Turkiye Vakiflar Bankasi Turk Anonim Ortakligi · BIST:VAKBN

Turkiye Vakiflar Bankasi Turk Anonim Ortakligi — H1 2019 Earnings Presentation

26 slides from Turkiye Vakiflar Bankasi Turk Anonim Ortakligi's earnings presentation, Aug 9, 2019

  1. Slide 1: Earnings Presentation BRSA Bank-Only 1H 2019

    VakıfBank IR App. Available at Earnings Presentation BRSA Bank-Only 1H 2019 August 9, 2019

  2. Slide 2: 1H19 Earnings and Ratios

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 1H19 Earnings and Ratios Net Income (TL million) Pre-Provisioning Operating Profit (TL million)* 651.2 3,806 With sustained 2,983 367.6 TL 917 million free provisions in the balance sheet 1Q19 2Q19 1H18 1H19 Strong coverage ratios maintained 2,

  3. Slide 3: Key Highlights of 1H19

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Key Highlights of 1H19 Muted quarterly lending growth • TL loans are flattish QoQ. • FX loans are up by 1.7% QoQ in USD terms. • Retail loans are up by 1.8% QoQ. • Business loans are up by 1.4% QoQ. Strong quarterly deposit growth • Total depos

  4. Slide 4: 1H19 P&L Details

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 1H19 P&L Details 2,431 8,295 (3,174) 1,834 51 (1,135) 5,115 (3,920) 1H19 (182) 1,019 Net Interest Net Fees and Dividend Net Trading Other Income Total Operating Provisions Taxes Net Income Income Commissions Income Income Revenue Expenses % vs

  5. Slide 5: Revenue breakdown

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Revenue breakdown Total Revenues – Revenue Breakdown (TL million) 17.5% Trading Dividend Trading Dividend 1.6 Other -13.7 0.6 4.3 8,295 11.5 7,062 29.3 Other NII 61.7 NII 1H18 69.1 1H19 Net F&C Net F&C 22.1 13.5 1H18 1H19 Core Banking Revenues

  6. Slide 6: NIM, Spreads & Swap

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 NIM, Spreads & Swap Net Interest Margin (NIM %) Swap Adjusted Net Interest Margin (%) Swap adj. NIM will be higher 4.30 >4 4.30 backed by lower cost of funding 3.55 3.45 3.22 >3 2.67 33 bps 2.45 2.16 2018 1Q19 2Q19 1H19 2H19E 2018 1Q19 2Q19 1H1

  7. Slide 7: Stellar fee income generation capacity despite muted lending growth

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Stellar fee income generation capacity despite muted lending growth Net Fee & Commission Income (TL million) – Fee Breakdown 92% Insurance Inquiry & Insurance Inquiry & Expertise 7% 1,834 Expertise 7% 11% 9% Cash Loans Other 36% Other 1% 1% 31%

  8. Slide 8: Opex breakdown and Cost/Income Ratios

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Opex breakdown and Cost/Income Ratios Operating Expenses (TL million) Breakdown of OPEX 37.0 38.3 C/I Ratio (%) 1H18 1H19 Annual Opex 3,174.1 Growth 21.4% 2,614.0 60% 58% 40% 42% HR Cost Non-HR Cost HR Cost Non-HR Cost 1H18 1H19 27.9% 18.5% Qua

  9. Slide 9: Well diversified & stable loan breakdown

    INVESTOR RELATIONS Earnings Presentation Bank Only 1Q19 Well diversified & stable loan breakdown Segment Breakdown of Loans (TL billion) Portfolio Breakdown (%) Asset Quality Breakdown (TL billion) 250.0 SME 25.1 25.5 Gross Loans 258.1 262.4 246.3 15.2 Stage III 11.9 12.4 221.6 14.2 Retail 26.7 23.5

  10. Slide 10: Breakdown of Loan Portfolio

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Breakdown of Loan Portfolio Sector Breakdown of Cash Loans Breakdown of Construction Loans Retail Loans Manufacturing 19% 14% Stage III TL 1.6 billion Stage II 5.8% Construction 10% TL 6.3 billion 23.2% Stage I TL 19.3 billion Other 1H19 1H19 1

  11. Slide 11: Lower than expected NPL inflows

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Lower than expected NPL inflows NPL (TL million)* Sector Breakdown of Stage III Loans 1,343 770 Construction 11,874 12,447 Wholesale & Retail Trade 12.8% Manufacturing 24.9% 16.7% Real Estate NPL 1Q19 New NPL Collections NPL 2Q19 4.8% 4.65 4.60

  12. Slide 12: Better than expected CoR and above than sector specific coverage ratio

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Better than expected CoR and above than sector specific coverage ratio Net Expected Credit Losses Net Cost of Risk (bps) (Thousand TL) 1H19 169 151 228 Expected Credit Losses 3,874,579 65 Stage I 867,910 Stage II 1,182,605 Cumulative Quarterly

  13. Slide 13: Customer deposits driven well diversified funding structure

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Customer deposits driven well diversified funding structure Total Deposits (TL billion) Breakdown of Deposits 214.3 198.1 170.4 179.4 54% 54% 46% 46% 97.7 89.5 $ 17.0 57.9 69.8 $ 15.9 Sector $ 12.7 $ 13.2 TL Deposits FC Deposits TL Deposits FC

