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Investor Relations / Investor Presentation
August 2013
Investor Relations / Investor Presentation
Agenda
1 Turkish Economy
2 Turkish Banking Sector: An attractive investment opportunity
3 Garanti Overview and Key Investment Highlights
4 Garanti 1H13 Results per BRSA Consolidated Financials
2
Investor Relations / Investor Presentation
Moderate economic growth, downward risks still continue
• 17th largest economy across the globe in 2012 • A period of sustainable growth • Rapid recovery in 2010-2011, slowdown in
2012, slight recovery expected in 2013 on the back of increasing domestic demand
• Much lower or even negative contribution from external demand in 2013
Slight Recovery Expected After the Slowdown in 2012
5,3%
9,4% 8,4% 6,9%
4,7%
0,7%
-4,8%
9,2% 8,8%
2,2% 3,8%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
GDP Growth
Inflation (CPI) 18,4%
9,3% 7,7%
9,7% 8,4%
10,1% 6,5% 6,4%
10,4%
6,2% 6,8%
27,2% 22,3%
14,0%
21,2% 16,6%
16,5%
8,9% 7,1%
11,0%
6,2% 8,0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
Real Interest
Inflationary Pressures Become More Apparent
Benchmark Bond Rate
Source: Turkish Statistical Institute, Undersecretariat of Treasury E:Garanti Estimate
3
• Successful switch from hyperinflationary economy to price stability in the recent years
• More recent developments in currency basket and interest rate create upward risks on inflation
• Considering increasing inflationary pressures CBT follows tight liquidity policy and utilizes interest rate corridor more flexibly and actively
• Inflation is expected to accelerate slightly to
~6.5%-7% in 2013
Investor Relations / Investor Presentation
Ongoing strength in fiscal balance while external balance widens
78% 74%
68% 60%
53% 47% 40% 40%
46% 42% 39% 36% 35%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
Maastricht criteria 60%
Government Indebtness
EU Defined Government Debt Stock
4
• Government indebtness far below Maastricht Criteria • Government debt has started to decline just
after the crisis and the downward trend is expected to continue in the coming years
• Strong domestic demand and relatively weak external demand led CAD/GDP ratio to reach its record level after the crisis.
• In line with the weakening domestic demand and strong export performance external balance improved throughout 2012.
• Relatively higher growth in 2013 will result in
slight expansion in CAD. Hence, macro prudential measures will likely remain in place for financial stability purposes.
Current Account Deficit*
Current Account Balance/GDP
Source: Turkish Statistical Institute, Undersecretariat of Treasury E:Garanti Estimate * Figures including tourism revenue revisions announced by TurkStat, as of 2012 YE
-2,5% -3,6%
-4,5% -6,0% -5,8% -5.4%
-2,0%
-6,2%
-9,7%
-6,0% -7,3%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
Investor Relations / Investor Presentation
Agenda
1 Turkish Economy
2 Turkish Banking Sector: An attractive investment opportunity
3 Garanti Overview and Key Investment Highlights
4 Garanti 1H13 Results per BRSA Consolidated Financials
5
Investor Relations / Investor Presentation
Underpenetrated market with strong growth potential
6
Significant long-term growth potential
backed by attractive demographics &
underpenetrated market
• 59% of the 76mn population < age of 355
• Loans/GDP: 52% vs. 116% in EU
• ROAE: ~17%3 58%
39% 13%
90% 51% 52%
345%
116% 116%
Total Assets / GDP Total Cus. Deposits / GDP Total Loans / GDP
Turkey - 2002 Turkey - 1Q13 Euro Area - 1Q13
Well-regulated and strictly monitored
1
High and sustainable Real GDP growth1
90
110
130
150
170
190
210
2002 2005 2008 2011 2014 2017
EU27 LATAM CEEMEA TURKEY
Rea
l GD
P G
row
th (
Reb
ased
)
Penetration Ratios4
2nd largest banking system in CEE2 with an asset size of US$728bn3
2002-1Q13 CAGR: 19%
1 Source: IMF. CEEMEA countries include Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, South Africa. LATAM Countries include Argentina, Brazil, Colombia, Ecuador, El Salvador, Mexico, Paraguay, Peru 2 Source: EBF Banking Sector Statistics Database 2011, ranking per total assets 3 BRSA Monthly data for commercial banks as of March 2013. US$/TL:1.785 4 Source: ECB, TurkStat, BRSA for commercial banks 5 Source: TurkStat
Investor Relations / Investor Presentation
• Deposits fund 57% of assets1
• Comfortable level of Loans/Deposits at 102%1
Highly liquid…
7
Deposit-heavy funding structure
Comfortable liquidity levels
Continuous access to international funding sources
Liquidity Adequacy Ratios2 well-above required levels
• Total Liquidity Ratio -- Weekly: 164%; Monthly: 121% • FC Liquidity Ratio -- Weekly: 154%; Monthly: 115%
Banking Sector External Debt Roll-over Ratio2
1 BRSA monthly data for commercial banks, as of March 2013 2 CBRT Financial Stability Report, November 2012. Liquidity Ratios are as of October 2012.
