Turkiye Is Bankasi Anonim Sirketi · BIST:ISBTR
Turkiye Is Bankasi Anonim Sirketi — Türkiye İş Bankası — Q1 2006 Earnings Presentation
57 slides from Turkiye Is Bankasi Anonim Sirketi's earnings presentation, Mar 31, 2006
Slide 1: Isbank 2006 Q1 Results
Slide 2: Contents
Contents… Isbank at a Glance 4 Financial Highlights 15 Retail Banking 47 Major Equity Participations 53 2 2 2
Slide 3: Isbank at a Glance
Isbank at a Glance 4 Financial Highlights 15 Retail Banking 47 Major Equity Participations 53 3 3 3
Slide 4: Shareholder Structure
Shareholder Structure… One of the most widespread shareholder base in Turkey… Breakdown of the Total Shares Breakdown of the Free Float Isbank Atatürk's Domestic Pension Shares Investors Fund 28,1% 31,4% Foreign 41,5% Investors 68,6% Free Float 30,4% Around 250,000 domestic and foreign shareholders
Slide 5: Domestic Presence
Domestic Presence… Nationwide coverage… Regions Number of % Branches 872 domestic branches (First among private banks) Marma Marmara 330 37.8 37.8% 2.691 2.691 ATMs (First in the sector) Central Anatolia 152 17.4 17.4% Covers all city centers in Turkey Aegean 145 16.6 16.6% 896 Kiosks Black Sea 93 1
Slide 6: International Presence
International Presence… Shaping its international presence in line with globalization of Turkish Economy 1 Isbank Branch in London,UK 7 Isbank Branches in 1 Financial Serv. Northern Subsidiary in Cyprus Dublin,Ireland 1 Isbank 1 Isbank GmbH Representative Branch in Paris, Office in China France 1 Is
Slide 7: Main Business Lines of Isbank Group
Main Business Lines of Isbank Group… ...as one of the biggest conglomerates in Turkey. ISBANK GROUP Core Business Non-core Business Banking Financial Non-Financial Services Participations Participations Corporate Banking Insurance Glass Retail Banking Private Pension Telecommunications Capital Marke
Slide 8: Comparative Strengths of Isbank
Comparative Strengths of Isbank… Thanks to its strong franchise and nationwide reputation, established banking culture and expertise, widespread customer base, vast distribution network, wide range of product portfolio, largest and stable deposit base, financial supermarket status via complementary
Slide 9: Main Strategies Going Forward
Main Strategies Going Forward… Strong balance sheet growth supported by high level of CAR with both domestic and foreign fund generation capacity Increasing customer focused and marketing oriented approach SUSTAINABLE LEADERSHIP Focus on retail based lending with high asset quality and longer term,
Slide 10: The Largest Private Bank
The Largest Private Bank… …in terms of asset size, IEA, TRL loans, total deposits and shareholders’ equity. Total Assets and IEA (31.03.2006-NTL mn.) LC Loans (31.03.2006-NTL mn.) 65.321 Total Assets IEA 17.317 55.027 52.226 16.404 48.955 38.830 34.927 11.120 23.413 19.930 7.926 Isbank Akbank Yapı K
Slide 11: The Largest Private Bank: Deposit Segments and Mutual Funds
The Largest Private Bank… ...in various deposit segments and mutual funds business... LC Deposits (31.03.2006-NTL mn.) FC Deposits (31.03.2006-NTL mn.) 25.360 14.508 14.108 18.047 11.082 13.680 6.525 9.199 Isbank Akbank Yapı Kredi Garanti Isbank Akbank Yapı Kredi Garanti Demand Deposits (31.03.2006-
Slide 12: The Largest Private Bank: Income and Profit
The Largest Private Bank… ...in terms of int. income on loans, net comm. income, gross income and gross profit. Interest Income on Loans (31.03.2006-NTL mn.) Net Comm. Income (31.03.2006-NTL mn.) 879 844 267 240 630 182 503 146 Isbank Akbank Yapı Kredi Garanti Isbank Akbank Yapı Kredi Garanti Gross
Slide 13: Increasing Dominance in the Market
Increasing Dominance in the Market… ... both in corporate and retail products and services. Share(%) Share(%) Rank 2000 2006/Q1 2006/Q1 Loans LC Loans 6.6 14.7 1st Total Loans 8.5 14.0 2nd Deposits(1) Demand 7.9 15.5 1st LC 4.1 14.9 1st FC 9.9 15.4 1st Total Deposits 6.8 15.1 1st Retail Products(2)
Slide 14: Financial Highlights
Isbank at a Glance 4 Financial Highlights 15 Retail Banking 47 Major Equity Participations 53 14 14 14
Slide 15: Impressive Growth Performance
Impressive Growth Performance… ... in all key measures. Total Assets (NTL mn.) Loans (NTL mn.) 494% 23.532 298% 65.321 20.750 63.712 12.452 38.514 8.579 31.063 6.541 23.731 3.959 16.393 2001 2002 2003 2004 2005 2006/Q1 2001 2002 2003 2004 2005 2006/Q1 Deposits (NTL mn.) Shareholders’ Equity (NTL mn.
