ISBANK INVESTOR PRESENTATION 2018 H1
Contents Isbank at a Glance 4 Financial Highlights 8 Retail Banking 27 Major Equity Participations 30 2
Isbank at a Glance 4 Financial Highlights 8 Retail Banking 27 Major Equity Participations 30 3
Isbank in Brief Widespread shareholder base Isbank Pension Fund 40.12% Free Float 31.79% 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 1,342 domestic branches country-wide (largest among private banks), and 22 foreign branches 6,528 ATMs (largest ATM network among private banks) Nationwide coverage International coverage 8 11 7 17 21 352 24 108 19 21 49 6 19 31 13 3 6 4 3 8 13 7 51 4 9 5 133 32 15 Isbank Branches in Northern Cyprus HO + 10 Isbank AG Branches in Germany Bank Subsidiary HO + 3 Isbank Russia Branches in Russia Bank Subsidiary 5 3 6 3 4 3 3 27 7 7 2 6 5 8 16 6 21 7 5 3 10 33 5 1 25 17 6 4 8 17 5 6 2 1 1 5 6 11 5 1 8 3 3 1 1 1 2 11 2 1 6 3 6 3 2 Isbank Branches in London, UK. 1 Isbank AG Branch in Amsterdam, the Netherlands HO+2 Isbank Georgia Branches in Georgia - Bank Subsidiary 3 Number of Branches 1,358 1 Branch in Manama, Bahrain 1 Isbank AG Branch in Paris, France 1 Representative Office in Shang-hai, China 1,377 1,374 1,364 1,364 2014 2015 2016 2017 2018 Q2 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 4
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
The Largest Private Bank Market Share (%) 2018 Q2 Rank (2) Main Balance Sheet Items (1) Total Assets 11.4 1 st Total Loans 11.5 1 st TL Loans 10.6 2 nd FX Loans 13.0 1 st Consumer Loans (3) 11.4 2 nd Non-Retail Loans 11.5 1 st Total Deposits 11.6 1 st TL Deposits 10.0 2 nd FX Deposits 13.2 1 st Demand Deposits 14.5 1 st Other Products & Distribution Network Volume of Debit Cards (4) 9.6 2 nd Number of POS (4) 12.0 3 rd Acquiring Volume (4) 17.5 3 rd Number of Credit Cards (4) 11.6 3 rd Issuing Volume (4) 14.4 3 rd Number of Branches 12.9 1 st Number of ATMs 12.8 1 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
Isbank at a Glance 4 Financial Highlights 8 Retail Banking 27 Major Equity Participations 30 7
Growth Performance Total Assets (TL mn.) Loans (TL mn.) 10.0% 9.0% 237,772 275,718 313,074 362,244 398,340 155,315 177,037 203,144 239,409 261,043 2014 2015 2016 2017 2018 Q2 Deposits (TL mn.) 2014 2015 2016 2017 2018 Q2 Shareholders Equity (TL mn.) 7.5% 4.9% 133,551 153,802 177,360 203,752 219,102 29,311 32,035 37,409 42,984 45,075 2014 2015 2016 2017 2018 Q2 2014 2015 2016 2017 2018 Q2 8
Asset Structure Main Balance Sheet Items (TL mn.) 2017 2018 Q2 Change Cash & Banks 38,424 44,879 16.8% Securities (Net) 57,352 62,576 9.1% Loans 239,409 261,043 9.0% Participations (Net) 13,802 14,838 7.5% Fixed Assets (Net) 5,163 5,159-0.1% Other Assets 8,095 9,843 21.6% Total Assets 362,244 398,340 10.0% Interest Earning Assets / Total Assets Asset Composition 10.6% 11.3% 15.8% 15.7% 66.1% 65.5% 3.8% 3.7% 3.7% 3.8% 2017 2018 Q2 Loans / Assets Cash & Banks Securities Loans Participations Fixed & Other Assets 92.3% 91.3% 91.1% 91.5% 91.6% 65.3% 64.2% 65.2% 66.1% 65.5% 2014 2015 2016 2017 2018 Q2 2014 2015 2016 2017 2018 Q2 9
