Denizbank Anonim Sirketi — DenizBank — Investor Presentation (March 2007)
96 slides from Denizbank Anonim Sirketi's investor presentation, Mar 1, 2007
Slide 1: Together in Istanbul - Part 1
No achievement without commitment Together in Istanbul - Part 1 Dirk Bruneel, Chairman of the Board of Directors DenizBank Saruhan Özel, Chief Economist DenizBank Hakan Ates, CEO DenizBank March 1st 2007, Istanbul 1
Slide 2: Disclaimer
Disclaimer This presentation includes forward-looking statements and assumptions related to the possible evolutions of business environment in the next 3 years. By their very nature, statements contained in this document involve inherent risks and uncertainties, both general and specific, and risks
Slide 3: Agenda
Agenda Turkey : the Eurasian Rising Economy Saruhan Özel Turkey : a Highly Promising Banking Landscape Saruhan Özel – Hakan Ates DenizBank : an Outperformer Since its Creation Hakan Ates DenizBank in 2006 Photo : G. Boublil Hakan Ates 3
Slide 4: Turkey: the Eurasian Rising Economy
Agenda Turkey : the Eurasian Rising Economy Saruhan Özel Turkey : a Highly Promising Banking Landscape Saruhan Özel – Hakan Ates DenizBank : an Outperformer Since its Creation Hakan Ates DenizBank in 2006 Photo : G. Boublil Hakan Ates 4
Slide 5: Turkey: a Crossroads for Ideas, Beliefs and Cultures (1/2)
Turkey : a Crossroads for Ideas, Beliefs and Cultures (1/2) Ottoman Turks conquered Constantinople (Istanbul) in 1453, after 400 years of consolidation of Turkish tribes living in Anatolia. Hence, the last Roman Empire (Byzantium) ceased to exist. The Turkish Republic was formed in 1923 by Mustafa K
Slide 6: Turkey: a Crossroads for Ideas, Beliefs and Cultures (2/2)
Turkey : a Crossroads for Ideas, Beliefs and Cultures (2/2) Through a number of crises, modern-day Turkey emerged as a Euro Asian power, gearing towards EU-standards in most aspects. AAunique uniqueexample examplein inthe theregion region of ofdemocratic democraticandand secular secularcountry, coun
Slide 7: Today, the Turkish Economy Has a Similar Size as Belgium
Today, the Turkish Economy Has a Similar Size as Belgium GDP 2005 (USD Bn) 2,781 2,110 1,123 763 Avg. EMU12 : 819 366 365 363* 354 300 Avg. NMS10** : 68.7 GER. FR. ES. RUS. SWIS. BE. TURK. SWE. POL. * 2006 Expected Turkey GDP : USD 400 Bn ** NM S10 = 10 New M ember States. 7 Sources : World Bank - D
Slide 8: ... but Growing Much Faster
... but Growing Much Faster Real GDP Growth (%) Turkey vs. EMU & NMS 10 8.9 Turkey EMU12 NMS10 7.9 7.4 6.5 6.3 5.8 5.8 5.3 5.5 5.5 5.5 5.1 4.1 4.3 2.6 2.0 2.1 2.2 1.4 0.9 0.8 2002 2003 2004 2005 2006* 2007E 2008E * As of June 2006 8 Sources : Eurostat - DenizBank Economic Research
Slide 9: Among Others Thanks to its Favorable Demographics
Among Others Thanks to its Favorable Demographics Total Population (%) Age Avg. NMS10 14.1 Avg. EMU12 65> 16.0 Turkey 5.9 54.0 25-64 54.7 47.5 31.9 0-24 29.3 46.6 Young, Young,dynamic dynamicand andentrepreneurial entrepreneurialpopulation population 9 Source : Eurostat
Slide 10: International Organizations are Highly Supportive (1/2)
International Organizations are Highly Supportive of the Country’s Development (1/2) Mr. John Lipsky, First Deputy Managing Director of the IMF on November 1, 2006 at a press conference in Istanbul : " As the saying goes, first impressions are lasting impressions, and my first impression of Turkey i
Slide 11: International Organizations are Highly Supportive (2/2)
International Organizations are Highly Supportive of the Country’s Development (2/2) IMF Managing Director Rodrigo de Rato, January 16, 2007, on the question whether the 2007 elections will alter the country’s attitude and perspectives : " I don't think that we should point out any in particular. I
Slide 12: Turkey's Importance (1/3): Energy Corridor
