Turkiye Vakiflar Bankasi Turk Anonim Ortakligi · BIST:VAKBN

Turkiye Vakiflar Bankasi Turk Anonim Ortakligi — Türkiye Vakıflar Bankası T.A.O. (VakıfBank) — Q1 2017 Earnings Presentation

30 slides from Turkiye Vakiflar Bankasi Turk Anonim Ortakligi's earnings presentation, May 10, 2017

  1. Slide 1: Earnings Presentation BRSA Bank-Only 1Q 2017

    Earnings Presentation VakıfBank IR App. Available at BRSA Bank-Only 1Q 2017 May 10, 2017

  2. Slide 2: 1Q17 Macro Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 1Q17 Macro Highlights Current Account Deficit (12m, bn USD) Monetary Policy 14.00 80 13.00 12.00 60 11.00 10.00 33.7 40 9.00 8.00 20 7.00 0 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 CBRT Avr. Funding Rate Monthly

  3. Slide 3: 1Q17 VakıfBank Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 1Q17 VakıfBank Highlights All time best quarterly net income of TL 1,224.8 Quarterly NIM is up by 69 bps to 5.2%; million, which is up by 137% YoY and 57% QoQ.  TL core spreads are up by 30 bps QoQ thanks to The best quarterly performance o

  4. Slide 4: 1Q17 Earnings and Ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 1Q17 Earnings and Ratios Net Income (TL million) ROAE (%) The best 137.1% quarterly 24.5 performance of 10 years time 16.5 17.5 15.0 1,224.8 13.3 12.1 12.2 11.6 56.6% 817.4 782.1 1Q16 4Q16 YE16 1Q17 586.9 VB Sector 516.7 ROAA (%) 2.3 1.9 Out

  5. Slide 5: 1Q17 P&L Details

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 1Q17 P&L Details (1,016) 440 3,267 291 117 43 2,377 (733) 1Q17 (293) 1,225 Net Interest Net Fees and Dividend Net Trading Other Income Total Operating Provisions Taxes Net Income Income Commissions Income Income Revenue Expenses % vs +53% +2

  6. Slide 6: Revenue breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Revenue breakdown Total Revenues (TL million) Revenue Breakdown (%) 57% Dividend Other Other Dividend 3,267 11.8 1.9 13.5 1.3 Trading Trading 23.6% 2,644 0.9 3.6 2,081 Net F&C Net F&C 10.9 1Q16 8.9 1Q17 NII NII 74.5 72.7 1Q16 4Q16 1Q17 Net I

  7. Slide 7: NIM, Spreads and Costs

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 NIM, Spreads and Costs TL Core Spreads (%) FC Core Spreads (%) 13.34 13.22 -24 bps 12.98 5.96 5.17 5.19 TL Loan Yields FC Loan Yields TL Deposit Costs 1.73 1.95 1.95 7.73 -54 bps FC Deposit Costs 7.61 7.07 TL core spreads are up by 30 bps 4.

  8. Slide 8: Eye-catching fee growth via further contribution from payment systems

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Eye-catching fee growth via further contribution from payment systems Net Fee & Commission Income (TL million) Breakdown of Net Fee & Commission Income (%) Inquiry&Expertise Insurance 28.1% 1Q17 6 7 Cash Loans Other 278.2 290.9 22 10 227.0 4

  9. Slide 9: Disciplined cost management on track: All time low C/I Ratio

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Disciplined cost management on track: All time low C/I Ratio Operating Expenses (TL million) Breakdown of Opex (TL million) Jaws Ratio (%, YoY) annual Quarterly 1Q16 9.1% opex Growth Jaws Ratio: 1Q17 growth is 57.0 2.3% lower than 1,016.5 Fe

  10. Slide 10: Asset Breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Asset Breakdown Total Assets (TL billion) Breakdown of Assets (%) 16.4% Other 15 221.0 Quarterly Growth 212.5 Interbank Securities Loans 2.7 4% 1Q17 189.8 1Q16 +6% +2% Selective Securities lending in key Loans growth 13.0 2Q16 -3% +4% segmen

