ISBANK INVESTOR PRESENTATION 2017 Q3

Transcription

1 ISBANK INVESTOR PRESENTATION 2017 Q3

2 Contents Isbank at a Glance 3 Financial Highlights 7 Retail Banking 26 Major Equity Participations 29 2

3 Isbank at a Glance 3 Financial Highlights 7 Retail Banking 26 Major Equity Participations 29 3

4 Isbank in Brief Widespread shareholder base Isbank Pension Fund 39.95% Free Float 31.96% Ataturk Shares 28.09% Stocks are quoted at BIST and also traded at LSE in the form of GDRs. Largest stake owned by employees via pension fund 1,348 domestic branches country-wide (largest among private banks), and 22 foreign branches 6,572 ATMs (largest ATM network among private banks) Nationwide coverage International coverage Isbank Branches in Northern Cyprus HO + 10 Isbank AG Branches in Germany Bank Subsidiary HO + 3 Isbank Russia Branches in Russia Bank Subsidiary Isbank Branches in London, UK. 1 Isbank AG Branch in Amsterdam, the Netherlands HO+2 Isbank Georgia Branches in Georgia - Bank Subsidiary Number of Branches 1,309 1 Branch in Manama, Bahrain 1 Isbank AG Branch in Paris, France 1 Representative Office in Shang-hai, China 1,358 1,377 1,374 1, Q3 2 Branches in Arbil and Baghdad, Iraq 1 Isbank AG Branch in Zurich, Switzerland 1 Representative Office in Cairo, Egypt 2 Branches in Pristine and Prizren, Kosovo 1 Isbank AG Branch in Sofia, Bulgaria 4

5 Main Business Lines Banking Services Other Financial Services Corporate Banking Commercial Banking Retail Banking Private Banking Capital Market Operations Other Banking Services Insurance Private Pension Asset Management Venture Capital Investment Banking REIT Leasing & Factoring Brokerage & Custody 5

6 The Largest Private Bank Market Share (%) 2017 Q3 Rank (2) Main Balance Sheet Items (1) Total Assets st Total Loans st TL Loans st FX Loans st Consumer Loans (3) nd Non-Retail Loans st Total Deposits st TL Deposits st FX Deposits st Demand Deposits st Other Products & Distribution Network Volume of Debit Cards (4) nd Number of POS (4) rd Acquiring Volume (4) rd Number of Credit Cards (4) rd Issuing Volume (4) rd Number of Branches st Number of ATMs st (1) Market share calculations are based on weekly BRSA data excluding participation banks. Total assets market share is based on monthly BRSA data. (2) Ranking among private-sector banks (3) Including retail overdraft accounts (4) Market share calculations are based on Interbank Card Center (BKM) data. 6

7 Isbank at a Glance 3 Financial Highlights 7 Retail Banking 26 Major Equity Participations 29 7

8 Growth Performance Total Assets (TL mn.) Loans (TL mn.) 11.2% 12.5% 210, , , , , , , , , , Q3 Deposits (TL mn.) Q3 Shareholders Equity (TL mn.) 9.4% 13.9% 120, , , , ,966 23,579 29,311 32,035 35,961 40, Q Q3 8

9 Asset Structure Main Balance Sheet Items (TL mn.) Q3 Change Cash & Banks 34,656 36, % Securities (Net) 51,310 56, % Loans 203, , % Participations (Net) 10,442 12, % Fixed Assets (Net) 4,838 5, % Other Assets 7,236 7, % Total Assets 311, , % Interest Earning Assets / Total Assets Asset Composition 11.1% 10.5% 16.5% 16.4% 65.2% 66.0% 3.4% 3.9% 3.5% 3.7% Q3 Loans / Assets Cash & Banks Securities Loans Participations Fixed & Other Assets 92.2% 92.3% 91.3% 91.5% 91.6% 64.1% 65.3% 64.2% 65.2% 66.0% Q Q3 9

