Turkiye Sinai Kalkinma Bankasi A.s. · BIST:TSKB
Turkiye Sinai Kalkinma Bankasi A.s — Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q2 2019 Earnings Presentation
31 slides from Turkiye Sinai Kalkinma Bankasi A.s's earnings presentation, 2019
Slide 1: The Industrial Development Bank of Turkey by 2Q '19
Created with a trial version of Syncfusion Essential PDF The Industrial Development Bank of Turkey by 2Q ‘19
Slide 2: Unique Banking Model
Unique Banking Model Access to TR Long lasting Ministry of Privately owned relationship with Treasury and Development and Development Finance Finance Investment Bank Institutions (DFIs) guaranteed funding Financially Integrated Business Solid Figures Model with Sustainability Principles Longer matur
Slide 3: TSKB at a Glance
TSKB at a Glance ▪ TRY 41.6 bn asset size ▪ 350 employees, 1 branch İş Bank Group 40.7% Shareholder ▪ 13th bank in terms of asset size Vakıfbank Structure 50.9% ▪ 3.4% market share in LTFC corporate loans Free Float and Other ▪ TRY 2.3 bn MCAP* 8.4% ▪ 39.4% of free float belongs to foreign investors
Slide 4: Main Stakeholders
Main Stakeholders MINISTRY of TREASURY and DFI’s & FI’s CLIENTS FINANCE Trustworthy partner in; Trustworthy partner in; •its experience of field •Large Corporates, MidCap •Theme generation Companies & SME’s •its capacity to introduce •Efficient utilization innovative themes for • Cooperation in vari
Slide 5: Sustainability is Key to Our Activities
Sustainability is Key to Our Activities Support for employment in Turkey; ▪ Encouraging women participation to the economy Support transition to low carbon economy ▪ Providing financing to operational health and safety ▪ Supporting less developed regions Financing to reduce energy dependency in Turk
Slide 6: Main Business Lines Supporting the Bank's Mission
Main Business Lines Supporting the Bank’s Mission Corporate Banking Investment Banking Advisory Services ▪ Manages own securities portfolio ▪ Strategic financial consultancy – LT ▪ Direct loan financing – industrial partnership to support strategic investments, energy and resource ▪ Structured risk
Slide 7: Main Highlights of the Quarter
Main Highlights of the Quarter TL mn Quarterly Net Profit 195 185 172 170 5% QoQ NIM 407 383 341 4.4% 277 ROE 16.0% -105 ROA 1.9% -146 -198 -237 CAR @ 16.4% 2Q-18 4Q-18 1Q-19 2Q-19 Net Banking Income Provisions&Tax Net Profit Quarterly Net Banking Income Annualized ROE & ROTE 407 383 341 18.0% 18.1%
Slide 8: Banking Sector vs TSKB
Banking Sector vs TSKB CAR Loans/Assets NPL 17.7% 73.0% 4.2% 16.4% 62.8% 2.2% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB Cost to Income NIM ROE 35.1% 16.0% 4.4% 11.5% 3.2% 12.0% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB Repo & Depo; 6% Funds Syndication & P/N 4% Re
Slide 9: Supportive FX Liquidity and Maturity Profile
Supportive FX Liquidity and Maturity Profile Funding / Total Liabilities (exc. equity) USD mn Maturity Profile of External Debt USD mn 6,878 6,542 6,616 6,383 6% 3% 5% 3% - - - - - - - 4% 4% 4% 4% -217 -142 4% 5% 5% 5% -454 -389 -114 -350 -534 -507 20% 21% 21% 21% -350 -300 -300 * -350 11% 11% 11% 1
Slide 10: Long Term DFI Funding
Long Term DFI Funding Outstanding DFI Funding Base Yearly Multilateral Funding Agreements IBRD 37% 38% EIB 28% 28% KFW 12% 986 12% 660 733 7% 600 IDB 7% 463 340 5% 160 CEB 5% 83% of DFI Funding 2012 2013 2014 2015 2016 2017 2018 AFD 4% 5% guaranteed by 2018 Turkey Ministry of IFC 2% 2% Treasury and
