Turkiye Vakiflar Bankasi Turk Anonim Ortakligi · BIST:VAKBN

Turkiye Vakiflar Bankasi Turk Anonim Ortakligi — Türkiye Vakıflar Bankası T.A.O. (VakıfBank) — Q1 2018 Earnings Presentation

31 slides from Turkiye Vakiflar Bankasi Turk Anonim Ortakligi's earnings presentation, May 21, 2018

  1. Slide 1: Earnings Presentation BRSA Bank-Only 1Q18

    VakıfBank IR App. Available at Earnings Presentation BRSA Bank-Only 1Q18 May 21, 2018

  2. Slide 2: 1Q18 Macro Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 1Q18 Macro Highlights GDP Growth Monetary Policy 14.00 12.0 13.00 10.0 12.00 8.0 11.00 6.0 10.00 4.0 9.00 2.0 8.00 0.0 7.00 -2.0 CBRT Avr. Funding Rate Monthly TL Deposit Rate O/N Lending Rate Late liquidity Window USD/TL Banking Sector 4.5 (%)

  3. Slide 3: 1Q18 VakıfBank Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 1Q18 VakıfBank Highlights Quarterly bank-only net income came at TL 1,051.4 Fee&Commission income growth came strong at million, which is up by 16.7% QoQ. 52.6% YoY. 1Q18 ROAE came at 17.4% vs sector average of 15.1%. Synergy improvement with s

  4. Slide 4: 1Q18 Earnings and Ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 1Q18 Earnings and Ratios Reported Net Income (TL million) ROAE (%) 1,224.8 3.9 ppt better than 24.5 sector 1,051.4 896.7 901.3 19.0* 16.7% 17.1 17.5 15.9 1.6* 700.7 14.9 15.1 13.5 17.4 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 4Q17 YE17 1Q18 VB Sector Comp

  5. Slide 5: 1Q18 P&L Details

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 1Q18 P&L Details 950* 3,857 (1,264) 113 444 44 2,306 (1,293) (249) 1,051 1Q18 Net Interest Net Fees and Dividend Net Trading Other Income Total Operating Provisions Taxes Net Income Income Commissions Income Income Revenue Expenses % vs 1Q17 -3

  6. Slide 6: NIM, Spreads and Costs

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 NIM, Spreads and Costs TL Core Spreads (%) FC Core Spreads (%) 13.37 14.01 14.07 TL Loan Yields 9.31 9.38 9.46 TL Deposit Costs 5.92 5.67 5.51 FC Loan Yields 2.16 2.17 2.14 FC Deposit Costs 4.63 4.61 Quarterly 4.06 (2 bps) flattish core 3.75 3.

  7. Slide 7: Eye-catching fee growth supported by diversified fee sources

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Eye-catching fee growth supported by diversified fee sources Net Fee&Commission Income (TL million) Breakdown of Net Fee&Commission Income (%) Money Transfer Insurance 52.6% 4 6 Inquiry&Expertise Cash Loans 443.9 9 28 371.8 19.4% Other 290.9 1

  8. Slide 8: Having one of the lowest Cost/Income Ratio among peer group

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Having one of the lowest Cost/Income Ratio among peer group Operating Expenses (TL million) Branch Number (#) +22.3% (adj)* 24.3% 1,263.6 1,202.8 29.7 957 1,016.5 29.5 5.1% Commercial only 924 927 35 Branches 7.9 920 opened Ytd 893 1Q17 4Q17 1Q

  9. Slide 9: Asset Breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Asset Breakdown Total Assets (TL billion) Breakdown of Assets (%) 27.6% Other* 282.0 15.1 270.6 221.0 Interbank The share of 4.2% 3.5 1Q18 loans in total Securities assets came at 12.1 Loans 69.3 %69.3 1Q16 YE17 1Q18 in 1Q18 Interest Earning As

  10. Slide 10: Well balanced TL and FC quarterly lending growth

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Well balanced TL and FC quarterly lending growth Total Loans (TL billion) FC Loans (USD billion) 27.6% 8.8% 195.4 Sector 182.9 vs total loan 14.6 6.8% 57.5 growth 14.0 20% YoY 13.4 4.3 % 52.7 29.4% 153.2 28.8% 9.1% 48.5 31.7% 18.5% 1Q17 YE17 1Q

