Turkiye Vakiflar Bankasi Turk Anonim Ortakligi · BIST:VAKBN

Turkiye Vakiflar Bankasi Turk Anonim Ortakligi — H1 2015 Earnings Presentation

25 slides from Turkiye Vakiflar Bankasi Turk Anonim Ortakligi's earnings presentation, Aug 3, 2015

  1. Slide 1: Earnings Presentation BRSA Bank-Only 1H 2015

    Earnings Presentation VakıfBank IR App. Available at BRSA Bank-Only 1H 2015 August 3, 2015

  2. Slide 2: 1H 2015 Macro Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 1H 2015 Macro Highlights US real GDP decreased at annual rate of 0.2% in the first Turkey GDP growth came in at 2.3% in 1Q15, exceeding quarter of 2015, according to the third estimate. The consensus. The highest contribution came from private

  3. Slide 3: 1H 2015 VakıfBank Highlights

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 1H 2015 VakıfBank Highlights 1H15 bank-only net income was 820.9 TL mn, which was up NPL ratio continued to improve another 5 bps QoQ and 15 by 13.6% YoY. bps Ytd, came down to 3.52% which reached the year-end 1H15 ROAE came at 11%, comparable

  4. Slide 4: 1H 2015 Earnings and Ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 1H 2015 Earnings and Ratios Net Income (TL mn) Comparable Net Income* (TL mn) Sector net 13.6% income growth 11% vs YoY 922.6 820.9 22.5% 753.2 722.8 434.6 386.3 1H14 1H15 373.6 349.2 ROAE (%) 11.6 Sector 11.5 12.4 11.1 11.0 1Q14 2Q14 1Q15 2Q15

  5. Slide 5: Loans/Assets reached to all time record level

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Loans/Assets reached to all time record level Total Assets (TL bn) 25.9% Sector total Breakdown of Assets (%) asset vs growth 168.4 174.5 21.5% YoY 158.2 Quarterly Growth 138.5 3.6% Other * 16.9 16.2 15.8 17.6 Securities Loans Interbank 0.9 1.6

  6. Slide 6: Effective management of security portfolio

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Effective management of security portfolio Total Securities (TL mn) Portfolio Structure Total 4.1 TL bn 8.3% equivalent 20.1 TL bn TL FC 22,558 24,385 24,215 35% Share of 22,350 (0.7%) 35% 100% securities in 30% 6,855 6,871 7,124 total assets 2

  7. Slide 7: Accelerated yet disciplined loan growth in target segments

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Accelerated yet disciplined loan growth in target segments Total Loans (TL bn) FC Loans (USD bn) 29.2% 20.7% 118.3 112.5 104.3 12.4 12.6 12.0 5.2% 33.7 91.5 32.3 10.4 1.4% 27.9 22.0 4.4% 52.7% 1H14 YE14 1Q15 1H15 Loan/Deposit (%) 80.2 84.6 76.4

  8. Slide 8: Well diversified loan breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Well diversified loan breakdown Breakdown of Loans (TL bn) Portfolio Shift (%) 29.2% SME 26.1 0.5 pps 26.6 91.5 104.3 112.5 118.3 5.2% 6.6 6.9 7.3 7.7 Other 1 Retail 35.9 (4.0 pps) 31.9 SME 2 23.9 27.7 29.2 31.5 Com.&Corp. 38.0 3.5 pps 41.5 Mor

  9. Slide 9: Ongoing focus on higher margin products in retail

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Ongoing focus on higher margin products in retail General Purpose Consumer (TL bn) Residential Mortgages (TL bn)* Strong presence in 22.5% 7.1% key retail segments thanks to 15.1 14.6 14.9 13.5 14.3 13.9 14.3 2.3 million 12.3 pay-roll accounts

  10. Slide 10: Sustained healthy growth in credit cards despite macroprudential measures

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Sustained healthy growth in credit cards despite macroprudential measures Credit Card Loans (TL mn) Outstanding Credit Cards (mn #) Sector’s 16.1% credit card loan growth 3.3 vs 2.4% YoY 3.2 3.2 4,783 4,503 3.0 3.1 4,383 4,120 6.2% 1H14 YE14 1Q

  11. Slide 11: Loan growth is fuelled by high quality segments

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Loan growth is fuelled by high quality segments Commercial&Corporate (TL bn) Project Finance Loans (USD bn) 41.0% 34.3% 7.6 49.1 6.8 7.1 47.1 34.8 41.9 4.1% 5.6 6.2% Share of commercial & corporate 1H14 YE14 1Q15 1H15 1H14 YE14 1Q15 1H15 loans

  12. Slide 12: Asset quality improvement remained intact

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Asset quality improvement remained intact Reported NPL Ratio (%)1 Comparable NPL Ratio (%) Mortgages NPL Ratio (%) 3.96 3.67 3.57 4.69 4.84 4.78 4.72 3 3.52 0.54 0.57 0.53 0.52 Sector 2.89 3.35 3.20 3.14 3.10 Sector 2.79 2.85 2.84 0.54 0.49 0.4

