DEPOSIT 28 LOAN PORTFOLIO DEPOSIT PORTFOLIO GEL MILLIONS GEL MILLIONS +18.9% +39.1% 10.2% 28.6% 14,192 14,020 11,931 10,077 9,398 8,389 59% 8,134 8,500 61% 7,741 6,985 59% 7,078 5,800 62% 6,986 69% 4,773 62% 5,488 67% 4,920 70% 4,946 41
Slide 29: Well-diversified loan book
Click to edit Master title WELL-DIVERSIFIED LOAN style BOOK 29 LOAN PORTFOLIO BREAKDOW | DEC-20 Gross Loans by segment Retail Banking Gross Loans Corporate and Investment Banking Bank of Georgia standalone by product Gross Loans by sectors Total: GEL 13.8bln Total: GEL 9.0bln Total: GEL 4.8bln Healt
Slide 30: Loan portfolio breakdown
Click LOANto PORTFOLIO edit MasterBREAKDOWN title style 30 RETAIL BANKING | DEC-20 CORPORATE AND INVESTMENT BANKING | DEC-20 JSC Bank of Georgia standalone JSC Bank of Georgia standalone GEL MILLIONS GEL MILLIONS 2.7% 2.9% 8,982 247 4,803 140 1.6% 3.2% 963 16 4,969 160 3,840 124 3.2% 4,013 2.2% 87 L
Slide 31: Strong competitive position
Click to edit STRONG Master titlePOSITION COMPETITIVE style 31 MARKET SHARE - GROSS LOANS MARKET SHARE - CUSTOMER DEPOSITS 39.5% 39.0% 39.8% 41.2% 38.2% 38.8% 39.0% 38.9% 34.9% 34.9% 33.9% 36.3% 37.2% 32.4% 33.5% 33.9% Dec-17 Dec-18 Dec-19 Dec-20 Dec-17 Dec-18 Dec-19 Dec-20 BOG Peer bank BOG Peer ba
Slide 32: Strong underlying performance amid COVID-19 impact
Click to edit STRONG Master titlePERFORMANCE UNDERLYING style AMID COVID-19 IMPACT 32 OPERATING INCOME NET NON-INTEREST INCOME GEL MILLIONS GEL MILLIONS -1.8% -2.4% 1,110 1,091 -3.0% -3.7% 321 313 321 29% 313 29% 21 48 +8.5% +35.7% 119 99 309 300 789 71% 778 71% 102 98 277 73 102 33% 73 26% 98 33% 1
Slide 33: Net interest margin
Click NETto edit Master INTEREST title style MARGIN 33 NET INTEREST MARGIN LOAN YIELD, COST OF FUNDS, COST OF DEPOSITS 5.4% 5.6% 4.8% 11.4% 11.7% 4.4% 4.6% 10.7% 10.4% 10.5% 4.7% 4.7% 4.6% 4.6% 4.7% 3.8% 3.8% 3.6% 3.0% 3.0% 4Q19 3Q20 4Q20 2019 2020 4Q19 3Q20 4Q20 2019 2020 Loan yield Cost of funds C
Slide 34: Focus on efficiency and stringent cost control
Click to edit FOCUS ON Master titleAND EFFICIENCY styleSTRINGENT COST CONTROL 34 COST TO INCOME RATIO OPERATING EXPENSES GEL MILLIONS +3.0% 39.3% 39.6% 37.8% 39.7% 37.1% -2.2% 420 433 4 5 78 83 +15.8% 106 106 122 119 103 4Q19 3Q20 4Q20 2019* 2020 1 2 1 24 21 231 240 35 19 32 24 62 58 64 c.35% 4Q19 3
Slide 35: Resilient loan portfolio quality
Click to edit LOAN RESILIENT Master title styleQUALITY PORTFOLIO 35 COST OF CREDIT RISK RATIO LOAN PORTFOLIO QUALITY NPL coverage 86.7% 92.7% 90.5% 80.9% 76.3% INCREASE IN 2020 DUE TO COVID-19 NPL coverage adjusted for collateral value 2.7% 132.1% 130.6% 129.9% 139.6% 128.8% 2.2% 4.2% 3.8% 3.7% 1.8%
Slide 36: Strong liquidity and funding positions
Click to edit STRONG Master title LIQUIDITY AND style FUNDING POSITIONS 36 LIQUIDITY COVERAGE AND NET STABLE NET LOANS TO CUSTOMER FUNDS AND DFIs FUNDING RATIOS JSC Bank of Georgia standalone (Basel III liquidity) 136.7% 132.5% 138.6% 137.5% 118.4% 133.6% 115.5% 125.5% 120.1% 109.4% 100.3% 103.2% 99
Slide 37: Well-established funding structure
