Turkiye Is Bankasi Anonim Sirketi · BIST:ISBTR
Turkiye Is Bankasi Anonim Sirketi — Türkiye İş Bankası A.Ş. — Investor Day (2020)
18 slides from Turkiye Is Bankasi Anonim Sirketi's investor day presentation, 2020
Slide 1: Well-Balanced and Diversified Loan Portfolio
WELL-BALANCED AND DIVERSIFIED LOAN PORTFOLIO 1
Slide 2: 2019 Performance: Actual vs. Guidance
2019 PERFORMANCE: ACTUAL vs. GUIDANCE 2019 2019 2019 Guidance Revised Guidance* Provisional TL Loan Growth 7 - 8% 9 - 10% TL Deposit Growth 17 - 18% 16 - 17% Return on Average Tangible Equity > 14% 11 - 12% ~ 12% Return on Average Assets 1.4 - 1.6% 1.2 - 1.4% ~ 1.4% Net Interest Margin (Swap adj.) 3
Slide 3: Recovery in Turkish Economy
RECOVERY IN TURKISH ECONOMY Rebalancing in 2019 › Slowdown in global economic activity › Expansionary monetary policies by major central banks 2019 2020 (F) › Rebalancing in Turkish economy Real GDP growth 0.5% (F) 4.0% › Improvement in inflation › Annual GDP growth starting from Q3 Inflation (CPI)
Slide 4: 2020 Strategic Priorities
2020 STRATEGIC PRIORITIES Risk-Oriented Growth & Sustainable Profitability in the Economic Recovery Period 4
Slide 5: Digital Transformation
dit sk em DIGITAL TRANSFORMATION ent t o tmo Unni vi evres er s meerr U C u sC u s e > Physical l and digital instant c ts Custo CX meausrement o d u me Pr Exper r > End-to-end customer and ien journey design ce Co v i c es m > Contextual interactions for instant solutions to problems S er m ct u ta
Slide 6: Digitalisation
DIGITALISATION Evolution of Share of Transactions per Channel Number of Digital Customers Total number of customers using mobile and/or internet Internet ATM Mobile Non-Branch Channels 92% >8.0 mn 86% 89% 7.2 mn 75% 6 mn 62% Highest 53% Net Promoter 39% Score Among 38% Turkish 30% 23% 18% 16% Privat
Slide 7: Integrated & Holistic Approach: Value Creation for Our Stakeholders
INTEGRATED & HOLISTIC APPROACH: VALUE CREATION FOR OUR STAKEHOLDERS Value Creation Model: İŞBANK BANKING › Customer focus Financial Capital › Digital transformation Human Capital › Effective risk management › Ethical and transparent banking Producing Natural Capital › Happy and qualified employees S
Slide 8: Improving Net Interest Margin
IMPROVING NET INTEREST MARGIN Swap Adj. NIM (quarterly) Swap Adj. NIM (cumulative) 3.8 – 4.0% >4.5% 3.6 – 3.7% 3.3% 3.6% 2.9% 3.1% 18 Q4 19 Q1 19 Q2 19 Q3 19 Q4P 2019 P 2020 G 2019 TL Core Spread Evolution (quarterly) In 2020… 20.1% 20.2% 20.3% 19.9% Loan Yield Flexible and dynamic management of fun
Slide 9: Maintaining Resilience in Fee Income
MAINTAINING RESILIENCE IN FEE INCOME Net Fee Income Growth (YoY) Net Fee Income Growth in 2020 31% ~ 10%** ~ 25% 19% 19% 19% 2015 2016 2017 2018 2019 P 2019 P 2020 G Composition of Net Fee Income (as of 2019 9M) In 2020… › Starting from a high base, a further growth of around 10% by: Lending › Incre
Slide 10: Growth Outlook for Loans and Deposits
