Turkiye Is Bankasi Anonim Sirketi · BIST:ISBTR
Turkiye Is Bankasi Anonim Sirketi — Turkiye Is Bankasi A.S. — Q3 2008 Earnings Presentation
48 slides from Turkiye Is Bankasi Anonim Sirketi's earnings presentation, Sep 30, 2008
Slide 1: Isbank Investor Presentation 2008Q3
=a ‘ ISBANK INVESTOR PRESENTATION 2008Q3
Slide 2: Disclaimer
The information in this document has been obtained by Turkiye Is Bankasi A.S. (“Isbank”) from sources believed to be reliable, however, Isbank cannot guarantee the accuracy, completeness , or correctness of such information. This document has been issued for information purposes only. only The finan
Slide 3: Agenda
Isbank at a Glance 5 Financial Highlights 9 Retail Banking 32 Customer Centric Transformation Program 38 Major Equity Participations 43 Page 3
Slide 4: Isbank at a Glance
Financial Highlights 9 Retail Banking 32 Customer Centric Transformation Program 38 Major Equity Participations 43 Page 4
Slide 5: Isbank at a Glance: shareholders and branch network
30,4% Domestic Investors • Around 250,000 domestic and foreign shareholders Free Float Ataturk Shares 35,1% • Share holding of employees via pension fund creates self‐ Isbank Pension Fund motivation Foreign Investors 41,5% 28,1% 64,9% • Stocks are quoted at ISE and also traded at LSE in the form of
Slide 6: One of the biggest conglomerates in Turkey
...as one of the biggest ...as gg conglomerates in Turkey Turkey.. Page 6
Slide 7: Market shares and rankings
Market Share(%) 2008Q3 Rank(1) Total Assets 13.5 1st Loans TRY Loans 12.9 1st FX Loans 13.8 3rd Total Loans 13.1 2nd Deposits Demand Deposits 15.9 2nd TRY Deposits 14.0 1st FX Deposits 13.2 3rd Total Deposits 13.7 1st Retail Products Volume of Debit Cards 18.5 1st N b off POS Number 16 1 16.1 2nd Ac
Slide 8: Financial Highlights
Isbank at a Glance 5 Retail Banking 32 Customer Centric Transformation Program 38 Major Equity Participations 43 Page 8
Slide 9: Total assets, loans and deposits trend
45.749 92.042 33.980 29.818 80.181 75.205 21.859 63.755 13.193 13 193 38.514 2004 2005 2006 2007 2008 Q3 2004 2005 2006 2007 2008 Q3 * Including interest accruals 56.067 56 06 10 604 10.604 46.399 48.533 9.826 9.288 9.410 37.222 7.640 24.473 2004 2005 2006 2007 2008 Q3 2004 2005 2006 2007 2008 Q3 *
Slide 10: Increasing share of loans since 2001 crisis
(TRY mn.) 2007 2008 Q3 Change ... increasing share of loans Cash & Banks 14.045 14 045 15.312 15 312 9% Cash & Banks since 2001 crisis crisis.. Securities (Net) 24.326 24.233 ‐ 18% 17% Securities Loans 33.980 45.749 35% 30% 26% Participations (Net) 4.817 3.703 ‐23% Loans Fixed Assets (Net) 1.978 1.9
Slide 11: TRY and FX loans growth
17,0% 14,4% 13,1% 45.749 11,8% 8,3% 7,9% 8,4% 8,5% 7,7% 33.071 33.980 5,8% 4,4% 4,4% 4 4% 25.068 8.912 12.678 TRY FX* TOTAL 2007 2008Q3 2007 Q Q4 2008 Q Q1 2008 Q Q2 2008 Q Q3 TRY Loans L FX Loans* L * T t l LLoans Total (*) 32% growth for FX loans when based on USD amounts. (*) Growth rates for FX
Slide 12: 62% comprised of retail and SME loans
...62% ...62 62% comprised of retail and SME loans loans.. 11% 8% 2% 3% Retail Loans 12% 11% 32% 1% 62% 66% 64% 67% 62% 1% 9% Housing Loans 9% Auto Loans General Purpose 2004 2005 2006 2007 2008 Q3 30% Consumer 33% Overdraft Credit Cards 10.199 8.291 12% SME 45% 53 % General Purpose 12% Investment C
Slide 13: Decreasing NPL ratio and 100% NPL provisioning
...marked by continuing ...marked decrease in NPL ratio and 100% 100 % NPL provisioning. provisioning. 1.697 1.697 1.494 1.494 1.164 1.164 133 133 53 53 1.05 1.05 1.1 1.1 7,9% 4,6% 3,8% 4,2% 3,6% 2004 2005 2006 2007 2008 Q3 2004 2005 2006 2007 2008 Q3 NPLs Reserves 100% NPL provisioning 144,8% 130,4