Click to edit Master title WELL-ESTABLISHED style STRUCTURE | DEC-20 FUNDING 37 INTEREST BEARING LIABILITIES WELL DIVERSIFIED INTERNATIONAL BORROWINGS Interest Bearing Liabilities GEL 18.9bln Other debt Others Debt securities, borrowings, Borrowings securities GEL GEL 12.1% issued 243mln, 442mln, Cu
Slide 38: Strong capital adequacy position
Click to edit STRONG MasterADEQUACY CAPITAL title style POSITION 38 NBG MEASURES AS A RESPONSE TO COVID-19 CAPITAL ADEQUACY RATIOS NBG’s COVID-19 Supervisory Plan effective since March 2020: 18.1% 17.4% 17.3% 17.6% 15.3% Combined buffer - the conservation buffer requirement of 2.5% of 13.6% 12.0%
Slide 39: Strong internal capital generation
Click to edit STRONG Master title INTERNAL styleGENERATION CAPITAL 39 CAPITAL RATIOS EVOLUTION DURING 2020 2020 NBG Potential Capital profit general New Tier 2 Capital impact of Business GEL ratios (excl. NBG provision – facility ratios additional growth Devaluation DEC-19 general COVID-19 impact DE
Slide 40: Strong capital adequacy position
Click to edit STRONG MasterADEQUACY CAPITAL title style POSITION 40 BOG EQUITY VS. CET1 REG. CAPITAL | DEC-20 RISK WEIGHTED ASSETS GEL MILLIONS GEL MILLIONS +5.8% % of RWAs 10.4% 2.5% 0.9% 1.7% 273 2,479 16,040 146 14,641 15,162 399 13,868 14,099 1,662 3.4% NBG Loan IP Other BOG Dec-19 Mar-20 Jun-20
Slide 41: Contents
Click CONTENTS to edit Master title style 41 RESPONSE TO COVID-19 AND TRACKING THE RECOVERY GROUP OVERVIEW AND STRATEGY 4Q20 AND FY20 RESULTS GEORGIAN MACRO OVERVIEW APPENDICES
Slide 42: Georgia at a glance
Click GEORGIA to edit Master AT A GLANCE title style 42 GENERAL FACTS Area: 69,700 sq. km Population (2019): 3.7 million Life expectancy: 74 years Official language: Georgian Literacy: 100% Capital: Tbilisi Currency (code): Lari (GEL) ECONOMY SOVEREIGN CREDIT RATINGS Nominal GDP (Geo
Slide 43: Georgia's key economic drivers
Click GEORGIA’S to edit Master KEY ECONOMIC title style DRIVERS 43 Top performer globally in WB Doing Business over the past 12 years Liberal economic Liberty Act ensures a credible fiscal and monetary framework policy Fiscal deficit/GDP capped at 3%; Government debt/GDP capped at 60% Business
Slide 44: Growth oriented reforms
Click GROWTH to edit ORIENTED Master titleREFORMS style 44 EASE OF DOING BUSINESS | 2020 ECONOMIC FREEDOM INDEX | 2020 New Zealand 1 Source: WB-IFC Doing Business Report UK 7 Source: Heritage Foundation Singapore 2 Estonia 10 Denmark 4 Georgia 12 Lithuania 16 Top 6 in Europe region out USA 6 #1 in E
Slide 45: Diversified economy
Click DIVERSIFIED to edit Master ECONOMY title style 45 GROSS DOMESTIC PRODUCT DIVERSIFIED NOMINAL GDP STRUCTURE | 9M20 Source: Geostat, Galt & Taggart Source: Geostat other 15.3% Trade 20 12% Accom. & food 14.0% 7.4% 15 6.4% 9% 3.4% 4.4% 4.8% 4.8% 5.0% 10 3.6% 3.0% 2.9% 6% Healthcare Real estate 5
Slide 46: Capital and productivity main engines of growth since 2004
