Turkiye Sinai Kalkinma Bankasi A.s. · BIST:TSKB
Turkiye Sinai Kalkinma Bankasi A.s — Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q1 2019 Earnings Presentation
32 slides from Turkiye Sinai Kalkinma Bankasi A.s's earnings presentation, 2019
Slide 1: Investor Presentation 1Q '19 – Bank only results
Created with a trial version of Syncfusion Essential PDF Investor Presentation by 1Q ’19 – Bank only results
Slide 2: Unique Banking Model
Unique Banking Model Access to TR Long lasting Ministry of Privately owned relationship with Treasury and Development and Development Finance Finance Investment Bank Institutions (DFIs) guaranteed funding Financially Integrated Business Solid Figures Model with Sustainability principles Longer matur
Slide 3: TSKB at a Glance
TSKB at a Glance TRY 41.6 bn asset size 364 employees, 2 branches İs Bank Group 40.7% Shareholder 13th bank in terms of asset size Vakifbank Structure 50.9% 3.3% market share in LTFC corporate loans Free Float and Other TRY 2.1 bn MCAP* 8.4% 47.6% of free float belongs to foreign investo
Slide 4: Main Stakeholders
Main Stakeholders MINISTRY of TREASURY and DFI’s & FI’s CLIENTS FINANCE Trustworthy partner in; Trustworthy partner in; •its experience of field •Large Corporates, MidCap •Theme generation Companies & SME’s •its capacity to introduce •Fast utilization innovative themes as for • Cooperation in variou
Slide 5: Sustainability is Key to Our Activities
Sustainability is Key to Our Activities Support for employment in Turkey; Encouraging women’s participation to the economy Support transition to low carbon economy Providing financing to operational health and safety Supporting less developed regions Financing to decrease energy dependency in
Slide 6: Main Business Lines Supporting the Bank's Mission
Main Business Lines Supporting the Bank’s Mission Corporate Banking Investment Banking Advisory Services Strategic financial consultancy – LT Direct loan financing – industrial Manages own securities portfolio partnership to support strategic investments, energy and resource Structured risk
Slide 7: Main Highlights of the Quarter
Main Highlights of the Quarter Net Profit – TL mn 170 185 17% 159 YoY NIM • Strong topline revenue generation 407 383 4.5% 269 • Prudent risk management ROE 14.8% -111 -198 -237 • Healthy solvency metrics ROA 1.9% • Sound liquidity 1Q-18 4Q-18 1Q-19 CAR @ 16.0% Net Banking Income Provisions&Tax Quar
Slide 8: Banking Sector vs TSKB
Banking Sector vs TSKB CAR Loans/Assets NPL 16.4% 71.6% 16.0% 63.6% 4.0% 2.1% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB Cost to Income NIM ROE 33.7% 4.5% 14.8% 3.8% 11.5% 11.1% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB * As of March 2019 Repo & Depo; 5% Funds Synd
Slide 9: Strong FX Liquidity
Strong FX Liquidity Funding / Total Liabilities (exc equity) USD mn 6,838 6,281 6,360 Balanced 5% 3% 5% Sound Liquid Positive Cash 4% 4% Flow 6% 5% 5% 4% Position throughout Repo &Money Market 19% 21% 21% the year Syndication & P/N etc. Subordinated Debt 11% 11% 11% Securities Issued Liquidity Net S
Slide 10: Long Term DFI Funding
Long Term DFI Funding Outstanding DFI Funding Base Yearly Multilateral Funding Agreements IBRD 37% 38% EIB 28% 28% KFW 12% 986 12% 660 733 7% 600 IDB 7% 463 340 160 CEB 5% 5% 83% of DFI Funding 2012 2013 2014 2015 2016 2017 2018 AFD 4% 5% guaranteed by 2018 Turkey Ministry of IFC 2% 2% Treasury and
Slide 11: Outstanding Project Themes