2
75,8
60
100
140
Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12
Investor Relations / Investor Presentation
…well-capitalized and underleveraged
8
High solvency ratio
15,1% 13,5%
14,3% 13,3%
Turkey LATAM CEEMEA EU27
Tier-I Ratio1
(4Q12)
Low leverage 7,3x 7,9x 9,2x
14,1x
Turkey LATAM CEEMEA EU27
Leverage1
1 Source: Latest data from the IMF-FSI database. Represents country averages most of which are based on 4Q12 figures 2 BRSA monthly data as of March 2013, commercial banks only
3
(4Q12)
Basel II CAR2: 16.8%
High ROAEs2 :~17%
despite the low leverage
(1Q13)
(1Q13)
Investor Relations / Investor Presentation
Standing out for its asset quality
1 Source: Latest data from the IMF-FSI database, most of which are based on 4Q12 figures 2 Source: Latest data from the IMF-FSI database. Represents country averages most of which are based on 4Q12 figures 3 BRSA weekly data for commercial banks, as of March 29, 2013
9
Sustained sound asset quality
• No exposure to any toxic assets or problematic sovereign assets
• NPL Ratio3: 2.9% in Turkey
• High cash coverage @ 75%3
• Established & prudent underwriting procedures
Non-performing loans/Total gross loans1
NPL ratio2
4
(1Q13)
EU 27 9,2%
CEEMEA 10.2%
LATAM 2.8%
TURKEY 2,8%
1,5%
2,5%
3,5%
4,5%
5,5%
6,5%
7,5%
8,5%
9,5%
10,5%
2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
Au
stri
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Turk
ey
Bel
giu
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the
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ds
Bra
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UK
Den
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S.A
fric
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Cze
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Po
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Ru
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Spai
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Po
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gal
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Bu
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Slo
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Hu
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Ro
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Ukr
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Gre
ece
Investor Relations / Investor Presentation
Differentiating itself even in a challenging environment
Decelerating pace in GDP growth moderates lending growth
In this environment
Turkish banking sector’s • High liquidity • Strong capitalization • Low leverage and • Sound asset quality
remain as its main strengths
10
Global macro picture remains as the highest risk factor
Regulatory changes supporting financial stability; pressure profitability
5
Investor Relations / Investor Presentation
Agenda
1 Turkish Economy
2 Turkish Banking Sector: An attractive investment opportunity
3 Garanti Overview and Key Investment Highlights
4 Garanti 1H13 Results per BRSA Consolidated Financials
11
Investor Relations / Investor Presentation
Garanti: Pre-eminent Banking Franchise
2nd largest private bank by asset size
Robust balance sheet highly liquid, well-capitalized & low risk
#1 in ordinary banking income proven track record of sustainable banking income generation
Focused on relationship banking with broad
geographical coverage and wide multi-channel distribution network
Most valuable company on the BIST by market capitalization
Note: BRSA Consolidated Financials as of June 30, 2013 US$/ TL = 1.905 as of June 30, 2013 * As of July 29, 2013
Total Assets
US$ 104 bn
12
1H13 Net Income
US$ 1.1 bn
ROAE
21%
Branch network
969*
# of customers
~12 mn*
Basel II CAR
15%
Investor Relations / Investor Presentation
Integrated financial services company focused on retail
13
~ 9.2 mn credit cards
~ 7.2 mn debit cards
>540k POS
>3,600 ATMs
~ 1.9k customers*
~ 40 sales force1
Major Turkish &
multinational
operations
~43k customers*
~920 sales force1,2
Annual sales
>TL10 mn or
Transaction Volume
>TL600k
Financial Subsidiaries
~10.4 mn customers*
~ 2,445 sales force1
Personal Financial Assets:
>$500k
Personal Financial Assets:
TL50k-$500k
Personal Financial Assets:
<TL50k
Affluent : 0.1%
Upscale: 4.7%
Mass Market: 95.2%
~ 1.5 mn customers*
~ 2,130 sales force1,2
Annual sales TL3 mn-TL10 mn
Annual sales TL500k-TL3 mn
Annual sales <TL500k
Note: Payment Systems’ data as of June 2013. POS figure includes shared POS *As of June 30, 2013 1 Sales force is field only, data as of 31 July, 2013 2 555 people within the sales force are responsible for serving both SME and Commercial banking.
Consumer Payment Systems
Corporate Commercial SME
Medium: 8%
Small: 24%
Mass: 68%
Asset Contribution: 5.3%
Asset Contribution: 2.0% Asset Contribution: 0.4%
Asset Contribution: 2.4% Asset Contribution: 1.5%
Asset Contribution: 0.8% Asset Contribution: 0.0%
Asset Contribution: 0.0%
Investor Relations / Investor Presentation
State-of-the-art, proprietary IT platform -- fully aligned with the business
• Top down fast decision making and strong communication
• Centralized management reporting systems, enabling management to take timely actions
• Advanced CRM applications
• Paperless banking environment
14
• Fully aligned IT processes & infrastructure with business strategy
• One of the largest private internal IT service providers in Turkey
• Most up-to-date IT infrastructure
• Tightly integrated and fully in-house developed, custom-fit IT solutions
• Uninterrupted transaction capability and infrastructure security
• Reputation as “innovator”
• Continuous investment in technology since 90’s
Investor Relations / Investor Presentation
Strong brand and reputation as a product and service innovator
15
Bonus Trink - credit card with contactless chip technology
Cardless remittance via ATMs
• First financial company in Turkey using call steering system in call center
• First cash management account in Turkey (the award - winning ELMA)
• First chip-based installment credit card loyalty program in Turkey (Bonus
Card)
• First credit card offering air miles (Shop & Miles)
• First credit card with the concept of personalization (Flexi)
• First direct debit system in Turkey
• First web-based supplier financing system (Garanti Discount) in Turkey
• First inventory financing system in Turkey
• First gold financing system in Turkey
• First P2P mobile money transfer in Turkey (CepBank)
• First cash withdrawal with coins in Turkey
• First cardless bill payment via ATM in Turkey
• First NFC enabled SIM card “Bonuslu Avea” in the world
• First gold-saving credit card in the world (Golden Bonus Card)
• First-of-its-kind financial service leading the future of banking business
and the revolution of conventional banking approach. (iGaranti)
E-trader Application
Mobile Banking
In 1H 2013 , 36 new products were launched
544 Products in total
Golden Bonus Card
Interactive mobile-only platform
Investor Relations / Investor Presentation
Extensive distribution network via strong branch coverage…
16
487 592
730 792
863 918 936 961
2006 2007 2008 2009 2010 2011 2012 1H13
Number of Branches
2x
#1 in branch openings since 2006
~450 new branch additions
1.25x of its closest peer
61% was outside of
Istanbul, Ankara and Izmir
96% Geographical Coverage
99% GDP Coverage
Presence in 78 Cities
Note: Represents net branch openings figure are as of December 2012. Source:Turkish Banking Association
Investor Relations / Investor Presentation
… and effective utilization of digital channels (I/II) -- Targeted solutions for new customer segment: Digital Customers
17
Total Bankable Population
40%*
Digital customers
Simple
Fast
Personalized
Anytime anywhere
accessible channels
to appeal
this new segment
Turkey is the 7th biggest user of
Facebook in the world
Garanti targets this new segment via; Simple Fast Personalized Anytime anywhere
accessible channels
+
Garanti Bank Application Store • 2.7mn downloads • World’s first banking app for
Windows 8 • E-trader app: Leading trading
platform in Turkey
+
*Source: McKinsey & Company 2011
1 Source: Socialbakers, last visit on February 21, 2013 2 Source: Information and Communications Technologies Authority, Quarterly Reports
Social Media platforms to shape
new era in CRM -- Turkey is the 6th
biggest user of Facebook1
18x
Increase in the # of mobile
internet users in last 2.5 years2