CAPITAL AND PRODUCTIVITY HAVE BEEN THE MAIN Click to edit Master title style 46 ENGINES OF GROWTH SINCE 2004 OVERALL CONTRIBUTION OF CAPITAL, LABOR, AND CONTRIBUTIONS OF CAPITAL, LABOR, AND TFP TO TOTAL FACTOR PRODUCTIVITY (TFP) TO GROWTH, GROWTH DURING PERIODS 2011-2019 Source: Geostat, Galt &Tagga
Slide 47: Further job creation is achievable
Click to editJOB FURTHER Master title style CREATION IS ACHIEVABLE 47 UNEMPLOYMENT RATE DOWN 1.6PPTS Y/Y TO HIRED WORKERS ON THE RISE 17.6% IN 2019 Source: Geostat Source: Geostat Note: Labor force statistics presented according to the ILO’s new standards 1,200 1,400 27.2% 27.2% 26.7% 26.4% 30% 23.0
Slide 48: Public debt
Click to edit PUBLIC DEBTMaster title style 48 FISCAL DEFICIT BREAKDOWN OF THE PUBLIC DEBT Source: MoF, 2021 budget Source: MoF, as of October 2020 0% -2.0% -1.9% -2.4% -2.7% -2.1% -2% -3.1% -2.6% -1.7% -4.4% External public debt -4% -2.6% -2.8% -2.3% Multilateral portfolio -6% -5.3% -7.6% 56% weigh
Slide 49: Investing in infrastructure and spending low on social
Click to edit Master INVESTING title style IN INFRASTRUCTURE AND SPENDING LOW ON SOCIAL 49 BUDGET EXPENDITURES EXPENDITURE BREAKDOWN: CURRENT VS. CAPITAL Source: MoF, 2021 budget Source: MoF, 2021 budget 20,000 50% 100% 81.7% 78.1% 80.0% 76.0% 72.5% 73.4% 80.0% 74.2% 73.1% 72.2% 75.8% 75.6% 34.4% 32
Slide 50: Diversified foreign trade
Click to edit Master DIVERSIFIED titleTRADE FOREIGN style 50 IMPORTS OF GOODS AND SERVICES EXPORTS OF GOODS AND SERVICES Source: NBG – BOP statistics Source: NBG – BOP statistics 12 10.8 11.1 10.1 10.0 9.5 9.3 9.4 8.9 10 9.2 8.7 8.5 2.2 1.0 1.7 2.4 7.6 0.8 7.5 8.0 1.6 8.0 7.2 7.0 8 1.4 2.0 0.5 1.7 1
Slide 51: Diversified sources of foreign capital
Click to edit Master DIVERSIFIED titleOF SOURCES style CAPITAL 51 FOREIGN DIRECT INVESTMENTS TOURISM REVENUES Source: Geostat Source: NBG, Geostat FDI down 24.0% y/y in 9M20 Tourism revenues down 83.4% y/y in 2020, 2.5 25% 3.5 25% due to COVID pandemic 18.3% 18.7% 2.0 20% 3.0 16.6% 20% 2.5 13.9% 1.5
Slide 52: Current account deficit supported by FDI
Click to editACCOUNT CURRENT Master title styleSUPPORTED BY FDI DEFICIT 52 CURRENT ACCOUNT BALANCE (% OF GDP) Source: NBG, Geostat 30% Goods, net Services, net Income, net Transfers, net CA deficit net FDI CA deficit at 12.0% of GDP in 9M20 20% 10.5% 6.5% 8.1% 9.5% 8.2% 6.0% 4.6% 5.3% 5.5% 5.9% 10%
Slide 53: Inflation targeting
-1% 0% 3% 1% 2% 7% 4% 5% 6% 8% 100 0 20 120 40 60 80 Click Jan-14 Jan-14 Apr-14 Apr-14 Aug-14 Aug-14 Dec-14 Dec-14 Mar-15 Mar-15 Jul-15 Jul-15 Nov-15 Energy Nov-15 INFLATION Headline inflation Feb-16 Feb-16 Jun-16 Jun-16 Oct-16 Oct-16 ANNUAL INFLATION Jan-17 Jan-17 May-17 May-17 Sep-17 Sep-17 Non-en
Slide 54: International reserves at adequate level
Click to edit Master INTERNATIONAL title style RESERVES AT ADECUATE LEVEL 54 INTERNATIONAL RESERVES CENTRAL BANK’S INTERVENTIONS Source: NBG Source: NBG 4.0 International reserves up 11.5% y/y to US$ 3.9bn in 2020 250 220 NBG sold US$ 916mn in 2020 200 200 US$ sale 174 3.5 100 120 150 120 3.0 100 60
Slide 55: Floating exchange rate - policy priority
