Assessment of 2016 Financial Results Ordinary General Meeting of Shareholders 30 March 2017
RECORD HIGH PROFIT Net Income (TL Million) 3,615 42% 5,148 ROAE 15.4% vs. 12.8% in 2015 TL 300mn free provisions remain as buffer Note: Leverage defined as Liabilities/SHE 2
COMPOSITION OF ASSETS CONTINUED TO BE CUSTOMER DRIVEN Total Assets (TL Billion) 12% Other Interest Earning Assets Non-Interest Earning Assets Securities Loans 279.6 312.1 9% 10% 15% 13% 15% 14% 60% 63% Increasingly customer-driven asset mix Asset growth remained lending driven throughout 2016 Loans/Assets reached its highest level: 63% Securities continued to serve as hedge against volatility Note: Accrued interest on B/S items are shown in non-ieas 3
CONTINUED TO SUPPORT THE ECONOMY WHILE PRESERVING SOUND ASSET QUALITY Performing Loans (TL Billion) 17% Main drivers of loan growth YoY Growth TL Business Banking Loans 1 25% 170.4 200.1 Consumer Loans 13% Mortgages 17% Foreign Currency (FC) 41% (4%) * 41% Auto Loans 25% Turkish Lira(TL) 59% 18% 59% Sound asset quality NPL ratio: 3.0% -- maintained below sector s Total Cash Coverage Ratio 2 : 131% * In US$ terms 1 TL business banking loans; TL loans TL retail loans 2 Includes specific and general provisions 4
SOLID & WELL-DIVERSIFIED FUNDING MIX Reigned by deposits & further reinforced with increasing share of free funds Composition of Liabilities Repos 4% Funds Borrowed 15% Bonds Issued 6% Other 7% SHE 11% Demand Deposits 15% Demand Deposits (TL Billion) 22% 46.7 38.3 vs. Time Deposits 42% Deposits/Assets: 57% Total Deposits Growth YoY: +14% 1 Sector data is based on BRSA weekly bank-only data as of December 30, 2016, commercial banks only. 5
HIGHEST SUSTAINABLE INCOME GENERATION CAPACITY AND EFFICIENT COST MANAGEMENT NIM (incl. Swap costs) +30bps YoY Net Fees & Comm. (TL billion) +10% YoY OPEX +6% YoY Garanti Peer I Peer II 1 4.5% 4.2% 3.9% 3.2 2.8 2.8 2.4 +7pp YoY improvement in Cost/Income ratio Highest per branch efficiency Effective utilization of digital channels: Managing Turkey s largest digital customer base Peer III 3.9% 1 Garanti Peer I Peer II Peer III HIGHEST CORE OPERATING INCOME 1 1 Comparison is among 4 large private banks and based on BRSA bank-only financials Note: Core Operating Income defined as NII excluding income on CPI linkers + Net F&C - Net Specific & General Provisions + Net Swap Gains/Losses-OPEX 6
CAPITAL GENERATIVE GROWTH STRATEGY ASSURES SOUND SOLVENCY RATIOS Capital Adequacy Ratios CAR: +115bps YoY 13.5% 12.8% 12.9% 14.7% 13.6% 13.6% CET-1: +77bps YoY Required Capital Levels 1 CAR: 9.2% CET-I: 5.7% CAR Common Equity Tier-I Total Tier-I CET-1 capital share in total: 93% vs. Highest CET-I ratio 2 : among peers 1 Required Consolidated CAR (9.158%) = 8.0% + SIFI Buffer for Group 3 (0.5%) + Capital Conservation Buffer (0.625%) + Counter Cyclical Buffer (0.033%) Required Consolidated CET-I (5.658%) = 4.5% + SIFI Buffer for Group 3 (0.5%) + Capital Conservation Buffer (0.625%) + Counter Cyclical Buffer (0.033%) 2 Among peers as of Dec16. 3 BRSA monthly data as of Dec 16 commercial banks only 7
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