Solid Lending Franchise Loan Portfolio QoQ (TL mn.) Loans / Deposits 5.9% 2.1% 11.7% 246,483 261,043 117.5% 119.1% 115.0% 116.5% 148,841 151,989 97,642 109,054 TL FX * Total 2018 Q1 2018 Q2 (*) -3.8% change in FX loans when adjusted for the change in exchange rate. Loan Portfolio YtD (TL mn.) 2017 2018 Q2 Loans/Deposits Loans/Deposits (Adj.)* (*) TL securities issued added to deposits. TL / FX Mix of Loans 9.0% 3.1% 147,442 151,989 91,967 18.6% 109,054 261,043 239,409 35.4% 36.1% 39.8% 38.4% 41.8% 64.6% 63.9% 60.2% 61.6% 58.2% TL FX * Total 2017 2018 Q2 (*) -2.0% change in FX loans when adjusted for the change in exchange rate. 2014 2015 2016 2017 2018 Q2 TL FX 10
Diversified Loan Portfolio 48% comprised of retail and SME loans. Total Loans (TL mn.) Consumer Loans (TL mn.) 239,409 261,043 44,882 45,934 18.7% 17.6% 5.0% 4.7% 23.0% 25.6% Retail Loans 22.3% Consumer (1) 50.5% 50.3% General Purpose Consumer Loans Auto Loans Credit Cards (2) 1.5% 1.5% Housing Loans 53.2% 52.1% SME (3) Commercial & Corporate 46.5% 46.5% Retail Overdraft 1.6% 1.7% 2017 2018 Q2 2017 2018 Q2 (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. for 2017 and companies with number of employees < 250 and turnover or total assets <= TL 125 mn. for 2018 Q2. 11
632 587 45 779 432 346 409 1,453 1,861 Lowest NPL Ratio Among Peers (1) NPL Ratios by Loan Categories (2018 Q2) NPL Trends (Quarterly) Total SME Corp. & Comm. Credit Cards Consumer Coverage Ratios Performing Loans NPL Isbank 2,3% 2,3% 2,0% Private-Sector Banks 2,7% 3,4% 3,6% 3,3% 4,8% 4,7% 5,4% Coverage Ratios 2018 Q1 2018 Q2 Stage 1 0.7% 0.8% Stage 2 8.8% 9.8% Stage 3 71.7% (3) 65.8% (3) Stage 3 -Total 157.6% (4) 143.6% (4) (TL mn.) 0.08% 0.57% 17 Q4 18 Q1 18 Q2 (2) Net NPL Formation Rate Net Cost of Risk (5) By 2018 H1 Specific Gross CoR (6) : 109 bps 2.29% Additions Recoveries Net NPL Formation Prov. for Exp. Credit Loss. (TL mn) Q1 Q2 H1 Stage 1 7 269 276 Stage 2 589 357 946 Stage 3 532 824 1,356 Reversals (TL mn) (-) Q1 Q2 H1 Stage 1+2 504 11 515 Stage 3 211 303 514 Net CoR (2018 H1) 124 bps (1) Adjusted for the NPL sales made by peer group banks in the quarter. (2) Net NPL Formation / Average Performing Loans (3) Provisions for Stage 3 Expected Credit Losses / Non-performing Loans (4) (Provisions for Stage 1+2+3 Expected Credit Losses + Free Provisions) / Non-performing Loans Share of Stage 2 Loans: 8.6% (5) (Stage 1+2+3 Expected Credit Losses-Reversals) / Average Performing Loans (6) Stage 3 Expected Credit Losses / Average Performing Loans (7) Collections / (Prior period ending balance NPL + Additions) 12
Securities Portfolio Breakdown of Securities Total Portfolio 2018 Q2 TL 57.4% FX 2017 86.1% 13.3% Held FVTPL for trading 46.1 57.4 50.2 62.6 42.6% 99.9% 59.2% 2018 Q2 40.1% AFS FVOCI HTM FVMaAC 11.3 12.4 3.0 2.7 2017 2018 Q2 Floating Fixed TL Securities (TRY bn.) FX Securities* (USD bn.) FX Securities (TRY bn.) Total Securities (TRY bn.) * USD equivalent. Government bonds and treasury bills constitute. 98% of total portfolio. 35.4% share of CPI linkers in total portfolio 698 mn. TL interest revenue and 13.5% quarterly yield on CPI linkers portfolio. Yields of TL and FX securities are 11.88% and 5.26%, respectively in 2018 Q2. Average durations are 1.7 years for TL Securities 6 years for FX Securities 13
Strong Fund Generation Capability Main Balance Sheet Items Liabilities Composition (TL mn.) 2017 2018 Q2 Change Deposits 203,752 219,102 7.5% REPOs & Money Market 19,834 25,425 28.2% Funds Borrowed 38,424 45,462 18.3% Securities Issued 25,911 30,076 16.1% Other* 31,338 33,200 5.9% Equity 42,984 45,075 4.9% Total Liabilities & Equity 362,244 398,340 10.0% 11.9% 11.3% 8.7% 8.3% 7.2% 7.6% 10.6% 11.4% 5.5% 6.4% Equity Other* Securities Issued Funds Borrowed Largest TL funding base among private-sector banks 56.2% 55.0% REPOs&Money Market Deposits 2017 2018 Q2 (*) Includes subordinated debt of USD 1.9 bn plus TL 1.1 bn as of 2017 and 2018 Q2. 14
