Strategic ReportStrategic ReportStrategic Report Financial Additional Overview Strategy Performance Governance Statements Information Corporate Investment Banking (CIB) CIB provides (1) loans and other credit facilities to Georgia’s large corporate clients and other legal entities, excluding SME and micro businesses; (2) services such as fund transfers and settlements services, currency conversion operations, trade finance services and documentary operations as well as handling savings and term deposits; (3) finance lease facilities through the Bank’s leasing operations arm, the Georgian Leasing Company; (4) brokerage services through Galt & Taggart; and (5) Wealth Management private banking services to high net worth individuals and international investment management products through representative offices in London, Budapest, Istanbul, Tel Aviv and Limassol. Change GEL thousands, unless otherwise noted 2018 2017 y-o-y Income statement highlights Net interest income 165,723 156,171 6.1% Net fee and commission income 26,680 22,717 17.4% Net foreign currency gain 54,702 46,276 18.2% Net other income 6,699 14,256 -53.0% Revenue 253,804 239,420 6.0% Salaries and other employee benefits (54,792) (54,573) 0.4% Administrative expenses (17,409) (16,190) 7.5% Depreciation and amortisation (4,945) (5,134) -3.7% Other operating expenses (1,175) (761) 54.4% Operating expenses (78,321) (76,658) 2.2% Operating income before cost of risk 175,483 162,762 7.8% Cost of risk (25,888) (47,403) -45.4% Profit beforenon-recurring items and income tax 149,595 115,359 29.7% Net non-recurring items (13,630) (1,882) NMF Profit before income tax 135,965 113,477 19.8% Income tax expense (16,827) (7,584) 121.9% Profit 119,138 105,893 12.5% Balance sheet highlights Net loans and finance lease receivables, currency blended 2,618,490 2,260,107 15.9% Net loans and finance lease receivables, GEL 464,397 383,058 21.2% Net loans and finance lease receivables, FC 2,154,093 1,877,049 14.8% Client deposits, currency blended 3,473,054 3,457,331 0.5% Client deposits, GEL 1,347,754 1,276,401 5.6% Client deposits, FC 2,125,300 2,180,930 -2.6% Time deposits, currency blended 1,337,112 1,297,984 3.0% Time deposits, GEL 491,622 470,288 4.5% Time deposits, FC 845,490 827,696 2.1% Current accounts and demand deposits, currency blended 2,135,942 2,159,347 -1.1% Current accounts and demand deposits, GEL 856,132 806,113 6.2% Current accounts and demand deposits, FC 1,279,810 1,353,234 -5.4% Letters of credit and guarantees, standalone * 1,035,630 644,750 60.6% Assets under management (AUM) 2,271,543 1,857,495 22.3% *Off-balance sheet item. Annual Report 2018Bank of Georgia Group PLC 99