Yap Kredi Equity Investor Presentation Erste Group Turkey Conference - PowerPoint PPT Presentation

Yapı Kredi Equity Investor Presentation Erste Group Turkey Conference Istanbul, 14-15 March 2013

Agenda Operating Environment Yapı Kredi at a Glance 2012 Results (BRSA Consolidated) Performance of Strategic Business Units & Subsidiaries 2013 Outlook and Strategy 2

Sound macroeconomic fundamentals supported by proactive monetary policy in a soft-landing environment Macro 2012 Highlights 2011 1Q12 2Q12 3Q12 4Q12 2012 Moderating growth vs 2011 mainly driven by 1 1 8.5% 3.4% 3.0% 1.6% 4.1% 3.0% GDP Growth Key Macro Indicators external demand Continuous downward trend supported by 10.4% 10.4% 8.9% 9.2% 6.2% 6.2% Inflation core inflation 5 dynamics Significant improvement in CAD/GDP driven 10.0% 9.2% 8.0% 7.0% 6.0% 6.0% CAD/GDP by positive trend in non-energy component Slight increase in budget deficit due to 1.3% 1.5% 2.0% 2.3% 2.0% 2.0% Budget Deficit/GDP lower tax revenues Unemployment remaining at single-digits for 2 2 Unemployment 9.8% 9.9% 8.0% 9.1% 9.4% 9.4% the last 7 quarters Rate 2012 Proactive / flexible monetary policy with Upper Band 12.5% (O/N Lending Rate) multiple objectives of managing growth, 11.5% Monetary Policy 10.0% current account deficit and inflation via use 9.5% of corridor 6 , effective rate and macro- 9.0% Effective 9.1% prudential measures 8.75% Rate 3 8.50% 2013 so far Policy Rate 4 5.75% 5.6% 5.5% Flexible / supportive monetary policy Lower Band 5.00% (O/N Borrowing Rate) 4.75% balanced by macro-prudential measures 4.50%  25bps reduction in upper and lower band to prevent TL appreciation 1H12 2H12  RRR and ROM hikes to control loan growth Tight policy to control Easing policy to stimulate  15% loan growth target by CBRT inflation and CAD economic growth (1) Based on YK Economic Research 2012 GDP estimates (2) Unemployment rate as of November 2012 (3) Effective rate is the weighted average cost of outstanding funding of the CBRT via open market operations including O/N repo, one-week repo and one-month repo (4) One-week repo rate 3 (5) Core inflation includes clothing, housing, furnishing, health, transport, communication, recreation, education, hotels, cafe, restaurant and other (excludes food, energy, alcohol, tobacco and gold) (6) Interest rate corridor refers to difference between O/N lending rate (upper band) and O/N borrowing rate (lower band) ROM: reserve option mechanism

Healthy volume evolution together with NIM expansion via higher loan yields. Asset quality trend aligned with soft-landing Banking Sector Banking Sector Volumes and KPIs Nominal Growth Banking Sector Net Interest Margin 2012 2010 2011 2012 bln TL Total Loans 1 751 34% 30% 15%  loan  security  deposit Quarterly TL 545 33% 27% 21% yields yields costs Drivers FC ($) 118 33% 13% 10% 4.6% Total Deposits 768 21% 13% 11% 4.2% 4.2% 4.0% 3.9% TL 505 28% 6% 13% 3.5% FC ($) 151 4% 7% 15% Total Securities 270 9% -1% -5% NPL Ratio 3.6% 2.6% 2.8% 2011 2012 1Q12 2Q12 3Q12 4Q12 CAR 17.7% 15.4% 17.3% Cumulative Quarterly Loans/Deposits Ratio 82% 94% 98% ROAE 20% 15% 16%  Loans +15% driven by TL (+21%). Pick-up in 4Q (+5%) via downward loan repricing  Deposits +11% driven by balanced growth in TL (+13%) and FC (+15%). Pick-up in 4Q (+4%) driven by corporate deposits  NPL ratio up to 2.8% (vs 2.6% in 2011). Excluding NPL sales 3.2%  Basel II CAR at 17.3% supported by sale / reclassification of HTM securities to AFS, sub-loan issuances and sovereign investment grade  LDR up to 98% (+4pp vs YE11), private banks at 104% accompanied by ongoing funding diversification  Cumulative NIM up to 4.2% (+63bps vs 3.5% in 2011) driven by upward loan repricing and increase in security yields Note: NPL ratio indicates non-performing loan ratio, CAR indicates capital adequacy ratio, LDR indicates loans/deposits ratio, ROAE indicates return on average equity Sector balance sheet data based on weekly BRSA figures, income statement data based on BRSA monthly figures (1) Total performing loans 4

