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8/8/2019 Liberty Capital Presentation
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Investor Presentation
June 2010
8/8/2019 Liberty Capital Presentation
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Executive Summary
Liberty Investments is an investment company founded in August 2009 by Dinu Patriciu
and Lado Gurgenidze
Invest in selected undervalued financial services companies, typically obscure due to
their small size, or operating in emerging/frontier markets
Acquisition of 91% of Liberty Bank was completed within one month from incorporation,
in September 2009
Raise additional capital from institutional and HNW investors and list the Company on the
London Stock Exchange within three years from inception
Liberty Bank is listed on the GSE (ticker code: BANK; Bloomberg ticker code: BANK.GG)
June 20Page 2 www.libertycapital.ge
Objective:
Exit/Liquidity Event:
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Investment Thesis Summary
June 20Page 3 www.libertycapital.ge
We invest in financial institutions in selected emerging/frontier markets
A geographic and sector matrix approach
Geographic focusSmaller frontier markets (with GDP of less than US$100 bn) have largely
been overlooked or de-emphasised since 2008 by multinational banks, and
this trend will likely continue for the next few years
We focus on countries with good governance, low levels of corruption,
sound macroeconomic policies and outlook, low taxes/small fiscal footprint,
transparency and stability of the legal framework and low banking
assets/GDP ratios
Sector focus
The banking sector in selected emerging/frontier markets
Very selectively - private banking, wealth management and trust &
corporate services providers serving clients in EMEA
Opportunistic but highly disciplined investments in other segments ofthe financial services sector
8/8/2019 Liberty Capital Presentation
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Investment Thesis Summary contd
The banking sector is a priority
Banks are among the earliest and biggest beneficiaries of economic reforms
in emerging/frontier marketsThe banks we invest in have to have a reasonable chance of attaining a top
five position in their home market, or already are among the top five thisgives the banks a natural entitlement to a share of local deposits, as well asdefendable earning power
We will seek to attain majority control or a meaningful minority stake in such
banks, because we are confident that we can add value by leveraging LadoGurgenidzes experience in building in 2004-2007 a similar institution fromvery humble beginnings (and creating about US$1 billion shareholder value in
the process) and help the investee banks with product innovation, delivery
channel modernisation, HR, risk management and IR to rapidly scale up the
footprint and gain market share, ensuring profitable organic growth
No more than 1-2 investments a year, to give us the time to provide sufficientattention to each investee company, initiate a transformation, build or enhance
the local team, etc
June 20Page 4 www.libertycapital.ge
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Making A Difference
June 20Page 5 www.libertycapital.ge
How do we intend to make a difference? We believe we can contribute in the following ways:
Strategic re-engineering. Small financial services companies, whether public or private, typically lack the resources
to embark upon business models which require aggressive scale. As such, they often engage in strategic self-censorship and pursue less ambitious strategies, thus leaving much low-hanging fruit untouched. We think we canadd a much-needed fresh look and genuinely international dimension to our investee companies strategic thinking
Scaling up the business. Even with resources available, the objective of scaling up the business over a 2-3 year
timeframe typically entails a set of operational challenges. This is particularly true for the financial services industry,
and more so now than before the crisis. Having led one of the most successful (and rapid) independent scaling-up