  11. Slide 11: TL Commercial loans driven quarterly loan growth

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 TL Commercial loans driven quarterly loan growth Total Loans (TL billion) FC Loans (USD billion) 22.7% 6.4% Sector 13.5 13.4 total loan 153.2 growth 12.6 146.6 4.5% vs (1.2%) 21.1% YoY 124.8 48.4 47.6 2% 35.4 37% 1Q16 YE16 1Q17 FC TL Loan/De

  12. Slide 12: Well diversified & stable loan breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Well diversified & stable loan breakdown Breakdown of Loans (TL billion) Loans (TL billion) 124.8 146.6 153.2 Other 1 8.6 9.5 9.7 VB VB VB Sector Sector 1Q17 QoQ YoY QoQ YoY Cash& Non-Cash SME 2 37.0 37.5 195.4 4% 24% 5% 22% 34.5 Loans Total

  13. Slide 13: GPC driven retail loan growth continued

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 GPC driven retail loan growth continued General Purpose Consumer (TL billion) Residential Mortgages (TL billion) 16% vs Sector GPC 8.1% growth of 9.8% Strong presence in 10.1% YoY market key retail 17.0 17.9 17.0 16.9 share 15.5 segments tha

  14. Slide 14: Selective business lending growth in key segments

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Selective business lending growth in key segments Commercial&Corporate (TL billion) Project Finance Loans (USD billion) Sector commercial & 7.2% Corporate & 40.8% corporate vs growth of Commercial 8.2 8.2 31.2% YoY 7.7 lending is 71.2 66.1 0

  15. Slide 15: Decelerated new NPL inflow & Lower share of Group II Loans

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Decelerated new NPL inflow & Lower share of Group II Loans NPL (TL million)* Reported1 and Comparable NPL Ratios (%) New NPL 773 inflow is 5.15 5.06 5.19 5.13 458 down by 4.19 4.21 6,413 6,728 24.6% QoQ 4.06 3.94 3.91 3.57 3.70 3.72 3.29 3.3

  16. Slide 16: Quarterly improvement in Net CoR despite NPL coverage increase

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 66 bps quarterly improvement in Net CoR despite NPL coverage increase Specific Provisions (TL million) General Provision (TL million) (25%) 666 674 34 1.1% 26 445 23 11.8% ~TL 1.3 billion general 1Q16 4Q16 1Q17 1Q16 4Q16 1Q17 provisions held

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

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Customer deposits driven well diversified funding structure Breakdown of Liabilities (%) Breakdown of Liabilities (TL billion) Sub-Debt Sub-Debt Other Bonds 2.4 Other Bonds 2.1 6.1 3 year bilateral 7.1 189.8 221.0 loan obtained 7.2 5.0 Other

  18. Slide 18: Non-granular deposit base via faster growth on demand & retail deposits

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Non-granular deposit base via faster growth on demand & retail deposits Total Deposits (TL billion) Breakdown of Deposits (%) 12.5% 123.8 130.0 115.5 5% 37.7 41.7 31 30 32 35.8 FC FC 2.5% TL 86.1 88.3 TL 69 70 68 79.7 Share of Demand 1Q16 YE

  19. Slide 19: Effective Capital Management further strengthened solvency ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Effective Capital Management further strengthened solvency ratios Capital Adequacy Ratio (%) Buffers (%) 1Q17 2017 2018 2019 +89 bps Capital Conservation Buffer 0.625 1.25 1.875 2.5 Core Tier I 11.49% 11.81% 11.83% 11.47% 12.36% Counter Cycl

  20. Slide 20: Appendix

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 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 Unconsolidated Key Financia

