Yap ı Kredi Investor Presentation Yap ı Kredi Investor Presentation Credit Suisse Trading the Silk Route Conference Credit Suisse Trading the Silk Route Conference - Opportunities in Turkey, MENA and Kazakhstan Opportunities in Turkey MENA and Kazakhstan London, 25-26 February 2009
AGENDA � Current macro and sector outlook � 2008 achievements and latest developments � 2008YE preliminary highlights and 2009 outlook � Appendix: Summary 9M08 results* (*) BRSA Consolidated 2
Starting from end of Sep‘08, Turkish economy negatively impacted by the acceleration of international financial and economic turmoil but still expected to close 2008 with positive GDP growth of ~ 1% but still expected to close 2008 with positive GDP growth of ~ 1% Current Macro and Sector Outlook GDP (y/y growth, %) � Sharp slowdown in GDP growth 1Q: 6.7% 2Q: 2.3% in 4Q08 to -5 5%; contraction of in 4Q08 to -5.5%; contraction of 3Q 0 5% 3Q: 0.5% 4Q: -5.5% 9.4 8.4 industrial output starting from 6.9 5.3 July 2008 onwards 4.6 3.4 � Expected GDP growth of 0.8% in � Expected GDP growth of 0.8% in 0.8 0.8 2008 and -1.0% in 2009 vs -1.0 average annual growth of 6.8% 2003 2004 2005 2006 2007 2008F 2009F 2010F between 2002-2007 � Main factors behind expected sluggish economic growth in Industrial Output (y/y growth, %) 1Q: 7.3% 20.0 2Q: 4.1% 2009 : 3Q: -1.4% 15.0 15.0 4Q: -12.5% � Weak domestic demand and 10.0 consumer confidence 5.0 � Weak foreign demand for 0.0 exports -5.0 -10.0 10 0 � Volatility in financial markets -15.0 � High exchange rates -17.6 -20.0 Jun-06 Feb-08 Jul-08 � Increasing unemployment Jan-06 Nov-06 Apr-07 Sep-07 Dec-08 A F D J J N S Note: 2009 Forecasts as 17 February 3
Continued downward trend in inflation since 2H08 mainly driven by sluggish demand and falling commodity prices, also encouraging aggressive rate cuts by CBT aggressive rate cuts by CBT Current Macro and Sector Outlook CPI inflation (y/y growth, %) � Inflation on an upward trend in 1H08 due to surge in international food and energy 18.4 prices while on a downward trend in 2H08 driven by stagnant demand and rapid fall in commodity prices (CPI: 6.8% 2009F vs 10.1 9 7 9.7 10 1% 2008) 10.1% 2008) 8.4 9.3 7.7 6.8 5.8 � Central Bank aggressively pursuing easing cycle from Nov’08 onwards (525 2003 2004 2005 2006 2007 2008 2009F 2010F bps rate cuts in policy rate to 11 5%) with bps rate cuts in policy rate to 11.5%) with bond rates declining in parallel Benchmark Bond and Central Bank Policy Rates (%) � As a result, economic activity to pick up 27% earlier than anticipated, also with the 25% h l help of implied further rate cuts f i li d f th t t 23% � Limited depreciation of TL so far 21% 19% � Key risk factors for disinflation in 2009: 14.8% 17% 15% � High risk perception and capital flight � High risk perception and capital flight 13% 12.2% � Weak TL and strong exchange rate 11% pass-through Dec-07 Jan-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-08 � Possible increase in commodity prices in 2H09 in 2H09 Bond rate (annual compound) Bond rate (annual compound) CB ON rate (annual compound) CB ON rate (annual compound) Note: 2009 Forecasts as 17 February 4
Easing trend in current account deficit driven by deceleration in economic activity starting from end of Sep’08; positive contribution of FDI to financing of current account deficit of FDI to financing of current account deficit Current Macro and Sector Outlook Foreign Trade (USD bn) � Slowdown in exports in 4Q08, along with weak global demand along with weak global demand 260 202 220 184 � Larger contraction in imports 170 155 180 132 129 110 140 coupled with stagnant domestic 107 100 demand and falling commodity demand and falling commodity 60 60 20 prices 2000 2001 2002 2003 2004 2005 2006 2007 2008F 2009F 2010F � Expected decline in exports and Exports Imports imports in 2009 by 17% and 23%, p y , respectively, driven by weak foreign and domestic demand Current Account Deficit (as % of GDP) � As a result, current account 4 deficit becoming less of an 2 0 external financing risk in 2009 -2 -1.5 -1.2 -2.4 -4 -2.7 -2.7 -2.9 -3.1 -3.2 -3.6 � In 2008, net FDI inflows reached -6 -4.6 -5.7 5 7 -5.9 5 9 -8 -6.1 USD 17.7 bln, despite global -10 problems ; expected USD 12.5 bln 2008F 2009F 2010F 2000 2001 2002 2003 2004 2005 2006 2007 net FDI in 2009 CA/GDP CA- FDI adj j Note: 2009 Forecasts as 17 February 5
