Turkiye Vakiflar Bankasi Turk Anonim Ortakligi · BIST:VAKBN

Turkiye Vakiflar Bankasi Turk Anonim Ortakligi — Türkiye Vakıflar Bankası T.A.O. (VakıfBank) — Q3 2017 Earnings Presentation

30 slides from Turkiye Vakiflar Bankasi Turk Anonim Ortakligi's earnings presentation, Nov 6, 2017

  1. Slide 1: Earnings Presentation BRSA Bank-Only 3Q17

    Earnings Presentation VakıfBank IR App. Available at BRSA Bank-Only 3Q17 November 6, 2017

  2. Slide 2: 3Q17 Macro Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 3Q17 Macro Highlights GDP Growth Monetary Policy 14.00 10.0 13.00 8.0 12.00 6.0 11.00 4.0 10.00 9.00 2.0 8.00 0.0 7.00 -2.0 CBRT Avr. Funding Rate Monthly TL Deposit Rate O/N Lending Rate Late liquidity Window USD/TL Banking Sector 4.0 3.8 (%)

  3. Slide 3: 3Q17 VakıfBank Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 3Q17 VakıfBank Highlights Quarterly reported bank-only net income is TL 700.7 million, Further strengthened asset quality metrics; which is down 21.9% QoQ.  NPL ratio came further down to 3.97% vs 4.04% in 2Q17. Quarterly comparable* net incom

  4. Slide 4: 3Q17 Earnings and Ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 3Q17 Earnings and Ratios Reported Net Income (TL million) Adjusted Quarterly Net Income (TL million)* 10.9% Sector net vs income 896.7 906.1 46.9% growth 817.4 1.1% 28.6% 2,822.1 YoY 1,224.8 1,921.0 817.4 896.7 3Q16 2Q17 3Q17 586.9 700.7 516.7

  5. Slide 5: 9M17 P&L Details

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 9M17 P&L Details 1,182 8,660 (3,218) 959 93 123 6,303 (1,920) (700) 2,822 9M17 Net Interest Net Fees and Dividend Net Trading Other Income Total Operating Provisions Taxes Net Income Income Commissions Income Income Revenue Expenses % vs 9M16 +

  6. Slide 6: Revenue breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Revenue breakdown Total Revenues (TL million) Revenue Breakdown (%) 26.7% Dividend Other Other Dividend 6,833 8,660 11.8 1.3 1.1 Trading Trading 13.6 3.2 1.4 Net F&C Net F&C 2,836 10.3 9M16 11.1 9M17 2,557 NII NII 73.4 72.8 9M16 2Q17 3Q17 9M17

  7. Slide 7: NIM, Spreads and Costs

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 NIM, Spreads and Costs TL Core Spreads (%) FC Core Spreads (%) 13.34 13.22 13.32 13.37 5.96 5.51 5.17 5.20 TL Loan Yields FC Loan Yields 9.31 TL Deposit Costs 1.95 2.04 2.16 8.50 1.73 FC Deposit Costs 7.73 7.61 4.01 5.61 5.61 3.44 3.17 3.35 4.8

  8. Slide 8: Eye-catching fee performance shows bank-wide fee generation commitment

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Eye-catching fee performance shows bank-wide fee generation commitment Net Fee & Commission Income (TL million) Breakdown of Net Fee & Commission Income (%) 36.4% Insurance Money Transfer 5 7 958.8 Cash Loans Inquiry&Expertise 7 21 44.2% 702.7

  9. Slide 9: Opex growth in line with operational budget

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Opex growth in line with operational budget Operating Expenses (TL million) Breakdown of Opex (TL million) Jaws Ratio (%, YoY) +10% (adj)* Quarterly 12% Growth 9M17 3,217.9 2,872.8 26.7 3,218 2,873 65.1 Stellar Jaws Non- HR (7.2%) Ratio 1,924.5

  10. Slide 10: Asset Breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Asset Breakdown Total Assets (TL billion) Breakdown of Assets (%) 24.9% Other* 15 Quarterly Growth 236.6 246.8 197.6 212.5 Interbank Securities Loans 4.3% 2.3 3Q17 3Q16 +1% +6% Selective lending, yet TL depreciation Securities related 12.2 Loan

