The world s favorite Turkish bank

Transcription

1 The world s favorite Turkish bank Profile 1H 2015

2 Turkey in Brief Turkey was the 18 th largest economy in the world in 2014 with its large, young and dynamic population (median age: 30.7 as of 2014). After realizing a growth of 2.9% in 2014 with the contribution of both domestic and external demand; a growth rate close to this level is likely to be experienced in 1H15 by the help of accelerating domestic demand despite the negative contribution from external demand due to weak exports. 12-month rolling central government budget primary surplus at about 2% of GDP in 1H15 and EU defined general government debt to GDP ratio of 33.8% as of Q1 of 2015 remain to be Turkey s fundamental strengths. Macro-Economic Indicators H15 Real GDP Growth 4.7% 0.7% -4.8% 9.2% 8.8% 2.1% 4.2% 2.9% 2.3%* Current Account Deficit / GDP 5.8% 5.4% 1.9% 6.2% 9.7% 6.2% 7.9% 5.8% 5.8%* Current Account Deficit (USD bn) Net FDI (USD bn) EU Defined Net Debt Stock / GDP 39.9% 40.0% 46.0% 42.3% 39.1% 36.2% 36.1% 33.5% 33.8%* CBT One-Week Repo Rate 15.75%** 15.0%** 6.5%** 6.50% 5.75% 5.5% 4.5% 8.25% 7.50% Interest Rate Corridor*** 5.0% 12.5% 5.0% 9.0% 3.50% 7.75% 7.50% 11.25% 7.25% 10.75% Inflation (CPI, eop) 8.4% 10,1% 6.5% 6.4% 10.4% 6.2% 7.4% 8.2% 7.2% Source: CBRT, Turkstat, Turkish Treasury, IMF WEO (April 2015) * as of March 2015 ** Before 2010, one-week repo rate refers to the O/N rate *** In 2011 CBRT started utilizing interest rate corridor as a policy tool 10-Year Cumulative Shareholder Return in Borsa Istanbul (BIST) * (USD) Garanti BIST Banks Index BIST 100 Index Jul Jun 15 Garanti shares continuously outperformed the market since year return of USD 100 in... BIST 100 Index; 1.5x BIST Banks Index; 1.3x vs. Garanti; 2.4x * Figures are based on daily USD/TL CBRT ask rate

3 Turkish Banking Sector in Brief Turkish banking sector is the second largest banking system 1 in Emerging Europe after Russia with an asset size of USD 833 billion. Turkish banking sector is well-regulated, monitored and governed by two primary regulatory authorities; the Banking Regulation and Supervision Agency (BRSA) and the Central Bank of Republic of Turkey (CBRT). Total Assets (USD billion) CAGR: 11% Top 10 Private Banks: 57% State Banks: 25% Main strengths include; Well-capitalized and underleveraged Sound solvency with Basel III CAR of 14.8% Tier-I capital constitutes 84% of total capital Tier-I ratio: 12.4% Low leverage 2 : 8.5x compared 11.0x in EU27 Underpenetrated market with strong growth potential Total Assets/GDP 3 : 108% compared to 268% in Euro Area Total Loans/GDP 3 : 67% compared to 117% in Euro Area Total Customer Deposits/GDP 3 : 59% compared to 112% in Euro Area Highly liquid Deposits fund 55% of assets Loans/Deposits ratio: 115% Solid asset quality NPL ratio 2 : 2.7% compared to 8.5% in CEEMEA and 10.8% in EU27 Closely monitored, well-hedged and low open position FX Net Position / Regulatory Capital Standard Ratio: -1.4% vs. required level of (+/-) 20% H15 Number of Banks : 51 Commercial Banks (Inc. 3 State Banks) : 33 (Share in assets: 90.4%) Development&Investment Banks : 13 (Share in assets: 4.4%) Participation Banks : 5 (Share in assets: 5.2%) Top Private Banks by Asset Size Source: BRSA monthly data for commercial banks only as of June Figures are based on BRSA unconsolidated data. 1 EBF Facts&Figures 2014, ranking per total assets. 2 Latest data from the IMF-FSI database. Represent country averages, most of which are based on 1Q15 figures. 3 ECB, TurkStat and BRSA for commercial banks only, as of 1Q15. (USD billion) Foreign Ownership % İşbank Garanti Akbank YKB DenizBank Finansbank TEB ING HSBC Odeabank* % % 99.9% 99.8% 72.5% 100.0% 100.0% 100.0% Source: Figures are based on BRSA consolidated data as of June 30, Note: Exchange rate used for currency conversion is based on Garanti s June 30, 2015 dated financials. * Based on bank-only financials, consolidated asset size not available.

