2012 Q1 Earnings Presentation - Albaraka Türk · - CAR Ratio will decrease 1.3 points in average...

2012 Q1Earnings Presentation

Contents

•Macroeconomic/BankingOutlook•2012Q1FinancialResults•MarketComparison•Appendix

AlbarakaTürk 2012Q1EarningsPresentation

AlbarakaTürk Page12012Q1EarningsPresentation

Macroeconomic / Banking Outlook


Whowillbethenextone?

Globaleconomyhasnotcomprehensivelyescapedfromthepossibilityofasecondglobalrecession

Eurozoneisstillstrugglingtoovercomesovereigndebtproblems.

PoliticaldevelopmentsespeciallyinEuropearecausingthepostponementofeconomymeasurement.

InflationpressuresstemmingfromliquidityinjectionsandconflictbetweenIranandWestcountrieswillbethemainchallengeinfrontoftheglobaleconomy.

Unemploymentratesarestillhistoricallyhigh.

Turkish economy is proceeding with its remarkable growth in the face of some constraints to be overcome

In2011,TurkisheconomyaccomplishedatremendousGDPgrowthratesupportedtotheoptimismabout2012.

However,inflationmaintainsitsplacebeingthemostsignificantchallengesinfrontoftheTurkisheconomy.

ThelatestAprilinflationdata(yoy,11.14%)madeCBRT’starget(5%)verydifficulttobeachieved.


Indicatorswerestrongforbankingsector

• Bankingsectorshowedstrongindicatorsforthefirstquarterof2012.

- Banksmanagedtoimproveyieldsfasterthanexpectedandmanagedassetquality

- Assets,equities,depositsandprofitabilityincreased

- Sectorextendedtheamountofsyndicationandinternationalfoundingchannels

• BaselIIregulationswillbeimplementedonJuly,2012

- CARRatiowilldecrease1.3pointsinaverage

- CARwillbehighenoughaswell

• Newlawaboutpropertysalestoforeignerswillsupportbankscreditlendingvolumeintermsofmortgage.

Participation banks diversifying and improving their funding base

• Accessingtowholesalefundingsources(i.e.sukuk,murabahasyndication,etc.)

• Offeringdiversifiedproductstoexpandthedepositbase(i.e.golddepositaccount)

• ExpectationaboutthegovernmentrentcertificationissuinginJune.

• ExpandingthesizeofP/Lsharingprojectsandretail-housingcredits

• Continuingbranchnetworkexpansion

• Seekingopportunitiesforbranchingandacquisitionsabroad


2012 Q1 Financial Results


Composition of Total Assets has changed

Total Assets (million)

TRL USD*

8,406

5,494

Dec ‘10 Mar ‘11 Jun ‘11 Mar ‘12Dec ‘11Sep ‘11

8,617

5,610

8,685

5,371

9,502

5,7915,564

10,30810,461

5,120

Assets Segmentation (Q1’12) (%)

Funded Credits Securities Portfolio Liquid Assets Other Assets

75

20

3

22.5% -1.5%

*USDequivalentoftotalassetsL/D(Q1)=97%Portionoffundedcreditsintotalassetsis74.8%inthefirstquarter.

Ytd Growth: -1.5 %in TRL terms YtD Growth: 4.1% in USD terms


11.86

Redemption of revenue indexed bonds and liquidity transformed into credit

Credits Yields(1) (%)

LC Credits Yields FC Credits Yields Total Credits Yields

20.18

8.05

15.39 11.35

5.41

9.36

14.29

7.12

13.08 13.7212.67

7.22 7.297.11

10.89 11.3410.59

Dec ‘09 Sep ‘10 Dec ‘10 Dec ‘11 Mar ‘12Sep ‘11

Total Securities Portfolio (TRL million)

Available for Sale

Held to Maturity

500

400

300

200

100

0

83%

68%

82%86%86%

515

435428

522

200

17%

33%

18%14%14%

*USDequivalentoftotalfundedcredits

Total Funded Credits* (million)

Securities Yield(2) (%)