Click to edit EXCHANGE FLOATING Master titleRATE style- POLICY PRIORITY 55 FX RESERVES NOMINAL AND REAL EFFECTIVE EXCHANGE RATE Source: NBG (JAN2014=100) Source: NBG 5.0 1.42 1.6 130 130 1.30 1.36 1.31 1.25 1.23 1.24 1.27 120 120 1.16 1.29 1.4 4.0 1.03 -5.6% y/y 1.2 110 110 3.9 1.0 3.0 3.5 100 100 3
Slide 56: Growing and well-capitalised banking sector
Click to edit AND GROWING Master title style WELL-CAPITALISED BANKING SECTOR 56 SUMMARY BANKING SECTOR ASSETS, LOANS AND DEPOSITS Source: NBG Prudent regulation and oversight ensuring financial stability 24.7% CAGR 60 56.9 Strong resilience towards both domestic and external shocks without singl
Slide 57: Credit growth dynamics
Click to edit CREDIT Master GROWTH title style DYNAMICS 57 BANKING SECTOR CORPORATE & RETAIL LOANS MORTGAGE LOANS TO GDP Source: NBG, Geostat Source: NBG 119,300 70% 106,370 Retail loans to GDP 8,624 60% 92,980 29,600 Corporate loans to GDP 39% 7,048 50% 6,031 72,140 31,720 33% 33% 5,062 35,990 40%
Slide 58: Georgia vs region: FX, inflation, policy rate
Click to editVS GEORGIA Master title REGION: FX,style INFLATION, POLICY RATE 58 CURRENCY WEAKENING VS. US$ Source: Bloomberg Note: +/- appreciation/depreciation period 1-January – 31-December, 2020 8.7% 0.1% 0.0% -9.1% -10.1% -14.3% -19.0% -19.7% -22.9% -23.4% Euro Moldova Armenia Ukraine Russia Aze
Slide 59: Recent trend - real GDP and its components
Click to edit RECENT Master TREND titleGDP - REAL style AND ITS COMPONENTS 59 REAL GDP GROWTH BY QUARTER, % CHANGE YoY CONTRIBUTION TO REAL GDP GROWTH Source: Geostat Source: Geostat, Galt & Taggart 12% 12% 6.8% 9% 8% 7.2% 6.0% 4.5% 4.4% 5.2% 5.4% 4.6% 6% 4% 2.2% 2.3% 3% 4.5% 4.1% 3.6% 4.8% 3.4% 3.2
Slide 60: Goods trade deficit reduced by US$1.1bn in 2020
Click to edit GOODS Master TRADE titleREDUCED DEFICIT style BY US$ 1.1BN IN 2020 60 EXPORTS DOWN 12.0% YoY IN 2020 IMPORTS DOWN 15.9% YoY IN 2020 Source: Geostat Source: Geostat 500 60% 1,000 50% 400 800 40% 300 40% 600 30% 200 400 20% 100 20% 200 10% 0 0 0% 0% -100 -200 -10% -200 -20% -400 -20% -30
Slide 61: Benefits from diversified economic linkages and closer ties with EU
BENEFITS FROM DIVERSIFIED ECONOMIC LINKAGES AND Click to edit Master title style 61 CLOSER TIES WITH EU EXPORTS, TOURISM, REMITTANCES AND ECONOMIC LINKAGES BREAKDOWN, 2020 FDI BY COUNTRY, 2020 No single country accounts for more than 20% in any particular category, minimising potential negative impa
Slide 62: Tracking Georgia's economic recovery
Click -80% -60% -40% 0% 20% -100% 40% 60% -20% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 TRACKING Jul-20 Aug-20 +8.8% Remmitances Sep-20 Oct-20 Nov-20 Dec-20 Jan-20 to edit Master Feb-20 Mar-20 Apr-20 May-20 GEORGIA’S Jun-20 Exports Jul-20 Aug-20 -12.0% Sep-20 Oct-20 Nov-20 Dec-20 style % change y/y
Slide 63: Appendices: Segment results
Click CONTENTS to edit Master title style 63 RESPONSE TO COVID-19 AND TRACKING THE RECOVERY GROUP OVERVIEW AND STRATEGY 4Q20 AND FY20 RESULTS GEORGIAN MACRO OVERVIEW APPENDICES | SEGMENT RESULTS
Slide 64: Retail Banking highlights
