Strategic ReportStrategic ReportStrategic Report Financial Additional Overview Strategy Performance Governance Statements Information Capital KPIs In 2018, our Tier I Capital Adequacy ratio (NBG, Basel III) stood at 12.2%. The risk weighted assets increased by 23.4%, reflecting the increase in interest earning assets during the year. We continue to generate high levels of internal capital as a result of both the Bank’s high return on average equity, and the improved risk asset intensity of our lending growth. Over the medium term, we will focus on managing our capital ratios c.200 basis points over our minimum regulatory requirements. Tier 1 capital adequacy ratio, (NBG, Basel III)** Bank of Georgia Leverage (times) Banking Business 12.2% 2016 9.1% 7.2 2016 7.2 2017 12.4% 2017 7.3 2018 12.2% 2018 7.2 NBG (Basel III) Tier I capital adequacy ratio equals Tier I capital divided by total risk weighted assets, bothLeverage (times) equals total liabilities divided by total equity. calculated in accordance with the requirements of the National Bank of Georgia instructions. Non-financial KPIs The Bank tracks customer satisfaction with multiple survey channels and several key performance indicators on an ongoing basis, followed by an effective “close-the-loop” process. The Bank is responsive to the customer feedback which it collects on a daily basis and has been consistently working on integrating the customer experience in its processes. Going forward, we aim at improving these non-financial KPIs. Net promotion scale (NPS) Customer satisfaction (CSAT) 38.8% 25.3% 2017 27.4% 2017 25.0% 2018 38.8% 2018 25.3% NPS asks: on a scale of 0-10, how likely is it that you would recommend our Bank to a friend or a colleague?CSAT asks: on a scale of 1-5, how satisfied are you with a particular channel or a parameter? The final The responses are: 9 and 10 – are promoters; 7 and 8 – are neutral; 1 to 6 – are detractors. The final result,result is the percentage of the respondents that reply with 5 from the total number of the respondents. thus an NPS, equals to the percentage of the promoters minus the percentage of the detractors. **Tier 1 capital adequacy ratio at 31 December 2016 is presented in accordance with NBG Basel II guidelines. Annual Report 2018Bank of Georgia Group PLC 47