2019 Year-End Investor Presentation Albaraka Trk Participation Bank - PowerPoint PPT Presentation

2019 Year-End Investor Presentation Albaraka Türk Participation Bank 11 February 2020

Agenda 1 Financial Highlights 2 Market Comparison Appendix 3

3 Albaraka Turk – 2019 Year-End at a Glance Key Ratios Balance Sheet Y-Y (Million TRL) 2018 2019 Y-Y (%) % 2018 2019 (bps) Total Assets 42.223 51.392 21,7 Total Funded Credits (Net) 26.185 29.749 13,6 CAR 14,66 14,97 31 Total NPLs 1.889 2.222 17,6 Deposits (incl. Interbank) 28.623 39.769 38,9 Tier 1 9,98 10,66 68 Shareholder’s Equity 3.261 3.822 17,2 Income Statement 31 NPL 6,88 7,19 (Million TRL) 2018 2019 Y-Y (%) Provisioning Net Profit Share Income 1020 823 -19,3 47,31 42,61 470 Stage III Net Fees & Commissions 198 300 51,3 30,0 Provisions for Loan Loss 608 790 Net Profit Share 2,86 2,10 -76 Margin 1.161 1.112 -4,2 Operating Expenses * Cost/Income 59,93 55,89 -404 -52,7 Net Profit 134 63 * including personnel expenses

4 6 2019 Main Highlights (Million TRL) Total Assets Total Funded Credits Total Collected Funds Net Profit 51.392 46.295 44.594 43.886 42.224 237 39.769 218 33.045 34.794 30.628 27.771 28.623 29.749 26.498 26.185 27.140 134 64 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 2016 2017 2018 2019 Common Equity Tier I Additional Tier I Additional Tier II Net Profit Share Margin* 14,97 % 14,66 % 4,31 2,86 4,68 % 2,26 2,28 2,10 2,62 2,42 % 8,40 1,58 7,56 % Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 2018 2019 * Trailing for last 4 quarters

5 7 Asset Composition Liquid Assets (Million TRL) Composition of Total Assets (2019) Other Liquid Assets % of Total Assets Assets; 4,7% 34,8% 33,0% 32,5% 31,9% 28,9% Other Funded Liquid Credits; Assets*; 57,9% 25,2% 13.466 15.510 12.663 15.266 17.215 Securities Portfolio; Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 12,1% *Liquid Assets includes Cash and Cash Equivalents, Financial Assets Measured at Fair Value * Other Liquid Assets includes Cash and Cash Equivalents and through Profit/Loss, Financial Assets Measured at Fair Value through Other Comprehensive Derivative Financial Assets Income and Derivative Financial Assets. Securities Yield (%) Total Securities Portfolio (Million TRL) 6.243 5.481 5.112 2.234 2.024 1.615 2.875 12,92 12,84 2.965 11,60 1.994 1.195 1.435 1.562 1.117 10,06 549 8,75 619 2.062 2.015 1.895 1.789 1.230 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Available for sale Held to Maturity Other Marketable Securities (*) Profit share income received from securities for the last 4Q/5Q average securities

6 6 Operating Performance Breakdown Key Movements in Income (Million TRL) Net Profit Share Income (Quarterly) (Million) 376 -35 325 182 102 4.607 4.032 196 158 144 108 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 2018 Profit Share Fees & Trading Others 2019 Income Comm Income Cost & Yield Movement (%) Net Fees and Commission Income (Million) % 51,3 Credit Yield Net Profit Share margin 300 Cost of Collected Funds % 33,5 198 10,76% 10,92% 10,09% 10,33% 10,58% 149 395 7,46% 7,61% 7,17% 7,13% 6,78% 293 217 2,86% 2,62% 2,10% 2,28% -68 1,58% -95 -96 2018 2017 2019 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Fees and Commissions Received Fees and Commissions Paid

7 Funded Credits Portfolio Yield on Performing Credits (%) Total Funded Credits (including financial leasing, million) 19,4% Q4’18 Q3’19 Q4’19 QoQ Y-Y 15,1% 12,092 12.492 14.205 13,7% 17,5% TL Credits, TL 11,4% 10,4% 1,7% 16,8% FC Credits, $* 1,933 2.222 2.259 5,9% 6,4% -4,0% -50,6% FC Indexed, $* 735 379 364 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Yield on TL Loans, adjusted, trailing 9,6% 13,6% 26,185 27.141 29.749 Total Credits, TL Blended Yield, adjusted Yield on FX Denominated Loans, trailing *USD equivalent Profit share income received from credits for the last 4Q/4Q average credits Currency Composition of Total Funded Credits* (2019) Composition of Total Funded Credits (%) 1% 17% Q4’18 Q1’19 Q2’19 Q3’19 Q4’19 TRL Corporate Credits 41.7 41.9 47.1 47.5 48.9 48% USD* SME Credits 48.1 48.6 44.2 43.9 42.1 EUR* 35% Retail Credits 10.2 9.6 8.7 8.6 9.0 Other *Including USD & EUR indexed credits According to BRSA definition

