Lion Finance Group PLC · LSE:BGEO
Lion Finance — Bank of Georgia Group — H1 2019 Earnings Presentation
70 slides from Lion Finance's earnings presentation, Aug 14, 2019
Slide 1: Bank of Georgia Group PLC 2Q19 and 1H19 Financial Results
BANK OF GEORGIA GROUP PLC Investor Presentation 2Q19 and 1H19 Financial Results 14 August 2019 www.bankofgeorgiagroup.com
Slide 2: Disclaimer – Forward Looking Statements
DISCLAIMER – FORWARD LOOKING STATEMENTS 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, capital expenditures, financing needs,
Slide 3: Contents
CONTENTS Group Overview 4 Results Discussion 8 Georgian Macro Overview 34 Appendices 55 3
Slide 4: Bank of Georgia Group Overview
BANK OF GEORGIA GROUP OVERVIEW Banking Business Top shareholders As of 30 June 2019 Corporate and Rank Shareholder name Ownership Retail Investment Banking Banking 1 JSC Georgia Capital* 19.90% 2 Harding Loevner LP 4.93% 3 JP Morgan Asset Management 3.01% Wealth BNB 4 Dimensional Fund Advisors (DFA)
Slide 5: Delivering on Group Strategy
DELIVERING ON GROUP STRATEGY SUCCESSFUL TRACK RECORD OF DELIVERING STRONG RESULTS BANKING BUSINESS KEY TARGETS 30.5% 1 26.4% 2 25.2% Loan book 24.5% 21.4% ROAE 23.7% 15.9% 22.2% growth 20%+ c.15% 2016 2017 2018* 1H19** 2016 2017 2018 1H19 3 ✓ Regular Dividends Robust Capital position: We aim to ma
Slide 6: Results Highlights
RESULTS HIGHLIGHTS* Income Statement ** Banking Business Change Change Change 2Q19 2Q18 1Q19 1H19 1H18 GEL thousands unless otherwise noted y-o-y q-o-q y-o-y Net interest income 181,622 186,582 -2.7% 182,941 -0.7% 364,563 366,831 -0.6% Net fee and commission income 43,267 37,847 14.3% 42,180 2.6% 85
Slide 7: Contents
CONTENTS Group Overview 4 Results Discussion 8 Georgian Macro Overview 34 Appendices 55 7
Slide 8: The Leading Bank in Georgia
THE LEADING BANK IN GEORGIA Strong profitability and growth momentum, on the back of outstanding capital and liquidity positions BOG – Leading Bank in Attractive Banking Sector Balance Sheet Highlights Banking Business Top Systemically important financial institution in Georgia CAGR 18.0% 21.4% 17
Slide 9: The Competition
THE COMPETITION Leading market position in Georgia by assets (34.3%), loans (34.6%), client deposits (33.9%) and equity (29.2%) Peer group’s market share in total assets Peer group’s market share in gross loans 50% 50% 39.1% 38.5% 40% 34.3% 40% 34.6% 30% 30% 20% 14.6% 20% 14.9% 10% 4.6% 10% 3.9% 3.5
Slide 10: Strong Underlying Performance: Operating Income
STRONG UNDERLYING PERFORMANCE Operating income | quarterly Operating income | half-year Banking Business +1.7% Banking Business +5.8% -0.5% 300 253.1 258.7 257.3 600 516.0 487.9 GEL millions GEL millions 66.5 26% 75.8 29% 75.7 29% 121.1 25% 151.4 29% 200 400 100 74% 200 186.6 182.9 181.6 71% 366.8 7
Slide 11: Strong Underlying Performance: Operating Expenses
STRONG UNDERLYING PERFORMANCE Operating expenses* | quarterly Operating expenses* | half-year Banking Business +5.8% Banking Business +5.5% +7.2% 180.5 190.5 93.1 91.9 98.6 200 2.3 120 1.7 0.9 1.1 1.3 22.9 33.0 100 160 GEL millions GEL millions 11.4 15.7 17.3 52.5 44.8 80 120 26.9 22.7 22.0 60 80 40
Slide 12: Focus on Efficiency
FOCUS ON EFFICIENCY Cost / Income* | quarterly Cost / Income* | half-year Banking Business Banking Business 40% 40% 37.0% 38.3% 35% 36.8% 35% 36.9% 35.5% 30% 30% 25% 25% 20% 20% 2Q18 1Q19 2Q19 1H18 1H19 Operating income and operating expenses* | quarterly Operating income and operating expenses* | h
