Turkiye Sinai Kalkinma Bankasi A.s. · BIST:TSKB
Turkiye Sinai Kalkinma Bankasi A.s — Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q4 2019 Earnings Presentation
32 slides from Turkiye Sinai Kalkinma Bankasi A.s's earnings presentation, February 2020
Slide 1: The Industrial Development Bank of Turkey by 4Q '19
Created with a trial version of Syncfusion Essential PDF The Industrial Development Bank of Turkey by 4Q ‘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 Integrated funding Business Model with Financially Solid Sustainability Figures Principles Longer matur
Slide 3: TSKB at a Glance
TSKB at a Glance ▪ TRY 42.0 bn asset size ▪ 375 employees, 1 branch İş Bank Group 40.7% Shareholder ▪ 13th bank in terms of asset size Vakıfbank Structure 50.9% ▪ 3.8% market share in LTFC corporate loans Free Float and Other ▪ TRY 3,8 bn MCAP* 8.4% ▪ 53% of free float belongs to foreign investors *
Slide 4: Main Stakeholders of the Bank
Main Stakeholders of the Bank A trustworthy partner in; •Large Corporates, MidCap Companies & SME’s •its field experience •Cooperation in various areas such as; •its capacity to introduce innovative corporate loans, investment banking themes w.r.t. investment projects activities and advisory service
Slide 5: Sustainability is embedded in our Business Model
Sustainability is embedded in our Business Model 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 dependenc
Slide 6: Core Business Lines Supporting the Bank's Mission
Core Business Lines Supporting the Bank’s Mission Corporate Banking Investment Banking Advisory Services ▪ Strategic financial consultancy – LT ▪ Direct loan financing – industrial ▪ Manages own securities portfolio partnership to support strategic investments, energy and resource ▪ Structured risk
Slide 7: 4Q-19 Highlights
4Q-19 Highlights TL mn Net Banking Income Quarterly Cumulative 261 325 1,343 1,324 NIM 4.2% 286 292 890 32% 1,174 ROTE 16.1% 43 44 46 410 -13 208 ROA 1.7% -68 -58 3Q-19 4Q-19 4Q-18 4Q-19 CAR @ 17.8% Net Banking Income exc. CPI&Trading Trading Gain/Loss CPI Income Net Profit Quarterly Cumulative Annu
Slide 8: Banking Sector vs TSKB
Banking Sector vs TSKB CAR Loans/Assets NPL 75.0% 5.1% 18.4% 17.8% 3.5% 62.3% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB Cost to Income NIM ROE 35.5% 13.5% 11.0% 4.2% 3.6% 13.4% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB Repo & Depo; 4% Funds Syndication & Deposit;
Slide 9: Comfortable FX Liquidity and Maturity Profile
Comfortable FX Liquidity and Maturity Profile Funding / Total Liabilities (exc. equity) USD mn Maturity Profile of External Debt* USD mn 6,540 6,272 6,142 -121 - - -176 -515 -467 -404 2.8% 3.9% 6.9% -447 3.8% 3.6% 4.6% 4.9% 3.9% -300 -300** -350 5.0% -350 -2,038 20.7% 22.0% 17%* 10.7% 10.3% 11.6% -3
Slide 10: Long Term DFI Funding Base
Long Term DFI Funding Base Outstanding DFI Funding Base (4Q-19) Yearly Multilateral Funding Agreements USD mn IBRD 38.6% EIB 25.3% KFW 12.5% 986 IDB 660 733 6.5% 600 463 340 294 CEB 4.3% 160 AFD 4.4% 80% of DFI Funding 2012 2013 2014 2015 2016 2017 2018 2019 guaranteed by IFC 2.2% Turkey Ministry of
Slide 11: Outstanding project themes shaping future loan book