efforts in universal banking in CEE, we believe we can meaningfully contribute in helping the incumbent
management teams to scale up their business 3x-5x in the medium term in their traditional markets and beyond
Innovation. In some cases, we may bring to bear our experience in designing innovative products and, in particular,
innovative approaches to developing alternative distribution and service delivery channels. This experience would
be applicable primarily but not exclusively in the frontier markets
Synergistic growth. Where appropriate, we will seek to convince the investee banks to systemically realign their
businesses with one another to take full advantage of cross-referral and other revenue opportunities. Such
realignments may or may not result in cross-shareholding or mergers, although we will pursue such opportunities
when appropriate
Access to funding. Some of the prospective investee companies may benefit from our experience in raising equity
and debt capital, and from our wide-ranging relationships with the buy-side (especially with the GEM-and-EMEA-
focused hedge funds and real-money accounts)
Corporate governance. In almost all cases we will actively seek board representation. Occasionally, we will resort to
shareholder activism if we are convinced that our efforts in this direction will help extract value and set the
companies on the right path. And in case of companies with attractive platform characteristics or indemonstrableneed of a turnaround,we will seek voting and managerial control
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Top-Down Approach/Macro Screening Of Suitable Frontier Markets
June 20Page 6 www.libertycapital.ge
The Millennium Challenge Country Eligibility Criteria (http://www.mcc.gov/mcc/countries/index.shtml)
Indicator Category Source
Civil Liberties Ruling Justly Freedom House
Political Rights Ruling Justly Freedom House
Voice and Accountability Ruling Justly World Bank Institute
Government Effectiveness Ruling Justly World Bank Institute
Rule of Law Ruling Justly World Bank Institute
Control of Corruption Ruling Justly World Bank Institute
Immunization Rates Investing in People World Health Organization
Public Expenditure on Health Investing in People World Health Organization
Girls' Primary Education Completion Rate Investing in People UNESCO
Public Expenditure on Primary Education Investing in People UNESCO and national sources
Business Start Up Economic Freedom IFC
Inflation Economic Freedom IMF WEO
Trade Policy Economic Freedom Heritage Foundation
Regulatory Quality Economic Freedom World Bank Institute
Fiscal Policy Economic Freedom National sources, cross-checked with IMF WEO
Natural Resource Management Investing in People CIESIN/Yale
Land Rights and Access Economic Freedom IFAD / IFC
Eligible CountriesAlbania
Armenia
Benin
Burkina Faso
Cape Verde
Colombia
El Salvador
Georgia
Ghana
Guyana
Honduras
Indonesia
Jordan
Kenya
Kyrgyz Republic
Lesotho
Liberia
Madagascar
Malawi
Mali
Moldova
Mongolia
Morocco
Mozambique
Namibia
Nicaragua
Niger
ParaguayPeru
Philippines
Rwanda
So Tomand Principe
Senegal
Tanzania
Timor-Leste
Uganda
Ukraine
Vanuatu
Zambia
Source: Millennium Challenge Corporation
The countries where we are currently invested are shown in red font. The countries in which we have looked at specific opportunities in 2009-2010 are shown in italics.
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Top-Down Approach/Screening For Economic Liberty
June 20Page 7 www.libertycapital.ge
The World Bank Doing Business Rankings (www.doingbusiness.org)
Selection criteria
Starting a business
Dealing with construction
permits
Employing workersRegistering property
Getting credit
Protecting investors
Paying taxes
Trading across borders
Enforcing contractsClosing a business
2010Rank
Economy2010Rank
Economy2010Rank
Economy2010Rank
Economy2010Rank
Economy
1 Singapore 42 Slovak Republic 83 Dominica 124 Paraguay 165 Togo
2 New Zealand 43 Armenia 84 El Salvador 125 Nigeria 166 Mauritania
3 Hong Kong, China 44 Bulgaria 85 Pakistan 126 Bhutan 167 Lao PDR
4 United States 45 Botswana 86 Dominican Republic 127 Micronesia, Fed. Sts. 168 Cte d'Ivoire5 United Kingdom 46 Taiwan, China 87 Maldives 128 Morocco 169 Angola
