TBC Bank 2011 Q2

TBC Bank Recent Financial performance

H1 2011

• Georgian Banking Sector

• TBC Bank at a Glance

• Business lines

• Strategy and Forecast

• Financials

• Capital

Contents

2

13.8 17.0

19.1

18.0

20.8 23.6

26.4

9.4%

12.3%

2.4%

-3.8%

6.4%

5.5%

5.3%

-8%

-5%

-2%

1%

4%

7%

10%

13%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2006 2007 2008 2009 2010 Prel 2011 F 2012 F

Nominal GDP (GEL $bln) Real GDP growth, y-o-y (%)

GDP

General — Population: 4.4 million

— Currency: Georgian Lari (GEL)

Economy — GDP: USD 14.1 bln; GDP per Capita: USD 3,131 (Projected 2011)

— Total Government Debt (in % of GDP): 36.8% (Projected 2011)

— Average yearly Inflation June 2011: 11.3%; non-food inflation 2010 : 2.3%*

Currency — 1 USD = GEL 1.6665, 1 EUR = GEL 2.4054**

— USD/GEL during last five years: Max 1.89, Min 1.40

Ratings — Fitch Rating B+

— Standard & Poor's: B+/Stable

— Moody's rating: Ba3/Stable

Recent Achievements — No 1 “reformer” named by IFC/World Bank (Doing Business Report 2011)

— No 4 in TI 2010 Global Corruption Barometer together with Iceland and Portugal

(TI 2010 Global Corruption Barometer)

— No 12 globally in Ease of Doing Business in 2010 (Doing Business Report 2011)

Georgia At A Glance

Components of Nominal GDP* (2010 Prel)

Industry 16.9%

Trade 16.6%

Public Administration 13.0%

Transport & Communication 11.6%

Agriculture 8.4%

Healthcare & Social Assistance 6.6%

Construction 6.3%

Education 4.8%

Other 15.7%

Source: IMF

*Geostat Figure Source: IMF

* Calculated using nominal GDP (preliminary) at basic prices Source: Geostat

3

**As of June 30

Gel

Bln

4% 6% 7% 8% 8% 12%

20% 21%

33%

0%

5%

10%

15%

20%

25%

30%

35%

40%

TUR GEO CZE RUS POL BUL ROM UKR KAZ

impaired loans

9% 9% 11% 11% 12% 13% 14% 14% 17%

0%

5%

10%

15%

20%

25%

30%

ROM POL KAZ CZE UKR TUR BUL RUS GEO

Equity/Assets

30% 43% 43% 53% 54% 48%

70% 59% 76% 26%

33% 43% 35%

52% 58% 37%

76% 67%

0%

50%

100%

150%

200%

GEO KAZ RUS ROM POL TUR UKR CZE BUL

Loans/GDP Deposits/GDP

-1.3% 0.2% 2.3%

3.8% 3.9% 4.3%

6.4% 7.0%

8.2%

-3%

-1%

1%

3%

5%

7%

9%

11%

13%

15%

ROM BUL CZE POL RUS UKR GEO KAZ TUR

real gdp growth in 2010 real gdp growth in 2010

114%

Attractive Macroeconomic and Banking Sector Fundamentals

4

Real GDP growth 2010 and Loan Book Growth 2010

5 % 2 % 5 % 10% 3% 26% -6% 13% 20%

Loan to GDP and Deposits to GDP

Impaired Loans and Reserve Coverage

Reserve coverage of Impaired Loans

Real GDP growth Loan Book Growth

Equity to Assets and ROAE

NM 12.5% NM 11.9% NM 16.3% 6.3% 4.9% 13.5%

108% 131% 93% 153% 104% 83% 188% 78%

* Source: Fitch report, IMF data

ROAE

•Source: Individual countries’ Central Banks, Analyst Research. Data as at 31 December 2010 unless otherwise stated. •Note(1) Data as at 31 December 2009. Georgian Banking System ROE is given for 2011 H1 NBG reporting Standard * Source: Fitch report; Data as at 31 December 2010

* Source: Individual countries’ Central Banks, Analyst Research. Data as at 31 December 2010