  11. Slide 11: Uninterrupted lending growth driven by TL Loans

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Uninterrupted lending growth driven by TL Loans Total Loans (TL billion) FC Loans (USD billion) 27.1% 1.9% Sector 13.6 13.7 vs 13.4 13.5 total loan 174.0 growth 167.1 0.5 % 4.1% 23.9% YoY 146.6 48.7 136.9 47.7 2% 47.6 40.2 21.2% 3Q16 4Q16 2Q17

  12. Slide 12: Well diversified & stable loan breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Well diversified & stable loan breakdown Breakdown of Loans (TL billion) Loans (TL billion) 136.9 146.6 167.1 174.0 Other 1 9.5 9.5 10.1 11.2 VB VB VB Sector Sector 3Q17 QoQ YoY QoQ YoY Cash& Non-Cash SME 35.7 37.0 44.7 46.8 219.4 5% 27% 4% 24%

  13. Slide 13: Lucrative retail segments were the main driver of quarterly lending growth

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Lucrative retail segments were the main driver of quarterly lending growth General Purpose Consumer (TL billion) Residential Mortgages (TL billion) 25.6% vs Sector GPC 7.8% growth of 19.2% YoY 18.9 20.1 Strong presence in 17.0 18.1 key retail 1

  14. Slide 14: TL business banking loan growth continued with slower pace

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 TL business banking loan growth continued with slower pace Commercial&Corporate (TL billion) Project Finance Loans (USD billion) 32.1% Sector 7.8% vs commercial & Expected corporate growth of slowdown in 8.6 8.8 27% YoY 8.2 8.2 2.9% growth pace

  15. Slide 15: Lower new NPL inflows & further improved NPL ratio

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Lower new NPL inflows & further improved NPL ratio NPL (TL million)* Reported and Comparable NPL Ratios (%) 22 bps improvement Collections/New 613 NPL: YtD 5.21 5.19 5.13 451 5.08 7,030 7,192 73.6% in 3Q17 4.19 4.06 4.04 3.97 3.72 3.88 3.76 3.7

  16. Slide 16: Conservative NPL coverage ratio further enhanced

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Conservative NPL coverage ratio further enhanced Specific Provisions (TL million) General Provision (TL million) 191 1,686 170 1,269 122 ~TL 1.3 billion 479 533 additional 22 general 9M16 2Q17 3Q17 9M17 9M16 2Q17 3Q17 9M17 provisions held Speci

  17. Slide 17: Customer deposits driven well diversified funding structure

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Customer deposits driven well diversified funding structure October 2017, Breakdown of Liabilities (%) Breakdown of Liabilities (TL billion) Covered Bond Sub-Debt Sub-Debt Bonds Other issuance 2.3 Other Bonds 6.3 2.2 6.6 8.6 6.1 197.6 246.8 TL

  18. Slide 18: Conservative funding maintained via moderate quarterly deposit growth

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Conservative funding maintained via moderate quarterly deposit growth Total Deposits (TL billion) Breakdown of Deposits (%) TL Deposits (TL billion) 21.4% 16.5% Sector TL State vs deposit Other 100.8 101.8 Deposit growth of 26.6 31.6 87.4 86.1

  19. Slide 19: Effective capital management & further strengthened solvency ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Effective capital management & further strengthened solvency ratios Capital Adequacy Ratio (%) Buffers (%) 3Q17 2017 2018 2019 +96 bps Capital Conservation Buffer 1.250 1.250 1.875 2.500 CET1 11.83% 11.47% 12.36% 12.80% 12.79% Counter Cyclical

  20. Slide 20: Appendix

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Appendix Pg. 21 Securities Portfolio Pg. 22 Credit Card Loans Pg. 23 Alternative Distribution Channels Pg. 24 VakıfBank with numbers Pg. 25 Ratings Pg. 26 Diversified funding sources via Non-Deposit Funding Pg. 27 Unconsolidated Key Financial R