Click RETAIL to edit BANKING Master title HIGHLIGHTS style 64 1 2 3 Segments Mass Retail Mass Affluent MSME Clients 2,326 k 60 k 230 k Loans GEL 2,955 mln GEL 2,731mln GEL 3,295 mln Deposits GEL 3,407mln GEL 2,736 mln GEL 958 mln 2020 profit GEL 47 mln GEL 57 mln GEL 26 mln P/C ratio 2.0 4.8 1.5 Bra
Slide 65: Retail Banking highlights: income statement
Click to edit RETAIL Master BANKING title style HIGHLIGHTS 65 INCOME STATEMENT HIGHLIGHTS Change Change Change GEL thousands unless otherwise noted 4Q20 4Q19 3Q20 2020 2019 y-o-y q-o-q y-o-y Net interest income 125,969 134,839 -6.6% 126,837 -0.7% 473,738 545,701 -13.2% Net fee and commission income
Slide 66: Retail Banking loans and deposits
Click to edit RETAIL Master BANKING title style LOANS AND DEPOSITS 66 MARKET SHARE – LOANS TO INDIVIDUALS* MARKET SHARE – DEPOSITS OF INDIVIDUALS* 38.8% 37.7% 40.3% 40.3% 37.5% 35.5% 36.9% 34.6% Dec-17 Dec-18 Dec-19 Dec-20 Dec-17 Dec-18 Dec-19 Dec-20 RETAIL BANKING LOANS RETAIL BANKING DEPOSITS +17.
Slide 67: Retail Banking loan yield, cost of deposits and NIM
Click to edit RETAIL Master BANKING titleYIELD, LOAN style COST OF DEPOSITS AND NIM 67 RETAIL BANKING LOAN YIELD I QUARTERLY RETAIL BANKING LOAN YIELD I FULL YEAR 16.7% 15.8% 15.4% 17.6% 15.4% 12.4% 11.7% 11.2% 12.9% 11.4% 6.8% 6.7% 6.0% 7.3% 6.5% Loan Yield Loan yield, GEL Loan yield, FC Loan Yield
Slide 68: Retail Banking loan portfolio composition
Click to edit RETAIL MasterLOAN BANKING title PORTFOLIO style COMPOSITION 68 RETAIL BANKING CLIENT DATA MORTGAGE LOANS DOLLARISATION Operating Data, GEL mln Dec-20 Dec-19 Dec-18 Dec-17 Number of total Retail clients, of which: 2,616,480 2,540,466 2,440,754 2,315,038 5% Number of Solo clients 60,330
Slide 69: Diversified retail portfolios and income streams
Click to edit Master DIVERSIFIED RETAILtitle style PORTFOLIOS AND INCOME STREAMS 69 BALANCE SHEET | DEC-20 INCOME STATEMENT | 2020 JSC Bank of Georgia Standalone JSC Bank of Georgia Standalone Total Loans Net Interest Income GEL 8,982mln GEL 474mln Mass Retail Mass Retail (GEL 201mln) 33% (GEL 2,955
Slide 70: CIB highlights
Click CIB to edit Master title style HIGHLIGHTS 70 INCOME STATEMENT HIGHLIGHTS Change Change Change GEL thousands unless otherwise noted 4Q20 4Q19 3Q20 2020 2019 y-o-y q-o-q y-o-y Net interest income 66,736 65,642 1.7% 68,454 -2.5% 267,641 217,874 22.8% Net fee and commission income 10,933 11,928 -8
Slide 71: CIB loan and deposits
Click CIB to editBOOK LOAN Master ANDtitle style DEPOSITS 71 MARKET SHARE – LOANS TO LEGAL ENTITIES* MARKET SHARE – DEPOSITS OF LEGAL ENTITIES* 37.3% 32.0% 33.1% 31.0% 30.9% 28.9% 28.8% 30.3% Dec-17 Dec-18 Dec-19 Dec-20 Dec-17 Dec-18 Dec-19 Dec-20 CIB NET LOANS +22.5% CIB NET DEPOSITS +67.2% GEL MIL
Slide 72: CIB loan book and deposits highlights
Click CIB to editBOOK LOAN Master ANDtitle style DEPOSITS 72 HIGHLIGHTS GROSS LOAN BOOK BY SECTOR | DEC-20 Top 10 CIB Health & Mining & quarrying borrowers – Leading corporate bank in Georgia 3.8% social work Other 29.4% of CIB 2.6% 15.8% Manufacturing loan book Financial 22.7% Integrated client
