Turkiye Sinai Kalkinma Bankasi A.s. · BIST:TSKB
Turkiye Sinai Kalkinma Bankasi A.s — Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q2 2023 Earnings Presentation
30 slides from Turkiye Sinai Kalkinma Bankasi A.s's earnings presentation, 2023
Slide 1: FI&IR Presentation 2Q-23 Bank-only Results
The Industrial Development Bank of Türkiye FI&IR Presentation 2Q-23 Bank-only Results Corporate Banking Investment Banking Advisory Services
Slide 2: TSKB at a Glance
TSKB at a Glance 4 Turkey tis Bank Group 40.2% Ly Ly) Gy Lyle oe Shareholding baae Z fakifban! AKG AN Fitch LTFC B- B Free Float* & Other Moody’sLTIR B3 B3 SAHA Corporate Governance Rating yy YY Sustainalytics ESG 7.9 Negligible Risk As of 8% of August 2023 Risk Rating Zp CORPORATE BANKING INVESTMEN
Slide 3: A Unique Business Model
A Unique Business Model = Long term tenor in liabilities: 11 years * Medium term in assets: 5 years = Diversified funding tools = Amortized loan book = Multi-disciplinary assessment during allocation = Sector specific research analysts during allocation and monitoring period = Strong collateralizati
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; corporate loans, investment banking activities and advisory services Ministry of Treasury and Finance Its capacity to introduce innovative the
Slide 5: Sustainability is Well Integrated into Our Business Model
Sustainability is Well Integrated into Our Business Model health and safety © Supporting less developed regions Support for employment in Turkey; ® Encouraging women participation to the economy ERB Support transition to low ye carbon economy © Providing financing to operational Environmental & Soci
Slide 6: TSKB Sustainability Journey
TSKB Sustainability Journey - | First Carbon Neutral Bank of Turkey Environmental Factor in Credit Appraisal Process Environmental Management System Yy coy 1980 1990 2005 2007 2008 2009 First Environmental Loans | + UNEP FI + ISO 14001 Certificate + Launch of www. cevreciyiz.com 0Og cevreciyiz. * ce
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Slide 8: Net-Zero Transition Pathway
Net-Zero Transition Pathway In 2022, we became UN NZBA member and submitted our Scope 1-2-3 emissions targets to SBTi. As of June 2023, SBTi approved our below targets. Scope3 representing e 53% of total Scope 2 assets reduce our electricity reduce GHG emissions continue active & generation project
Slide 9: 1H-23 Sustainable Finance Developments and ESG Ratings
1H-23 Sustainable Finance Developments and ESG Ratings Sustainable Reporting Developments Further Strengthened ESG-linked Funding and IFRS S2 Standards by ISSB = Submitted 2023 CDP Climate Change Report * Alignment check of our Integrated Annual Report with IFRS $1 Continuing Engagement with DFls Kf
Slide 10: 2Q-23 At a Glance
2Q-23 At a Glance + Stellar banking income generation earnings quality + NIM above guidance: 6.3%* maintained + ROE: 43.4% “Excluding FX Gains /Losses. Solid profitability and + 1.7% FX-adjusted loan growth + TL650 mn extra free provisions + NPL down to 1.9% + FX LCR: 205% Shemp ladle pictisye » ~85
Slide 11: Financial Guidance (Bank Only)
Financial Guidance 1H-23 (%) YE-23 (%) (Bank Only) Figures Guidance Growth FX Adjusted Loan Growth 1.7 ~5 Profitability Net Interest Margin* 6.3 >5 Fees & Commissions Growth 65 ~100 Return On Equity ** 43.4 ~35 Efficiency OPEX Growth 141 ~90 Cost/Income Ratio 9.2 <13 Solvency*** Capital Adequacy Rat
Slide 12: Strong top line, backed by continuous expansion of core banking income & remarkable trading gain
12 Strong top line, backed by continuous expansion of core banking income & remarkable trading gain Net Banking Income-TL mn 3,027 5,291 3,534 Continuous expansion of core banking income 1,757 Significant trading 983 Net Banking Income vs Provisions - TL mn i 103 income 671 10-23 20-23 1H-22 1H-23 1
Slide 13: Banking Sector vs TSKB
Banking Sector vs TSKB CAR* 21.7% 18.0% LU Banking Sector *Reported figures Cost to Income 31.7% da Banking Sector oc Repo Syndication Funds ic) on Borrowed 5; 8% a Deposit oO 659% Securities Issued 2 2% 4 2 Subordinated bonds Equity < yy ‘oth. ane lans (AT + Tri B 8% Loans/Assets Lege NPL 54.4% 1.6
Slide 14: Comfortable FX Liquidity and Maturity Profile
Comfortable FX Liquidity and Maturity Profile Funding / Total Liabilities (exc. Equity & Oth.) - USD mn ™ Guaranteed DFl Funding Unguaranteed DFl Funding 22% 16% 16% Securities Issued 13% 12% ts 1 Subordinated Debt Syndication & Other mRepo &Money Market 35 59% 60% 0, 40-22 10-23 20-23 ~85% ESG alig
