Turkiye Sinai Kalkinma Bankasi A.s. · BIST:TSKB
Turkiye Sinai Kalkinma Bankasi A.s — Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q4 2022 Earnings Presentation
31 slides from Turkiye Sinai Kalkinma Bankasi A.s's earnings presentation, February 2023
Slide 1: The Industrial Development Bank of Türkiye FI&IR Presentation 4Q-22
The Industrial Development Bank of Türkiye FI&IR Presentation 4Q-22 Bank-only Results Corporate Banking Investment Banking Advisory Services
Slide 2: TSKB at a Glance
TSKB at a Glance Z Turkey nls Bank Group ssn Ratings TSKB Sovereign Lyle oe Shareholding Z fakifban! AKG Fitch LTFC B- B Free Float* & Other Moody’sLTIR B3 B3 SAHA Corporate Governance Rating Yi TRY 11.3 bn MCAP . 5 Sustainalytics ESG te / As of February,6th 2023 Risk Rating 7.9 Negligible Risk CORP
Slide 3: A Unique Business Model
A Unique Business Model = Long term tenor in liabilities: 11 years * Medium term in assets: 5 years = Diversified funding tools = Amortized loan book = Multi-disciplinary assessment during allocation = Sector specific research analysts during allocation and monitoring period = Strong collateralizati
Slide 4: Main Stakeholders of the Bank
Main Stakeholders of the Bank A trustworthy partner in; Large Corporates, MidCap Companies & SME's Its field experience Cooperation in various areas such as; corporate loans, investment banking activities and advisory services Ministry of Treasury and Finance Its capacity to introduce innovative the
Slide 5: Sustainability is Well Integrated into Our Business Model
Sustainability is Well Integrated into Our Business Model health and safety © Supporting less developed regions Support for employment in Turkey; ® Encouraging women participation to the economy ERB Support transition to low ye carbon economy © Providing financing to operational Environmental & Soci
Slide 6: TSKB Sustainability Journey
TSKB Sustainability Journey - | First Carbon Neutral Bank of Turkey Environmental Factor in Credit Appraisal Process Environmental Management System Yy coy 1980 1990 2005 2007 2008 2009 First Environmental Loans | + UNEP FI + ISO 14001 Certificate + Launch of www. cevreciyiz.com 0Og cevreciyiz. * ce
Slide 7: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 8: Sustainability Developments and Future Agenda
Sustainability Developments and Future Agenda Net Zero Pathway Stakeholder Engagement Strong ESG Risk Management Net-Zero Banking Alliance (NZBA) Membership + Stakeholder and Materiality Analysis + Sustainalytics ESG Risk Rating Score + Setting targets before 2030 update with the double materiality
Slide 9: 4Q-22 At a Glance
4Q-22 At a Glance + Intact asset quality, with elevated Intact Asset Quality & coverages an extra free provisions = Intact asset quality, no change in the loan classifications Strong Front Loaded z Provisioning + NPL: down to 2.9% + No change in the loan classifications = One of the highest coverage
Slide 10: Financial Guidance (Bank Only)
Financial Guidance 2022YE (%) 2022YE (%) 2023YE (%) (Bank Only) Guidance Figures Guidance Growth FX Adjusted Loan Growth Contraction -6 ~5 Profitability Net Interest Margin (*) >6 6.9 >5 Fees & Commissions Growth ~80 124 ~100 Return On Equity ** >40 41.1 ~35 Efficiency OPEX Growth In line with CPI 9
Slide 11: Stellar core revenue expansion continues
Stellar core revenue expansion continues Net Banking Income-TLmn Annual Evolution of Net Banking Income vs Provisions TLmn 7,194 7,194 2,164 2,003 150% 882 150% 835 2,889 360 73 1,810 2,889} 1,095 922 495 30-22 40-22 YE-21 YE-22 Net Banking Income Provisions (inc. free provisions) ‘= Net Banking Inc
Slide 12: Banking Sector vs TSKB
AP Banking Sector vs TSKB CAR* 23.6% 19.5% L Banking Sector *Reported figures Cost to Income 20.4% da Banking Sector BANKING SECTOR Repo |__| Syndication Funds 4% 1% Borrowed Deposit 65% ee ry Securities Issued 2% Subordinated bonds and loans (ATI + Tier Il) 2% Loans/Assets NPL 69.5% 55.0% He 2.1% B
Slide 13: Funding maturity profile
-116 -604 -471 -464 -350 -400 -198 -1,984 -350 -200 2023 2024 2025 >=2026 Syndication & Other DFI Funding Eurobond Subordinated loan Money Market Funding
Slide 14: Long Term DFI Funding Base
14 IBRD AIB Kfw CDB AFD IDB vac FR o> IFC Long Term DFI Funding Base Outstanding DFI Funding Base - 4Q-22 43.5% Yearly Multilateral Funding Agreements - USD mn New Loan Agreements in 4Q22 + AIIB| USD 200 million + AFD|EUR 80 million 2016 2017 2018 2019 2020 2021 2022 48% 4.8% 4.3% 3.8% EBRD | | 2.0%
Slide 15: Outstanding Project Themes Shaping Future Loan Book