Slide 16: Assets Composition
Assets Composition… ... increasing share of loans. Change 19% 14% (NTL mn.) mn.) 2005 2005 2006/Q1 2006/Q1 Ytd(%) td(%) Cash & Banks* Securities 35% Loans Cash & Banks 12,053 9,140 -24% 24% 34% Participations Tangible Assets Securities 21,573 22,679 5% Other 33% 36% Loans 20,750 23,532 13% 13% Parti
Slide 17: Towards a Healthier Asset Structure
Towards a Healthier Asset Structure… ... with no more strategic investments in non-financial businesses. Total Assets vs IEA (NTL mn.) LC/ FC Mix of IEA 85% 84% 65.321 77% 63.712 76% 54.069 55.027 48,9% 59,8% 62,7% 46,0% 38.514 31.063 29.764 40,2% 37,3% 23.687 54,0% 51,1% 2003 2004 2005 2006/Q1 2003
Slide 18: Solid Lending Franchise
Solid Lending Franchise… ... a crucial competitive edge. Total Loans (NTL mn.) LC vs. FC Loans (NTL mn.) 69% 23.532 10% 17.317 20.750 15.729 18.658 16.324 13.894 % 24% 6.215 13 5.021 2005/Q1 2005/Q2 2005/Q3 2005 2006/Q1 2005 LC FC 2006/Q1 Loans Market Share Corporate vs. Non-corporate 13,6% 14,6% 14
Slide 19: More Retail Oriented and Diverse Loan Portfolio
More Retail Oriented and Diverse Loan Portfolio… ... 68% comprised of retail and SME loans. Loans Breakdown (NTL mn.) Retail and SME Loans (NTL mn.) 10% 15,987 20,750 23,532 14,573 2% 2% 13% Overdraft 14% Credit Cards 37% 30% 39% 29% Consumer SME * 55% 55% SME * Retail 32% 31% 2005 2006/Q1 Investmen
Slide 20: Improving Loan Quality
Improving Loan Quality... ...marked by continuing decrease in NPL ratio and 100% NPL provisioning. NPL Ratio NPLs & Loan Loss Reserves (NTL mn.) 11,8% 1.152 1.152 1.133 1.133 1.091 1.091 1.053 1.053 8,3% 4,8% 4,4% 2003 2004 2005 2006/Q1 2003 2004 2005 2006/Q1 NPLs Reserves Coverage (31.03.2006) 152%
Slide 21: Continuous Recovery in Loan Portfolio
Continuous Recovery in Loan Portfolio NPL Ratio by Loan Categories NPL Ratios- Isbank vs. Sector 8,0% 4,8% 4,4% 4,4% 4,4% 3,1% 3,1% 2,2% 0,5% 0,5% 0,5% 0,7% Consumer Credit Cards Total Loans Consumer Credit Cards Total Loans 2005 2006/Q1 Isbank Banking Sector Performing Loan Groups (31.03.2006) NPL
Slide 22: Securities Portfolio
Securities Portfolio… ...still a big investment but losing its share. Breakdown of Securities Portfolio (31.03.2006) Total Portfolio (NTL mn.) 22.679 21.573 FC 13.849 Floating 11.838 6.1% 7.573 LC LC Floating Discount 25.8% Bills 33.3% 2002 2003 2004 2005 2006/Q1 FC Indexed 1.5% FC Fixed rate Averag
Slide 23: A Diversified Equity Participation Portfolio
A Diversified Equity Participation Portfolio… ...operating in financial and non-financial sectors. Sectoral Breakdown by Book Value (31.03.2006) Financial vs. Non-financial Non-core business Financial 41.8% Non- Banks Other financial 10,4% 8,8% Telecom 58.2% 15,2% Insurance Core business Non-financi
Slide 24: Asset Disposals Since 2002
Asset Disposals Since 2002… ...have reinforced free equity and IEA. Revenue from Participation Sales (USD million) Revenue from Fixed Asset Sales (USD million) Total Number of Participations 74 829 9% 58 55 44 44 91% 135 181 155 24% 3% 66% 97% 76% 34% 2002 2003 2004 2005 Shares in 30 equity particip
Slide 25: Strong Fund Generation Capability
Strong Fund Generation Capability… ... driven by flight to quality process, strong franchise and solid reputation. Customer Funds * (NTL mn.) Change (NTL mn.) 2005 2006/Q1 +9% Ytd (%) 37,917 Commercial 34,938 Savings Deposits 37,400 39,868 7% 45% 45% REPOs 5,670 3,185 -44% Funds 8,185 8,488 4% Borro
