Q22020 Investor Presentation Albaraka Trk Participation Bank 07 - PowerPoint PPT Presentation

Q2’2020 Investor Presentation Albaraka Türk Participation Bank 07 August 2020

Agenda 1 Financial Highlights 2 Market Comparison Appendix 3

3 Albaraka Turk – Q2’20 At a Glance Key Ratios Balance Sheet YtD (Million TRL) Q4’19 Q2’20 Q-Q (%) % Q4’19 Q2’20 (bps) Total Assets 51.392 59.456 15,69 Total Funded Credits (Net) 29.749 35.931 20,78 CAR 14,97 15,37 40 Total NPLs 2.222 2.394 7,76 Deposits (incl. Interbank) 39.769 45.566 14,58 Tier 1 10,66 10,47 -19 Shareholder’s Equity 3.822 3.921 2,58 Income Statement -78 NPL 7,19 6,41 (Million TRL) Q2’19 Q2’20 Y-Y (%) Provisioning 577 Net Profit Share Income 340 768 125,37 42,61 48,38 Stage III Net Fees & Commissions 147 100 -32,00 -6.39 Provisions for Loan Loss 410 384 Net Profit Share 2,10 2,86 76 Margin 538 609 13,15 Operating Expenses * Cost/Income 55,89 56,39 50 25,62 Net Profit 50 63 * including personnel expenses

4 6 Q2’20 Main Highlights (Million TRL) Total Assets Total Funded Credits Total Collected Funds Net Profit 196 59.456 55.552 51.392 46.295 45.566 43.886 43.277 131 129 39.769 35.931 33.890 34.794 33.045 29.749 27.771 27.140 63 50 Q2'16 Q2'17 Q2'18 Q2'19 Q2'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Net Profit Share Margin* Common Equity Tier I Additional Tier I Additional Tier II 14,97 % 15,32 % 4,85 4,31 % 2,86 2,26 % 2,17 2,41 2,28 2,1 1,58 8,40 % 8,30 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q4'19 Q2'20 * Trailing for last 4 quarters

5 7 Asset Composition Liquid Assets (Million TRL) Composition of Total Assets (Q2’20) Other Liquid Assets % of Total Assets Assets; 4,1% 30,0% 33,0% 32,5% 29,0% Other 28,9% Liquid Funded Assets*; Credits; 18,3% 60,4% 12.663 15.266 17.215 16.114 17.827 Securities Portfolio; Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 17,1% *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) 10.184 8.827 4.972 6.243 3.845 5.481 5.112 2.234 11,60 2.024 10,06 1.615 8,75 3.091 3.010 7,32 1.994 6,49 1.435 1.562 2.120 2.062 2.015 1.972 1.895 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 (*) 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 Key Movements in Income (Million TRL) Net Profit Share Income (Quarterly) (Million) 395 376 373 -54 -68 -245 -18 2.400 2.014 144 108 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Profit Share Fees & Trading Others Q2'20 Income Comm Income Cost & Yield Movement (%) Net Fees and Commission Income (Million) 147 101 Credit Yield Net Profit Share margin Cost of Collected Funds 85 10,76% 10,92% 10,33% 10,18% 195 9,42% 178 7,46% 7,61% 7,13% 126 6,15% 4,64% 2,41% 2,10% 2,28% 2,86% 1,58% -41 -48 -77 Q2’18 Q2’20 Q2’19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Fees and Commissions Received Fees and Commissions Paid

7 Funded Credits Portfolio Yield on Performing Credits (%) Total Funded Credits (including financial leasing, million) 18,9% 18,8% 17,9% 17,5% 16,3% Q2’19 Q4’19 Q2’20 YtD Y-Y 11,4% 11,1% 10,8% 12.233 14.205 17.591 23,83% 43,80% 10,7% TL Credits, TL 10,0% 4,55% 7,11% FC Credits, $* 2.233 2.287 2.392 6,0% 5,9% 5,70% 5,60% 5,2% -13,32% -36,93% FC Indexed, $* 460 335 290 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Yield on TL Loans, adjusted, trailing 20,78% 29,38% 27.771 29.749 35.931 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* (Q2’20) Composition of Total Funded Credits (%) 1% 16% Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 TRL Corporate Credits 46,4 47,5 48,9 58,3 60,0 49% USD* SME Credits 44,8 43,9 42,1 32,7 30,8 EUR* 34% Retail Credits 8,8 8,6 9,0 9,1 9,3 Other *Including USD & EUR indexed credits According to BRSA definition