Turkey's Importance (1/3) Greater Geopolitical Advantage of Being an Energy Corridor Turkey Turkeywill willcontinue continuetotobenefit benefitfrom fromsignificant significantsupport supportfrom fromthe themajor major power powerblocks blocksgiven givenits itsunique uniqueposition positionas asaasec
Slide 13: Turkey's Importance (2/3): Economic Potential Comparable to NMS10
Turkey's Importance (2/3) An Economic Potential Comparable to NMS10 Total GDP 2005 (USD Bn) Total Population 2005 (M) 9,812 314 74 71 686 363* EMU12 NMS10 Turkey EMU12 NMS10 Turkey * 2006 Expected Turkey GDP : USD 400 Bn. 13 Sources : EU, World Bank, BRSA
Slide 14: Turkey's Importance (3/3): A Model Aspired to in the Region
Turkey's Importance (3/3) A Model Aspired to in the Region • The only democratic, secular muslim country in the region. • Good relations and cooperation with the US, the EU and the other power blocks. 14
Slide 15: A Clear Roadmap Towards European Standards (1/2)
A Clear Roadmap Towards European Standards (1/2) Moody’s Credit Opinion December 11, 2006 : " Turkey’s serious structural reforms of the past seven years have made the Economy much more resilient. Any likelihood of a hard landing resulting from a balance of payments adjustment should be ameliorated
Slide 16: A Clear Roadmap Towards European Standards (2/2)
A Clear Roadmap Towards European Standards (2/2) FitchRatings Credit Analysis December 19, 2006 : " […] The accession process is a positive rating factor that helps to anchor political and economic stability, by supporting political institutional, legal and structural economic reforms […]." European
Slide 17: Focus on Turkey's Recent Track Record (1/2)
Focus on Turkey’s Recent Track Record (1/2) An Impressive Macro-economic Performance Since 2001 : Disinflation & High Growth Real GDP Growth Inflation (CPI) (%) 69 9 (%) 8 7 6 6 7 39 6 6 30 18 9 8 10 7 4 -7 2000 2001 2002 2003 2004 2005 2006* 2007E 2008E * As of September 17 Sources : Turkstat - Den
Slide 18: Focus on Turkey's Recent Track Record (2/2)
Focus on Turkey’s Recent Track Record (2/2) Risks : High Current Account Deficit and Rising Foreign Borrowing CA Deficit as % GDP External Debt as % GDP 4 3 20 2 0 01 2 0 02 2 0 03 204 205 2 0 6E 79 198 (USD -2 -1 (%) 72 (%) -5 171 Bn) -7 -3 -5 -6 59 61 162 -10 -9 145 130 54 47 51 -16 119 114 -23 -3
Slide 19: Economic Situation in Turkey is not Exceptional
Economic Situation in Turkey is not Exceptional when Compared with Some Other EU Countries CA Deficit as % GDP External Debt as % GDP 5 100 80 (%) HUN. 60 -5 TURK. 40 -10 ROM. 20 -15 (%) 2000 2001 2002 2003 2004 2005 2006E 2000 2001 2002 2003 2004 2005 2006E 19 Sources : IFF, DenizBank Economic Rese
Slide 20: And it is Manageable (1/3)
And it is Manageable (1/3) Private Sector Foreign Debt Privatization Receipts & FDI* (Private Sector LT Debt (USD Bn) as % of Total Debt) 81 20.0 69 43 8.2 8.6 8.0 18 2.7 2.8 1.7 0.1 0.1 0.5 0.4 0.2 0.1 1.3 2003 2004 2005 2006-Q3 2000 2001 2002 2003 2004 2005 2006-Q3 Private Privatesector sectorborr
Slide 21: And it is Manageable (2/3)
And it is Manageable (2/3) ... And More : Tight Fiscal Policy & Lower Public Debt Primary Budget Surplus Net Public Debt (As % of GNP) (As % of GNP) 91 79 7.4 6.8 7.0 70 6.0 6.1 63 5.3 57 56 4.7 51 2000 2001 2002 2003 2004 2005 2006E 2000 2001 2002 2003 2004 2005 2006E Public Publicdebt debtsteadily
Slide 22: And it is Manageable (3/3)
And it is Manageable (3/3) ... And More : A Much Stronger Banking System Able to Absorb Shocks Open FX Position Capital Base (As % of Balance Sheet) Equity (USD Bn) - Capital Adequacy (%) 0 0 -1 -1 40 40 -2 -2 34 31 29 25 25 24 23.5 15 16 11 9 10 -8 2000 2001 2002 2003 2004 2005 2006E 2000 2001 2002
Slide 23: Despite Strong Market Turbulences ...