Slide 26: Liabilities Composition
Liabilities Composition… ... reflecting sound funding base and adequate capitalisation. 5% 4% 5% 13% 13% 10% 2% 9% 5% Other Funds Borrowed 63% 59% 61% Repo Funds Deposits Equity 20% 15% 16% 2004 2005 2006/Q1 Stable deposits base remains as the main source of funding Increasing borrowings enhance bal
Slide 27: Deposits
Deposits… 9 Well diversified retail customer base 9 Unmatched domestic franchise 9 Enjoying the advantage of safe haven status 9 Minimum level of price sensitivity 27 27 27
Slide 28: Largest Deposits Franchise
Largest Deposits Franchise… ... a clear indicator of customer trust. Total Deposits (NTL mn.) 64% 59% 39.868 47% 37.400 44% 35% 24.320 28% 19.562 16.720 11.432 2001 2002 2003 2004 2005 2006/Q1 Total Deposits Share of LC Deposits 28 28 28
Slide 29: Largest Deposits Franchise: Market Share
Largest Deposits Franchise… ... with an increasing market share. Market Shares Deposits (NTL mn.) 16,6% 13,8% 14,9% 14,9%15,4%15,1% +7% 39.868 9,9% 37.400 6,8% 4,1% +15% 25.360 2000 2005 2006/Q1 22.055 LC Deposits FC Deposits Total Deposits Cost of Deposits as of 31.03.2006 15.345 14.508 -5% 12,8% 1
Slide 30: Demand Deposits
Demand Deposits… ...constitute 17% of total deposits and are the main contributor to lower cost of funding. Demand Deposits (NTL mn.) Cost of Demand Deposits 15,3% 15,5% 14,6% 7,247 6,892 6,288 0,32% 53% 0,19% 45% 45% 0,15% 0,14% 2003 2004 2005 2006/Q1 55% 47% 55% Largest and most stable demand depo
Slide 31: Related Party Transactions
Related Party Transactions… ... negligible levels of group financing. Cash Loans (% of Total Cash Loans) Non-Cash Loans (% of Total Non-Cash Loans) 21,6% 16,8% 15,9% 12,4% 11,3% 10,9% 12,6% 10,1% 9,7% 11,5% 7,8% 6,4% 4,0% 3,6% 3,7% 3,2% 1,8% 1,6% 1,7% 1,6% 2002 2003 2004 2005 2006/Q1 2002 2003 2004
Slide 32: Client Assets Under Management
Client Assets Under Management… ... has almost reached a remarkable total of NTL 63 billion. Client Assets (NTL mn.) No. Of Investment Accounts (000) +137% 63,125 4.363 4.302 60,130 0% 4.001 0% 3.597 3.110 45,030 35,142 0% 26,610 63% On-Balance 1% 62% 1% Sheet 54% 55% 63% 2002 2003 2004 2005 2006/Q1
Slide 33: Sufficient Capitalisation
Sufficient Capitalisation… ... and high CAR support balance sheet growth going forward. Capital Adequacy Regulatory Capital (NTL mn.) 8,450 29,0% 7,755 27,0% 25,0% 25,4% 6,458 21,9% 7.196 21,6% 6.787 6.001 3.040 3.510 1.734 2004 2005 2006/Q1 1.278 2.072 2.256 CAR Tier I Ratio 2004 2005 2006/Q1 Capit
Slide 34: Visible Improvement in Free Equity
Visible Improvement in Free Equity… ... thanks to asset disposals and superior profitability. Free Equity in Total Shareholders’ Equity (NTL mn.) mn.) Free Equity/Shareholders’ Equity 10,556 55,5% 9,677 53,0% 7,640 5.857 5.128 2.140 28,0% 2004 2005 2006/Q1 2004 2005 2006/Q1 Shareholders' Equity Free
Slide 35: Income Statement Highlights
Income Statement Highlights… ... big balance sheet creates high level of operational profit. Change (NTL mn.) 2005/Q1 2006/Q1 YoY Net Banking Income Composition Adj. Net Interest Income (1) 624 604 -3% Net Commissions 207 267 29% 51% 59% Net Trading Income 96 1 -99% Dividend Income 8 15 88% 23% 20%