Largest Deposits Franchise a clear indicator of customer trust. Deposits QoQ (TL mn.) Market Shares 5.9% -0.7% 11.9% 206,900219,102 13.8% 13.2% 12.0% 11.6% 10.5% 10.0% 98,496 97,784 108,404121,317 TL FX * Total 2018 Q1 2018 Q2 2017 2018 Q2 TL Deposits FX Deposits Total Deposits (*) -3.7% change in FX deposits when adjusted for the change in exchange rate. Deposits YtD (TL mn.) 7.5% Largest market share in FX, demand, savings and total deposits among private sector banks 0.8% 97,050 97,784 13.7% 106,702121,317 219,102 203,752 TL savings deposits account for deposits. 31% of total TL FX * Total 2017 2018 Q2 (*) -6.0% change in FX deposits when adjusted for the change in exchange rate. 15
Demand Deposits 25,6% 24,8% 26,4% 25,0% 27,2% 25,8% 25,4% 28,1% 26,4% 25,4% 27,4% 26,3% 26,6% 28,0% 27,0% make significant contribution to lower cost of funding. Demand Deposits (TL mn.) Share of Demand Deposits 59,073 53,501 29,431 34,683 43,599 49% 46% 44% 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 54% 46% 50% 50% 51% 54% 56% (*) Excluding interbank deposits TL* FX* Total 14.5% market share in demand deposits Largest among private-sector banks 2014 2015 2016 2017 2018 Q2 TL FX 16
Sufficient Capitalization Comfortable level of capital Capital Adequacy Ratio Change in CAR 2018 Q1 16.51% Net Income 0.42% 16.53% 16.98% 16.65% 16.51% 15.88% 14.01% 14.06% 13.99% 13.78% 13.06% M-t-M Differences Stage 1+2 Exp LLPs RWA Growth exc. TL Dep. -0.33% -0.12% 0.08% TL Dep. Impact -0.84% 20.3% 20.1% 17.5% 20.7% 17,921 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 25,006 23,329 610 1,427 22,719 23,579 CAR 31,535 2,224 29,311 32,035 25.0% 25.0% 25.0% 35,244 3,209 41,909 4,500 37,409 49,379 6,394 42,984 45,075 Payout Ratio 53,327 8,253 2011 2012 2013 2014 2015 2016 2017 2018 Q2 Shareholders' Equity Cash Dividends Reinvested at ROE Tier I Ratio Equity Growth (TL mn.) 17,921 Other 2018 Q2 Capital adequacy ratio is well above the regulatory limit. (%) 2018 2019 Capital Conservation Buffer 1.875 2.5 Counter Cyclical Buffer 1.875 2.5 SIFI Buffer (2) 1.5 2 Min. Legal Requirement for CAR 8 8 CAR (Bank-only) 11.75 13.00 CAR (Consolidated) 13.25 15.00 (1) As of 2018 Q2, %0.04 on a bank-only basis (2) Taken into consideration only on a consolidated basis (1) 0.16% Max. Max. 15.88% 17
Income Statement Highlights (TL mn.) 2018 Q1 2018 Q2 QoQ 2017 H1 2018 H1 YoY Net Interest Income 3,750 4,251 13.4% 6,434 8,000 24.4% (1) (-) SWAP Cost 512 712 39.0% 628 1,224 94.8% Net Interest Income Incl. Swap Cost 3,238 3,539 9.3% 5,806 6,777 16.7% Net Fees & Commissions 921 1,066 15.7% 1,618 1,987 22.8% Net Trading Gains/Losses Excl. Swap Cost -166-57 -65.5% -149-223 50.1% Other Operating Income 797 379-52.4% 629 1,176 87.1% Total Operating Income 4,790 4,927 2.9% 7,903 9,717 22.9% HR Expenses 914 1,007 10.3% 1,681 1,921 14.3% Non-HR Expenses 1,049 1,176 12.1% 1,884 2,225 18.1% Total Operating Expenses 1,963 2,183 11.2% 3,565 4,146 16.3% (-) Pre-provision for pension fund 90 125 38.9% 120 215 79.2% Total Operating Expenses - Adj. 1,873 2,058 9.9% 3,445 3,931 14.1% Operating Profit 2,827 2,744-2.9% 4,339 5,571 28.4% Operating Profit - Adj. 2,413 2,869 18.9% 4,459 5,282 18.5% Stage 3 Expected Credit Losses 532 824 55.1% 