Slide 11: Outstanding Project Themes
Outstanding Project Themes Social Infrastructure: Midcap Industrial Energy & Resource Renewable Development Health, Education Capacity Efficiency & Clean Energy Building Transportation Environmental Occupational Health Pollution Climate Change SME Support & Safety Abatement in Industry Women’s Susta
Slide 12: Well-managed Asset Composition
Well-managed Asset Composition Asset Composition Total Loans TL bn 41.6 41.6 38.3 5% 3% Currency 35.0 4% 9% 9% TL bn Breakdown 8% 30.6 7% 14% 14% 29.8 14% 27.2 28.2 2.3 2.6 9% 14% 2.3 3.0 78% 74% 72% 74% 91% 5.3$ 5.1$ 5.0$ 4.8$ 2Q-18 2018 1Q-19 2Q-19 2Q-18 4Q-18 1Q-19 2Q-19 Loans Securities Cash & M
Slide 13: Strong Risk Management
Strong Risk Management ▪ Monitoring the clients individually with analysing the ▪ Effective internal control systems to financials prevent, detect and manage the operational risks which results in a very low ▪ Preparing monitoring reports for the clients at least level of losses in connection with o
Slide 14: Loan Evaluation, Appraisal and Allocation
Multi-Disciplinary Loan Appraisal and Monitoring ▪ Detailed technical analysis of the investment projects Monitoring and Collateralization Engineering ▪ Capacity determination of the investments Vision ▪ Review and justification of the business model ▪ Loan concentration is prudently ▪ Establishing
Slide 15: Selective Lending Book
Selective Lending Book Loans by sector (2Q-19) Electricity Generation 36% Electricity Generation; Finance 12% 86% of which is Telecom/Logistics 10% Renewable Energy, Electricity/Gas Distribution 8% where 90% benefits Metal and Machinery 5% from Feed in Tariff Construction 4% Chemistry and Plastics 4
Slide 16: Energy Production % in Detail
Energy Production % in Detail Energy Portfolio Renewable Energy Portfolio (Outstanding Risk $) Risk Breakdown 1.3 bn 1.4 bn 1.5 bn 1.6 bn 1.9 bn 1.9 bn 1.8 bn 1.8 bn 2% 4% 6% 6% 6% 7% 7% 6% 6% 5% 5% 5% 5% 14% 18% 22% 34% 32% 3% 35% 37% 35% 34% 9% 14% 17% 18% 18% 18% 75% 69% 86% 51% 46% 37% 35% 36% 3
Slide 17: State Incentive Mechanisms
State Incentive Mechanisms Guaranteed Sales Prices & Incentives for Local Manufactured Equipments Guaranteed Sale Price Incentives for Local Equip. Type (USD cent/kWh) (USD cent/kWh) Hydro Power Plant (HPP) 7.3 1.0—2.3 Wind Power Plant (WPP) 7.3 0.6—3.7 Geothermal Power Plant (GEO) 10.5 0.7—2.7 Biom
Slide 18: Loan Classification with Prudent Approach
Loan Classification with Prudent Approach Stage 1 Loans 31.03.2019 88.0% Gross Share in Total Coverage Ratio Provisions (-) TL Mn. Amount 83.0% 87.0% 86.8% Stage 1 25,930 87.0% 0.5% 134 78.0% Stage 2 * 3,240 10.9% 10.5% 339 1Q-19 2Q-19 Stage 3 618 2.1% 26.9% 166 Stage 2 Loans Gross Loans ** 29,789 1
Slide 19: Stage 2 & NPL Portfolio under Focus
Stage 2 & NPL Portfolio under Focus Stage 2 Loans TL bn 3.2 3.4 NPLs TL mn 618 681 SICR Loans are in 49% the restructuring NPL inflow is 63% process minor 92% 92% 51% 37% 8% 8% 1Q-19 2Q-19 1Q-19 2Q-19 Restructured SICR Single file Other Stage 2 Sectoral Breakdown Other • Single file NPL (92% of the
Slide 20: NPL: TSKB vs Banking Sector
20 9.4% 2002 17.6% 9.4% 2003 11.5% 4.9% 2004 6.0% 2.9% 2005 4.8% 1.5% 2006 3.7% 0.8% 2007 3.4% 0.7% 2008 3.6% 0.6% 2009 5.2% NPL: TSKB vs Banking Sector 0.5% TSKB 2010 3.6% 0.4% 2011 2.7% 0.2% 2012 2.8% Banking Sector 0.4% 2013 2.7% 2014 0.2% 2.8% 0.4% 2015 3.1% 0.3% 2016 3.2% 0.2% 2017 2.9% 2.1% 3.
