Investor Presentation 2Q2011 BRSA Bank Only Results 1
Turkish Economy GDP Growth (%) 8.4% 6.9% 47% 4.7% 0.7% 8.9% 8.7% 2.5% 4.8% 2005 2006 2007 2008 2009 2010 2011E 2012E 100 90 80 70 60 50 40 30 Eurozone vs Turkey: Public Debt/GDP (%) Eurozone Turkey IMF Forecast Maastricht Criteria: 60% 2002 2004 2006 2008 2010 2012 2014 2 Balance of Payments Fiscal Balance 0.0 0.0% -10.0 2007 2008 2009 2010 2011T 2012T -1.0% 6.0% -20.0-2.0% 20% -3.0% 4.0% -30.0-4.0% 2.0% -40.0-5.0% 0.0% -50.0-6.0% -2.0% 20% 2007 2008 2009 2010 2011T 2012T -7.0% -60.0-8.0% -4.0% -70.0-9.0% -6.0% -80.0-10.0% Budget Deficit / GDP Primary Balance / GDP C/A (US$ bn) C/A / GDP Source: Turkstat, CBRT, Ministry of Finance IMF,OECD
Turkish Economy 25 23 21 19 17 15 13 11 9 7 5 Interest Rate Benchmark Bond Rate (Compound) CBRT Policy Rate (Compound) Fiyat (bps) Turkey CDS 900 5yr CDS 800 700 10yr CDS 600 500 400 300 200 100 O 08 M 08 E 08 O 09 M 09 E 09 O 10 M 10 E 10 O 11 M 11 Exchange Rate & Inflation CDS & Rating 3 1.8 17 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 $/TL Jan 10 Source: Turkstat, CBRT, IMF,OECD Apr 10 Jul 10 Yıllık Enflasyon Oct 10 Jan 11 Apr 11 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 25 2500 AA 2000 1500 1000 500 0 Greece Ire eland Countries, whose CDS and rating is higher Hu ungary Italy Be elgium Indo onesia CDS (5y) Turkey Africa S. Brazil Mexico Czech S&P Rating China Swiss Den nmark No orway 20 BB 15 B 10 B C 5 C 0 C
TSKB @ a Glance Ownership İsbank; 50.0% Free Float; 41.6% Credit Ratings (May 2011) TSKB Turkey Fitch LTFC BB + BB+ Moody s LTIR Ba1 Ba2 Main Subsidiaries Yatırım Finansman Securities TSKB Real Estate Appraisal 100% Vakifbank; 8.4% İş Leasing 96% 29% TSKB REIT 64% Corporate Governance Rating SAHA 8.92/10 Established in 1950 Largest private investment & development bank, 15 th largest bank in Turkey USD 5.3 billion asset size 351 employees, 3 branches TSKB 4
Snapshots Sustainable Profitability; Stable Net Interest Margin Profitability higher than last year; Implying 6.4% yoy increase, net Income reached TRY 130 mn, RoE @ 20.3%, still strong similar to last quarter 20.9% NIM @ 4.11%, flat ytd C/I ratio @ 15.3%, Up by 7.4% ytd, total assets keep growing without compromising on asset Robust Asset Quality; High Efficiency quality, Loan volume totaling USD 3.4 bn; up by 9.7% ytd (in USD terms) Gross NPL decreased by 20.2% ytd and NPL dropped to 0.37% Cost of risk @ 0.41% CAR @ 20.3%;free capital @ 11.9% Leverage ratio 6.5X 5
Banking Sector vs TSKB 2011 2Q Banking Sector TSKB CAR 17.1% 20.3% Loans/ assets 54.% 65.1% NPL 2.9% 0.4% Cost to income 43.6% 15.3% NIM 3.9% 4.1% ROAE 15.5% 20.3% Banking Sector TSKB 60% Deposits 64% Long Term Funding 6 60% of liabilities are deposits 64% of liabilities are long term funding (Average maturity is less than 3 months) (Average maturity is 12 years)
Business Lines MAIN BUSINESS LINES Corporate Banking Investment Banking Treasury Key Subsidiaries Corporate Loans Corporate Finance ALM Yatırım Finansman Securities Project Finance Brokerage Fixed Income TSKB REIT Apex Banking Asset Management Spot&Derivative Trading TSKB Real Estate Appraisal Trade Finance TMU TSKB Real Estate Advisory TSKB Real Estate Brokerage 7