Outstanding Project Themes Social Infrastructure: Midcap Industrial Energy & Resource Renewable Development Health, Education Capacity Efficiency & Clean Energy Building Transportation Environmental Occupational Health Pollution Climate Change SME Support & Safety Abatement in Industry Women’s Susta
Slide 12: Well-managed Asset Composition
Well-managed Asset Composition Asset Composition – TL bn Total Loans – TL mn Currency Breakdown 41.6 38.3 5% 4% 9% 29,789 8% 28,226 31.4 14% 2,266 8% 14% 23,977 2,233 6% 5% 6% 2,178 15% 7% 68% 67% 5,062$ 5,017$ 92% 5,561$ 69% 1Q-18 4Q-18 1Q-19 1Q-18 4Q-18 1Q-19 FX Loans TRY Loans Securities FX Loans
Slide 13: Strong Risk Management
Strong Risk Management Monitoring the clients individually with analysing the Effective internal control systems to financials prevent, detect and manage the operational risks which results in a very low Preparing monitoring reports for the clients at least level of losses in connection with o
Slide 14: Loan Evaluation, Appraisal and Allocation
Multi-Disciplinary Loan Appraisal and Monitoring Detailed technical analysis of the investment projects Monitoring and Collateralization Engineering Capacity determination of the investments Vision Review and justification of the business model Loan concentration is prudently Establishing
Slide 15: Selective Lending Book
Selective Lending Book Loans by sector (Q1’19) Electricity Generation 36% Electricity Generation; Finance 10% 86% of which are Telecom/Logistics 10% Renewable Energy Electricity/Gas Distribution 8% 91% of which benefit Metal and Machinery 5% from Feed in Tariff Construction 4% Chemistry and Plastics
Slide 16: Energy Production % in Detail
Energy Production % in Detail Renewable Energy Portfolio (Outstanding Risk $) Energy Portfolio Risk 1.9 bn 1.9 bn 1.8 bn Operating % 1.3 bn 1.4 bn 1.5 bn 1.6 bn Breakdown 4% 6% 6% 93% 7% 7% 6% 6% 5% 5% 5% 60% 18% 22% 14% 34% 32% 3% 35% 37% 35% 100% 9% 14% 17% 18% 18% 75% 86% 95% 75% 69% 51% 46% 38%
Slide 17: State Incentive Mechanisms
State Incentive Mechanisms Guaranteed Sales Prices & Incentives for Local Manufactured Equipments Guaranteed Sale Price Incentives for Local Equip. Type (USD cent/kWh) (USD cent/kWh) Hydro Power Plant (HPP) 7.3 1.0—2.3 Wind Power Plant (WPP) 7.3 0.6—3.7 Geothermal Power Plant (GEO) 10.5 0.7—2.7 Biom
Slide 18: Loan Classification with Prudent Approach
Loan Classification with Prudent Approach Stage 1 Loans 31.12.2018 88.0% Gross Amount Share in Total Coverage Ratio Provisions (-) TL Mn. 83.0% 87.5% 87% Stage 1 24,690 87.5% 0.6% 134 Stage 2 * 2,944 10.4% 7.2% 212 78.0% Stage 3 593 2.1% 28.0% 165 2018YE 1Q-19 Gross Loans 28,227 100.0% 1.86% 511 Sta
Slide 19: Stage 2 & NPL Portfolio in Focus
Stage 2 & NPL Portfolio in Focus Stage 2 Loans TL bn 2.9 3.2 NPLs TL mn 593 618 SCIR Loans are in the restructuring No new NPL 65% 63% inflow process 88% 92% 35% 37% 12% 8% 2018YE 1Q-19 2018YE 1Q-19 Restructured SICR Single file Other Stage 2 Sectoral Breakdown Other Electricity/Gas Electricity 1) A
Slide 20: NPL: TSKB vs Banking Sector
20 9.4% 2002 17.6% 9.4% 2003 11.5% 4.9% 2004 6.0% 2.9% 2005 4.8% 1.5% 2006 3.7% 0.8% 2007 3.4% 0.7% 2008 3.6% 0.6% NPL: TSKB vs Banking Sector 2009 5.2% TSKB 0.5% 2010 3.6% 0.4% 2011 2.7% 0.2% Banking Sector 2012 2.8% 0.4% 2013 2.7% 0.2% 2014 2.8% 0.4% 2015 3.1% 0.3% 2016 3.2% 0.2% 2017 2.9% 2.1% 20
Slide 21: Securities Portfolio
