performance & financial results

PERFORMANCE & FINANCIAL RESULTS – 9M10November 11, 2010

Performance & Financial Results – 9M10

1

Overview of Turkish Capital Markets

Our Performance

Financial Results

Expectations for the Rest of the Year

Overview of Turkish Capital Markets 2

Equity Market Volume (In TL Billion)*

Source: ISE

665 681

965906

0

100

200

300

400

500

600

700

800

900

1000

2008 2009/9 2009 2010/9

* Market Transactions by Members

33%

416478

668627

0

100

200

300

400

500

600

700

800

2008 2009/9 2009 2010/9


Derivatives Market Volume (In TL Billion)*

Source: TurkDEX


31%

2,802 2,667

4,105

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2007 2008 2009

3,168

4,135

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2009/9 2010/9


Source: ISE Settlement and Custody Bank Inc.


Securities Lending/Borrowing Market (In TL Million)*


Source: CMB & IS Asset Management

Pension Funds grew 29% with respect to the same period of 2009

Asset Management (In TL Billion)

8.511.0

29.8

30.3

0

5

10

15

20

25

30

35

40

45

2009/9 2010/9

Mutual Funds*

Pension Funds

*A Type, B Type Funds and ETFs.

4.6 6.09.1

26.4 24.0

29.6

0

5

10

15

20

25

30

35

40

45

2007 2008 2009

Mutual Funds*

Pension Funds


6


Our Performance

Financial Results


41.849.1

44.0

76.6

6.4 6.36.6

7.9

0

1

2

3

4

5

6

7

8

9

0

10

20

30

40

50

60

70

80

90

2006 2007 2008 2009

Volume (TL Bn) Market Share (% - Right Axis)

55.962.8

8.2

6.9

0

1

2

3

4

5

6

7

8

9

0

10

20

30

40

50

60

70

80

90

2009/9 2010/9

Volume (TL Bn) Market Share (% - Right axis)

Equity Market Volume and Market Share

Our Performance 7

Source: ISE

IS Investment 6.9%

Broker 1 6.1%

Broker 2 5.9%

Broker 3 4.8%

Broker 4 3.9%

#1IS Investment 7.9%

Broker 1 6.4%

Broker 2 6.0%

Broker 3 5.2%

Broker 4 4.4%

#1

1 1 1 1

Derivatives Market Volume and Market Share

Our Performance 8

IS Investment 13.2%

Broker 1 6.7%

Broker 2 6.2%

Broker 3 5.8%

Broker 4 5.3%

#1

Source: TurkDEX

IS Investment 10.9%

Broker 1 7.0%

Broker 2 6.9%

Broker 3 5.7%

Broker 4 5.3%

#1

1.5 9.0 40.0 56.9 88.4

25.2 25.3

16.9

13.7 13.2

0

5

10

15

20

25

30

0

10

20

30

40

50

60

70

80

90

2005 2006 2007 2008 2009


64.5 68.3

13.5

10.9

0

3

6

9

12

15

0

10

20

30

40

50

60

70

80

90

2009/9 2010/9


1 1 1 1 1

324

719

1,555

11.5

26.9

37.9

0

5

10

15

20

25

30

35

40

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2007 2008 2009

Volume (TL Mn) Market Share (% - Right axis)

Securities Lending/Borrowing Market Volume and Market Share

Our Performance 9

The most active investment house despite the volatile equity market trading volumes

Source: ISE Settlement and Custody Bank Inc.& IS Investment

2 1 1

698

917

22.0 22.2

0

5

10

15

20

25

0

200

400

600

800

1000

2009/9 2010/9

Volume (TL Mn) Market Share (% - Right axis)

36.9

81.0

0

10

20

30

40

50

60

70

80

90

2009/9 2010/9

Our Performance 10

Margin Trading Volume (In TL Million)

Source: IS Investment

Margin trading volume beat the increase in the equity market

44.8

34.4

64.1

0

10

20

30

40

50

60

70

80

90

2007 2008 2009

Our Performance 11

International Capital Markets (In $ Million)

2,2082,076

655426

498

632

0

100

200

300

400

500

600

700

0

500

1000

1500

2000

2500

2009/9 2010/9

Th

ou

san

ds

Fixed Income Equity # Der. Contracts (Right Axis)