Omni Channel Strategy Providing seemless experience across all channels (branches, ATMs, Internet banking, Mobile Banking, Call Center)
+ 33% of customers use self-service channels
+ Product sales through ADCs GPL: 24% Time Deposit:13%
Investor Relations / Investor Presentation
… and effective utilization of digital channels (II/II) -- 80% of financial transactions carried through digital channels
18
SME Customers:
1.4Mn
Online Banking
Mobile Banking
Social Media
Call Center
ATMs
Omni Channel Strategy Providing seemless experience across
all channels
Every 1 out of 3 internet transaction is via Garanti Internet Banking
~2.5 mn active users
• >170 type of transactions
• Serving non-bank customers
through cardless transactions
• Cash deposits/withdrawals: 105%
• ~60 mn customer contact/yr • Centralized branch calls
• Special offerings a first-of-its-kind application in Europe
• Money transfer
• Consumer loan application via secure full form
#1 in mobile banking >500k mobile banking users
45% in financial transactions
market share
A new banking experience targeting socially active & connected customers
• Digital Wallet – credit, debit, identity and loyalty cards under one roof
• Location based offers based on check-ins from foursquare
• First in Europe: speech recognition, speech command
Investor Relations / Investor Presentation
Growing Revenues • Outperform sector in selective products • Leader in ordinary banking income generation*
• ROAE : 21% ; ROAA :2.4%
• Net F&C Income market share ~16%*
-- highest in the sector
Adding New Customers
• Extensive branch network • Tripled in the last 10 years • 96% TR coverage • To open 30 - 40 branches in 2013
• Customer Centricity Index • Making a difference in customer
experience with smart business processes
Delighting Customers
• Innovative customer – oriented products and services
• Multi-channel CRM tools offering effective & timely solutions
• Integrated channel strategy • Internet & Mobile Banking • ATM • Call Center • Branch Network
Improving Process & Service
• Technologically advanced banking systems • Competent HR & dynamic sales force
• Extensive training • Incentive schemes
• Operational efficiencies • Superior employee productivity • 99% centralization ratio • Cross-sell
Customer
Customer-centric growth strategy aligned with…
* As of March 2013, Garanti figure is per bank-only data for fair comparison with sector Sector figure is based on BRSA monthly data for commercial banks 19
Investor Relations / Investor Presentation
…key strengths feed the differentiated business model…
• Leading market shares across all lucrative products
• Impressive track record and attractive platform for future growth
• Sophisticated customer segmentation model
• Solid asset quality
• High quality, multi-channel distribution
• Business-integrated IT
• Product, service and technology innovator
• High quality employee base & proven management team
• Strong shareholder support -- Jointly controlled by Doğuş Group and BBVA
20
Investor Relations / Investor Presentation
…result in sustainable outperformance
21
2000 1H13 Growth CAGR
Assets (TL Bn) 6.6 177.2 27x 30%
Market Share 6.6% 12.9% +6.2pps
Rank(1) #4 #2
Loans (TL Bn) 2.5 106.2 42x 35%
Market Share 8.1% 12.8% +4.7pps
Rank(1) #5 #2
Customer Deposits (TL Bn) 3.4 96.2 37x 34%
Market Share 5.0% 12.3% +7.3pps
Rank(1) #5 #2
Shareholders’ Equity (TL Bn) 0.6 21.5 35x 33%
Net Profit (TL Mn) 205 3,070* 15x* 25%*
ROAE 2006-1H13 Avg. >20%
Note: Figures are based on BRSA Bank-only financials for fair comparison. 1 Among private banks 2 Rankings are as of 1Q13. Market shares are as of 1H13, calculated based on bank-only financials. Asset market share is as of March 2013 as sector data for June 2013 has not been announced. *2012 Bank only Net Income used in calculations for fair comparison
Investor Relations / Investor Presentation
Agenda
1 Turkish Economy
2 Turkish Banking Sector: An attractive investment opportunity
3 Garanti Overview and Key Investment Highlights
4 Garanti 1H13 Results per BRSA Consolidated Financials
22
Investor Relations / Investor Presentation
2Q 2013 Macro Highlights
Mixed outlook on global growth with
extreme volatility and uncertainty as Fed sees stimulus winding down
Investment grade ratings suppressed
under changing global dynamics,
less optimism on growth,
weaker currency, rising inflation,
external vulnerabilities and political tension
• “Tapering” of the accommodative Federal Reserve monetary policy and market’s perception that the Fed’s quantitative easing program would end sooner than had been expected triggered a sharp sell-off in EM bonds, equities, and currencies.
• The eurozone economy remained relatively stagnant suggesting the worst of the recession has passed.
• Global volatility and weak growth in China weighed heavily on EM equities and commodity prices. Gold prices were down 23% as Brent oil finished the quarter down 7%.
• The Fed's exit plans added to worries about slowing growth across the emerging world, rising interest rates, currency weakness and instability in major markets like Brazil and Turkey.
• 1Q GDP growth was 3% YoY -- moderate improvement but weaker positive outlook o growth dynamics changed: positive support by domestic demand led by government expenditures as
external demand contributed negatively o ongoing contraction in private sector investment expenditures
• Rising during April and May, 12m current account deficit increased to US$ 53.6 billion as of May -- uncertainties remain regarding improvement in domestic demand and global economic growth signaling limited external demand contribution
• Yearly inflation rose to 8.3% at the end of 2Q13 from 7.3% at 1Q13 -- depreciation in TL is an upward risk, however, uncertainty regarding the growth outlook may limit the negative impact.
• CBRT gradually cut policy rate by 100 bps from 5.50% in 1Q13 to 4.5% as of 2Q13 and continued to utilize multiple tools in order to support financial stability – moved the interest rate corridor lower by 100 bps, increased reserve requirement on FC liabilities and Reserve Option Coefficient for holding FC instead of TL.
• After having depreciated by 0.7% against the currency basket in 1Q13, TL depreciated with an acceleration by 2.6% in 2Q13.
• Benchmark bond yield, that fell below 6.4% at the end of 1Q13 and further to below 4.7% in May, increased to 7.5% at the end of the 2Q13 and hit 9.6% on July 11, a record high since 2Q12.
23
Investor Relations / Investor Presentation
1H 2013 Highlights
Lending strategy -- Chasing profitable growth opportunities
• TL lending -- solid growth with selective market share gains. Main drivers:
- lucrative retail products : Mortgages (10% q-o-q ), GPLs (9% q-o-q) & Auto loans (6% q-o-q)
- mid&long- term TL working capital loans
• FC lending: Awaited pick-up started in 2Q, with project finance loans in energy & utilities
- Growth: 2Q13: 4% vs. 1Q 13: 1%
Actively shaped & FRN-heavy securities portfolio – Securities/Assets: 18%
Solid & well-diversified funding mix providing comfortable liquidity
• Deposits fund 57% of assets:
• ~23% of total customer deposits are demand deposits
• Opportunistic utilization of alternative funding sources to effectively manage costs & duration mismatch
Risk-return balance priority
• Sound asset quality – declining new NPL inflows, continued progress in collections
• Prudent coverage and provisioning levels
Well-capitalization
• Basel II CAR: 15.2%, Leverage:8x
Healthy profit generation
• Comparable* net income up by 30% y-o-y; ROAE: 21%; ROAA: 2.4%,
• Well-defended margin
• Outstanding performance in sustainable revenue growth -- #1 in net fees & commissions
• Strict cost discipline
24 * Please refer to slide 18 for comparable net income analysis
Investor Relations / Investor Presentation
1.782
2.185
1H12 1H13
962
1.181
820
1.005
Net Income (TL million)
Solid profit on the back of strong balance sheet
1Q12
Quarterly drop due to timing of account maint. fees. Robust Y-o-Y growth @ 27%
Flattish quarterly specific CoR. Higher general provisioning mainly due to increased originations & TL depreciation against FX
Continued progress in collections
On track with budget
ROBUST PROFITABILITY
Based on actual monthly inflation readings
Well-defended NII 23%
2Q12 1Q13 2Q13
Capital gain realizations
25
(TL Million) 1Q13 2Q13 D QoQ
(+) NII- excl .income on CPI linkers 1,470 1,498 2%
(+) Net fees and comm. 663 644 -3%
(-) Specific & General Prov. - exc. one-off on specific prov.