6 Denmark 47 Hungary 88 Serbia 129 Brazil 170 Equatorial Guinea
7 Ireland 48 Portugal 89 China 130 Lesotho 171 Cameroon
8 Canada 49 Chile 90 Zambia 131 Tanzania 172 Benin
9 Australia 50 Antigua and Barbuda 91 Grenada 132 Malawi 173 Guinea
10 Norway 51 Mexico 92 Ghana 133 India 174 Niger
11 Georgia 52 Tonga 93 Vietnam 134 Madagascar 175 Eritrea
12 Thailand 53 Slovenia 94 Moldova 135 Mozambique 176 Burundi
13 Saudi Arabia 54 Fiji 95 Kenya 136 Algeria 177 Venezuela, R.B.
14 Iceland 55 Romania 96 Brunei 137 Iran, Islamic Rep. 178 Chad
15 Japan 56 Peru 97 Palau 138 Ecuador 179 Congo, Rep.
16 Finland 57 Samoa 98 Marshall Islands 139 West Bank and Gaza 180 Sao Tomao and Principe
17 Mauritius 58 Belarus 99 Yemen, Rep. 140 Gambia, the 181 Guinea-Bissau
18 Sweden 59 Vanuatu 100 Jordan 141 Honduras 182 Congo, Dem. Rep.
19 Korea, Rep. 60 Mongolia 101 Guyana 142 Ukraine 183 Central African Republic
20 Bahrain 61 Kuwait 102 Papua New Guinea 143 Syrian Arab Republic
21 Switzerland 62 Spain 103 Croatia 144 Philippines
22 Belgium 63 Kazakhstan 104 Solomon Islands 145 Cambodia
23 Malaysia 64 Luxembourg 105 Sri Lanka 146 Cape Verde
24 Estonia 65 Oman 106 Egypt, Arab Rep. 147 Burkina Faso
25 Germany 66 Namibia 107 Ethiopia 148 Sierra Leone
26 Lithuania 67 Rwanda 108 Lebanon 149 Liberia
27 Latvia 68 Bahamas, the 109 Greece 150 Uzbekistan
28 Austria 69 Tunisia 110 Guatemala 151 Haiti
29 Israel 70 St. Vincent and the Grenadines 111 Seychelles 152 Tajikistan
30 Netherlands 71 Montenegro 112 Uganda 153 Iraq
31 France 72 Poland 113 Kosovo 154 Sudan
32 Macedonia, FYR 73 Turkey 114 Uruguay 155 Suriname
33 United Arab Emirates 74 Czech Republic 115 Swaziland 156 Mali
34 South Africa 75 Jamaica 116 Bosnia and Herzegovina 157 Senegal
35 Puerto Rico 76 St. Kitts and Nevis 117 Nicaragua 158 Gabon
36 St. Lucia 77 Panama 118 Argentina 159 Zimbabwe
37 Colombia 78 Italy 119 Bangladesh 160 Afghanistan
38 Azerbaijan 79 Kiribati 120 Russian Federation 161 Bolivia
39 Qatar 80 Belize 121 Costa Rica 162 Comoros
40 Cyprus 81 Trinidad and Tobago 122 Indonesia 163 Djibouti
41 Kyrgyz Republic 82 Albania 123 Nepal 164 Timor-Leste
Source: World Bank
The countries where we are currently invested are shown in red font. The countries in which we have looked at specific opportunities in 2009-2010 are shown in italics.
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Top-Down Approach/2010 Index Of Economic Freedom
The Index Of Economic Freedom World Rankings (http://www.heritage.org/index/ranking.aspx)
June 20Page 8 www.libertycapital.ge
10 components of
economic freedom
Business Freedom
Trade Freedom
Fiscal FreedomGovernment Size
Monetary Freedom
Investment Freedom
Financial Freedom
Property Rights
Freedom from Corruption
Labor Freedom
World
Rank Country
Freedom
Score
Change From Previous
Year
World
Rank Country Freedom Score Change From Previous Year
1 Hong Kong 89.7 (0.3) 41 Mexico 68.3 2.5
2 Singapore 86.1 (1.0) 42 Kuwait 67.7 2.1
3 Australia 82.6 - 43 Oman 67.7 0.7
