brsa consolidated earnings presentation, december 31, 2011

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DISCLAIMER STATEMENT 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. December 31, 2011 BRSA Consolidated Earnings Presentation

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Garanti Bank announced its consolidated financial statements dated December 31st, 2011. In 2011, the Bank reached consolidated total assets of TL 163.5 billion and consolidated net profit of TL 3 billion 346 million. Garanti Bank delivered an ROAE (Return on Average Equity) of 19.5% and ROAA (Return on Average Assets) of 2.2%.

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  • 1. December 31, 2011BRSA Consolidated Earnings PresentationDISCLAIMER STATEMENTTrkiye Garanti Bankasi A.. (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 tothe 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 theDocument 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 towhom 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 andstatements, expressed, implied, contained herein, or for any omissions from Information or any other written or oral communication transmitted or made available.

2. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 20114Q 2011 Macro Highlights The European Rating agencies either warned or cut the credit profile of nearly every major European country. Collateral and funding issues in the European banking sector accelerated. sovereign Central banks from developed nations have taken coordinated actions and provided liquidity. credit crisis The U.S. economy has shown signs of resilience and stronger economic data has provided confidence. continued to Most commodity prices were hurt in the fourth quarter by the rally in the USD. weigh on the Elevated domestic inflationary pressures and related fears of a hard landing in China led to tighter monetary policy inmany emerging market countries. markets 3Q11 GDP growth rate 8.2%, above expectations of 7% -- decelerating pace in GDP growth (12% and 8.8% in Limitedprevious quarters) to halve in 4Q (approximately 4%) and end 2011 at around 8%.The 12 month cumulative C/A deficit decelerated to below USD 78 bn -- still limited improvement improvement Annual inflation rose to 10.45% at the end of 2011 -- double digit in headline while slight deceleration in core inflation in C/A deficit After the policy shift to tightening in October, CBT highlighted focus on price stability while preserving financial whilestability as a supplementary objective and started additional monetary tightening at the end of December. additional During 2011, TL depreciated by 13.5% in real terms against the currency basket, fell to its lowest real value againstemerging market currencies tightening by CBT interventions caused volatility in TL, pressured reserves and limited funding at 5.75% resulting in increased cost CBT pushes Benchmark bond rate increased from 7% to over 11% levels in 2011. rates higher CBT decreased TL RRR on average to 10.5% from 13.1% in 3Q11 and FC RRR to 10.2% from ~11% Banks are able to maintain up to 40% of TL RRR in FX and maintain up to 10% of both TL and FX RRR in Gold.2 2 3. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 20114Q 2011 HighlightsCustomer driven assets increasingly contribute to the asset mix Solid lending growth highlights the year (2011:30%; 2011 Currency adj.: 19%), moderating in 4Q as economy slows down:Balance sheet TL loan growth 3% in 4Q vs 9% in 3Q, mainly driven by lucrative retail productsGPLs (+4% qoq;+44% ytd); CCs (+6% qoq; +23% ytd); mortgages (+2% qoq; +16% ytd)strength: FC loans (in US$) flattish qoq; +1% ytdFRN heavy securities book remain as a hedge -- Securities/assets: 21% from 27% in 2010distinguishingSound asset quality NPL ratio 2011 YE 2.1%feature of Exceptionally strong collections in 4Q smooth out the temporary increase in new NPL inflows Gross CoR @95 bps -- still4 years) are excluded Strong capitalization mirroring high internal capital generation capacity : CAR: 16%, Leverage:8xSustained high profitability in a challenging year...leads to ROAE:20% -- on a comparable basis* ROAE :21% vs. 22% at YE 10 ROAA:2.2% -- on a comparable basis* ROAA :2.4% vs. 2.8% at YE 10consistentExpanding margin