4 About Garanti In Brief Established in 1946, Garanti is Turkey s second largest private bank by total assets of USD 99.9 billion. Garanti s core banking activities include retail, corporate, commercial, SME and payment systems. Garanti operates as an integrated financial services company with a total of eight financial subsidiaries offering services in pension, leasing, factoring, securities and asset management along with its international subsidiaries in the Netherlands, Russia and Romania. Garanti provides a wide range of financial services to its 13.5 million customers through an omni-channel distribution network of 997 domestic branches; 9 foreign branches in Cyprus, Luxembourg and Malta; 3 international representative offices in London, Düsseldorf and Shanghai; 4,218 ATMs; an award-winning Call Center; state-of-the-art internet and mobile banking platforms built on cutting-edge technological infrastructure as well as its new banking application, igaranti serving socially active and connected customers. Consistent delivery of strong results underpinned by the highest ordinary banking income generation capacity. Following the best practices in corporate governance, Garanti is controlled by two powerful entities, Banco Bilbao Vizcaya Argentaria S.A. (BBVA) and Doğuş Holding Co. with shares of 39.9% and 10.0%, respectively. Having share publicly traded in Turkey, depository receipts in the UK and the USA, Garanti has an actual free float of 49.93%* in Borsa Istanbul as of June 30, Garanti Share Garanti is the most valuable company in the BIST with USD 13.1 billion market capitalization as of June 30, Garanti also represents the highest floating market capitalization in the BIST. Garanti is listed on Borsa Istanbul (BIST) since 1990 under the ticker symbol GARAN and the London Stock Exchange Main Market (LSE). In 1993, the Bank became the first Turkish bank to offer its shares to international markets in the form of American/Global Depositary Receipts (ADR/GDR). These international DRs are currently traded on the International Order Book (IOB) which is the international market of London Stock Exchange (LSE). In 2012, Garanti was entitled to join the prestigious tier of the U.S. Over-the-Counter (OTC) market, OTCQX International Premier, where select OTC companies with the highest financial standards and superior information availability are traded. In 2014, Garanti has been qualified to join OTCQX ADR 30 Index ( OTCQX30 ) as the only Turkish company that tracks the top 30 ADRs traded on the OTCQX marketplace launched by OTCQX in cooperation with BNY Mellon. Rated by Moodys (Baa3), S&P (BB+), Fitch (BBB) and JCR (BBB), Garanti s long term LC and FC ratings assessed by Fitch, Moody s and JCR represent investment grade. * Source: Central Registry Agency, as of June 30, Our Strategy To maintain long-term sustainable growth via continuous value creation. Key Strengths Robust balance sheet and high capital adequacy ratios, Strong liquidity ratios and proven access to funding, particularly deposits, Sustainable growth in lending while keeping sound asset quality attributable to advanced risk management systems and disciplined credit approval process, Human-centric approach in all possible dimensions, Strong brand reputation as a product and service innovator, Competent and dynamic employee base led by a management team with proven track record, Proprietary and business aligned IT platform with high operational efficiency and well-integration with the subsidiaries, Service through its wide branch & ATM network and digital channels within its Omni-Channel Distribution Strategy, Leader in Digital Banking through advanced technology and interactive platforms with wide range of customized services, Commitment to corporate governance, ethics and corporate values.