Slide 13: Solid Income Notwithstanding the Pressure on Yields
SOLID INCOME NOTWITHSTANDING THE PRESSURE ON YIELDS Loan Yields | quarterly Loan Yields | half-year Banking Business Banking Business 120% 14.0% 12.2% 15% 120% 14.2% 14.2% 13.5% 15% 11.8% 12.0% 100% 100% 80% 10% 80% 10% 58.3% 60.7% 60.1% 61.7% 61.7% 60.1% 60% 60% 71.3% 40% 5% 40% 5% 20% 41.7% 39.3%
Slide 14: Stable Cost of Funding
STABLE COST OF FUNDING Cost of Customer Funds | quarterly Cost of Customer Funds | half-year Banking Business Banking Business 120% 3.6% 3.3% 3.3% 4% 120% 3.8% 3.5% 3.5% 4% 3.3% 100% 100% 3% 3% 80% 80% 62.1% 67.1% 68.6% 69.5% 67.5% 68.6% 60% 2% 60% 76.8% 2% 40% 40% 1% 1% 20% 37.9% 32.9% 20% 30.5% 32
Slide 15: Diversified Asset Structure and Loan Portfolio
DIVERSIFIED ASSET STRUCTURE AND LOAN PORTFOLIO Total asset structure | 30 June 2019 Liquid assets | 30 June 2019 Banking Business Total: GEL 16.1bln Banking Business Total: GEL 4.5bln Other assets 6.3% Other liquid Cash and assets equivalents Liquid assets 20.0% 20.6% 28.1% Government bonds, treasur
Slide 16: Loan Portfolio Breakdown
LOAN PORTFOLIO BREAKDOWN Retail Banking | 30 June 2019 Corporate and Investment Banking | 30 June 2019 JSC Bank of Georgia standalone JSC Bank of Georgia standalone 4.5% 1.9% 0.3% 2.9% 6,900 129 3,360 152 GEL millions GEL millions 3 1,055 28 4.4% 2.8% 976 24 551 3,766 104 99 5.4% 1,834 2,080 1.1% 22
Slide 17: Resilient Loan Portfolio Quality
RESILIENT LOAN PORTFOLIO QUALITY Expected credit loss and NIM NPL composition Banking Business NPL Banking Business coverage ratio 86.7% 92.7% 90.5% 88.1% 7.4% 7.3% 400 8% 500 5% 6.5% 4.2% 3.8% 3.2% 5.6% 3.3% 300 5.1% 6% 400 347 4% 4.7% 4.9% 318 295 301 16 4.1% 27 300 3% 200 4% 38 49 183 288 306 200
Slide 18: Strong Liquidity
STRONG LIQUIDITY Liquid assets to total liabilities Liquidity coverage ratio & net stable funding ratio Banking Business JSC Bank of Georgia standalone (Basel III Liquidity) 15,000 37.9% 38.3% 34.9% 31.9% 40% 200% 11,355 151.5% 12,000 9,771 133.6% 131.6% 13,000 30% 150% 125.5% 120.1% 114.3% GEL mill
Slide 19: Strong NBG (Basel III) Capital Adequacy Position
STRONG NBG (BASEL III) CAPITAL ADEQUACY POSITION Capital adequacy requirements introduced by National Bank of Georgia in December 2017 Transition to Basel III Standards: Systemic capital surcharge: 2.5% of risk weighted assets to be phased-in during the Capital Adequacy Ratios following years as
Slide 20: Strong NBG (Basel III) Capital Adequacy Position
STRONG NBG (BASEL III) CAPITAL ADEQUACY POSITION Capital Management Tier 1 Capital Adequacy Ratio Evolution JSC Bank of Georgia standalone Issuance of AT1 Capital Notes in March 2019 15% 2.3% 0.3% 0.4% 13.3% In March 2019, the Bank issued inaugural US$ 100 1.2% 1.1% 12.2% 0.6% 13% million Additi
Slide 21: Well-Established Funding Structure
WELL-ESTABLISHED FUNDING STRUCTURE Interest Bearing Liabilities structure | 30 June 2019 Well diversified international borrowings | 2Q19 Banking Business Banking Business Interest Bearing Liabilities GEL 14.0bln Others borrowings, Debt securities GEL 112.0 mln, issued, GEL Other debt 3.2% Borrowing
Slide 22: Retail Banking Highlights
RETAIL BANKING HIGHLIGHTS Data as at 30 June 2019 for JSC Bank of Georgia standalone 1 2 3 4 Segments Emerging Retail Mass Retail Mass Affluent MSME Clients 538 k 1,670 k 49 k 218 k Loans GEL 291 mln GEL 2,183 mln GEL 2,050 mln GEL 2,377 mln Deposits GEL 257mln GEL 2,055 mln GEL 1,963 mln GEL 713 ml