Despite Strong Market Turbulences … What Happened? • TRY lost 20% in May 2006, and a further 7% in the first three weeks of June. • Stock Exchange Index plunged by 14% in May, and by a further 11% in the first three weeks of June. • Central Bank raised over-night rates by 425 bps. • Bond yields rose
Slide 24: ... Turkey Recovered Quickly
… Turkey Recovered Quickly Yet Without Significant Macro-economic Impact • Inflation rose from 8% to 12% in July ; year end : below 10%. • Industrial production grew by 11% in June ; year end + 6.5%. • Real GDP rose by 6% (exp.) in 2006. • TRY appreciated quickly by 7% in July and then stabilized. •
Slide 25: Turkey: a Highly Promising Banking Landscape
Agenda Turkey : the Eurasian Rising Economy Saruhan Özel Turkey : a Highly Promising Banking Landscape Saruhan Özel – Hakan Ates DenizBank : an Outperformer Since its Creation Hakan Ates DenizBank in 2006 Photo : G. Boublil Hakan Ates 25
Slide 26: A Much More Solid Banking Sector
A Much More Solid Banking Sector Evolution After the 2001 Crisis Capital Adequacy (%) Total Assets / GDP (%) 23.5 77.0 84.0 9.3 2000 2006E 2000 2006E # Banks 79 47 2000 2006E 26 Sources : BRSA, TBA, DenizBank Economic Research
Slide 27: And Firmly Withstanding 2006 Turbulences
And Firmly Withstanding 2006 Turbulences Total of Banking Sector Equity (TRY Bn) 57.6 55.7 53.7 50.9 2005 March 2006 June 2006 2006 Equity Equitydropped droppedbybyalmost almost10% 10%atatthe theend endofofJune June2006 2006;; two twoquarters quarterslater, later,equity equitywas wasentirely entirel
Slide 28: Strong Independent Regulatory Environment
Strong Independent Regulatory Environment Focus SDIF1 • restructured an amount of USD* 5.1 Bn of loans for 226 companies as of August 2003 • invested USD* 47.2 Bn in the recovery of the banking system after 2001 • full deposit guarantee up to USD 20,000 available Focus BRSA2 • strong independent reg
Slide 29: Low Banking Penetration Levels Offer Strong Growth Perspectives
Low Banking Penetration Levels Offer Strong Growth Perspectives ... Total Banking Assets / GDP 2.8 0.9 0.8 NMS10 Turkey EMU12 Loans / GDP (%) Total Deposits / GDP (%) 123.5 102.1 58.3 50.0 47.0 31.0 NMS10 Turkey EMU12 NMS10 Turkey EMU12 December 2005 data 29 Sources : BRSA, TBA, EU Banking Structure
Slide 30: ... Among Others in Retail Products
... Among Others in Retail Products Mortgage / GDP (%) Insurance Penetration (%) (Total Premium Income / GDP) 36.5 8.1 8.1 2.9 3.0 2.0 NMS10 Turkey EMU12 NMS10 Turkey EMU12 Consumer Loans / GDP (%) 6.8 4.6 2.0 NMS10 Turkey EMU12 December 2005 data 30 Sources : BRSA, EU Banking Structures 2006, CEA A
Slide 31: ... But Also Large Potential in Public and Project Finance
... But Also Large potential in Public and Project Finance due to a large number of projects in the following fields : • Environment : significant investment needs in areas of water treatment and distribution • Energy : foreseen future privatization of the electricity distribution network, ongoing h
Slide 32: An Up-to-date Modern Banking Market Infrastructure (1/2)
An Up-to-date Modern Banking Market Infrastructure and Offer (1/2) Internet Penetration (%)1 # of Credit Cards / 000 Population2 580 51.3 420 41.1 300 22.7 Turkey NMS10 EU25 Turkey Europe Belgium # of Inhabitants / ATM3 1 2005 data 2 2006 estimates based on Datamonitor 3 2004 data - unweighted avera
Slide 33: An Up-to-date Modern Banking Market Infrastructure (2/2)
An Up-to-date Modern Banking Market Infrastructure and Offer (2/2) • Efficient operations (lowest Cost Income in the region). • In line with western standard IT systems & Customer Relationship Management systems. • A highly innovative approach. • Full product offer. • All alternative distribution ch
Slide 34: Illustration of Modern Tools: Business Process Management
