Yap ı Kredi Investor Presentation Yap ı Kredi Investor Presentation Morgan Stanley European Financials Conference Morgan Stanley European Financials Conference London, 29-30 March 2011
AGENDA � 2010 Operating Environment � 2010 Operating Environment � Yap ı Kredi at a Glance � 2010 Results (BRSA Consolidated) � 2010 Results (BRSA Consolidated) � Performance by Strategic Business Unit (Bank-only) � Performance of Subsidiaries � Performance of Subsidiaries � 2011 Outlook and Priorities � Annex � Annex 2
Strong economic recovery with solid GDP growth supported by stabilised interest rates and low inflation 2007 2008 2009 2010 2 4.7% 4.7% 0.7% 0.7% -4.7% 4.7% 7.4% 7.4% GDP Growth (y/y) GDP Growth (y/y) 8.4% 10.1% 6.5% 6.4% Inflation (eop, y/y) CBRT Policy Rate (eop) 1 15.75% 15.00% 6.50% 6.50% 7.0% -0.6% -9.9% 13.1% Industrial Production (y/y) 93.9 69.9 78.8 91.0 Consumer Confidence Index 10.3% 10.3% 11.0% 11.0% 14.0% 14.0% 11.9% 11.9% Unemployment Rate p y 2 5.9% 5.6% 2.3% 6.6% Current Account Deficit / GDP 2 3.4% 2.5% 0.9% 1.1% FDI / GDP � Strong and sustainable growth dynamics driven by domestic demand and steady productivity gains � Sustained low inflation environment with annual inflation paralel to CBRT target � Stabilised interest rates , with rate cuts as part of CBRT’s new policy mix together with hike in banks’ reserve requirement to contain current account deficit through discouraging short term capital inflows, reserve requirement to contain current account deficit through discouraging short-term capital inflows, preventing further appreciation of TL and curbing excessive loan growth � Significant pickup in industrial production in line with increased private consumption � Consumer confidence progressively strengthening to pre-crisis levels � Continuous improvement in unemployment , albeit still higher than pre-crisis levels 1 As of May 2010, the policy rate changed to one-week lending repo rate (7.0%) from the Central Bank of Turkey (CBRT) O/N borrowing rate (6.5%). 3 As of 21 January, 2011, policy rate decreased to 6.25% from 6.5% as of YE10. As of December 2010, CBRT O/N borrowing rate at 1.5% 2 YK Economic Research estimates
Sustained profitability at sector level driven by robust volume growth and improvement in asset quality, despite strong competition and margin pressure margin pressure Sector KPIs Sector Loans (bln TL) 2008 2009 2010 2010- 2009 Δ 501 373 352 Total Assets (bln TL) 707 800 964 21% Net Income (bln TL) 12.7 19.4 21.2 9% Loans / Deposits 79% 74% 82% 8 pp Deposits / Assets 61% 61% 61% - 2008 2009 2010 Y/Y growth NPL Ratio 3.5% 5.3% 3.7% -1.6 pp Total Loans 30% 6% 34% NIM 4.9% 5.6% 4.4% -1.2 pp TL Loans 21% 10% 34% FC Loans ($) FC Loans ($) 16% 16% -2% 2% 31% 31% ROAE ROAE 18.3% 18 3% 23.0% 23 0% 20 1% 20.1% -2 9 pp -2.9 pp ROA 1.8% 2.4% 2.2% -0.2 pp Sector Deposits (bln TL) Cost / Income 45.3% 36.0% 41.6% 5.6 pp CAR 16.6% 19.3% 17.7% -1.6 pp 611 505 445 � Strong lending growth. Loans up to TL 501 bln (+34%) � Comfortable funding position. Deposits up to TL 611 bln (+21%), Loans / Deposits at 82% � Positive asset quality trend. NPL ratio at 3.7% (-1.6 pp) 2008 2009 2010 � Decreasing but still robust capitalisation level. CAR at Total Deposits 27% 14% 21% 17.7% TL Deposits 26% 16% 28% � Sustained profitability. ROAE at 20.1% � Sustained profitability ROAE at 20 1% FC Deposits ($) FC Deposits ($) -1% -1% 10% 10% 4% 4% Note: Banking sector loan and deposit figures based on BRSA weekly, all other figures based on monthly data, excluding participation banks 4
Underpenetrated banking sector, an opportunity for rapid growth Underpenetrated Banking Sector in Terms of Both Individual Banking Branches Per Products and Commercial Lending Million Inhabitants Million Inhabitants Total Loans 1 / GDP Loans to Non-Financial Companies/GDP 459 60% 52.3% 160% 141.5% 141 5% 50% % 120% 40% 31.9% 125 30% 80% 78.5% 25.8% 56.6% 20% 17.3% 40% 38.6% Eurozone Turkey 10% (2009) (2009) (2009) (2009) 0% 0% 2003 2004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009 Hungary Poland MU16 Turkey Hungary Poland MU16 Turkey (Loans+Deposits)/GDP Mortgage Loans / GDP Loans to Households 2 / GDP 50% 60% 55.2% 40% 39.6% 50% 305% 30% 40% 33.3% 30% 31.4% 20% % 17 0% 17.0% 90% 20% 15.8% 10% 13.2% 10% 4.5% 0% 0% 2003 2004 2005 2006 2007 2008 2009 Turkey 2003 2004 2005 2006 2007 2008 2009 Eurozone Hungary Poland MU16 Turkey (2009) (2009) Hungary Poland MU16 Turkey Source: European Central Bank 5 (1) Excluding lending to credit institutions (2) Including housing loans, consumer lending and other household lending (including CC, excluding SMEs)
