4Q19 Consolidated Financial Results What to remember? Despite In - PowerPoint PPT Presentation

4Q19 Consolidated Financial Results

What to remember? Despite In 2019 Akbank ‣ Expanded its NIM well ahead of guidance ‣ Negative CPI adjustment ‣ Achieved superior fee generation ‣ Delayed loan growth ‣ Preserved best-in-class CIR ‣ Low leverage at 7.1x ‣ Realized better than guidance CoC ‣ Proactive NPL recognition ‣ Reinforced its capital strength Best positioned to capture healthy & profitable growth 2

Sound core operating performance Revenue OPEX c. 2 pp impact of SDIF (TL bn) (TL mn) +15% +4% premium increase 19.2 and depreciation QoQ QoQ 17.0 expense from 12.9% YoY major 18.6% YoY investments 14.2 13.3 6,882 5,802 5.0 3.7 2018 2019 2018 2019 Fee income Swap adj. Net Interest Income Net Income Pre-provision Income Cost to Income (3) -3% 32% (TL mn) (TL mn) (%) QoQ QoQ 6.2% YoY 8.1% YoY 14,092 13,042 34,0 33,8 33,4 32,9 32,3 35.0% 10,442 5,709 5,352 YoY 2018 2019 2018 2019 2018 1Q19 1H19 9M19 2019 (1) CPI adjusted PPI (2) (1) Excluding TRY 250 mn free provision reversal in 2Q18 (2) For comparability, FY18 CPI is adjusted to 8.58% (vs 25.2%) which has an impact of TRY 2.6 bn on 2018 PPI (3) CIR calculation excludes FX gain from long FX position related with stage 1&2 provisions as well as impact of free provision reversal 3

NIM significantly exceeds guidance despite CPI adjustment 2019 FY NIM Breakdown (bps) Quarterly NIM Breakdown (bps) +2 +6 +14 -86 +124 +40 -83 -33 -17 +25 -14 +64 414 471 -10 397 +43 413 380 CPI-adj. NIM CPI-adj. NIM 314 Borrowing 2018 FY Securities (1) Loan Deposit CPI 2019 FY Other 3Q19 Securities (1) Borrowing Deposit Loan Other (2) 4Q19 Swap CPI Swap Cost NIM NIM Yield Cost Impact NIM Cost Cost Yield NIM Impact CPI Linker Income (TL mn) Quarterly Total Swap Cost (3) (TL mn) 2,030 (a) 589 403 740 442 -697 -530 (b) -656 (d) (c) -765 -746 4Q18 1Q19 2Q19 3Q19 4Q19 Impact of change in CPI estimation: (a) from 17% to 25.2% is TL 1.2 bn gross (b) from 14% to 12% is - TL 190 mn gross 4Q18 1Q19 2Q19 3Q19 4Q19 (c) from 12% to 10% is - TL 295 mn gross (d) from 10% to 8.58% is - TL 303 mn gross (1) Excluding CPI impact 4 (2) 4Q19 other impact mainly consists of lower interest income from RR (3) Includes short and long-term swaps

Remarkable beat in fee income growth Payment Systems Net Fees & Comm. +22% YoY (TL mn) +8% QoQ Strong performance in both acquiring & issuing 33.4% Business Loans YoY +69% YoY 4,958 3,718 Strong performance in both cash and non-cash loan fees Money Transfers 2018 2019 +17% YoY Supported by increased transactions and repricing Fees & Commissions by product (%) Bancassurance Other Money Transfers +41% YoY Bancassurance 8 7 6 Business Loans Strong performance in both lending and non-lending 22 6 Wealth Management 2 Consumer Loan Wealth Management +22% YoY 49 Payment Systems Strong innovative product development & state-of-the-art investment experience in mobile 5 (1) Based on bank-only MIS data

