Turkiye Garanti Bankasi Anonim Sirketi · BIST:GARAN

Turkiye Garanti Bankasi Anonim Sirketi — Turkiye Garanti Bankasi A.S. — Q2 2024 Earnings Presentation

30 slides from Turkiye Garanti Bankasi Anonim Sirketi's earnings presentation, Jul 30, 2024

  1. Slide 1: 1H24 Earnings Presentation

    1H24 EARNINGS PRESENTATION Based on BRSA Consolidated Financials July 30th, 2024

  2. Slide 2: Macro Recap

    ${Garanti BBVA MACRO RECAP

  3. Slide 3: Turkish Economy (I/II)

    1H24 CONSOLIDATED EARNINGS PRESENTATION 3 TURKISH ECONOMY (I/II) GDP GROWTH (YoY) CBRT FUNDING RATE CONSUMER INFLATION (% YoY) 60,0% 75,5% 5,5% 71,6% 50,0% 50,0% 4,5% 45,0% 40,0% 45,0% 3,5% 43,0% 30,0% 20,0% 10,0% 14,0% 0,0% Dec’24 Dec’24 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Apr-24 Jan-24 Jul-2

  4. Slide 4: Turkish Economy (II/II)

    1H24 CONSOLIDATED EARNINGS PRESENTATION 4 TURKISH ECONOMY (II/II) CA DEFICIT / GDP (year end) BUDGET DEFICIT / GDP (year end) 2022 2023 1H24 E 2024 E 2022 2023 1H24 E 2024 E 1.6% 2.1% -0,9% 3.0% -1,6% -2,2% Earthquake related -4,0% -4,7% -5,1% -5,2% -5,0% -46bn$ -45 bn$ -26 bn$ -20 bn$ Excluding ear

  5. Slide 5: 1H24 Financials

    ${Garanti BBVA 1H24 FINANCIALS

  6. Slide 6: Unrivaled leadership in core banking – the pillar of our sustainable revenue generation

    1H24 CONSOLIDATED EARNINGS PRESENTATION 6 UNRIVALED LEADERSHIP IN CORE BANKING – THE PILLAR OF OUR SUSTAINABLE REVENUE GENERATION CAPABILITY NET INCOME (TL bn) CORE BANKING REVENUE (TL bn) CUMULATIVE QUARTERLY QoQ ∆ QUARTERLY +32% -1.8% 41.9 Core Banking Revenue 7 + % +40%* 39.1 44.6 10,6 Core NII +

  7. Slide 7: Customer driven asset mix remains the main differentiator

    1H24 CONSOLIDATED EARNINGS PRESENTATION 7 CUSTOMER DRIVEN ASSET MIX REMAINS TO BE THE MAIN DIFFERENTIATOR PERFORMING LOANS (TL, US $ billion) QoQ YtD ASSET BREAKDOWN 1,460 7% 22% 1,361 $5.0 Total 1,194 $5.0 4% 4% Other (incl. FC (subsidiaries) $5.1 $10.9 Fixed Assets & $10.4 NPLs); 5,1% $10.2 Subs.

  8. Slide 8: Navigating through the intended slowdown in TL lending

    1H24 CONSOLIDATED EARNINGS PRESENTATION 8 NAVIGATING THROUGH THE INTENDED SLOWDOWN IN TL LENDING TL PERFORMING LOAN BREAKDOWN TL PERFORMING LOAN GROWTH (65% of total performing loans) Consumer (exc. CCs) TL Business Credit Cards Mortgage, 4% vs. 4% in 1Q Auto, 2% vs. 2% in 1Q YtD QoQ Business, 44% v

  9. Slide 9: Prudent approach maintained: closely watched Stage-2 portfolio with high coverage ratios

    1H24 CONSOLIDATED EARNINGS PRESENTATION 9 PRUDENT APPROACH MAINTAINED: CLOSELY WATCHED STAGE-2 PORTFOLIO WITH HIGH COVERAGE RATIOS LOAN & RECEIVABLES PORTFOLIO STAGE-2 BREAKDOWN (TL bn) BREAKDOWN (TL bn) 156.2bn excl. currency impact2 137.5bn 151.7 bn TL in June’24 129.9bn 133.2 bn TL in Mar’24 Stag

  10. Slide 10: NPL flow faring as expected: strong collection performance

    1H24 CONSOLIDATED EARNINGS PRESENTATION 10 NPL FLOW FARING AS EXPECTED: STRONG COLLECTION PERFORMANCE REMAINS SUPPORTIVE NPL EVOLUTION (TL mn) COVERAGE RATIOS QUARTERLY Net NPL Flow 4,760 1,433 1,674 1Q24 2Q24 2Q24 (adj. w/ WD*) Net NPL Flow Adj. w/ curr. impact, 4,630 Total Provision 53.5 55.1 70.4

