Turkiye Garanti Bankasi Anonim Sirketi · BIST:GARAN
Turkiye Garanti Bankasi Anonim Sirketi — Turkiye Garanti Bankasi A.S. — Q1 2023 Earnings Presentation
33 slides from Turkiye Garanti Bankasi Anonim Sirketi's earnings presentation, Apr 27, 2023
Slide 1: 1Q23 Earnings Presentation
1Q23 EARNINGS PRESENTATION Based on BRSA Consolidated Financials April 27th, 2023
Slide 2: Turkish Economy
TURKISH ECONOMY Uncertainty remains high due to upcoming ELECTIONS & IMPACT FROM EARTHQUAKES ECONOMIC ACTIVITY is backed by FISCAL EXPANSION & SUPPORTIVE GLOBAL OUTLOOK SLOW-DOWN IN INFLATION MIGHT BE LIMITED in the rest of the year after elections
Slide 3: Growth Momentum Remains Strong
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 3 GROWTH MOMENTUM REMAINS STRONG GDP GROWTH (YoY) CG BUDGET BALANCE / GDP (year end) 11.4% 2022: 5.6% 7.6% 7.8% -0.9% 4.0% 3.5% -2.7% 3.0% -2.9% -3.4% -4.6% 2021 1Q22 2Q22 3Q22 4Q22 2023E 2019 2020 2021 2022 2023E CONSUMER & PRODUCER INFLATION (YoY) Despi
Slide 4: 1Q23 Financial Results
1Q23 FINANCIAL RESULTS STRATEGICALLY MANAGED LENDING GROWTH SUSTAINED IMPROVEMENT IN CORE BANKING REVENUES NET COR IN-LINE W/ GUIDANCE EVEN AFTER EARTHQUAKE RELATED IMPACTS CAPITAL REMAINS STRONG
Slide 5: Resilient Earnings Outperformance and Improving Core Revenues
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 5 RESILIENT EARNINGS OUTPERFORMANCE AND IMPROVING CORE REVENUES EVEN IN A CHALLENGING REGULATORY ENVIRONMENT NET INCOME (QUARTERLY, TL bn) PERFORMANCE IN LINE YoY WITH GUIDANCE 19.8 87% 15.5 1.6X YoY QoQ Core NII growth 8.3 (incl. Swap excl. CPI income) (
Slide 6: Disciplined Capital Allocation Ensures Sustainable Growth
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 6 DISCIPLINED CAPITAL ALLOCATION ENSURES SUSTAINABLE… GROWTH PROFITABILITY STRENGTH GROWTH Strategically managed loan growth High RoE with low leverage suggests Liquid, highly provisioned & and high quality funding rock-solid balance sheet management well
Slide 7: Asset Mix Continues to Be Customer Oriented
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 7 ASSET MIX CONTINUES TO BE CUSTOMER ORIENTED, INCREASE IN SECURITIES’ WEIGHT LARGELY ATTRIBUTABLE TO THE REGULATIONS ASSET BREAKDOWN PERFORMING LOANS (TL, US $ billion) QoQ 807.2 742.1 $5.0 9% $5.2 $10.0 Total 475.3 $9.3 3% Fixed Assets & Other (incl. FC
Slide 8: Strategically Managed Loan Growth in Light of Regulatory Framework
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 8 STRATEGICALLY MANAGED LOAN GROWTH IN LIGHT OF THE REGULATORY FRAMEWORK LED TO SLOWDOWN IN LENDING TL PERFORMING LOAN BREAKDOWN TL PERFORMING LOAN GROWTH (64% of total performing loans) Consumer (exc. CCs) TL Business Credit Cards 127% Mortgage, 5% Auto,
Slide 9: Highly Liquid & Actively Managed Funding Portfolio