(1) (1)

168% 57% 120% 65% 48% 56% 90% 88% 96%

Loan/Deposits

Main Regulatory Requirements

NBG Main Regulatory Requirements

•FX minimum reserves from 5% to 15% (From August 2011)

•For the borrowings in GEL of more than 1 year and borrowings in FC of more than 2 years not required from August 2011 Minimum Reserves

•Tier 1 > 8% and Total Capital > 12%

•Major difference with Basel is Foreign currency loan weighting at 175% Capital Requirements

•Liquidity ratio increased from 20% to 30%, (from October 2010)

•(NBG has acknowledged prudent liquidity management policy of TBC by Setting lower limit) Liquidity Ratio

•Early repayment fee of not more than 2%

•(May 2011) Yearly Repayment Fee

•Single Related party < 5% of capital •All related party < 25% of capital •Group exposure < 25 % of capital

Exposure ratios

In addition

No limits or restrictions on the sector or FX policy

In the future

NBG is discussing to introduce Loan to Deposit ratio of < 130% and non-resident deposit to total deposit book ratios < 20%. We will meet the requirements if it materializes as our Loan to Deposits is forecasted to be at 117% and non resident deposits is less than 5%

5

4,589

5,993

5,185

6,261 6,901

84%

31%

-13%

21%

20%

-20%

0%

20%

40%

60%

80%

100%

0

1,400

2,800

4,200

5,600

7,000

2007 2008 2009 2010 2011 I H

Gel

Mln

Total Loans Growth %

3,215 3,568 3,950

5,488 5,775 65%

11%

11%

39%

10%

0%

10%

20%

30%

40%

50%

60%

70%

0

1,400

2,800

4,200

5,600

7,000

2007 2008 2009 2010 2011 I H

Gel

Mln

Total Deposits Growth %

Georgian Banking Sector Growth Dynamics in USD Millions

6

Source: National Bank of Georgia. NBG Reporting Standard *Growth Annuialized

2,993

3,469

3,102

3,847 4,187

1,596

2,524

2,084 2,414

2,713

0

900

1,800

2,700

3,600

4,500

2007 2008 2009 2010 2011 I H

Gel

Mln

Corporate loans Retail Loans

1,666 1,709

1,846

2,846 2,964

1,549 1,859

2,104

2,641 2,812

0

800

1,600

2,400

3,200

4,000

2007 2008 2009 2010 2011 I H

Gel

Mln

Corporate Deposits Retail Deposits

Georgian Banking Sector Loan Growth Over Last 5

Years

Georgian Banking Sector Loan Growth Over Last 5

Years

Georgian Banking Sector Deposit Growth Over Last

5 Years

Source: National Bank of Georgia. NBG Reporting Standard

Source: National Bank of Georgia. NBG Reporting Standard

Georgian Banking Sector Deposit Growth Over Last

5 Years

Source: National Bank of Georgia. NBG Reporting Standard *Growth Annualized

Number of world’s largest financial institutions have partnered with Georgian banks :

Y 2000 Y 2002 Y 2004 Y 2006 Y 2008 Y 2010 Y 2011 Q2

2.6%

3.4%

3.9%

6.4%

6.4%

8.3%

25.1%

36.0%

2.0%

2.4%

2.5%

6.1%

8.1%

11.8%

30.0%

33.1%

All banks, including TBC Standalone, NBG Reporting Standards

Total Loans Retail Deposits

1.5%

3.0%

3.2%

6.5%

7.5%

8.5%

27.6%

34.6%

Total Deposits

Georgian Banking Sector – Eight Largest Banks Market Shares Q2 2011

7



• Business lines


• Financials

• Capital

Contents

8

• Corporate

49.1%

• Retail

35.5%

• SME

10.7%

• Micro** 4.7%

Fitch Moody’s

Long Term B+ Foreign Currency B1

Ratings

• No 1 by Retail Deposits – 33.1% of market share as at 30 June 2011

• A leading bank in the country with 25.1% of total customer loans market share as at 30 June 2011

