Investor Presentation on the FY 2014 result

Investor Presentation on the FY 2014 result

2 Azerbaijan: Key Facts General Economy Currency Population: 9.2 m Area: 86,600 km 2 Largest Cities: Baku, Ganja, Sumgayit, Mingachevir, Lenkaran GDP: USD 76 bn GDP per Capita (PPP): USD 13,486 GDP growth: 3% Inflation: 1.4% Currency: Azerbaijani Manat (AZN) 1 USD = AZN 0.7844 stable since 2011 Ratings Moody s: Baa3 / Stable Fitch: BBB-/ Stable S&P: BBB- / Stable Sources: Central Bank of the Republic of Azerbaijan, Data as of January 31, 2014; The Economist Intelligence Unit, Azerbaijan Country Report,2013

3 Azerbaijan: Key Facts USD m GDP USD m Foreign Trade Surplus 100000 80000 non-oil oil sector 25000 20000 60000 15000 40000 10000 20000 5000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 USD m Currency Reserves USD m State Oil Fund Total Assets 60000 40000 40000 30000 20000 20000 10000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0 2008 2009 2010 2011 2012 2013 2014 Sources: Central Bank of the Republic of Azerbaijan, Data as of Dec 31, 2014; The Economist Intelligence Unit, Azerbaijan Country Report, 2013; State Oil Fund of the Republic of Azerbaijan

4 AccessBank at a Glance Universal Commercial Bank with Focus on Micro and SME Lending Among Top 5 Banks in Azerbaijan; leader in micro and small business lending Strong shareholder structure with triple A rated IFI s owning majority stake Market leader in portfolio quality Highest international credit rating of local commercial banks: Investment Grade BBB- outlook stable by

5 Shareholder Structure Credit Rating IDR (S&P) International Finance Corporation (20%) AAA European Bank for Reconstruction and Development (20%) AAA Kreditanstalt fuer Wiederaufbau (20%) AAA Black Sea Trade and Development Bank (20% ) A- Access Microfinance Holding AG (16.53%) LFS Financial Systems GmbH (3.47%)

6 International Awards Euromoney quote on AccessBank s award Best Bank in Azerbaijan 2014 In 2013, the SME and microfinance specialist again easily outperformed its rivals, posting an industry-best net profit of $34.7 million up 72% on 2012 and an equally unbeatable return on equity of 28.8%. Growth was also stellar, with total assets increasing by 53.3% to pass the $1 billion mark. The Bank has continued to pursue alternative funding sources, issuing its first local currency AZN-denominated bond in December and raising $60 million in the largest-ever syndicated loan from an Azerbaijani private-sector financial institution in March. (Euromoney, Volume 45, 07/2014) Best Bank in Azerbaijan Euromoney Awards for Excellence Bank of the Year The Banker Best Emerging Market Bank Azerbaijan Global Finance

7 Financial Highlights 2014 Total Assets Loan Portfolio Total Equity Net Profit USD 1.3bn USD 1.05bn USD 185m USD 55m CAR* RoE CIR NPL** 24.8% 32.2% 59.3% 0.77 % IFRS Management accounts as of December 31, 2014 * According to Basel Capital Accord 1988 ** Portfolio at Risk >30 days

Financial Highlights 2014 2013 2012 Total Assets $1.3bn $1.0bn $656m Total Loan Portfolio $1.05bn $800m $525m Total Equity $185m $146m $121m Net Profit $55m $34.6m $20.2m CAR* 24.8% 22.8% 28.2% RoE 32.2% 28.8% 18.6% CIR 59.3% 64.8% 72.4% NPL** 0.77% 0.36% 0.63% IFRS Management accounts including 2012 and 2013 audited results * According to Basel Capital Accord 1988 ** Portfolio at Risk > 30 days 8

9 Focus on Micro and SME Lending Loan Portfolio by Segment Amount USD m Clients 9% 4% 44% Micro Portfolio 459 124,501 SME Portfolio 447 2,618 43% Retail Portfolio 95 27,830 Mortgage Loan Portfolio 38 1,052 Micro Loans Retail Loans SME Loans Mortgage Loans Data based on management accounts as of December 31, 2014

10 Continuous Dynamic Growth USD m 1400 Total Assets Loan Portfolio 1200 1000 800 600 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

11 Top Banks in Azerbaijan* Total Assets (USD m) Loan Portfolio (USD m) Total Equity (USD m) 1 Azerbaijan International Bank (IBA) 10.697 7.728 1.258 2 Kapital Bank 1.716 1.110 324 3 Xalq Bank 1.552 1.272 226 4 Pasha Bank 1.370 553 436 5 AccessBank 1.275 1.005 175 6 UniBank 1.051 862 182 7 Bank of Baku 901 813 163 8 Bank Technique 745 579 89 9 AGBank 654 475 67 10 Bank Respublika 633 389 84 12 DemirBank 540 407 78 13 Bank of Azerbaijan 506 464 61 14 Muganbank 497 358 72 15 Expressbank 365 268 167 *Ranking by Total Assets Source: Trend Ranking, Data as of October 2014, Exchange Rate USD/AZN: 0.7844