Illustration of Modern Tools Business Process Management at DenizBank • Powerful reporting and monitor tool to follow up processes. • Management & measurement of workload and performance of a user. • Offers higher productivity and reduced errors. 34
Slide 35: Illustration of Modern Tools: Incentives at DenizBank
Illustration of Modern Tools Incentives at DenizBank • Incentive system for all branch people (incl. security, meeters & greeters…). • Based on sale of products, targets met and relationships with customers. • Amounts to an average of 15% on top of regular salary. 35
Slide 36: DenizBank: an Outperformer Since its Creation
Agenda Turkey : the Eurasian Rising Economy Saruhan Özel Turkey : a Highly Promising Banking Landscape Saruhan Özel - Hakan Ates DenizBank : an Outperformer Since its Creation Hakan Ates DenizBank in 2006 Photo : G. Boublil Hakan Ates 36
Slide 37: DenizBank: an Outperformer Since its Creation
Agenda DenizBank : an Outperformer Since its Creation 1. DenizBank at a glance 2. Focus on : • PPFCE • PFS • Asset Management • TFM Photo : G. Boublil 37
Slide 38: DenizBank is the 6th Largest Private Bank
DenizBank is the 6th Largest Private Bank Top 10 Banks by Total Assets % Share Total Assets Owners 30 June EUR 2006 (In Total Assets) (Bn Eur) 1. IsBank 19.3 38.8 ISE 2. Ziraat Bankasi* 16.8 33.8 State 3. AkBank 14.6 29.4 JV '06 4. Garanti 13.3 26.7 JV '05 5. Yapi Kredi / Koç 12.1 24.3 JV '06 6. Vak
Slide 39: ... Built since 1997 at an Impressive Speed
... Which Has Been Built since1997 at an Impressive Speed Top Banks by Total Assets 1997 - TRY M June 2006 - TRY M Growth 1. Ziraat Bankasi 3,158 1. IsBank 77,392 x 57 2. Halk Bank 1,536 2. Ziraat Bankasi 67,568* x 21 3. IsBank 1,351 3. AkBank 58,696 x 50 4. Yapi Kredi / Koç 1,243 4. Garanti 53,323
Slide 40: Initially DenizBank Grew Organically ...
Initially DenizBank Grew Organically ... Initial Three empty branches + securities portfolio Set-up + the banking licence (including brand name) auctioned on March 20, 1997. Mainly • 13 branches opened before YE 1997. Organic Growth • In 2001, 50th branch was inaugurated. Until • DenizYatirim, Deniz
Slide 41: ... Followed by an Acquisition Phase from 2001 ...
... Followed by an Acquisition Phase from 2001 ... 1. Branch site, deposit and credit acquisitions 2. Investment banking group acquisitions 133 additional branches • Tektas Menkul (2000) Branches were acquired • DemirYatirim Ortakligi (2001) • EkspresYatirim (2002) Deposits 25,000 accounts purchased
Slide 42: Turning the 2001 Financial Crisis into an Opportunity (1/2)
... Turning the 2001 Financial Crisis into an Opportunity by Rapidly Expanding our Banking Platform (1/2) 3. Bank acquisitions Tarisbank Agricultural Banking 2002 Yasar Foreign Trade Offshore Ltd. Off-shore banking Northern Cyprus 2002 Esbank AG Austria & Germany 2002 IktisatBank Unibranch in Moscow
Slide 43: Turning the 2001 Financial Crisis into an Opportunity (2/2)
... Turning the 2001 Financial Crisis into an Opportunity by Rapidly Expanding our Banking Platform (2/2) 4. Non-financial acquisitions Anadolu • First Turkish credit card processor. Kredi Karti • After internalizing most of the activities, the remainder was sold in 2004. 2002 Intertech • IT company
Slide 44: Breakdown of Employees
Breakdown of Employees As of December 2006 By Education (%) By Age (% ) By Gender (%) Primary 40 and over 5 11 1 Under 20 Female University 30-39 45 High 47 44 48 55 44 Male 20-29 Total FTE (average 2006) ~ 6,000 Young Youngand andWell-Educated Well-EducatedStaff. Staff. 44 Source : DenizBank (Bank
Slide 45: Rapid Growth Reflected in Financial Performance Since 1997
DenizBanks' Rapid Growth has been Reflected in its Financial Performance Since its Foundation in 1997 Loans (TRY M) Net Income (TRY M) % 8,899 : 60 % 76 GR CA GR : C A 342 6,252 231 3,214 123 137 2,177 1,572 43 55 223 452 640 631 5 22 21 25 3 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1997 19
Slide 46: ... Consistently Gaining Market Share in Turkey ...