1,109 1,356 22.3% Stage 1+2 Expected Credit Losses 596 625 4.8% 264 1,221 362.3% Other Provision Charges 3 154 NM 56 157 178.6% Total Provision Charges 1,130 1,604 41.9% 1,429 2,734 91.3% (-) Free provisions 0 150 NM 0 150 NM Total Provision Charges - Adj. 1,130 1,454 28.6% 1,429 2,584 80.8% Income from Participations (Equity Method) 510 669 31.1% 784 1,179 50.4% Tax Provisions 400 280-29.9% 638 680 6.7% Net Income 1,807 1,528-15.4% 3,056 3,335 9.1% NM: Not meaningful (1) Based on MIS data (2) 504 mn TL of this figure is resulting from IFRS 9 impact on other income. (2) 18
Fee Income Performance Fees & Commissions Income (Net) Gross Fees & Comm. Income (TL mn.) (TL thousand) 2017 H1 2018 H1 YoY Loans 488,898 590,579 20.8% Mutual Fund Man. & Other Inv. Acc. Fees 127,640 155,096 21.5% Credit Cards (Net) 610,095 813,695 33.4% (*) Other 390,958 427,235 9.3% 1,924 24.9% 2,403 Net Fees & Commissions 1,617,591 1,986,605 22.8% Composition of Net Fees & Comm. 2017 H1 2018 H1 Fees & Comm. Income Coverage 30,2% 29,7% Lending Related Fees 7,9% 7,8% 37,7% 41,0% Mutual Fund Man. & Other Inv. Acc. Fees Credit Cards 96.2% 45.4% 47.9% 103.4% 24,2% 21,5% 2017 H1 2018 H1 Other (*) 2017 H1 2018 H1 Net Fees & Comm. / Operating Expenses Net Fees & Comm. / HR Expenses (*) Including Fund Transfer, Insurance, Account Keeping and Other fees. 19
Margin & Spreads (1) NIM (Cumulative) (2) TL Loan-Deposit Spread (Quarterly) NIM NIM - Swap Adjusted 4,39% 4,68% 3,86% 4,03% 15.28% 15.71% 9.16% 9.22% 6.12% 6.48% Loan Yield Deposit Cost TL Spread 2017 2018 H1 2018 Q1 2018 Q2 NIM (Quarterly) (2) FX Loan-Deposit Spread (Quarterly) NIM NIM - Swap Adjusted 4.68% 4.86% 4.03% 4.03% 6.02% 6.56% 1.41% 1.44% 4.61% 5.12% Loan Yield Deposit Cost FX Spread 2018 Q1 2018 Q2 2018 Q1 2018 Q2 (1) Based on MIS data (2) Interest earning assets include Central Bank reserves. 20
Effective Cost Management Cost / Income (1) Employees per Branch 42.3% 40.5% 39.9% 37.5% 19.5 18.4 17.9 18.3 18.8 19.3 19.4 17.1 17.3 17.6 18.0 18.0 18.2 18.1 (2) 2017 2018 H1 Cost / Income (3) Cost / Income (Adjusted) (4) 2012 2013 2014 2015 2016 2017 2018 Q2 İşbank Peer Average (5) Cost vs. Assets 2.2% 2.2% 2.1% 2.1% Cost Structure 10.3% 14.2% 4.4% 4.2% 8.3% 7.1% 31.1% 28.2% Other SDIF Fees Depreciation 2017 (2) 2018 H1 Cost/Av. Assets Cost/Av. Assets (Adjusted) (4) (3) 46.0% 46.3% 2017 2018 H1 (1) Income figures include income from participations according to IAS 27. 2018 Q1 income figure excludes 504 mn TL of IFRS 9 impact on other operating income. (2) Calculated using restated figures according to IAS 27 (3) Half-year figures are annualized. (4) Adjusted for non-recurring and other items. (5) Peer banks are defined as the closest 3 private sector banks. Other Op. Expenses HR Expenses 21
Profitability Ratios RoAA & RoATA (1) RoAE & RoATE (1) 16.3% 15.4% 15.1% 15.8% 1.84% 1.85% 1.77% 1.78% (2) (3) 2017 2018 H1 2017 (2) 2018 H1 (3) RoAA RoATA RoAE RoATE (1) Tangible Equity (TE) and Tangible Assets (TA) are calculated by the deduction of M-t-M valuation differences regarding AFS (FVOCI) portfolio and real estates from shareholders equity and total assets. (2) Calculated using restated figures according to IAS 27 (3) Half-year figures are annualized. 22