AGENDA � 2010 Operating Environment � 2010 Operating Environment � Yap ı Kredi at a Glance � 2010 Results (BRSA Consolidated) � 2010 Results (BRSA Consolidated) � Performance by Strategic Business Unit (Bank-only) � Performance of Subsidiaries � Performance of Subsidiaries � 2011 Outlook and Priorities � Annex � Annex 6
Yap ı Kredi: fourth largest private bank in Turkey Yap ı Kredi at a Glance FINANCIAL HIGHLIGHTS MARKET POSITIONING (BRSA Consolidated Figures in TL, 31 Dec 2010) (31 Dec 2010) Mkt. Sh. % 4 9.2 # of Branches Deposits 6 8.6 TOTAL Total Assets (bln) 92.8 Loans 4 10.4 Consumer Loans (5) Performing Loans (bln) 54.2 7 7.6 Retail Credit Cards (6) 1 19.3 Deposits (bln) 55.2 AuM + AuM + Asset Management Asset Management 2 2 18 4 18.4 Yap ı Kredi AUM (bln) 9.0 Brokerage Brokerage (7) 3 5.9 Fourth Largest Private Bank by Cash Loans (8) No. of Credit Cards (mln) (1) 7.8 3 10.3 Assets Non Cash Loans Non Cash Loans 1 13.7 Corporate No. of Active Customers (mln) (2) 6.0 1 19.2 Leasing No. of Branches (3) 868 Factoring 1 23.1 No of ATMs No. of ATMs 2 530 2,530 Life Life 6 6 5.0 5 0 Insurance Pension 3 15.5 No. of Employees (4) 16,821 5 6.3 Non-Life (1) Including 1.5 mln virtual cards (5) Including mortgages, general purpose and auto loans (2) Bank-only (6) Credit card outstanding volume (3) Bank-only including 1 off-shore branch (7) Equity trading volume 7 (4) Bank: 14,411 (8) Cash loans excluding credit card outstanding volume and consumer loans
Customer focused, divisonalised service model supported by better integration of product factories supported by better integration of product factories Yap ı Kredi at a Glance L Corporate Retail Banking Retail Banking Private Banking Private Banking /C /Comm. Banking B ki � 32 branches Credit Individual � 205 RMs Corporate Commercial Cards & SME � 7.8 M cards* � 727 branches � 3 branches � 100 branches � ~405K POS 40 K POS � 3,471 RMs 3 4 1 RM � 72 RMs � 569 RMs � 156 direct � 2,530 ATMs sales force � 305K Mass Product Factories: merchants Product Factories: Affluent #3 in Brokerage #1 in Factoring SME (market share: 5.9%) (market share: 23.1%) #1 in Leasing #2 in Mutual Funds (market share: 19.2%) (market share: 18.4%) L Mcap: TL 1,973 mln #3 in Private Pension #5 in Non-life Insurance International Operations Funds Other Product (market share: 6.3%) L #1 in Health Insurance (market share: 15.5%) Factories #6 in Life Insurance (market share: 19.8%) Mcap: TL 1,200 mln (market share: 5.0%) Branch numbers by segment exclude 2 free zone, 1 off-shore and mobile branches Segment figures as of Dec 2010, market capitalisations as of 21 March 2011. 8 *Including 1.5 mln virtual cards L = Listed
Track record of successful execution of strategy aligned with changing priorities since the merger in 2006… g g p g Yap ı Kredi at a Glance 2006 2007 2008 2008 / 2009 2010 Merger and Relaunch of Challenging Restructuring Back to Growth Integration Growth Environment � Legal merger of � Launch of � Accelerated � Temporary � Re-launch of Yap ı Kredi and Yap ı Kredi and accelerated accelerated branch branch suspension suspension branch branch Koçbank branch expansion of branch expansion expansion plan expansion � IT systems � Tight cost � Focus on above integration � Completion of management � Tight cost market volume divisionalised divisionalised and efficiency and efficiency management management and revenue and revenue � Merger of 4 core service model efforts, also with and efficiency growth subs in migration of efforts factoring, � KFS � Continuous cost transactions to leasing, asset restructuring to � Proactive credit discipline and ADCs management management streamline streamline risk risk efficiency efforts efficiency efforts and investment governance and � Innovation / management � Emphasis on banking / bring financial product and � Focus on innovation, new brokerage subsidiaries service supporting product under Yap ı Kredi p development p � Completion of C l ti f customer base t b offerings and ff i d full capital base � Efficiency � Strengthening of and customer client acqusition restructuring initiatives in capital base via related banking systems and capital increase processes p 9
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