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 9 HIGHLY LIQUID & ACTIVELY MANAGED FUNDING PORTFOLIO LIABILITIES & SHE BREAKDOWN EXTERNAL DEBT VS. FC QUICK LIQUIDITY2 (US$ bn) Total Demand Other ; Deposits; 30.5% 5.3 5.5% 4.4 SHE; 11.9% TL1.5tr 1Q23 Interbank Money Market; 2.5% External Debt FC Liquidi
Slide 10: Accelerated Increase in TL Deposit Base
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 10 ACCELERATED INCREASE IN TL DEPOSIT BASE IS OWED TO ADDITIONAL REGULATIONS INCENTIVIZING LIRAIZATION TL CUST. DEPOSITS (in TL bn) STRONG ZERO-COST DEMAND (54% of total deposits) QoQ DEPOSIT BASE 561.6 32% 424.1 436.0 40% 43% 177.9 310.8 Cust. demand dep
Slide 11: Anticipated Margin Drop from the Peak
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 11 ANTICIPATED MARGIN DROP FROM THE PEAK WITH REGULATORY PRICE CAPS ON LENDING AND THE REMOVAL OF THE CAP ON THE FC PROTECTED DEPOSITS NIM INCL. SWAP COST* 13.1% 11.7% YoY QoQ 7.4% +28bps -614bps 5.5% 7.8% CPI Impact 6.6% 6.9% 2.6% 2.2% 2.5% Core NIM 6.2%
Slide 12: Continued to Prudently Increase Provisions
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 12 CONTINUED TO PRUDENTLY INCREASE PROVISIONS MAINLY FOR THE PORTFOLIO AFFECTED BY THE DEVASTATING EARTHQUAKES LOAN PORTFOLIO BREAKDOWN STAGE-2 BREAKDOWN (TL Billion ) 120.4bn excl. currency impact2 118.1 bnTL in Mar’23 107.2bn Stage 1, vs. 107.2 bn TL in
Slide 13: Strong Recoveries and an Improving NPL Ratio
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 13 STRONG RECOVERIES AND AN IMPROVING NPL RATIO, YET NO EASE IN PROVISIONING NPL EVOLUTION NPL & COVERAGE RATIOS (TL million) (%) Net New NPL Adj. w/ curr. impact, 549 854 NPL sales & write-downs 3.4% 145 2.7% NPL RATIO 2.5% 276 Currency Impact 82% 2,465
Slide 14: Net CoR Faring in Line with Guidance
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 14 NET COR FARING IN LINE WITH GUIDANCE EVEN AFTER EARTHQUAKE RELATED ADDITIONAL PROVISIONS NET PROVISIONS excl. CURRENCY (TL bn) NET CoR TREND excl. CURRENCY* +15% YoY -54% QoQ 3,565 2.5% 2.3% 1.3% 1,632 1.1% 1,419 0.8% 2019 2020 2021 2022 1Q23 1Q22 4Q22
Slide 15: Sustained Fee Generation Capability
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 15 SUSTAINED FEE GENERATION CAPABILITY OWED TO STRENGTH IN RELATIONSHIP BANKING & DIGITAL EMPOWERMENT NET FEES & COMMISSIONS (TL bn) NET F&C BREAKDOWN1 Cash +106% YoY Loans, Non-Cash +8% QoQ 14.9% Loans, 9.5% Other, 3.0% Global Markets, 6.6 6.1 13.9% 3.2
Slide 16: High Opex Growth Due to Base Effect
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 16 HIGH OPEX GROWTH IS DUE TO BASE EFFECT & WILL CONVERGE TO GUIDED LEVELS BY YEAR-END OPERATING EXPENSES (TL Bn) +127% YoY +31% QoQ 9% Currency Depreciation 12.0 Impact 9.1 No impact on bottom line (100% hedged). 7.7 5.3 6.3 Non-HR 3.3 4.3 HR 2.0 2.9 1Q2
Slide 17: Capital Remains Strong
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 17 CAPITAL REMAINS STRONG – 1Q CAPITAL GENERATION COULD LARGELY COMPENSATE DIVIDEND & OPERATIONAL RISK IMPACTS SOLVENCY RATIOS without BRSA’s forbearance CET1 CAR CAR inc free prov. ~31bps ~35bps 17.5% BRSA CAR sensitivity to 16.8% 15.9%16.5% 10% TL Forbe