  21. Slide 21: Well balanced security portfolio

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Well balanced security portfolio Total Securities (TL million) Portfolio Structure 15.4% 26,188 27,611 29,352 30,213 Total TL 5.4 billion 8,087 8,181 8,992 2.9% 8,991 TL 24.8 billion equivalent 29.6% 30.6% 29.8% TL FC 30.9% 1,648 1,611 1,669 86

  22. Slide 22: Sustainable market share gain in credit card business maintained

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Sustainable market share gain in credit card business maintained Credit Card Loans (TL million)* Retail Credit Card Market Share (%) Sector 16.9% credit card 47 bps YoY loan growth 5.80 increase in 6,801 vs of 11.6% YoY 5.49 5.64 retail credit

  23. Slide 23: Increased focus on alternative distribution channels

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Increased focus on alternative distribution channels Active Mobile Banking Customers (#thousand)* Breakdown of Transactions (%) 55.5% Other** Call Center 10.2 1,544.7 1,399.9 3.0 1,110.8 10.3% 993.5 ATM Mobile Banking 36.3 23.4 3Q17 3Q16 4Q16 2

  24. Slide 24: VakıfBank with numbers

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 VakıfBank with numbers Distribution Channels & Customer (#) 3Q17 Efficiency (‘000 TRY) 3Q17 Personnel 16,152 Assets per Employee 15,281 POS Terminals 213,536 Assets per Branch 266,539 Outstanding Credit Cards 3.9 mn Loans per Employee 10,774 To

  25. Slide 25: Ratings

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Ratings Fitch Ratings Moody’s Standard & Poor’s (October 4, 2017) (October 26, 2017) (February 1, 2017) Long term FC IDR BB+ Ba2 BB / B FC Counterparty Credit Ratings VakıfBank Outlook Stable Negative Negative BCA (Baseline Credit Assessment) V

  26. Slide 26: Diversified funding sources via Non-Deposit Funding

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Diversified funding sources via Non-Deposit Funding US$ 2,052 milllion outstanding April 2017 US$ 967 million equivalent 1 year syndicated loan, all in cost as Libor + 1.45% ve Euribor +1.35% with participation of 30 banks from 15 countries. Sy

  27. Slide 27: Unconsolidated Key Financial Ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Unconsolidated Key Financial Ratios 9M16 3Q16 2Q17 3Q17 9M17 Profitability* ROAE 14.4% 17.8% 17.0% 12.8% 18.1% ROAA 1.3% 1.7% 1.6% 1.2% 1.6% Cost / Income 42.0% 38.0% 38.0% 43.9% 37.2% Cost / Assets 1.9% 2.0% 1.8% 1.8% 1.7% Fee / Cost 24.5% 25.

  28. Slide 28: Unconsolidated Balance Sheet

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Unconsolidated Balance Sheet 3Q16 4Q16 2Q17 3Q17 TL USD (thousand) TL USD TL USD TL USD TL USD YoY QoQ YoY QoQ Cash & Balances with Central Bank 21,636,174 7,224,098 24,365,297 6,931,806 26,244,627 7,477,102 26,242,801 7,366,359 21.29% (0.01%)

  29. Slide 29: Unconsolidated Income Statement

    INVESTOR RELATIONS Earnings Presentation_Bank Only 3Q17 Unconsolidated Income Statement 3Q16 (TL-thousand, %) 9M16 3Q16 2Q17 3Q17 9M17 YoY QoQ 3Q17 Net Interest Income 5,017,983 1,919,791 2,121,383 1,804,381 6,302,521 25.60% (14.94%) (6.01%) Net Fee & Com. Income 702,715 246,955 311,912 356,037 958,

  30. Slide 30: Investor Relations contact and disclaimer

    A member of BIST Sustainability Index With this recycling paper, following items have been saved annually; Investor Relations 60 kg of landfill Levent Mah. Çayır Çimen Sok. No:7 Kat:6 14 kg of CO2 and greenhouse gases 34330 Beşiktaş-İstanbul / Turkey E-mail: investorrelations@vakifbank.com.tr 1,519

Türkiye Vakıflar Bankası T.A.O. (VakıfBank) — Q3 2017 Earnings Presentation on 6ix