• 45 branches, 183 ATMs, 2,414 POS’s across Georgia

• Number of accounts c. 615,800; Number of employees c. 2,400

• Entered microfinance segment in May, 2011 through acquiring Bank Constanta

• Presence in Azerbaijan-subsidiary TBC Kredit - non-banking credit organization

TBC Bank at a Glance

Financial Highlights and Ratios

(As of and for the Q2 2011) USD m

Total assets 1,657

Net loans 1,026

Customer deposits 972

Stockholders’ equity 249

Financial Ratios

ROE annualized (H1 2011) 24.3%

Cost to income (H1 2011) 49.2%

BIS Tier1 capital adequacy ratio (H1 2011) 19.5%

Key Facts About TBC

Shareholder Structure

Notes: Market shares are NBG Based, * Micro Segment includes Constanta Portfolio, Number of branches and number of accounts excludes Constanta

Loan portfolio composition as per the segments – 2-nd Q 2011

Source: TBC Bank Consolidated IFRS Statements (Unaudited) Exchange Rate Used: USD/GEL 1.6665

9

Georgian Shareholders 35.3%

European Bank for Reconstruction and Development (EBRD) 20.0%

International Financial Corporation (IFC) 20.0%

Deutsche Investitions-und Entwicklungsgesellschaft (DEG) 11.4%

JP Morgan 5.0%

Ashmor 5.0%

Netherlands Development Finance Company (FMO) 3.3%

History

1993 • TBC bank was granted banking license to Conduct International Operations in May

1996 • TBC Bank became a member of the international financial information exchange system S.W.I.F.T.

1997 • The Bank entered into a credit line with the World Bank for a principal amount of U.S.$1 million

1998 • TBC received funds in an amount of U.S.$ 2 million from EBRD, U.S.$ 3 million from IFC and DM 3 million from DEG

1999 • The volume of the Bank’s letter of credit provided by the EBRD was increased by USD 2 million

2000 • IFC and DEG became TBC Bank shareholders, each with a 10% share

2002 • TBC Bank became the principle member of VISA-INTERNATIONAL and started issuing Visa plastic card

2003 • EBRD allocated a USD 6 million credit line to the bank • TBC Bank’s total assets market share increased by 2.9 percentage points from y/e 2002 and reached historical maximum of 19.7

percent market share by y/e 2003

• The Bank’s subsidiary, TBC Leasing began operations

2005

• In February the Bank’s new Head Office was opened • TBC Bank’s total assets market share increased by 2.9 percentage points from y/e 2003 and reached historical maximum of 22.6

percentage market share by y/e 2005 • TBC Bank has acquired the license of general member bank from “MasterCard International”

2006 • The Bank entered into a U.S.$35 million loan facility with Citibank

2007 • The Bank raised USD 102m funding from J.P. Morgan, Credit Suisse and FMO, that included both senior and subordinated loans • TBC bank’s market share further increased by 1.1 percentage points from y/e 2005 and reached historical maximum of 23.7 percent • The Bank acquired 75% of the share capital of SOA Credit (currently TBC Kredit LLC), a company incorporated in Azerbaijan

10

2008

• The TBC Bank attracted funds totaling USD 206 million from foreign markets, including following international financial institutions: DEG, FMO, Merrill Lynch, Rose Mount, OTP, Banco International, EBRD, OPIC, CITI Bank

• In order to support the victims of the hostilities, TBC Bank established a charitable organization – “TBC Foundation” and made the initial contribution of GEL 5 million

2009

• EBRD, FMO, JP Morgan and Ashmore became the shareholders of TBC Bank • The Bank raised U.S.$ 138.3 m from four international financial institutions: IFC, EBRD, FMO and DEG, that included: Equity

contribution - $39.9m, Senior Loan – $52.3m, and Subordinated Loan - $44m • Recapitalization transactions changed the composition of the Supervisory Board: Each IFI shareholder has its nominee to the Board

2010 • The Bank’s growth continued despite the effects of the global financial crisis as reflected by the levels of specific financial indicators as

at 31 December 2010

2011 • In March 2011, the Bank acquired [80]% of the share capital of Bank Constanta, through which it entered the micro-finance segment. • TBC Bank was granted Visa and MasterCard licenses for electronic commerce merchant acquiring

2004

Current Shareholders

Shareholder Structure

11

Founder Shareholders

• Mamuka Khazaradze, Chairman of the supervisory board since 1992. Founded TBC-Group and JSC TBC Bank in 1992

• Until the early 2000s, Vice-Chairman of the Supervisory Board of Microfinance Bank of Georgia.