4 New Zealand 82.1 0.1 44 Israel 67.7 0.15 Ireland 81.3 (0.9) 45 Peru 67.6 3.0
6 Switzerland 81.1 1.7 46 United Arab Emirates 67.3 2.6
7 Canada 80.4 (0.1) 47 The Bahamas 67.3 -3.0
8 United States 78.0 (2.7) 48 Malta 67.2 1.1
9 Denmark 77.9 (1.7) 49 Saint Vincent and the Grenadines 66.9 2.6
10 Chile 77.2 (1.1) 50 Latvia 66.2 -0.4
11 United Kingdom 76.5 (2.5) 51 Hungary 66.1 -0.7
12 Mauritius 76.3 2.0 52 Jordan 66.1 0.7
13 Bahrain 76.3 1.5 53 Albania 66.0 2.3
14 Luxembourg 75.4 0.2 54 Costa Rica 65.9 -0.5
15 The Netherlands 75.0 -2.0 55 Trinidad and Tobago 65.7 -2.3
16 Estonia 74.7 -1.7 56 Macedonia 65.7 4.5
17 Finland 73.8 -0.7 57 Jamaica 65.5 0.3
18 Iceland 73.7 -2.2 58 Colombia 65.5 3.2
19 Japan 72.9 0.1 59 Malaysia 64.8 0.2
20 Macau 72.5 0.5 60 Panama 64.8 0.1
21 Sweden 72.4 1.9 61 Slovenia 64.7 1.8
22 Austria 71.6 0.4 62 Portugal 64.4 (0.5)
23 Germany 71.1 0.6 63 Romania 64.2 1.0
24 Cyprus 70.9 0.1 64 France 64.2 0.9
25 Saint Lucia 70.5 1.7 65 Saudi Arabia 64.1 (0.2)
26 Georgia 70.4 0.6 66 Thailand 64.1 1.1
27 Taiwan 70.4 0.9 67 Turkey 63.8 2.2
28 Botswana 70.3 0.6 68 Montenegro 63.6 5.4
29 Lithuania 70.3 0.3 69 Madagascar 63.2 1.0
30 Belgium 70.1 -2 70 Dominica 63.2 0.6
31 South Korea 69.9 1.8 71 Poland 63.2 2.9
32 El Salvador 69.9 0.1 72 South Africa 62.8 (1.0)
33 Uruguay 69.8 0.7 75 Bulgaria 62.3 (2.3)
34 Czech Republic 69.8 0.4 76 Uganda 62.2 (1.3)
35 Slovakia 69.7 0.3 77 Namibia 62.2 (0.2)36 Spain 69.6 -0.5 78 Cape Verde 61.8 0.5
37 Norway 69.4 -0.8 79 Belize 61.5 (1.5)
38 Armenia 69.2 -0.7 80 Kyrgyz Republic 61.3 (0.5)
39 Qatar 69.0 3.2 81 Paraguay 61.3 0.3
40 Barbados 68.3 -3.2 82 Kazakhstan 61.0 0.9
Source: Heritage Foundation
The countries where we are currently invested are shown in red font. The countries in which we have looked at specific opportunities in 2009-2010 are shown in italics
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Selected Target Markets The Macro Screen Overlap
June 20www.libertycapital.gePage 9
Nepal
Iraq
Latvia
Lithuania
Countries with GDP
per capita of less
than US$10,000ranked among top
80 in the three
indices used for the
macro screen
World Bank
Doing Business
Index Of Economic Freedom
Kenya
Mali Mozambique
Niger
UkraineParaguay
GeorgiaArmenia
Uganda
Namibia
Kyrgyzstan
GhanaTanzania
Botswana
MacedoniaEstonia
South Africa
Albania
Cape Verde
Colombia
El Salvador
Jordan
Peru
Zambia
Guyana
Benin
Honduras
Indonesia
Moldova
Mongolia
MoroccoNicaragua
Senegal
Timor-Leste
Jamaica
Thailand
Madagascar
Paraguay
Liberia
Madagascar
Malawi
Rwanda
Burkina
Faso
Lesotho
Philippines
Vanuatu
Azerbaijan
Tonga
Fiji
Samoa
Tunisia
Maldives
Egypt
EthiopiaSwaziland
Bangladesh
Kiribati
Zambia
Sri Lanka
Guatemala
Bhutan
Haiti
Vietnam
Solomon Islands
EcuadorPapua New GuineaAlgeria Ecuador
Sierra Leone
Sudan
Gambia
Honduras
Tajikistan
Surinam
Zimbabwe
Montenegro
Belize
The countries where we are currently invested are shown in red font. The countries in which we have looked at specific opportunities in 2009-2010 are shown in italics.