Securities Yield

8.33

10.319.9510.06

TRL USD*

Mar ‘11 Mar ‘11Mar ‘12 Mar ‘12Jun ‘11 Jun ‘11

Sep ‘10

Sep ‘11 Sep ‘11

Dec ‘10 Sep ‘11

Dec ‘11 Dec ‘11

6,532 6,7727,6787,265

6,393

4,162 4,040 3,649 4,3133,864

10.25

Dec ‘11 Mar ‘12

5.7%

(1)Profitshareincomereceivedfromcreditsforthelast12M/12Maveragecredits (2)Profitshareincomereceivedfromsecuritiesforthelast12M/12Maveragesecurities

Ytd Growth: 5.7%in TRL terms YtD Growth: 11.6% in USD terms


Composition of Total Funded Credits (%)

Funded Credits Portfolio

Total Retail Credits* (TRL million)

5

6 5

36

476

32 33

762 55 52

845

16

862

26

Q1 ‘11 Q1 ‘12Q4 ‘11

Consumer Vehicle Housing Credit Cards Other

Currency Composition of Total Funded Credits (Q1 ‘12) (%)

TRL USD* EUR*

Corporate SME Retail

6355

11

13

2632

Retail credits (excluding installment based commercial credits and corporate credit cards) grew to 978 million TRL in March 31,2012 up from 954 million TRL in Q4 2011 Housing finance is primary segment among retail credits

*IncludingUSD&EURindexedcredits

*Excludinginstallmentbasedcommercialcredits,andcorporatecreditcards


Asset quality has always priority

Non-performing Loans (TRL million)

NPL Specific Provisions Collateral

Q4 ‘11

Sep ‘10 Dec ‘10

Q1 ‘12

Sep ‘11 Dec ‘11 Mar ‘12

167172159

181 181 185

Composition of NPL (Q1 ‘12) (%)

Depositors’ Share in Participation Pools

From Bank’s Own Share Bank’s Share in Participation Pools

70

7

23

Cost of Risk** (bps)

171

129

96 87105

NPL Ratio* (%)

3.63

3.243.03

2.352.36

2.99

Dec ‘09 Sep ‘10 Dec ‘10 Mar ‘12Dec ‘11Sep ‘11

**Specificprovisionsforcreditsforlast12M/12Maveragecredits*Includingfinancialleasings&accrualsandrediscounts


Total Liabilities

Composition of Total Liabilities (Q1 ’12) (%)

77 9

10

4

Composition of Funding Base (TRL million)

5%15%

12% 10%

5% 16% 16%20% 18%

14%

81% 79%69%

68% 72%

Q3 ‘10 Q4 ‘10 Q3 ‘11 Q4 ‘11 Q1 ‘12

Wholesale Funding Current Accounts Participation Accounts

9,000

8,000

6,000

4,000

2,000

0

6,231 6,7838,182

9,098 8,871

Funds Collected Shareholders’ Equity Wholesale Funding Other Liabilities


Total funds collected

Total Funds Collected (million)

TRL USD*

Dec ‘09 Sep ‘10 Dec ‘10 Dec ‘11 Mar ‘12Sep ‘11

6,882 6,9615,465

3,717

6,222

4,321 4,498 4,276 4,466

8,045 7,949

3,750

Currency Composition of Participation Accounts (Q1 ‘12) (%)

TRL USD EUR

64

25

11

Maturity Composition of Funds Collected* (%)

171245 47 515

310

3411

48

1 0 23 4 28 7 824 19 17

18

52

17 18 23 20

Dec ‘09 Dec ‘10 Sep ‘11 Dec ‘11 Mar ‘12

>1 year Up to 1 year Up to 6 months Up to 3 months Up to 1 month Current Accounts

Cost of Funds Collected(1) (%)

LC FC Total

8.66

3.71

6.82

7.91

3.69

6.42

7.52

3.66

6.15

7.267.71

7.18

3.85 4.083.70

6.08 6.455.96

Dec ‘10 Mar ‘11 Jun ‘11 Dec ‘11 Mar ‘12Sep ‘11

Average Maturity for Funds Collected (days)TRL: 160 FX: 176 Total: 166

*USDequivalentoftotalfundedcredits (1)Profitshareexpensetodepositorsforthelast12M/12Maverageparticipationaccounts