10 Solid Lending Franchise Loan Portfolio QoQ (TL mn.) Loans / Deposits 2.3% 1.8% 3.1% 223, , % 117.9% 111.3% 115.5% 139, ,140 83,914 86,491 TL FX * Total 2017 Q Q3 * 1.8% change in FX loans when adjusted for the change in exchange rate. Loan Portfolio YtD (TL mn.) Q3 Loans/Deposits Loans/Deposits (Adj.)* * TL securities issued added to deposits. TL / FX Mix of Loans 16.2% 7.0% 12.5% 228, , % 35.4% 36.1% 39.8% 37.8% 142, ,340 80,804 86, % 64.6% 63.9% 60.2% 62.2% TL FX * Total Q3 * 6.1% change in FX loans when adjusted for the change in exchange rate Q3 TL FX 10

11 Retail Oriented and Diversified Loan Portfolio 47% comprised of retail and SME loans. Total Loans (TL mn.) Consumer Loans (TL mn.) 203, ,631 39,895 43, % 19.1% 5.3% 5.2% 21.8% 23.0% Retail Loans 24.2% Consumer (1) 52.4% 50.9% General Purpose Consumer Loans Auto Loans Credit Cards (2) 1.7% 1.5% Housing Loans 53.3% 52.8% SME (3) Commercial & Corporate 44.4% 46.0% Retail Overdraft 1.5% 1.6% Q Q3 (1) Includes retail overdraft accounts. (2) Includes retail credit card balances only. (3) SME definition includes companies with number of employees < 250 and turnover or total assets <= TL 40 mn. 11

12 Loan Quality NPL Ratio NPL Ratio by Loan Categories (17 Q3) 3.1% 3.3% 3.2% 3.1% 3.0% 2.6% 2.4% 2.4% 2.4% 2.4% 16 Q3 16 Q4 17 Q1 17 Q2 17 Q3 Isbank Sector * Consumer Credit Cards SME (1) (2) 2,1% 2,9% 5,0% 6,4% 3,6% 4,7% 1,7% Corp. And Comm. 1,7% 2,4% Total Loans 3,0% Isbank Sector * * BRSA weekly data, excluding participation banks. * BRSA weekly data, excluding participation banks. NPL Trends* (TL mn.) 1.02% 0.74% 0.67% 0.45% 0.27% Other Indicators (2017 9M) Collection Rate 20.1% Gross CoR (4) (3) 118 bps Coverage Ratio 84.4% 16 Q3 16 Q4 17 Q1 17 Q2 17 Q3 Additions to NPLs Recoveries Net NPL Formation - Net NPL Formation Rate** (1) Includes retail overdraft accounts. (2) SME definition includes companies with number of employees < 250 and turnover or total assets <= TL 40 mn. (3) Collections / (Prior period ending balance NPL + Additions) (4) (Specific Loan Loss Provisions + General Loan Loss Provisions ) / Average Performing Loans * Quarterly 12 ** Net NPL Formation (annualized) / Average Loans

13 Securities Portfolio Breakdown of Securities (2017 Q3) Total Portfolio TL Floating 48,6% TL Fixed 32,8% FX Fixed 18,6% Q3 TL Securities (TRY bn.) FX Securities* (USD bn.) * USD equivalent. FX Securities (TRY bn.) Total Securities (TRY bn.) Government bonds and treasury bills constitute 98% of total portfolio. 31.9% share of CPI linkers in total portfolio 469 mn. TL interest revenue and 10.5% quarterly yield on CPI linkers portfolio. Yields of TL and FX securities are 10.15% and 4.28%, respectively in 2017 Q3. Average durations are 1.66 years for TL Securities 6.40 years for FX Securities 13

14 Strong Fund Generation Capability Main Balance Sheet Items Liabilities Composition (TL mn.) Q3 Change Deposits 177, , % REPOs & Money Market 20,593 25, % Funds Borrowed 30,885 32, % Securities Issued 22,465 24, % Other* 24,362 29, % Equity 35,961 40, % Total Liabilities & Equity 311, , % 11.5% 11.8% 7.8% 8.5% 7.2% 7.1% 9.9% 9.4% 6.6% 7.2% Equity Other* Securities Issued Funds Borrowed Largest TL funding base among private-sector banks 56.9% 56.0% REPOs&Money Market Deposits Q3 * Includes subordinated debt of USD 1.4 bn as of 2016 and USD 1.9 bn plus TL 1.1 bn as of 2017 Q3. 14

