Bank only Results · 2018-01-31 · 2016 Equity Cash Dividend MTM Gains/Losses 2017 Net Profit 2017...

Earnings Presentation

2017YE - BRSA Bank only Results

Macro Outlook and Expectations

3.9%

5.4%

2.6%

4.0%3.5%

5.7%

3.6%

2.1%

1Q17 2Q17 3Q17 4Q17

Corporate Loan Growth (Fx adj. terms-QoQ)

Banking Sector TSKB

Sectoral Developments

Developments at TSKB

Macroeconomic Developments

• Improved growth dynamics prevail• Capital flows to EMs are likely to continue• Central Banks’ normalization steps and

jeopolitical risks will be closely monitored

• TL200 bn CGF disbursement• 16% loan growth• Maintained asset quality• 15% ROE

• 15% Loan Growth (2018: 12-15%)• Still intact asset quality (2018: <0.5%)• 25% expansion in the client portfolio• Above sector ROE (2018: ~18%)

11%

22%

15%

Loan Growth (Fx adj. terms-YoY)

Private Sector Banks State Banks TSKB

Investor Relations I BRSA Unconsolidated Earnings Presentation 20171

2017 GUIDANCES 2017YE RESULTS

FX Adjusted Loan Growth 15 15 in line

Loans/Assets Ratio 70 77 in line

Net Interest Income Growth >12 34 beated

Fees & Commissions Growth >20 67 beated

OPEX Growth 13 15 in line

Net Interest Margin (adj.)* >3.5 3.9 beated

Return On Equity 17-18 18.4 beated

Return On Assets ~2.0 2.3 beated

Cost/Income Ratio 15-16 12.5 beated

Capital Adequacy Ratio >14 17.0 beated

NPL Ratio <0.5 0.2 beated

Leverage Ratio ~8X 8.2 in line

Remarkable Performance; guidances were beated


*Swap adjusted.

Stellar Performance in Profitability

3

ROAE 18.4%

ROAA

2.3%

NIM

3.9%

407476

596

2015 2016 2017

Net Profit (TL million)

666

141 151 161 143

1Q17 2Q17 3Q17 4Q17

Quarterly Net Profit(TL million)

213


Transfer to IFRS 9 completed (2018)

Extra provisions classfied as free

provisions

Free ProvisionEffect

Provisions in Focus

4

Sept’17

General Provisions

209 mn TRY

4Q17 General Provisions

18 mn TRY

General ProvisionsCorrection

1.0% 0.5%

-77 mn TRY

Dec’17

General Provisions

150 mn TRY

Sept’17

Other Provisions

94 mn TRY

Transfers General Provisions to Free

Provisions

(Tax Included)

+100 mn TRY

Extra FreeProvisions

(Tax Included)

+86 mn TRY

Dec’17

Other&FreeProvisions

280 mn TRY


(TRY mn) 4Q-16 1Q-17 2Q-17 3Q-17 4Q-17 QoQ

Net Interest Income 189.2 210.4 203.9 233.2 280.9 20.5%

Trading Income-Adj. - 6.7 9.9 13.8 3.4 32.3 NA

Net Commissions 1.9 2.2 3.6 3.1 5.5 78.4%

Dividend & Other 1.1 5.0 14.5 0.8 4.3 NA

Net Banking Income 185.5 227.5 235.8 240.5 323.0 34.3%

OPEX -27.1 - 34.1 - 33.2 - 30.7 - 34.5 12.4%

Operating Profit 158.4 193.5 202.6 209.9 288.6 37.5%

Provisions -10.7 - 18.9 - 12.8 - 7.5 - 128.1 NA

Tax -30.0 - 33.8 - 39.3 - 41.5 - 17.1 -58.9%

Net Profit 117.7 140.8 150.6 160.9 143.4 -10.9%

Impressive Quarterly Performance

5

*Based on MIS data** Swap costs are adjusted between trading income and interest income from loans.***Interest Income from securities includes impairment expenses of marketable securities with provisions.