Slide 23: Retail Banking Highlights
RETAIL BANKING HIGHLIGHTS Income Statement Highlights* Market Position** Change Change Change GEL thousands unless otherwise noted 2Q19 2Q18 y-o-y 1Q19 q-o-q 1H19 1H18 y-o-y Market Share by Loans Market Share by Deposits Net interest income 128,167 138,485 -7.5% 130,987 -2.2% 259,154 273,938 -5.4% N
Slide 24: Retail Banking Loan Yield, Cost of Deposits & NIM
RETAIL BANKING LOAN YIELD, COST OF DEPOSITS & NIM RB Loan Yield I quarterly RB Loan Yield I half-year 30% 22.0% 30% 22.2% 19.3% 17.7% 18.4% 20% 15.7% 13.6% 12.9% 20% 15.8% 13.2% 8.2% 7.7% 7.3% 8.3% 7.5% 10% 10% 0% 0% Loan Yield Loan yield, GEL Loan yield, FC Loan Yield Loan yield, GEL Loan yield, FC
Slide 25: Retail Banking - Leading Retail Bank in Georgia
RETAIL BANKING - LEADING RETAIL BANK IN GEORGIA RB Client Data RB Portfolio | 30 June 2019 Net Loans by products Operating Data, GEL mln 2Q19 % of clients 2018 2017 2016 Total: GEL 6.8bln 19.7% of total clients Number of total Retail clients, of which: 2,475,292 2,440,754 2,315,038 2,141,229 Number
Slide 26: Retail Banking Financial Data
RETAIL BANKING FINANCIAL DATA Balance Sheet | 30 June 2019 Income Statement | 1H19 JSC Bank of Georgia Standalone JSC Bank of Georgia Standalone Total Gross Loans Net Interest Income 4% GEL 6,900mln GEL 260mln 15% 30% 32% 18% 39% 34% 28% Mass Retail (GEL 2,183mln) Mass Retail (GEL 103mln) MSME (GEL
Slide 27: Retail Banking – Digital Penetration
RETAIL BANKING – DIGITAL PENETRATION Digital Channel Statistics Internet Bank Transactions Mobile Bank Transactions 8.2 1.5 6.7 1.4 1.4 1.4 1.3 5.5 4.1 1,025 790 3.2 697 620 530 558 539 452 490 408 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 Volume of transactions, GEL millions # of transactio
Slide 28: Corporate and Investment Banking Highlights
CORPORATE AND INVESTMENT BANKING HIGHLIGHTS Income Statement Highlights* Market Position** Change Change Change GEL thousands unless otherwise noted 2Q19 2Q18 y-o-y 1Q19 q-o-q 1H19 1H18 y-o-y Market Share by Loans Market Share by Deposits Net interest income 47,459 41,718 13.8% 45,679 3.9% 93,138 79
Slide 29: CIB Loan Book & Deposits
CIB LOAN BOOK & DEPOSITS Highlights Portfolio breakdown | 30 June 2019 Loans by sectors Leading corporate bank in Georgia Mining and Health and quarrying social work 3.7% 3.0% Other Integrated client coverage in key sectors Financial Top 10 CIB borrowers 8.2% represent 29.4% of total intermediat
Slide 30: CIB Loan Yield, Cost of Deposits & NIM
CIB LOAN YIELD, COST OF DEPOSITS & NIM CIB Loan Yield I quarterly CIB Loan Yield I half-year 13.2% 13.0% 12.0% 15% 11.5% 12.6% 15% 10.4% 9.1% 9.5% 9.8% 8.6% 8.9% 10.2% 9.2% 9.6% 8.7% 10% 10% 5% 5% 0% 0% Loan Yield Loan yield, GEL Loan yield, FC Loan Yield Loan yield, GEL Loan yield, FC 2Q18 1Q19 2Q1
Slide 31: Building Blocks to Become the Financial Services Hub
BUILDING BLOCKS TO BECOME THE FINANCIAL SERVICES HUB Wealth Management – aim to increase AUM from current US$0.9bln to US$3.0bln in 5 years time Strong international presence: Wealth Management Vision – Become the regional hub for Israel (since 2008), UK (2010), Hungary wealth management offerin
Slide 32: Building Blocks: Galt & Taggart