... Consistently Gaining Market Share in Turkey ... Loan Market Share (%) 4.1 2.7 2.7 3.1 1.7 0.6 2000 2001 2002 2003 2004 2005 Deposit Market Share (%) 2.7 2.9 2.1 2.1 2.2 0.4 2000 2001 2002 2003 2004 2005 46 Sources : BRSA, Sector-TBA
Slide 47: ... and Outperforming its Peers
... and Outperforming its Peers (Akbank, Fortis, Finans, Garanti, Isbank, TEB, (weighted avg.), as of 2006-Q2) Positioned for real ... with a low cost ... with a growth leading to banking with strong platform ... track-record and = strong profitability asset quality potential for growth Securities/T
Slide 48: ... Also on the Risk Side
... Also on the Risk Side NPL Ratio (%) Coverage* (%) 118 116 1.8 2.3 DenizBank Peers DenizBank Peers DenizBanks’ DenizBanks’prudent prudentrisk riskapproach approachisisevidenced evidencedby byits itslower lowernon non performing performingloans loans(NPL’s) (NPL’s)and andhigher higherCoverage Cove
Slide 49: DenizBank Split among Dexia's Business Lines (1/2): PPFCE
DenizBank Will Be Analytically split among Dexia’s Business Lines (1/2) PPFCE Scope • Corporate & commercial • Public Finance customers (turnover > USD 5 M) • Project Finance • Leasing / Factoring Key Figures – 2006 • Total corporate cash loans : EUR 1,472 M • Total corporate deposits : EUR 982 M •
Slide 50: DenizBank Split among Dexia's Business Lines (2/2): PFS
DenizBank Will Be Analytically split among Dexia’s Business Lines (2/2) PFS Scope • Retail • Agricultural Banking • SME • Private Banking • Credit Cards • Insurance Key Figures – 2006 • Total retail loans : EUR 919 M • Total retail deposits : EUR 2,257 M • # PFS clients : 1,953,733 - of which # SME
Slide 51: PFS Already 2/3 of the Bank's Revenue
PFS Already 2/3 of the Bank's Revenue 2006 Figures Loans (%) Deposits (%) PPFCE PFS 41 37 PPFCE 59 PFS 63 Net Banking Income (%) Net Income (%) 2 TFM 5 TFM PPFCE PPFCE 32 42 53 PFS PFS 66 51 Source : DenizBank
Slide 52: Country-wide Branch Network (1/2)
DenizBank Serves its Customers Through a Country-wide Branch Network (1/2) 2006 Figures Branch Network • Branches 262 • Foreign subsidiaries 11 Branch Breakdown • Retail and SME 173 • Full service 58 • Corporate 6 • Commercial center 4 • Others (mobile/free zone/offices/foreign sub.) 32 52
Slide 53: Country-wide Branch Network (2/2)
DenizBank Serves its Customers Through a Country-wide Branch Network (2/2) Branches • 57 out of 81 Cities have a DenizBank branch. • 38% of DenizBank branches are located in Istanbul. • DenizBank network covers 97% of total Turkish loan and deposit base. 53
Slide 54: Several Alternative Distribution Channels (ADC)
... As Well as Several Alternative Distribution Channels ("ADC") 2005 2006 Growth • Online banking users 157,845 201,788 28% • Contact center calls 4,950,000 5,175,114 5% • DenizBank ATM's 302 349 16% • % of transactions through online banking 25% 28% 12% • % of transactions through ADC's 26% 31% 19
Slide 55: Young Network is a Cornerstone of Future Growth
DenizBanks' Young Network is One of the Cornerstones of its Future Growth Ageing of Branches Market Share (MS) (volume of Loans + Deposits,TRY M) (%, 2005) 146 3.8 3.0 98 82 40 18 1yr 3yr 5yr 6yr 9yr Total Assets # Branches 4yr Current Currentaverage averageage ageofofbranch branchnetwork network==
Slide 56: DenizBank: an Outperformer Since its Creation
Agenda DenizBank : an Outperformer Since its Creation 1. DenizBank at a glance 2. Focus on : • Public / Project Finance and Credit Enhancement • PFS • Asset Management Photo : G. Boublil • TFM 56
Slide 57: PPFCE: Public Finance
PPFCE : Public Finance • On 31.12.2006, DenizBank had the second largest lending portfolio to Istanbul Municipality satellites*. • DenizBank offers a broad and diversified range of products such as loans, leasing, civil servant loans, civil servant salary payments, ... • DenizBank is well prepared t
Slide 58: PPFCE: Project Finance
PPFCE : Project Finance • Project Finance activity started at the end of 2005. • Sectors which are core for Dexia business : Environment, Energy, Infrastructure, Transport … • DenizBank already realized a few transactions with Hospitals and Universities. 58