  11. Slide 11: Well diversified & stable loan breakdown

    INVESTOR RELATIONS Earnings Presentation Bank Only 1Q18 Well diversified & stable loan breakdown Breakdown of Loans (TL billion) Loans (TL billion) 153.2 182.9 195.4 Other 1 9.7 11.9 12.1 VB VB VB Sector Sector 1Q18 QoQ YoY QoQ YoY Cash&Non-Cash SME 37.5 47.8 51.0 251 7% 28% 5% 20% Loans Total Loans

  12. Slide 12: Profitability focused Retail Banking continued

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Profitability focused Retail Banking continued General Purpose Consumer (TL billion) Residential Mortgages (TL billion) Strong presence in key retail 18.3% 16.0% segments thanks to 20.6 21.2 2.2 million 17.9 19.6 pay-roll accounts 3.0% 19.0 16.

  13. Slide 13: Selective commercial&corporate lending was the main driver of quarterly loan growth

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Selective commercial&corporate lending was the main driver of quarterly loan growth Commercial&Corporate (TL billion) Project Finance Loans (USD billion) 28.5% 14.7% 91.5 83.6 9.4 71.2 9.0 8.2 5.0% 9.5% (TL bn) 3Q17 2017 1Q18 Total CGF Guarante

  14. Slide 14: The share of stage II loans in total lending continued to decrease

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 The share of stage II loans in total lending continued to decrease NPL (TL million)* Reported and Comparable NPL Ratios (%) 30 bps improvement 753 YoY 446 5.13 5.08 4.97 5.04 7,638 7,945 4.21 4.04 4.01 3.91 3.21 3.29 3.11 3.26 3.21 3.10 2.96 2.

  15. Slide 15: IFRS-9 Transition

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 IFRS-9 Transition Loan Portfolio Breakdown (TL Billion) Pre- IFRS 9 Post-IFRS 9 Group 7.9 III,IV,V 7.6 Stage III 7.6 5.8 6.2 Group II 6.9 Stage II Group I 189.2 Stage I 176.0 177.1 31-Dec-17 01-Jan-18 31-Mar-18 Group I 0.9% 0.8% 0.8% Stage I Co

  16. Slide 16: Further decline in Net CoR

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Further decline in Net CoR Net Expected Credit Losses Net Cost of Risk (bps) (43 bps) 93 83 (Thousand TL) 1Q18 50 Expected Credit Losses 1,283,114 Stage III 1,037,650 Provision Reversals under other 1Q17 4Q17 1Q18 810,560 income 1Q18 Specific N

  17. Slide 17: Customer deposits driven well diversified funding structure

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Customer deposits driven well diversified funding structure Breakdown of Liabilities (%) Sub-Debt Sub-Debt Other Bonds 2.2 Other Bonds 2.4 January 2018, 8.8 7.2 February 2018, Repo* 8.3 7.1 USD 650 Third Covered 3.3 Repo* 3.0 million, the Bond

  18. Slide 18: Further market share gains continued in TL deposits

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Further market share gains continued in TL deposits Total Deposits (TL billion) Breakdown of Deposits (%) TL Deposits (TL billion) 24.7% vs Sector total 22.2% Sector TL State vs deposit deposit Other growth of Deposit growth of 155.3 162.1 28.8

  19. Slide 19: Conservative solvency ratios maintained despite challenging environment

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Conservative solvency ratios maintained despite challenging environment Capital Adequacy Ratio (%) Impact of IFRS-9 Transition on Equity The effect of 0.1 TL decrease CET1 12.36 12.80 12.79 12.33 12.22 /increase in USD/TL parity on CAR is 15.74

  20. Slide 20: Appendix

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Appendix Pg. 21 Securities Portfolio Pg. 22 Credit Card Loans Pg. 23 Alternative Distribution Channels Pg. 24 VakıfBank with Numbers Pg. 25 Ratings Pg. 26 Diversified Funding Sources via Non-Deposit Funding Pg. 27 Historical developments on the