  21. Slide 21: Increased share of CPI in TL securities signals higher interest income for 2017

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Increased share of CPI in TL securities signals higher interest income for 2017 Total Securities (TL million) Portfolio Structure 7.4% 26,792 27,611 28,786 Total TL 5.6 billion TL 23.2 billion equivalent 8,181 4.3% 8,629 7,493 30.0% TL FC 28

  22. Slide 22: Further increased market share in retail credit card business

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Further increased market share in retail credit card business Credit Card Loans (TL million) Retail Credit Card Market Share (%) Sector 13.5% credit card 54 bps YoY loan growth increase in vs of 8.4% YoY 5.33 5.44 5.49 retail credit 5,974 5,

  23. Slide 23: Increased focus on alternative distribution channels

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Increased focus on alternative distribution channels Active Mobile Banking Customers (#thousand) Breakdown of Transactions (1Q17) 83.1% Other 1,265.6 Call Center 6.59 3.80 1,110.8 993.5 13.9% 691.1 ATM Mobile Banking 41.60 20.80 1Q16 3Q16 20

  24. Slide 24: VakıfBank with numbers

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 VakıfBank with numbers Distribution Channels & Customer (#) 1Q17 Efficiency (‘000 TRY) 1Q17 Personnel 15,678 Assets per Employee 14,097 POS Terminals 204,249 Assets per Branch 239,190 Outstanding Credit Cards 3.6 mn Loans per Employee 9,770

  25. Slide 25: Ratings

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Ratings Fitch Ratings Moody’s Standard & Poor’s (February 2, 2017) (March 24, 2017) (February 1, 2017) Long term FC IDR BB+ Ba2 BB / B FC Counterparty Credit Ratings VakıfBank Outlook Stable Negative Negative BCA (Baseline Credit Assessment)

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

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Diversified funding sources via Non-Deposit Funding US$ 2,052 milllion outstanding April 2017 US$ 967 million equivalent 1 year syndicated loan, all in cost as Libor + 1.45% ve Euribor +1.35% with participation of 30 banks from 15 countries.

  27. Slide 27: Unconsolidated Key Financial Ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Unconsolidated Key Financial Ratios 1Q16 1H16 9M16 2016 1Q17 Profitability* ROAE 12.1% 12.7% 14.4% 15.0% 24.5% ROAA 1.1% 1.2% 1.3% 1.4% 2.3% Cost / Income 44.8% 44.5% 42.0% 40.5% 31.1% Cost / Assets 2.0% 2.0% 1.9% 1.8% 1.8% Fee / Cost 24.4%

  28. Slide 28: Unconsolidated Balance Sheet

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Unconsolidated Balance Sheet 1Q16 4Q16 1Q17 TL USD (thousand) TL USD TL USD TL USD YoY QoQ YoY QoQ Cash & Balances with Central 23,928,428 8,485,258 24,365,297 6,931,806 23,300,205 6,418,789 (2.6%) (4.4%) (24.4%) (7.4%) Bank Interbank 6,692,

  29. Slide 29: Unconsolidated Income Statement

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1Q 2017 Unconsolidated Income Statement (TL-thousand, %) 1Q16 4Q16 1Q17 YoY QoQ Net Interest Income 1,550,977 1,948,658 2,376,757 53.2% 22.0% Net Fee & Com. Income 227,031 278,168 290,876 28.1% 4.6% Dividend Income 38,257 31 43,013 12.4% 138651.6% N

  30. Slide 30: Investor Relations contact and disclaimer

    A member of BIST Sustainability Index Investor Relations Levent Mah. Çayır Çimen Sok. No:7 Kat:6 34330 Beşiktaş-İstanbul / Turkey E-mail: investorrelations@vakifbank.com.tr Tel (90-212) 316 7336 Fax (90-212) 316 7126 www.vakifbank.com.tr Disclaimer Notice: This report has been prepared by VakıfBank,

Türkiye Vakıflar Bankası T.A.O. (VakıfBank) — Q1 2017 Earnings Presentation on 6ix