VS Outstanding Project Themes Shaping Future Loan Book Energy and Resource Efficiency Women’s Employment and Equal Opportunity Renewable Energy Midcap Financing Supporting Exporters Regional Development Supporting Employment Sustainable Agriculture Industrial Development Sustainable Tourism Occupati
Slide 16: Resilient Asset Composition
Resilient Asset Composition Asset Composition-TL bn Total Loans - TL bn carey % % Breakdown % 6 9 80.3 75.5 ZY 10% 63.9 4.0 3.98 90% 4.65 4Q-21 30-22 4Q-22 WY Yyy Yj Loans mSecurities =Cash&MM_ mNon IEAs & Other =FXLoans($) = TRY Loans 4Q-22 Loans by Currency & Type Remaining Average Maturity - Year
Slide 17: Risk Management Pillars
Risk Management Pillars Credit Risk * Monitoring the clients individually with analysing the financials * Preparing monitoring reports for the clients at least once a year * Keeping track of internal and external (if it is done) ratings of the customers, reviewing the internal ratings annually = Act
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Slide 19: Loan book by sector
Electricity Generation 39.0% Finance 10.4% Metal & Machinery 7.2% Tourism 5.6% Health & Education 5.6% Electricity/Gas Distr. 5.2% Logistics 4.4% Construction & Construction Materials 3.3% • Chemistry & Plastics 2.9% • Food & Beverage 2.6% • Non-Residential Real Estate 1.9% Automotive 1.3% Telecom &
Slide 20: Renewable energy loans by source
1.6 bn 1.9 bn 1.9 bn 1.9 bn 1.9 bn 1.7 bn 4% 6% 6% 7% 8% 11% 5% 5% 5% 6% 9% 11% 35% 37% 35% 37% 39% 36% 17% 18% 19% 20% 19% 19% 37% 35% 35% 31% 24% 23% 2017 2018 2019 2020 2021 2022 Hydro Geothermal Wind Biomass Solar • •
Slide 21: 68,094 2,652 2,140 % 45.5 8.8 21.0 22.1 26.9
68,094 695 2,652 2,140 % 45.5 7 5 8.8 5 21.0 9 22.1 26.9
Slide 22: Security Yields
Security Yields 80.4% 75.6% TL Sec. Yield exc. CPI CPI 58.6% • 42.8% • 23.2% 16.6% 19.6% • 13.0% 18.9% 17.0% 17.3% 18.8% 19.1% 13.6% 15.3% 16.4% 1Q-21 2Q-21 3Q-21 4Q-21 1Q-22 2Q-22 3Q-22 4Q-22
Slide 23: Income Statement Highlights
Income Statement Highlights TLmn YE-21 E22 [JJ¥oYll) 30-22 40-22 fas) strong ni generation boosted Net Interest Income 2,529 6415 154% 1,877 2,010 7% by CPHinkers and . robustloan spread Trading Income 495 1,024 107% 360 73-80% ; a Outstanding Net Fees & Commissions 71 159 124% 37 39 6% YoY increase
Slide 24: Further enhanced core NIM performance
24 Further enhanced core NIM performance = CPI Impact Core NIM 3.94% 4Q21 0.8% 3.2% 4Q21 Annualized NIM 6.90% 6.44% 3Q-22 4Q-22 — 3.0% 20 bps. 3.7% DO 3.9% 3Q-22 4Q-22 Robust margin expansion continues excluding CPI linkers 2022 October - October CPI is 85.51% TL 1.5 bn of additional revenue generat
Slide 25: Strengthened Solvency Metrics above regulatory levels
25 Strengthened Solvency Metrics above regulatory levels Capital Ratios Without BRSA Temporary Measures 12.0% 16.7% 8.5% 14.4% 8.9% 2021 3Q-22 2022 BTier|Ratio =CAR With BRSA Temporary Measures ~ CAR: 22.4% | Tier :21.3% | CET-I: 16.5% 76.9 Tier | Ratio Evolution 0.27 095 Free Provision Adjusted CAR
Slide 26: 2S BS Q gf x
2S BS Q gf x
Slide 27: TSKB Sustainability Policies
• TSKB Sustainability Policy • Environmental and Social Management Impact Policy • Climate Change Mitigation and Adaptation Policy • List of Activities that are not to be financed • Sustainable Procurements Management Policy Revised to further align with • Responsible Corporate Communications Policy
Slide 28: TSKB Sustainable Finance Framework
TSKB Sustainable Finance Framework * Updated in December 2020 in line with recent ICMA principles and global trends. Peas ee rinende Frenewon + Reviewed by Sustainalytics + Align with ICMA Green Bond, Sustainability Bond, Social Bond and LMA Green Loan Principles Use of Proceeds - 2 Main business ac
Slide 29: Balance Sheet
29 Balance Sheet Cash and Banks Securities Loans (Gross) Provisions Subsidiaries Other Total ST Funds LT Funds Securities Issued Repo & MM Other Subordinated Debt Equity 9,888 23,401 80,274 -5,499 3,962 3,548 115,575 2,481 65,847 21,048 3,929 5,659 3,829 12,782 31/12/2021 30/09/2022 31/12/2022 mo TL
Slide 30: Detailed Income Statement
30 Detailed Income Statement TLmn Net Interest Income inc. Swap Cost Net Interest Income CPI Linkers Swap Costs (-) Net Commissions Other Income Dividends Other Trading & FX gains/losses FX gains/losses MtM gains/losses Trading gains/losses Banking Income OPEX (-) Net Banking Income ECL (-) Stage |
Slide 31: TSKB Financial Institutions & Investor Relations
31 ool Oe TSKB Financial Institutions & Investor Relations TSKB Financial Institutions & Investor Relations ir@tskb.com.tr www.tskb.com Meclisi Mebusan Cad. 81 Findikli 34427 istanbul
Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q4 2022 Earnings Presentation on 6ix