Strong Focus on Digitalisation Evolution of Share of Transactions per Channel Digital Banking Number of Customers ( 000) 74.8% Internet Banking ATM Mobile Banking Total Non-Branch 88,2% 5,596 5,925 5,218 ~ 6.5 mn digital customers 50,5% 37.6% 30.3% 19,3% 2.2% 14,6% 2011 2014 2015 2016 2017 2018 Q1 2018 Q2 2,792 2,788 2,753 1,620 207 Mobile Banking Internet Banking 2011 2017 2018 Q1 2018 Q2 Mobile Banking Market Shares * Share of Digital Channels in Retail Sales * # Transactions Mobile Banking Investment 33.1% Credit Cards 18.0% Money Transfer 14.9% Payments 14.8% 67.3% TL Time Deposits 53.5% GPLs (*) Source: The Banks Association of Turkey, as of 2018 Q1. (*) Number of sales in 2018 Q2 23
Processes Policies Sustainability Senior level commitment in sustainability management Corporate Governance Committee Efficient governance structure for ESG activities Sustainability Management System Sustainability Policy Sustainability Coordinator Environmental and Social Impacts Policy Human Rights and Human Resources Policy Anti-bribery and Anticorruption Policy Gifts and Hospitality Policy Sustainability Service (Investor Relations Division) Sustainability Team - Evaluation of Environmental and Social Impacts Caused by Lending Activities - Evaluation of Internal Environmental Impacts - Calculation of GHG emissions - Training and Improving Internal Capacity - Reporting - Internal Audit and Internal Control - Management Review Environment-friendly buildings Head Office Atlas Data Center Tuzla Technology and Operations Center Risk assessment via Environmental and Social Risk Evaluation Tool for new investment projects worth more than USD 10 million İşbank Exclusion List of activities which are not financed Declaration of Sustainable Finance Strong support for renewable energy RE share in total energy projects portfolio %46 (As of 31.12.2017) Strong rights contributing to employee satisfaction (As of 30.06.2018) Unionized employees 99% Turnover rate 0.95% Return from maternity leave 99% Female employees 51% Female managers 41% 24
Ratings FC Issuer Credit LC Issuer Credit Turkish National Scale Rating* BB- / Stable / B BB- / Stable / B tra+ / tra-1 Rating* FC Issuer Default Rating BB- / Negative / B LC Issuer Default Rating BB / Negative / 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* Ba3 / on review / Not-Prime Ba3 / on review / Not-Prime Ba3 / on review B2 / B3 (hyb) (*) Long term / Outlook (if exists) / Short term 25
Isbank at a Glance 4 Financial Highlights 8 Retail Banking 27 Major Equity Participations 30 26
Credit Card Business Over 331,500 Maximum Sales Points and over 508,000 chains are included in Maximum loyalty programme. The number of Maximum cards reached 12.7 million, 7.5 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 and Georgia in addition to Turkey. Issuing debit cards in Iraq, UK, Georgia and Kosovo in addition to Turkey. (TL million) (*) 2017 H1 2018 H1 Change Issuing Volume 44,848 53,463 19% Issuing Volume Market Share 14.1% 14.4% 0.3 pp Acquiring Volume 53,323 67,425 26% Acquiring Volume Market Share 16.7% 17.5% 0.7 pp Balance 13,247 15,635 18% Number of Credit Cards (000) 7,201 7,503 4% Number of P.O.S. Terminals 466,577 481,054 3% (*) According to Interbank Card Center data 27
Strong Retail Customer Base supported by payroll accounts and bill payment agreements. Payroll Accounts (TL mn.) Automated Bill Payments (TL mn.) (Total amount of wages paid in the period) 27,677 31,245 23,713 6,716,503 28,889 6,904,267 2017 H1 2018 H1 2017 H1 2018 H1 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