Romania
Bahrain
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Established in September 2009
Current Group Structure
June 20Page 10 www.libertycapital.ge
100%
77.3%
100%Established in October 2009
100%In progress
Subject to regulatory approval
US$15,000,000
Acquisition of a 91.218%
equity interest in
September 2009
Mandatory Tender Offer For The
Minority Interest In
November 2009
Corporate Broker
GEL 18.7 million
February 2010
Corporate Broker
Capital Increase
Established in September 2009
Lib t B k At A Gl
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Liberty Bank At A Glance
Page 11June 20www.libertycapital.ge
The leading bank by number of clients, serving approximately 1.2 million individuals and over 20,000
legal entities
The largest retail network comprising 179 branches and sales outlets 1,350 mobile sales force
Sixth largest bank by total assets, with a 4.8% market share*Exclusive provider of state pension services
Sole provider of welfare payment services
Providing payroll services to approximately 100,000 individuals employed at over 2,900 organisations
Robust in-house card processing platform, servicing 1.2 mln cards, with estimated capacity of over 5
mlncards
A new experienced team running the bank since October 2009, comprising Lado Gurgenidze and 20
experienced professionals
Risk controls & procedures have been established
ALCO has been established
Aggressive credit risk management efforts are underwayAdequate provisioning of legacy exposures provisions of GEL 5.6 mln and write-offs of GEL 8.5 mlnmade since the acquisition
Corporate Banking and Private Banking have been enhanced and re-launche d and integrated client
coverage introduced
RB product lineup redesign underway
Branch footprint normalisation effort underway
Consolidated Total Assets, Net Loans and Client Deposits grew 11.3%, 20.4% and 14.4% q-o-q,
respectively, in Q1 2010
Standalone Total Assets, Net Loans and Client Deposits grew 30.6%, 39.9% and 49.9% , respectively,
YTD 2010 (May)
Leading Retail Footprint A Turnaround in Progress
Investment HighlightsKey Figures*
*As of 31 May 2010
Source: the National Bank of Georgia
GEL mln, unless otherwise noted *
Consolidated
M ar 10 D ec 09 Sep 09 YE 2008 YE 2007
Total Assets 362 325 281 318 283
Net Loans, of which 101 84 78 109 114
Retail loans 66 56 46 81 75
Corporate loans 33 27 32 28 39
Private Banking loans 1.2 0.7 0.4 N/A N/A
Total Liabilities 333 315 263 303 222
Ac count Balances, of which 271 254 202 199 204
Retail client account balances 91 77 80 114 107
Corporate client account balances 124 111 63 68 94
Private Banking client account balances 16 15 13 N/A N/A
Shareholders Equity 29 11 17 15 59
*Not audited or reviewed (except for 2007 and 2008 figures), IFRS-based. Audited IFRS results may vary significantly from these preliminary figures
As of 31 May 2010
Shares outstanding* 3,060,446,927
Shares owned by Liberty
Capital 2,409,047,026
% owned by Liberty Capital 78.7%Treasury shares 9.1%
ESOP 5.7%
Free Float* 6.4%
Exchange GSE
Ticker Code BANK
Share price GEL 0.034
MCap** GEL 94.7 mln
* including treasury shares
** net of treasury shares
GEL/US$ Exchange Rate (e-o-p) of 1.7847 as at 31
May 2010
Source: The Georgian Stock Exchange
GEL mln, unless otherwise noted *
Consolidated
Q1 10 Q4 09 Q3 09 2008 2007
Revenue 12 11 NMF 55 49
Net Income/(Loss) 0.1 (3) NMF (46) 3
GEL/US$ Exchange Rate, e-o-p 1.75 1.69 1.68 1.67 1.59
Total Assets Growth May '10-September 09
Liberty Bank (Standalone) 52.1%
The Georgian Banking Sector 11.8%
Net Loan Book Growth May '10-September 09
Liberty Bank (Standalone) 50.9%
The Georgian Banking Sector 8.4%
Client Deposits Growth May '10-September 09
Liberty Bank (Standalone) 95.2%
The Georgian Banking Sector 20.1%
GSE+OTC Trading Volume GEL Shares
July '09 200 6,250
August '09 98,014 1,444,852
September '09 300,796 3,077,545