Slide 36: LC / FC Mix
LC / FC Mix… ... has been changing in favour of LC. LC/ FC Mix (NTL mn.) Assets Liabilities 42,189 65,321 65,321 42,189 68% 64% 63% 58% 37% 42% 32% 36% 2005/Q1 2006/Q1 2005/Q1 2006/Q1 LC* FC *Including FC indexed items 36 36 36
Slide 37: Increasing Volume of Interest Earning Assets
Increasing Volume of Interest Earning Assets… ... contributes to sustaining high net interest margins. IEA vs. IBL (NTL mn.) IEA Development 7.247 6.892 103% 106% 107% 6.288 54.069 55.027 51.255 51.540 28.984 85% 84% 29.764 77% 2004 2005 2006/Q1 2004 2005 2006/Q1 Int. Ear. Assets Demand Deposits Int
Slide 38: Breakdown of Interest Income
Breakdown of Interest Income… ... increasing income from loans in line with higher share of loans in the balance sheet. Interest Income (NTL mn.) Interest Income on Loans (NTL mn.) 879 6% 1,640 12% 662 6% 6% 25% 1,195 18% 5% 53% 55% 38% 57% 41% 40% 38% 2005/Q1 2006/Q1 2005/Q1 2006/Q1 Corporate Loans
Slide 39: Robust Commissions Income Performance
Robust commisions income performance... ... supported by superior retail and corporate franchise. Commisions Received (NTL mn.)-(Gross) Net Comm. Income / Cost 289 66,2% 11% 54,7% 7% Cash Loans 233 6% Non-Cash Loans 14% 7% Credit Information 10% Mutual Funds 21% 2005/Q1 2006/Q1 Credit Card 25% Forei
Slide 40: Effective Cost Management and Increased Profitability
Effective Cost Management and Increased Profitability… ... resulted in one of the best cost/income improvement among peers. Cost / Income Cost vs. Income (NTL mn.) 55,8% 1.184 45,7% 1.055 40,2% 37,2% 34,1% 378 403 2002 2003 2004 2005 2006/Q1 2005/Q1 2006/Q1 Cost Income Cost vs. Assets Cost Structure
Slide 41: Higher Profitability
Higher Profitability… ... reflected in improved ratios. ROAE ROAA 16,14% 2,53% 11,47% 1,94% 1,83% 9,63% 2004 2005 2006/Q1 2004 2005 2006/Q1 41 41 41
Slide 42: Stock Performance and Dividend Distribution
Stock Performance and Dividend Distribution… ... most valuable listed company in Turkey. Market Cap. Comparison (NTL mn.) Earnings per Share & Payout Ratio 27.000 10,57% 10,67% 48,54% 22.123 22.000 20.340 38,73% 17.000 12.280 12.525 32,43% 32,67% 32,10% 12.000 10.500 29,66% 7.000 5.112 5.342 3.190 2
Slide 43: Ratings
Ratings… ...ahead of Turkey’s standards in various aspects of rating. FITCH RATINGS Rating Outlook MOODY’S Rating Outlook Long Term Foreign Currency BB- Positive Financial Strength D Positive Long Term Local Currency BB* Positive Long Term Bank Deposits FC B1 Stable Short Term Foreign Currency B - L
Slide 44: Corporate Governance
Corporate Governance… First company in Turkey rated for Corporate Governance Principles set by the CMB… Rating Summary Isbank has become the first company, which Evaluation Subject Rate Weight % was rated for compliance with the Corporate 25 Governance principles set by the Capital Market Board of D
Slide 45: Advantages of Isbank
Advantages of Isbank… ... to maintain high profitability in the low interest environment 9 Well positioned banking business to benefit from economic recovery and opportunities of newly forming mortgage market with high growth potential 9Appropriate positioning of balance–sheet to take maximum advant
Slide 46: Retail Banking