Swap valuations&derivativetrading create volatility


Free provisions; for one-offincome and released provisions

Released provisions from general provisions are adjusted

OPEX in line with the guidance

High volume&solid loan spreads, and CPI contribution

6

Growth (FX adjusted)

QoQ YTD

Loans 2.1% 15.0%

Securities&Other -0.4% -3.5%

Total Assets 1.0% 9.5%

FX Assets 0.9% 7.3%

TRY Assets 2.1% 15.4%

Resillient Asset Composition

Other Ratios

Leverage 8.2X

Loan/Asset 77.1%

FX Assets 77.8%

59%

8%

18%

12%3%

67%

5%

18%

6%3%

68%

8%

15%

6%3%

TRY mn Total assets increased by 20%

67%

7%

16%

7%3%

4Q-16 2Q-17 3Q-17 4Q-17

FX Loans TRY Loans Securities Cash & MM Non IEAs

27,22525,794

24,002

28,910

3%

8%19%

5%

67%

6% 15%

8%

68%

3%

68%

16%

5%3%

3%4%

16%

70%

IEA; % 97


6%

7%

49%

41%

10%

Loans byCurrency

USD EUR TRY

Diversified and Sustainable Funding Base

7

3,548 3,609

520 739 319

427 -300 999

998 412

420

2016 2017

Repo &Money Market

Securities Issued

Subordinated Debt

Syndication & P/N etc.

Unguarenteed LT Funding

T. Guarenteed LT Funding

USD mn 5,797

58.8% 53.4%

8.6%10.9%

5.3% 6.3%4.5%

16.5% 14.8%

6.8% 6.2%

2016 2017

Funding / Total Liabilities (exc equity)

Repo &Money Market

Securities Issued

Subordinated Debt

Syndication & P/N etc.

Unguarenteed LT Funding

T. Guarenteed LT Funding

6,493


Total SeniorEurobond:

1 billion USD

DFI Funding/ LT Funding

72%

Tier 2 Capital: 300 million

USD

Total Funding: USD 6,5 mn

• 87% of the Total Funding is LongTerm

• FX Short term funding: 13%(including syndication, P/N, Repo, Money Market)

2016 Equity Cash Dividend MTMGains/Losses

2017 Net Profit 2017 Equity

TRY mn565.7 3,535

2,928 103.4-92.8

Equity Movement

Above Sector Solvency Metrics

Capital Adequacy Ratio

8

14.0% 13.5% 12.5%

2015 2016 2017

CAR

Tier I 14.9% 14.3%

17.0%

12.0%

6.0%


Total Risk Weighted Assets

TRY mn

Market Risk

187

Operational Risk

1,221

Credit Risk

26,767

28,176

15% Last 5 year average SHE increase

18%

10%Free Capital Ratio

Last 5 year average ROE

30%

Solid Loan Growth

Loans by Sector

34%

13%

9%

8%

5%

5%

5%

4%

4%

3%

3%

6%

Electricity Production

Finance

Logistics

Electricity/Gas Distribution

Non-residential Real Estate

Metal and Machinery

Chemistry and Plastics

Construction

Tourism

Health & Education

Food

Other (*)

9

(*) Automative: 1.6%, Textile: 1.9%, Other: 4.4%

Disbursements by Themes & Sectors

21%RE, mostly Geothermal and Solar Projects

SMEs inc. APEX Loans

Green & Sustainable Projects

Energy & Resource Effieciency

17%

10%

6%

4%Women Empowerment

74%

18%

8%

Loans byType

Investment Loans

Working Capital Loans

APEX


• NPL ratio is 0.2%.

• Group 2 loans/Total Loans is 2.1%.

3,102 3,213 3,262 3,337

342 340 323 322

3Q-16 4Q-16 3Q-17 4Q-17

FX($)

TRY

% 73

TRY mn

Well-managed Securities Portfolio

% 65 Floating

TRY Securities Portfolio Breakdown

10

TRY Securities / Assets : 12%

By maturity

5%

43%

26%

26%

< 1 Year 1<3 3<5 >5

Floating%35

Floating%25

CPI Linked

%35

CPI Linked

%40

Fixed%30

Fixed%35

4Q-16 4Q-17

All TL securitiesare funded by

Free Equity


Duration is 2.7 yrs in Fixed & Floating bonds, 4.3

yrs in CPIs.

70% is in AFS portfolio.