• Founded IDS Borjomi Georgia, Borjomi Beverages Co.N.V. • In 2004 he founded Georgian Reconstruction and Development

Company (GRDC), • Founded and served as the Chairman of the Lisi Lake

Development and the private high school -The American Academy in Tbilisi.

• Badri Japaridze, deputy chairman of the board since 1992. Co-Founder of TBC-Group and JSC TBC Bank in 1992

• Member of the Board of GeoPlant, the largest Georgian producer and exporter of green tea.

• Since the early-2000s, member of the Supervisory Board of both American Chamber of Commerce in Georgia and EU-Georgia Business Council (EUGBC).

• Board Member of Georgian Reconstruction and Development Company (GRDC) and Bank Constanta.

• Chairman of the Board of TBC-TV, a Georgian advertising company, and,

• Chairman of the Board of TBC Kredit, TBC Bank’s subsidiary in Azerbaijan.

• IFC Became a shareholder in May 2000. Eric Rajenda Member of the Supervisory Board nominated by IFC in 2010

• DEG Became a shareholder in May 2000. Steffen Shuhany Member of the Supervisory Board nominated by DEG in 2007

• EBRD Became a shareholder in April 2009. Mike Hesketh Member of the Supervisory Board nominated by EBRD in 2009

• FMO Became a shareholder in April 2009. Mike Hesketh Member of the Supervisory Board nominated by FMO in 2009

• JP Morgan and Ashmore Became a shareholder in April 2009, They are entitled (but not required) to send an observer to attend all meetings of the Supervisory Board

Two Founder Shareholders,

28%

EBRD, 20% I F C, 20%

Management &

Other 8%

JPMorgan 5%

Ashmore 5%

FMO 3%

D E G 11%

11

Source: IFRS Consolidated

Statements

12

IFI Shareholders

EBRD

EBRD - 20.0% • Total Exposure to TBC Bank

• Senior Loan - USD 71 ml • Subordinated Loan - USD 18.5 ml

• Diversified product range: • SME • Mortgage • Energy Efficiency • Trade Finance • RCA • Subordinated Loan • Agro Loan • Local Currency Loan • Co Financing Agreement • Revolving Facility

• TC Projects • EUR 500,000 worth TC project provided by EBRD in 2010 – 2011 covered 5

modules including: Corporate Recovery, Risk Management, Accounting and Finance, HR, IT.

• Ongoing TC project of Trade finance through E-learning • Various TC projects in different years to strengthen SME financing,

Environmental and Social Management System, Credit Risks, Operational Risks

IFC -20.0% • Total Exposure to TBC Bank

• Senior Loan - USD 31 ml • Subordinated Loan - USD 20.5 ml

• Diversified product range: • Subordinated Loan • Senior Loan • Revolving Facility

• TC Projects • Various TC projects in different years to strengthen SME

financing, Environmental and Social Management System, Credit Risks, Operational Risks

FMO – 3.3% • Total Exposure to TBC Bank

• Senior Loan - USD 21 ml • Subordinated Loan - USD 27 ml

• Diversified product range: • Subordinated Loan • SME Loan • Mortgage Loan • Revolving Facility

• TC Projects • TC projects in different years to strengthen ALM

DEG – 11.4% • Total Exposure to TBC Bank

• No Senior Loan • Subordinated Loan - USD 20 ml

• Diversified product range: • Subordinated Loan • Senior Loan • Revolving Facility

• TC Projects • Various TC projects in different years to strengthen

Environmental and Social Management System, Credit Risks

Cost Of Risk

0.4%

2.3%

7.2%

C/I

49.0%

55.1%

57.9%*

ROAA

3.8% (Annualized)

2.5%

0.2%

ROAE

24% (Annualized)

14%

1%

NPLs (PAR 90)