  11. Slide 11: Commitment to robust provisioning solidifies our financial position

    1H24 CONSOLIDATED EARNINGS PRESENTATION 11 COMMITMENT TO ROBUST PROVISIONING SOLIDIFIES OUR FINANCIAL POSITION NET PROVISIONS excl. CURRENCY (TL bn) NET CoR TREND excl. CURRENCY +60% YoY CUMULATIVE 4.6 +347% YoY* CUMULATIVE 2.9 1.0 2,49% 2,31% Earthquake related 1.9 provisioning - 1,06% 1,30% 1H23 1

  12. Slide 12: Strategic funding approach – the backbone of our success

    1H24 CONSOLIDATED EARNINGS PRESENTATION 12 STRATEGIC FUNDING APPROACH - THE BACKBONE OF OUR SUCCESS EXTERNAL DEBT VS. FC QUICK LIQUIDITY2 WHOLESALE FUNDING BREAKDOWN (US$ bn) LIABILITIES & SHE BREAKDOWN Syndication; Securitisation; 20% Total Demand Deposits; FC liquidity buffer External Debt 44% 27,

  13. Slide 13: Accelerated conversion to standard TL deposits

    1H24 CONSOLIDATED EARNINGS PRESENTATION 13 ACCELERATED CONVERSION TO STANDARD TL DEPOSITS FC DEPOSITS’ SHARE IN TOTAL AT ITS HISTORIC LOW TL CUST. DEPOSITS (TL bn) FC CUST. DEPOSITS (US$ bn) (58% of total deposits) (42% of total deposits) QoQ YtD QoQ YtD $25.0 $26.3 $23.9 1,069 +17% +22% 7,5 -9% -4%

  14. Slide 14: Our legacy: highest core NII generation capability remains

    1H24 CONSOLIDATED EARNINGS PRESENTATION 14 OUR LEGACY: HIGHEST CORE NII GENERATION CAPABILITY REMAINS NIM INCL. SWAP COST1 NET INTEREST INCOME INCL. SWAP COST (TL BILLION) NII Incl. Swap cost 22.6 17.4 20.0 CUMULATIVE QUARTERLY 2Q vs. 1Q 9,3 5.1%* CPI Income 8,4 15,2 3.6% 3.6% 3.6% Flat CPI Impact 2

  15. Slide 15: Payment system fees continue to drive the fee growth

    1H24 CONSOLIDATED EARNINGS PRESENTATION 15 PAYMENT SYSTEM FEES CONTINUE TO DRIVE THE FEE GROWTH NET FEES & COMMISSIONS (TL bn) NET F&C BREAKDOWN1 QUARTERLY CUMULATIVE +13% QoQ +193% YoY Cash Loans, Non-Cash Loans, 5,6% 8,9% Brokerage + AM, 7,9% 41,8 Money Transfer, 9,1% 22,2 19,6 Insurance, 3,1% 14,

  16. Slide 16: Opex growth inline with expectations

    1H24 CONSOLIDATED EARNINGS PRESENTATION 16 OPEX GROWTH INLINE WITH EXPECTATIONS OPERATING EXPENSES (TL bn) Currency QUARTERLY QoQ CUMULATIVE YoY Adjusted* 45.2 +84% +71% 21.8 23.4 +7% 14,5 13,1 +10% 27,6 +77% 24.5 Non-HR 15,6 8,6 8,9 +3% 17,6 +97% HR 8,9 1Q24 2Q24 1H23 1H24 COST CAUTIOUS BUSINESS GR

  17. Slide 17: Capital remains strong

    1H24 CONSOLIDATED EARNINGS PRESENTATION 17 CAPITAL REMAINS STRONG SOLVENCY RATIOS (without BRSA’s forbearance) CAR EVOLUTION (Consolidated, without BRSA’s forbearance) CET1 CAR 16,5% 0,82% -0,61% 15,4% 15,2% 2,03% -2,47% 14,5% 12,7% 12,8% Tier-2 -0,23% -0,79% Dividend -0,22% -0,06% 0,11% 0,09% Net I

  18. Slide 18: 1H24 in summary… a gold medal winner in financial pentathlon

    1H24 CONSOLIDATED EARNINGS PRESENTATION 18 1H24 IN SUMMARY…A GOLD MEDAL WINNER IN FINANCIAL PENTATHLON 1 SUSTAINED & SEQUENTIALLY INCREASING CORE NET INCOME HIGH QUALITY EARNINGS BANKING REVENUES FEED THE HIGHEST NET INCOME 44.6bn TL in 1H24 +63% 1H YoY growth alludes to 34% ROAE w/ low leverage in

  19. Slide 19: Appendix

    Appendix P G . 20 Sector Breakdown of Gross Loans P G . 25 Securities Portfolio P G . 21 FC Loan Breakdown P G . 26 Summary Balance Sheet P G . 22 Maturity Profile of External Debt P G . 27 Summary P&L P G . 23 Adjusted L/D and Liquidity P G . 28 Key Financial Ratios Coverage Ratios, P G . 29 Quarte

  20. Slide 20: Appendix: Sector breakdown of gross loans

    1H24 CONSOLIDATED EARNINGS PRESENTATION 20 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 1.3tr Retail 84% 13% 3% 0.6% 6.6% 57.3% Energy 59% 38% 3% 0.3% 30.8% 80.6% Construction 90% 6% 4