in 4Q on the back of timely loan re-pricings, focus on growth of high margin products & effectivelymanaged funding mix (4Q NIM: 4.7% vs. 3.4% in 3Q; Cumulative NIM: 3.9% vs. 4.6% at YE 10 well within guidance)delivery of Net fees and commissions: Sustained double digit growth momentum via highly diversified fee sources Money transfer +24% y-o-y; Insurance +13% y-o-y; Payment systems: +11% y-o-ystrongCommitment to strict cost discipline - single digit growth despite higher than expected inflation Opex/ Avg assets: 2.5% in 2011 vs. 2.8% in 2010results Fees/OPEX: 57% in 2011 vs. 56% in 2010; Investment in distribution network continued (net branch additions: +55 ytd & +7 qoq) 3Note: Please see Appendix page 21 and 22 for details 4. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Sound profitability sustained even in a challenging environment Net IncomeNet Income TL Million TL Million7%Business as Usual(1%) (BaU) ROE3,6243,385 3,346 sustained at 1Q11: 9132010 20112011 BaU >20% 2Q11:1,016 3Q11: 539 ROAA:2.2%ROAE: 20% 4Q11: 878 22%21%2.8% 2.2% 2.4% 20% 2011:3,346 2010 20112011 BaU2010 2011 2011 BaU4Note: 2011 BaU: One-off items and regulatory effects are excluded.Please see Appendix page 21 and 22 for details 5. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Proven ability in generating strong core banking revenues via strategicallyand dynamically managed balance sheet4Q11 Net Income OtherTL MillionInc. on Inc. onincome CPI-linkers RRsColln140 4108105 Regulatory&One-off effects666 on prov.Net 1,170Fees&Comm. Trading 14288 Improving loan-depositNII-exc. 500Prov.adj.* spread q-o-q & actively nc. on managed funding mixCPI-linkersOPEX259Net Income Diversified & sizable Other fee base -- lower fee Provisions & Tax income q-o-q due to1,053 IMPROVING CORE 878 timing of account maintenance feesBANKING REVENUES CPI linkers prove 1,411 hedge objective1,3613Q11 Net IncomeTL Million Strengthened provisioning3Q11 4Q11 ExceptionallyOther strong collectionsNetInc. on Inc. on Colln income Fees&Comm.CPI-linkers RRs44 0 Regulatory& 43 22 Seasonality in OPEX 170 Trading222 Prov.adj.* 69 One-off effects NII-exc. 556on prov. nc. on876CPI-linkersOPEX164 Net Income 975 Other Provisions & Tax5395Note: Provisions adjusted with the BRSAs recent regulations on general reserve rates (TL 22 mn in 3Q11 & TL 17mn in 4Q11)and TL91mn one-off effect on specific provisions resulting from NPL inflows in 4Q 11, which are related to a few commercialfiles with strong collateralization 6. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Customer driven assets increasingly contribute to the mix-- Loans/Assets back to pre-crisis levelsTotal AssetsComposition of Assets1TL / USD Billion2011 Growth:20% 2011164.1 (0.4%)163.5Reserve Req. 4.4%Loans3:30%Securities: -10% LoansNon-IEAsOthers 54.5%11.9% 7.5% 136.8Securities21.0% Other 98.0 IEAs, 12.6% Loans/Assets92.3 85.52010 IEA / Assets: 88.1%55% vs. 50% at YE 10Loans Reserve Req.50.4%4.0%Non-IEAs12.4%Others 8.4%Liquidity Ratio236.3 38.1Securities 33.7 Other 27.2% IEAs, 20102010TLFC (USD)3Q 119M 112011 2011 Total Assets (TL) 10.1% IEA / Assets: 87.6%31%61 Accrued interest on B/S items are shown in non-IEAs2 (Cash and banks + trading securities +AFS)/Total Assets3 Performing cash loans 7. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011FRN heavy securities book remain as a hedge -- shrinkage in security bookdue to a redemption Total SecuritiesTL Securities Securities2/AssetsTL Billion TL Billion (10%) (13%) 35.241.014% 36.315%36.816%39.518% 37.0 17% (12%) 30.8 1% 31.0 5%32.6(6%)30.721% down from1%7% 27% at YE 10 (12%) (6%) CPI:27%CPI:CPI: 32%CPI:CPI: 86%82%30%30% 32% 85%84% 83% FRNs: FRNs: FRNs:36% FRNs: FRNs:36% 36% 30% 29%2010 1Q 11 2Q 11 3Q 11 2011FRN mix in total 20101Q 11 2Q 113Q 11 2011 TLFC Total Securities CompositionFC SecuritiesAFS 84.2% US$ Billion 3.93.6(13%)3.6 3.83.458% fromTrading 2.8% 56% at 9M 11 and 60% at YE 10 (7%) 1%5% (12%) HTM 12.9%FRNs:FRNs:FRNs:Unrealized gain 37% FRNs:42% FRNs: 32%29%31%~TL 180mn1as of Dec. 31,2011: 2010 1Q 11 2Q 113Q 11 2011 7 1 Based on bank-only financials 7 2 Excluding accruals Note: Fixed / Floating breakdown of securities portfolio is based on bank-only MIS data 8. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Robust lending growth in 2011 -- moderating in 4Q as economy slows downTotal Loan1 Growth & Loans by LOB2TL Billion30%TL Loan Growth:32%Q-o-Q4% vs. Sectors 3%8% 90.388.1 7% 81.376.018.5%18.2%Tighter TL liquidity showed its impact Total 69.7 18.5%on lending -- Slow down in TL lending growth20.1%20.7% Market Share: 11.3% in 2011 Corporatevs. 10.7% in 201039.0%39.5%38.1% 37.7%Commercial37.5%3 12.6%13.1% 12.8%11.8% FC Loan Growth: 11.6% Q-o-Q and US$ based SME -0.3% vs. Sectors -1%11.6%11.9%11.9%12.5%11.5%Credit Cards18.4% 18.1%18.5% Consumer 17.7% 18.0% Market Share: 18.5% in 2011vs. 20.4% in 201020101Q 112Q 113Q 112011TL (% in total)54% 54% 55% 55% 55%FC (% in total)46% 46% 45% 45% 45%US$/TL 1.520 1.530 1.6001.820 1.865 81 Performing cash loans82 Based on bank-only MIS data3 Growth figures and Market shares data are per bank-only data for fair comparison with sector.Sector data is based on BRSA weekly data for commercial banks only 9. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Increasing loan yields: timely repricing + maturing lower interest rate loans+ increasing weight of higher yielding loans TL Loans1 TL Billion34%9%3%Interest Income on loans (quarterly)8%48.5 50.0 TL Million 10%44.441.237.32,063 1,90015.13% 15.16%1,5561,632 14.75%1,489 14.47% 14.33%TL Yield2 10.72% 2010 1Q 112Q 11 3Q 11 201110.42% 10.26%Blended Yield29.92% 9.92% FC Loans1 US$ Billion1% 1% (6%)(1%) 7% 4Q 101Q 112Q 113Q 11201121.3 22.723.1 21.8 21.6Pro-active & timely loan re-pricings4.75% 5.12%FC Yield2avg. TL loan repricing ytd3 +~700 bpsavg. FC loan repricing ytd3 +~300 bps 4.49% 4.50%4.51% reflected in loan yields trending up 2010 1Q 112Q 11 3Q 11 201191 Performing cash loans2 Based on MIS data and calculated using daily averages3 Based on MIS data 10. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Lucrative retail products continued to be the main driver of TL loan growthRetail Loans1Mortgage Loan GrowthTL Billion TL Billion 30% 38.640.236.6 Higher market share gain in33.6 11.0 16% 31.0 10.9 10.510.28.4 9.58.8 9.40.6 9.7 0.6 10.00.60.6high-margin products6% 4% 0.6 9%8% 3% 2%GPL Market Share6%4%24.1 26.1 27.7 29.28.89.19.4 9.6 +~40 bps increase in 2011 22.6 8.2 to 10.6%20101Q 112Q 11 3Q 112011 20101Q 112Q 113Q 112011 Consumer Loans Commercial Installment LoansAuto Loan Growth General Purpose5 Loan GrowthMarket Shares2,3TL Billion TL Billion44% 16.7 17.3 4YtD Dec 11Rank15.4 35% 13.88.3 Mortgage13.3%#112.08.3 7.97.1Auto14.9%#3 6.2 4%2.6 2.8 8%General10.6%#22.3 2.5 12% Purpose52.115%1.6 1.61.7 1.58.3 8.9 Retail1 12.9%#21.3 6.67.510% 3% 7%5.811% 0.9 1.01.10.80.820101Q 112Q 113Q 11 20112010 1Q 112Q 113Q 112011101 Including consumer, commercial installment, overdraft accounts, credit cards and other102 Including consumer and commercial installment loans3 Sector figures are based on bank-only BRSA weekly data, commercial banks only4 As of 9M11 among private banks5 Including other loans and overdrafts 11. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Strength in cards business a good contributor to sustainable revenuesIssuing VolumeTL Billion Acquiring Volume TL Billion #1in Card Business16% 17% 58.6Per Credit Card Spending(TL, Dec 11 )254.950.66,67047.1 5,904 Garanti SectorPer Debit Card Spending >2 times the sector... with the ultimate aim ofcreating cashless society 2010 20112010 2011 No. of Credit Cards Credit Card Balances Market Shares In Thousand TL Billion54023%197YTD Dec 11 Rank 8,544 10.0 9.4 8,347 9.08.18.1Acquiring-144 bps19.9%#28,004Issuing-119 bps18.9%#1 10%6% 5%# of0% -42 bps 16.6%#1Credit CardsPOS1 +98 bps 23.2%#1ATM-79 bps 10.1%#4 2010 3Q 11 2011 20101Q 11 2Q 113Q 112011 111 Including shared POS2 Annualized 12. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Sustained sound asset quality -- Exceptionally strong collections performancesmooth out the temporary increase in new NPL inflowsNPL Ratio1 Net NPLs (quarterly) TL MillionGaranti3.1% 2.4%2.2%2.0% 2.1%(Cons.) Net quarterly NPLs 98 2,3 4.6%4.4%3.9%39533 3.6% 3.7%3.3% 3.7% 44100 23.4%2.9%2.7%2.6%753-391-50253 2.9% 2.9%2.6%2.4% 2.4% 243 73 126128 129New NPL 2.1%1.9% 1.8% 1.8% 86 84-98 -159 -141-168 Collections20101Q 112Q 11 3Q 112011 -298 Write-offs Garanti SectorGaranti excld.NPL Sector w/ no NPL sales & write-offs* sales & write-offs** Adjusted with write-offs in 2008,2009,2010 and 2011. 