0.85%

1.6%

2.6%

Net Profit

48

49

3

Net Loans

1,710 (23.8% growth)

1,381 (39.7% growth)

988

Total Assets

2,762 (21.8% growth)

2,268 (30.5% growth)

1,738

2010

A Winning Franchise with Robust Performance throughout the Financial Crisis

2010 2010 2010

Awards

Banker Award 2010 Euromoney Award 2011

*IFRS Statements Unaudited 2011 Q2

*2009 Excludes one-off income of GEL 25900 and one-off expense 4,600

2009

2010

2009

2010

2009

2009 2009 2009

2010

2009

Source: TBC Bank Consolidated IFRS Audited Figures (Unaudited for H1 2011)

13

2010

2009

2011 1H* 2011 1H*

2011 1H* 2011 1H* 2011 1H* 2011 1H*

2011 1H* 2011 1H*

All Figures in Million GEL

Branches

45

POS

2414

TBC Pay

442

Mobile Banking

6.5K customers

Internet Banking

66K customers

Highly-Organized Call Center

Superior Customer Experience

“The Most Desired Employer in Georgia” - according to on-line

survey held by National Credit Information Bureau

Keeping up with Modern Day Banking

TBC Bank – Distribution Channels

14

Effective Branch Network

Net Loans and Deposits/Number of Branches*

Total Tbilisi Regions

Bank of Georgia 133 75 58

Procredit Bank 59 33 26

TBC Bank 45 31 14

Bank Republic 37 21 16

VTB Bank 16 7 9

GEL

Mln

Source: *NBG Based for comparison for 1H 2011

The Best Employer in the Market

Source: TNS Georgia 2011 report

Source: TBC Bank Internal Figures

36

17

13 10 9

35

17

11 10 8

0

10

20

30

40

50

TBC BOG VTB Republic Procredit

Net Loans/Number of Branches Total Customar Deposits/Number of Branches

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

2008-I 2008-II 2009-I 2009-II 2010-I 2010-II 2011-I

TBC BOG Republic ProCredit

26.00% 25.60%

26.70% 26.60% 26.70%

27.63%

20%

22%

24%

26%

28%

30%

10-Mar 10-Jun 10-Sep 10-Dec 11-Mar 30-Jun

432

854 946 756

976 1,095 159

314

509

413

572

775

56%

98%

25%

-20%

32% 21%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

0

400

800

1,200

1,600

2006 2007 2008 2009 2010 2011 Q2

Corporate Loans Retail Loans Growth %

21.99% 22.78%

23.38% 23.80% 24.22% 25.13%

15%

20%

25%

30%

10-Mar 10-Jun 10-Sep 10-Dec 11-Mar 30-Jun

Total Deposits Market Shares *

Sustainable Growth

15

Total Customer Deposits

Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011)

Total Loans Market Shares

* Excludes Railway Transfer of USD 250m

3.1

4 %

Source: NBG, NBG Reporting Standard

1.6

3 %

Gel

Mln

Gel

Mln

Total Gross Customer Loans

308 343 334 321 513

668 244

437 511 671

852

952

45% 41%

8%

17%

38%

19%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

400

800

1,200

1,600

2006 2007 2008 2009 2010 2011 Q2

Corporate Deposits Retail Deposits Growth %


Source: NBG, NBG Reporting Standard



• Business lines


• Financials

• Capital

Contents

16

2008 2009 2010 2011 Q2

Customer Loans (Gel Mln)

Customer Deposits* (Gel Mln)

# of accounts (‘000)**

Net Income (Gel Mln)***

Universal Bank with Diverse Customer Base

17

Corporate SME Retail Micro ****

% of Loans

% of Deposits

Loans > USD 1,5m Or Turnover => GEL 8m

Loans < USD 1,5m Or Turnover <

GEL 8m

All Individual Customers

Total Portfolio of Constanta Loans <

USD 150K

54 52 49 52

2008 2009 2010 2011 Q2 2008 2009 2010 2011 Q2 2008 2009 2010 2011 Q2

29 23 31 28

13 13 9 10

11 9 10 10

33 35 37 38

60 68 58 62

N/A N/A 5 N/A

N/A N/A 0.4 N/A

Source: 2010 TBC Bank audited consolidated IFRS Figures, SME Deposits – Internal Data (H1 2011 unaudited) Notes: *Customer Deposits Internal Data, **Number of Accounts Internal Data - excluding accounts with zero balances, *** Net Income Internal Data, **** Bank Constanta Data, ***** Bank Constanta Standalone Profit, consolidated by TBC as at H1 2011 will be only 0.5 mln Note: figures exclude Minority shares