Corporate Loans Corporate Lending and SME Loans Between 2005 Leasing Trade Finance Non cash Loans 2010, TSKB has financed half of USD 7.7 bn investments and contributed to the creation of 15.000 new jobs. 8
Project Finance Renewable energy investments reached USD 6.1 bn of which USD 1.8 bn is underwritten by TSKB. 96 projects with totalt installed capacity of 3,335335 MWin Hydro, Wind, Geothermal and Biomass. 55 of these projects are syndicated with other banks. 17 of 18 Electricity Distribution Privatization were completed and TSKB has financed four of them. 2011 Prospects Two awards to TSKB Euromoney Project Finance Magazine 2010 Deals of the Year Alternative energy sources European Hydro PowerDeal of the Year European Utilities Deal of the Year Acquisition finance Real Estate Sector Boyabat Dam ve HES Project Finance Uludağ Electricity Distribution and Çamlıbel Electricity Distribution Shares Purchase Project Finance 9
Apex Banking 5 Commercial Banks 12 Leasing Companies 10 Commercial Banks 9 Leasing Companies 13% of lending through APEX scheme Placed through 23 intermediary financial instituions USD 1.49 bn APEX funds; USD 1,200 mn to exports, USD 219 mn to SMEs Reached over 1,000 companies. A new agreement signed with the World Bank amounted to USD 300 mn. SMEs Exporters 10
Long Term Funding Outstanding Funding Base 3,016 USD mn 2,848 2,513 2,036 1,670 3,382 World Bank (IBRD) European Investment Bank (EIB) Council of Europe Development Bank (CEB) 368 640 413 94 258 245 Kreditanstalt für Wiederaufbau (KfW) 2006 2007 2008 2009 2010 2011 2Q2Q Long term Funds Short term funds Multilateral Funding Agreements (anually) USD mn 1039 Agence Française de Developpement (AFD) International Finance Corporation(IFC) 145 279 549 121 407 2006 2007 2008 2009 2010 2011 11
Funding Base Long Term Funding; 93% Funding Total LT outstanding funds: USD mn 3,382 ; Since 2009 totaling USD mn 1,684 agreements were signed. Short Term Funding; 7% Outstanding LT Funds Long term funding average maturity: 12 yrs 93% of long term funds guaranteed by Turkish Treasury EIB 35% Short term funding: 7% (Syndications, Bilateral Borrowings) IBRD 45% CEB 8% AFD 6% KFW 4% 12
Corporate Finance Privatization The forefront advisor of the most strategic asset privatizations Recent track record in port, motorways & bridges privatization projects to sell side Continues 2010 2008 M&A and Strategic Advisory Buy Side Advisory Leading investment bank in the energy sector M&A buy side mandates of electricity and gas distribution projects Continues 2010 2010 2010 2010 Sale of Akenerji and Sedaş Ayedaş and Akdeniz Electricity Distribution Gediz Electricity Distribution Dicle Electricity Distribution Başkent Natural Gas Distribution Motorways & Bridges İskenderun Port Bandırma Port TSKB TSKB TSKB TSKB TSKB 175.5 milyon ABD$ Buy Side Advisory Buy Side Advisory Buy Side Advisory Buy Side Advisory