VakıfBank IR App. Avail ilab able le at at Earnings Presentation BRSA Bank-Only 3Q 2019 November 8, 2019
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS 3Q19 Earnings and Ratios Net Income (TL million) Pre-Provisioning Operating Profit (TL million)* Despite quarterly effective tax rate of 31.6% 6,972.8 503.2 2,027.7 5,010.6 367.6 TL 852 milli lion on free provisions 36.9% 836.5 in the balance sheet 9M18 9M19 2Q19 3Q19 2Q19 3Q19 Strong coverage ratios maintained 3,110.1 Stage III Total NPL Sector Stage III Coverage Ratio Coverage Ratio Coverage Ratio 1,522.0 96.8% 70.7% 65.6% 9M18 9M19 5.1% higher than sector www.vakifbank.com.tr *PPOP=NII+NFC+Dividend+Trading+Other Income-OPEX-Provision Reversals 2
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS Key Highlights of 3Q19 Sound nd NIM expans nsion ion • Reported 3Q19 NIM materialized at 4.08% vs. 3.55% in 2Q19 • Reported 3Q19 NIM would be 4.25% 5% without any CPI adjustment*. Swap adjusted NIM reached 2.87% 7% in 3Q19 vs. 2.19% in previous quarter. • Robus bust t perfo formanc rmance e on fee and commissio mission n income me is still ll on track ck • Cumulative and quarterly fee growth came strong at 88% 88% YoY and 28% 28% QoQ, respectively, with a well-diversified base. All time high Fee/Total Revenues realized above 25% 25% level in 3Q19. • Fee/Opex ratio reached all time high level 65.6% 6% . • Strong ng core revenu enue generation neration capacity city remai aine ned intact ct • Core banking revenue growth realized at 15.7% 7% YoY. All time high Core Banking Revenues/Total Revenues realized 89.9% on a cumulative basis, reflecting the high quality revenue generation. • Maint ntai ained ed strong ng liquidity dity level els s and further rther impro roved d LtD ratios tios • Total LCR came at 13 134%. FC LCR reached 508 08% . • Total LtD ratio decreased to 113% 113% in 3Q19 vs 117% in 2Q19. • • TL LtD ratio improved to 130% 130% from 136% QoQ. Comfo fortab table le solven vency cy ratio ios s mainta intained ined • First ever TLREF indexed Tier II issuance out of Turkey with an amount of TL 725 5 millio llion. • Total CAR was flattish QoQ, came at 17.0% 0%. Tier I realized at 13.8% 8% , well above the required levels. • www.vakifbank.com.tr 3 *October- October CPI estimate has been revised down to 9% in 3Q19 vs. 10.5% in 2Q19.
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS 9M19 P&L Details 3,249 12,626 (4,846) 2,931 (2,022) 51 8,417 (5,842) 9M19 (415) 1,522 Net Interest Net F&C Dividend Net Trading Other Income Total Operating Provisions Taxes Net Income Income Income Income Income Revenue Expenses % vs +2% +88% -61% -449% +175% +8% +23% +49% -42% -51% 9M18 1,097 0 (1,672) (887) 818 4,330 3,302 (1,922) 3Q19 (233) 503 Net Interest Net F&C Dividend Net Trading Other Income Total Operating Provisions Taxes Net Income Income Income Income Income Revenue Expenses % vs +19% +28% -100% -30% -23% +25% +3% +35% +350% +37% 2Q19 www.vakifbank.com.tr 4
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS High quality revenue breakdown Total Revenues – Revenue Breakdown (TL million) 8% Dividend Other+Trading Dividend Other+Trading 1.1 9.7 15.0 12,626 0.4 11,694 NII 66.7 9M19 Net F&C 9M18 13.3 Net F&C NII 23.2 70.6 9M18 9M19 Core Banking Revenues (TL million)* Free provisions 15.7% 1Q19 2Q19 3Q19 89.9% 11,348 9,805 Outstanding TL 1,030 TL 917 TL 852 amount million million million Free TL 113 TL 65 Provision - million million Share of high quality Releases core banking revenues 9M18 9M19 in total www.vakifbank.com.tr 5 *Core Banking Revenues= NII+NFC
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS NIM, Spreads & Swap Swap Adjusted Net Interest Margin (%) Net Interest Margin (NIM %) In line with Expected to the guidance be in line with 4.30 4.22 4.30 4.22 the guidance 4.95 4.95 3.71 >4 4.08 3.55 2.63 >3 2.87 53 bps 2.19 68 bps 3Q18 2Q19 3Q19 2H19E 9M18 2018 9M19 3Q18 2Q19 3Q19 2H19E 9M18 2018 9M19 Cost of Funding Core Spreads (%) 1Q19 2Q19 3Q19 35 bps 35 bps 3.84 ppt ppt QoQ Total money TL spread 18.70 18.38 TL 46.2 TL 45.3 TL 42.3 17.60 18.50 17.00 improvement market billion billion billion on TL core funding * TL Loan 17.32 spreads 15.01 Yields 14.55 14.44 13.40 Cost of Funding 25.08% 24.02% 16.38% TL Deposit Costs 7.89 4.28 28 ppt ppt 6.27 6.64 6.78 FC FC spread TL 402 TL 1,061 TL 976 5.39 Swap Cost FC Loan million million million 3.36 3.10 2.61 Yields 2.44 2.00 Average TL 9.7 TL 20.9 TL 23.3 FC Deposit Costs Swap Usage billion billion billion 3Q18 4Q18 1Q19 2Q19 3Q19 www.vakifbank.com.tr 6 *Including overnight and one week repos, total short term cross currency swaps and interbank Money market.