-336 -381 13%
= CORE BANKING REVENUES 1,797 1,761 -2%
(+) Income on CPI linkers 517 395 -24%
(+) Collections 74 62 -16%
(+) Trading & FX gains 236 153 -35%
(+) Other income -before one-offs 126 133 6%
(-) OPEX -before one-offs -1,022 -1,128 10%
(-) Other Provision & Taxation -392 -339 -13%
(-) One-offs -155 -31 n.m
(+) NPL sale 0 35 n.m
(-) Free Provision Reversal 55 5 n.m
(-) Payment Systems tax penalty expense 0 -24 n.m
(-) Saving Dep. Insurance Fund expense 0 -13 n.m
(-) Various tax fine provisions -50 0 n.m
(-) Additional prov. to keep coverage ratio 0 -35 n.m
(-) Competition Board Fine -160 0 n.m
= NET INCOME 1,181 1,005 -15%
Investor Relations / Investor Presentation
179,8 185,8
197,4
2012 1Q13 2Q13
Total Assets (TL)
108,5 112,9
119,5
40,5 40,9 40,9
2012 1Q13 2Q13
TL FC (USD)
Total Assets (TL/USD billion)
Increasingly customer-driven asset composition
Other IEAs 7,9%
Non-IEAs 16,4%
Securities 18,2%
Loans 57,5%
Composition of Assets1
Reserve req. 7.6%
Others 8.8%
1H13
2012
1 Accrued interest on B/S items are shown in non-IEAs 2 Performing cash loans
10%
6%
IEA / Assets: 84%
26
Loans/Assets
58% Increasing weight of
customer driven assets
Other IEAs 8,2%
Non-IEAs 17,1%
Securities 20,0%
Loans 54,7%
Reserve req. 7.4%
Others 9.6%
IEA / Assets: 83%
3%
Growth:
Loans2
2Q: +10% 1Q: +5%
Securities 2Q: -6% 1Q: +3%
Investor Relations / Investor Presentation
2Q12 3Q12 2012 1Q13 2Q13
86% 91% 90% 91%
14% 9% 10% 9% 10%
2Q12 3Q12 2012 1Q13 2Q13TL FC
39.1
90%
Trading 1,3% AFS 96,4%
HTM 2,4%
2Q12 3Q12 2012 1Q13 2Q13
41.3
Total Securities (TL billion)
CPI: 39%
FRNs: 26%
CPI: 28%
FRNs: 30%
TL Securities (TL billion)
FRNs: 46%
FRNs: 33%
FC Securities (USD billion) Total Securities Composition
Actively shaped & FRN-heavy securities portfolio
1 Based on bank-only MIS data 2 Excluding accruals Note: Fixed / Floating breakdown of securities portfolio is based on bank-only MIS data. *YtD adj. growth is calculated with 2012 YE USD/TL exchange rate of 1.76. QoQ adj. growth is calculated with 1Q13 USD/TL exchange rate of 1.785.
39.3
CPI: 31%
FRNs: 30%
35.6 35.7 35.3
FRNs: 53%
3.1
2.0
(5%) (1%)
(5%) (0%)
27
Securities2/Assets
18% hovering around its
lowest levels (7%)
(6%) (34%)
2.1
FRN mix1 in total
64%
40.4
3% 2%
36.3
12%
CPI: 32%
FRNs: 30%
FRNs: 52%
2.3
41.6
3%
37.8
4%
CPI: 34%
FRNs: 29%
2.1
(8%) FRNs: 51%
(6%)
• Shrinkage in TL securities q-o-q, due to redemptions & capital gain realizations
• Security additions to the
portfolio, to timely & strategically manage the book, fell short of offsetting the disposals & redemptions
(36%)
Unrealized loss (pre-tax)
as of June-end ~TL 270mn
Currency Adj.Growth*
YtD: (4%) QoQ: (7%)
(3%) (3%)
(13%)
Investor Relations / Investor Presentation
2Q12 3Q12 2012 1Q13 2Q13
2%
Total Loan1 Growth & Loans by LOB2 (TL million)
Accelerated lending growth in 2Q, with sustained focus on profitability
1 Performing cash loans 2 Based on bank-only MIS data 3 Sector data is based on BRSA weekly data for commercial banks only *YtD adj. growth is calculated with 2012 YE USD/TL exchange rate of 1.76. QoQ adj. growth is calculated with 1Q13 USD/TL exchange rate of 1.785.
95.1 96.9
Market share3:
11.0% at 2Q13 vs.
10.9% at 1Q13 & 10.8% at YE12 TL (% in total) 58% 58% 58% 59% 59%
FC (% in total) 42% 42% 42% 41% 41%
US$/TL 1.780 1.772 1.760 1.785 1.905
21%
3%
99.5 55,2 56,7 58,1
61,9 68,0
2Q12 3Q12 2012 1Q13 2Q13
TL Loans1 FC Loans1 (in US$)
23%
+ 22,4 22,7 23,5 23,7 24,6
2Q12 3Q12 2012 1Q13 2Q13
10%
Market share 3 :
17.6% at 2Q13 vs.