Slide 59: PPFCE: Corporate Banking
PPFCE : Corporate Banking Overview of Corporate Banking Operations • Target clients : turnover of over USD 25 M • Provides services through 6 dedicated branches Cash Loans (TRY M) Deposits (TRY M) GR: 58% 3% CA CAGR: 2 1,795 2,692 2,350 1,536 1,196 1,074 2004 2005 2006 2004 2005 2006 Foreign Currenc
Slide 60: PPFCE: Corporate Banking Loan Breakdown
PPFCE : Corporate Banking Corporate Loan Breakdown by Sector NPL Ratio (%) Finance & Fin.int; ser vice; 5% 4% IT&Electronic ; 1.5 Healthcare; 6% 5% Communication; Media & br oadcasting; 7% Textile Industry; 1.0 3% 4% food & agrc.; 7% Transportation; 7% Metal Indst(iron, steel & others); 4% 2005 2006
Slide 61: PPFCE: Commercial Banking
PPFCE : Commercial Banking Overview of Commercial Banking Operations • Target clients : turnover of USD 5 - 25 M • Provides services through 62 branches & 210 portfolio managers Cash Loans (TRY M) Deposits (TRY M) R: 4 0% C AG 2,562 CAGR: 10 % 1,890 1,349 1,424 1,475 1,259 2004 2005 2006 2004 2005 2
Slide 62: PPFCE: Commercial Banking Loan Breakdown
PPFCE : Commercial Banking Commercial Loan Breakdown by Sector NPL Ratio (%) Transportation Touris m 1.8 1.7 Finance & Fin.int; 4% 3% 8% Textile and leather 8% Construction 17% Shipping Consumer durables, 9% electronics and IT 4% Others 10% 2005 2006 Finance Mining,glass & energy 8% 6% Food 8% Metal
Slide 63: PPFCE: Factoring
PPFCE : Factoring Outperforming in All its Business : Factoring Overview • In 2005, 4th largest factoring company in Turkey with a 6.4% market share and 3rd in export factoring. • Full member of FCI (Factor Chain International). • Executes all types of factoring (domestic, export & import factoring)
Slide 64: PPFCE: Leasing
PPFCE : Leasing Outperforming in All its Business : Leasing Overview • DenizLeasing is the leasing arm of DenizBank providing leasing services to companies operating in different industries. • Offers standard and tailor-made solutions to SME, commercial and corporate clients. • Effectively cooperate
Slide 65: Example of Innovative Approach Combining PPFCE and PFS
PPFCE Example of Innovative Approach Combining PPFCE and PFS "Sea & Miles" : A première in Turkey, DenizBank and the Istanbul Sea Bus and Ferry Authority (IDO) joined forces for the "Sea & Miles” programme in February 2006 • The programme is based on award mileage collection in return for spending d
Slide 66: DenizBank: an Outperformer Since its Creation
Agenda DenizBank : an Outperformer Since its Creation 1. DenizBank at a glance 2. Focus on : • PPFCE • Personal Financial Services • Asset Management • TFM Photo : G. Boublil 66
Slide 67: PFS: Retail Banking - A Key Growth Area
PFS : Retail Banking A Key Growth Area Overview of Retail Banking Operations • Targets individuals and professionals with a minim um certifiable monthly income of USD 400. • Rapidly expanding franchise. • Plan to increase the number of branches from the current 173 to 410 by 2009. Cash Loans (TRY M)
Slide 68: PFS: Focus on Loan Portfolio
PFS : Retail Banking Focus on Loan Portfolio Retail Loan Breakdown by Product (TRY M) 1,702 Other loans General purpose loans 854 Car loans 274 Overdrafts Housing loans 2004 2005 2006 68 Source : DenizBank
Slide 69: PFS: Focus on Loan Portfolio - Market Share
PFS : Retail Banking Focus on Loan Portfolio Market Share by Product (%) Housing Car General Purpose 5.9 3.6 2.9 2.3 2.4 2.3 2005 2006 2005 2006 2005 2006 NPL Ratio (%) 1.4 1.1 2005 2006 69 Source : DenizBank
Slide 70: PFS: Focus on Credit Cards
PFS : Retail Banking Focus on Credit Cards Overview • Credit cards make up 4.7% of total TRY loan portfolio • Joint distribution agreement of Bonus Cards with Garanti Loans (TRY M) # Credit Cards (000) R : 32% 1% CA G CAGR: 2 1,381 1,509 421 376 860 289 3.2% 4.6% 4.7% Market share 2004 2005 2006 200
Slide 71: Segment-oriented Loan Campaigns