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS Eye catching fee income growth further accelerated via retail lending Net Fee & Commission Income (TL million) – Fee Breakdown 88.5% Insurance Insurance Quarterly Net Fee & Inquiry & Expertise 2,931 Commission Income 8% 6% 10% Inquiry & Expertise Growth 28.3% 8% Cash Loans 37% Other Other 1% 0% 1,555 9M18 9M19 Cash Loans Payment 32% systems 31% 28% 18% Non-Cash Loans Payment Non-Cash 21% systems Loans 9M18 9M19 Fee/Total Revenue (%) Fee/Operating Expense (%) All time best fee 25.3 65.6 23.2 60.5 ratios 52.6 39.4 13.3 24.6 9M18 9M19 2Q19 3Q19 9M18 9M19 2Q19 3Q19 www.vakifbank.com.tr 7
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS Opex breakdown and Cost/Income Ratios Operating Expenses (TL million) Branch number Breakdown of OPEX 38.4 5 branches have Cumulative Opex been closed in 33.8 C/I Ratio (%) Growth 22.7% 59% 3Q19 4,846 41% 951 950 9M18 946 3,951 57% 43% 9M19 9M18 9M19 3Q18 2Q19 3Q19 HR Cost Non-HR Cost Quarterly OPEX Breakdown (TL million) 46.8 C/I Ratio (%) 38.6 34% 18.7% Quarterly Opex 1,672 Growth 2.8% 748 1,626 971 925 655 14.2% (4.8%) 779 558 HR Cost Non HR Cost 3Q18 2Q19 3Q19 2Q19 3Q19 3Q18 2Q19 3Q19 www.vakifbank.com.tr 8
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS Well diversified & stable loan breakdown Segment Breakdown of Loans (TL billion) Currency Breakdown of Loans (TL billion) Portfolio Breakdown (%) 259.9 259.9 250.0 24.2 24.7 250.0 15.6 SME 235.8 15.2 235.8 221.6 Other 1 221.6 14.4 24.2 24.6 Retail 14.8 64.2 $15.1 63.7 $15.9 57.1 SME 33% $15.0 37% 51.6 58.7 $15.4 Com.&Corp. 50.7 21.1 38% 19.0 37% Mortgage 20.3 27.3 24.7 19.4 22.4 3Q18 3Q19 GPC 21.2 Breakdown of FC Loans 174.9 158.4 145.8 140.2 131.7 Project 67% 127.4 Com.& 121.6 63% 107.5 Finance 62% Corp. 63% 30% Export Loans 58% 3Q18 YE18 2Q19 3Q19 12% 3Q18 YE18 2Q19 3Q19 Working Capital FC TL and Other QoQ YoY Total Loan Growth 4% 10.2% Quarterly Loan Growth 16% TL Loan Growth 16% 10.4% 20% 11% 11% GPC FC Loan Growth ($) Mortgage 3% -5.3% 2% 0.3% 2% 1% 1% -1% -1% -5% FC Loans ($) Business Loans 1Q19 2Q19 3Q19 www.vakifbank.com.tr 9 1 Other includes credit cards, overdraft and auto loans.
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS Breakdown of Loan Portfolio Sector Breakdown of Cash Loans CGF Loans Manufacturing Retail Loans 15% 20% (TL bn) 2018 2Q19 3Q19 Construction Total CGF 10% 26.6 31.9 32.4 Guarantee Limit Originated Amount 28.9 35.4 36.1 3Q19 Other Energy 13% Outstanding Amount After 7% 19.6 21.8 21.0 Redemptions Real Estate Wholesale & Retail 4% Trade 15% 12% 4% Logistic& Tourism Transportation Breakdown of Project Finance Breakdown of Construction Loans Breakdown of Energy Loans Other Service (Including Stage III Breakdown of Production Stage II tourism, health, TL 1.8 billion TL 7.9 billion 12% education) Share of Renewable: 51% 6.6% Share of Local Coal: 48 48% 9% Limited Energy Share of Other: 1% concentration in 29% 29.4% retail developers Distribution 3Q19 3Q19 33% Selective 3Q19 64.0% approach to 71% construction 45% Production Infrastructure Stage I TL 17.3 billion www.vakifbank.com.tr 10
Earnings Presentation Bank Only 3Q19 INVESTOR RELATIONS NPL recognition move strengthens balance sheet position NPL (TL million)* Sector Breakdown of Stage III Loans 761 Construction 2,662 14,348 12,447 Wholesale & Retail 12.4% Manufacturing Trade 17.7% 24.9% Real Estate 4.3% Other NPL 2Q19 New NPL Collections NPL 3Q19 9.7% 4.74 5.23 4.3% 4.65 3.90 Logistic & NPL Ratio (%)* Transportation Tourism 1.4% 19.1% 6.2% 3Q18 4Q18 2Q19 3Q19 Energy Retail Loans Stage II Loans Breakdown (TL million) Sector Breakdown of Stage II Loans Construction 12.00% 10.91% Wholesale & Retail 25.5% 8.96% 6.26% Trade Share in total Manufacturing loans 19.3% 31,183 15.5% 27,279 12,274 19,854 Real Estate 39% 12,826 Other Total Stage II 14,775 8.8% 47% 5,932 Loans 10.8% 30% 9,846 2,380 4,659 Restructured 5,636 32% 16% 17% Logistic & Past Due 28% 8,294 30 Days 6.3% Transportation 9,794 56% 8,286 9,062 Tourism 4,100 36% 2.9% 1.8% 9.1% SICR 42% 29% 28% Energy Retail Loans 3Q18 4Q18 2Q19 3Q19 www.vakifbank.com.tr * Accumulated NPL, no write off&no asset sale 11
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