Slide 15: Long Term DFI Funding Base
Long Term DFI Funding Base Outstanding DFI Funding Base - 2Q-23 IBRD 44.5% AIIB 4 f Yearly Multilateral Funding Agreements - USD mn EIB New Loan Agreements Kfw 7.6% + KfW| EUR 100 million JBIC * OeEB| EUR 25 million AFD 4.5% cDB 4.5% IDB 3.9% | tl ooo o EBRD | | 2.0% 2016 2017 2018 2019 2020 2021 20
Slide 16: Outstanding Project Themes Shaping Future Loan Book
16 Outstanding Project Themes Shaping Future Loan Book Energy and Resource Efficiency Women’s Employment and Equal Opportunity Renewable Energy Midcap Financing Supporting Exporters Regional Development Supporting Employment Sustainable Agriculture Industrial Development Sustainable Tourism Occupati
Slide 17: Resilient Asset Composition
7 Resilient Asset Composition Asset Composition - TL bn 4Q-22 10-23 mLoans mSecurities mCash&MM mNonIEAs & Other 20-23 Remaining Average Maturity - Years Investment Loons IN 6.1 Working Capital Loans. |) 2.3 APEX Loans [I 2.1 *DFlLinked working capital loans are 3.5% Weight | 70% 21% 9% ) 4.9 years
Slide 18: Risk Management Pillars
Risk Management Pillars Credit Risk * Monitoring the clients individually with analysing the financials * Preparing monitoring reports for the clients at least once a year * Keeping track of internal and external (if it is done) ratings of the customers, reviewing the internal ratings annually = Act
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Slide 20: Loan Sector Breakdown
Electricity Generation 36.5% Metal & Machinery 9.8% Finance 9.1% Tourism 6.4% Health & Education 5.5% Logistics 5.3% Construction & Construction Materials 4.7% Electricity/Gas Distr. 4.6% • Chemistry & Plastics 3.1% • • Food & Beverage 2.6% • Non-Residential Real Estate 1.6% • • Automotive 1.3% Tele
Slide 21: Renewable Energy Loan Breakdown
1.6 bn 1.9 bn 1.9 bn 1.9 bn 1.9 bn 1.7 bn 1.6 bn 4% 6% 6% 7% 8% 11% 5% 5% 5% 6% 12% 9% 11% 14% 35% 37% 35% 37% 39% 36% 34% 17% 18% 19% 20% 19% 19% 19% 37% 35% 35% 31% 24% 23% 21% 2017 2018 2019 2020 2021 2022 2Q-23 Hydro Geothermal Wind Biomass Solar • •
Slide 22: 97,752 1,064 11,631 3,398 2,096 1,991 % 41.5 19.6 2 8 29.1 5 9.7
97,752 1,064 11,631 3,398 2,096 1,991 % 38 17 41.5 19 19.6 22 8 29.1 5 9.7 5 17.9 2 43.0 1 47.0 5 13.7 28.6
Slide 23: TRY Securities Yield excluding CPI
TRY Sec. Yield exc. CPI CPI 75.6% 80.4% • 58.6% 47.8% 42.8% 47.5% • • 18.8% 19.1% 18.9% 19.4% 17.3% 19.9% • 1Q-22 2Q-22 3Q-22 4Q-22 1Q-23 2Q-23 •
Slide 24: Solid bottom line increase despite further strengthened provisions
Solid bottom line increase despite further strengthened provisions TLhmn 1H-22 1H-23 YoY | 10-23 20-23 00 Net Interest Income 2,527 3,932 56% 1,584 2,349 48% Stellar Nil = = = " generation Trading Income 592 1,638 177% + 103 1,534 1384% Contribution from " H a tailor-made Net Fees & Commissions 83 1
Slide 25: Core NIM continues to widen
Core NIM continues to widen Annualized NIM 16.8% 6.4 6.3% 30-22 1Q-23 20-23 25 = CPI Impact ™Core NIM 7.65% 3.6% 30-22 Quarterly NIM 7.51% 7.55% 2.0% 5.86% 4.1% 2.3% A 5.5% 200 bps 3.5% 5% 4Q-22 19-23 20-23
Slide 26: Comfortable and resilient solvency metrics despite depreciation
Comfortable and resilient solvency metrics despite depreciation Capital Ratios Without BRSA Temporary Measures Evolution of RWA and Equity-TL bn 136.6 A 104.3 i. 17.4 i. 18.9 W777 = = = 2022 19-23 2Q-23 2022 1Q-23 2Q-23 BTier | Ratio CAR With BRSA Temporary Measures ~ CAR: 21.7% | Tier :20.6% | CET-
Slide 27: 2S BS Q gf x
2S BS Q gf x
Slide 28: Balance Sheet
28 Balance Sheet Cash and Banks Securities Loans (Gross) Provisions Subsidiaries Other Total ST Funds LT Funds Securities Issued Repo & MM Other Subordinated Debt Shareholders’ Equity 6,051 25,518 111,479 ~6,465 5,188 4874 146,645 5,062 89,367 19,935 4,084 6,415 5314 16,468 31/12/2022 31/03/2023 30/
Slide 29: Detailed Income Statement
29 Detailed Income Statement TLmn Net Interest Income inc. Swap Cost Net Interest Income CPI Linkers Swap Costs (-) Net Commissions Other Income Dividends Other Trading & FX gains/losses FX gains/losses MtM gains/losses Trading gains/losses Banking Income OPEX (-) Net Banking Income ECL (-) Stage |
Slide 30: TSKB Financial Institutions & Investor Relations
30 ool Oe TSKB Financial Institutions & Investor Relations TSKB Financial Institutions & Investor Relations ir@tskb.com.tr www.tskb.com Meclisi Mebusan Cad. 81 Findikli 34427 istanbul
Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) — Q2 2023 Earnings Presentation on 6ix