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Sopho Balavadze, Bank of Georgia PR Head Assessing 2014

Over the last few years Bank of Georgia has made strong progress in delivering growth in its core retail banking, corporate banking and investment management businesses. This growth has been combined with maintaining a solid capital and liquidity position and consistently high returns on shareholder equity, delivering dividends that have more than quadrupled over the last three years and an excellent total return to shareholders. Georgia’s economic development has remained robust and the Bank expects this progress to be maintained in the future. The banking sector in Georgia remains relatively underpenetrated and we expect our recent strong customer lending growth, particularly in the retail bank, to continue.

The main events of 2014 were: placing of 3,590,937 new ordinary shares with existing and new institutional investors, raising gross proceeds of approximately US$114 million (before expenses). The Placing Shares being issued represent approximately 9.99 per cent of the issued ordinary share capital of Bank of Georgia Holding plc. prior to the Placing; acquisition of JSC Privatbank, the 9th largest bank in Georgia by total assets with a focus on retail banking. The acquisition will expand Bank of Georgia’s core banking business and distribution network, enhancing its market leading position in Georgian financial services; As  National Bank of Georgia announced in fall 2014 that it intends to regulate banks on a standalone basis and thereby restrict, from a regulatory perspective, investments in non-banking businesses by locally regulated banking entities, Bank of Georgia intends to undertake a legal entity restructuring that will involve the transfer of ownership and separation of the banking and non-banking businesses from Bank of Georgia to a Georgian holding company, which will be 100% owned by BGH. The corporate restructuring and transfer of these businesses – in particular the Group’s healthcare and real estate subsidiaries – is expected to take place during the middle of 2015. As a result of these changes, the Bank adopted a revised management structure: there will be no changes in the management structure of Bank of Georgia Holdings PLC, where Irakli Gilauri will continue as Chief Executive Officer and Neil Janin will remain Chairman of the Board of Directors. Murtaz Kikoria, former CEO of Georgia Healthcare Group, became Chief Financial Officer of Bank of Georgia, before assuming the role of CEO, Bank of Georgia in June 2015. Irakli Gilauri will become Chairman of JSC Bank of Georgia.