Strategic ReportStrategic ReportStrategic Report Financial Additional Overview Strategy Performance Governance Statements Information Retail Banking – client-centric, multi-brand strategy Over the past decade, Retail Banking has been a primary driver of Banking Business growth and has repeatedly demonstrated a stellar performance by reaching 2.4 million clients, delivering a retail loan book growth of 24.2% y-o-y and Retail Banking ROAE of 30.0% in 2018. The past several years marked the Bank’s successful transformation from a product-focused to a client-centric business model, which has resulted in more effective tailor-made services through the Bank of Georgia’s multi-brand strategy. We have made significant achievements in creating highly popular digital platforms, such as our mobile banking application (mBank) and attractive loyalty programmes, both of which are an integral part of our client-centric Over 2.4 million Retail Banking clients business model and our focus on developing stronger customer relationships. CAGR 12.8% Product to Our Retail Banking is made up client 2.1 of four segments: Express Bank 2.1 2.3 2.4 for emerging retail clients; Bank 2.0 of Georgia’s flagship mass retail 1.5 brand; SOLO for the affluent 0.9 1.1 1.2 retail clients; and Micro, Small 0.7 0.8 0.8 and Medium Enterprise (MSME) banking. Each serves and focuses on the specific needs of their 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 respective clients. Retail Banking segments 2-3 year targets and priorities Segments Emerging Retail Mass Retail Mass Affluent Micro, Small and Medium Business Strategic focus Profitability and growth through client-centric business model Clients 539 k 1,663 k 44 k 195 k 2018 profit* GEL 40 mln GEL 109 mln GEL 56 mln GEL 79 mln +2.0 % y-o-y -1.4% y-o-y +31.4% y-o-y +58.2% y-o-y Profit per client* GEL 75 GEL 67 GEL 1,455 GEL 440 P/C ratio 3.3 1.7 5.4 1.4 Branches 165 94 12 n/a *Adjusted for Demerger-related expenses and one-off impact of remeasurement of deferred tax balances. Annual Report 2018Bank of Georgia Group PLC 25