5 Key Performance Indicators Total Assets USD 99.9 billion Total Performing Loans USD 60.0 billion Total Deposits USD 54.7 billion 1H 2015 Net Income USD billion Return on Average Equity (ROAE) 16.1% Return on Average Assets (ROAA) 1.7% Non Performing Loans (NPL) Ratio 2.9% Capital Adequacy Ratio (CAR) 13.0% Figures are based on BRSA consolidated financials as of June 30, Market Position Market Share Credit Ratings (Moody's/S&P/Fitch) Baa3/BB+/BBB Corporate Governance Rating Score (JCR) 9.14 Total Branches 1,009 Personnel 19,643 ATM 4,230 POS* 573,072 Total Customers 13,498,222 Internet Banking Customers** 3,524,520 Mobile Banking Customers** 1,899,328 Credit Cards 9,553,119 Debit Cards 8,436,605 * Includes shared POS ** Active customers only with min. 1 login per quarter Ranking Total Assets Total Performing Loans TL Loans 11.7% 11.8% 10.8% FC Loans (in USD) 14.1% Assets #3 in 2006 in 1H 2015 Consumer Loans 14.0% Mortgage Loans 13.8% C.C. Issuing (Cumulative) C.C. Acquiring (Cumulative) 19.1% 20.4% #1 #1 Consumer Loans #3 in 2006 #1 in 1H 2015 Total Customer Deposits 11.4% Customer Demand Deposits 13.5% FC Customer Deposits 14.1% Customer Deposits #4 in 2006 in 1H 2015 Electronic Fund Transfers (EFT) 15.5% Bancassurance - Non-Life Insurance Bancassurance - Life Insurance 11.8% 10.7% #1 #1 Mortgage Loans #5 in 2006 #1 in 1H 2015 Note: Based on BRSA unconsolidated financials as of June 30, 2015 for fair comparison with the sector. Sector figures are per BRSA monthly and weekly data, commercial banks only. Rankings are among private banks, as of June 2015 Select Awards Ranked first among banks in the Transparency in Corporate Reporting research conducted by Transparency International Turkey with the highest score in three dimensions: Reporting on anti-corruption programmes, Organizational transparency and Country-by-country reporting. Recognized as the Best Project Finance House by EMEA Finance, a leading finance magazine, for its continuous efforts to support energy projects to add value to its customers and playing an essential role for Turkey s sustainable growth. Honored with the IMA Best in Class Award for its website in the categories of "Banking" and "Financial Services" at the Interactive Media Awards. Garanti Pension and Life was recognized as the Best Life Insurance Company in Turkey in 2015 by World Finance. Garanti Faktoring was honored as the Best of Export Factoring Company in the World in 2015 by Factors Chain International.

6 Financial Subsidiaries Netherlands based customer-centric transaction banking services provider 24 years of presence in the country Specialized in trade & commodity finance, private banking, structured finance and retail deposits Branch in Germany; representative offices in Switzerland, Turkey and Ukraine Assets*: USD 5.3 billion 20 years of presence in Russia Focus on corporate and commercial banking services Established relationships with large-scale highly credible Russian companies Sustainable profitability with sound asset quality despite heightened geopolitical tension and the resulting uncertainties Well-positioned for the tough climate Assets: USD 207 million 18 years of presence in the country Launched retail banking in Romania in first Consumer Banking project outside of Turkey 84 branches, >338k customers, >244k plastic cards Specialized in retail, SME and corporate banking Bonus Card, Romania s first international chip-based credit card with a reward program Consolidated Assets: USD 2.2 billion Turkey s first asset management company Strong position in the sector with 12.5% market share Management of mutual funds of Garanti, pension funds of Garanti and another third party pension company, discretionary portfolio management and alternative investment management services Assets Under Management: USD 4.2 billion Leading brokerage house with 7.3% market share in BIST trading volume in 1H15 Major investment banking institution active in M&As, equity offerings, debt offerings, with a total transaction size of USD 48.8 billion Leading bookrunner in equity offerings in Turkey, with a total size of USD 21.8 billion Equity model portfolio outperforming BIST-100 by 17% on average since 2009 Executed M&A Transactions, with a total size of USD 7.8 billion in number of pension participants with 16.8% market share #3 in pension fund size with 15.9% market share #5 in life insurance premium production #5 in number of insured Effective use of bancassurance via Garanti s extensive distribution network Total Funds: USD 2.3 billion #1 in business volume market share as of March 2015 Presence in operational leasing sector with Garanti Fleet since 2007 Business Volume: USD 411 million * Based on Garanti Bank Consolidated Financial Statements dated June 30, 2015 in factoring volume with 10.6% market share as of March years of presence in the sector Its shares are publicly traded in BIST with an actual free float ratio of 8.4% Highest rated factoring company in the BIST Corporate Governance Index Factoring Volume: USD 3.0 billion