Ytd Growth: -1.2 %in TRL terms YtD Growth: 4.4% in USD terms

-1.2%

*Excludingaccrualsandrediscount


Off balance sheet

*Revocablecreditlimitsnotincluded

LGs-to-Total Assets (%)

Dec ‘09 Dec ‘10 Mar ‘11 Dec ‘11 Mar ‘12

5044

42 4345

Off Balance Sheet Composition (%)

Others* Letters of Credit Letters of Guarantee

Dec ‘10Dec ‘09 Mar ‘11 Mar ‘12Dec ‘11

88 9 1210109 13 89

8283 78 8081

Off Balance Sheet (TRL million)

Dec '09 Dec '10 Mar '11 Dec '11 Mar ’12Growth (%)

Q-Q YoY

Letters of Guarantee 3214 3687 3385 4534 4650 3 37

Letters of Credit 348 471 557 506 442 -13 -21

Others* 309 335 372 545 721 32 94

Total 3871 4493 4314 5585 5813 4 35


(TRL thousand) Year on Year Change Quarterly Change Notes

Mar '11 Mar '12 % Change Q4 '11 Q1 '12 % Change

Net Profit Share Income 87.068 105.852 26% 109.951 105.852 -4% Higher NPSI arises from higher credit yields

Net Fee Income 23.419 27.575 18% 25.040 27.575 10%Net fee income increased by 18% thanks to solid growth (cash and non-cash) in Q1

Net Trading Income 4.681 3.101 -34% 9.372 3.101 -67% Lower FX trading income was earned on QoQ basis

Other Income 13.412 21.125 54% 20.691 21.125 2% Huge increase in recollections on YoY basis

Staff Costs 34.424 44.441 29% 37.516 44.441 18%QoQ change is due to annual wage increase, bonus and staff expansion

Provisions 20.070 30.500 52% 36.220 30.500 -16% Specific and general provisions have grown significantly

Other Costs 23.032 32.914 35% 27.837 32.914 18%YoY increase in other operational costs can be attributable to new branch openings

Tax 9.845 10.617 8% 13.286 10.617 -20% -

Net Profits 41.209 39.181 -5% 50.194 39.181 -22% -

Income-cost dynamics


Income-cost dynamics

Net Profit Staff Costs Provisions Other Costs Tax

Net PS Income Net Fee Income Net Trading Income Other Income

(TRL million)

67%

18%

3%

12%

70%

16%

4%

10%

28%

25%

18%

22%

7%

29%

26%

18%

19%

8%

Mar ‘11

Income

Mar ‘11Mar ‘12

Cost

Mar ‘12

180

160

140

120

100

80

60

40

20

0


Breakdown of income for Q1 2012

Breakdown of Fee&Commission Income (TRL million)Breakdown of Profit Share Income (TRL million)

From Participation Pools Funded Credits Commission Income

From Bank’s Own Equity

From Non-funded Credits From Other Banking Services From Credit Card and POS Commissions

Reversal from Prior Year Provisions

Other Operating Income Net Trading Income

19141

7

63

621

Breakdown of Other Income (TRL million)

19

3

2


Expanding branch network

Total Number of Branches

Total Number of Personnel Albaraka Türk Branches

739909

1,1561,477

1,799 1,934 2,1752,601 2,697

100109

37 43

6380

101

123 130

2004

2004

2005

2005

2006

2006

2007

2007

2008

2008

2009

2009

2010

2010 2011 2012

2011 Q1 ‘12

İstanbul 50Ankara 13İzmir 4Konya 4Adana 3Bursa 3Kayseri 3Kocaeli 3Antalya 2Diyarbakır 2

Gaziantep 2Adıyaman 1Afyon 1Aksaray 1Aydın 1Balıkesir 1Batman 1Bolu 1Çanakkale 1Çorum 1

Denizli 1Düzce 1İzmit 1Elazığ 1Erzurum 1Eskişehir 1Hatay 1Isparta 1İçel 1Karaman 1

Karabük 1Kastamonu 1Malatya 1Manisa 1Maraş 1Ordu 1Osmaniye 1Rize 1Sakarya 1Samsun 1