  21. Slide 21: Appendix: Closely monitored and well-provisioned FC loans

    1H24 CONSOLIDATED EARNINGS PRESENTATION 21 APPENDIX: CLOSELY MONITORED AND WELL-PROVISIONED FC LOANS FC PERFORMING LOANS (35% of total performıng loans) US$ 15.9 bn MITIGATION OF FX RISK - TIMELY DELEVERAGING (in $ bn) US$ GBI and GB Romania loan placements 5.0bn Natural hedge 170,0 Sector1 148,9 16

  22. Slide 22: Appendix: Maturity profile of external debt

    1H24 CONSOLIDATED EARNINGS PRESENTATION 22 APPENDIX: MATURITY PROFILE OF EXTERNAL DEBT MATURITY PROFILE OF EXTERNAL DEBT (US$ billion) 0.75 Bilateral MTN Covered Bond 0.2 Secured Finance Securitisation Syndication Subdebt Eurobond Postfinance $3.1 $1,25 $1,8 $0.5 $0.5 $0.1 $0,4 $0.07 $0.4 Q3 Q4 Q1 Q

  23. Slide 23: Appendix: Adjusted LDR and liquidity coverage ratios

    1H24 CONSOLIDATED EARNINGS PRESENTATION 23 APPENDIX: ADJUSTED LDR AND LIQUIDITY COVERAGE RATIOS Loans funded via long-term on B/S alternative funding sources ease LDR (TL billion) 1,854 1,854 Total Loans / 79% Adjusted 68% 1.460 - 2,9 0,0 - 80,8 Deposits: LDR - 7,2 - 102,9 1.266 TL Bonds TL MM TL Lo

  24. Slide 24: Appendix: Market shares

    1H24 CONSOLIDATED EARNINGS PRESENTATION 24 APPENDIX: MARKET SHARES Market Shares1 Dec-23 Mar-23 Jun-24 QoQ ∆ Rank Consumer Loans inc. Consumer CCs 14,9% 15,3% 15,7% 39 bps #1* Cons. Mortgage Loans 8,8% 9,5% 10.0% 53 bps #3* Consumer Auto Loans 18,4% 18,9% 19,1% 19 bps #2* Cons. General Purpose Loans

  25. Slide 25: Appendix: Securities portfolio

    1H24 CONSOLIDATED EARNINGS PRESENTATION 25 APPENDIX: SECURITIES PORTFOLIO TOTAL SECURITIES (TL bn) TL SECURITIES (TL bn) FC SECURITIES (US$ bn) 15% of Total Assets +4% +22% +4% +16% 257.7 246.8 2.6 396.5 5.8 -1% +4% 380.3 Consolidated 202.7 + + 255.1 2.6 241.0 326.5 35% 4.3 4.3 35% + 4.2 Bank-only 2

  26. Slide 26: Appendix: Summary balance sheet

    1H24 CONSOLIDATED EARNINGS PRESENTATION 26 APPENDIX: SUMMARY BALANCE SHEET (TL billion) ASSETS 30.06.2023 30.09.2023 31.12.2023 31.03.2024 30.06.2024 Cash & Cash Equivalents 294.2 188.5 234.6 215.6 272.2 Balances at CBRT 149.9 284.2 291.7 334.8 313.1 Securities 265.6 296.3 326.5 380.3 396.6 Gross Lo

  27. Slide 27: Appendix: Summary P&L

    1H24 CONSOLIDATED EARNINGS PRESENTATION 27 APPENDIX: SUMMARY P&L QUARTERLY P&L CUMULATIVE P&L TL Million 1Q24 2Q24 QoQ 1H23 1H24 YoY (+) Net Interest Income including Swap costs 17,434 19,950 14% 36,583 37,384 2% (+) NII excluding CPI linkers' income 16,528 23,462 42% 25,371 39,990 58% (+) Income on

  28. Slide 28: Appendix: Key financial ratios

    1H24 CONSOLIDATED EARNINGS PRESENTATION 28 APPENDIX: KEY FINANCIAL RATIOS Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Profitability ratios ROAE (Cumulative)1 38.3% 41.1% 44.5% 36.0% 34.2% ROAA (Cumulative)1 4.2% 4.5% 4.9% 3.9% 3.7% Cost/Income 37.2% 35.1% 34.8% 41.7% 42.1% Liquidity ratios Loans / Deposits 6

  29. Slide 29: Appendix: Quarterly & cumulative net CoR

    1H24 CONSOLIDATED EARNINGS PRESENTATION 29 APPENDIX: QUARTERLY & CUMULATIVE NET CoR (Million TL) (Million TL) Quarterly Net Expected Credit Loss 3Q23 4Q23 1Q24 2Q24 Cumulative Net Expected Credit Loss 1H24 (-) Expected Credit Losses 7,395 9,417 15,971 12,844 (-) Expected Credit Losses 28,816 Stage 1

  30. Slide 30: Disclaimer Statement

    1H24 CONSOLIDATED EARNINGS PRESENTATION 30 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 Garanti B

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