  21. Slide 21: Well balanced security portfolio

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Well balanced security portfolio Total Securities (TL million) Portfolio Structure 18.6% 34,143 TL 6.2 billion 32,253 Total TL 28.0 billion equivalent 28,786 5.9% TL FC 8,628 16,766 30.0% 52.0% 25,753 18% 75.4% 50% 1,771 100% 6.2% 32% 1,937 6.0

  22. Slide 22: Stable market share in supplementary credit card business

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Stable market share in supplementary credit card business Credit Card Loans (TL million)* Retail Credit Card Market Share (%) Sector 20.0% credit card 40 bps YoY loan growth increase in vs of 14.7% YoY retail credit card market 7,123 7,157 5.80

  23. Slide 23: Strong growth in mobile platforms continues

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Strong growth in mobile platforms continues Active Mobile Banking Customers (#thousand)* Breakdown of Transactions (%) 51.0% Call Center 3 1,911 1,727 1,545 1,400 1,266 10.7% ATM Mobile Banking 32 26 1Q18 1Q17 2Q17 3Q17 YE17 1Q18 Internet 21 Br

  24. Slide 24: VakıfBank with numbers

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 VakıfBank with numbers Distribution Channels&Customer (#) 1Q18 Efficiency (‘000 TRY) 1Q18 Personnel 16,148 Assets per Employee 17,463 POS Terminals 215,622 Assets per Branch 301,588 Outstanding Credit Cards 4.1 mn Loans per Employee 12,101 Tota

  25. Slide 25: Ratings

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Ratings Fitch Ratings Moody’s Standard&Poor’s (February 1, 2018) (March 9, 2018) (May 4, 2018) Long term FC IDR BB+ Ba3 BB- / B FC Counterparty Credit Ratings VakıfBank Outlook Stable Stable Stable BCA (Baseline Credit Assessment) Viability Rat

  26. Slide 26: Diversified funding sources via Non-Deposit Funding

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Diversified funding sources via Non-Deposit Funding US$ 2.4 billion outstanding April 2018 US$ 1.291 million equivalent syndicated loan with 1 year and 2 year tranches, all in cost as Libor + 1.30% and Euribor +1.20% for 1 year and Libor + Synd

  27. Slide 27: Historical developments on the upcoming share transfer process

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Historical developments on the upcoming share transfer process Mr. Ali Babacan, Deputy Prime Minister The Articles 6-12 of the Statutory Decree numbered 696 that was published on the Official Gazette on during that time, announced the transfer

  28. Slide 28: Unconsolidated Key Financial Ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Unconsolidated Key Financial Ratios 1Q17 1H17 9M17 2017 1Q18 Profitability* ROAE 24.5% 20.8% 18.1% 17.5% 17.4% ROAA 2.3% 1.9% 1.6% 1.5% 1.5% Cost / Income 31.1% 34.3% 37.2% 37.2% 32.8% Cost / Assets 1.8% 1.8% 1.7% 1.6% 1.8% Fee / Cost 28.6% 28.

  29. Slide 29: Unconsolidated Balance Sheet

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Unconsolidated Balance Sheet 1Q17 2017 1Q18 TL USD (thousand) TL USD TL USD TL USD YoY QoQ YoY QoQ Cash&Balances with Central 23,300,205 6,418,789 28,644,824 7,577,996 30,855,501 7,804,920 32.40% 7.70% 21.60% 3.00% Bank Interbank 5,860,899 1,61

  30. Slide 30: Unconsolidated Income Statement

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q18 Unconsolidated Income Statement (TL-thousand, %) 1Q17 4Q17 1Q18 YoY QoQ Net Interest Income 2,376,757 2,318,905 2,306,171 (3.0%) (0.5%) Net Fee & Com. Income 290,876 371,840 443,857 52.6% 19.4% Dividend Income 43,013 60 44,413 3.3% 73921.7% Net

  31. Slide 31: Investor Relations contact and disclaimer

    A member of BIST Sustainability Index With this recycling paper, following items have been saved annually; Investor Relations Saray Mahallesi Dr. Adnan Buyukdeniz Cad. A1 Blok 60 kg of landfill No: 7a Umraniye/Istanbul 14 kg of CO2 and greenhouse gases (Akyaka Park Mall) E-mail: investorrelations@va

Türkiye Vakıflar Bankası T.A.O. (VakıfBank) — Q1 2018 Earnings Presentation on 6ix