918 176 687 88

3.5 23.2 508 14

28.1 11.0 1.2*****

506 162 945 7

8.1

198

153 153

176

82 91

136

162

0

50

100

150

200

250

2008 2009 2010 2011 Q2

Gel

mln

SME Loans SME Deposits

802 604

812 918

252 229

377

506

27%

23% 24% 26%

20% 18% 18%

22%

0%

5%

10%

15%

20%

25%

30%

0

200

400

600

800

1,000

1,200

2008 2009 2010 2011 Q2

Gel

mln

Corporate Loans Corporate Deposits

Market Share CL Market Share CD

Corporate

SME

Corporate & SME Banking

18

Defined as loans more than USD 1.5 m and turnover minimum GEL 8 m

2nd position in the market by loan and deposit portfolio size as well as by the number of clients

c. 1,400 clients, 4,240 accounts, 760 loans

Strong industry expertise. Especially strong presence in following industries: Energy, Consumer Product and Services , Oil and Gas, Food and Drinks, Construction

Convenient Service Model in the head office and major branches, Bank-Client, Internet Banking, Call Centre. 81%* of non cash transactions are performed by e-channels

The strongest brand and most appropriate image Diversified product: Trade Finance, Asset Finance, Project Finance, Working

Capital, Syndicated Loans

Defined as loans up to USD 1.5 m and turnover up to GEL 8 m

No 1 by SME Deposits – 149 mln GEL vs 118 mln GEL PCB total Corporate**

No 2 by SME Loans – 176 mln GEL vs 386 mln GEL of PCB**

c. 26000 customers, 44,000 accounts, 1,200 loans

Customers can access 45 branches across all major cities with the highest service quality that is expressed in bright and comfortable environment, politeness and high qualification of staff and quick service

Strong presence in following industries: Consumer Product and Services, Food and Drinks, Real Estate, Health care and Construction etc

Convenient Internet banking, Bank-Client, Internet Banking, Call Centre. 87%* of non cash transactions are performed by e-channels

Corporate Loans & Deposits

SME Loans & Deposits

Surce: TBC Bank Consolidated IFRS Statement (derived from audited statement, H1 2011 unaudited). market Shares TBC Standalone NBG Reporting based

Surce: TBC Bank Consolidated IFRS Statement (derived from audited statement, H1 2011 unaudited). * TBC bank Standalone ** SME market position based on TBC Bank Standalone NBG standard reporting

486 413

584 687

511 671

852 945

27.0%

31.4% 31.8% 33.1%

19.8% 20.1% 23.2% 24.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

300

600

900

1,200

1,500

2008 2009 2010 2011 Q2

Gel

Mln

Retail Loans Retail Deposits

Market Share RD Market Share RL

Retail Segment

19

Defined as all individual customers Number 1 in Deposits, 2nd in Loans 45 branches, 183 ATMs, 2414 POS’s across Georgia c.567,500 accounts, c. 512,800 Debit Cards, c.5,500 mortgages 942 VIP customers, separate service and products for VIPs with Personal

Bankers The highest Service quality in the branches that is expressed in bright and

comfortable environment, politeness and high qualification of staff and quick service

Significant multi channel capabilities including internet banking, SMS banking, TBC Cash in and call centre. 40%* cash in and 61%* of non cash transactions are performed by e-channels

The strongest brand and most appropriate image

Retail Loans & Deposits

58 53 69

88

0.95% 1.02%

1.10%

1.25%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

0

15

30

45

60

75

90

2008 2009 2010 2011 Q2

Gel

Mln

Total Loans Market Share

Recently acquired bank focused purely on micro finance segment with the strongest image and the best developed expertise in the segment

4-th in the micro loans

c. 442 employees, assets of GEL 114 m (2Q 2011)

c. 14,000 accounts, 25,000 loans

22 branches across the country, specific products for microfinance in rural areas

Well-diversified high quality credit portfolio

Micro Loans Micro Segment

Retail & Micro Banking

*Note: TBC Bank Standane

Source: TBC Bank Consolidated IFRS Figures (Unaudited H1),

NBG standards for market share information.