Underpenetrated banking sector; an opportunity for rapid growth Banking Sector Penetration Underpenetrated in both individual banking products and company lending Branches Per Million Inhabitants Total Loans 1 /GDP Corporate Loans/GDP 60% 160% 47% 462 138% 120% 40% 34% 80% 24% 58% 20% 132 54% 15% 40% 50% EU-27 Turkey 0% 0% (2011) (2011) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 Hungary Poland Turkey EU17 Hungary Poland Turkey EU17 (Loans+Deposits)/GDP Mortgages/GDP Loans to Households 2 /GDP 62% 47% 50% 60% 40% 246% 33% 40% 30% 19% 27% 20% 20% 104% 17% 13% 10% 5% 0% 0% EU-27 Turkey 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 (2011) (2011) Hungary Poland Turkey EU17 Hungary Poland Turkey EU17 Source: European Central Bank (1) Excluding lending to credit institutions (2) Including housing loans, consumer lending and other household lending (including CC, excluding SMEs) 5

Agenda Operating Environment Yapı Kredi at a Glance 2012 Results (BRSA Consolidated) Performance of Strategic Business Units & Subsidiaries 2013 Outlook and Strategy 6

Yapı Kredi: Fourth largest private bank in Turkey with leading positions in key segments Yapı Kredi at a Glance FINANCIAL HIGHLIGHTS MARKET POSITIONING (BRSA Consolidated Figures in TL, 31 December 2012) (31 December 2012) Mkt Shr (%) Rank # of Branches 5 9.1 Total Assets (bln) 131.5 TOTAL Deposits 6 8.9 4 10.0 Loans Performing Loans (bln) 77.8 Consumer Loans 5 7 8.1 Retail Credit Cards 6 1 19.4 Deposits (bln) 71.1 Asset Management 2 17.6 AuM + AUM (bln) 9.6 Yapı Kredi Brokerage Brokerage 7 2 7.0 Fourth Largest No. of Credit Cards (mln) 1 9.3 Private Bank by Cash Loans 8 5 9.1 Assets Non Cash Loans 2 13.2 No. of Customers (mln) 2 Corporate 6.5 Leasing 1 17.2 No. of Branches 3 928 Factoring 1 15.0 Life 4 7.7 No. of ATMs 2,819 Insurance Pension 3 17.1 Non-Life 5 7.2 No. of Employees 4 17,461 (1) Including 1.8 mln virtual cards (5) Including mortgages, general purpose and auto loans (2) Bank-only (6) Credit card outstanding (3) Bank-only including 1 off-shore branch (7) Equity trading volume 7 (4) Bank:14,733 (8) Cash loans excluding credit card outstanding volume and consumer loans

Customer focused, divisionalised service model supported by product factories Organisational Structure L Corp.&Comm. Retail Banking Private Banking Banking  22 branches Credit Individual  155 RMs Corporate Commercial Cards & SME  9.3 mln cards 1  820 branches  3 branches  77 branches  ~446K POS  3,350 RMs  57 RMs  504 RMs  422 direct sales  2,819 ATMs force  340K merchants Mass Subsidiaries Subsidiaries Affluent #2 in Brokerage #1 in Factoring (market share: 7.0%) (market share: 15.0%) SME #2 in Mutual Funds #1 in Leasing (market share: 17.6%) (market share: 17.2%) #5 in Non-life Insurance #3 in Private Pension Funds International Operations (market share: 7.2%) (market share: 17.1%) Insurance Subsidiaries #1 in Health Insurance #4 in Life Insurance L (market share: 22.7%) (market share: 7.7%) Mcap: TL 2.1 bln Note: Branch numbers by segment exclude 2 free zone, 1 off-shore and mobile branches. Segment and market share figures as of Dec ’12. Market capitalisations as of 15 February 2013 (1) Including 1.8 mln virtual cards 8 L = Listed

Successful execution of strategy aligned with changing priorities... History 2006 2007 2008 2009 2010 2011 2012 Smart Merger and Relaunch of Back to Flexible Restructuring Global Crisis Growth Integration Growth Growth Approach  Legal merger of  Launch of branch  Acceleration of  Temporary  Re-launch of  Continuation of  Ongoing branch Yapı Kredi and expansion branch expansion suspension of branch expansion branch expansion expansion Koçbank branch expansion  Completion of  Innovation in  Innovation, new  Selective and  Selective and  Merger of core  Continuous segment based product, service products and sustainable quality lending financial service model and delivery support for customer growth in key high growth subsidiaries channels customers acquisition margin areas  Streamlining  Solid core  Restructuring of  Tight cost  Tight cost  Above sector  Sustainable governance via revenue capital base bringing financial management and management and growth and revenue performance and continuous cost subsidiaries under emphasis on efficiency efforts continuous cost generation and the Bank decreasing cost to discipline tight cost control discipline  Integration of serve  Proactive credit information  Efficiency  Simplification of  Sustained asset  Dynamic and technology risk management  Strengthening of systems initiatives in processes and quality proactive asset systems and capital base via improvement in quality management processes capital increase efficiency  Diversification of funding and  Continuous focus emphasis on liquidity on funding diversification  Effective use of capital with strengthening actions in place 9