7 Sustainability & Corporate Governance Garanti defines sustainability as a commitment to build a strong and successful business for the future, while minimizing negative environmental and social impacts, and sharing long-term values with its stakeholders and the communities it operates in. Garanti aspires to achieve its aim of sustainable banking through technological innovations, managing the environmental footprint of its operations and developing sound environmental & social risk assessment as part of its risk management framework. The Bank also recognizes the importance of an effective organizational structure and strong corporate governance to maintain ongoing development and successfully deliver its sustainability objectives. Garanti is aware of the need to collaborate and engage with its peers and suppliers on a global level to identify new opportunities, capture emerging best practices and products and remain a sustainability leader in Turkey. Garanti is committed to corporate governance as a principal component of its strategy to maintain long-term sustainable growth by continuously creating value for all its stakeholders. For Garanti, the essentials of a good corporate governance practice are transparency, accountability, straightforwardness, fairness, integrity and ethical values. These essentials allow the Bank to implement an effective risk management system and play a key role for the Bank to demonstrate full compliance with the law and regulations, and to establish open and transparent communication with its stakeholders. The Remuneration Committee, the Audit Committee and the Corporate Governance Committee are the corner stones of the Bank s corporate governance structure. 1H 2015 Highlights Launched its support for CDP Water program. Supported Heforshe initiative which emphasizes men s support for women rights. Launched efficient irrigation systems loan for agriculture sector. Established Women Committee within the bank to further enhance its support for women s empowerment. Supported Sustainable Finance Sector Meeting organized by Business Council for Sustainable Development in Turkey. Organized Pink Soiree meeting with the participation of women employees at Garanti Bank, with the theme women s empowerment, in order to raise awareness of employees on gender issues. Ranked first among banks with the highest score in the Transparency in Corporate Reporting research and in the overall score consisting of three dimensions, i.e. Reporting on anti-corruption programmes, Organizational transparency and Country-by-country reporting, conducted by Transparency International Turkey. Presented its Women Entrepreneurship Program during 2015 WEPs Annual Event named Unlimited Potential: Business Partners for Gender Equality held in New York on March, As a UNGC signatory, participated in UN Global Compact ( UNGC ) 15+ which was organized to celebrate UNGC s 15 year anniversary. As the main sponsor of CDP Turkey Water Program, Garanti has extended its support for two workshops which aimed to build capacity among the companies invited to respond to the program. Having submitted its response to CDP Climate Change Program for the fifth time, Garanti has become one of the first companies in Turkey to submit its response to CDP Water Program. Supported III. Sustainable Finance Forum organized by Turkish Business Council for Sustainable Development, in collaboration with UNEP FI and the local network for UN Global Compact on May 5 th. Submitted its Communication on Progress to UNGC. Received limited assurance from a third party for the second time on its 2014 Scope 1 and Scope 2 GHG emissions. Became the first Bank in Turkey to ratify Caring for Climate (C4C) statement, an initiative aimed at advancing the role of business in addressing climate change. For more information, please visit

8 For further information please contact Garanti Investor Relations. Address: Levent, Nispetiye Mah. Aytar Cad. No: 2, 34340, Beşiktaş, Istanbul-Turkey Tel: +90 (212) Fax: +90 (212) Web: Garanti_IR Disclaimer: This report has been prepared by Garanti Bank Investor Relations Department and is provided for information purpose only. Although the information on which the report is based has been obtained from sources which we believe to be reliable, no representation or warranty is made by Garanti Bank for the accuracy or completeness of the information contained herein. Information contained herein is subject to change without notice. Garanti Bank and/or any person connected with it accepts no liability whatsoever for any direct or consequential loss of any kind arising out of the use of this document or any part of its contents.