18.2% at 1Q13 & 18.3 % at YE12
Corporate
Commercial
SME
Credit Cards
Consumer
16.0%
37.4%
12.6%
12.9%
21.1%
16.0%
39.0%
13.4%
12.4%
19.2%
15.9%
38.3%
12.8%
13.0%
20.0%
16.4%
37.9%
12.1%
13.1%
20.5%
3% 3%
10%
3% 1%
4%
104.2
5%
7%
1%
28
Main drivers:
> Lucrative retail products
> Mid & long-term TL working capital loans with relatively higher yields
> Project Finance loans in energy & utilities
16.3%
37.4%
12.6%
12.8%
20.9%
114.9
15%
17%
5% 10%
Currency Adj.Growth*
YtD: 12% QoQ: 7%
Investor Relations / Investor Presentation
1,2 1,2 1,3 1,3 1,4
2,1 2,1 1,8 1,8 2,0
2Q12 3Q12 2012 1Q13 2Q13
2.8
QoQ June’13 Rank4
Mortgage 13.7% #1
Auto 17.1% #2
General Purpose5 10.3% #2
Retail1 12.6% #2
31,2 32,9 34,4 36,2 39,6
12,5 12,5 12,5 12,6 13,6
2Q12 3Q12 2012 1Q13 2Q13
Consumer Loans
53.1
43.7
Retail Loans1 (TL billion)
3.2
Auto Loan (TL billion)
3.3
9,7 10,3 10,8 11,7 12,9
9,3 9,2 9,2 9,2 9,8
2Q12 3Q12 2012 1Q13 2Q13
22.7
19.5
General Purpose Loan5 (TL billion)
Lucrative retail loans led the acceleration in lending growth
Commercial Installment Loans
10,1 10,5 11,0 11,7 12,9
0,6 0,6 0,9 0,6 0,7
2Q12 3Q12 2012 1Q13 2Q13
Mortgage (TL billion)
10.7 11.9
Market Shares2,3
1 Including consumer, commercial installment, overdraft accounts, credit cards and other 2 Including consumer and commercial installment loans 3 Sector figures are based on bank-only BRSA weekly data, commercial banks only
4 As of 1Q13, among private banks
5 Including other loans and overdrafts
4% 3%
21%
4% 6%
1% (5%) 2%
2% 3% 5%
3% 20%
29
45.4
11.2
19.0
3.1
4%
46.9
4%
6%
12.3
3.2 9%
20.0
9%
48.8 13.6
10%
20.9
3.4
• Rational pricing stance supporting margins
• Generating cross-sell & increasing customer retention
27% 13%
15%
8% 14%
Investor Relations / Investor Presentation
32,4
39,5
1H12 1H13
10,8 11,5 12,0 12,4
13,4
2Q12 3Q12 2012 1Q13 2Q13
No. of Credit Cards (thousand) Credit Card Balances (TL billion)
Solid market presence in payment systems -- good contributor to sustainable revenues
Market Shares
25%
6% 4% 4%
Issuing Volume (TL billion)
31,0
34,7
1H12 1H13
Acquiring Volume (TL billion)
12% 22%
YTD ∆ June’13 Rank
Acquiring (Cumulative)
+8 bps 19.2% #2
Issuing (Cumulative)
-86 bps 17.0% #2
POS1 +28 bps 18.0% #1
ATM -43 bps 9.2% #3*
9.052 9.131
9.214
Jun'12 Mar'13 Jun'13
161
30
9%
1 Excluding shared POS *Among private banks
12%
Turkey’s largest Credit Card Platform:
Bonus Card
Strong player in the market with the ultimate aim
of creating cashless society
Garanti debit card spending >2x of the sector
83
Investor Relations / Investor Presentation
1,4% 1,5% 1,8% 1,9% 1,7%
2,4% 2,8% 2,7% 2,8% 2,6%
2Q12 3Q12 4Q12 1Q13 2Q13
Global Crisis & Hard Landing
Recovery Soft Landing
2,4%
4,3% 2,9%
1,8% 2,3% 1,9%
3,4%
5,2% 3,6%
2,6% 2,8% 2,7%
2008 2009 2010 2011 2012 2Q13
1 NPL ratio and NPL categorisation for Garanti and sector figures are per BRSA bank-only data for fair comparison 2 New NPL additions from GBM, GBI and Garanti Bank Romania 3 Garanti NPL sale in 2012 amounts to TL218 mn, of which TL188 mn relates to NPL portfolio with 100% coverage and the remaining TL31 mn being from the previously written-off NPLs; NPL sale in 2Q13 amounts TL 314mn of which TL310mn relates to current NPL portfolio and the remaining TL4 mn being from the previously written-off NPLs
Sound asset quality -- declining NPL inflows, successful collection performance & debt sale in 2Q supported the NPL ratio NPL Ratio1
2,7%
4,8% 3,4%
2,4% 3,0% 2,8%
3,9%
5,9% 4,6%
3,7% 4,1% 3,9%
Sector Garanti
Sector w/ no NPL sales & write-offs Garanti excld.NPL sales & write-offs
1,6% 1,7% 1,8% 1,9% 1,6%
2,0% 2,2% 2,1% 2,2% 2,1%
2Q12 3Q12 4Q12 1Q13 2Q13
4,8% 5,0% 5,2%
5,4%
3,7%
5,2% 5,4% 4,9%
5,3% 4,6%
2Q12 3Q12 4Q12 1Q13 2Q13
Retail Banking (Consumer & SME Personal) 23% of total loans
Credit Cards 13% of total loans
Business Banking (Including SME Business)
64% of total loans
NPL Categorisation1
Net Quarterly NPLs (TL billion)
Sector Garanti
NPL sale effect on NPL ratio
+30bps
Garanti (Cons.)
2.4% 4.1% 3.1% 2.1% 2.6% 2.3%
165 263 245
333 258
27
41 41
31 80
60
54
246
-43 -75 -111 -174 -175
-310
New NPL
Collections
NPL sale
29
-1803
276
408
2Q12 3Q12 4Q12 1Q13
2
2
-83
4Q12
Garanti: TL 176mn
Romania: TL 70mn
NPL inflows resulting from few commercial files with strong collateralization;
3Q12
GBI: TL 54mn
2Q12
Garanti: TL 60mn
Write-off
2
188
2Q13
-148
2
2
3
-13
-1
31
Investor Relations / Investor Presentation
1 Sector figures are per BRSA weekly data, commercial banks only 2 Additional general provisions, defined by law, for loans extended before 2006 in the amount of TL150mn, TL 60mn of which is set aside in 4Q12 and remaining at equal amounts within the following three years
Comfortable coverage and provisioning levels -- higher originations weighed on general provisions
General Specific
Quarterly Loan-Loss Provisions (TL million)
*NPL inflows resulting from few commercial files with strong collateralization;
Additional
provisions of
TL44mn set aside
for alignment of
coverage ratio to
pre-NPL sale level
Garanti (Cons)
78% 77% 78% 78% 79%
Garanti 81% 81% 81% 81% 81%
Sector1 81% 75% 76% 75% 74%
Coverage Ratio
Cumulative Gross CoR
130 bps excld. additionally set aside provision to lift the coverage
up to pre-NPL sale level 138bps
on a reported
basis
High general provisioning in 2Q vs. 1Q due to > Strong loan originations & TL depreciation against FX
2Q13
None
vs.