October '09 128,119 1,605,407
November '09 242,089 3,910,182
December '09 244,261 3,748,464
January '10 1,519,989 35,608,902
February 10 24,406,336 1,450,727,143
March 10 592,548 26,830,620
April 10 989,269 43,034,141
May 10 120,560 3,493,095
June '10 422,899 12,264,678
Total 29,065,080 1,585,751,279
June 10 M ar 10 Dec 09 Sep 09 YE 2008 YE 2007
Numbe r of debi t cards o uts tanding 1, 202, 647 1, 189, 421 885, 938 N/A N/A N/A
Number of ATMs 171 137 136 134 135 N/A
Number of employees , of which 3,765 3,857 3,804 3,700 3,880 4,121
Full-time employees 1,860 1,946 1,890 1,790 1,907 2,162
Number of POS terminals 533 491 510 503 548 N/A
A 91.218% equity interest purchase in September 2009 for GEL 25 mln (US$15 mln) by Liberty
Capital, a wholly-owned subsidiary of Liberty Investments Hold ing B.V.Dinu Patriciu (one of the most accomplished entrepreneurs and investors in CEE) and Lado
Gurgenidze (Georgias most successful banker, who led the Bank of Georgia turnaround in 2004 -2007) are the ultimate beneficial shareholders
Regulatory waiver (applicable to CAR and other prudential ratios) of GEL 108 mln t hrough
September 2012
Capital increase of GEL 18.7 mlne ffected in February 2010, of which GEL 17.2 mln was invested
by Liberty Capital
Tax loss carryforward of GEL 49 mln
Significant untapped lending potential, given the low loan book penetration rate amont retail
clients, Net Loans/Total Deposits ratio of 37.5% and Liquidity ratio of 34.6% as at 31 March 2010
Net Loans/Assets Ratio of 28.1% as at 31 March 2010
Profitable from Q1 2010
Growing much faster than the banking sector
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About Dinu Patriciu
Dinu Patriciu is a Romanian citizen who began his career as an architect. Over the last twenty years he has been at the forefront of regional
business and political life, becoming one of the leading advocates of free market principles and classical liberal values in Romania and South
Eastern Europe.
Between 1990 and 1998 Dinu was the President of ALPHA Construction and Real Estate Investments SA, the first private company founded in
Romania after the collapse of Communism. During this period, he acquired land and developed over 40,000 square meters of high-endcommercial and residential properties in Bucharest.
In 1998 he led an investor buyout of the Romanian company Rompetrol SA, served on the Supervisory Board of the new company from its
establishment, and took over as full time CEO in 2001. Dinu led Rompetrol from a state-owned Romanian oil services company into one of the
top 25 oil operators in the European Union through a program of strategic acquisitions and organic growth. He took control of Rompetrol in
1998 when it was a money-losing asset that had been declared unsalvageable by the World Bank. After several acquisitions in Romania,
Rompetrol embarked on an international expansion program in the Balkan region and beyond, including Moldova, Georgia, and Ukraine, and in
2005 acquired Dyneff Group SA, the largest independent distributor of oil products in France. In August 2007, Dinu Patriciu sold 75% of
Rompetrol to Kazakhstans KazMunayGas (KMG). In June 2009, Dinu Patriciu sold his remaining 25% equity stake to KMG while remaining aMember of theBoard of The Rompetrol Group.
Over the past year, Dinu has focused his attention on the European commercial real estate market with the purchases of AIM-listed Fabian
Romania, which owns GBP 138 million of Romanian assets, and 73.6% of LSE-listed Rutley European Property Limited. Dinu is also Chairman of
the Board of Adevarul Holding, a media group (since 2006), and President of the Dinu Patriciu Foundation, which provides educational
scholarships for promising Romanian students. Forbes ranks Dinu Patriciu the richest man in Romania and the 397th richest person in the world
with assets of US$1.8 billion.