Isbank at a Glance 4 Financial Highlights 8 Retail Banking 27 Major Equity Participations 30 29
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
A Diversified Equity Participation Portfolio Sectoral Breakdown Glass 48.5% Other 5.2% Banks 20.0% Insurance 12.0% 14.3% Financial Ins. Non-Financial Financial 53.7% 46.3% As of June 2018, Isbank has 17 participations. Share of participations in total assets is 3.7%. Since 2002, a total of 43 participations has been divested. Non - Listed 23.8% Listed 76.2% 31
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. 65.47% share of Şişecam is held by İşbank. Flat Glass 8 68.0 20.3 3.6 Glassware 69.9 6 17.4 7 10.3 7 Glass Packaging 8 61.7 6.4 2.5 Soda Ash 4,8 48.0 15.4 3.4 Chromium Chemicals 5,8 77.0 48.0 28.0 Financial Information (Con., IFRS) USD (Million) 2018 Q1 2017 Q1 Total Assets 5,865 5,675 Shareholders Equity 3,440 3,231 Net Sales 791 729 International Sales 1 460 415 Gross Profit 258 253 EBITDA 233 231 1. 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. 6. Market share in terms of units. 7. Market share in terms of revenue. 8. Market share in terms of tonnage. *Market share in production capacity as of 2018 Q1. 32
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
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 40.52 50.00 7,438,794 932,247 17.1 Total Assets İşbank AG Bankacılık 100.00 100.00 2,119,351 220,707 N/A JSC İşbank Bankacılık 100.00 100.00 244,702 66,320 N/A JSC Isbank Georgia Bankacılık 100.00 100.00 93,677 14,355 0.65 Total Assets Anadolu Anonim Türk Sigorta Şirketi Insurance - 64.31 1,906,886 417,318 10.9 Premium Income Anadolu Hayat Emeklilik A.Ş. Life Insurance & Private Pension 62.00 83.00 4,729,640 210,020 18.8/ 7.8 (1) Private Pension Funds Under Management / Life Premium Income Milli Reasürans T.A.Ş. Reinsurance 76.64 77.06 1,002,500 543,457 8.1 (2) Premium Income İş Yatırım Menkul Değerler A.Ş. (4) Brokerage House 65.65 70.69 1,962,963 233,103 7.9 Transaction Volume Yatırım Finansman Menkul Değerler A.Ş. (4) Brokerage House - 98.42 202,916 21,981 3.7 Transaction Volume İş Yatırım Ortaklığı A.Ş. Trust Company - 38.66 55,077 54,900 46.2 NAV İş Portföy Yönetimi A.Ş. Portfolio Mngt. - 100.00 23,720 22,369 20.0 Funds Under Management İş Finansal Kiralama A.Ş. (4) Leasing 27.79 58.29 2,438,108 261,684 9.0 Lease Receivables İş Faktoring A.Ş. Factoring - 100.00 1,027,404 53,292 9.5 Factoring Receivables İş Gayrimenkul Yatırım Ortaklığı A.Ş. REIT 42.23 58.04 1,405,266 827,680 4.2 Market Value İş Girişim Sermayesi Yatırım Ortaklığı A.Ş. Risk Venture - 57.67 66,182 65,650 - Efes Varlık Yönetim A.Ş. Asset Management - 100.00 52,855 6,059 TOTAL 24,770,041 3,951,142 - (1 As of March 31, 2018; total amount of funds (including state contribution) managed within private pension system is TL 81.1 billion while Anadolu Hayat Emeklilik accounts for 18.8% of this figure. The company s market share in life insurance market is 7.8% 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 8.1%. The rest 91.9% is shared by foreign reinsurance companies. (3) As of March 31, 2018 (4) Consolidated amount 34
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. 35
Investor Relations Contact Details Süleyman H. Özcan Head of Investor Relations Division Phone : + 90 212 316 16 02 E-mail : Suleyman.Ozcan@isbank.com.tr Alper Turgal Unit Manager of Investor Relations Division Phone : + 90 212 316 16 10 E-mail : Alper.Turgal@isbank.com.tr 36