Slide 14: NPL ratios by loan type
5,1% 5,8% 4,7% 5,1% 4,2% 3,6% 3,6% 3,0% 1,8% 1,4% 1,4% 1,1% Consumer Credit Cards Total Loans Consumer Credit Cards Total Loans 2007 2008 Q3 Isbank Sector 99,6% 63% 63% 67% 83% 92% 0,4% 37% 37% 33% 17% 8% 2004 2005 2006 2007 2008 Q3 I. Group Loans II. Group Loans Restructured Other NPLs Page 14
Slide 15: Securities portfolio
26.319 24.326 24.233 TRY Discount and 22.366 FX Floating Fixed Coupon Bonds 13,1% 13 1% 21 8% 21,8% 14.330 FX Discount and Fixed TRY Floating Coupon Bonds 34,9% 30,2% 2004 2005 2006 2007 2008 Q3 * Including interest accruals on securities 85 % of Securities are Available for Sale Average durations a
Slide 16: Increasing share of listed participations
...increasing share of listed ...increasing companies.. companies Financial 38,6% Non‐Financial 61,4% Other Banks Telecom 11,7% 9,3% 20,9% Strategic Insurance 21,0% Core Non‐financial Financial Non‐core Glass Financial Ins. 28,7% Business 8 4% 8,4% TRY 4.8 48 Areas billion Listed Non ‐ Listed 55,1%
Slide 17: Liabilities and funding structure
mn ) (TRY mn.) 2007 2008 Q3 Change Deposits 48.533 56.067 16% REPOs&Money Market 5.803 9.777 68% 13% 11% Equity 6% Funds F d B Borrowed d 9.963 9 963 10.233 10 233 3% 7% 11% Other Other 5.278 6.139 16% 12% Equity 10.604 9.826 ‐ 7% 7% 11% T t l Liabilities Total Li biliti 80 181 80.181 92 042 92.042
Slide 18: Deposits: composition in favor of TRY
... a clear indicator of customer t ttrust. trustt. Remarkable R k bl change in the composition in favor of TRY deposits. deposits. FX Deposits 56.067 TRY Deposits 48.533 48 533 46.399 36% 33% 37.222 39% 41% 24.473 52% 67% 61% 64% 59% 48% 2004 2005 2006 2007 2008 Q3 Page 18
Slide 19: Largest market share in TRY and total deposits
13,7% 14,0%13,8% 14,0% 13,2%13,7% 56.067 48.533 , 9,9% 37.323 6,8% 31.267 4,1% 17.266 18.744 TRY FX Total 2000 2007 2008 Q3 2007 2008 Q3 TRY Deposits FX Deposits Total Deposits Largest g market share in TRY and total deposits among private banks as of 22.806 18.381 30.09.2008. Having one of the best
Slide 20: Demand deposits and lower funding cost
... constitute 16,6 16,6%% of total d i and deposits d are the h main i contributor to lower cost of funding. 9.298 7.991 7 991 7.678 15,9% 15,3% 14,3% 14,3% 14,1% 6.759 6.288 47% 55% 60% 50% 45% 53% 45% 40% 2004 2005 2006 2007 2008 Q3 55% 50% 12,2 % of funding is in the form of demand 2004 2005 200
Slide 21: Assets under management
... has reached a remarkable total of TRY 94 billion. 5.739 94,493 5.231 79,821 4.363 4.630 70,488 , 4.001 4 001 59,952 On‐Balance 45,183 59% e Sheet 61% 62% 66% 54% 2004 2005 2006 2007 2008 Q3 26% 20% 18% 15% 13% 11% 10% 7% 6% 9% 8% 6% Sheet Off‐Balance 9% 18% 22% Assets under management almost tri
Slide 22: High CAR supports balance sheet growth
... and high CAR support balance sheet growth going forward.. forward 29,0% 10.834 10.993 27,0% 25,0% 7.755 8.794 23,9% 21,9% 22,2% 20,5% 6.457 19,1% 16,5% , 16,1% 6.787 6 787 8.164 8 164 10.056 10.715 10 715 6.001 1.278 3.040 832 889 377 1.734 2.072 202 111 100 2004 2005 2006 2007 2008 Q3 1 2 3 4 5
Slide 23: Quarterly income statement 2008 Q2 vs Q3
Change (TRY mn.) 2008 Q2 2008 Q3 QoQ Net N t Interest I t t Income I 896 851 ‐5% Net Fees & Comm. from Banking NII Serv. 316 292 ‐8% 49% 69% Net Trading Gains/Losses 234 ‐54 ‐123% Net Commissions 17% Dividends Received 224 2 ‐99% 13% 24% 21% Net Trading Released Provisions 89 107 20% 11% Income Gain
