Yapı Kredi Investor Presentation Yapı Kredi Investor Presentation KDB Daewoo Securities and KRX Turkish Corporate Days ae oo Secu t es a d u s Co po ate ays Seoul, 16-17 April 2012
Agenda � Yapı Kredi Overview � Turkish Economy and Banking Sector y g � Outlook � Annex Note: Throughout the presentation, US$/TL translation at 1.8417 has been made for convenience and illustrative purposes g p p p 2
Executive Summary As the world’s 17th largest economy 1 and a member of G20, Turkey is a dynamic country with a unique onment � rating ability to cope with change. The country stands out with favourable demographics, solid / improving macroeconomic fundamentals, growth potential and low leverage g p g Enviro Oper Turkish banking sector is highly underpenetrated and well regulated with solid capital, liquidity and funding � positions Yap ı Kredi is the 4th largest private bank in Turkey; operating in retail (individual and SME), private and Y K di i th 4th l t i t b k i T k ti i t il (i di id l d SME) i t d � corporate / commercial banking with leading positions in key segments and products supported by its product factories The Bank’s unique competitive advantages include: � - Large network and leading brand - Strong and committed shareholders ı Kredi - Healthy, robust and customer business focused balance sheet - Strong liquidity and funding position with limited reliance on wholesale borrowing and proven access to Strong liquidity and funding position with limited reliance on wholesale borrowing and proven access to Yapı international funding - Solid risk profile with strong credit infrastructure and conservative credit policy - Focus on value generating segments with leadership in key products - Diversified, high quality revenue mix - Proven capability of cost control and efficiency improvements - Commitment to sustainable growth and commercial effectiveness (1) According to 2010 data published by the Turkish Statistical Institute and IMF 3
Yapı Kredi Highlights 59% 1944 Highest in the sector due to customer-business focus. Deep-rooted private bank with a nationwide presence Lowest securities / assets (18%) founding year loans/assets Solid deposit base with high contribution of retail, 2006 2006 56% 56% strong demand deposit share (17%) and lengthening Largest merger in the Turkish banking sector maturity merger year deposits/assets ~10% 64 Natural market share level Fourth largest private bank with leading positions in key segments / products (number of branches, assets, loans, deposits) market share US$ bln assets Strong market position in key segments / products >15% 38 Strong loan book with focus on value generating (credit cards, asset management, leasing, factoring, segments private pension and health insurance) market share US$ bln loans 68% 68% 6 2 6.2 Highest in the sector driven by focus on efficiency g y y L Loyal customer base l t b and sustainability fees/opex mln customers Strong net income evolution since 2007 Fifth largest branch network created via 1.2 907 (+22% CAGR vs 7% sector). Only bank to increase successfully executed branch expansion net income in 2011 y/y (+49% since 2007) US$ bln net income branches Highest among private peers in 2011 and 22% 17,350 Young, dynamic and highly qualified workforce consistently above 20% since the merger managed effectively (+3% since 2007) (highest tangible ROAE: 24%) ROAE headcount Solid provisioning level and sound asset quality 111% 111% 78% 78% Focus on technology to improve customer gy p confirming conservative risk profile confirming conservative risk profile satisfaction and decrease cost to serve (NPL ratio at 3.0%) share of ADC 1 Total coverage 3 14.9% 8.5 Among the top 30 stocks trading on the Istanbul Sound capitalisation level Stock Exchange; listed since 1987 US$ bln mcap 2 CAR (1) Share of alternative delivery channels (including ATMs, internet, call center and mobile banking) in total transactions (2) Market capitalisation as of 11 April 2012 (3) (Specific + general provisions) / NPL 4
Yapı Kredi and its Major Shareholders A very successful partnership model in the Turkish banking sector Shareholding Structure Excellent � Koç Holding is one of the most deep-rooted companies in Turkey with solid Combination of positions in energy, automotive, consumer durables, finance and 81 thousand Shareholders employees. The Group brings local expertise and access to a wide industrial base 50% 50% 50% 50% � UniCredit operates in 22 countries with over 160 thousand employees via 9 U iC dit t i 22 t i ith 160 th d l i 9 thousand branches and has the largest network in CEE. The Group provides international banking expertise and access to a large commercial banking network 81.8% 1 � Shareholding structure providing stability, ensuring sustainable / profitable growth L Local � Local management / strong local relationships Approach � Independent decision making process / Bank run at arm’s length � Strong partnership with committed shareholders is one � Strong inherent culture of core banking focus and value generation � Strong inherent culture of core banking focus and value generation Product and Product and of Yap ı Kredi’s key competitive Management � Short “time to market” for flagship products / “in-house” investment banking advantages: Best Practices support � Leverage on UniCredit know-how and expertise in credit, market, liquidity risk - Via Koç Holding, the management and cost control / efficiency Bank has access to an established industrial group � Joint HR / training initiatives with Koç Holding and UniCredit including international career opportunities offering synergy and cross-sell opportunities across sectors � Shareholders capable and committed to supporting the capital base if and when Capital needed - Via UniCredit, the Bank Via UniCredit, the Bank Support Support receives know-how and best � No history of capital extraction (no dividend payments) practice transfer from a � Limited reliance on UniCredit funding leading global banking group � Local regulators monitoring / avoiding any capital leakage between jurisdictions (1) Remaining 18.2% held by minority shareholders = Listed L 5
Strategy Clear and unique strategic guidelines aimed at profitable / sustainable growth and customer satisfaction Yap ı Kredi’s medium-term objective is to achieve above sector profitability performance on the back of improvement in commercial effectiveness and continuation of investments for growth Yapı Kredi’s strategy is based on: � Healthy and consistent growth via focus on core banking activities – Loan growth focused on value generating segments / products: high margin SME, consumer in TL and project finance in FC lending – Deposit growth to ensure adequate levels of liquidity coupled with diversification of long-term funding through Deposit growth to ensure adequate levels of liquidity coupled with diversification of long-term funding through recurring access to international markets – Continued branch expansion � Strong and sustainable profitability via customer business focus, strict cost control and efficiency gains – Revenues to be driven by emphasis on product penetration / innovation and fee generation in view of low margin environment – Cost growth to remain in line with inflation also incorporating growth initiatives � Superior and long lasting customer satisfaction Superior and long lasting customer satisfaction – Simplification of processes together with product and delivery channel improvements – Strengthening of customer centric business model 6
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