15 Largest Deposits Franchise a clear indicator of customer trust. Deposits QoQ (TL mn.) Market Shares 1.4% 2.4% 0.5% 191,289193, % 13.7% 12.2% 12.0% 10.8% 10.5% 90,955 93, ,334100,814 TL FX * Total 2017 Q Q3 * -0.7% change in FX deposits when adjusted for the change in exchange rate. Deposits YtD (TL mn.) 9.4% Q3 TL Deposits FX Deposits Total Deposits Largest market share in TL, FX, demand, savings and total deposits among private sector banks 4.9% 13.8% 193, ,360 TL savings deposits account for deposits. 33% of total 88,765 93,152 88, ,814 TL FX * Total Q3 * 12.8% change in FX deposits when adjusted for the change in exchange rate. 15

16 Demand Deposits 22.8% 23.1% 22.6% 23.9% 23.9% 24.6% 25.6% 24.8% 26.4% 25.0% 27.2% 25.8% 25.4% 28.1% 26.4% make significant contribution to lower cost of funding. Demand Deposits (TL mn.) Share of Demand Deposits 17.7% 51,297 43,599 25,623 57% 29,431 54% 34,683 50% 49% 46% 16 Q3 16 Q4 17 Q1 17 Q2 17 Q3 * Excluding interbank deposits TL* FX* Total 43% 46% 50% 51% 54% 15.3% market share in demand deposits (largest among private-sector banks) Q3 TL FX 16

17 Sufficient Capitalization 270,199 40, ,138 42, ,496 46, ,600 48,672 Comfortable level of capital Capital Adequacy Ratio RWAs & Regulatory Capital (TL mn.) 16.53% 16.98% 15.17% 14.94% 13.14% 13.01% 14.01% 14.06% 16 Q4 17 Q1 17 Q2 17 Q3 CAR Tier I Ratio Equity Growth (TL mn.) 25.0% 25.0% 20.3% 20.1% 17.5% 20.7% 16 Q4 17 Q1 17 Q2 17 Q3 RWAs Regulatory Capital Capital adequacy ratio is well above the regulatory limit. 47,180 40,461 6,238 35,244 31,535 4,500 3,209 23, ,224 17, ,427 40,942 29,311 32,035 35,961 22,719 23,579 17, Q3 Shareholders' Equity Cash Dividends Reinvested at ROE Payout Ratio Buffers (%) Capital Conservation Buffer Counter Cyclical Buffer (1) SIFI Buffer (2) (1) To be determined in the relevant years (2) Taken into consideration only on a consolidated basis 17

18 Income Statement Highlights (QoQ) Main Income Statement Items (TL mn.) 2017 Q Q3 QoQ Net Interest Income 3,205 3, % (1) (-) SWAP Cost % Net Interest Income Incl. Swap Cost 2,791 2, % Net Fees & Commissions % Net Trading Gains/Losses Excl. Swap Cost NM Dividends Received % Released Provisions % Other Operating Income % Total Operating Income 3,993 3, % HR Expenses % Non-HR Expenses 1, % Total Operating Expenses 1,923 1, % (2) Total Operating Expenses - Adj. 1,857 1, % Operating Profit 2,070 2, % Operating Profit - Adj. (2) 2,136 2, % Specific Loan Loss Provisions % General Provisions % Other Provision Charges % Total Provision Charges % Tax Provisions % Net Income 1,245 1, % NM: Not meaningful (1) Based on MIS data (2) Adjusted for one-off and non recurring items. Please see Appendices 1 and 2 on pages 35 and 36. Operating Income Composition 80.3% 81.2% 20.5% 20.7% 12.2% 9.5% -12.9% -11.4% 2017 Q Q3 31.2% 30.7% 20.7% 23.2% 14.4% 14.7% 23.1% 20.9% 10.6% 10.5% 2017 Q Q3 NII Net Commissions Other Income Net Trading Income Allocation of Operating Income Net Profit Total Provision Charges Adm. Expenses Personnel Expenses Other Operating Expenses 18