June 20Page 12 www.libertycapital.ge
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About Lado Gurgenidze
June 20Page 13 www.libertycapital.ge
Lado Gurgenidze is a career banker whoafter a decade spentat several investment banks in Eastern Europeand London returned to his native Georgia in 2004 and
spearheaded, as Executive Chairman and CEO, a turnaround of Bank of Georgia (LSE: BGEO). During Lados three-year tenure, the banks total assets and netincome grew 760% and 1,563%, respectively. As its market share grew from 18% to 34%, Bank of Georgia became the leading universal bank in Georgia and the
region with market capitalisation exceeding US$900 million at the time ofLados departure (up from US$30 million at the time of his arrival). Prior to taking thehelm at Bank of Georgia, Lado served as Head of Europe at Putnam Lovell (now part of Jefferies) and as Head of TechnologyCorporate Finance and Head of M&A,
Emerging Europe at ABN Amro advising such clients as SWIFT, Reuters, Moneyline Telerate, Wirtualna Polska, Marconi, Andrew Corporation, Merloni
Elettrodomestici, News Corp, Global One,Golden Telecom, UPCand Philips.
In 2007-2008, Lado served as Prime Minister of Georgia, leading the Georgian economy through the final stage of free-market reforms, including tax cuts, financial
services sector reform as well as aggressive privatisationand liberalisation policies. In the aftermath of the August 2008conflict with Russia, Lado was instrumental
in stabilising the Georgian economy and its financial sector, as well as securing a US$750 million IMF stand-by arrangement and a $4.5 billion multi-donor aid
package.
Lado put Georgia on the global institutional investor map, leading the first-ever international equity and debt capital markets issues by Bank of Georgia and the
Georgian government as well as the countrys first-ever domestic IPOs. He is responsible for bringing in approximately US$1 billion of portfolio investments andcloseto US$500 millionof FDI.Lado is the only person to have been awarded St Georges VictoryOrder (in 2008) and the Presidential Order of Excellence (in 2010)
the two highest civilian honours in Georgia.
Sincehe stepped down as Prime Minister, Lado has been a frequent public speaker on issues of economic libertyand free-market reforms in developing countriesand co-chairs the Emory Center for Alternative Investments. In October 2009, he was invited to join, as Chairman, the supervisory board of Bank of Kigali, thelargest bankin Rwanda.
In September 2009, Lado established, togetherwith Dinu Patriciu, Liberty Investments, an investment company focusing on financial services institutions in frontier
markets with low corruption, low taxes and openeconomies. In the same month, Liberty Investments announced the acquisition of a controlling equity interest in
Liberty Bank, which has the largest client base in Georgia, serving some 1.2 million clients through 179 branches. By June 2010, the first phase of the turnaround
has been completed, withthe rebranded bank returning to profitability and growing much faster than the Georgian banking sector.
Lado is married with four sons. He is a Georgian and British citizen and received his MBA from Goizueta Business School of Emory University in 1993, following
undergraduate studies at Middlebury College andTbilisi State University. In 2006Lado hosted the licensed Georgian version ofThe Apprentice TV show.
Current Commitments
L iberty Cap ital
Past Engagements
UK FSA individual reference number VXG01025 (currently inactive)
Transformation of JSC Bank of Georgia Under Lado Gurgenidzes LeadershipCase Stud
8/8/2019 Liberty Capital Presentation
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Transformation of JSC Bank of Georgia Under Lado Gurgenidze s Leadership
June 20Page 14 www.libertycapital.ge
US$ mln, unless otherwise noted 30 September 04 30 September 07 Growth
Share price, US$ 2.2* 35* 1,468%
MCap 29 937 3,087%
Assets 152 1,448 854%
Market share, % 18.2% 34%
Net Loan book 86 779 806%
NPLs, % of Loan book 7.5% 1.3%
Deposits 96 684 609%
Equity 26 280 961%
Book value per share, US$ 3 10 233%
Revenue , YTD 16 90 461%
Net income, YTD 2** 30 1,779%
ROAA 1.2% 3.5%
ROAE 5.7% 16.2%