Source: IS Investment

2,904

18,145

26,773

2,733

517 882 885 78071

391

707

0

100

200

300

400

500

600

700

800

0

5,000

10,000

15,000

20,000

25,000

30,000

2006 2007 2008 2009

Th

ou

san

ds

Fixed Income Equity # Der. Contracts (Right Axis)

Our Performance

AuM size reached TL 10.5 billion surging by 6% on annual basis, while pension funds registered 29% growth rate and mutual funds

contracted by 4%

12

Source: IS Investment & IS Asset Management

Pension Funds portfolio size

represents 20% of the total

pension funds

AuM – IS Asset Management & IS Investment (In TL Billion)*

* Other Funds: Portfolio size of TL 1,218 mn and TL 1,637 mn for other funds for 2009/9 and 2010/9 respectively.

Mutual Funds portfolio size represents

21.9% of the market

**A Type, B Type Funds and ETFs.

1.72.2

7.06.7

0

1

2

3

4

5

6

7

8

9

10

2009/9 2010/9

Mutual Funds**

Pension Funds

0.8 1.21.8

5.85.5

7.0

0

1

2

3

4

5

6

7

8

9

10

2007 2008 2009

Mutual Funds**

Pension Funds


13


Our Performance

Financial Results


Despite extremely low activity in the markets, profit generation continues

Financial Results Profit Generation 14

*Consolidated

IS Investment* TL (000) 9M09 9M10 YoY

Total Assets 2,182,590 3,280,609 50%

Shareholders' Equity 321,008 361,067 12%

Net Profit 55,356 46,209 -17%

146198

258294 303

341

10.8%

19.4%

17.3%

21.5%22.6%

17.4%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

300

350

400

450

500

2006 2007 2008 2009/9 2009 2010/9

TL M

illi

on

ROAE

Average Shareholders' Equity ROE (Right Axis)

Net Profit in TL 9M09 9M10 YoY

IS Investment Only* 34,812,973 42,109,021 21%

Consolidation Effect 20,542,942 4,100,204 -80%

Subsidiaries 21,734,745 13,367,120

Elimination (1,191,803) (9,266,916)**

Consolidated Net Profit 55,355,915 46,209,225 -17%

Lower consolidation effect due to the volatility in the markets and high amount of dividend elimination decreased the consolidated net profit