Private sector bonds: 4.2% of total portfolio

11

Net Loan Spread

Yields enhanced by new originations and inflation

3.2 3.23.1 3.1

2015 2016 3Q-17 4Q-17

FX

9.9% 10.0% 10.3%11.2%

12.5%

9.6%10.8% 11.1%

13.0%

16.3%

8.0%9.3%

4Q-16 1Q-17 2Q-17 3Q-17 4Q-17

Security Yields

TRY Sec. Yield-exc CPI TRY Sec. Yield Funding Cost

1.4

2.7

3.4 3.6

2015 2016 3Q-17 4Q-17

TRY


Notable NIM ExpansionQuarterly NIM

3.7%

3.5%

3.9%

2015

2016

2017

3.3%

2.9%

3.4%3.2%

3.4%3.2% 3.2%

3.6%

3.9%

3.1%

3.9%

3.4%

3.8%3.6%

3.8%

4.2%

1Q-16 2Q-16 3Q-16 4Q-16 1Q-17 2Q-17 3Q-17 4Q-17

NIM exc. CPI NIMAnnual NIM

Based on Adj Net Interest Income excluding valuation gain/loss. Quarterly and Annual Adj. Net Interest Incomes are annualized.

381391

37bps

yoy


14.3% 15.0%12.8%

1%

2015 2016 2017 2018E

Cost to Income


64 73 83

22 23

33 15 19

16

2015 2016 2017 2018E

OPEX

Personnel Expenses Adm. Expenses Other Op. Expenses Total Operating Expenses Dividends to Personnel

14%15% ~18%

~30%

14-15%

Well Sustained Efficiency

* Adjusted after free provisions**ΔTotal operating income after free provisions - ΔOPEX

TRY mn

17%

25%

4%

10%

2016 2017

Positive JAWS Ratio

Δ Op. Income* Jaws Ratio**

13

14

2018 Forward Looking Expectations

2018YE GUIDANCES

FX Adjusted Loan Growth 12-15

Loans/Assets Ratio ~77

Net Interest Income Growth ~15

Fees & Commissions Growth >20

OPEX Growth ~30

Net Interest Margin (adj.)* 3.6-3.8

Return On Equity ~18

Return On Assets ~2.2

Cost/Income Ratio 14-15

Capital Adequacy Ratio >16

NPL Ratio <0.5

Leverage Ratio ~8.5X

*Swap adjusted.


Appendix: Balance Sheet

(TRY mn)31/12/2016 30/09/2017 31/12/2017

TRY FX TOTAL TRY FX TOTAL TRY FX TOTAL

Cash and Banks 240 856 1,096 169 906 1,074 11 843 854

Securities 3,214 1,188 4,402 3,262 1,143 4,406 3,342 1,208 4,550

Loans 1,280 16,042 17,322 2,046 18,637 20,684 2,143 20,151 22,294

Subsidiaries 382 19 401 462 23 485 486 28 513

Other 254 527 781 296 280 577 355 343 699

Total 5,370 18,632 24,002 6,235 20,990 27,225 6,337 22,573 28,910

ST Funds 485 1,599 2,084 1,150 2,141 3,292 763 2,292 3,055

LT Funds - 14,196 14,196 - 14,832 14,832 - 16,315 16,315

Securities Issued - 3,487 3,487 - 4,661 4,661 - 4,892 4,892

Repo* 460 61 521 80 282 362 80 161 242

Other 501 285 786 482 205 687 624 248 872

Equity 2,955 -27 2,928 3,371 19 3,390 3,522 12 3,535

Total 4,401 19,601 24,002 5,084 22,141 27,225 4,989 23,921 28,910

* TRY security funding only

15 Investor Relations I BRSA Unconsolidated Earnings Presentation 2017

Appendix: Cumulative Income Breakdown

16

(TRY mn) 2016 2017 YoY

Net Interest Income 715.8 928.4 29.7%

Trading Income - Adj. - 0.9 59.5 NA

Net Commissions 8.6 14.4 67.4%

Dividend & Other 45.2 24.6 -45.4%

Net Banking Income 768.7 1,027.5 33.6%

OPEX - 115.6 - 132.4 14.5%

Operating Profit 653.1 894.5 37.0%

Provisions - 59.8 - 167.2 179.5%

Tax - 116.8 - 131.6 12.7%

Net Profit 476.4 595.7 25.0%


TSKB Investor RelationsMeclisi Mebusan Cad. 81

Fındıklı 34427 İstanbul

[email protected]

www.tskb.com

mailto:[email protected]

http://www.tskb.com/

Bank only Results · 2018-01-31 · 2016 Equity Cash Dividend MTM Gains/Losses 2017 Net Profit 2017...

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