Outstanding project themes shaping future loan book Environmental Pollution Supporting Infrastructure Innovation Abatement in Exporters Industry Regional Development Midcap Women’s Sustainable Employment & Supporting Financing Agriculture and Equal Employment Opportunity Energy and Industrial Resour
Slide 12: Resilient Balance Sheet against volatile market conditions
Resilient Balance Sheet against volatile market conditions Currency Asset Composition Total Loans 31.4 Breakdown TL bn 42.0 TL bn 9% 40.3 29.4 3.0 38.3 4% 6% 5% 27.9 5% 6% 3.2 8% 16% 2.2 15% 14% 4.9$ 91% 4.7$ 5.1$ 75% 4Q-18 3Q-19 4Q-19 73% 73% FX Loans ($) TRY Loans 4Q-19 Loans by Currency & Type Wo
Slide 13: Strong Risk Management Perspective
Strong Risk Management Perspective ▪ 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 conne
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 & re
Slide 15: Sustainability-themed Loans account for 74% of the Portfolio
Sustainability-themed Loans account for 74% of the Portfolio Loans by sector (4Q-19) Electricity Generation Renewable Energy: 31% 5% 36% Electricity Generation; Finance 14% 85% of which is Logistics/Telecom 8% Renewable Energy, Electricity/Gas Distribution 7% where 91% benefits Metal and Machinery 4
Slide 16: Energy Generation Portfolio in Detail
Energy Generation Portfolio in Detail Energy Generation Renewable Energy Portfolio (Outstanding) Portfolio Risk 1.3 bn 1.4 bn 1.5 bn 1.6 bn 1.9 bn 4% 1.9 bn 6% 1.9 bn 6% 2% Breakdown 7% 18% 7% 6% 6% 5% 5% 5% 22% 34% 32% 35% 3% 37% 35% 15% 9% 14% 17% 18% 19% 75% 69% 51% 46% 37% 35% 35% 2013 2014 2015
Slide 17: State Incentive Mechanisms for RELs in Turkey
State Incentive Mechanisms for RELs in Turkey Guaranteed Sales Prices & Incentives for Local Manufactured Equipments Guaranteed Sale Price Incentives for Local Manufactured Equipment 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
Slide 18: Proactive Loan Provisioning Policy
Proactive Loan Provisioning Policy 30.09.2019 Stage 1 Loans Gross Amount Share in Total Coverage Ratio Provisions (-) TL Mn. 87.2% Stage 1 25,645 87.2% 0.67% 171 85.7% Stage 2 2,828 9.6% 10.59% 300 78.0% Stage 3 952 3.2% 30.32% 289 3Q-19 4Q-19 Gross Loans 29,425 100.0% 2.58% 759 Free Provisions 240
Slide 19: Most Restructurings are completed in Stage 2 & NPL Portfolio
Most Restructurings are completed in Stage 2 & NPL Portfolio TL bn Stage 2 Loans Restructured Stage 2&3 Loans 3.1 3.4 14.3% 12.8% 26% 12.0% 12.3% 36% SICR Loans are in the restructuring process 74% 64% 70% 61% 62% 25% 3Q-19 4Q-19 1Q-19 2Q-19 3Q-19 4Q-19 Restructured SICR Stage 2 Sector Breakdown 28%
Slide 20: Security Book
Security Book TL 6.7 bn TL Securities Portfolio Breakdown TL 6.1 bn TL 5.5 bn 376$ Fixed Fixed 330$ Fixed 309$ %33 %39 %33 CPI CPI CPI %46 %49 %42 %67 4,217 4,432 %67 3,896 Floating Float Float Float %21 %19 %18 4Q-18 3Q-19 4Q-19 4Q-18 3Q-19 4Q-19 TL (mn) FX($ mn) TL Security Yields Securities / Ass
Slide 21: Cumulative and Quarterly Net Income
Cumulative and Quarterly Net Income Cumulative Quarterly TL mn 2018 2019 YoY 3Q-19 4Q-19 QoQ Supported by declining Net Interest Income 1,435.9 1,523.9 6.1% 371.7 381.5 3% TL funding costs Trading Income 42.7 -57.6 n.m -68.4 -13.3 n.m. Visible pick (Derivative MtM Valuation) 11.1 -61.2 n.m. -45.7 -2
Slide 22: Strong NIM Generation