Source: bank Constanta IFRS Figures (Unaudited H1),

NBG standards for market share information.



• Business lines


• Financials

• Capital

Contents

20

• Implement the best (functionality and design) Multichannel platform in the region. (Including internet-banking, mobile/Ipad –banking. Actively, promote sales and service though the e-channels

1. Establish the Best Multichannel Service and Sales Model

• Replacement of the core banking software applications (Includes: cards, loans and deposits modules), development of a single customer view to further enhance customer experience and decrease cost per transition.

2. Achieve Breakthrough in Automation and Quality of Processes to Improve Customer Satisfaction

• Form foreign representatives offices, create organizational system for direct sales , Improve products and procedures and improve technological channels and communication to attract non-resident deposit.hence support growth and decrease cost of funding.

3. Become Number One in Non-Resident Deposit Portfolio

4. Microfinance Segment Development

Strategic Initiatives

A Fine-tuned Strategy

*ProCredit Bank

• Increase market penetration by opening branches in rural areas, develop new products and services, tasilored to microfinance segment, laverage from TBC Bank knowledge and experitese for synergy effect, develop cross selling capabilities between TBC and Constanta

Description

21

Main Targets 2011 Q2 Medium Term Targets

ROE 24.3% 20%

Cost to income (without Provisions) 49.6% 51.0%

Market Share in deposits 27.6% 28.6%

Market Share in loans 25.1% 26.3%

Segment Aspirations 2011 Q2 Medium Term Targets

Retail Deposits 33.1%

24.2% 33.5% 25.3% Loans

SME Deposits

100% PCB* 42%

120% PCB* 43% Loans

Corporate Deposits 22.4%

25.7% 24.7% 25.8% Loans

Micro Loans/Constanta Loans 7% N/A

Source: TBC Bank IFRS Statement (Unaudited 2011 H1), Medium Term targets from

Internal Data



• Business lines


• Financials

• Capital

Contents

22

-58

3

49 48 -3.2%

0.2%

2.5% 3.8%

-10% -80

-60

-40

-20

0

20

40

60

2008 2009 2010 2011 1H

Net Income ROAA, annualized

-58

3

49 48

-20%

1%

14%

24%

-20%

0%

20%

-80

-60

-40

-20

0

20

40

60

2008 2009 2010 2011 1H

Net Income ROAE, annualized

Rapid Post Crisis Recovery

Operating Efficiency

236

211 211

123 107 112 116

61

44.1% 52.9%

55.1% 49.6%

0%

10%

20%

30%

40%

50%

60%

0

50

100

150

200

250

2008 2009 2010 2011 1H

Net Revenue Non-Operating Expenses Cost to Income

Net Income, ROAE

Provision Expenses

Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011).

Gel

Mln

Gel

Mln

G

el M

ln

Gel

Mln

23

Net Income, ROAA

Note: 2009 Cost to Income Ratio excludes extraordinary income

196

94

31 4

14.9%

7.2%

2.3% 0.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

50

100

150

200

250

300

2008 2009 2010 2011 1H

Loan Provision Expense Cost of Risk

Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011).

Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011). Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011).