Sivas 1Şanlıurfa 1Tekirdağ 1Tokat 1Trabzon 1Van 1Yalova 1Zonguldak 1Erbil* 1

Current Branches

*1branchinErbil,Iraq

Albaraka Türk branches


Market Comparison


Percent 2011 (12 Months) 2012 (3 Months)

Albaraka Türk Participation Banks

Banking Sector Albaraka Türk Participation Banks

Banking Sector

AssetSize 24.38 29.57 20.92 -1.46 1.31 0.94

Total Credits 14.01 25.76 29.83 5.81 4.82 2.39

Deposits 16.74 18.53 12.72 -1.19 1.53 0.03

Total growth



Albaraka Türk/Participation Banks

Albaraka Türk/Banking Sector

Participation Banks/Banking Sector

Albaraka Türk/Participation Banks

Albaraka Türk/Banking Sector

Participation Banks/Banking Sector

AssetSize 18.62 0.86 4.61 18.00 0.82 4.50

Total Credits 17.53 1.01 5.74 17.50 1.04 5.90

Deposits 20.40 1.15 5.64 19.80 1.10 5.60

Market share




Banking Sector


Banking Sector

CAR 12.53 14.05 16.46 12.31 13.91 16.56

NPL Ratio* 2.48 3.15 2.76 2.44 3.20 2.81

Provisioning Ratio 92.41 65.43 79.42 92.48 68.22 79.48

ROAA (IBT) 2.21 2.04 2.22 2.11 2.12 2.19

ROAE (NI) 17.32 13.80 14.26 16.34 14.54 14.31

Yield 9.16 9.19 8.60 9.41 9.57 9.04

Spread 4.27 4.52 3.42 4.34 4.80 3.56

Net Profit Share Margin 4.58 4.85 3.95 4.64 5.07 4.09

Net Fee Income / Avg. Assets 1.81 1.72 1.27 1.79 1.70 1.25

Op Costs / Avg. Assets 2.97 3.19 2.38 3.07 3.44 2.60

Cost/Income** 46.09 50.32 47.02 50.54 46.44 43.55

Credits / Branches (000 ‘TRL) 59,244 60,621 66,628 59,311 61,627 67,710

Staff / Branches 21 20 19 21 20 18

CA / Deposits* 17.62 23.48 17.25 19.91 21.87 16.26

Ratios

*Accrualsandrediscountsexcluded**Cost:OperatingCosts,Income:NII/NPSI,NetFeesandCommissionsIncome,OtherIncome


Appendix


(TRL thousand) Dec ’11 Mar ’12 Growth (%)

Cash and Banks 2,358,672 2,082,439 -11.7%Financial Assets 90,682 65,269 -28.0%FundsUtilized 7,286,960 7,710,479 5.8%

Funded Credits 7,251,756 7,664,417 5.7% NPL 171,936 181,042 5.3% Provisions -158,882 -167,433 5.4% Net Financial Leasing Receivables 22,150 32,453 46.5%

Investments Held To Maturity (Net) 430,862 135,379 -68.6%Associates 3,050 3,050 0.0%Fixed Assets 236,496 241,291 2.0%Assets Held For Sale and Investment 25,372 28,506 12.4%Other Assets (inc. Tax Assets) 28,791 41,619 44.6%Total Assets 10,460,885 10,308,032 -1.5%Funds Collected 8,044,747 7,949,059 -1.2%Funds Borrowed 1,053,291 922,136 -12.5%Debts (inc. Taxes) 212,404 244,623 15.2%Provisions 146,193 147,681 1.0%Shareholders' Equity 1,004,251 1,044,533 4.0%

Capital 539,000 539,000 0.0% Capital Reserves (inc. Premium) 35,330 36,193 2.4%

Profit Reserves 269,051 429,920 59.8% Profits 160,870 39,420 -75.5%

Past Periods 715 239 -66.6% Current Year 160,155 39,181 -75.5%

Total Liabilities 10,456,100 10,308,032 -1.4%

Summary balance sheet


(TRL thousand) Mar ‘11 Mar ‘12 Growth (%)

