Burgan Bank A.. Turkey (BBT) December 2014 Presentation (BRSA - - PowerPoint PPT Presentation

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Burgan Bank A.. Turkey (BBT) December 2014 Presentation (BRSA - - PowerPoint PPT Presentation

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Burgan Bank A.. Turkey (BBT) December 2014 Presentation (BRSA Consolidated) Burgan Bank Group 1 | Burgan Bank Turkey - March 2014 1 Kuwait Turkey Iraq Jordan Algeria Tunisia - Malta Operating Environment Key Highlights

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1 1 | Burgan Bank Turkey - March 2014

December 2014 Presentation (BRSA Consolidated)

Burgan Bank A.Ş. Turkey (BBT)

Burgan Bank Group Kuwait – Turkey – Iraq – Jordan – Algeria – Tunisia - Malta

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2 2 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

2 | Burgan Bank Turkey – December 2014

Key Indicators

2013 2014F 2015F(*) Nominal GDP (USD bln) 820,0 800,0 810,0 Population (mil) 76,7 77,7 78,6 GDP per capita (USD) 10.720 10.300 10.300 Real GDP (% change) 4,1% 2,7% 3,5% CPI (Inflation) 7,4 8,2 6,7 Gov.Debt (USD bln) 297,8 280,0 275,0

  • Gov. Debt / GDP

36,2 34.0 33,0 Current Account Bal. / GDP

  • 7,9
  • 5,7
  • 5,0

Forex Reserves (USD bln) 133 126 130 Trade Balance (USD bln)

  • 100
  • 84.5
  • 75

Export (USD bln) 152 158 165 Imports (USD bln) 252 242 240 Fitch Moody’s S&P Long Term FC Rating BBB- Baa3 BB+ Outlook Stable Negative Negative

Ratings

(*) Source: Burgan Securities Co. Macroeconomic Research

Operating Environment Macro Economic Outlook - Turkey

Recent Developments The Turkish economy is expected to grow by 2.7% yoy in 2014, down from 4.1% yoy growth a year ago. There is some deceleration in economic activity after 1Q14 due to supply side developments in agriculture, weak consumer confidence, investment tendency and external demand. We foresee some acceleration in GDP growth to 3.5% in 2015, backed by lower interest rates and oil prices, while subdued global growth is expected to be a drag on economic activity. Hence, the balance

  • f growth is likely to shift towards domestic demand - as opposed

to external demand in 2014. We expect exports to remain under pressure due to uncertainties in main export markets, including the EU, Iraq and Russia. On the

  • ther hand, current account deficit-to-GDP ratio is expected to

improve further to 5% by YE15, from 5.7% in 2014, mainly driven by lower oil prices. Inflation is also projected to decelerate below 7% in 2015, thanks to lower energy prices, expected correction in food prices and relatively stable outlook for the currency.

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3 3 | Burgan Bank Turkey - March 2014

Operating Environment Turkish Banking Sector

3 | Burgan Bank Turkey - December 2014

Number of Banks: 51 Number of Depository Banks: 34

Growth (billionTRY)

2013 2014 YoY Total Assets 1.732 1.994 15,1% Total Deposits 946 1.053 11,3% Total Loans 1.054 1.250 18,6% Net Profit 24,7 24,7 0% Key B/S Ratios(%) 2013 2014 ROA 1,6 1,3 ROE 14,2 12,2 NPL 2,8 2,9 CAR 15,3 16,3 NIM 3,7 3,5 Coverage 76,3 73,9 Loan/Deposit 111,5 118,8 Total Assets/GDP 110,7 115,3 Total Loans/GDP 67,4 72,3 Total Deposits/GDP 60,4 60,9 62% 6% 15% 9% 8%

Total Assets

Loans Liq.Assets Securities

  • Sp. Prov.

Other 53% 16% 7% 4% 11% 9%

Total Liabilities

Deposits Borrowings Funds Un.Repo Issued Sec. S/H Equity Other

Source: BRSA

1.054 1.250 946 1.053

1,11 1,19

  • 0,10

0,10 0,30 0,50 0,70 0,90 1,10 1,30 300 600 900 1.200 1.500 2013 2014 Loans Deposits Loans/Deposits

Operating Environment Turkish Banking Sector

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SLIDE 4

4 4 | Burgan Bank Turkey - March 2014

4 | Burgan Bank Turkey – December 2014

A subsidiary of KIPCO(Kuwait Projects Company), is a strongly positioned regional Bank in the MENA region Listed on Kuwait Stock Exchange with a market cap of 2,7 bn $ Having a network of 240 branches across 8 countries Carrying an asset size of 26,5 bn $

Financial Performance FY2014 vs. FY2013 Revenue Growth (YoY) 13,5% Operating Profit Growth (YoY) 18,1% Cost to Income Ratio 44,3% Loans to Cust. Deposits 93,2% Liquidity Ratio 30,4% NPA Ratio 3,2% NPA net of Collateral Ratio 1,5% ROE 18,2% Ratings Bank Sovereign Moody’s A3 Aa2 S&P BBB+ AA CI A- AA-

  • International operations contributing 41% in Total Assets and 54 % in

Revenues

  • Burgan Bank, Turkey is ranked as the biggest contributor among

Burgan Subsidiary Banks in Loans + Deposit share.

