Turkiye Sinai Kalkinma Bankasi A.s. · BIST:TSKB
Turkiye Sinai Kalkinma Bankasi A.s — Türkiye Sınai Kalkınma Bankası (TSKB) — Q3 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 3Q '19
Created with a trial version of Syncfusion Essential PDF The Industrial Development Bank of Turkey by 3Q ‘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 40.3 bn asset size ▪ 369 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 2.6 bn MCAP* 8.4% ▪ 58.4% 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 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: Core Business Lines Supporting the Bank's Mission
Core 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: 3Q-19 Highlights
3Q-19 Highlights Net Banking Income TL mn Quarterly Cumulative NIM 341 261 999 4.3% 936 34% 308 286 657 881 ROE 14.7% 102 51 44 177 162 -18 -44 ROA 1.8% -68 2Q-19 3Q-19 3Q-18 3Q-19 Net Banking Income exc. CPI&Trading CAR @ 17.8% Trading Gain/Loss CPI Income Net Profit Quarterly Cumulative Annualized
Slide 8: Banking Sector vs TSKB
Banking Sector vs TSKB CAR Loans/Assets NPL 4.7% 18.4% 74.0% 17.8% 3.2% 62.3% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB Cost to Income NIM ROE 35.8% 14.7% 4.3% 3.3% 10.9% 13.1% Banking Sector TSKB Banking Sector TSKB Banking Sector TSKB Repo & Depo; 4% Funds Syndication & Borrowed;
Slide 9: Solid FX Liquidity and Maturity Profile
Solid FX Liquidity and Maturity Profile Funding / Total Liabilities (exc. equity) Maturity Profile of External Debt USD mn 6,540 6,383 6,272 - -143 - -179 3% 3% 4% -505 -454 -395 4% 4% 4% -350* 5% 5% -532 5% -300** -350 -300 -350 -1,926 21% 21% 22% 11% 11% 10% -300 4Q-19 2020 2021 2022 2023 >=2024 5
Slide 10: Long Term DFI Funding Base
Long Term DFI Funding Base Outstanding DFI Funding Base (3Q-19) Yearly Multilateral Funding Agreements USD mn IBRD 38% EIB 27% KFW 12% 986 IDB 660 733 7% 600 463 340 CEB 5% 160 200 AFD 5% 80% of DFI Funding 2012 2013 2014 2015 2016 2017 2018 2019 guaranteed by IFC 2% Turkey Ministry of EBRD 1% Treas
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 Agriculture Financing Employment and Equal Opportunity Energy and Industrial Resour
Slide 12: Resilient Balance Sheet against volatile market conditions
Resilient Balance Sheet against volatile market conditions Asset Composition Total Loans TL bn 41.6 40.3 TL bn 3% 38.3 5% 30.6 Currency 4% 9% 6% 29.7 Breakdown 8% 2.3 14% 28.2 15% 14% 3.2 11% 2.2 4.8$ 74% 5.1$ 4.7$ 89% 74% 74% 4Q-18 2Q-19 3Q-19 FX Loans ($) TRY Loans 2018 2Q-19 3Q-19 Loans by Curren
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
Slide 15: Selective Lending Book
Selective Lending Book Loans by sector (3Q-19) Electricity Generation Renewable Energy; 32% 5% 37% Electricity Generation; Finance 13% 85% of which is Telecom/Logistics 9% Renewable Energy, Electricity/Gas Distribution 7% where 91% benefits Metal and Machinery 4% from Feed in Tariff Chemistry and Pl
Slide 16: Energy Generation Portfolio in Detail
Energy Generation Portfolio in Detail Energy Generation Renewable Energy Portfolio (Outstanding Risk $) Portfolio Risk 1.3 bn 1.4 bn 1.5 bn 1.6 bn 1.9 bn 1.9 bn 1.8 bn 6% Breakdown 7% 7% 6% 2% 6% 4% 5% 5% 7% 5% 18% 22% 34% 32% 35% 3% 37% 33% 15% 9% 14% 17% 18% 19% 75% 69% 51% 46% 37% 35% 35% 2013 20
Slide 17: State Incentive Mechanisms for RELs in Turkey
State Incentive Mechanisms for RELs in Turkey Guaranteed Sales Prices & Incentives for Local Manufactured Equipments Guaranteed Sale Price Incentives for Local Equip. Type (USD cent/kWh) (USD cent/kWh) Hydro Power Plant (HPP) 7.3 1.0—2.3 Wind Power Plant (WPP) 7.3 0.6—3.7 Geothermal Power Plant (GEO
Slide 18: Proactive Classification of Loans