19 Income Statement Highlights (YoY) Main Income Statement Items (TL mn.) M M YoY Net Interest Income 7,806 9, % (1) (-) SWAP Cost 686 1, % Net Interest Income Incl. Swap Cost 7,121 8, % Net Fees & Commissions 2,046 2, % Net Trading Gains/Losses Excl. Swap Cost % Dividends Received % Released Provisions % Other Operating Income % Total Operating Income 10,705 12, % Total Operating Income - Adj. (2) 10,405 12, % HR Expenses 2,165 2, % Non-HR Expenses 2,512 2, % Total Operating Expenses 4,677 5, % Total Operating Expenses - Adj. (2) 4,475 5, % Operating Profit 6,027 7, % Operating Profit - Adj. (2) 5,930 7, % Specific Loan Loss Provisions 1,586 1, % General Provisions % Other Provision Charges % Total Provision Charges 1,990 2, % Total Provision Charges - Adj. (2) 1,852 2, % Tax Provisions % Net Income 3,337 4, % NM: Not meaningful (1) Based on MIS data (2) Adjusted for one-off and non recurring items. Please see Appendices 1 and 2 on pages 35 and 36. Operating Income Composition 72.9% 77.3% 19.1% 19.5% 16.6% 13.0% -8.7% -9.8% M M 31.2% 32.9% 25.1% 23.9% 13.3% 13.0% 20.2% 20.1% 10.2% 10.1% M M NII Net Commissions Other Income Net Trading Income Allocation of Operating Income Net Profit Total Provision Charges Adm. Expenses Personnel Expenses Other Operating Expenses 19

20 Commissions Income Performance Fees and Comm. Income (Net) Gross Fees & Comm. Income (TL mn.) (TL thousand) M M YoY Non-Cash Loans 319, , % Cash Loans 274, , % Mutual Fund Man. & Other Inv. Acc. Fees 163, , % Credit Cards (Net) 846, , % Fund Transfer (Net) 224, , % Insurance 124, , % Account Keeping Fees (*) 48,423 49, % Other 45,062 69, % Net Fees & Commissions 2,045,746 2,439, % Composition of Net Comm. Income 21.6% 2,926 2, M M Commission Income Coverage 29.0% 29.8% 8.0% 8.2% 41.4% 37.8% Lending Related Fees Mutual Fund Man. And Other Inv.Acc.Fees Credit Cards (*) 94.5% 97.1% 43.7% 45.2% 21.6% 24.2% M M Other M M Net Comm.Income/Operating Expenses Net Comm.Income/Personnel Expenses (*) Retail account keeping fees have been suspended since the end of January

21 Margin & Spreads (1) NIM (Cumulative) (2) TL Loan-Deposit Spread (Quarterly) NIM NIM - Swap Adjusted 4.27% 4.37% 3.93% 3.87% 14.07% 14.31% 8.54% 9.22% 5.53% 5.09% Loan Yield Deposit Cost TL Spread M 2017 Q Q3 NIM (Quarterly) (2) FX Loan-Deposit Spread (Quarterly) NIM NIM - Swap Adjusted 4.33% 4.24% 3.77% 3.63% 5.26% 5.52% 1.34% 1.36% 3.92% 4.16% Loan Yield Deposit Cost FX Spread 2017 Q Q Q Q3 (1) Based on MIS data (2) Interest earning assets include Central Bank reserves. 21