Slide 24: Income statement 2007 Q3 vs 2008 Q3
Change (TRY mn.) 2007 Q3 2008 Q3 YoY Net Interest Income 2 117 2,117 2 670 2,670 26% Net Fees & Comm. from Banking NII 784 894 14% Serv. 55% 57% Net Trading Gains/Losses 318 275 ‐14% Net Commissions Dividends Received 137 267 95% Net Trading Released Provisions 202 436 116% 20% Income 19% Gains on A
Slide 25: Net commission income supported by retail and corporate franchise
... supported by superior retail and corporate franchise.. franchise 7% 6% Non Cash Loans 978 867 14% 16% Credit Appraisal Mutual Fund Man. 18% 17% And Other Inv.Acc.Fees Credit Cards Foreign Trade 2007 Q3 2008 Q3 36% 40% Fund Transfer Account Keeping 2% Fees 95,4% 93,8% 6% 1% 5% Insurance Agency 7%
Slide 26: Net interest margin and spreads
4,7% 7,4% 7,2% 4,5% 5,3% 5 2% 5,2% 2,2% 2,2% 2 4% 2,4% 2,3% 2008 H1 2008 Q3 2008 H1 2008 Q3 TRY FX TRY FX Blended • Adjusted for Net Trading Gains / Losses and Commission from Cash Loans according to regulatory reclassification * Adjusted for FX Gains / Losses, Net Trading Gains / Losses and Commiss
Slide 27: Cost/income improvement
... resulted in one of the best cost/income improvement among peers in spite of 4.685 comprehensive 45,5% 43,6% 42,0% 3.861 transformation project 40,2% 36,7% which was kicked off in 2006. 2.133 1.536 2007 Q3 2008 Q3 2004 2005 2006 2007 2008 Q3 Cost Income 6%4% 14% Other 7% 4% 3 6% 3,6% 6% 3,3% 29%
Slide 28: ROAE and ROAA
27,6% 2,3% 25,0% 2,2% 24,3% 2,1% 2,0% 22,2% 22,2% 1 8% 1,8% 1,7% 1,7% 1,7% 1,6% 17,0% 17,1% 1,5% 13,7% 11,9% 9,6% 2004 2005 2006 2007 2008 Q3 2004 2005 2006 2007 2008 Q3 ROAE ROAE* ROAA ROAA* * On banking business Page 28
Slide 29: Net profit, payout ratio and index listings
36,1% 23.105 34,6% 20.311 32,7% 1.702 17.972 32 1% 32,1% 14.789 12.280 1.109 956 635 2004 2005 2006 2007 2008 Q3 Isbank is listed on the following indexes: • ISE‐100 • ISE‐30 2004 2005 2006 2007 • ISE‐Bank ISE Bank Index • Merrill Lynch Global Banks Index Payout Ratio (**) * Net Profit (TRY billion)
Slide 30: Credit ratings
R i Rating Outlook O l k ... ahead of Turkey’s Rating Outlook Long Term FC IDR BB Stable standards in various aspects of rating Global Scale Long Term LC IDR BBB BBB‐‐ Stable Long Term Counter Party Credit BB‐‐ BB Negative Short Term FC IDR B ‐ Long Term Certificate of Deposits BB‐‐ BB ‐ Short Term
Slide 31: Retail Banking
Isbank at a Glance 5 Financial Highlights 9 Customer Centric Transformation Program 38 Major Equity Participations 43 Page 31
Slide 32: Credit cards
14 different products for different customer segments Reward points by 98,273 merchant firms through 181,818 chains,, called “Maxipuan” p After the cooperation of Isbank with Ziraat Bank, regarding the use of Isbank’s “Maximum Card” brand, the number of cards using the “Maximum” advantages reached 6
Slide 33: Asset management dominance since foundation
... an area which Isbank dominates since its foundation.. foundation Page 33
Slide 34: Mutual funds
... 20 types of mutual funds designed d i d for f different diff t risk i k 609.121 582.249 590.656 appetites.. appetites 5.659 555.954 552.346 5.140 5.268 4.910 4.523 2004 2005 2006 2007 2008 Q Q3 2004 2005 2006 2007 2008 Q Q3 With 9 A type and 11 B type mutual funds and more than 580 thousand inve
Slide 35: Payroll accounts and bill payments
... supported by payroll accounts and bill p payment y agreements.. agreements 8.097 16.896 6.570 15.471 6.074.781 1.349.282 5.561.393 1.346.406 2007 Q3 2008 Q3 2007 Q3 2008 Q3 Amount (TRY million) Number of Accounts Amount (TRY million) Number of Payments Automated bill payments and payroll account