BUILDING BLOCKS TO BECOME THE FINANCIAL SERVICES HUB Galt & Taggart - Largest Investment Bank in Georgia Brokerage DCM/ECM The leading brokerage house in the region During 1H19 Galt & Taggart acted as: The only international sub-custodian in the region • lead manager of JSC Microfinance Organi
Slide 33: Contents
CONTENTS Group Overview 4 Results Discussion 8 Georgian Macro Overview 34 Appendices 55 33
Slide 34: Georgia at a Glance
GEORGIA AT A GLANCE General Facts Area: 69,700 sq km Population (2018): (2017): 3.7 mln Life expectancy: 74 77 years Official language: Georgian Literacy: 100% Capital: Tbilisi Currency (code): Lari (GEL) Economy Nominal GDP (Geostat) 2017: GEL 38.0 bln (US$15.2 bln) Nominal GDP (G
Slide 35: Georgia's Key Economic Drivers
GEORGIA’S KEY ECONOMIC DRIVERS Top performer globally in WB Doing Business over the past 12 years Liberty Act ensures a credible fiscal and monetary framework: Liberal economic policy Fiscal deficit/GDP capped at 3%; Government debt/GDP capped at 60% Business friendly environment and low tax r
Slide 36: Growth Oriented Reforms
GROWTH ORIENTED REFORMS Ease of Doing Business | 2019 Economic Freedom Index | 2019 Source: WB-IFC Doing Business Report UK 7 Source: Heritage Foundation New Zealand 1 USA 12 Singapore 2 Estonia Denmark 3 15 Top 8 in Europe region out of 44 up from 9th in 2018 Georgia 16 Georgia 6 Lithuania 21 count
Slide 37: Government's Ongoing Reforms
GOVERNMENT’S ONGOING REFORMS 1 Structural Reforms 2 Promoting Transit & Tourism Hub Tax Reform Roads Corporate income tax reform Plan to finish all spinal projects by 2020 – East-West Highway, other Enhancing easiness of tax compliance supporting infrastructure Capital Market Reform Rail
Slide 38: Diversified Resilient Economy
DIVERSIFIED RESILIENT ECONOMY Gross domestic product Diversified nominal GDP structure, 2018 Source: Geostat Source: Geostat Growth was 4.9% in 1H19 Hotels & Other 20 16% Trade restaurants 9.9% Financial 17.0% 3.1% 15 12% interm. 7.2% 4.4% 10 6.2% 6.4% 8% 4.8% 4.7% Healthcare 4.6% 3.4% 2.9% 2.8% 5.8
Slide 39: Productivity and Capital Main Engines of Growth
PRODUCTIVITY AND CAPITAL HAVE BEEN THE MAIN ENGINES OF GROWTH SINCE 2004 Overall contribution of capital, labor, and Total Factor Contributions of capital, labor, and Productivity (TFP) to growth, 2010-2018 TFP to growth during periods Source: Geostat,G&T calculation Source: Geostat,G&T calculation
Slide 40: Further Job Creation Is Achievable
FURTHER JOB CREATION IS ACHIEVABLE Unemployment rate down 1.3ppts y/y to 12.7% in 2018 Average monthly wages and income per household Source: Geostat Source: Geostat 1,800 17.4% 17.3% 17.2% 16.9% 20% 500 1,700 14.6% 14.1% 14.0% 13.9% 400 1,600 12.7% 15% 1,500 300 1,400 10% 1,300 200 1,200 5% 100 1,1
Slide 41: Low Public Debt
LOW PUBLIC DEBT Fiscal deficit Breakdown of public debt Source: MoF, IMF Source: MoF, as of June 2019 0% -2% -2.1% -1.7% -2.1% -4% -2.8% -2.7% -2.9% -2.9% -2.5% -2.6% -2.7% External public debt portfolio -6% Multilateral weighted average -5.6% Domestic External 55% interest rate 2.2% -8% 21% 79% Con
Slide 42: Investing in Infrastructure and Spending Low on Social
INVESTING IN INFRASTRUCTURE AND SPENDING LOW ON SOCIAL Budget expenditures Expenditure breakdown: current vs. capital Source: MoF, Geostat Source: MoF 16,000 50% 100% 14,000 34.0% 40% 80% 12,000 30.7% 30.6% 29.4% 30.3% 30.5% 31.0% 30.4% 30.1% 30.8% 30.5% 80.0% 81.7% 78.1% 80.0% 76.0% 74.2% 74.2% 75.