22 Effective Cost Management Cost / Income (1) Employees per Branch 46.2% 43.7% 43.4% 41.4% Q Q3 Cost / Income Cost / Income (Adjusted) (2) Q3 İşbank Peer Average Cost vs. Assets 2.29% 2.22% 2.09% 2.12% 2016 Q Q3 Cost/Av. Assets (1) Cost/Av. Assets (Adjusted) (3) Cost Structure 11.6% 10.5% 4.5% 4.5% 7.1% 8.3% 30.5% 30.2% 46.3% 46.6% M M Other SDIF Fees Depreciation Other Op. Expenses Personnel Expenses (1) Calculations are based on trailing four quarters data (2) Cost and income figures are adjusted for non-recurring and other items given in Appendix on page 36. (3) Adjusted for non-recurring and other items given in Appendix-2 on page 36. (4) Peer banks are defined as the closest 3 private sector banks. 22

23 Profitability Ratios ROAA ROAE 15.63% 14.83% 16.59% 17.46% 13.70% 13.15% 12.14% 13.75% 14.45% 1.66% 1.64% 1.52% 1.54% 1.19% 1.63% 1.66% 1.68% 1.72% 10.40% 1.17% Q3 (1) (1) Q3 ROAA ROATA (2) ROAE ROATE (2) (1) Calculations are based on trailing four quarters data. (2) Tangible Equity (TE) and Tangible Assets (TA) are calculated by the deduction of M-t-M valuation differences regarding AFS portfolio, listed participations and real estate portfolio from shareholders equity and total assets. 23

24 Digitalisation Share of Transactions per Channel Number of Customers ( 000) 23X 1,7X 74.8% 37.6% 30.3% 2.2% 83.8% 85.9% 31.9% 37.8% 25.1% 22.8% 22.9% 21.5% 207 3,633 4,739 2,768 2,809 1, mn Digital Customers (*) Q3 Internet Banking ATM Mobile Banking Total Non-Branch Digital Banking Market Shares (*) Mobile Banking Internet Banking Q3 (*) As of October 2017 Share of Digital Channels in Sales (*) # Transactions Mobile Internet Banking Banking Investment 27.0% 17.7% Credit Cards 19.7% 21.3% Money Transfer 20.3% 15.7% Payments 21.8% 13.8% 57.0% Time Deposits 35.0% GPLs (*) Source: TBA, as of 2017 Q2 (*) Unit retail sales in M 24

25 Ratings FC Issuer Credit LC Issuer Credit Turkish National Scale Rating* BB / Negative / B BB / Negative / B traa- / tra-1 Rating* FC Issuer Default Rating BB+ / Stable / B LC Issuer Default Rating BB+ / Stable / B National Long Term Rating AA+(tur) / Stable Viability Rating bb+ Support Rating 4 Support Rating Floor B+ FC Bank Deposit LC Bank Deposit FC Issuer FC Subordinated Debt Rating* Ba2 / Negative / Not-Prime Ba1 /Negative / Not-Prime Ba1 / Negative Ba3 / B1 (hyb) * Long term / Outlook (if exists) / Short term 25

26 Isbank at a Glance 3 Financial Highlights 7 Retail Banking 26 Major Equity Participations 29 26

27 Credit Card Business Over 325,000 Maximum Sales Points and over 322,000 chains are included in loyalty programme. The number of cards reached 11.5 million, 7.3 million of which are issued to Bank s own customers. Largest e-commerce acquirer in Turkey. 13 alternative payment methods (Ideal, Giropay, EPS, Alipay, QIWI, Mybank, Sofort, Entercash, Bancontact, Multibanco, P24, Trustpay, Safetypay) in e-commerce. Online merchants are able to accept these payment methods thanks to Isbank s strong e-commerce API. Acceptance of Visa, Mastercard, American Express, JCB and Union Pay branded cards. Merchant acquiring in UK, Iraq and Georgia in addition to Turkey. Issuing debit cards in Iraq, UK, Georgia and Kosovo in addition to Turkey. (TL million) (*) M M Change Issuing Volume 60,526 70,290 16% Issuing Volume Market Share 13.6% 14.2% 0,5 pp Acquiring Volume 68,730 84,581 23% Acquiring Volume Market Share 15.8% 16.8% 1,1 pp Balance 12,623 14,355 14% Number of Credit Cards (000) 6,932 7,310 5% Number of P.O.S. Terminals 487, ,754-4% * According to Interbank Card Center data 27