  • Ranked as the third contributor for revenue generation

Burgan Bank SAK Sound and Consistent Financial Performance

59% 16% 12% 7% 4% 1%

Kuwait Turkey Jordan Algeria Iraq Tunisia

Loan+Deposit by International Operations 46% 16% 19%

2%

13% 5% Revenues by Int. Operations

Shareholding Structure KIPCO 40.87% United Gulf Bank 17% Wafra Int. Inv. Comp Kuwait 7.19% Free float 34.94%

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5 5 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

5 | Burgan Bank Turkey – December 2014

Burgan Bank A.Ş. is 99,26% owned by Burgan Bank SAK, Kuwait Has 58 Branches well spread out of the whole country

  • 26 Branches in Istanbul
  • 32 Branches out of Istanbul
  • 35 Combo Branches (Providing Commercial and Retail Banking Services)
  • 17 Retail Branches
  • 5 Business Centres (Providing Commercial Banking Services)
  • 1 Corporate Branch

Synergies with Group Banks located in

  • Algeria – Gulf Bank Algeria
  • Iraq – Bank of Baghdad
  • Jordan – Jordan Kuwait Bank
  • Tunis – Tunis International Bank
  • Malta – Fimbank / LFC

Burgan Bank A.Ş. has three subsidiaries

  • Burgan Leasing
  • Burgan Securities
  • Burgan Portfolio Management

Rated By Moody’s

  • Long Term Global Local Currency : Ba2

K.Ma raş

  • Well spread out in the country , present in cities, producing

85% of total GDP

Burgan Bank A.Ş. at a Glance

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6 6 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

6 | Burgan Bank Turkey – December 2014

Balance Sheet (million TRY)

2013 2014 Y/Y Total Assets 7.304,4 9.487,3 29,9% Loans1 5.241,9 7.215,1 37,6% Securities 949,6 794,6

  • 16,3%

Deposits 3.407,9 5.339,4 56,7% Borrowings 1.751,4 1.920,7 9,7% Subordinated Loan 320,5 350,0 9,2% Shareholders’ Equity 591,2 953,0 61,2%

Balance Sheet Ratios

2013 2014 Loans / Assets 72% 76% Securities / Assets 13% 8% Loans / Deposits 154% 135% Loans / Deposits2 96% 95% (1) Factoring and Leasing Receivables Included (2) Sub debt and Borrowings included

Performance Trends Growing Balance Sheet Performance Trends Expanding Balance Sheet

Asset & Liabilities Composition

Loans 76% Securities 8% Liquid Assets 8% Other 8% Deposits 56% Borrowings 20% Funds from ISE MM &under Repurchase Agreements 5%

Subordinated Loan 4%

Shareholders Equity 10% Other 5%

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7 7 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

7 | Burgan Bank Turkey – December 2014

  • Loan portfolio showed a remarkable growth with 37,6% in

2014 which was well above the system average of 18,5%

Loan Growth Well Above Market Average

Loan composition by sector

Manufacturing 32% Agriculture 1% Mining 2% Wholesale & Retail Trade 17% Construction 17% Tourism 10% Real estate 5% Financial intermediaries 6% Others 10%

Loan composition by customer segment

Corporate 36% Commercial 47% SME 15% Retail 1%

2,8 3,7 2,4 3,5

  • 1,00

2,00 3,00 4,00 5,00 6,00 7,00 8,00 2013 2014 FCY Loans TL Loans

Loan Growth(billion TRY) Definition of customer segment Corporate: Companies with turnover exceeding TRY 100 mln Commercial: Companies with turnover between TRY 25 mln to TRY 100 mln SME: Companies with turnover below TRY 25 mln. Retail: Individual customers

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SLIDE 8

Diversified Funding Structure

8 | Burgan Bank Turkey – December 2014 2013 2014 YoY Customer Deposits 3.408 5.339 56,7% Borrowings 1.751 1.921 9,7% Intergroup Funding 1.094

941

  • 14,0%

EIB 143

106

  • 25,9%

Other Bank Borrowings

379

784

106,9% Eximbank 135

90

  • 33,3%

Sub Debt 320 350 9,4% Money Market&Repo 790 462

  • 41,5%

Other Liabilities 69 95 37,7% Shareholder’s Equity 591,2 953,0 61,2%

Funding structure (million TRY)

Diversified Funding Structure

2013 2014 Other Liabilities 69 95 Sub Debt 320 350 Money Market&Repo 790 462 Shareholder's Equity 591 953 Other Bank Borrowings 657 980 Intergroup Funding 1.094 941 Customer Deposits 3.408 5.339 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000 10.000

Breakdown of Funding

(million TRY)

  • Third party funding sources increased dramatically through the

increased cooperation with Correspondent Banks.