Slide 43: Diversified Foreign Trade
DIVERSIFIED FOREIGN TRADE Imports of goods and services Exportsof goods and services Source: NBG – BOP statistics Source: NBG – BOP statistics 12 10 8.8 10.8 7.5 9.4 6.1 0.8 10 10.1 8.7 8.5 8 7.1 2.2 7.0 6.0 0.5 8.0 1.7 1.4 9.3 1.6 2.0 5.9 1.1 0.9 3.5 8 9.2 1.7 6 5.1 0.4 0.3 1.3 1.7 0.9 3.0 6.1 3.9
Slide 44: Diversified Sources of Capital
DIVERSIFIED SOURCES OF CAPITAL Strong foreign investor interest Tourist arrivals and revenues on the rise Source: Geostat Source: NBG, Geostat 2.0 25% 3.5 25% 19.9% 3.0 17.9% 20% 20% 1.5 2.5 14.7% 12.6% 15% 13.4% 11.9% 2.0 15% 11.0% 10.9% 10.7% 10.8% 1.0 7.8% 1.5 8.9% 7.3% 7.6% 10% 10% 6.5% 6.3% 6.6
Slide 45: Current Account Deficit Supported by FDI
CURRENT ACCOUNT DEFICIT SUPPORTED BY FDI Current account balance (% of nominal GDP) Source: NBG, Geostat 30% Goods, net Services, net Income, net Transfers, net CA deficit net FDI 20% 10.8% 6.1% 6.8% 8.5% 9.7% 8.1% 6.6% 10% 4.6% 5.6% 5.5% 5.4% 0% -10% -5.9% -7.7% -6.2% -10.3% -10.8% -8.8% -20% -12.8
Slide 46: Inflation Targeting Since 2009
1% 4% 5% 6% 7% -1% 0% 3% 8% 2% 40 60 80 120 140 100 20 Jan-14 Jan-14 Apr-14 Apr-14 Jul-14 Jul-14 Oct-14 Oct-14 Feb-15 Feb-15 May-15 May-15 Headline inflation Aug-15 Aug-15 Dec-15 Dec-15 Mar-16 Mar-16 Jun-16 Energy Jun-16 Sep-16 Sep-16 Jan-17 Jan-17 Apr-17 Apr-17 Jul-17 Jul-17 Annual Inflation Nov-17
Slide 47: International Reserves Sufficient to Finance Imports
INTERNATIONAL RESERVES SUFFICIENT TO FINANCE MORE THAN 3 MONTHS OF IMPORTS International reserves Central Bank’s interventions Source: NBG Source: NBG 250 220 US$ sale NBG purchased US$ 216mn in 1H19, o.w. US$ 51mn 4.0 200 via put option instrument 3.5 150 120 100 3.0 100 40 40 27 60 60 40 2.5 50 20
Slide 48: Floating Exchange Rate - Policy Priority
FLOATING EXCHANGE RATE - POLICY PRIORITY Nominal and Real effective exchange rate FX reserves (Jan2014=100) Source: NBG Source: NBG 5.0 1.42 1.6 130 130 1.30 1.36 1.31 4.5 1.25 1.23 1.24 1.4 4.0 1.16 1.19 120 120 1.03 1.2 3.5 3.0 3.7 1.0 110 110 3.3 -6.8% y/y 2.5 2.9 3.0 0.8 2.8 2.8 2.7 2.8 100 100
Slide 49: Growing and Well-Capitalised Banking Sector
GROWING AND WELL-CAPITALISED BANKING SECTOR Summary Banking sector assets, loans and deposits Source: NBG 25.4% CAGR Prudent regulation and oversight ensuring financial stability 45 39.7 40 34.6 Demonstrated strong resilience towards both domestic andexternal 35 30.1 shocks without single bank g
Slide 50: Growing Economy Supports Healthy Credit Growth
GROWING ECONOMY SUPPORTS HEALTHY CREDIT GROWTH Banking sector corporate & retail loans to GDP Mortgage loans Source: NBG, Geostat Source: NBG 5,444 72,030 60% 50% 36% 54,538 36% 3,838 32% 32,870 40% 28% 3,099 41,753 25% 37,472 21% 79.0% 29,840 30% 18% 2,156 11% 13% 14% 80.1% 20% 28,431 33,331 91.7%
Slide 51: Flexible FX Regime Supports Macro Stability