Cost/Income ratio 65% 53%
Employees, FTE 944 3,992 323%
Branches 50 109 118%
ATMs 16 185 1,056%
Accounts, 000 206 659 220%
Cards, 000 30 520 1,633%
GEL/US$ (e-o-p) 1.84 1.66
* 4 October 2004 GSE price of GEL 4.0, converted at GEL/US$ of 1.82; Closing price on the LSE on 16 November 2007 , the day Lados resignation was announced**The new team had to provision heavily immediately upon assuming operational control in October 2004, which resulted in full- year 2004 loss of GEL 9.2 mln
Executive Chairman, CEO of JSC Bank of Georgia (BoG) October 2004-November 2007Transformed BoG from an obscure, loss-making local commercial bank with US$25 mln MCap (GSE), 18% market share and narrow business model into the undisputed
domestic leader universal bank with US$900 mln Mcap (LSE at the time of his depa rture, 91% free float, 85% institutionally owned), 33% market share, emerging
international footprint and US$47 mln net income (2007)
The first Georgian company to list on the LSE US$160 mln IPO in November 2006, 100+ bidsThe first Georgian entity to issue Eurobonds US$200 mln 9% 2012 issued in February 2007, 100+ bids
Assembled a team of experienced professionals, including alumni of ABN Am ro, Credit Suisse, UBS, Merrill Lynch, Nomura, Deutsche Bank, Morgan Stanley, Raiffeisen,UniCredit, JP Morgan, IFC, EBRD, Ernst & Young, Deloitte, PwC etc
Acquired and developed Galt & Taggart Securities into the undisputed domestic leader (60%+ market share) with significant institutional client base and high
profitability (9M 2007 net income US$6.6 mln, 21.9% of the group net income for the period, US$189 mln client assets as at 30 September 2007)
Developed organically the market-leading wealth management business (1,000+ local and international clients, US$50.5 mln client assets as at 30 September 2007)
Developed organically the countrys sole asset management business (Galt & Taggart Asset Management, US$65 mln AUM as at 30 September 2007)Built, through three acquisitions, an insurance market leader with c. 25% market share
Built a leading card processing centre serving 1 mln cards
The Rebranding Transformation of JSC Liberty Bank Under Lado Gurgenidzes LeadershipCase Stud
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The Rebranding Transformation of JSC Liberty Bank Under Lado Gurgenidze s Leadership
June 20Page 15 www.libertycapital.ge
Note: unaudited, IFRS-based , standalone
* Due to database cleanup and closure of inactive accounts
Executive Chairman & CEO of JSC Liberty Bank September 2009-present
Turned, in eight short months, a heavily loss-making insolvent bank with Cost-Income ratio exceeding 100% into
a profitable and rapidly modernising institution by Q1 2010, and currently trending to a run-rate monthly pre-
provisioning profit of US$ 1 million
Rebranded the bankLaunched several new products
Started branch network modernisation
Completed the central branch/headquarters renovation
Launched a GDR programme with BNY Mellon
GEL mln, unless otherwise noted 30 September 09 31 May '10 Growth
Share price, GEL 0.0176 0.0340 93%
Assets 279 425 52%
Market share by total assets, % 3.5% 4.8%
Net Loan Book 78 118 51%
NPLs, % of Loan Book 17.5% 8.3%Market share by net loans, % 1.7% 2.4%
Deposits 156 304 95%
Market share by client deposits, % 5.8% 8.1%
Equity 16 35 113%
Book value per share, GEL 0.010 0.013 21%
Revenue , YTD 31 21 NMF
Net Income, YTD (7) 1 NMF
ROAA -3.4% 0.8% NMF
ROAE -51.2% 10.6% NMF
Cost/Income ratio 100.3% 83.2%
Employees, FTE 1,790 1,854 4%
Branches 177 179 1%
ATMs 136 166 22%
Accounts, 000* 2,990 2,320 -22%
Cards, 000 1,176 1,199 2%
GEL/US$ (e-o-p) 1.677 1.785
New Products Launched
Liberty Bank Before The Renovation
Liberty Bank After The Renovation
Rebranding
2007
2010
June 2010
June 2010
Contact Information
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Contact Information
Page 16
Lado Gurgenidze
Chief Executive Officer
+995 99 477 [email protected]
Dmitry Kasatkin
Chief Operating Officer
+44 77 860 28 700
June 2010 www.libertycapital.ge
Tamuna Gunia
Head of Investor Relations
Important Information
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Important Information
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June 20Page 17