Simple, digital and experience focused operating model Digital Banking in Numbers (1) Digital Digital customer customers cross-sell versus non-digital 5.1 mn 2x The World's Credit cards sold through Share in non-credit digital channels (2) linked fees Best Digital 49% 55% Bank EUROMONEY GPLs sold through digital channels (2) 69% (1) Based on bank-only MIS data 6 (2) Including non-branch channels

Strategic asset allocation drives sustainable long-term shareholder value Optimized asset Assets Loan Breakdown composition (TL bn) (net, TL bn) +9.2% +6.5% Y o Y Y o Y 379.3 387.2 214.5 Low leverage 354.7 5.9% 202.6 5.5% 6.1% 2.1% 201.3 6.9% 0.6% 7.1x 6.5% 6.9% 8.6% 7.5% 10.6% 11.5% 39.8% 37.8% 41.7% 13.2% 20.4% 21.6% 16.0% Strong capital 20.3% 21.1% 20.3% 19.7% 53.4% 55.4% 56.8% 38.0% 39.9% 41.1% Unique growth (2) (2) 2018 9M19 2019 opportunity 2018 9M19 2019 with risk & return in focus Loans (net) Securities Other TL Business Banking Consumer incl. Credit Cards (1) Reserve Requirement Liquid assets FX Loans (1) Cash and cash equivalents 7 (2) For comparability, 2018 total loan figure excludes leasing receivables and adjusted for financial assets measured at fair value through P&L

Broad-based TL loan growth gained pace in 4Q19 FX Loans TL Loans (net,USD bn) (net, TL bn) QoQ YoY Market QoQ YoY Market Change Change Share (2) Change Change Share (2) +13.6% 7.8% +9.3% 133.3 -4.5% -14.1% 6.8% 122.0 16.0 117.4 13.6 12.8 +6.1% +12.9% 10.5% 12.1 34% 14.3 31.5 13.7 28.3 28.8 30% 26% +11.3% +9.3% 7.1% Multinationals & corporates with FX cash +9.1% +15.3% 7.6% 76.4 80.8 88.2 flow generation 66% 70% 74% (1) (1) 2018 9M19 2019 2018 9M19 2019 TL Business Banking Consumer Credit Card Project Finance & Export Other Increased business activity with diversified customer acquisition drives: ‣ Commercial loan growth at +9.1% QoQ, ‣ Consumer loan growth at +11.3% QoQ, led by c. 20% growth in GPLs ๏ 60% of 2019 GPL originations were pre-approved, separately 41% were to salary customers (1) For comparability, 2018 total loan figure excludes leasing receivables and adjusted for financial assets measured at fair value through P&L 8 (2) Market share data based on bank only BRSA weekly data as of December 27, 2019

Balanced loan portfolio (1) (% of Total Gross Loans) Other (2) 16.7 Retail Loans 22.5 Real Estate 9.3 ‣ LTV 65-80%, with recent valuations & Petrochemicals 2.4 assuming Decree 32 to be implemented perpetually (despite 2 yr limitation) ‣ 20% of total has FX cash collateralization ‣ 14.7% of Stage 2 and 24.6% of Stage 3 are Transportation & Logistics 2.6 real estate loans Services 8.1 Tourism 2.9 Finance 6.2 Metal & Fabricated Metal Products 3.1 Energy Generation 6.2 ‣ 100% of PF loans since 2016 are renewable ‣ 77% of total energy generation are renewable Textile & Ready-made 3.6 ‣ 52% are government guaranteed (feed-in tariff) ‣ 7.0% of Stage 2 and 5.7% of Stage 3 are Food 3.6 energy generation loans Retailer 4.9 Construction 3.9 Transport Vehicles & Sub-industry 4.0 ‣ c. 60% in FX ‣ c. 70% of FX loans are government guaranteed (debt assumption) ‣ 5.3% of Stage 2 and 5.1% of Stage 3 are construction loans (1) Consists of consolidated performing and non-performing loans & excludes leasing receivables and adjusted for financial assets measured at fair value through P&L 9 (2) Loan concentration below 2%