Slide 36: Alternative distribution channels
... are being used more ffi i tl . efficiently. efficiently ( ) (%) 2004 2005 2006 2007 2008Q3 49% 47% 44% 43% ATM 28 26 26 26 24 52% Internet 16 20 22 26 28 Call Center 1 2 2 2 2 51% 53% 56% 57% 48% Kiosk 1 1 1 1 1 Telephone 2 2 2 1 1 2004 2005 2006 2007 2008Q3 Non‐Branch Branch The share of non‐br
Slide 37: Customer Centric Transformation Program
Isbank at a Glance 5 Financial Highlights 9 Retail Banking 32 Major Equity Participations 43 Page 37
Slide 38: Transformation programme: actions, benefits, results
@ What the programme is doing? @ What will be the benefits to the bank? @ What will be the result? Page 38
Slide 39: Moving to a customer centric organisation
The Programme is helping İş Bank to move to a more customer centric organisation with the Targeted Client Centric Organization From Organization customer as the key focus. communication by product to and Distribution This requires change in the initiatives Organization by Brand strategy current oper
Slide 40: Countering increased competition
The Programme is helping İş Bank to counter the increase in competition by: by: Page 40
Slide 41: Increasing shareholder value
We will increase our shareholder h h ld value l through th through: h: Page 41
Slide 42: Major Equity Participations
Isbank at a Glance 5 Financial Highlights 9 Retail Banking 32 Customer Centric Transformation Program 38 Page 42
Slide 43: Sisecam: flat glass, glassware, packaging, chemicals
A leading l di fl t glass, flat l glassware, l glass l packaging k i and d Turkey k Europe** ** World*** l *** chemicals producer. Flat Glass 76.0 13.1*** 3.7 In all product lines, leader in the domestic market with a strong presence in export markets. Glassware 64.0 20.5*** 8.0 Glass Packaging 90 0
Slide 44: Sisecam production facilities geography
The Group spreads its operational risk by positioning ii i the h production d i facilities f ili i iin a wider geography geography,, namely the fast growing markets in the neighbouring countries countries.. Flat Glass Glassware Glass Packaging Chemicals Page 44
Slide 45: Sisecam export markets by product
Glassware (%) Chromium Products (%) Bulgaria 32 Italy 60 Iran 30 Taiwan 77 Ukraine 31 S. Korea 40 U.K. 28 China/Hong Kong 24 Russian Federation 23 Flat Glass (%) Italy 17 Albenia 62 Germany 12 Bulgaria 55 Spain 9 Greece 25 Romania 17 Glass Fibre (%) Soda Ash (%) Iran 16 Serbia 95 Spain 5 Bulgaria 53
Slide 46: Avea
İşbank Group 18.87% Turk Telekom 81.13% Aria and Aycell merged under TT & TIM as of February 19, 19, 2004 Avea brand has been successfully launched in June 2004. 2004. The coverage and efficiency have increased significantly due to the combination and integration of 2 GSM networks networks.. A numbe
Slide 47: Group companies and participations table
Bank’s Shareholder’s Field of Direct Groupp Assets (1) Market Group G Company C Equity (1) Activity Share Share (%) (USD 000) Share (%) (%) (USD 000) Türkiye Sınai Kalkınma Bankası A.Ş. Investment Bank 40.52 50.10 4,229,856 (6) 552,110 (6) 25.26 (1) (6) İşbank GmbH Banking 100.00 100.00 740,550 (6)
Slide 48: Contact
A. Ferit Eraslan Manager of Accounting Department Phone :+90212 3163002 E-mail __ : ferit.eraslan@isbank.com.tr Alper Turgal Assistant Manager Phone :+90212 316 3036 E-mail _: alper.turgal@isbank.com.tr Page 48
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