Q1-2019 Investor Presentation Albaraka Trk Participation Bank 15 - PowerPoint PPT Presentation

Q1-2019 Investor Presentation Albaraka Türk Participation Bank 15 May 2019

Agenda 1 Financial Highlights 2 Market Comparison Appendix 3

3 Albaraka Turk – Q1’19 At a Glance (Million TRL) Q4’18 Q1’19 Q-Q (%) % Q4’18 Q1’19 Q-Q (bps) Balance Sheet Total Assets 42.223 44.594 5,62 Key Ratios CAR 14,66 13,57 -109 Total Funded Credits (Net) 26.185 26.498 1,20 Total NPLs 1.889 2.045 8,26 Tier 1 9,98 9,45 -53 Deposits (incl. Interbank) 28.623 30.628 7,00 Shareholder’s Equity 3.261 3.257 -0,12 48 NPL 6,88 7,36 Provisioning 47,31 52,26 495 Stage III (Million TRL) Q1’18 Q1’19 Y-Y (%) Net Profit 2,80 2,55 -25 Income Net Profit Share Income 250 196 -21,5% Share Margin Statement Net Fees & Commissions 40 70 75,0% 26.4 Provisions for Loan Loss 257 325 ROAE 4,27 1,93 -234 103 105 1,94% Operating Expenses* Cost/Income 59,93 42,88 -1705 -72,4% Net Profit 98 27 * Includes personnel expenses

4 6 Q1’19 Main Highlights (Million TRL) Total Assets Total Funded Credits Total Collected Funds Net Profit 98 44.712 44.594 42.224 40.456 37.084 29.330 27.711 30.628 28.623 26.099 29.797 26.498 27.689 26.185 25.938 36 27 Q1'17 Q1'18 Q1'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 NPSM (Exc. JV Projects)* Net Profit Share Margin* Common Equity Tier I Additional Tier I Additional Tier II 14.66 % 13.57 % 4,68 % 3,71 4,12 3,48 3,35 2,42 % 2,29 2,94 3,37 3,19 3,14 2,62 7,56 % 7,16 2,8 2,55 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q4'18 Q1'19 * Trailing for last 4 quarters

5 7 Asset Composition Liquid Assets (Million TRL) Composition of Total Assets (Q1’19) Other Liquid Assets % of Total Assets Assets; 4,7% 34,70% 31,90% 28,10% 27,00% Other Funded 25,30% Liquid Credits; Assets*; 59,4% 28,0% 9.395 10.920 12.580 13.465 15.485 Securities Portfolio; Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 7,9% *Liquid Assets includes Cash and Cash Equivalents, Financial Assets Measured at Fair Value * Other Liquid Assets includes Cash and Cash Equivalents and Derivative Financial Assets through Profit/Loss, Financial Assets Measured at Fair Value through Other Comprehensive Income. Securities Yield (%) Total Securities Portfolio (Million TRL) 2.875 2.934 2.965 1.195 2.714 2.648 12,92 12,84 927 1.117 995 941 549 515 11,11 619 564 629 10,02 1.789 9,78 1.492 1.230 1.144 1090 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 (*) Profit share income received from securities for the last 4Q/5Q average securities Available for sale Held to Maturity Other Marketable Securities

6 6 Operating Performance Breakdown Income (Million TRL) Key Movements in Income (Million TRL) 1.302 1.029 22.7% 1,302 5.2% 33 835 36 22 181 26.6% 1,029 7.3% 1.5% 11.3% 3.3% 5.7% 64.8% 87.2% 64.4% 4.0% Q1'18 Profit Share Fees & Trading Others Q1'19 Q1'18 Q4'18 Q1'19 Income Comm Income Others Trading Income Fees & Comm Profit Share Income Cost & Yield Movement (%) Net Profit Share Income (Million TRL) Profit Share Income Profit Share Expense Credit Yield Net Profit Share margin Cost of Collected Funds 196 158 250 10,09% 10,58% 10,47% 10,18% 10,04% 844 751 663 6,78% 6,41% 7,17% 6,08% 5,83% -413 -593 3,35% -648 2,55% 3,48% 3,71% 2,80% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1’18 Q4’18 Q1’19

7 Funded Credits Portfolio Yield on Performing Credits (%) Total Funded Credits (including financial leasing, million) 16,6% Q1’18 Q4’18 Q1’19 QoQ YoY 13,4% 13.243 12.092 12.175 TL Credits, TL -0,69% -8,06% 10,9% 9,8% FC Credits, $* 1.549 1.933 1.972 2,02% 27,31% 6,4% 6,4% 1.669 735 581 FC Indexed, $* -20,95% -65,19% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Yield on TL Loans, adjusted, trailing 25.938 26.185 26.498 1,20% 2,16% 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* (Q1’19) Composition of Total Funded Credits* (%) 18% Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Corporate Credits 40.2 39.6 41.4 41.7 41.9 TRL 46% SME Credits 46.9 49.2 48.9 48.1 48.6 USD* EUR* 36% Retail Credits 12.8 11.2 9.7 10.2 9.6 *Including USD & EUR indexed credits *According to BRSA definition