52 70 106 105
184
60 161 194
157 231
197
52 14
217
32
44
2Q12 3Q12 4Q12 1Q13 2Q13
278
*
2
297
541
*
336
* *
425
2Q12
Garanti: TL 52mn
Additional
provisions of
TL32mn set aside
for alignment of
coverage ratio to
pre-NPL sale level
3Q12
GBI: TL 14mn
4Q12
Garanti: TL 141mn
Romania: TL 70mn
GBI: TL 6mn
*
32
Quarterly Specific CoR
down to 71bps
from 90bps in 1Q13
when excld. additionally set aside provision to lift the coverage up
to pre-NPL sale level
Investor Relations / Investor Presentation
8,0% 8,4% 8,0%
11,3% 12,0% 11,1%
11,7% 12,2% 12,7%
44,9% 42,0% 43,9%
7,2% 7,8% 6,3%
14,7% 14,2% 13,6%
2,3% 3,3% 4,5%
2Q12 2012 2Q13
Consumer+SME / Total Deposits :
2Q12 3Q12 2012 1Q13 2Q13
99.7 97.8 104.8 112.0
FC
TL
48%
52%
97.0
47%
53%
49%
51%
Total Deposits (TL billion) Composition of Liabilities
Funds Borrowed
Repos
Time Deposits
Other
SHE
Demand Deposits
Bonds Issued
Solid funding mix reigned by deposits & reinforced with diversified funding sources
IBL: 69%
IBL: 67%
IBL: 68%
7%
7%
(1%)1
15%
46%
54%
(6%)
4%1
33
13%
1 Growth in USD terms
46%
54%
7%
(0%)1
19,1 19,8 20,6 21,8 23,9
0,9 0,8 1,3 1,1 1,2
2Q 12 3Q 12 2012 1Q13 2Q13
20.0
Customer Demand
9%
20.6 21.9 22.9 25.1
Demand Deposits (TL billion)
Bank Demand
63%
15%
26%
14%
(0%)1
Per bank-only figures 20% vs. sector’s 18%
~23% of total
customer deposits
Investor Relations / Investor Presentation
Utilization of alternative funding sources to actively manage funding costs and duration mismatch
34
+
Opportunistic utilization of repos & money market borrowings
+
~TL 2.5bn TL bonds
+
Funding base reinforced with alternative funding sources
Issuances under GMTN program ~TL700mn with an avg. maturity of 2 yrs
EUR 1.1bn 1 yr syndicated loan 110% roll-over ratio at cost of L+100bps
+
TL 750 mn TL Eurobond issuance in 1Q13 with coupon rate of 7.375%, yielding 7.5%
+
Comfortable level of
LtD ratio:
79%
exclud.
Adjusted LtD ratio (TL Billion,%)
Investor Relations / Investor Presentation
16,1% 15,9% 15,4% 14,4% 13,3%
5,8% 5,8% 5,7% 5,4% 5,3%
2Q 12 3Q 12 4Q 12 1Q 13 2Q 13
Declining asset yields were mostly offset with lower funding costs
35
Loan Yields1 (Quarterly Averages)
10,4% 9,8%
8,1% 7,2%
6,6% 8,9% 8,4%
6,9% 6,1%
5,5% 3,2% 3,0% 2,7% 2,4% 2,2%
2,5% 2,3% 2,0% 1,9% 1,7%
2Q 12 3Q 12 4Q 12 1Q 13 2Q 13
TL Time
TL Blended
FC Time
FC Blended
TL Yield
FC Yield
1 Based on bank-only MIS data and calculated using daily averages
LtD SPREAD SLIGHTLY
SUPRESSED QoQ
by 20bps
Ongoing ease in deposit costs, yet; at a decelerating pace vs. 1Q 13
Managed drop in loan yields backed by selective & healthy growth strategy
Cost1 of Deposits (Quarterly Averages)
Investor Relations / Investor Presentation
513
394
462
Quarterly NIM (Net Interest Income / Average IEAs)
Loans
CPI Sec. Other Income Items
Deposits
Provisions
1Q 13 NIM
2Q 13 NIM
FX & Trading
2Q 13 Adj NIM
Other Expense
Items
Securities exc. CPI
-21 -25
-29 -5
+20
+10
+37
NIM
Quarterly margin supression is securities book driven
Adjustments to NIM: Net Interest Income/ Average IEA adjusted by FX gain/loss, provision for loans and securities, and net trading income/loss
-51 bps
-105
4,2% 3,4%
5,4% 5,1% 4,6%
2Q12 3Q12 4Q12 1Q13 2Q13
3,6% 3,9% 4,0% 4,9%
3,9%
2Q12 3Q12 4Q12 1Q13 2Q13
Adjusted NIM
-93bps
Q-o-Q Evolution of Margin Components (in bps)
TL depreciation against FX in
2Q, boosted Avg IEA base &
negatively impacted NIM
Adj. NIM down by ~93bps due to; • Relatively higher general
provisioning q-o-q • Additional provisions for the
alignment of cash coverage to pre-NPL sale level
36
Quarterly NIM down slightly
by 22bps when excluding
CPI linker volatility
Investor Relations / Investor Presentation
Outstanding performance in sustainable revenues
1.032
1.308
1H 12 1H 13
Net Fees & Commissions (TL million)
Net Fees & Commissions Breakdown 1,2
1H 12 1H 13
#1 in
Ordinary Banking
Income3 generation
with the
highest Net F&C
market share
27%*
Sustainably growing and highly diversified fee base
Growth2 (y-o-y)
Cash* & non-cash loans ~60%
Brokerage 15%
Money transfer 12%
Insurance 17%
37
*Accounting of consumer loan fees were revisited in the beginning of 2013 upon the opinion of «Public Oversight» --Accounting & Auditing Standards Authority
Cash Loans 20,9%
Non Cash Loans 7,0%
Money Transfer
9,0% Insurance
5,4% Brokerage
4,0% Asset Mgt
1,7%
Other 10,8%
Payment Systems 41,2%
• Leader in interbank money transfer 18% market share vs. the peer average of 10%
• Highest payment systems commissions per volume -- 1.5% vs. the peer average of 1.2%4
• #1 in bancassurrance5
• Sustained brokerage market share #2 in equity market with 8% market share
• Most preferred pension company 19.5% market share in # of pension participants
1 Breakdown is on a comparable basis to same period last year 2 Bank-only MIS data 3 Defined as; net interest income adjusted with provisions for loans and securities, net FX and trading gains + net fees and commissions; for 1Q13 4 Peer average as of 1Q13 5 Among private banks as of May 2013 * Cash loan fees on a comparable basis for 1H 12 and 1H 13, where consumer loan orignation fees are included in the respective fee bases on a cash basis
Cash Loans 28,6%
Non Cash Loans 7,6%
Money Transfer
8,3% Insurance 5,2% Brokerage
3,8%
Asset Mgt 1,7%
Other 9,6%
Payment Systems 35,2%
* *
Investor Relations / Investor Presentation
16,9% 16,8%
15,2% 15,5% 15,6%
14,3%
Basel II2012
Basel II1Q13
Basel II2Q13
Comfortable solvency supports the healthy and profitable growth strategy
Recommended
12%
Required 8%
TIER I
CAR & Tier I ratio
TIER I
Free Equity = SHE - ( Net NPL+ Investment in Associates and Subsidiaries + Tangible and Intangible Assets+ AHR+ Reserve Requirements) Free Funds = Free Equity + Demand Deposits * Including the effects of consolidation eliminations
Basel II CAR: 15.2%
Strong capitalization
Leverage: 8x
Low leverage
No negative impact expected under Basel III
High internal capital
generation supporting long-term
sustainable growth
38
TIER I
Investor Relations / Investor Presentation
Differentiated business model -- reflected, once again, in strong results…
39 *Business as Usual= Excluding non-recurring items and regulatory effects in the P&L 1 Accounting of consumer loan fees were revisited upon the opinion of «Public Oversight» --Accounting & Auditing Standards Authority
OPEX/Avg. Assets
2.3% Flattish Y-o-Y
Committed to strict cost discipline -- on track with budget guidance
Omni-channel convenience supporting efficiencies • 35 net branch openings; •Successive & targeted investments
in digital platforms: İGaranti
•+6% rise in # of ATMs
•>1,000 new hires
Solid core banking revenue generation
Cost/Income
41% vs. 46% in 1H12
High level of Fees/OPEX
60% vs. 54% in 1H12
Strong consumer loan originations1 and well-diversifed fee sources generating across the board fee growth
(TL Million) 1H12 1H13 D YoY
(+) NII- excl .income on CPI linkers 2,124 2,967 40%
(+) Net fees and comm. 1,032 1,308 27%
(-) Specific & General Prov. - exc. one-off on specific prov.