GROWTH OUTLOOK FOR LOANS AND DEPOSITS Loans (mn TL) Deposits (mn TL) 10 - 11% 13.5 - 14.5% 2020 2020 13.5 - 1 4 . 5 % 10 - 11% 250,962 a l L o a n s 16 - 17% 264,022 Total D e p o s i t s 15 - 16% Tot e p o s i ts 3 - 4 % TL L o a n s F l a ttish TL D U S D ) ( - ) s ( U SD) e p o s it s ( FX Lo a n
Slide 11: Improving Outlook for Asset Quality
IMPROVING OUTLOOK FOR ASSET QUALITY NPL Ratio & Stage 2 (as of 2019 Q3) % NPL Ratio 2020 h ( < 7 ) Share of Stage 2 o: F la ttis N PL R ati 17.4% - 1 5 0 bp s %) 16.1% 16.1% Co R : < h (< 1 4 13.9% - Net ta g e 2 : F la ttis rough aging re o f S reas e th - Sha a g e R a tio : In c e 3 C ov er 6.7%
Slide 12: Strong Liquidity
STRONG LIQUIDITY Maturity Profile of FX Wholesale Funding (bn USD) Non-Deposit FX Funding Progression (bn USD) as of 2019 November 2.5 2.5 Subordinated 2.2 2.1 15.4 2.0 Debt 2.0 1.8 Securities Issued ~12.7 1.5 Other Funds Borrowed 1.0 0.8 Securitization 0.7 0.5 0.3 Syndication 0.3 0.0 2018 2019 P 20
Slide 13: Solid Capital Base
SOLID CAPITAL BASE Legal Requirements & Basel III Buffers CAR & Tier 1 Ratio 20% Min. Legal Requirements (%) 2019 CAR 16% CAR 8 Tier 1 Ratio Tier 1 Ratio 6 12% CET 1 Ratio 4.5 8% Buffers (%) 2019 4% Capital Conservation Buffer 2.5 0% Counter Cyclical Buffer ~0.05 2018 2019 Q1 2019 Q2 2019 Q3 2019 P
Slide 14: Key P&L Items: Improving Profitability
KEY P&L ITEMS: IMPROVING PROFITABILITY Revenue & OPEX Growth (YoY) RoTE 14 - 15% 2019 P 2020 G ~ 12% Flattish NII (Swap adj.) 2019 P 2020 G >20% RoA ~25% Net Fee 1.6 – 1.8% Income ~ 1.4% ~10%* 2019 P 2020 G ~(-) 5% Income from Subsidiaries 3 - 4% Cost / Income** 39 - 40% 40 - 41% 3.5% 20 - 22% OPEX
Slide 15: Sustainability at İşbank
SUSTAINABILITY AT İŞBANK › Top management commitment & efficient governance structure for ESG activities › Responsible financing › Risk assessment via ERET* for new investment projects worth more than USD 10 million › Share of renewable energy projects in total energy generation projects portfolio >
Slide 16: 2020 Expectations & Targets
2020 EXPECTATIONS & TARGETS 2020 G Loan Growth 13.5 – 14.5% Deposit Growth 10 – 11% Return on Average Tangible Equity 14 – 15% Return on Average Assets 1.6 – 1.8% Net Interest Margin (Swap adj.) 3.8 – 4.0% Net Fees and Commissions Growth ~ 10%* OPEX Growth ~ 17% Cost to Income Ratio 40 – 41% NPL Rat
Slide 17: Key Takeaways
KEY TAKEAWAYS › Loan growth in real terms with a selective approach › Continuing focus on asset quality › Utmost attention to low-cost, wide-spread deposit base › Cost-sensitive approach in non-deposit funding › Maintaining resilience in fee income › Cost-management, again, under spotlight › Dissemi
Slide 18: Disclaimer Statement
DISCLAIMER STATEMENT The information in this document has been obtained by Türkiye İş Bankası A.Ş. (“İşbank”) from sources believed to be reliable, however, İşbank cannot guarantee the accuracy, completeness, or correctness of such information. This document has been issued for information purposes