  13. Slide 13: Net CoR is inside budget despite one of the highest coverage ratio of 93%

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Net CoR is inside budget despite one of the highest coverage ratio of 93% in peer group NPL (TL mn)* Breakdown of New NPL Inflow (%) Other Credit Cards 6.1 445 305 4,310 4,170 14.1 SME Mortgage 25.5 3.5 GPC 18.5 Com.&Corp. NPL 1Q15 New NPL Coll

  14. Slide 14: Customer deposit driven well diversified funding structure

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Customer deposit driven well diversified funding structure Breakdown of Liabilities (%) Other 5.3 5.1 4.9 5.3 Sub-Debt 1.4 1.4 2.2 2.2 Breakdown of Liabilities (TL bn) Bonds 5.9 6.6 6.5 6.7 Private placement Repo* 9.3 10.2 9.3 138.5 174.5 outst

  15. Slide 15: Non-granular deposit base via strong growth on demand and retail deposit

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Non-granular deposit base via strong growth on demand and retail deposit Total Deposits (TL bn) FC Deposits (USD bn) 19.1% 13.9% 91.8 99.7 100.3 84.2 0.6% 11.6 29.3 31.1 11.2 11.3 21.6 26.1 3.5% 6.5% FC 10.2 Solid quarterly 62.6 65.7 70.4 69.1

  16. Slide 16: Solvency ratios

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Solvency ratios Capital Adequacy Ratio (%) Core Tier I 11.7% 11.2% 11.4% 10.8% 10.4% 14.3 13.9 14.0 14.2 Share of FX capital 13.7 in total regulatory BRSA Recom. capital increased to 12% Min. Ratio 16.6% 8% in 2Q15 creating natural hedge to FX

  17. Slide 17: NIM, Spreads and Costs

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 NIM, Spreads and Costs Yields (%) Cost of Deposits (%) TL Loans TL Securities TL Deposits FC Deposits 15 bps 404 bps 51 bps (3 bps) 11.88 11.97 11.63 11.48 11.32 7.95 2.08 10.40 9.52 7.76 1.60 1.66 1.63 7.28 7.23 7.25 2Q14 4Q14 1Q15 2Q15 2Q14 4

  18. Slide 18: Earnings breakdown

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Earnings breakdown Net Interest Income (TL mn) Other Income (TL mn) 26.9% (10.9%) 2,673 610.7 279.3 264.6 543.9 Total Other Income 380.4 (5.4%) 2,105 399.2 4.9% Collections 1,433 from NPL 1,240 185.5 213.7 Other 15.5% 230.3 Income 15.2% 93.8 14

  19. Slide 19: Eye-catching fee growth promise better than budget figures for full year 2015

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Eye-catching fee growth promise better than budget figures for full year 2015 Net Fee and Commission Income (TL mn) Breakdown of Net Fee and Commission Income (%) 1H15 Inquiry&Expertise Insurance 42.0% 5 5 449.4 Cash Loans Other 28 11 316.5 228

  20. Slide 20: Comparable opex growth is better than the operating budget, Cost/Income improves

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Comparable opex growth is better than the operating budget, Cost/Income improves Operating Expenses (TL mn) Comparable Opex 15.4% 1,760.6 1H15 1,526.0 Fee Comparable 1H15 Reimbursement OPEX 127.1 TL mn 1.633,5 TL mn 855.3 905.3 9.8% 5.8% 1H14 F

  21. Slide 21: VakıfBank with numbers

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 VakıfBank with numbers Distribution Channels & Customer (#) 1H2015 Efficiency (‘000 TRY) 1H2015 Branches 904* Assets per Employee 11,385 ATMs 3,357 Assets per Branch 193,211 Personnel 15,324 Loans per Employee 7,720 POS Terminals 159,251 Loans

  22. Slide 22: Balance Sheet

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Balance Sheet YoY QoQ (TL-mio, %) 1H2014 1Q2015 1H2015 Growth Growth Cash & Balances with Central Bank 18,638 21,179 21,518 15.5% 1.6% Interbank 1,286 4,198 4,443 245.5% 5.8% Assets Securities 22,350 24,385 24,215 8.3% (0.7%) Loans 91,541 112,4

  23. Slide 23: Income Statement

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Income Statement YoY QoQ (TRY-Thousand, %) 1H2014 1Q2015 2Q2015 1H2015 Growth Growth Net Interest Income 2,105,441 1,240,163 1,432,613 2,672,776 26.9% 15.5% Net Fee & Com. Income 316,467 228,679 220,746 449,425 42.0% (3.5%) Dividend Income 65,6

  24. Slide 24: Diversified funding source via Non-Deposit Funding

    INVESTOR RELATIONS Earnings Presentation_Bank Only 1H15 Diversified funding source via Non-Deposit Funding Sub-debt January, 2015 •US$ 500 million equivalent subordinated notes (Tier II) were issued with a yield of 6.95%. Coupon rate has been set at 6.875%, maturity of the notes is 10 years. DPR Sec

  25. Slide 25: Investor Relations contact and disclaimer

    A member of BIST Sustainability Index Investor Relations Çamlık Cad. Çayır Çimen Sok. No:2 Kat:6 34330 1. Levent-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

Turkiye Vakiflar Bankasi Turk Anonim Ortakligi (VakıfBank) — H1 2015 Earnings Presentation on 6ix