8 Asset Quality Gross Funded Credits by Groups (including financial leasing, million) NPL Ratio (%) 30.881 29.103 27.778 28.491 7,2% 27.442 7,3% 7,7% 7,4% 11,9% 6,9% 14,1% 13,8% 15,2% 19,4% 7,74 7,36 7,31 7,19 6,88 80,9% 78,6% 78,4% 77,5% 73,7% Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Group I Group II Group III Including financial leasing & accruals and rediscounts Cost of Risk (bps) Provisioning (Stage III) 70,0% 231 52,2% 218 216 213 60,0% 51,9% 52,3% 47,3% 183 42,6% 50,0% 40,0% 30,0% 1.152 1.104 1.069 947 893 20,0% 10,0% 0,0% Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Specific provisions for credits for last 4Q/ 5Q average credits Lifetime ECL Impaired Credits (Stage 3) (Million TRL) Provisioning Ratio (%)

9 Asset Quality NPL Formation Trend (Quarterly) NPL Inflow Sector Distribution (2019) 677 18,1% 7,2% 369 26,2% 11,4% 272 3,2% 19,9% 14,0% 128 119 439 253 186 315 237 154 243 164 529 465 70 84 78 79 64 Communication Construction&Real Estate* 4Q'18 Q1'19 Q2'19 Q3'19 Q4'19 Manufacturing Others Trading Hotels & Restaurants Additions (million TRL) Recoveries (million TRL) Energy *Includes construction of power plant projects Net NPL Formation (million TRL) Net NPL Formation Rate (bps) Stage II Credits Sector Distribution (2019) Stage II-III Coverage (Million TRL) 36,6% 85 10,5% 1,3% 11,2% 14,0% 4.246 947 3.665 26,4% 2.222 1.513 Manufacturing Others Stage 2 Stage 2 Stage 3 Stage 3 Construction&Real Estate* Trading Transportation Energy Risk amount Collateral Provision *Includes construction of power plant projects

10 Funding Profile Composition of Funding Base (Million TRL) Composition of Total Liabilities (2019,%) 22% 3,6% Funds Collected 7,4% 40.881 45.697 39.231 37.452 39.978 11,5% Wholesale Funding 52% 53% 57% 57% Shareholders' 58% Equity 77,4% Others 23% 23% 27% 27% 30% 25% 24% (Million TRL) 16% 15% 13% 2018 2019 Y-Y Growth % Funds Collected (incl. Bank deposits) 38,9 28.623 39.769 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Wholesale Funding -32,9 8.828 5.928 Fund Borrowed* Current Accounts Participation accounts Funds Borrowed * Fund Borrowed includes Funds Borrowed , Borrowings from Money Market and Subordinated Loans 6.852 4.535 -33,8 Syndicated Loans 1.665 - - Maturity Profile of Liabilities (Million USD) Wakala 1.211 979 -18,2 Issued Lease Certificates & Sukuk 3.463 2.743 -18,5 Other 205 >2030 514 813 24,5 Sub-Ordinated Debt (Tier 2) 1.204 1.375 14,2 Interbank 772 18 -97,6 250 2025 Shareholders’ Equity 17,2 3.261 3.822 Paid in Capital 50,0 900 1.350* Other Liabilities 1.510 1.873 24,0 0 100 200 300 Total Liabilities 42.224 51.392 21,7 Tier 1 Sukuk (Perpetual) Tier 2 Sukuk *The registration process of capital increase has been continuing.

11 Funding Profile (Collected Funds) Currency Composition of Funds Collected (2019,%) Total Funds Collected (Million TRL) 2018 2019 Y-Y Funds Collected 28.623 39.769 38,9% 6 Current Accounts 8.729 13.902 59,3% TRL 20 Current Accounts TL 2.810 4.199 49,5% 37 USD 1.121 1.637 46,0% Current Accounts, FC, $ EUR Participation Accounts 19.895 25.867 30,0% Others Participation Accounts TL 8.970 10.497 17,0% Participation Accounts FC, $ 2.069 2.593 25,3% 37 *USD equivalent of FC accounts Maturity Composition of Funds Collected (2019,%) Cost of Funds Collected* Blended TL FC Precious Metal 4 4 15,26% 14,11% 14,67% 12,63% Current Acc. 11,31% 35 7,61% Up to 1 month 7,46% 7,17% 6,78% 7,13% 39 Up to 3 months 2,56% 2,50% 2,35% 2,47% 2,14% 1,21% 0,30% Up to 1 year 0,94% 0,68% 0,40% 19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 >1year *Profit share expense to depositors for the last 4Q/5Q average participation accounts

12 Off Balance Sheet Growth Off Balance Sheet Composition (%) LGs*-to-Total Assets *Below 20% of LGs to Total Assets is targeted LG LC Others 13.753 12.675 12.444 20.648 14.832 20,3% 18,8% 21 21 18,6% 30 37 17,7% 17,0% 10 10 53 10 8 7 69 69 60 55 40 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Guarantees & Sureties (TRL million) Growth (%) Q4’18 Q1’19 Q2’19 Q3’19 Q4’19 Y-Y 1,7% Letter of Guarantee 8.575 8.304 8.251 8.192 8.718 8,2% 1.230 1.423 1.328 1.180 1.330 Letter of Credit 242 424 409 347 383 158,6% Others* Total: 10.046 10.151 9.998 9.722 10.431 3,8% *Revocable credit limits not included.