Slide 18: Exceptional Value Creation Also in Non-Financial KPIs
EXCEPTIONAL VALUE CREATION ALSO IN NON-FINANCIAL KPIs First Turkish bank to announce INTERIM DECARBONISATIONS TARGETS for 2030 to achieve Net Zero by 2050 Hub for other banks’ accounts ONE OF THE PIONEERS OF OPEN BANKING IN TURKEY 13.4 MILLION MOBILE CUSTOMERS Highest digital & mobile customer base
Slide 19: Garanti BBVA's Unique Value Proposition (I/III)
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 19 GARANTI BBVA’S UNIQUE VALUE PROPOSITION (I/III) STRONG PERFORMANCE IN BLOOMBERG GENDER HYBRID WORKING PRACTICES FOR EMPLOYEE LOYALTY EQUALITY INDEX MODEL EMPLOYEE SATISFACTION AND WORK-LIFE BALANCE 4.3/5 poll results The only Turkish company that has b
Slide 20: Garanti BBVA's Unique Value Proposition (II/III)
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 20 GARANTI BBVA’S UNIQUE VALUE PROPOSITION (II/III) FIRST TURKISH BANK TO ANNOUNCE INTERIM DECARBONISATIONS TARGETS FOR 2030 TO ACHIEVE NET ZERO BY 2050 COMMITTED TO PORTFOLIO ALIGNMENT CONTRIBUTION TO SUSTAINABLE FINANCE (TL bn) WITH THE PARIS AGREEMENT
Slide 21: Garanti BBVA's Unique Value Proposition (III/III)
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 21 GARANTI BBVA’S UNIQUE VALUE PROPOSITION (III/III) OUR COMMITMENT TO ESG IS RECOGNIZED BY VARIOUS AGENCIES CDP Moody’s BLOOMBERG CDP SUSTAINALYTICS Indices DJSI CLIMATE MSCI ESG FTSE4GOOD GENDER EQUALITY WATER ESG RISK INDEX CHANGE Credit Impact Score S
Slide 22: Appendix
Appendix P G . 23 Sector Breakdown of Gross Loans P G . 28 Securities Portfolio P G . 24 FC Loan Breakdown P G . 29 Summary Balance Sheet P G . 25 Maturity Profile of External Debt P G . 30 Summary P&L P G . 26 Adjusted L/D and Liquidity P G . 31 Key Financial Ratios Coverage Ratios, P G . 32 Quarte
Slide 23: Appendix: Sector Breakdown of Gross Loans
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 23 APPENDIX: SECTOR BREAKDOWN OF GROSS LOANS % SHARE COVERAGE RATIO SECTOR BREAKDOWN OF GROSS LOANS1 Key Sectors Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 TL 737.7bn Retail 85% 12% 2% 0.6% 4.9% 61.6% Energy 47% 47% 5% 0.4% 18.8% 76.5% Construction 3
Slide 24: Appendix: Closely Monitored and Well-Provisioned FC Loans
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 24 APPENDIX: CLOSELY MONITORED AND WELL-PROVISIONED FC LOANS FC PERFORMING LOANS (36% of total performıng loans) MITIGATION OF FX RISK - TIMELY DELEVERAGING (in $ bn) US$ 15.0 bn Consolidated FC Performing Loans* = US$ GBI and GB Romania loan placements 1
Slide 25: Appendix: Maturity Profile of External Debt
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 25 APPENDIX: MATURITY PROFILE OF EXTERNAL DEBT MATURITY PROFILE OF EXTERNAL DEBT (US$ billion) 0.75 0.2 Syndicated Loan Eurobond MTN Secured Finance DPR Covered Bond $3.02 Bilateral Post Finance Sub ordinated Debt 0.75 0.21 $0.76 1.92 $0.51 0.6 $0.05 0.4