Slide 21: Favorable Yields on Securities support Profitability
Favorable Yields on Securities support Profitability TL mn Securities / Assets : 14% 303 309 309 278 ▪ Duration: 1.2 yrs in Fixed bonds, 1.9 yrs in Floating bonds, 3.3 yrs in CPIs in TL Sec. Portfolio. 3,896 4,085 4,043 % 69 ▪ 69% is in AFS portfolio. 3,594 ▪ Private sector bonds: 3.4% of total port
Slide 22: Hefty Topline Revenue Despite Lower CPI Contribution
Hefty Topline Revenue Despite Lower CPI Contribution TL mn 1H-18 1H-19 YoY 1Q-19 2Q-19 QoQ Stable and strong Net Interest Income 550.8 770.7 40% 372.0 398.8 7% NIM Trading Income 54.6 24.1 -56% 42.4 -18.3 - Derivative valuation loss, FX position (Derivative MtM Valuation 26.4 5.4 - 19.3 -13.8 -) inc
Slide 23: Sustained Core NIM Generation
Sustained Core NIM Generation Quarterly NIM NIM NIM exc. CPI&Trading 426 5.4% 4.6% 4.5% 4.3% 3.9% 3.3% 3.7% 3.9% 3.3% 3.3% 2Q-18 3Q-18 4Q-18 1Q-19 2Q-19 Annualized NIM 2Q-19 4.4% CPI normalized NIM Quarterly Spread 1Q-19 4.5% 3.4 3.5 4Q-18 4.1% 3.1 3.2 3.1 4.9% 2Q-18 3.9% 2.8 2.7 2.8 Quarterly Swap
Slide 24: Strong Capital Generation Bolsters Solvency Metrics
Strong Capital Generation Bolsters Solvency Metrics Capital Adequacy Ratio Evolution of RWA and Equity TL bn 16.2% 16.0% 16.4% 15.2% 40.4 41.2 35.5 37.4 12.0% 10.4% 11.1% 10.7% 11.1% 4.6 6.8 8.5% 6.4 3.7 5.4 4.2 6.0 3.3 2Q-18 2018 1Q-19 2Q-19 2Q-18 2018 1Q-19 2Q-19 Tier I (CET 1) CAR RWA Core Equity
Slide 25: Key Performance Indicators
Key Performance Indicators ROE ROA Cost to Income 18.4% 16.0% 16.0% 12.5% 12.0% 10.8% 2.3% 2.0% 1.9% 2017 2018 2Q-19 2017 2018 2Q-19 2017 2018 2Q-19 ROTE CAR NIM 17.1% 4.9% 18.8% 4.4% 18.1% 18.1% 3.9% 16.4% 16.1% 2017 2018 2Q-19 2017 2018 2Q-19 2017 2018 2Q-19 ROE; Annualized Net Income for the peri
Slide 26: 1H19 Figures vs 2019YE Guidance
1H19 Figures vs 2019YE Guidance Financial Guidance (%) 1H19 Figures 2019 Guidance FX Adjusted Loan Growth -2.2% ~5 Loans/Assets Ratio 73 ~75 Loans/Long Term Funding Ratio* 122 ~115 Fees & Commissions Growth 52 >35 OPEX Growth 23 <25 Net Interest Margin ** 4.4 3.5-3.8 Return On Equity 16.0 14-15 Retu
Slide 27: What Lies Ahead?
What Lies Ahead? Development Banking Targets •Support transition to low carbon economy •Extend resources to support UN Sustainable Environmental Development Goals Targets •Focus on geothermal, solar, wind and biomass investments in renewable energy •Encourage women’s participation to the economy •Of
Slide 28: Appendix
Appendix — ==>
Slide 29: A Long Award-Wining Track Record
A Long Award-Wining Track Record ▪ ''Best Green Bond in CEE Award'' & ''Best structured finance deal in CEE'' & ''Best syndicated loan in CEE'' & ''Best Infrastructure Deal'' & ''Best Privatization Deal in EMEA'' - EMEA Finance Awards 2017 ▪ ''SRI Bond of the Year'' – IFR (International Financing Re
Slide 30: Appendix: Balance Sheet
Appendix: Balance Sheet 30/06/2018 31/12/2018 30/06/2019 (TRY mn) TRY FX TOTAL TRY FX TOTAL TRY FX TOTAL Cash and Banks 102 1,103 1,205 600 1,340 1,940 1,208 1,727 2,935 Securities 3,594 1,262 4,856 3,894 1,585 5,479 4,051 1,790 5,840 Loans (Gross) 2,898 24,231 27,129 2,233 25,994 28,227 2,655 27,94
Slide 31: TSKB Financial Institutions & Investor Relations
TSKB Financial Institutions & Investor Relations www.tskb.com.tr
Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q2 2019 Earnings Presentation on 6ix