Buy Side Advisory TSKB TSKB TSKB Advisory to PA Advisory to PA Advisory to PA Other Strategic t Advisory Services Company and asset valuations Feasibility studies Brand appraisals Establishment of new companies and investment trusts Sell Side Advisory ImpressiveI i track record in M&A sell side mandates for various sectors Continues 2010 2009 Bizfonik Eston VARYAP Construction Company TSKB TSKB TSKB Sell Side Advisory Sell Side Advisory Sell Side Advisory 13
Public Offering & Bond Origination Ongoing Ongoing Türk Hava Yolları Advisory for ÖİB Completed Public Offering Advisor of Turkish Privatization Administration since February 2011 Scope of work includes strategy, valuation, legal infrastructure, marketing, etc. Execution Options: SPO, block sale or both. 3 IPOs were completed in 2010. Emlak Konut REIT IPO was the 5th biggest IPO in Turkish history. TSKB REIT IPO is the first REIT IPO in year 2010. Aksa Energy is the largest indepedent power producer of Turkey. TSKB has won EMEA Finance s Best Equity House in Turkey 2010 award in Europe Banking Awards. Şekerbank Bank Bill Issuance Consortium Leader 12 and 18 months maturity TRY 350 mln March 2011 TSKB Bank Bill Issuer and Consortium Leader Bond Origination 2011 Completed 2010 Şekerbank Bank Bill Issuance Consortium Leader 12 and 24 months maturity TRY 150 mln March 2011 Ekspo Factoring Bond Issuance Consortium Leader 180 and 360 days maturity 2 years maturity TRY 200 mln TRY 20 mln August 2010 October 2010 14
Asset Management & Brokerage Conventional Investment Funds Private Asset Management TSKB Investment Trust Assets Manegement Other Mutual Funds Capital Guaranteed Funds under the Umbrella fund TSKB Energy Index at ISE Secondary capital market transactions: Investment Advisory and brokerage services to private&institutional customers in equity, fixed income, FX and derivative products TSKB Trading Platform (TTP) Istanbul Ankara İzmir branches Capital Guaranteed Umbrella Funds (TRY mn) 13 TSKB Investment Trust AUM (TRY mn) 164 332 Outstanding Total 2011 1Q 15
Financial Highlights Foreign Currency Turkish Lira Assets Liabilites Assets Liabilities Long Term Loans 5 years 62% Long Term Funds 12 years 64% Liquid Assets 23% Repo 12% Free Capital 12% TRY FX 16
Composition of Assets Loan/ Asset ratio: 65% TRY Bn 38% 39% 35% 31% Liquid Assets 57% 57% 61% 65% 5% 4% 4% 4% 2009 2010 2Q 2010 2011 2Q 6.9 7.3 79 7.9 8.5 Loans Others Securities/ es/ Assets: 27% 72% of assets are FX denominated 62% of liquid assets are TRY government bonds Other assets: subsidiaries and tangible assets Total Assets (TRY) 2009 2010 2Q 2Q 2010 2011 2Q 2Q 7.4% (ytd) 17
Loans USD Mn, 2,642 2,612 3,125 10% 3,427 Energy egy Distrubution 5% Logistics 10% Loans by Sector Other 23% Construction 5% Metal 4% Tourism 4% 2009 2010 2Q 2010 2011 2Q 97% foreign currency denominated No currency mismatch 47% in EUROs, 50% USD 5 years of average maturity 0.4% NPL Ratio Energy Production 31% Apex 13% Corporate Loans 39% Loans by Type Finance 17% Project Finance 48% 18