Yield enhancement with dynamic securities management Total Securities 
 Security Yields (1) (TL bn) +47% Y o Y +8% QoQ 17.7 17.1 16.9 84 77 65 16.3 57 57% 58% 54% 50% 4.9 4.8 4.6 4.2 50% 2.3 2.2 46% 2.1 43% 42% 2.0 1Q19 2Q19 3Q19 4Q19 2018 1H19 9M19 2019 CPI (real rate) TL Securities (excl. CPI) FX FX TL ‣ Significant market share gain in securities during low loan growth environment ‣ Strategic positioning in 2019 will continue to be NIM accretive in 2020 10 (1) Based on MIS data

Securities mix change ahead of easing interest rate cycle TL Securities FX Securities (TL bn) (USD bn) +58% Y o Y +20% Y o Y +10% QoQ 0% QoQ 48 44 6.0 6.0 33 5.6 31 42% 5.0 45% 30% 27% 11% 13% 8% 9% 99% 99% 99% 99% 60% 59% 49% 47% 1% 1% 1% 1% 2018 1H19 9M19 2019 2018 1H19 9M19 2019 Floating Fixed CPI Floating Fixed Proactive positioning in both Avg. maturity c. 1.5 yrs (Fixed TL) NIM accretive fixed rated TL and FX securities and c. 3.5 yrs (FX) ahead of easing interest rate cycle 11

Maintained disciplined funding mix while growing Composition of Liabilities (%) Deposit Currency Split (TL bn) Demand Deposits +17% Y o Y 22% 22% +26% Y o Y 2.4 2.9 2.9 +4% QoQ 20% 0.2 0.3 1.1 6.3 7.2 7.6 209 236 245 Sticky & low 13.9 61% 61% 13.8 63% cost RETAIL & 17.3 SME DEPOSITS’ Share in TL 39% 39% 37% 14.0 Deposit 77% (1) 13.6 12.3 2018 9M19 2019 Demand Deposit/ Tot. Dep. TL FX LDR (2) (%) 138 137 Sector’s 130 58.8 62.2 63.2 Total LDR at 103% (3) 95 90 91 64 51 51 2018 9M19 2019 2018 9M19 2019 Deposit Equity Funds Borrowed Other TL Repo FX Repo TL LDR LDR FX LDR (1) MIS data (2) Bank-only, adjusted for financial assets measured at fair value through P&L. TL LDR includes domestic TL bond issuances and merchant payables 12 (3) Based on BRSA weekly data dated December 27, 2019

Well-diversified borrowing mix Maturity Profile of Wholesale Borrowings Wholesale Borrowings (USD mn) (USD mn,%) Total: ~ USD 8 bn 3,135 Avg. maturity: ~ 3yrs GMTN Covered Bond (1) 11; 0.1% 303; 3.8% Trade Finance Eurobond 274; 3.5% 1,500; 19.0% 1,011 951 Multilateral Tier 2 694 222; 2.8% 541 513 538 900; 11.4% 422 57 46 Remaining average maturity ~ 3 years ≥ 2029 Syndicated 2020 2021 2022 2023 2024 2025 2026 2027 2028 Loans Securitisation 1,767; 22.3% (1) Covered Bond Eurobond GMTN 2,931; 37.1% Multilateral Securitisation Syndicated Loans (2) Tier 2 Trade Finance ‣ Wholesale funding reduced down to c. USD 8 bn (c. USD 10 bn in 2018) ‣ Reduction mainly led by c. USD 2 bn decrease in short-term wholesale liabilities ‣ Successful roll-over of syndicated loan in October 2019 with 1.43x over-subscription & 31 banks from 19 countries Balances based on principal outstanding and bank-only MIS data (1) USD equivalent of TL 1.8 bn Covered Bond issuance 13 (2) Tier 2 bonds have issuer call scheduled at 2022 and 2023, respectively