Securities Portfolio TL mn Securities / Assets : 14% 309 303 312 Duration: 1.1 yrs in Fixed bonds, 1.8 yrs in Floating bonds, 3.6 yrs in CPIs in TL Sec. Portfolio. 3,896 4,085 % 71 3,561 70% is in AFS portfolio. Private sector bonds: 3.3% of total portfolio 1Q-18 4Q-18 1Q-19 TL FX($) TL Securi
Slide 22: Hefty Topline Revenue Despite Lower CPI Contribution
Hefty Topline Revenue Despite Lower CPI Contribution Stable NIM TL mn 1Q-18 4Q-18 1Q-19 QoQ YoY excluding CPI-linker Net Interest Income 267.7 513.7 375.5 -27% 40% Income Trading Income 24.8 - 59.1 38.9 N.M. 57% Derivative valuation gain, FX position Net Commissions 4.7 5.8 7.8 34% 65% income held f
Slide 23: Stable Core Net Interest Margin
Stable Core Net Interest Margin Annualized NIM CPI normalized NIM Quarterly NIM NIM NIM exc. CPI&Trading 1Q-19 4.5% 4.4% 5.4% 4.1% 3.8% 4.1% 3.9% 4.6% 4Q-18 3.6% 4.5% 4.9% 3Q-18 4.1% 3.4% 3.4% 3.2% 3.7% 3.1% 3.3% 3.3% 3.3% 2Q-18 3.9% 1Q-18 4.1% 2Q-17 3Q-17 4Q-17 1Q-18 2Q-18 3Q-18 4Q-18 1Q-19 Quarter
Slide 24: Strong Capital Generation Bolsters Solvency Metrics
Strong Capital Generation Bolsters Solvency Metrics Capital Adequacy Ratio Evolution of RWA and Equity – TL mn 16.1% 16.2% 16.0% 40,406 37,369 12.0% 31,452 8.5% 11.6% 11.1% 10.7% 3,656 5,071 4,155 6,056 4,326 6,446 1Q-18 2018 1Q-19 1Q-18 2018 1Q-19 Tier I (CET 1) CAR RWA Core Equity Total Capital Ti
Slide 25: Key Performance Indicators
Key Performance Indicators ROE ROA Cost to Income 18.4% 16.0% 14.8% 12.5% 10.8% 11.1% 2.3% 2.0% 1.9% 2017 2018 1Q-19 2017 2018 1Q-19 2017 2018 1Q-19 ROTE CAR NIM 4.9% 4.5% 18.8% 18.1% 18.0% 3.9% 17.1% 16.1% 16.0% 2017 2018 1Q-19 2017 2018 1Q-19 2017 2018 1Q-19 ROE; Annualized Net Income for the peri
Slide 26: Guidances for 2019
Guidances for 2019 Financial Guidance (%) 2019YE Guidance 1Q-19 Main Agenda for 2019 FX Adjusted Loan Growth ~5 Flat Loans/Assets Ratio ~75 72 Prudent Loans/Long Term Funding Ratio* ~115 122 Risk Management Fees & Commissions Growth >35 65 OPEX Growth <25 24 Strong Capital Net Interest Margin ** 3.5
Slide 27: What Lies Ahead?
What Lies Ahead? Development Banking Targets •Support transition to low carbon economy •Extend resources to support UN Sustainable Environmental Development Goals Targets •Focus on geothermal, solar, wind and biomass investments in renewable energy •Encourage women’s participation to the economy •Of
Slide 28: Appendix
Appendix — aa»
Slide 29: A Long Award-Wining Track Record
A Long Award-Wining Track Record ''Best Green Bond in CEE Award'' & ''Best structured finance deal in CEE'' & ''Best syndicated loan in CEE'' & ''Best Infrastructure Deal'' & ''Best Privatization Deal in EMEA'' - EMEA Finance Awards 2017 ''SRI Bond of the Year'' – IFR (International Financing Re
Slide 30: Appendix: Cumulative Income Breakdown
Appendix: Cumulative Income Breakdown (TRY mn) 1Q-18 1Q-19 YoY Net Interest Income 267.7 375.5 40% Trading Income - Adj. 24.8 38.9 57% Net Commissions 4.7 7.8 65% Dividend & Other 12.2 11.1 -9% Banking Income 309.5 433.2 40% OPEX (-) 40.0 49.7 24% Net Banking Income 269.5 383.4 42% Provisions (-) 71
Slide 31: Appendix: Balance Sheet
Appendix: Balance Sheet 31/03/2018 31/12/2018 31/03/2019 (TRY mn) TRY FX TOTAL TRY FX TOTAL TRY FX TOTAL Cash and Banks 8 1,329 1,329 600 1,340 1,940 926 1,919 2,845 Securities 3,561 1,235 4,797 3,894 1,585 5,479 4,088 1,664 5,753 Loans (Gross) 2,129 21,799 23,928 2,233 25,994 28,227 2,573 27,215 29
Slide 32: TSKB Financial Institutions & Investor Relations
TSKB Financial Institutions & Investor Relations www.tskb.com.tr
Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q1 2019 Earnings Presentation on 6ix