  14. Slide 14: Timely executed long term wholesale funding transactions

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Timely executed long term wholesale funding transactions Breakdown of Wholesale Funding* EUR 700 million Basel III compatible Local Bonds Other Additional Tier I issuance under GMTN 5.9% 1.0% programme with PNC5 structure and 5.076% AT I Issuan

  15. Slide 15: Strong solvency ratios amid challenging macro conditions

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Strong solvency ratios amid challenging macro conditions Capital Adequacy Ratio (%) The effect of 0.1 TL decrease Tier I 11.81 11.98* 13.75 12.23 13.98 /increase in USD/TL parity on CAR is 16.99 17.01 BRSA 15.02 15.26* 15.25 ~8 bps Rec. 12% The

  16. Slide 16: Appendix

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Appendix Pg. 17 Composition of Assets&Liabilities Pg. 18 Well balanced Securities Portfolio Pg. 19 Retail Lending Portfolio Pg. 20 Strong growth in mobile platforms continues Pg. 21 VakıfBank with Numbers Pg. 22 Diversified Funding Sources via

  17. Slide 17: Composition of Asset & Liabilities

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Composition of Asset & Liabilities Breakdown of Assets (%) TL/FC Mix in Total Assets Other 2Q19 16.4 Interbank 1.1 The share of IEA 83.6% 59% 41% 2Q19 Securities 65.7 in total assets 16.8 Loans FC TL Breakdown of Liabilities (%) TL/FC Mix in To

  18. Slide 18: Well balanced security portfolio

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Well balanced security portfolio Total Securities (TL million) Portfolio Structure 82.6% TL FC 63,856 54,868 16% 49,054 16.4% 34,972 46,666 100% 40,930 73% ‘Share of total’ 44% 40% 39,981 75% 82% 28,060 80% 136 100 61 71 0% 0% 0% 0% 13,802 17,0

  19. Slide 19: Retail Lending Portfolio

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Retail Lending Portfolio General Purpose Consumer (TL billion) Residential Mortgages (TL billion) Credit Card Loans (TL million)* 11.1% (9%) 28% 24.5 24.7 9,772 22.4 20.9 20.3 8,944 8,836 22.2 21.2 8,580 19.4 19.2 19.0 7,636 10.6% 0.7% 2Q18 3Q1

  20. Slide 20: Strong growth in mobile platforms continues

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Strong growth in mobile platforms continues Active Mobile Banking Customers (#thousand)* Breakdown of Transactions (%) 33.1% Call Center 2.1 Mobile Banking 2,921 2,570 2,769 28.2 2,388 ATM 2,195 33.4 5.5% 2Q19 Internet 2Q18 3Q18 4Q18 1Q19 2Q19

  21. Slide 21: VakıfBank with numbers

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 VakıfBank with numbers Distribution Channels&Customer (#) 1H19 Efficiency (‘000 TRY) 1H19 Personnel 16,754 Assets per Employee 22,713 POS Terminals 315,631 Assets per Branch 400,132 Outstanding Credit Cards 4.9 mn Loans per Employee 14,920 Tota

  22. Slide 22: Diversified funding sources via Non-Deposit Funding

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Diversified funding sources via Non-Deposit Funding US$ 2.30 billion outstanding April 2019 US$ 1.100 million equivalent syndicated loan, all in cost as Libor + 2.50% and Euribor +2.40% with participation of 38 banks from 17 countries. Syndicat

  23. Slide 23: Unconsolidated Key Financial Ratios

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Unconsolidated Key Financial Ratios 1H18 9M18 2018 1Q19 1H19 Profitability ROAE 17.2% 16.6% 16.1% 9.1% 7.1% ROAA 1.5% 1.3% 1.4% 0.8% 0.6% Cost / Income 37.0% 33.8% 36.9% 32.1% 38.3% Cost / Assets 1.7% 1.5% 1.8% 1.7% 1.7% Fee / Cost 36.5% 39.4%

  24. Slide 24: Unconsolidated Balance Sheet

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Unconsolidated Balance Sheet 1H18 1Q19 1H19 TL USD (thousand) TL USD TL USD TL USD YoY QoQ YoY QoQ Cash & Balances with 35,533,591 7,765,887 30,451,373 5,399,180 35,884,469 6,229,943 1.0% 17.8% (19.8%) 15.4% Central Bank Interbank 7,431,301 1,6

  25. Slide 25: Unconsolidated Income Statement

    INVESTOR RELATIONS Earnings Presentation Bank Only 1H19 Unconsolidated Income Statement (TL-thousand, %) 1H18 1Q19 2Q19 1H19 YoY QoQ Net Interest Income 4,877,953 2,344,772 2,769,984 5,114,756 4.9% 18.1% Net Fee & Com. Income 955,348 978,559 855,486 1,834,045 92.0% (12.6%) Dividend Income 117,447 1,

  26. Slide 26: 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

Turkiye Vakiflar Bankasi Turk Anonim Ortakligi (VakıfBank) — H1 2019 Earnings Presentation on 6ix