2010 and 2011 sector NPL sales & write-offs total: TL ~2.7 bn and ~TL 1.9 bn, respectivelyGaranti sold NPLs in 1Q 11 amounting to TL 484mn, of which TL 200mn relates to the NPL portfolio with 100% coverage and the rest being frompreviously written-off NPLs. Gross income booked amounts TL 54mn.4 -200 NPL saleNPL Categorisation1Retail Banking Credit Cards Business Banking(Including SME Business) 4Q 101Q 112Q 113Q 114Q 11(Consumer & SME Personal)21% of Garantis Total Loans 12% of Garantis Total Loans2 67% of Garantis Total Loans 7.8% 7.7%3.3% 3.0% 2.7% Normalizing but still strong Collections 25%3.1%7.7% 7.0%1.9%2.4%2.5%Collection rate 6.3% 2.4% 6.9% 5.7%1.4%6.3% 1.2% 1.2%2.8%2.1% 1.9% 1.2% 1.9%5.8% 5.7%Nominal NPL stock decline ytd2.1%1.8%1.6% 1.6%20101Q11 2Q11 3Q112011 2010 1Q11 2Q11 3Q11 20112010 1Q11 2Q11 3Q1120119%* vs. Garanti Sector sectors 3% increase*-- clear evidence of success in collections since 2008.121 NPL ratio and NPL categorisation for Garanti and sector figures are per BRSA bank-only data for fair comparison.122 Including NPL inflows in 4Q 2011, amounting to ~TL100 mn, which are related to a few commercial files with strong collateralization 3 Including the impact of newly consolidated Romanian subsidiary4 Garanti NPL sale amounts TL484 mn, of which TL200 mn relates to NPL portfolio with 100% coverage and the remaining TL284 mn being from the previously written-off NPLs.Source: BRSA, TBA & CBT 13. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Gross CoR remains under 100bps, even with increased provisionsdue to regulations and prudency79%Quarterly Loan-Loss ProvisionsTL Million Coverage Ratio Coverage ratioDec 10Mar 11 Jun 11 Sept 11Dec 11 remains strong,Sector1 86% 86%87%83% 82%Garanti 82% 82%82%82% 82% the slightly lower consolidated coverage is due tothe Romanian subsidiarys NPL policy.Garanti 81% 81%81%81% 79%(Cons.) 250 2003Cost of Risk1929116549 2010 108 bps86 12582 791Q11 68 bps 90 2 67 22 2 1H11 62 bps 24 bps2 17 28284 9M11 68 bps19 bps2 576263 2011 79 bps 16 bps2 4Q 10 1Q 112Q 113Q 11 4Q 11 20101Q 111H 113Q 112011General Specific 131 Sector figures are per BRSA weekly data, commercial banks only132 The effect of BRSAs recent regulations on general reserve rates for extended loans and GPLs.3 TL91mn of provisions resulting from NPL inflows in 4Q 11, which are related to a few commercial files with strong collateralization 14. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Solid funding base -- Focus back on deposits, limiting the dependency onpotentially higher cost of repos Composition of LiabilitiesTotal Deposits TL BillionBonds IssuedLoans /88% 93% 96% 99%97%2.2%2.3% Deposits15.0% 15.4%15.3%Funds Borrowed18% 8.6% 7.2%5%9.7%Repos88.693.2Time79.181.484.5Deposits46.4% 42.2%44.3% 49% 48% 49%49% IBLIBL IBL44% FC(2%)2 (5%)2 2%2 70%70% 69%11.1% 11.5%12.4%Demand Deposits 6% 5%2%TL12.2% 10.6%10.9%SHE56% 51%51% 51% 52% 6.6% 8.3%7.6%Other 2010 3Q 11 201120101Q 11 2Q 11 3Q 11 2011 97% Cost of Deposits1 Quarterly AveragesLoans/ or94% Deposits when merchant 8.7% 8.8% 8.8%9.1%payables as deposits8.9% 8.8% 8.4% 7.7%8.2%included7.9% 7.8% 7.8%7.7% 7.8%7.4% 7.4% 7.0%6.6%Deliberate reduction in repo funding 2.6% 2.9% 3.1% 3.1% 2.0%2.1% 2.6% 2.1%2.6%due to potential of significant cost increase in 4Q 2.1%2.3%2.4%2.4%1.8% 2.1% 2.1%1.8% 1.7%2009 1Q 102Q 103Q 102010 1Q 112Q 11 3Q 11 2011Deposit costs rising, however at a more contained TL TimeTL Blendedmanner FC TimeFC Blended 141 Based on bank-only MIS data 142 Growth in USD terms 15. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Clear differentiation in attracting demand deposits Deposits by LOB1Demand Deposits (Excluding bank deposits) TL Billion 33% 8%13.5%16.4%16.3% 20.3 BankCorporate18.90.8 16.8 0.5Deposits15.2 16.0 0.6 0.90.519.518.4 Customer 16.2Deposits25.0% 15.5 21.3%20.9% 14.3Commercial15.3%16.1%16.0%20101Q 11 2Q 11 3Q 112011 SME Customer Demand Deposits215.2% YTD GrowthMarket share36%vs. Sectors 20%46.8% Consumer46.3%46.3% Sizeable demand deposit level strengthened 2010 3Q11 2011Demand Deposits / Total Deposits:21% vs. Sectors 17% 32151 Based on bank-only MIS data152 Sector data is based on BRSA weekly data for commercial banks only3 Based on bank-only financials for fair comparison with sector. Demand Deposits/Total Deposits as per consolidated figures is 22% 16. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Sustained strong capitalization ratios due to high internal capital generationcapabilityCARFree Funds Evolution TL MillionFree Funds/2011 IEAs20,33036,036 7,18528,851 20%vs.TIER I17,900 405 1,78916% in 9M 11 18.1%TIER I15.8% 15.7% SHE Net NPL Subs, Assoc, Fixed Assets Demand DepositsFree Funds Reserve Req. Free Fundsw/o Reserve Easing on RRRsTIER I& AHR Req.14.1%in 4Q & higher+TL 6.2 bn demand depositRecommended 12% 2010 15,241 29,839 5,493 levels boosted24,345 free fundsRequired8% 16,675 4291,648LeverageRatio2010 2011 SHE Net NPLSubs, Assoc, Fixed Assets& AHR Demand DepositsFree Funds Reserve Req. Free Fundsw/o ReserveReq.8x 16Note: Free Funds: Free Equity + Demand DepositsFree Equity = SHE - ( Net NPL+ Investment in Associates and Subsidiaries + Tangible and Intangible Assets+ AHR+ Reserve Requirements) 17. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Margin expansion resumes in 4Q on the back of timely and proactively managedasset/liability mix -- Cum. margin down by 65 bps, better than expectedQuarterly NIM (Net Interest Income / Average IEAs)4Q 11 over 3Q 11: NIM Adjusted NIM123bps Long-term strategy of investing 4.6% 4.7%154bps3.7% 3.8% 3.4%4.2% 4.1% 3.4% 4.2%in CPI linkers paid off in 4Q2.7% NIM up by 123 bps Flattish NIM q-o-q when4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11NIM NIM3 volatility from CPI linkers are excluded Q-o-Q Evolution of Margin Components (in bps) Increasing loan volumes with higher yields &~5 bps effect -1 0of increased+120 -6 Other Inc.0 467 provisions Well-managed fundingSecurities Items Deposits Other Exp.Items+24+14 -68 Loansexc. CPIProvisionsFX&Trading424costs Securities CPI 343 Adj. NIM up by 154bps in 4Q,bolstered also by the recovery oftrading losses incurred in 3Q3Q11 113Q NIM LoansSecurities-CPI Securities-nonCPIOther Deposits Other 4Q11 11 4Q NIMProvisions X&Trading 4Q 11F4Q11 Adj NIM NIMNIM Adj NIM 17Source:BRSA consolidated financials 17Adjustments to NIM: Net Interest Income/ Average IEA adjusted by FX gain/loss, provision for loans and securities, and net trading income/loss 18. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Strength in customer acquisition and penetration reflects on thedouble digit growth momentum of net fees & commissionsOrdinary Banking Income1 GenerationBased on 9M 2011 bank-only data for fair comparisonGaranti Strong presence in brokerage market share~6%Net fees and comm.Peersmarket share % #1 in bancassurance25% Leader in interbank money transfer20%18% market share vs. Peer avg. ~10%4.415%3.4 Highest payment systems commissions per volume 53.61.6% vs. Peer avg. 1.3%10%3.5 Diminishing share of asset management fees Ordinary5% 2.02.7 bankingdue to regulatory pressures compensated by incomefurther diversifed fee sources (TL Billion)0%-24 6Net Fees & Commissions Breakdown3,4 Thousands Net Fees & Commissions2 TL Million201020111,910 2,129CashNon Cash11% Loans, Cash Loans,PaymentLoans ,Payment 17.2% 19.8%Systems,8.9%Systems, 34.0% 33.9% Non CashLoans , 8.8%20102011Money Transfer ,MoneyMoney transfer+24% y-o-y 8.3% Transfer , Other, Other,9.2% Insurance+13% y-o-yInsurance,Insurance, 11.1% 10.2% 6.5% Brokerage,Asset Mgt , 6.6%Payment Systems+11% y-o-y Asset Mgt ,Brokerage,4.3%6.7% 10.6% 4.0%181 Defined as; net interest income adjusted with provisions for loans and securities, net FX and trading gains + net fees and commissions 182 As per new BRSA classification in P/ L, excludes net fees and commissions received from cash loans amounting TL 214 mn for 2011 and TL 146 mn for 20103 Include consumer loan fees as well as other cash loan fees now classified as interest on loans in income statement amounting TL 156mn for 2011 and TL 117mn for 20104 Bank-only MIS data 5 Peer average as of 9M 2011 19. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Differentiated business model leading to consistent delivery ofoutstanding results(TL Million)2010 2011% Change 2011*Adj: Romania full-(+)NII- excl. inc on RRs and CPIs 3,9103,849-2% OPEX- 1 year consolidation OPEX- Reported effectAdjusted(+)Net fees and commissions 1,9102,12911%2 Adj: Currencyeffect from (-) Specific LLP & General Prov. -- exc. regulatory effects & one-offs(669)(548) -18% foreign subs. = CORE BANKING REVENUES 5,151 5,430 5%(+)Income on RR 87 5 -95% Y-o-y Chg.