-321 -717 123%
= CORE BANKING REVENUES 2,835 3,558 25%
(+) Income on CPI linkers 939 912 -3%
(+) Collections 89 136 52%
(+) Trading & FX gains 144 388 169%
(+) Other income -before one-offs 229 260 13%
(-) OPEX -before one-offs -1,908 -2,150 13%
(-) Other provisions -28 -66 137%
(-) Taxation -477 -665 39%
= BaU NET INCOME (exc. non-reccuring items) 1,824 2,372 30%
(+) NPL sale 25 35 n.m
(+) Free Provision Reversal 0 60 n.m
(-) Payment systems tax penalty expense 0 -24 n.m
(-) Saving Deposits Insurance Fund expense 0 -13 n.m
(-) One-offs on specific prov. -42 0 n.m
(-) Additional prov. to keep coverage ratio at 81% -25 -35 n.m
(-) Competition Board Fine 0 -160 n.m
(-) Various tax fine provisions 0 -50 n.m
= NET INCOME 1,782 2,185 23%
Investor Relations / Investor Presentation
87%
13%
…with increasing contribution from subsidiaries
Consolidated Net Income
40
*
*
Subsidiaries’ contribution to bottom-line
up by 65% GarantiBank International • Capturing new business opportunities
• Effective management of market risks
• Positive contribution from treasury operations further reinforcing the bottom line • Net income up by 127% YoY
Total contribution mainly driven by:
GarantiBank Romania • Sustainable operating revenue growth
• Net income tripled YoY
Garanti Pension • Most preferred pension company
• Solid results even after
decreased cap on enterance,
fund management & administrative fees
Garanti Leasing • Coverage of a broad customer base--
corporates , commercial cust.s, & SMEs
• #1 in number of contracts
• Net income up by 18% YoY
89%
11%
Bank_only Net Income
Consolidation effect
Bank_only Net Income
Consolidation effect
1H 13
1H 12
Investor Relations / Investor Presentation
Appendix
41
Investor Relations / Investor Presentation
Balance Sheet - Summary
1 Includes banks, interbank, other financial institutions 2 Includes funds borrowed and sub-debt
42
Ass
ets
Liab
iliti
es&
SHE
(TL million) Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 YTD Change
Cash &Banks1 12,407 12,794 12,973 11,800 13,656 5%
Reserve Requirements 9,854 11,868 13,365 15,159 14,937 12%
Securities 41,329 39,291 40,358 41,580 39,070 -3%
Performing Loans 95,056 96,933 99,527 104,200 114,916 15%
Fixed Assets & Subsidiaries 1,615 1,607 1,697 1,713 1,701 0%
Other 10,334 10,584 11,860 11,346 13,111 11%
TOTAL ASSETS 170,597 173,078 179,779 185,798 197,391 10%
Deposits 97,032 99,722 97,778 104,829 112,011 15%
Repos & Interbank 12,245 8,094 14,107 11,836 12,421 -12%
Bonds Issued 4,005 6,160 6,077 7,181 9,066 49%
Funds Borrowed2 25,253 25,530 25,893 25,680 26,962 4%
Other 12,754 12,934 14,268 13,687 14,993 5%
SHE 19,309 20,637 21,657 22,585 21,938 1%
TOTAL LIABILITIES & SHE 170,597 173,078 179,779 185,798 197,391 10%
Investor Relations / Investor Presentation
Drivers of the Yields on CPI Linkers1 (% average per annum) Interest Income & Yields on TL Securities (TL billion)
Long-term strategy of investing in CPI linkers as a hedge for expected reversal in market indicators
1 Based on bank-only MIS data 2 Per valuation method based on actual monthly inflation readings Note: All figures are based on bank-only data 43
6,6%
13,1%
19,7%
6,5%
-5,2%
1,3%
6,2%
15,0%
21,2%
5,6%
9,7%
15,3%
5,4% 5,4%
10,9%
Real Rate Inflation Impact Yield
2Q 12 3Q 12 4Q 12 1Q 13 2Q 13
12,8%
7,2%
12,7%
10,5%
8,7% 10,0% 9,8%
8,8% 8,0%
7,4%
451
30
605 517 395
573
543
477
441 404
2Q12 3Q12 4Q12 1Q13 2Q13
TL Sec. Yield1 incl. CPIs
TL Sec. Yield1 excl. CPIs
958
Income excl. CPIs
CPI effect2
1,025
573
1,082
(17%)
799
Investor Relations / Investor Presentation
= -
-
=
Quarterly Margin Analysis
Adjustments to NIM: Net Interest Income/ Average IEA adjusted by FX gain/loss, provision for loans and securities, and net trading income/loss * Funds borrowed and repos 44
Total Interest Income Int. Income on loans (% of Avg. Interest Earning Assets)
Int. Income on securities (% of Avg. Interest Earning Assets)
Int. Income - Other (% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets)
Total Interest Expense Int. expense on deposits (% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets)
Int. expense on borrowings* (% of Avg. Interest Earning Assets)
Int. Expense - Other (% of Avg. Interest Earning Assets)
Net Interet Margin Prov. for Loans & Securities Net FX & Trading gains Net Int. Margin - Adjusted (% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets)
+
+
+
+
+
5,98% 6,11% 6,10%
5,97%
5,76%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
2,97%
1,69%
2,97% 2,61%
2,07%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
0,62% 0,51% 0,55% 0,47% 0,42%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
9,57%
8,31%
9,62% 9,06%
8,25%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
3,65% 3,60% 2,95%
2,62% 2,42%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
1,45% 1,08% 1,04% 1,06% 0,94%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
0,23% 0,21% 0,24% 0,26% 0,27%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
5,33% 4,89% 4,24% 3,93% 3,63%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
0,80% 0,73%
1,41%
0,87% 1,05%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
3,63% 3,92% 3,95% 4,87%
3,94%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
4,24% 3,42%
5,38% 5,13% 4,62%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
0,19%
1,24%
-0,02%
0,61% 0,37%
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