Proactive Classification of Loans 30.06.2019 Gross Amount Share in Total Coverage Ratio Provisions (-) Stage 1 Loans TL Mn. Stage 1 26,578 86.8% 0.63% 167 86.8% 86.3% Stage 2* 3,375 11.0% 11.4% 384 Stage 3 682 2.2% 26.1% 178 78.0% 2Q-19 3Q-19 Gross Loans 30,635 100.0% 2.4% 729 Free Provisions 240 11
Slide 19: Visible Improvement in the Weight of Restructured Loans
Visible Improvement in the Weight of Restructured Loans Stage 2 Loans Restructed Stage 2&3 Loans TL bn 3.4 3.1 13.2% 13.7% 13.0% 12.5% 42% SICR Loans are in 49% the restructuring process 51% 58% 58%58% 59% 58% 20% 23% 2Q-19 3Q-19 4Q-18 1Q-19 2Q-19 3Q-19 Restructured SICR Stage 2 Sector Breakdown 33%
Slide 20: Historical Trend of NPL Ratio: TSKB vs Banking Sector
Historical Trend of NPL Ratio: TSKB vs Banking Sector 17.6% 11.5% 9.4% 9.4% 6.0% 5.2% 4.9% 4.8% 4.7% 3.8% 3.7% 3.6% 3.6% 3.4% 3.2% 3.2% 3.1% 2.9% 2.9% 2.8% 2.8% 2.7% 2.7% 2.1% 1.5% 0.8% 0.7% 0.6% 0.5% 0.4% 0.4% 0.4% 0.3% 0.2% 0.2% 0.2% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 21: Favorable Yields on Securities support Profitability
Favorable Yields on Securities support Profitability TL Securities Portfolio Breakdown TL mn 330$ Fixed Fixed Fixed Fixed 309$ 309$ %33 %33 303$ %38 %39 CPI CPI CPI CPI %44 %46 %61 4,217 %43 %42 3,587 3,896 4,043 Floating Float Float Float Float %23 %21 %19 %19 3Q-18 4Q-18 2Q-19 3Q-19 3Q-18 4Q-18 2Q
Slide 22: Elevating Contribution of Commissions to Quarterly and Yearly Net Income
Elevating Contribution of Commissions to Quarterly and Yearly Net Income Cumulative Quarterly TL mn 9Q-18 9Q-19 YoY 2Q-19 3Q-19 QoQ Consistently Net Interest Income 922.2 1,142.5 24% 398.8 371.7 -7% stable NIM Trading Income 101.8 -44.4 -144% -18.3 -68.4 n.m Derivative (Derivative MtM Valuation 41.1
Slide 23: Sustained Core NIM Generation
Sustained Core NIM Generation Annualized NIM Quarterly NIM NIM NIM exc. CPI&Trading 3Q-19 5.4% 4.3% 4.6% 4.5% 4.3% 2Q-19 4.4% CPI normalized NIM 3.9% 1Q-19 4.5% 3.7% 3.9% 3.3% 3.3% 3.9% 4Q-18 4.1% 4.9% 3Q-18 4.1% 3Q-18 4Q-18 1Q-19 2Q-19 3Q-19 Quarterly Spread 4.0 3.4 3.2 3.1 3.1 3.1 2.7 2.8 Quarterl
Slide 24: Solid Solvency Metrics backed by Internal Capital Generation
Solid Solvency Metrics backed by Internal Capital Generation Evolution of RWA and Equity 17.9% 16.2% 17.8% TL bn 16.4% 41.2 39.4 35.2 37.4 12.0% 11.6% 11.1% 11.1% 12.3% 8.5% 4.1 6.3 4.2 6.0 4.6 6.8 4.9 7.0 3Q-18 2018 2Q-19 3Q-19 3Q-18 2018 2Q-19 3Q-19 Tier I (CET 1) CAR RWA Core Equity Total Capital
Slide 25: Key Performance Indicators
Key Performance Indicators ROE ROA Cost to Income 18.4% 16.0% 12.5% 13.1% 14.7% 10.8% 2.3% 2.0% 1.8% 2017 2018 3Q-19 2017 2018 3Q-19 2017 2018 3Q-19 ROTE CAR 17.8% NIM 17.1% 16.1% 4.9% 18.8% 18.1% 4.3% 16.5% 3.9% 2017 2018 3Q-19 2017 2018 3Q-19 2017 2018 3Q-19 ROE; Annualized Net Income for the peri
Slide 26: 2019YE Guidance Revisions
2019YE Guidance Revisions 3Q19 2019 Revised Financial Guidance (%) Figures Guidance Guidance FX Adjusted Loan Growth -1.3 ~5 Flat Loans/Assets Ratio 74 ~75 no Δ Loans/Long Term Funding Ratio* 126 ~115 no Δ Fees & Commissions Growth 50 >35 no Δ OPEX Growth 26 <25 no Δ Net Interest Margin (adj.)** 4.3
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 — ==>
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 30/09/2018 31/12/2018 30/09/2019 (TRY mn) TRY FX TOTAL TRY FX TOTAL TRY FX TOTAL Cash and Banks 14 1,547 1,561 600 1,340 1,940 1,491 919 2,410 Securities 3,591 1,795 5,387 3,896 1,585 5,481 4,203 1,862 6,065 Loans (Gross) 2,493 31,105 33,598 2,232 25,994 28,226 3,460 26,212 2
Slide 31: TSKB Financial Institutions & Investor Relations
TSKB Financial Institutions & Investor Relations www.tskb.com.tr
Türkiye Sınai Kalkınma Bankası (TSKB) — Q3 2019 Earnings Presentation on 6ix