PFS : Retail Banking Example of Innovative Approach Segment-oriented Loan Campaigns ... ... aim at greater penetration in retail market. Current Campaigns - Example Loans with favorable conditions : • for public workers : 76,752 applications processed by September 2006 • for teachers : 22,076 applic
Slide 72: PFS: SME Banking - Started in 2004
PFS : SME Banking Started in 2004 ... Overview of SME operations • Targets : - small-sized businesses : annual turnover of < USD 1 M - medium-sized businesses : annual turnover of USD 1-5 M • Created to better target the under-served SME sector Cash Loans (TRY M) # Customers 1,176* GR: 84% 199,095 C
Slide 73: PFS: Focus on Agricultural Banking
PFS : SME Banking Focus on Agricultural Banking Overview of Agricultural Banking Operations • Obtained instant know-how and an industry platform through Tarisbank acquisition. • Provides agricultural banking services through 83 of DenizBank's branches. Strategy • Agricultural segment typically negle
Slide 74: PFS: Agricultural Banking Loans and Customers
PFS : SME Banking Focus on Agricultural Banking Cash Loans (TRY M) : 1 61% 347 R CAG 173 51 2004 2005 2006 # Customers 33,411 19,533 9,800 2004 2005 2006 74 Source : DenizBank
Slide 75: Innovative Approach in Agriculture Banking: Producer Card
PFS : SME Banking Example of Innovative Approach in Agriculture Banking Producer Card • Unique application in Turkey • Facilitates short-term seasonal loans • Combines payment system and loan facility according to producers’ needs • Once-a-year repayment according to producers’ harvest time • Drawdo
Slide 76: Example of Innovative Approach: Business Notes and Loans
PFS : SME Banking Example of Innovative Approach Business Notes Cashflow Backed Loans Consulting & Training Services a.o.: "Sectoral Credit" options : • Financial Management • Tourism • Tax Issues • Food • Government Policies • Furniture • White Goods Business ON "Equal Payment Credit" options : Fin
Slide 77: Example of Innovative Approach: Marketing Strategy Sub-branding
PFS : SME Banking Example of Innovative Approach Marketing Strategy sub-branding SME’s in Turkey criticise ... we create a sensation of ... with guerilla bonding and togetherness by the disinterest of the banking system as a problem ... marketing ... our logo By. the By theend endof of2006, 2006,the
Slide 78: PFS: Private Banking - A Niche to Explore
PFS : Private Banking A Niche to Explore Overview of Private Banking operations • Created in Q3 2004. • Currently a team of 29 FTE spread over 3 private banking centers. (Istanbul, Ankara and Izmir) • Servicing customers with assets over TRY 150,000. • Total AuM amount to USD 280 M* client segmentat
Slide 79: PFS: Insurance - Bancassurance
PFS : Insurance Until End of 2006 ... Overview of Bancassurance • Division created in 2004 as mean of diversification and to create an additional source of fee based income. • DenizBank has agreements and works in cooperation with reputable insurance companies: - non-life via agency agreement with A
Slide 80: DenizBank: an Outperformer Since its Creation
Agenda DenizBank : an Outperformer Since its Creation 1. DenizBank at a glance 2. Focus on : • PPFCE • PFS • Asset Management • TFM Photo : G. Boublil 80
Slide 81: Asset Management: Still a Young Business
Asset Management Still a Young Business Overview of Asset Management • All DenizBank's mutual funds are among the top performers within their respective categories (with 90% in money market Funds). • As of Dec-06 the value of the mutual fund portfolio stood at USD 216 M. • The B Money Market Fund is
Slide 82: DenizBank: an Outperformer Since its Creation
Agenda DenizBank : an Outperformer Since its Creation 1. DenizBank at a glance 2. Focus on : • PPFCE • PFS • Asset Management • TFM Photo : G. Boublil 82
Slide 83: Treasury and Financial Markets
Treasury and Financial Markets Overview of Treasury Operations • The Treasury department is divided into 3 business units : - Treasury group - Foreign currency and liquidity management - Structured products Not Notonly onlydoes doesthe theTreasury Treasurydepartment departmentmanage managethe thefor