FLEXIBLE FX REGIME SUPPORTS TO MACRO STABILITY Currency weakening vs. US$ Source: Bloomberg Note: US$ per unit of national currency, period 1-Aug-2014 –30-June-2019 63.2% 52.0% 52.9% 53.9% 49.4% 43.4% 39.2% 23.1% 14.8% 15.3% Armenia Russia Turkey Moldova Ukraine Georgia Azerbaijan Euro Belarus Kazak
Slide 52: Exports and Tourism Revenues
0 200 300 100 400 500 50 250 0 300 350 150 200 100 400 Jan-17 Jan-17 Feb-17 Feb-17 Mar-17 Mar-17 Apr-17 Apr-17 May-17 May-17 Jun-17 Jun-17 Jul-17 Jul-17 Aug-17 Aug-17 Sep-17 Sep-17 Oct-17 Oct-17 Nov-17 Nov-17 Dec-17 Dec-17 Exports, US$ mn Jan-18 Jan-18 Feb-18 Feb-18 Mar-18 Mar-18 Tourism revenues, U
Slide 53: Exposure to Partner Countries Well Diversified
EXPOSURE TO PARTNER COUNTRIES WELL DIVERSIFIED Well diversified economic linkages Exports, tourism, FDI and remittances, % of GDP (exports, tourism, FDI and remittances), 2018 Source: Geostat, NBG, GNTA, G&T Source: Geostat, NBG, GNTA, G&T 50% 50% 45% 44.0% 45% EU 40% 40% Other countries 12.9% 35% 3
Slide 54: Contents
CONTENTS Group Overview 4 Results Discussion 8 Georgian Macro Overview 34 Appendices 55 54
Slide 55: Board of Directors
BOARD OF DIRECTORS 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 2009; originally joined as Paris;
Slide 56: Highly Experienced Management Team
HIGHLY EXPERIENCED MANAGEMENT TEAM 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 Officer Sulkhan Gvalia, Chief Financial Of
Slide 57: Bank of Georgia Group Income Statement
BANK OF GEORGIA GROUP INCOME STATEMENT Bank of Georgia Group Consolidated Banking Business Discontinued Operations Eliminations Change Change Change Change Change Change GEL thousands, unless otherwise noted 2Q19 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 2Q18 1Q19 y-o-y q-o-q y-o-y q-o-q y-o-y q-
Slide 58: Bank of Georgia Group Income Statement
BANK OF GEORGIA GROUP INCOME STATEMENT Bank of Georgia Group Consolidated Banking Business Discontinued Operations Eliminations Change Change Change Change GEL thousands, unless otherwise noted 1H19 1H18 1H19 1H18 1H19 1H18 1H19 1H18 y-o-y y-o-y y-o-y y-o-y Interest income 676,959 638,771 6.0% 676,9
Slide 59: Bank of Georgia Group Balance Sheet
BANK OF GEORGIA GROUP BALANCE SHEET Bank of Georgia Group Consolidated Change Change GEL thousands, unless otherwise noted Jun-19 Jun-18 Mar-19 y-o-y q-o-q Cash and cash equivalents 936,106 1,546,863 -39.5% 1,162,168 -19.5% Amounts due from credit institutions 1,704,701 993,862 71.5% 1,391,630 22.5%
Slide 60: BNB Financial Highlights
BNB FINANCIAL HIGHLIGHTS INCOME STATEMENT, HIGHLIGHTS Change Change Change 2Q19 2Q18 1Q19 1H19 1H18 GEL thousands, unless otherwise stated y-o-y q-o-q y-o-y Net interest income 6,360 6,354 0.1% 6,585 -3.4% 12,945 12,898 0.4% Net fee and commission income 1,798 2,503 -28.2% 1,812 -0.8% 3,611 4,780 -2
Slide 61: Banking Business Key Ratios