8 Asset Quality Gross Funded Credits by Groups (including financial leasing, million) NPL Ratio (%) * 31.272 28.887 27.778 27.048 27.442 6,2% 5,6% 7,3% 17,6% 6,9% 5,3% 14,2% 7,36 10,7% 15,1% 19,4% 6,88 6,22 5,57 5,34 76,2% 80,3% 84,0% 77,6% 73,7% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Group I Group II Group III *Including financial leasing & accruals and rediscounts Provisioning (Stage III) Cost of Risk** (bps) 70,0% 243 60,1% 58,7% 232 227 57,7% 218 216 60,0% 52,3% 47,3% 50,0% 40,0% 30,0% 1.168 1.069 929 893 848 20,0% 10,0% 0,0% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 ** 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 NPL Inflow Sector Distribution 475 7,7% 372 363 25,7% 272 250 30,2% 5,19% 12,0% 10,9% 287 231 209 454 117 336 439 253 186 315 237 165 78 56 44 Communication Construction&Real Estate 1Q'18 2Q'18 3Q'18 4Q'18 Q1'19 Manufacturing Others Trading Transportation Additions (million TRL) Recoveries (million TRL) *Includes construction of power plant projects Net NPL Formation (million TRL) Net NPL Formation Rate (bps) Stage II-III Coverage (Million TRL) Stage II Credits Sector Distribution 20,50% 7,90% 4,00% 14,20% 17,80% 96 4.209 1.069 2.861 2.045 1.337 35,60% Stage 2 Stage 2 Stage 3 Stage 3 Manufacturing Others Construction&Real Estate Trading Risk amount Collateral Provision Source: Albaraka Turk Transportation Energy

10 Funding Profile Composition of Funding Base (Million TRL) Composition of Total Liabilities (Q1’19,%) 21.6% 3% Funds Collected 7% 39,978 32,885 36,295 37,452 40,155 Wholesale Funding 21% Shareholders' 52% 52,0% 53% 56% Equity 60% Others 69% 21% 23% 23% 21% 19% (Million TRL) Q4’18 Q1’19 YoY Growth Comp. 27% 25% 24% 24% 21% Funds Collected (incl. Bank 28,623 30,628 7.0% 69% deposits) Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Wholesale Funding 8,828 9,350 5.9% 21% Fund Borrowed* Current Accounts Participation accounts Funds Borrowed 6,852 7,499 9.4% 17% * Fund Borrowed includes Funds Borrowed , Borrowings from Money Market and Subordinated Loans Syndicated Loans 1,665 1,764 5.9% 4% Maturity Profile of Liabilities (Million USD) Wakala 1,211 1,199 -1.0% 3% Issued Lease Certificates & 3,463 4,187 -20% 9% Sukuk Other 514 349 -32% 1% 2019 350 Sub-Ordinated Debt (Tier 2) 1,204 1,313 9.1% 3% Interbank 772 537 -30% 1% Shareholders’ Equity 3,261 3,257 -0.1% 7% >2020 205 250 Paid in Capital - 900 900 2% Tier 1 Sukuk - 776 2% 0 100 200 300 400 500 Others -10.0% 1,510 1,359 3% Senior Sukuk Tier 1 Sukuk Tier 2 Sukuk

11 Funding Profile (Collected Funds) Currency Composition of Funds Collected (Q1’19,%) Total Funds Collected (Million TRL) Q4’18 Q1’19 YoY Funds Collected 28,623 30,628 7,0% 6 Current acc./ Total Funds Col. 30.49% 32.14% TRL 20 Current Accounts 8,729 9,842 12,8% 37 USD Current Accounts TL 2,810 2,886 2,7% EUR 1,121 1,240 10,6% Current Accounts, FC, $ Others Participation Accounts 19,895 20,785 4,5% 38 Participation accounts TL 8,970 8,447 -5,8% Participation Accounts FC, $ 2,069 2,199 6,3% *USD equivalent of FC accounts Maturity Composition of Funds Collected (Q1’19, %) Cost of Funds Collected* Blended TL FC Precious Metal 4 3 12,63% 11,31% 10,34% Current Acc. 9,58% 9,10% 32 6,78% Up to 1 month 6,41% 7,17% 5,88% 6,13% Up to 3 months 42 2,47% 2,13% 2,33% 1,94% 2,56% Up to 1 year 0,94% 1,36% 1,41% 1,25% 1,21% 19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 >1year *Profit share expense to depositors for the last 4Q/4Q average participation accounts

12 Off Balance Sheet Growth LGs*-to-Total Assets Off Balance Sheet Composition (%) LG LC Others *Below 20% of LGs to Total Assets is targeted 12.003 13.544 15.413 12.444 20.648 20,4% 20,3% 21 19,9% 19,8% 30 32 34 18,6% 10 53 8 9 8 7 69 62 59 58 40 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Guarantees & Sureties(TRL million) Growth (%) Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 YoY Letter of Guarantee 7,387 8,004 8,910 8,575 8,304 12% 1,266 1,230 1,423 39% 1,020 1,178 Letter of Credit 205 242 424 248% Others* 122 137 Total: 8,530 9,319 10,382 10,046 10,151 19% *Revocable credit limits not included.