Financial Results Consolidation Effect 15

** Dividend and revenue elimination with subsidiaries

34.8

42.1

20.5

4.10

5

10

15

20

25

30

35

40

45

9M09 9M10 9M09 9M10

TL M

illi

on

Net Profit - IS Investment Only

Consolidation Effect

* IS Private Equity has been consolidated with equity pick-up method

Interest and Trading Income64%

Commission Income36%

Financial Results Breakdown of Operating Revenues 16

Breakdown of Revenues (TL 000) 9M09 9M10 YoY

Interest and Trading Income 102,585 65,460 -36%

Commission Revenues 57,627 74,469 29%

Total Operating Revenues 160,212 139,929 -13%

Operating Revenues – 9M09

Interest and Trading Income47%

Commission Income53%

Operating Revenues – 9M10

TL 160.2mn TL 139.9mn

Healthy Progress - Commission income has taken larger portion

Brokerage 67%Corporate

Finance10%

Asset Management

22%

Other Commissions

1%

Brokerage 70%

Corporate Finance

2%

Asset Management

28%

Other Commissions

0%

Financial Results Breakdown of Commissions 17

Commission Revenues(TL 000) 9M09 9M10 YoY

Brokerage 40,045 49,759 24%

Corporate Finance 1,029 7,445 623%

Asset Management 16,285 16,738 3%

Other Commissions 268 527 97%

Total 57,627 74,469 29%

TL 57.6mn

Commission Income – 9M09

TL 74.5mn

Commission Income – 9M10

Marketing, Sales and

Distribution Expenses

15%

General Adminisrative

Expenses85%

Marketing, Sales and

Distribution Expenses

19%

General Adminisrative

Expenses81%

Financial Results Breakdown of Operating Expenses 18

Operating Expenses(TL 000) 9M09 9M10 YoY

Marketing, Sales and Distribution Expenses 13,106 11,754 -10%

General Adminisrative Expenses 56,158 68,890 23%

Total 69,264 80,644 16%

TL 69.3mn

Operating Expenses – 9M09

TL 80.6mn

Operating Expenses – 9M10

382

82

353

458

0

50

100

150

200

250

300

350

400

450

500

39220 39772 40178 4026718/05/2007 20/11/2008 31/12/2009 09/11/2010

Financial Results Price Performance 19

ISMEN Performance

09/11/2009 31/12/2009 09/11/2010

P/E 4.50 5.16 7.19

P/BV 0.92 1.06 1.34

Share price increased 36% in 2010 in parallel with the equity market performance and 423% from the beginning of 2009

Market Capitalisation (In TL Million)

0

100

200

300

400

500

600

ISMEN ISE 100

Financial Results Foreign Investors Shares 20

Foreign Investors Shares/ Free Float

48.0%

66.8%

0%

10%

20%

30%

40%

50%

60%

70%

2007/5 2010/11

The increase in the portion of foreign investors’ share in the free float attracted the attention of media


21


Our Performance

Financial Results


Expectations for the Rest of the Year 22

Corporate finance business has begun to up and run.

IPOs; Have a market share of 56% with TL 762.3 million total IPO size (Koza Gold-TL 662.4mn and Akfen Holding-TL 99.9mn) in

9M10.

– REIT; The IPO of Torunlar REIT, one of the largest ones in the sector, was performed in October intermediating 55% of total

IPO size.

– Aviation; Pegasus Airlines, which would be the first private IPO of the sector is planned to be performed in the first quarter of

2011.

– Port; Global Ports IPO is in the pipeline.

– Catering; European Stock Exchange quoted international catering firm, Do&Co’s domestic IPO is expected to be realized at the

end of November.

Corporate bonds; Have a market share of 44% for corporate bond issuances with TL 230.5mn total nominal value (Akfen Holding,

Creditwest Factoring, Merinos and Bimeks) in 9M10. Besides, the issuance of Bankpozitif’s bonds with a nominal value TL 100mn

was realized in October.

– Creditwest Factoring; Nominal TL 50mn bond issuance (second tranche of its TL 100mn bond) is planned to be launched in

4Q10.

M&A; Have a market share of 12% with 8 transactions worth USD 1.3 billion in 9M10.

IS Investment Warrants are currently traded on the stock exchange.

We applied to establish a new asset management company that specializes in managing banks’ NPLs.

Continue to actively provide prime brokerage services and the established funds have already been offered to investors.

We see higher trading volumes in the markets in 4Q10 which is in line with our expectation and budget.

Investor Relations 23

Mr. Mert Erdoğmuş

Assistant General Manager

Phone : +90 0212 350 24 12

Fax : +90 0212 350 20 01

E-mail : [email protected]

Mr. Ozan Altan

Vice President

Phone : +90 0212 350 28 72

Fax : +90 0212 350 20 01

E-mail : [email protected]

The Investor Relations Department is responsible for the timely

communication of necessary, accurate, complete,

comprehensible and easily accessible information and

explanations, which are not considered to be trade secrets to its

shareholders and stakeholders.

http://www.isinvestment.com/wwa_ir.aspx

Disclaimer

The information in this report is prepared by “IS YATIRIM MENKUL DEGERLER A.S.” (IS Investment) and it is not to be construed as

an offer or solicitation for the purchase or sale of any financial instrument or the provision of an offer to provide investment services.

Information, opinions and comments contained in this material are not under the scope of investment advisory services. Investment

advisory services are given according to the investment advisory contract, signed between the intermediary institutions, portfolio

management companies, investment banks and the clients. Opinions and comments contained in this report reflect the personal views of

the analysts who supplied them. The investments discussed or recommended in this report may involve significant risk, may be illiquid

and may not be suitable for all investors. Therefore, making decisions with respect to the information in this report cause inappropriate

results.

All prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any

form of reproduction, dissemination, copying, disclosure, modification, distribution and/or publication of this report is strictly prohibited.

The information presented in this report has been obtained from sources believed to be reliable. IS Investment cannot be held responsible

for any errors or omissions or for results obtained from the use of such information.

24

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PERFORMANCE & FINANCIAL RESULTS – 9M10November 11, 2010

performance & financial results

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