12 Extensive Countrywide Branch Network Branches: 43 Employees: 2184 29 Regional Branches 14 Branches in Baku

13 Strategy Market leader in Micro lending Maintaining leading position in SME lending Focus on Regions Focus on Agro lending Expanding Mortgage lending

Strong Profitability USD m 70 Pre-Tax Profit 30% Net Interest Margin 60 69 50 20% 17.8% 19.2% 40 30 20 10 22 26 44 10% 17.1% 14.8% 0 2011 2012 2013 2014 0% 2011 2012 2013 2014 USD m 70 Net Profit 50% RoE 60 50 40 55 40% 30% 28.8% 32.2% 30 20 10 22 20 35 20% 10% 24.3% 18.6% 0 2011 2012 2013 2014 0% 2011 2012 2013 2014 14

15 Market Leader in Portfolio Quality 5,00% PaR > 30 days ratio 4,00% 3,00% 2,00% 1,00% 0,00% I 2011 III V VII IX XI I 2012 III V VII IX XI I 2013 III V VII IX XI I 2014 III V VII IX XI Micro SME Total PaR Sector average NPL ratios in Azerbaijan: Micro-loans 5%; SME-loans 10%

Strong Shareholder Support Continued reinvestments of profits into Bank equity Organic growth of the Bank s equity solely based on reinvested profits Shareholders current longterm funding to the Bank is about USD 210m USD m 200 180 160 140 120 100 80 60 40 20 0 Development of Total Equity 185 146 129 109 94 66 42 16 2007 2008 2009 2010 2011 2012 2013 2014 16

17 Foreign Currency Lending Risk Mitigants About half of AccessBank s loans are denominated in USD Central Bank pursues policy of stable exchange rate of local AZN vs USD (crawling peg) High foreign trade surplus triggers steadily increasing currency reserves High currency reserves represent strong buffer against potential turbulences on currency market and protect AZN from devaluation in the short to medium term Low level of foreign investment in Azerbaijan protects from volatilities on international capital markets Bank provides USD denominated loans mostly to SME s high average DSCR of around 3x in SME lending represents a strong risk mitigant in case of devaluation

18 Funding Profile Customer Deposit Development Diversified Funding Structure USD m 400 USD 98m (9%) 300 200 USD 449m (41%) USD 317m (30%) 100 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 Current Accounts Savings Deposits Term Deposits USD 218m (20%) Retail Current Accounts Customer Deposits Borrowings from Commercial Lenders Borrowings from IFI/DFIs

19 Conservative Refinancing of Loans Loan portfolio USD 1,047m in 12/2014 USD m 500 400 300 200 100 0 1-15 -12 10 65-4 1 < 1 month 1-3 months 3-6 months 6 m-1 yr 1-3 yr 3-5 yr > 5 yr Loans Refinancing Loans with maturities > 1 yr are refinanced according to their tenors Current and savings accounts are displayed as short-term liquidity Liquidity buffer above USD 100m Currency profile of loan book is matched by funding in respective currencies

Financial Statements Balance Sheet in USD thousands Assets 31 December 2014 31 December 2013 non-audited audited Cash and cash equivalents 196 679 141 161 Loans to customers 1 045 352 786 732 Property and equipment 54 352 57 954 Intangible assets 26 605 17 120 Other assets 7 648 3 494 Total assets 1 330 636 1 006 461 Liabilities Amounts due to credit institutions - 34 653 Amounts due to customers 432 416 332 901 Debt securities issued 27 871 12 764 Borrowed funds from international lenders 629 991 443 901 Current income tax liabilities 6 470 5 768 Other liabilities 27 993 20 693 Subordinated loan 20 389 10 294 Total liabilities 1 145 130 860 974 Equity Share capital 108 363 108 349 Retained earnings 77 143 37 138 Total equity 185 506 145 487 Total equity and liabilities 1 330 636 1 006 461 20

Financial Statements Income and Capital Statement in USD thousands 31 December 2014 31 December 2013 non-audited audited Interest income 215 577 163 090 Interest expense (65 917) (43 810) Net interest income 149 660 119 280 Allowance for loan impairment 4 969 (4 948) Net interest income after allowance for loan impairment 154 629 114 332 Non-interest income 14 806 11 248 Non-interest expense (100 018) (81 757) Profit before income tax expense 69 417 43 823 Income tax expense (14 417) (9 123) Profit for the period 55 000 34 700 Tier 1 Capital 185 505 145 488 Tier 2 Capital 30 836 10 620 Total Capital 216 341 156 108 Risk Weighted Assets 870 940 684 862 Tier 1 capital ratio 21,3% 21,2% Total capital ratio 24,8% 22,8% Capital ratios according to Basel Capital Accord 1988 21

22 Contact Dr. Rolf Reichardt TEL: + 99 412 490 80 10 Executive Director Finance/Treasury EMAIL: rolf.reichardt@accessbank.az Farida Pirverdiyeva TEL: + 99 412 490 80 10 International Partner Relations Manager EMAIL: farida.pirverdiyeva@accessbank.az