Securities Portfolio TL FX($) 327 351 300 1,943 1,881 1,985 337 1,699 Duration is 12 months in Zero Coupon bonds, 2.9 yrs in FRNs. 92% is in AFS portfolio. Floating in TRY portfolio: 78% 2009 2010 2Q 2010 2011 2Q 76% of the portfolio: TRY securities 2010 2011 2Q TRY Fixed 31% Private Private Sector Sector Bonds Bonds 11% 7% TRY TRY Fixed TRY Floating 17% Floating 41% 42% CPI FX Fixed Linked 15% 6% FX Fixed 18% CPI Linked 12% 19
Liabilities USD mn 4,612 4,585 5,105 5,264 18.6% 19.1% 61.8% 58.9% 15.0% 12.4% Repo 59.1% 64.2% Long Term Funds Other Total FX borrowings: USD 3.4 bn Paid in Capital: TRY 800 mn Leverage ratio: 6.5X 4.6% 6.7% 9.9% 8.0% 15.1% 15.4% 16.0% 15.4% Equity 2009 2010 2Q 2010 2011 2Q 20
Shareholder s Equity TRY mn Capital Adequacy Ratio 1,041 1,117 1,264 1,306 25% 25% 22% 22% 23% 20% 20% 18% 2009 2010 2Q 2010 2011 2Q 2009 2010 2Q 2010 2011 2Q CAR Tier 1 Equity Movement 130 1,306 Free Capital Ratio 1,264 47 28 12% 12% 12% 11% 2010 Equity Cash Dividend MTM Gains 2011 2Q Net 2011 2Q Profit Equity 2009 2010 2Q 2010 2011 2Q 21
Income Breakdown (TRY mn) 2010 2Q 2011 2Q Change Adj. Net Interest Income 148.3 160.0 8% Net Commisions 6.4 6.8 5% Dividend Income 22.7 25.0 10% Other Operating Income 7.9 13.0 65% Net Banking Income 185.2 204.7 11% Banking Income 11% Personnel Expenses 16.3 19.1 17% Adm. Expenses 9.1 7.7 15% Net Interest Income Other Op. Expenses 4.7 4.6 3% Operating Profit 155.1 173.3 12% Provisions(+/ ) 3.1 13.4 327% Tax Provisions 29.5 29.5 0% 8% Net Profit 122.5 130.3 6% 22
Quarterly Income Breakdown (TRY mn) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Change QoQ Adj. Net Interest Income 72 76 70 71 85 75 12% Net Commisions Dividend Income Other Operating Income Net Banking Income 2 4 2 6 4 3 32% 7 16 0 0 10 15 39% 3 5 4 5 3 10 292% 84 101 76 82 102 103 1% Personnel Expenses 8 8 8 12 10 9 8% Adm. Expenses 4 5 3 4 4 4 6% Other Op. Expenses Operating Profit 2 3 4 2 3 2 46% 70 85 61 64 85 88 3% Provisions(+/ ) 1 2 0 9 3 10 178% Tax Provisions 13 17 15 12 15 14 6% Net Profit 56 66 46 43 67 64 4% 23
Income Breakdown Net Profit 7% Income Breakdown 122 130 86% 80% 84% 79% 3% 6% 5% 4% 12% 4% 4% 7% 5% 3% 12% 6% Net Interest Income Commissions Dividend Other 2010 2Q 2011 2Q 2009 2010 2Q 2010 2011 2Q Net Interest Income Breakdown 38% 50% 50% 60% 62% 50% 50% 40% 2009 2010 Q 2010 2011 Q Liquid Assets Loans Commission Income Breakdown 27% 16% 25% 15% 37% 15% 21% 10% 16% 36% 27% 7% Brokerage Fund Mng. Corporate Finance 41% 46% 28% 33% Non cash 2009 2010 2Q 2010 2011 2Q Loans 24
Key Performance Indicators 19.5% 22.7% ROAE 18.4% 20.3% 2.7% 3.5% ROAA 2.9% 3.2% Cost to Income 17.9% 17.6% 16.0% 15.3% 2009 2010 2Q 2010 2011 2Q 2009 2010 2Q 2010 2011 2Q 2009 2010 2Q 2010 2011 2Q NIM Spread 3.0% 3.2% 4.42% 2.3% 2.6% 4.07% 4.32% 4.39% 4.10% 4.11% 25 2009 1Q 10 2Q 10 2010 1Q 11 2Q 11 2008 2009 2010 2011 2Q
Contact Us Financial Institutions & Investor Relations Meclisi Mebusan Caddesi No: 81 Fındıklı 34427 Istanbul Turkey Email: fi_ir@tskb.com.tr Tel: +90 (212) 334 5124 5194 5129 Fax: +90 (212) 334 5234 Internet: www.tskb.com 26