Slide 73: CIB loan yield, cost of deposits and NIM
Click to edit RETAIL Master BANKING titleYIELD, LOAN style COST OF DEPOSITS AND NIM 73 CIB LOAN YIELD I QUARTERLY CIB LOAN YIELD I FULL YEAR 12.5% 13.0% 12.7% 12.0% 12.8% 9.2% 8.6% 8.5% 8.5% 7.7% 7.6% 9.1% 8.6% 8.6% 7.7% Loan Yield Loan yield, GEL Loan yield, FC Loan Yield Loan yield, GEL Loan yield
Slide 74: Wealth management and investment banking
Click to edit WEALTH Master title style MANAGEMENT AND INVESTMENT BANKING 74 WEALTH MANAGEMENT GALT & TAGGART STRONG REGIONAL PRESENCE LARGEST INVESTMENT BANK IN GEORGIA Israel (2008), UK (2010), Hungary (2012), BROKERAGE Turkey (2013) Leading brokerage house in the region Exclusive part
Slide 75: Regional leading franchise
Click to editREGIONAL LEADING Master title style FRANCHISE 75 GROWTH IN AUM DIVERSIFIED CUSTOMER BASE ACROSS GEL MILLIONS CAGR: +16.8% MULTIPLE GEOGRAPHIES +11.2% Other 2,769 14% 2,490 2,247 1,856 UK 1,487 984 1,157 512 834 3% 356 1,612 Georgia 1,131 1,344 1,413 1,506 37% Dec-16 Dec-17 Dec-18 Dec-19
Slide 76: Galt & Taggart brokerage - online brokerage driving growth
GALT & TAGGART BROKERAGE - ONLINE BROKERAGE Click to edit Master title style 76 DRIVING GROWTH GALT & TAGGART BROKERAGE – GROSS FOCUS ON DIGITALISING BROKERAGE REVENUES AND NET MARGINS* OFFERINGS GEL MILLIONS NET MARGIN 50.4% -56.1% -41.7% -0.7% 44.6% 50.9% SIGNIFICANT MILESTONES TOWARDS 6.5 DIGITAL
Slide 77: Digital Area ecosystem overview
Click to edit DIGITAL Master AREA title style ECOSYSTEM OVERVIEW 77
Slide 78: Digital Area ecosystem overview
Click to edit DIGITAL Master AREA title style ECOSYSTEM OVERVIEW 78 SINCE JUNE 2019 COMING SOON Extra.ge - launch of web platform Extra.ge - launch automated C2C fulfillment service Extra.ge - largest e-commerce marketplace Optimo - launch loyalty programme Extra.ge - launch on IOS and And
Slide 79: Appendices: Corporate governance
Click CONTENTS to edit Master title style 79 RESPONSE TO COVID-19 AND TRACKING THE RECOVERY GROUP OVERVIEW AND STRATEGY 4Q20 AND FY20 RESULTS GEORGIAN MACRO OVERVIEW APPENDICES | CORPORATE GOVERNANCE
Slide 80: Board of Directors
Click BOARD to edit OFMaster DIRECTORS title style 80 ROBUST CORPORATE GOVERNANCE BASED ON UK CORPORATE GOVERNANCE CODE Neil Janin, Independent Non-Executive Chairman Archil Gachechiladze, Chief Executive Officer Experience: formerly Director at McKinsey & Company in Experience: with the Group since
Slide 81: Highly experienced management team
Click HIGHLY to edit EXPERIENCED Master title style MANAGEMENT TEAM 81 SENIOR EXECUTIVE COMPENSATION POLICY APPLIES TO TOP EXECUTIVES AND ENVISAGES LONG-TERM DEFERRED AND DISCRETIONARY AWARDS OF SECURITIES AND NO CASH BONUSES TO BE PAID TO SUCH EXECUTIVES Archil Gachechiladze, Chief Executive Office
Slide 82: Highly experienced management team
Click HIGHLY to edit EXPERIENCED Master title style MANAGEMENT TEAM 82 Etuna Iremadze, Head of Premium Business Banking Zurab Masurashvili, Head of SME Business Banking With the Group since 2006. More than 18 years of experience in financial With the Group since 2015. Extensive experience in financi