Slide 26: Appendix: Adjusted LDR and Liquidity Coverage Ratios
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 26 APPENDIX: ADJUSTED LDR AND LIQUIDITY COVERAGE RATIOS Loans funded via long-term on B/S alternative funding sources ease LDR (TL billion) 1,040 1,040 Total Loans / 78% Adjusted 67% 807 - 0.2 - 37.5 - 7.0 - 67.2 Deposits: LDR - 2.3 693 TL Bonds TL MM Mer
Slide 27: Appendix: Market Shares
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 27 APPENDIX: MARKET SHARES Market Shares1 Dec-22 Mar-23 QoQ D Rank Consumer Loans inc. Consumer CCs 14.0% 14.1% 7 bps #1* Cons. Mortgage Loans 7.1% 7.5% 40 bps #2* Consumer Auto Loans 15.2% 16.0% 84 bps #2* Cons. General Purpose Loans 14.1% 13.4% -71 bps
Slide 28: Appendix: Securities Portfolio
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 28 APPENDIX: SECURITIES PORTFOLIO TOTAL SECURITIES (TL billion) TL SECURITIES (TL billion) FC SECURITIES (US$ billion) 17% of Total Assets 19% +29% 9% +10% 167.8 7% 19% (1%) +16% +28% 3.7 (4%) 243.8 +2% + +16% 129.9 118.5 164.1 204.7 3.2 187.7 31% 2.9 3.9
Slide 29: Appendix: Summary Balance Sheet
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 29 APPENDIX: SUMMARY BALANCE SHEET (TL billion) ASSETS 31.03.2022 30.06.2022 30.09.2022 31.12.2022 31.03.2023 Cash & Cash Equivalents 109.1 133.1 170.1 158.4 166.8 Balances at CBRT 105.6 123.6 123.3 114.0 157.5 Securities 135.9 157.1 187.7 204.7 243.8 Gro
Slide 30: Appendix: Summary P&L
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 30 APPENDIX: SUMMARY P&L QUARTERLY P&L CUMULATIVE P&L TL Million 4Q22 1Q23 QoQ 3M22 3M23 YoY (+) Net Interest Income including Swap costs 28,531 17,950 -37% 10,951 17,950 64% (+) NII excluding CPI linkers' income 14,798 13,092 -12% 10,829 13,092 21% (+) I
Slide 31: Appendix: Key Financial Ratios
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 31 APPENDIX: KEY FINANCIAL RATIOS Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Profitability ratios ROAE (Cumulative)1 37.5% 43.1% 49.0% 51.0% 38.2% ROAA (Cumulative)1 3.7% 4.3% 5.0% 5.4% 4.5% Cost/Income 27.6% 25.4% 23.9% 23.6% 37.8% Liquidity ratios Loans / Depos
Slide 32: Appendix: Quarterly & Cumulative Net CoR
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 32 APPENDIX: QUARTERLY & CUMULATIVE NET CoR (Million TL) (Million TL) Quarterly Net Expected Credit Loss 2Q22 3Q22 4Q22 1Q23 Cumulative Net Expected Credit Loss 3M23 (-) Expected Credit Losses 6,231 6,321 6,302 10,345 - (-) Expected Credit Losses 10,345 S
Slide 33: Disclaimer Statement
1Q23 BRSA CONSOLIDATED EARNINGS PRESENTATION 33 DISCLAIMER STATEMENT Türkiye Garanti Bankasi A.Ş. (“Garanti BBVA”) has prepared this presentation document (the “Document”) thereto for the sole purposes of providing information which include forward looking projections and statements relating to Gara
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