%9 6%(+)Income on CPI linkers1,1731,40520% (-) Regulatory&One-off effects1 on provisions 0 (220)n.m(+)Trading & FX gains402353-12%(+)Collections 578435-25%(+)Other income -before one-offs 321418 31% (-) OPEX (3,404)(3,720) 9% Fees/Opex: (-) Taxation and other provisions(923)(961) 4%57%up from(+)One-offs (post -tax)0200 n.m56% at 2010 (+) -NPL sale 0 43n.m (+) -Eureko, Mastercard & Visa stake sale 0162n.m Opex/Avg. Assets: (+) -Subsidiary valuation 0 85n.m2.5% down from (-) -Free provisions0(90) n.m 2.8% at 2010 = NET INCOME3,385 3,346-1% Equity holders of the Bank 3,364 3,326 -1%Cost/Income: Minority Interest21 20 -7%46%19Note: Provisions adjusted with the BRSAs recent regulations 19general reserve rates (TL 129 mn in 2011on *For fair comparison 2011 & 2010 OPEX adjusted for the following items:and TL91mn one-off effect on specific provisions resulting from NPL inflows in 4Q 11, which are related to 2011 : The currency appreciation of the foreign subsidiaries in 2011 vs. 2010a few commercial files with strong collateralization 2010 : Adjusted to reflect the full year consolidation effect of the Romanian subsidiary (in reported figures 7-months effect is included) 20. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011 Appendix2020 21. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Details on One-off items affecting 2011 P&L P&L ImpactSources of ChangesExplanation(Post-tax) Proceeds of TL 67 Mn from Mastercard stake sale1. Mastercard & Visa Stake Sale +76 Mn TL Capital gain of TL 9 Mn on VISA stake sale Garanti exercised the put option to sell 20% of the share capital of Eureko2. 20% Eureko Stake Sale+86 Mn TLSigorta A.. to Eureko B.V. Due to change in accounting method regarding valuation of Garanti Technology(from equity method to cost method under TAS 27), 85 Mn TL provision charged3. Revaluation of GT+85 Mn TLin previous years for the corresponding associate has been reversed andrecorded as income Non-performing loan portfolio amounting to TL 483.9 million was sold to a local4. Income From Debt Sales +43 Mn TLasset management company at a sale price of TL 53.9 million. 90 Mn TL free provision is set aside in line with the conservatism principle5. Free Provisionsconsidering the circumstances which may arise from any changes in the -90 Mn TLeconomy or market conditions Total one-off effect200 Mn TL21 22. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Details on regulatory actions affecting 2011 P&LP&L ImpactSources of Changes Explanation (Post-tax) TL average reserve requirement ratio was increased to 11.7% in 2011 from 5.2% -216 Mn TL in 20101. Reserve Requirement RatiosFC average reserve requirement ratio was increased to 11.0% in 2011 from 9.8% -30 Mn TL in 2010 The remuneration on TL reserve requirements ended as of Oct 14, 2010 -70 Mn TL2. Flexibility on TL Reserve CBRT allowed banks to keep up to 40% of reserve requirements as FX and 10% as +23 Mn TLRequirements gold gradually since Sept. 2011 Liquid fund management fee cap has been decreased to 1.1% from 2.73% recently3. Cap on Fund Management Fees -54 Mn TL (from 3.65% at the beginning of 2011) 1. On Extended Loans 5% general provisioning ratio for loan extensions (vs. 1% previously) -37 Mn TL4. Additional General Provisioning 2. On Unsecured Consumer Lending 4% general loan loss provision ratio for consumer loans other than mortgage -92 Mn TL and auto (vs. 1% previously) The impact emerges from the projected increase in Saving Deposits Insurance5. SDIF Size Parameter-2 Mn TL Fund (SDIF) premium ratio (+%0.02 from %0.013 to %0.015) Total regulatory effect Total one-off effectGrand Total -479 Mn TL200 Mn TL -279 Mn TL 22 23. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Balance Sheet - Summary(TL Million) Dec-10 Sep-11Dec-11 YTD ChangeCash & Banks1 11,62415,156 17,85154%Reserve Requirements 5,49310,4447,18531%Securities41,037 39,51136,992-10%AssetsPerforming Loans69,72988,141 90,32930%Fixed Assets & Subsidiaries1,5441,575 1,6628%Other7,3679,290 9,45728%TOTAL ASSETS 136,795164,118163,475 20%Deposits79,07088,637 93,23618%Liabilities & SHERepos & Interbank 11,76915,878 11,7380%Bonds Issued0 3,674 3,742 n.mFunds Borrowed2 20,80925,545 25,29722%Other8,47112,917 11,56236%SHE 16,67517,468 17,9007%TOTAL LIABILITIES & SHE136,795164,118163,47520% 23 1 Includes banks, interbank, other financial institutions 2 Includes funds borrowed and sub-debt 24. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Quarterly Income Statement Quarterly- TL million 4Q 113Q 112Q 11 1Q 11 4Q 10 3Q 10 2Q 10 1Q 10 NII- excl. inc on RRs and CPIs 1,053975856965 948 906 958 1,098 Net fees and commissions500 556513560 457 487 470 496 Specific LLP & General Prov. -- exc. regulatory effects & one-offs -142 -170-110-125-165 -197-111-197 CORE BANKING REVENUES 1,4111,361 1,2591,400 1,2401,196 1,318 1,398 Income on RR4 00 04 292826 Income on CPI linkers 666 222354163 445 52328 3481 Regulatory & One-off effects on provisions-108 -22 -9000 0 0 0 Trading & FX gains88-69 76259 30112 83178 Collections 105 4382205 97133 143 205 Other income -before one-offs 140 44 1459081967667 OPEX -1,170 -876-831-843-963 -824-777-839 Taxation and other provisions-258 -164-225-313-214 -184-231-294 One-offs (post -tax)0 0247-47 0 0 0 0-NPL sale0 00430 0 0 0-Eureko, Mastercard & Visa stake sale0 0162 00 0 0 0 -Subsidiary valuation 0 0 85 00 0 0 0 -Free provisions0 00-90 0 0 0 0 NET INCOME878 5391,016913 720 610 966 1,088 Equity holders of the Bank872 5331,010911 715 603 961 1,085 Minority Interest 6 65 25 8 5 3 24Note: Provisions adjusted with the BRSAs recent regulations on general reserve rates and TL91mn one-off effect on specificprovisions resulting from NPL inflows in 4Q 11, which are related to a few commercial files with highly strong collateralization 25. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Long-term strategy of investing in CPI linkers as a hedge for expected reversalin market indicatorsDrivers of the Yields on CPI Linkers1Interest Income & Yields on TL Securities% average per annumTL Million 4Q 10 15.9% 15.4%15.7%23.5% 8.1%TL Sec. Yield1 incld. CPIsReal Rate Inflation Impact Yield11.5% 1Q 11 9.8%9.8%8.9%9.4% 9.4% 9.7%9.7%0.5% 7.1% 7.6% TL Sec. Yield1Real Rate Inflation Impact Yield excld. CPIs 2Q 119.3%16.2%1,16970%6.9%1,018Real RateInflation Impact Yield806503 3Q 11687 573670 Income2.9%452exc. CPIs9.6%6.7%508 465666Real RateInflation Impact Yield4452354CPI effect 4Q 11163 222 4Q 101Q 11 2Q 113Q 11 4Q 11 23.4%30.0%6.6%Real RateInflation Impact Yield 251 Based on bank-only MIS data2 Per valuation method based on actual monthly inflation readings 26. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Cumulative Margin Analysis Int. Income on loans Int. Income on securities Int. Income - otherTotal Int. Income % of Avg. Interest Earning Assets % of Avg. Interest Earning Assets % of Avg. Interest Earning Assets % of Avg. Interest Earning Assets5.31% 3.40%2.73% 8.97% 0.59%4.97%+ + 0.43% = 8.47% Dec 10 Dec 11Dec 10 Dec 11 Dec 10Dec 11 Dec 10Dec 11- Int. Expense on deposits Int. Expense on Borrowings* Int. Expense - other Total Int. Expense % of Avg. Interest Earning Assets% of Avg. Interest Earning Assets% of Avg. Interest Earning Assets % of Avg. Interest Earning Assets 3.29%1.34% 0.14%4.56%1.12% 3.08%4.41%+ +=0.01%Dec 10 Dec 11 Dec 10 Dec 11 Dec 10Dec 11Dec 10 Dec 11 = Net Int. IncomeProv. for Loans & SecuritiesNet FX & Trading gains Net Int. Income- Adjusted % of Avg. Interest Earning Assets% of Avg. Interest Earning Assets% of Avg. Interest Earning Assets % of Avg. Interest Earning Assets0.35% 4.56% 0.59% 4.32% 0.26% 3.59%3.90%- 0.57%+=Dec 10Dec 11 Dec 10Dec 11Dec 10Dec 11Dec 10 Dec 1126 Note: Cumulative NIM analysis Adjustments to NII: Net Interest Income/ Average IEA adjusted by FX gain/loss, provision for loans and securities, and net trading income/loss * Funds borrowed and repos 27. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Quarterly Margin Analysis Int. Income on loansInt. Income on securitiesInt. Income - otherTotal Int. Income % of Avg. Interest Earning Assets% of Avg. Interest Earning Assets % of Avg. Interest Earning Assets% of Avg. Interest Earning Assets 3.62%3.37%5.59% 0.50% 9.38%5.45% 2.77%9.05% 2.46%2.27% 5.11% 0.44% 8.31%4.93% 5.07% + +0.43% 0.43% 0.43% = 7.96%8.15% Dec 10 Mar 11 Jun 11 Sep 11Dec 11 Dec 10 Mar 11Jun 11Sep 11Dec 11Dec 10Mar 11Jun 11Sep 11Dec 11 Dec 10 Mar 11 Jun 11 Sep 11Dec 11- Int. Expense on depositsInt. Expense on Borrowings*Int. Expense - other Total Int. Expense % of Avg. Interest Earning Assets % of Avg. Interest Earning Assets% of Avg. Interest Earning Assets% of Avg. Interest Earning Assets1.37% 1.38% 1.33%4.72% 4.72% 3.22% 1.29%0.19%3.16% 3.16% 0.18%4.52%3.06% 0.13%4.42% 2.96% +1.20% + 0.04%=4.29%0.00% Dec 10 Mar 11 Jun 11 Sep 11Dec 11 Dec 10 Mar 11 Jun 11 Sep 11Dec 11 Dec 10 Mar 11Jun 11Sep 11Dec 11 Dec 10 Mar 11 Jun 11 Sep 11Dec 11 = Net Int. 