28 Strong Retail Customer Base supported by payroll accounts and bill payment agreements. Payroll Accounts (TL mn) (Total amount of wages paid in the period) Automated Bill Payments (TL mn) 39,102 40,793 30,271 28,624 6,694,922 7,003, M M Amount (TL mn) M M Amount (TL mn) Number of Active Payments Automated bill payments and payroll accounts are important sources for low cost demand deposits. Payroll accounts create significant cross selling opportunities. 28

29 Isbank at a Glance 3 Financial Highlights 7 Retail Banking 26 Major Equity Participations 29 29

30 Isbank and Its Participations as one of the biggest conglomerates in Turkey. Isbank Banking Services Corporate Banking Commercial Banking Retail Banking Private Banking Capital Market Operations Other Banking Services Core Business Financial Participations Insurance Private Pension Asset Management Venture Capital Investment Banking REIT Leasing & Factoring Non-core Business Non-financial Participations Glass Others Brokerage & Custody 30

31 A Diversified Equity Participation Portfolio Sectoral Breakdown Glass 49.4% Other 5.3% Banks 16.7% Insurance 9.8% 18.8% Financial Ins. Non-Financial 54.7% Financial 45.3% As of 30 September 2017, Isbank has 19 participations. Since 2002, a total of 41 participations has been divested. Share of participations in total assets is 3.5% as of the end of 2017 Q3. Non - Listed 14.9% Listed 85.1% 31

32 Glass General Information Market/Production Shares (%)* Turkey Europe 2,3 World 3 A leading flat glass, glassware, glass packaging, glass fibre, soda ash and chromium chemicals producer in the domestic market. Backed by its vision, Şişecam expands its production operations into neighbouring countries % share of Şişecam is held by İşbank. Flat Glass Glassware Glass Packaging Soda Ash Chromium Chemicals Financial Information (Con., IFRS) USD (Million) 2017/6 2016/12 Total Assets 5,688 5,488 Shareholders Equity 3,426 3,246 Net Sales 1,537 2,413 International Sales ,268 Gross Profit Includes exports and sales from production abroad. 2. Market shares including Turkey. For Soda Ash and Flat Glass, European market does not include Russia and Ukraine. 3. Production/capacity shares. 4. Soda products are based on heavy soda ash and light soda ash in the domestic, European and Global market. Soda ash sales within Turkey and BiH are considered in European market share. 5. Chromium chemicals are based on Basic Chromium Sulphate. *market share in production capacity as of EBITDA

33 Production Plants of Şişecam Flat glass Glassware Glass packaging Chemicals The Group enlarges its business area by expanding its operations to the fastest-growing countries in its region 33

34 List of Financial Participations Company Name Field of Activity Bank s Direct Share(%) Risk Group Share (%) Shareholders Assets (USD Market 000) (3) Equity (USD 000) (3) Share (%) (3) Basis for Market Share Türkiye Sınai Kalkınma Bankası A.Ş. Investment Bank ,417, , Total Assets İşbank AG Banking ,526, ,150 N/A JSC İşbank Banking ,896 66,885 N/A JSC Isbank Georgia Banking ,340 12,677 N/A Total Assets Anadolu Anonim Türk Sigorta Şirketi Insurance ,876, , Premium Income Anadolu Hayat Emeklilik A.Ş. Life Insurance & Private Pension ,630, , / 8.5 (1) Management / Life Premium Private Pension Funds Under Income Milli Reasürans T.A.Ş. Reinsurance , , (2) Premium Income İş Yatırım Menkul Değerler A.Ş. (4) Brokerage House ,213, , Transaction Volume Yatırım Finansman Menkul Değerler A.Ş. (4) Brokerage House ,134 22, Transaction Volume İş Yatırım Ortaklığı A.Ş. Trust Company ,514 65, NAV İş Portföy Yönetimi A.Ş. Portfolio Mngt ,473 25, Funds Under Management İş Finansal Kiralama A.Ş. (4) Leasing ,475, , Lease Receivables İş Faktoring A.Ş. Factoring ,115,294 44, Factoring Receivables İş Gayrimenkul Yatırım Ortaklığı A.Ş. REIT ,472, , Market Value İş Girişim Sermayesi Yatırım Ortaklığı A.Ş. Risk Venture ,694 74,066 - Efes Varlık Yönetim A.Ş. Asset Management ,882 5,546 - TOTAL 24,455,573 3,866,154 (1) As of June 30, 2017; total amount of funds (including state contribution) managed within private pension system is TL 69.7 billion while Anadolu Hayat Emeklilik accounts for 18.7% of this figure. The company s market share in life insurance market is 8.5% as of the same date. (2) Milli Reasürans T.A.Ş. is the only reinsurance company backed by national capital operating in Turkey with a market share of 8.3%. The rest 91.7% is shared by foreign reinsurance companies. (3) As of (4) Consolidated amount 34