  • Capital injection was realized by converting 330mioTRY

from intergroup funding into the paid in capital

  • Commitment of Burgan Bank SAK still continues with a

balance of 250mioUSD in intergroup funding

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9 9 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

9 | Burgan Bank Turkey – December 2014

Deposits Increased Five Fold Market Average

up to 1 month 17% 1-3 month 62% 3-6 month 14% 6-12 months 3% 1 year + 4% Corporate 24% Commercial 21% SME 6% Retail 25% Private 24%

Deposit composition by customer segment Deposit composition by maturity

1,4 2,1 2,0 3,2

1 2 3 4 5 6 2013 2014 FCY Deposits TL Depositss

Deposit Growth(billion TRY)

  • 56,7% deposit growth is achieved at the year-end 2014 whilst the

system average was 11,3%

  • Well diversified deposit portfolio. The Total of Top 20 deposits

receives a share of 30,0 % out of Total Deposits.

  • The biggest depositor share is 4,26 %
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10 10 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

Improved Asset Quality

10 | Burgan Bank Turkey – December 2014 2013 2014 Gross Loans (million TRY) 5.306 7.289 NPL’s(million TRY) 120 146 NPL Ratio 2,3 2,0 NPL, net of collateral 87 102 NPL coverage, net of collateral 84,9% 78,5%

NPL KPIs

  • Provisioning is in line with BRSA rules and regulations.
  • Coverage ratio is below sector average due to the

collateral structure of the Loan portfolio.

Improved Asset Quality

2,3 2,0 2,8 2,9

0,0 1,0 2,0 3,0 4,0 5,0 2013 2014 NPL Ratio Sector

NPL Ratio (%)

53,4 52,1 76,3 73,9

20 40 60 80 100 2013 2014

Coverage Ratio Sector

Coverage Ratio (%)

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11 11 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

Strong Capitalization

11 | Burgan Bank Turkey – December 2014 2013 2014 Shareholder’s Equity (million TRY) 591 953 CAR Ratio (%) 13,70 16,12 Tier 1 Ratio (%) 8,96 11,45

Strong Capitalization to Support Future Growth

  • Paid in capital of the bank was increased by 330mioTRY(approx. 150mioUSD) and reached to 953mioTRY
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12 12 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

12 | Burgan Bank Turkey – December 2014

Progress in Earnings

3,92 2,90 1 2 3 4 5 2013 2014

NIM Trends(%)

  • Profit generation started on yearly basis
  • 17,8mln TRY net profit was realized in 2014. This figure was -53,7mln TRY in 2013.

(million TRY)

2013 2014 y/y Total Interest Income 441,1 674,0 52,8% Total Interest Expense 256,8 426,5 66,0% Net Interest Income 184,2 247,5 34,3% Total Revenues 253,8 354,6 39,7% Total Operating Expenses 222,0 258,2 16,3% Operating Income 31,8 96,4 203,1% Provision 94,8 71,1

  • 25,0%

Net Profit

  • 53,7

17,8

  • 133,1%

Progress in Earnings

31,80 96,40 20 40 60 80 100 120 2013 2014

Operating Profits (million TRY)

  • 53,70

17,80

  • 55
  • 45
  • 35
  • 25
  • 15
  • 5

5 15 25 2013 2014

Net Profit (million TRY)

253,8 354,6 50 100 150 200 250 300 350 400 2013 2014

Revenues(million TRY)

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13 13 | Burgan Bank Turkey - March 2014

Key Highlights 9 Months 2013: Key Highlights

Contact Details

13 | Burgan Bank Turkey – December 2014

Financial Institutions

  • Ms. Şehnaz Günay, Head of FI

+90 212 371 37 40 sgunay@burgan.com.tr Ms.Inci Yılmaz, Unit Manager +90 212 371 37 41 iyilmaz@burgan.com.tr

  • Ms. Ezgi Yıldırım, Manager

+90 212 371 37 42 eyildirim@burgan.com.tr Ms.Mine Demirtaş, Assistant Associate +90 212 371 37 91 mdemirtas@burgan.com.tr Treasury, Capital Markets and Financial Institutions Group

  • Mr. Mutlu Akpara

Executive Vice President +90 212 371 36 70 makpara@burgan.com.tr Treasury & Capital Markets

  • Ms. Aslı Koçer, Head of Treasury Sales

+90 212 371 36 81 akocer@burgan.com.tr

  • Mr. Arda Türerer, Head of ALM

+90 212 371 36 42 aturerer@burgan.com.tr

  • Mr. Bilge Gönen, Head of FX Desk

+90 212 371 36 76 bgonen@burgan.com.tr Esentepe Mahallesi, Büyükdere caddesi Tekfen Tower, 209 34394 Şişli Istanbul – Turkey Swift: TEKFTRIS Reuters: BRGN www.burgan.com.tr

Contact Details

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14 14 | Burgan Bank Turkey - March 2014

Thank you

14 | Burgan Bank Turkey - December 2014