Profit Share Income 177,340 225,396 27.1Profit Share Expense 90,272 119,544 32.4Net Profit Share Income 87,068 105,852 21.6Net Fees and Commissions Income 23,419 27,575 17.7

Fees and Commissions Received 26,467 31,944 20.7Fees and Commissions Paid 3,048 4,369 43.3

Net Trading Income 4,681 3,101 -33.8Other Operating Income 13,412 21,125 57.5Total Operating Profit 128,580 157,653 22.6Provisions for Loan Losses 20,070 30,500 52.0Other Operating Expenses 57,456 77,355 34.6Net Operating Profit 51,054 49,798 -2.5Tax Provision 9,845 10,617 7.8Net Profits 41,209 39,181 -4.9

Summary income statement


Notes

DISCLAIMER

THISPRESENTATIONANDTHEINFORMATIONCONTAINEDHEREINISCONFIDENTIALANDMAYNOTBEREPRODUCED,CIRCULATED,DISTRIBUTEDORPUBLISHED(INWHOLEORINPART)ORDISCLOSEDBYRECIPIENTSTOANYOTHERPARTY.BYVIEWINGTHISPRESENTATION,YOUAGREETOBEBOUNDBYTHEFOREGOINGLIMITATIONS.

Thispresentationdoesnotconstituteorformpartofanyofferorinvitationtosellorissue,oranysolicitationofanyoffertopurchaseanysecuritiesofAlbarakaTürkKatılımBankasıA.Ş.,norshallanypartofitformpartoforbereliedoninconnectionwithanycontractorinvestmentdecisionrelatingthereto,nordoesitconstitutearecommendationregardingthesecuritiesoftheBank.Theinformationcontainedinthisdocumentispublishedfortheassistanceofrecipients,butisnottoberelieduponauthoritativeortakeninsubstitutionfortheexerciseofjudgmentbyanyrecipient.TheBankdoesnotacceptanyliabilitywhatsoeverforanydirectorconsequentiallossarisingfromanyuseofthisdocumentoritscontent.AnypurchaseofsharesoftheBankshouldbemadesolelyonthebasisofsoundfinancialanalysisonthepartoftheinvestor,withnoliabilitiesarisingagainsttheBank.

TheinformationusedinpreparingthesematerialswasobtainedfromorthroughtheBankortheBank’srepresentativesorfrompublicsources.Althoughpreparedingoodfaithandfromsourcesbelievedtobereliable,noreliancemaybeplacedforanypurposeswhatsoeverontheinformationcontainedinthispresentationoronitsaccuracy,completenessorfairness.Theinformationinthispresentationissubjecttoverification,completionandchange.

Theprojections,forecastsandestimatesoftheBankcontainedhereinareforillustrativepurposesonlyandarebasedonmanagement’scurrentviewsandassumptions.Suchprojections,forecastsandestimatesinvolveknownandunknownrisksanduncertaintiesthatmaycauseactualresults,performanceoreventstodiffermateriallyfromthoseanticipatedinthispresentation.TheBankexpresslydisclaimsanyobligationorundertakingtoupdateorreviseanyprojections,forecastsorestimatescontainedinthispresentationtoreflectanychangeinevents,conditions,assumptionsorcircumstancesonwhichanysuchstatementsarebasedunlesssorequiredbyapplicablelaw.Investorsshouldnotemanydifferentriskfactorscouldadverselyaffecttheoutcomeandfinancialeffectsoftheplansandprojectionsdescribedherein.Asaresult,youarecautionednottoplaceunduerelianceonanyforward-lookingstatements.TheBank,itsadvisersandeachoftheirrespectivemembers,directors,officersandemployeesdisclaimanyliabilityincaseprojectionsandplansgiveninthisdocumentarenotrealized.

Albaraka Türk Participation BankInvestor Relations

SarayMah.Dr.AdnanBüyükdenizCad.No:6Ümraniye/İstanbul

Tel: +90 (216) 666 03 03 Fax: +90 (216) 666 16 20 E-mail: [email protected] Web page: www.albarakaturk.com.tr

2012 Q1 Earnings Presentation - Albaraka Türk · - CAR Ratio will decrease 1.3 points in average...

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