8 Asset Quality Gross Funded Credits by Groups (including financial leasing, million) NPL Ratio (%) 37.376 35.204 7,74 6,4% 6,7% 8,0% 30.881 29.103 10,2% 28.491 7,2% 7,3% 7,31 7,7% 11,9% 7,19 14,1% 13,8% 85,6% 6,71 83,1% 80,9% 78,6% 78,4% 6,41 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Group I Group II Group III Including financial leasing & accruals and rediscounts Cost of Risk (bps) Provisioning (Stage III) 257 70,0% 48,4% 229 52,2% 47,1% 213 60,0% 51,9% 197 183 42,6% 50,0% 40,0% 30,0% 1.152 1.158 1.112 1.104 947 20,0% 10,0% 0,0% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 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 (Q2’20) 577 13,4% 10,7% 8,8% 7,2% 5,8% 11,2% 42,8% 189 119 128 39 154 243 164 529 465 266 120 145 108 84 70 79 33 75 64 Manufacturing Construction & Real Estate Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Trading Transportation Education Agriculture Additions (million TRL) Recoveries (million TRL) Others Net NPL Formation (million TRL) Net NPL Formation Rate (bps) Stage II Credits Sector Distribution (Q2’20) Stage II-III Coverage Q2’20 (Million TRL) 17,5% 14,5% 5,5% 106 29,9% 10,0% 1.158 22,8% 3.317 3.007 2.394 1.507 Manufacturing Construction & Real Estate Stage 2 Stage 2 Stage 3 Stage 3 Trading Energy Hotels&Restaurants Others Risk amount Collateral Provision *Includes construction of power plant projects

10 Funding Profile Composition of Funding Base (Million TRL) Composition of Total Liabilities (Q2’20,%) 3,6% 36% Funds Collected 6,6% 49.820 53.366 45.697 39.231 40.881 13,1% Wholesale Funding 54% 56% 57% 57% Shareholders' 58% Equity 76,6% Others 32% 27% 27% 31% 30% (Million TRL) 16% 15% 15% 13% 13% Q4’19 Q2’20 YtD Growth % Funds Collected (incl. Bank deposits) 14,6 39.769 45.566 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Wholesale Funding 31,6 5.928 7.800 Fund Borrowed* Current Accounts Participation accounts Funds Borrowed * Fund Borrowed includes Funds Borrowed , Borrowings from Money Market and Subordinated Loans 4.535 5.866 29,4 Syndicated Loans - - - Maturity Profile of Liabilities (Million USD) Wakala 979 2.085 113,0 Issued Lease Certificates & Sukuk 2.743 2.986 8,9 Other 205 >2030 813 795 -2,2 Sub-Ordinated Debt (Tier 2) 1.375 1.597 16,1 Borrowings From Money Market 18 337 1748 250 2025 Shareholders’ Equity 2,6 3.822 3.921 Paid in Capital 50,0 900 1.350 Other Liabilities 1.873 2.169 15,8 0 100 200 300 Total Liabilities 51.392 59.456 15,7 Tier 1 Sukuk (Perpetual) Tier 2 Sukuk

11 Funding Profile (Collected Funds) Currency Composition of Funds Collected (Q2’20,%) Total Funds Collected (Million TRL) Q4’19 Q2’20 YtD Funds Collected 39.769 45.566 14,6% 8,7 Current Accounts 13.902 17.001 22,3% TRL Current Accounts TL 4.199 5.355 27,5% 16,8 38,2 USD 1.637 1.703 4,0% Current Accounts, FC, $ EUR Participation Accounts 25.867 28.566 10,4% Others Participation Accounts TL 10.497 12.065 14,9% Participation Accounts FC, $ 2.593 2.413 -6,9% 36,3 *USD equivalent of FC accounts Maturity Composition of Funds Collected (Q2’20,%) Cost of Funds Collected* Blended TL FC Precious Metal 15,26% 14,67% 3 4,5 14,11% 12,95% Current Acc. 10,96% 7,61% 7,46% 37,3 Up to 1 month 7,13% 6,15% 37,5 4,64% Up to 3 months 2,50% 2,35% 2,14% 1,73% 1,14% 0,19% Up to 1 year 0,68% 0,30% 0,27% 0,40% 18,0 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 >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 12.675 16.066 16.951 14.832 13.753 18,8% 21 30 35 37 17,7% 40 17,0% 10 10 15,9% 10 8 9 14,5% 69 60 55 55 51 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Guarantees & Sureties (TRL million) Growth (%) Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 YtD Y-Y -0,9% 7,7% Letter of Guarantee 8.251 8.192 8.718 8.826 8.636 14,2% 14,4% 1.328 1.180 1.330 1.662 1.519 Letter of Credit 409 347 383 369 283 -26,1% -30,8% Others* Total: 9.998 9.722 10.431 10.857 10.438 0,1% 4,4% *Revocable credit limits not included.