Pawn-Shops, 7%

Consumer, 23%

Fast consumer, 5%

Credit Cards, 14%

Cash Covered, 3%

Mortgage, 49%

24

Corporate Loans RB Loans SME Loans

Well Diversified Loan Book

Loans by Currency, 2011, June 30 Loan Book – Historical Data

Consolidated Audited IFRS figures, unaudited data for 2011 Q2

Source: TBC Bank Standalone NBG Reporting Standard As of June 30

Financial service, 4%

Development and real estate realization, 8%

Energy, 9%

Communication, 11%

Oil and gas, 13%

Construction, 8%

Food and drink, 7%

Consumer Service and

Product, 17%

Agriculture, 1%

Other, 23%


30% 14% 20%

70% 86% 80%

0%

20%

40%

60%

80%

100%

120%

RB CB Total

FC

GEL

2% 9%

18%

17%

49%

0

400

800

1200

1600

2000

2009 2010 2011 Q2

Retail

SME

Corporate

35%

13%

52%

37%

10%

53%

42%

9%

49%

1,169

1,548

1,869

Financial service, 3%

Real Estate, 19%

Healt Care, 8%

Transport and Logistics, 4%

Oil and gas, 2%

Construction, 13%

Food and drink, 11%

Consumer Service and

Product, 30%

Raw Materials, 3%

Other, 8%


Source: Audited IFRS Statements, Unaudited data for 2011 Q2

Provision Level to Gross Loans and NPL Coverage

Concentration and Quality of The Loan Book

25

NPLs* to Gross Loans


*NPLs are defined as Loans overdue more than 90 days

Loan Concentration to Gross Loans

Related Party Loans to Capital

11.51% 15.47%

10.81% 8.57%

68% 84%

116%

126%

0%

20%

40%

60%

80%

100%

120%

140%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 1H

Provision Level To Gross Loans NPL + restructured loans coverage ratio

23% 24% 27%

25%

3% 2% 3% 3%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 1H

20 Largest Borrowers Single Largest Borrower

3.6% 2.6% 1.6% 0.8%

17.0% 18.4%

9.3% 6.8%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 1H

NPL's Gross Loans NPLs+Restructured Loans to Gross Loans

22%

13%

6% 4%

8% 7%

2% 2%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 1H

All Related party Loans Top 1 Related party Loan

Source: TBC Bank Internal Data Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011)

Source: TBC Bank Internal Data

0

400

800

1,200

1,600

2,000

2008 2009 2010 2011 1H

Current/settlement accounts Term deposits

172%

118% 113% 115%

-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%

0

400

800

1,200

1,600

2,000

2008 2009 2010 2011 1H

GEL FC Loans to Deposits Ratio

Strong and Growing Funding Base

26

Liabilities Structure, 2011, Q2

Deposit Portfolio Concentration (M GEL)

Deposits by Type

43%

57% 52%

48%

45%

55%

845

991

1,365

22.72%

77.28%

26.0%

74.0%

27.7%

73.3% 845

991

1,365

18.2%

11.3%

16.3% 17.9%

1.1% 0.9% 0.7% 0.8%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 1H

20 Largest Deposits All Related Party Deposits

48%

52%

1,620

Deposits by Currency

76.1%

23.9%

1,620

Due to other banks, 5%

Customer Accounts, 69%

Other borrowed funds , 17%

Other liabilities, 2%

Subordinated debt, 6%

Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011);

Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011); Source: TBC Bank Consolidated IFRS Audited Figures (Non-Audited for H1 2011);

Source: TBC Bank Internal Data



• Business lines


• Financials

• Capital

Contents

27

11.1%

16.3%

12.2% 10.3%

10.90%

22.80%

17.60%

13.44%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2008 2009 2010 2011 1H

Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio

Source: TBC Bank Standalone NBG Reporting Standard, (Unaudited IFRS 2011 1H)

Strong Capital Base

28

BIS Capital Adequacy Ratios NBG Capital Adequacy Ratios

Source: TBC Bank Consolidated IFRS Audited Figures (Unaudited IFRS 2011 1H)

Main Difference between BIS and NBG Capital Adequacy Rations

Foreign Currency Loans are weighting - 175% for NBG regulations

General Loan Reserve are included in NBG Capital

Revaluation Reserve is included in BIS Capital

Minimum Requirement of Total Capital Adequacy – 12%

Minimum Requirement of Tier I Capital Adequacy – 8%

13.3%

25.3%

21.4% 19.5% 18.80%

38.20%

30.00%

25.80%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2008 2009 2010 2011 1H

Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio

TBC Bank 2011 Q2

Economy & Finance

Transcript of TBC Bank 2011 Q2