Slide 83: Appendices: Financial and operating information
Click CONTENTS to edit Master title style 83 RESPONSE TO COVID-19 AND TRACKING THE RECOVERY GROUP OVERVIEW AND STRATEGY 4Q20 AND FY20 RESULTS GEORGIAN MACRO OVERVIEW APPENDICES | FINANCIAL AND OPERATING INFORMATION
Slide 84: Group income statement
Click GROUP to edit INCOME MasterSTATEMENT title style 84 Change Change Change GEL thousands, unless otherwise noted 4Q20 4Q19 3Q20 2020 2019 y-o-y q-o-q y-o-y Interest income 420,398 393,480 6.8% 407,666 3.1% 1,595,427 1,437,161 11.0% Interest expense (218,802) (186,389) 17.4% (203,636) 7.4% (817,7
Slide 85: Group balance sheet
Click GROUP to edit BALANCE Master title SHEETstyle 85 Change Change GEL thousands, unless otherwise noted Dec-20 Dec-19 Sep-20 y-o-y q-o-q Cash and cash equivalents 1,970,955 2,153,624 -8.5% 2,154,224 -8.5% Amounts due from credit institutions 2,016,005 1,619,072 24.5% 1,980,195 1.8% Investment sec
Slide 86: BNB financial highlights
Click BNB toFINANCIAL edit MasterHIGHLIGHTS title style 86 INCOME STATEMENT HIGHLIGHTS Change Change Change 4Q20 4Q19 3Q20 2020 2019 GEL thousands, unless otherwise noted y-o-y q-o-q y-o-y Net interest income 8,888 7,194 23.5% 8,735 1.8% 36,249 27,586 31.4% Net fee and commission income 1,268 1,602
Slide 87: Key ratios
Click KEY toRATIOS edit Master title style 87 4Q20 4Q19 3Q20 2020 2019 Profitability ROAA, annualised ** 2.4% 3.4% 3.0% 1.5% 3.1% ROAA, annualised (unadjusted) 2.4% 3.4% 3.0% 1.5% 3.1% ROAE, annualised ** 21.3% 29.9% 26.0% 13.0% 26.1% RB ROAE ** 22.0% 31.4% 25.0% 10.0% 28.6% CIB ROAE ** 20.7% 28.5%
Slide 88: Key ratios
Click KEY toRATIOS edit Master title style 88 4Q20 4Q19 3Q20 2020 2019 Liquidity NBG liquidity coverage ratio (minimum requirement 100%) 138.6% 136.7% 147.0% 138.6% 136.7% Liquid assets to total liabilities 33.5% 33.9% 33.7% 33.5% 33.9% Net loans to client deposits and notes 101.2% 118.4% 104.9% 101
Slide 89: Key operating data
Click KEY toOPERATING edit Master DATA title style 89 Dec-20 Dec-19 Sep-20 Selected operating data: Total assets per FTE 2,993 2,515 2,976 Number of active branches, of which: 211 272 211 - Express branches (including Metro) 105 162 105 - Bank of Georgia branches 95 98 95 - Solo lounges 11 12 11 Num
Slide 90: Key ratio definitions
Click KEY toRATIO edit Master DEFINITIONS title style 90 Cost of funds Interest expense of the period divided by monthly average interest bearing liabilities; Cost of credit risk Expected loss on loans to customers and finance lease receivables for the period divided by monthly average gross loa
Slide 91: Company information
Click COMPANY to edit Master INFORMATION title style 91 Registered Address Auditors 84 Brook Street Ernst & Young LLP London W1K 5EH 25 Churchill Place United Kingdom Canary Wharf Registered under number 10917019 in England and Wales London E14 5EY United Kingdom Secretary Link Company Matters Limit