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 4.62%4.67% 0.84% 3.67% 3.79%3.43%-0.55% 0.63% 0.55% 0.68% +=4.18% 4.10% 3.39% 2.68% 4.23%0.41%0.24% 0.24%0.10%Dec 10 Mar 11Jun 11Sep 11Dec 11 Dec 10 Mar 11 Jun 11 Sep 11Dec 11Dec 10 Mar 11 Jun 11 Sep 11Dec 11-0.20%Dec 10 Mar 11 Jun 11Sep 11Dec 11 27Note: Quarterly NIM analysis 27Adjustments 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 28. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Further strengthening of retail network...Number of BranchesNumber of ATMsNumber of POSThousand #4#3 #1* 5526554 3,2684574599119183,1443,229 442 8848943,003 3,048423 863 405 2 7 39178515 109619 20101Q 111H 11 3Q 11201120101Q 111H 113Q 11 2011 2010 1Q 111H 113Q 112011Number of Customers MortgagesDemand Deposits (customer+bank)MillionsTL Billion TL Billion0.91.4 #1**#2** 10.75.1 10.2 10.5 10.010.2 20.39.8 10.09.49.7 18.9 8.816.8 16.0 15.2 0.2 0.21.40.30.2 20101Q 111H 11 3Q 112011 2010 1Q 111H 113Q 11 201120101Q 111H 113Q 112011 28*Including shared POS28**Mortgage and demand deposit ranks are as of 3Q 11Note: Ranks are among private banks 29. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011...while preserving the highest efficiencies Ordinary Banking Income per BranchLoans per Branch19M 2011, TL million9M 2011, TL million4.9110.6102.389.3 89.0 3.83.8 3.0 GarantiPeer 1Peer 2 Peer 3 GarantiPeer 1Peer 2Peer 3 Assets per Branch Customer Deposits per Branch9M 2011, TL million9M 2011, TL million84.0 158.075.568.2135.3126.562.2 111.7 GarantiPeer 1Peer 2 Peer 3GarantiPeer 1Peer 2Peer 3291 Total loans = Cash+Non-cash loans29Note: Figures are bank-only for fair comparison 30. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Key financial ratios Dec-10 Mar-11Jun-11 Sep-11 Dec-11 Profitability ratios ROAE22.2%21.6% 21.4%18.9%19.5% ROAA 2.8% 2.6%2.5% 2.2% 2.2%Cost/Income44.1%38.4% 39.2%43.6%45.6%NIM (Cumulative)4.6% 3.7%3.7% 3.6% 3.9% Adjusted NIM (Cumulative)4.3% 4.1%3.7% 3.3% 3.6% Liquidity ratios Liquidity ratio34%31% 29%30%31%Loans/Deposits 88.2%93.3% 96.1%99.4%96.9% Asset quality ratios NPL Ratio 3.1% 2.4%2.2% 2.0%2.1% Coverage81%81% 81%81% 79% Cost of Risk (bps) 1086886 8795Solvency ratiosCAR18.1%16.9% 16.8%15.5%15.8%Tier I Ratio 15.7%14.9% 14.9%13.7%14.1%Leverage7.2x 7.4x7.9x 8.4x 8.1x 30 30 31. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Details of selected items in funding baseBonds issued: 1Q 11: TL 1 billion bond with 1 year maturity, at a cost of 7.68% 2Q 11: TL 750 million bond with 6M maturity, at a cost of 8.41% TL 750 million bond with 6M maturity, at a cost of 8.54% US$ 500 million Eurobond with 10 year maturity, fixed coupon 6.25% US$ 300 million Eurobond with 5 year maturity, floating 3M LIBOR + 2.5% 4Q 11: TL 750 million bond with 6M maturity, at a cost of 8.10% (Roll-over) TL 750 million bond with 6M maturity, at a cost of 10.09% (Roll-over) 31 31 32. INVESTOR RELATIONSBRSA CONSOLIDATED EARNINGS PRESENTATION 2011Details of selected items in funding baseFunds borrowed: 2Q 11: Secured 1 billion 1 year syndicated loan, comprising two separate tranches in the amount of 782.5 million and US$ 304.5 million. The all-in cost has been realized as EURIBOR+1.1% and LIBOR+1.1%, respectively. Borrowed 50 million and US$ 225 million with 5 year maturity under Diversified Payment Rights securitization program 4Q 11: Secured US$ 1 billion 1 year syndicated loan, comprising two separate tranches in the amount of US$ 233.6 million and 576.2 million. The all-in cost has been realized as LIBOR+1% and EURIBOR+1%, respectively.3232 33. INVESTOR RELATIONS BRSA CONSOLIDATED EARNINGS PRESENTATION 2011Investor RelationsLevent Nispetiye Mah. Aytar Cad. No:2Beikta 34340 Istanbul TurkeyEmail: [email protected]: +90 (212) 318 2352Fax: +90 (212) 216 5902Internet: www.garantibank.com33