Strong NIM Generation Quarterly NIM NIM NIM exc. CPI&Trading Annualized NIM 5.4% 4.0% 4Q-19 4.5% 4.3% 4.2% 3.9% 3Q-19 4.3% CPI normalized NIM 3.7% 3.7% 3.9% 3.9% 2Q-19 4.4% 3.3% 1Q-19 4.5% 4Q-18 4.1% 4.9% 4Q-18 1Q-19 2Q-19 3Q-19 4Q-19 Quarterly Spread 5.9 4.0 Quarterly Swap Costs TL mn 3.4 3.1 3.1 3
Slide 23: Solid Capitalization with Internal Capital Generation
Solid Capitalization with Internal Capital Generation Evolution of RWA and Equity TL bn 16.2% 17,8% 17.8% 42.6 37.4 39.4 12.0% 11.1% 12.3% 12.4% 8.5% 4.2 6.0 4.9 7.0 5.3 7.6 2018 3Q-19 4Q-19 2018 3Q-19 4Q-19 Tier I (CET 1) CAR RWA Core Equity Total Capital Tier 1 (CET1) Evolution Solvency Limits (%)
Slide 24: Key Performance Indicators
Key Performance Indicators ROE ROA Cost to Income 18.4% 16.0% 12.5% 13.4% 13.5% 10.8% 2.3% 2.0% 1.7% 2017 2018 2019 2017 2018 2019 2017 2018 2019 ROTE CAR 17.8% NIM 17.1% 16.1% 4.9% 18.8% 18.1% 3.9% 4.2% 16.1% 2017 2018 2019 2017 2018 2019 2017 2018 2019 ROE; Annualized Net Income for the period / A
Slide 25: 2019YE Figures
2019YE Figures 2019YE 2019YE vs. Financial Guidance (%) Guidance Figures Guidance FX Adjusted Loan Growth Flat Flat ✓ Loans/Assets Ratio ~75 75 ✓ Loans/Long Term Funding Ratio* ~115 125 ✓ Fees & Commissions Growth >35 57 ✓ OPEX Growth <25 26 ✓ Net Interest Margin (adj.)** ~4 4.2 ✓ Return On Equity 1
Slide 26: 2020 Guidance & Agenda
2020 Guidance & Agenda Financial Guidance (Bank Only) 2020E (%) FX Adjusted Loan Growth 3-5 Growing Advisory&Investment Banking Revenues Loans/Assets ~75 Fees & Commissions Growth >50 Continued IT and Other Internal Investments OPEX Growth <20 Net Interest Margin (adj.)* ~4.0 Expansion in the Loan V
Slide 27: What Lies Ahead?
What Lies Ahead? Financials •Sustainable growth of the Bank Investment Banking & •Innovative finance models Advisory •Strengthen the existing •Extend our accumulated knowledge Development Banking cooperations with DFI’s to a wider client base through our •Support transition to low carbon •Increase c
Slide 28: Appendix
Appendix — ili»
Slide 29: A Long Award-Wining Track Record
A Long Award-Wining Track Record ▪ Boards Empowered by Women Special Award (2018) ▪ Project Finance Deal of the Year (Runner-Up), M&A/Acquisition Finance Deal of the Year (Third Prize), Structured Finance Deal of the Year (Third Prize), Natural Resources Finance Deal of the Year (Runner-up), Syndica
Slide 30: Appendix: Balance Sheet
Appendix: Balance Sheet 31/12/2018 30/09/2019 31/12/2019 (TRY mn) TRY FX TOTAL TRY FX TOTAL TRY FX TOTAL Cash and Banks 600 1,340 1,940 1,491 919 2,410 526 881 1,408 Securities 3,894 1,585 5,479 4,201 1,862 6,063 4,429 2,223 6,651 Loans (Gross) 2,232 25,703 27,935 3,460 25,872 29,332 2,974 28,450 31
Slide 31: Appendix: Cumulative Income Breakdown
Appendix: Cumulative Income Breakdown (TRY mn) 4Q-18 4Q-19 YoY Net Interest Income 1,435.9 1,523.9 6.1% Trading Income - Adj. 42.7 - 57.6 -234.9% Net Commissions 19.0 29.8 56.6% Dividend & Other 8.0 32.7 309.2% Banking Income 1,505.6 1,528.8 1.5% OPEX (-) - 162.9 - 204.9 25.8% Net Banking Income 1,3
Slide 32: TSKB Financial Institutions & Investor Relations
TSKB Financial Institutions & Investor Relations www.tskb.com.tr
Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q4 2019 Earnings Presentation on 6ix