35 Appendix 1 Income Statement Highlights (TL mn.) 2017 Q Q3 QoQ M M YoY Net Interest Income 3,205 3, % 7,806 9, % (-) SWAP Cost(*) % 686 1, % Net Interest Income Incl. Swap Cost 2,791 2, % 7,121 8, % Net Fees & Commissions % 2,046 2, % Net Trading Gains/Losses Excl. Swap Cost NM % Dividends Received % % Released Provisions % % Other Operating Income % % Total Operating Income 3,993 3, % 10,705 12, % (-) Payment from Visa 0 0 NM NM Total Operating Income - Adj. 3,993 3, % 10,405 12, % HR Expenses % 2,165 2, % Non-HR Expenses 1, % 2,512 2, % Total Operating Expenses 1,923 1, % 4,677 5, % (-) Fee Rebates % % (-) Pre-Provision for Pension Fund % % Total Operating Expenses - Adj. 1,857 1, % 4,475 5, % Operating Profit 2,070 2, % 6,027 7, % Operating Profit - Adj. 2,136 2, % 5,930 7, % Specific Loan Loss Provisions % 1,586 1, % General Provisions % % Other Provision Charges % % Total Provision Charges % 1,990 2, % (-) Provisions for Payment to SDIF 0 0 NM NM Total Provision Charges - Adj % 1,852 2, % Tax Provisions % % Net Income 1,245 1, % 3,337 4, % NM: Not meaningful (*) Based on MIS data 35

36 Appendix 2 Non-recurring and Other Items (TL mn.) 16 Q2 16 Q3 16 Q4 17 Q1 17 Q2 17 Q3 Other Operating Income Payment from Visa 300 Total Operating Income 300 Non-HR Expenses Fee rebates Provision expenses related to pension fund Provision for pension fund 213 Pre-provision for pension fund Other Provision Charges Provisions for payment to SDIF Impairment charge for an unlisted participation 149 Total Expenses

37 Disclaimer Statement The information in this document has been obtained by Turkiye Is Bankasi A.S. ( Isbank ) from sources believed to be reliable, however, Isbank cannot guarantee the accuracy, completeness, or correctness of such information. This document has been issued for information purposes only. The financial reports and statements announced by Isbank to the public and the relevant corporations are accepted to be the sole material. Isbank does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document or its contents due to the misleading information in this document. All estimations contained in this document are the opinions of Isbank and can be subject to change without notice. This document can not be interpreted as an advice to the investors and Isbank can not be held responsible for the results of investment decisions made on account of this document. This document has been issued specially to the person, whom the document is concerned and may not be reproduced, distributed or shared with third parties for any purpose. 37

38 Investor Relations Contact Details Süleyman H. Özcan Head of Investor Relations Division Phone : Suleyman.Ozcan@isbank.com.tr Alper Turgal Unit Manager of Investor Relations Division Phone : Alper.Turgal@isbank.com.tr 38