Overview of financial results continued Balance sheet Bank of Georgia Group consolidated Banking Business 4 Change Change GEL thousands unless otherwise noted 2018 2017 y-o-y 2018 2017 y-o-y Liquid assets 4,540,032 4,373,251 3.8% 4,540,032 4,346,509 4.5% Cash and cash equivalents 1,215,799 1,582,435 -23.2% 1,215,799 1,516,401 -19.8% Amounts due from credit institutions 1,305,216 1,225,947 6.5% 1,305,216 1,216,349 7.3% Investment securities 2,019,017 1,564,869 29.0% 2,019,017 1,613,759 25.1% Loans to customers and finance lease receivables 9,397,747 7,690,450 22.2% 9,397,747 7,741,420 21.4% Property and equipment 344,059 988,436 -65.2% 344,059 322,925 6.5% Assets of disposal group held for sale – 1,136,417 NMF – – – Total assets 14,798,303 15,168,669 -2.4% 14,798,303 12,907,678 14.6% Client deposits and notes 8,133,853 6,712,482 21.2% 8,133,853 7,078,058 14.9% Amounts due to credit institutions 2,994,879 3,155,839 -5.1% 2,994,879 2,778,338 7.8% Borrowings from DFI 1,302,679 1,624,347 -19.8% 1,302,679 1,297,749 0.4% Short-term loans from NBG 1,118,957 793,528 41.0% 1,118,957 793,528 41.0% Loans and deposits from commercial banks 573,243 737,964 -22.3% 573,243 687,061 -16.6% Debt securities issued 1,730,414 1,709,152 1.2% 1,730,414 1,386,412 24.8% Liabilities of disposal group held for sale – 516,663 NMF – – – Total liabilities 13,000,030 12,436,299 4.5%13,000,030 11,354,976 14.5% Total equity 1,798,273 2,732,370 -34.2% 1,798,273 1,552,702 15.8% Book value per share5 37.59 65.22 -42.4% Banking Business ratios 2018 2017 ROAA6 3.2% 3.2% ROAE6 26.1% 25.2% Net interest margin 6.5% 7.3% Loan yield 13.5% 14.2% Liquid assets yield 3.8% 3.4% Cost of funds 5.0% 4.7% Cost of client deposits and notes 3.5% 3.5% Cost of amounts due to credit institutions 7.3% 6.4% Cost of debt securities issued 7.8% 7.4% Cost to income ratio 36.7% 37.7% NPLs to gross loans to clients 3.3% 3.8% NPL coverage ratio 90.5% 92.7% NPL coverage ratio, adjusted for discounted value of collateral 129.9% 130.6% Cost of credit risk ratio 1.6% 2.2% NBG (Basel III) Tier I capital adequacy ratio 12.2% 12.4% NBG (Basel III) Total capital adequacy ratio 16.6% 17.9% 4Banking Business financials do not include eliminations with Investment Business during the five months of 2018. 5The y-o-y decline in book value per share as at 31 December 2018 is driven by the Demerger of Investment Business to Georgia Capital PLC on 29 May 2018 and the issuance of additional 9,784,716 Bank of Georgia Group shares (equivalent to 19.9% of Bank of Georgia Group’s issued ordinary share capital) to Georgia Capital. 62018 results adjusted for GEL 30.3 million Demerger-related costs, GEL 8.0 million Demerger-related corporate income tax gain, and GEL 30.3 million one-off impact of remeasurement of deferred tax balances (see details on page 92). 88 Annual Report 2018Bank of Georgia Group PLC