Slide 84: Brokerage (1/2): DenizBank is #1 in Turkey
Brokerage (1/2) DenizBank is # 1 in Turkey Customers Services Key figures 2006 • Brokerage Brokerage Net Income : TRY 28.7 M • Retail clients • Corporate Finance Corporate Revenues : TRY 6.0 M Yatirim • Institutional clients • Investment Banking Underwriting Commissions : TRY 5.8 M • IPOs • Domestic
Slide 85: Brokerage (2/2): #1 in Turkey
Brokerage (2/2) # 1 in Turkey ISE Trading Volumes (%) Rank 1 1 1 1 8.4 8.1 8.0 Market 6.4 Share* 2003 2004 2005 2006 Another Anotherstrong strongprofit profitcontributor contributorto toDenizBank DenizBankbottom bottomline. line. * Deniz Yatirim 85 Sources : ISE, Deniz Tatirim, Ekspres
Slide 86: DenizBank in 2006
Agenda Turkey : the Eurasian Rising Economy Saruhan Özel Turkey : a Highly Promising Banking Landscape Saruhan Özel - Hakan Ates DenizBank : an Outperformer Since its Creation Hakan Ates DenizBank in 2006 Photo : G. Boublil Hakan Ates 86
Slide 87: DenizBank in 2006
Agenda DenizBank in 2006 1. Update on 2006 Results 2. Challenges Encountered Photo : G. Boublil 87
Slide 88: Update on 2006 Results (1/2): Another Strong Year
DenizBank : Update on 2006 Results* - BRSA figures (1/2) Another Strong Year Total Assets (TRY M) Shareholders’ Equity (TRY M) 35 % % C AG R 14,737 CAGR 25 11,984 1,354 1,112 8,072 873 2004 2005 2006 2004 2005 2006 Total Loans (TRY M) Total Deposits (TRY M) 6 6% 3 2% CAGR G R 8,899 8,944 C A 7,019 6
Slide 89: Update on 2006 Results (2/2): Another Strong Year
DenizBank : Update on 2006 Results* - BRSA figures (2/2) Another Strong Year Net Income (TRY M) NPL (%) R 58 % 342 C AG 231 3.5 137 2.1 1.9 2004 2005 2006 2004 2005 2006 Cost Income : 53.4% 53.3% 52.7% ROAA (%) ROAE (%) 23.3 27.8 2.3 2.6 18.6 1.9 2004 2005 2006 2004 2005 2006 * Without accounting tr
Slide 90: Shareholder's Equity Evolution 9M 2006
DenizBank : Update on 2006 Results (BRSA figures) Shareholder’s Equity Evolution 9M 2006 (year-to-date)* (%) 13.6 14.2 5.8 3.8 -0.2 -0.6 -7.1 Isbank Akbank Garanti Vakif Halk DenizBank Oyak In a challenging year 2006 affected by DenizBanks’ sales process, May market turbulences, and a more regulated
Slide 91: DenizBank: Currency Exposure
DenizBank : Currency Exposure Exposure on Total Assets (%) Exposure on Total Liabilities (%) 39 USD 41 19 EUR 20 42 TRY 39 Currency Currencyexposure exposureisisalways alwaysfully fullyhedged. hedged. AAnegligible negligibleshort shortposition positionisismaintained. maintained. As of December 2006
Slide 92: DenizBank in 2006
Agenda DenizBank in 2006 1. Update on 2006 Results 2. Challenges Encountered Photo : G. Boublil 92
Slide 93: Dexia, a Committed Partner to Address Main Challenges
2005 - 2006 : Identified Challenges DenizBank Has Found in Dexia a Committed Partner to Address its Main Challenges Need For ... Dexia Fit ... • Capacity to increase equity to • Integral part of Dexia, DenizBank will benefit fully from the Group’s strong equity capture high growth of the market. bas
Slide 94: Wrap Up: Turkey is a Promising Country
Wrap Up Turkey is in All Aspects a Promising Country : • It has high sustainable economic growth prospects supported by all major international institutions. • It is a country with large potential due to its growing infrastructure needs. • It is converging towards European standards at a high speed.
Slide 95: Wrap Up: Turkey's Banking Landscape is Very Promising
Wrap Up Turkey’s Banking Landscape is in All Aspects Very Promising : • Low foreign presence • Effective operations, state-of-the art IT systems, very valuable sales oriented human capital... • And still a very considerable potential in Dexia’s main business lines DenizBank DenizBankoutperformed out
Slide 96: Together in Istanbul - Part 1
No achievement without commitment Together in Istanbul - Part 1 Dirk Bruneel, Chairman of the Board of Directors DenizBank Saruhan Özel, Chief Economist DenizBank Hakan Ates, CEO DenizBank March 1st 2007, Istanbul 96