Isbank at a Glance 4 Financial Highlights 15 Retail Banking 47 Major Equity Participations 53 46 46 46
Slide 47: Among the Top Three in Credit Card Business
Among the Top Three in Credit Card Business… Credit Cards 14 different products for different customer segments 4 Isbank started distributing chip cards 4 The first and only bank in Turkey which has made an agreement with 4 the world’s fourth largest payment system JCB Reward points by more than 80,
Slide 48: Capital Market Operations
Capital Market Operations… ... an area which Isbank dominates since its foundation. Market Share Rank NTL bn. Volume of Mutual Funds 20% 1st 5.7 Fixed Income Sec. Under Custody 14% 1st 11.9 Odd-lot Equity Trading 98% 1st 0.008 48 48 48
Slide 49: First and Largest Mutual Fund Provider
First and Largest Mutual Fund Provider… ... 17 types of mutual funds designed for different risk appetites. Mutual Funds (NTL mn.) Number of Investors 5.659 5.711 609.121 617.167 4.910 555.954 499.324 3.942 2003 2004 2005 2006/Q1 2003 2004 2005 2006/Q1 Income From Funds (NTL mn.) 24,8% 21,4% With 8
Slide 50: Increasing Retail Customer Base
Increasing Retail Customer Base… ... supported by payroll accounts and bill payment agreements. Payroll Accounts Automated Bill Payments 1.789 4.050 3.518 1.011 1.198.000 1.243.513 4.604.901 3.962.062 2005/Q1 2006/Q1 2005/Q1 2006/Q1 Amount(NTL million) Number of Accounts Amount(NTL million) Number o
Slide 51: Alternative Distribution Channels
Alternative Distribution Channels… ... are being used more efficiently. Use of Non-Branch Channels (%) 1997 2000 2003 2004 2005 2006/Q1 ATM 28 29 23 22 21 19 43% 40% 38% 64% 58% POS 5 6 20 21 21 20 Internet 1 5 10 13 16 18 57% 60% 62% 42% 36% Telephone 2 2 2 2 1 2 97 00 03 04 06/Q1 Kiosk - - 1 1 1 2
Slide 52: Major Equity Participations
Isbank at a Glance 4 Financial Highlights 15 Retail Banking 47 Major Equity Participations 53 52 52 52
Slide 53: Glass
Glass… Isbank 66 % General Information Market/Production Shares (%)* Turkey** Europe World*** 9 A leading flat glass, glassware, glass packaging, and chemicals producer. Flat Glass 76.0 8.0*** 3.0 9 In all product lines, leader in the domestic market with a strong presence in export Glassware 68.0 1
Slide 54: Market Shares of Şişe Cam
Market Shares of Şişe Cam… Glassware (%) Chromium Products (%) Bulgaria 30 Taiwan 60 Iran 26 S.Korea 30 Ukraine 25 China/H. Kong 15 U.K. 22 Flat Glass (%) Russian Federation 20 Bulgaria 16 Italy 12 Greece 10 Germany 10 Spain 8 Soda Ash (%) Syria 50 Glass Fibre (%) Egypt 45 Switzerland 7.3 Italy 13 G
Slide 55: Mobile Telecommunication
Mobile Telecommunication… İşbank Group 18.86% Turk Telecom 40.57% Telecom Italia Group 40.57% Aria and Aycell merged under TT & TIM as of February 19, 2004 Avea brand has been successfully launched in June 2004. The coverage and efficiency have increased significantly due to the combination and inte
Slide 56: List of Financial Participations
List of Financial Participations… Bank’s Shareholder’ Field of Direct Group Assets (1) Market Company s Equity (1) Activity Share Share (%) (USD 000) 000) Share (%) (%) (USD 000) 000) Türkiye Sınai Kalkı Kalkınma Bankası Bankası A.Ş A.Ş. Investment Bank 40.52 50.10 (6) 2,477,281 (6) 412,979 (6) 25.8
Slide 57: Disclaimer Statement
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 purpose