BANKING BUSINESS KEY RATIOS 2Q19 2Q18 1Q19 1H19 1H18 Profitability ROAA, annualised ** 2.9% 3.1% 3.1% 3.0% 3.2% ROAA, annualised (unadjusted) 2.8% 1.6% 2.8% 2.8% 2.4% ROAE, annualised ** 22.9% 25.4% 24.5% 23.7% 25.7% RB ROAE ** 26.9% 30.6% 25.3% 26.2% 31.1% CIB ROAE ** 22.0% 20.1% 27.1% 24.5% 20.0%
Slide 62: Key Operating Data
KEY OPERATING DATA Jun-19 Jun-18 Mar-19 Selected operating data: Total assets per FTE 2,184 1,821 2,017 Number of active branches, of which: 276 284 276 - Express branches (including Metro) 167 168 166 - Bank of Georgia branches 97 104 98 - Solo lounges 12 12 12 Number of ATMs 890 856 886 Number of
Slide 63: Multichannel Performance
MULTICHANNEL PERFORMANCE Number of Transactions ‘000s +5% 1H17 1H18 1H19 54,251 53,314 51,545 +76 % 37,335 +27% 28,945 x6.7 22,670 +32% 22,442 +3% 21,159 -21% 17,839 14,880 14,363 12,628 6,520 10,898 6,319 6,051 6,359 2,933 2,213 3,472 2,760 Tellers Mobile banking Internet banking POS terminals ATMs
Slide 64: Solo - A Fundamentally Different Approach to Premium Banking
SOLO - A FUNDAMENTALLY DIFFERENT APPROACH TO PREMIUM BANKING The target of 40,000 Solo clients (currently 48,953) already achieved ahead of time SOLO Lounges Solo offers: • Tailor made banking solutions • New financial products such as bonds • Concierge-style environment • Access to exclusive produc
Slide 65: Solo – Thinking Ahead of Customers Needs
SOLO – THINKING AHEAD OF CUSTOMERS NEEDS Banking TOP AFFLUENT EDUCATION A d v i s o r y s e r v i c e s in b a n k i n g a n d lifestyle so l u ti o n s T R AV E L Customer-centric approach maximisation MASS E N T E R TA I N M E N T AFFLUENT P e r so n a l b a n k i n g Life s ty l e a n d lifestyle
Slide 66: Solo - A Mid-Term Key Objective
SOLO - A MID-TERM KEY OBJECTIVE EXCELLENCE IN C U S T O M E R SERVICE DOUBLING PROFIT IN 3 YEARS REACHING HIGHER DIGITA L I S AT I O N GEL 112MLN TA I L O R - M ADE BUNDLED OFFERING
Slide 67: Retail Banking – Client-Centric Model
RETAIL BANKING – CLIENT-CENTRIC MODEL At 30 June 2019, we have 76 branches operating on our client-centric model 67
Slide 68: Notes to Key Ratios
NOTES TO KEY RATIOS Cost of funds Interest expense of the period divided by monthly average interest bearing liabilities; Cost of credit risk Expected loss/impairment charge for loans to customers and finance lease receivables for the period divided by monthly average gross loans to customers an
Slide 69: Company Information
COMPANY INFORMATION Registered Address 84 Brook Street London W1K 5EH United Kingdom Registered under number 10917019 in England and Wales Secretary Link Company Matters Limited 65 Gresham Street London EC2V 7NQ United Kingdom Stock Listing London Stock Exchange PLC’s Main Market for listed securiti
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Bank of Georgia Group — H1 2019 Earnings Presentation on 6ix