Investor Relations / Investor Presentation
= -
Total Interest Expense
Prov. for Loans & Securities Net FX & Trading gains
Total Interest Income Int. Income on loans
Int. expense on deposits -
(% of Avg. Interest Earning Assets)
= Net Int. Margin - Adjusted
Cumulative Margin Analysis
Adjustments to NIM: Net Interest Income/ Average IEA adjusted by FX gain/loss, provision for loans and securities, and net trading income/loss * Funds borrowed and repos
45
+
+
+
+
Int. Income on securities (% of Avg. Interest Earning Assets)
Int. Income - Other (% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets)
(% of Avg. Interest Earning Assets)
(% of Avg. Interest Earning Assets)
(% of Avg. Interest Earning Assets) Int. expense on borrowings* (% of Avg. Interest Earning Assets)
Int. Expense - Other (% of Avg. Interest Earning Assets)
(% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets) (% of Avg. Interest Earning Assets)
+
Net Interest Margin
5,94%
6,02%
5,84%
6M12 12M12 6M13
3,02% 2,67%
2,33%
6M12 12M12 6M13
0,52% 0,53%
0,45%
6M12 12M12 6M13
9,48% 9,21%
8,62%
6M12 12M12 6M13
3,67% 3,47%
2,51%
6M12 12M12 6M13
1,44% 1,25%
0,99%
6M12 12M12 6M13
0,22% 0,22% 0,26%
6M12 12M12 6M13
5,33% 4,94%
3,77%
6M12 12M12 6M13
0,55% 0,82%
0,96%
6M12 12M12 6M13
0,20%
0,40% 0,49%
6M12 12M12 6M13
3,80% 3,87%
4,38%
6M12 12M12 6M13
4,15% 4,28%
4,85%
6M12 12M12 6M13
Investor Relations / Investor Presentation
20,0 20,6 21,9 22,9 25,1
1H12 3Q12 2012 1Q13 1H13
498 513 502 518 543
1H12 3Q12 2012 1Q13 1H13
3.388 3.441 3.508 3.559 3.605
1H12 3Q12 2012 1Q13 2Q13
11,6
11,9
1Q13 1H13
10,7 11,2 11,9 12,3 13,6
1H12 3Q12 2012 1Q13 1H13
926 932 936 947 961
1H12 3Q12 2012 1Q13 1H13
Mortgages (TL billion) Number of Customers (million)
Number of Branches Number of ATMs Number of POS (thousand)
Demand Deposits (customer+bank) (TL billion)
Further strengthening of retail network...
35 217 45
5.1 2.9 0.3
11
14
6 4
51
46
67 53
15
1.3 2.1
46
#3** #1*
#2** #1**
25
(11) 16
#3
*Including shared and virtual POS terminals ** Branch, Mortgage and Demand Deposit rankings are as of March 2013. All rankings are among private banks Note: All figures are based on bank-only data except for mortgages amd demand deposit balances
Sustained momentum in
customer acquisition
Investor Relations / Investor Presentation
...while preserving the highest efficiency ratios
1 Total Loans=Cash+non-cash loans Note:Figures are per bank-only financials for fair comparison 47
2,4
2,1
1,6 1,4
Garanti Peer 1 Peer 2 Peer 3
178,1 162,1
144,0 136,1
Garanti Peer 1 Peer 2 Peer 3
96,9
77,7 80,4 75,2
Garanti Peer 1 Peer 2 Peer 3
Ordinary Banking Income per Avg. Branch (1Q13) (TL million)
Assets per Avg. Branch (1Q13) (TL million) Customer Deposits per Avg. Branch (1Q13) (TL million)
127,2
116,5
110,8 114,3
Garanti Peer 1 Peer 2 Peer 3
Loans1 per Avg. Branch (1Q13) (TL million)
Investor Relations / Investor Presentation
Key financial ratios
48 1 Payables from credit card transactions. Please refer to footnote 5.2.4.3 miscellaneous payables as per BRSA Unconsolidated financial report * CAR and TIER I ratios are per Basel I for the periods Mar 12, Jun12 and per Basel II for Sep 12,Dec 12,Mar 13, Jun 13.
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
Profitability ratios
ROAE 19.3% 18.3% 17.0% 23.8% 20.8%
ROAA 2.2% 2.1% 2.0% 2.9% 2.4%
Cost/Income 45.6% 45.9% 47.5% 36.4% 41.2%
NIM (Quarterly) 4.2% 3.4% 5.4% 5.1% 4.6%
Adjusted NIM (Quarterly) 3.6% 3.9% 4.0% 4.9% 3.9%
Liquidity ratios
Liquidity ratio 29.7% 29.3% 28.9% 28.2% 26.2% Loans/Deposits adj. with merchant payables
1
94.3% 93.5% 97.8% 95.8% 98.7%
Asset quality ratios
NPL Ratio 2.1% 2.3% 2.6% 2.7% 2.3%
Coverage 78.1% 76.5% 78.0% 78.3% 78.9%
Gross Cost of Risk (Cumulative-bps) 87 97 128 131 138
Solvency ratios
CAR* 15.3% 16.4% 16.9% 16.8% 15.2%
Tier I Ratio* 14.3% 15.1% 15.5% 15.6% 14.3%
Leverage 7.8x 7.4x 7.3x 7.2x 8.0x
Investor Relations / Investor Presentation
Disclaimer Statement
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Türkiye Garanti Bankasi A.Ş. (the “TGB”) has prepared this presentation document (the “Document”) thereto for the sole purposes of providing information which include forward looking projections and statements relating to the TGB (the “Information”). No representation or warranty is made by TGB for the accuracy or completeness of the Information contained herein. The Information is subject to change without any notice. Neither the Document nor the Information can construe any investment advise, or an offer to buy or sell TGB shares. This Document and/or the Information cannot be copied, disclosed or distributed to any person other than the person to whom the Document and/or Information delivered or sent by TGB or who required a copy of the same from the TGB. TGB expressly disclaims any and all liability for any statements including any forward looking projections and statements, expressed, implied, contained herein, or for any omissions from Information or any other written or oral communication transmitted or made available.
Investor Relations / Investor Presentation
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Investor Relations Levent Nispetiye Mah. Aytar Cad. No:2 Beşiktaş 34340 Istanbul – Turkey Email: investorrelations@garanti.com.tr Tel: +90 (212) 318 2352 Fax: +90 (212) 216 5902 Internet: www.garantibank.com
/garantibankasi
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