Turkey less affected by the global financial turmoil than most other emerging market peers emerging market peers 5Y Credit Default Swaps (USD, bps) Vs 3Q08 � Turkey has been relatively less � Turkey has been relatively less 432 +179 bps Turkey affected by the global financial crisis 748 as evidenced by comparative CDS +487 bps Russia spreads with major CEE countries 795 795 +1,175 bps 1 175 b Kazakhstan � Ongoing talks for a new IMF stand-by 833 +570 bps deal providing further stability in Latvia Turkey vs most peers 413 413 +417 bps 41 b Croatia � Expectation regarding the 617 completion of the IMF deal still +482 bps Romania continuing despite some 473 Bulgaria +425 bps recent uncertainty 245 � Turkey is relatively less vulnerable in +320 bps Poland terms of capital outflows vs other 172 +183 bps +183 bps Slovakia Slovakia CEE countries as a result of lower and CEE i l f l d further reduced current account 193 +260 bps Czech Rep. deficit Current 379 4Q08 +389 bps Hungary g y 3Q08 3Q08 6
Despite a challenging fourth quarter, the banking sector is still solid in terms of liquidity and capitalization q y p Current Macro and Sector Outlook Banking Sector 1Q08 ∆ 2Q08 ∆ 3Q08 ∆ 4Q08 ∆ 2008 6-Feb-09 Solid loan growth in the first 3 quarters of � Total Loans 11% 8% 6% 2% 30% -1% 2008 followed by contraction in both TL and TL Loans TL Loans 7% 7% 10% 10% 7% 7% -4% 4% 22% 22% -2% 2% FC loans in all categories (except for credit FC loans in all categories (except for credit FC Loans (in USD) 12% 6% 4% -6% 16% -4% cards) in 4Q due macroeconomic slowdown and banks’ cautious stance Consumer Loans 9% 8% 8% -2% 24% -1% 10% 7% 5% -2% 21% -1% Mortgage Rising trend in NPL ratio as a function of � -2% 1% 1% -10% -9% -5% Auto loan contraction and asset quality 10% 10% 10% 10% 11% 11% -1% 1% 33% 33% 0% 0% General Purpose General Purpose deterioration in SME, credit cards and Credit Cards 5% 11% 4% 6% 29% -1% consumer loans Corporate 13% 7% 6% 2% 32% -1% Banking sector still sound and healthy: � Total Deposits 8% 5% 3% 8% 27% 0% � Implementation of intensive restructuring TL 7% 5% 7% 5% 27% -1% in aftermath of 2001 crisis thoroughly in aftermath of 2001 crisis thoroughly FC (in USD) FC (i USD) 0% 0% 10% 10% -3% 3% -9% 9% -3% 3% -5% 5% addressing weaknesses NPL Ratio 3.1% 3.0% 3.0% 3.5% 3.5% 3.8% � No imminent liquidity problems and Loans / Deposits 82% 84% 87% 82% 82% 81% limited reliance on wholesale funding CAR 16.0% 15.3% 16.1% 16.5% 16.5% n/a � Sector well capitalised with CAR well Sector NPL Ratio Sector NPL Ratio above regulatory limits vs peer countries 7.1% � No toxic assets on banks’ balance sheets 7.0% 6.6% 6.3% Credit Cards � Limited FX risk 6.0% 5.0% Effective measures taken by Central Bank: � Total Loans 3.8% 3.8% 3.8% 3 5% 3.5% 4.0% 4 0% � Opening of interbank FX deposit market O i f i t b k FX d it k t 3.7% 3.5% 3.0% Commercial Loans where CBT acts as intermediary 3.5% 2.6% 2.0% 2.3% � Reduction of FX reserve requirement 1.3% Consumer Loans 1.0% from 11% to 9% resulting in an additional ec-07 n-08 eb-08 ar-08 pr-08 ay-08 n-08 ul-08 g-08 p-08 ct-08 v-08 ec-08 n-09 eb-09 foreign currency liquidity of ~ USD 2.5 bln g y y Ju Oc Ma Ap De De Ja Fe Ma Ju Au Se No Ja 06-Fe Source: Weekly BRSA data as of 26 December 7 ** Deposit banks
Profitability of the banking sector impacted by the negative developments in the second half of 2008; ROAE at 16.6% Current Macro and Sector Outlook 2007 2008 Banking Sector Jan-Dec Jan-Dec % chg (mln YTL) � Banking sector revenue Total Revenues 39,839 44,062 11% growth of 11% y/y; driven by growth of 11% y/y; driven by Net Interest Income 25,140 29,697 18% 18% y/y growth in net Non-Interest Income 14,700 14,365 -2% interest income and 22% y/y o/w Fees & Comm. 7,963 9,695 22% growth in fee income . Non- o/w Other 6,737 4,670 -31% interest income negatively interest income negatively Operating Costs 18,714 22,075 18% impacted by FX losses as a HR costs 7,617 9,285 22% result of exchange rate Non-HR costs 11,097 12,791 15% volatility in 4Q08 Operating Income 21,126 21,987 4% � Operating costs up 18% y/y, O i 18% / Provisions 3,516 6,167 75% driven by branch network Pre-tax Income 17,610 15,819 -10% expansions throughout the Tax 3,234 3,163 -2% year Net Income 14,376 , 12,656 , -12% � Provisions up 75% on the Sector Return on Average Equity (%) back of asset quality 26% deterioration accelerating 22% from 2H08 onwards 16.6% � Net income down by 12% y/y 18% � ROAE at 16.6% as of Dec’08 14% 10% 10% Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 8
AGENDA � Current macro and sector outlook � 2008 achievements and latest developments � 2008YE preliminary highlights and 2009 outlook � Appendix: Summary 9M08 results* (*) BRSA Consolidated 9
Recommend
More recommend
