VakıfBank IR App. Avail ilab able le at at Earnings Presentation BRSA Bank-Only 1Q 2019 May 10, 2019
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS 1Q19 Earnings and Ratios Net Income (TL million) Pre-Provisioning Operating Profit (TL million) 26.3% 3,275 %43 PPOP 1,051.4 1,044.2 increase QoQ despite 2,593 ~TL 1. 1.1 1 billion 2,295 lower interest 42.7% 651.2 income from CPI 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 PPOP increase would be 90 90% QoQ adjusted with 43.6% ~TL 1.1 billion lower interest income from CPI Quarterly Coverage Ratios comparable 1,499 net income would be Further 1,044 4Q18 1Q19 TL 1.5 billio llion , enhanced provisioning which is up by ratio despite Total NPL Coverage Ratio 100.6% 102.5% 44% QoQ 44% already high Stage II Coverage Ratio 6.6% 7.3% coverage Stage III Coverage Ratio 74.3% 73.8% 4Q18 1Q19 www.vakifbank.com.tr 2
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS Drivers of Strong Performance & Key Highlights of 1Q19 Effec fective e NIM management gement 1Q19 NIM came at 3.22 % vs 3.65% in 4Q18 due to seasonality of CPI linkers. • Adjusted with CPI linkers impact on a quarterly basis, 1Q19 NIM would be 4.71% 1%. • • Core spreads improvement visible both in TL and FC mainly due to lower cost of funding; TL core spreads improved 178 bps QoQ to 3.16% 6% . FC core spreads improved 174 bps s QoQ to 4.03% 3% . Eye-cat atching ching fee e growth owth gained ined additi ditional onal momentum entum with th lending ding growt owth 1Q19 fee growth came strong at 120% YoY on top of 2018 solid fee performance. • Fee/Total Revenues exceeded medium term target of 20% 20% threshold in 1Q19. • Fee/Opex ratio reached all time high level 63.2% 2% . • Conser servat vativ ive e appro roac ach on stag aging ing and further rther incre reased ased provi visio sioning ning levels els • NPL ratio remained flattish at 4.6% in 1Q19. • Total NPL coverage ratio further increased to 102.5% 5% vs 100.6% in 2018YE. • In line with the guidance, the share of Stage II loans increased to 10% 10% in 1Q19 vs 8.6% in 2018YE. Yet the coverage of Stage II further increased to 7.3% from 6.6% in the same term. • All time me high h FC liqu quidi idity ty level els • FC LCR came all time high at 353 353.5 .5% vs required level of 80%. Total LCR came at 118.9% 9% vs required level of 100%. • FC liquidity (available in short term) reached all time high level at around USD D 6.5 billio llion* . • • Short term right way swap usage increased to USD D 3 3 bill llio ion*. Timel ely y execut cuted ed long term m internat ternational ional fundin nding trans nsact actions ns TL 1.5 bill llio ion n fresh covered bond issuance in 1Q19 from international markets with 8 years maturity. • • Timely issuance of USD D 600 millio lion n eurobond in 1Q19 with 5 years maturity at 8.125% coupon rate. • EUR 700 millio lion n Basel III compatible Additional Tier I issuance under GMTN programme with PNC5 structure and 5.076% coupon rate. • USD D 1.1 billio llion n syndication loan obtained from total 38 correspondent banks in April/2019 with 100% % roll-over ratio. www.vakifbank.com.tr *Current figures as of early May-2019 3
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS 1Q19 P&L Details 4,823 (1,548) 1,370 129 1 979 (2,494) 2,345 1Q19 (130) 651 Net Interest Net Fees and Dividend Net Trading Other Income Total Operating Provisions Taxes Net Income Income Commissions Income Income Revenue Expenses % vs +2% +120% -97% +14% +44% +25% +23% +93% -48% -38% 1Q18 % vs -9% +33% +100% +99% +66% +14% -19% +160% -55% -38% 4Q18 www.vakifbank.com.tr 4
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS Revenue breakdown Total Revenues – Revenue Breakdown (TL million) 25.1% Trading Dividend Trading Dividend 2.7 1.2 0.0 2.9 4,823 Other Other 28.4 3,857 24.6 48.6 NII NII 59.8 1Q19 1Q18 Net F&C Net F&C 20.3 11.5 1Q18 1Q19 Core Banking Revenues (TL million)* 20.8% 3,323 Strong top line growth 2,750 driven high quality revenue generation continued 1Q18 1Q19 www.vakifbank.com.tr * Core Banking Revenues= NII+NFC 5
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS Effective NIM management Net Interest Margin (NIM %) Breakdown of Interest Income from Securities (TL million) 4.71 2,458 3.96 1,989 1,538 3.65 3.22 758 828 1,636 549 1,376 398 363 989 822 395 430 613 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 4Q18 1Q19 Adjusted Interest income from CPI linkers Interest income from other securities 1Q19* Core Spreads (%) TL&FC core spreads 178 178 bps bps started to improve 316 bps TL QoQ spread 18.70 17.60 significantly on a 17.00 improvement 15.01 14.07 on TL core quarterly basis as TL Loan 17.32 13.40 spreads 10.23 Yields guided 14.44 9.46 TL Deposit USD 3 billion Costs 7.89 403 3 bps FC FC 6.61 6.64 174 174 bps bps short term right 5.67 spread 5.39 QoQ FC loan way FX swap improvement yields 2.36 2.14 on FC core usage** FC deposit 3.36 3.10 2.61 costs spreads 1Q18 2Q18 3Q18 4Q18 1Q19 *Assuming same level of CPI contribution on a quarterly basis www.vakifbank.com.tr 6 ** Current figures as of early May-2019
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS Eye-catching fee growth gained additional momentum with lending growth Net Fee & Commission Income (TL million) – Fee Breakdown 120.5% Insurance Inquiry & Insurance Inquiry & Expertise 8% 6% 979 Expertise 13% 11% Cash Loans 36% Other Other 1% 0% 29% 1Q19 444 1Q18 Cash Loans Non-Cash Loans 32% 26% 17% Payment Non-Cash systems Payment Loans systems 21% 1Q18 1Q19 Fee/Total Revenue Fee/Operating Expense (%) 63.2 Fee/Total 20.3 Fee/Opex Revenues 17.5 ratio reached exceeded medium all time high 38.4 term target of 35.1 level 11.5 20% threshold 63.2% in 1Q19 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 www.vakifbank.com.tr 7
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS Further improved C/I ratio despite high inflation driven cost growth Operating Expenses (TL million) Breakdown of OPEX 22.5% 1Q18 1Q19 1,548 1,531* 57% 56% 1,264 43% 44% 1.1% HR Cost Non-HR Cost HR Cost Non-HR Cost 1Q18 4Q18 1Q19 Cost/Income (%) 27.9% 18.5% (67 bps) 45.6 947* 689 860 584 725 32.8 538 18.0% 32.1 (9.3%) HR Cost Non HR Cost 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 www.vakifbank.com.tr * ~TL 392 million provisioning cost related to OTAS shifted to OPEX in 4Q18 without any P&L impact 8
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS Well diversified & stable loan breakdown Breakdown of Loans (TL billion) Portfolio Breakdown (%) Loan Portfolio Breakdown (TL billion) 246.3 14.2 258.2 221.6 26.1 25.8 SME 14.8 11.9 Gross Loans 232.5 195.4 63.5 24.7 23.5 27.1 Retail 10.8 12.0 Stage III Other 1 58.7 19.9 Stage II 19.2 51.0 SME Com.&Corp. 50.7 46.8 19.4 24.5 19.6 21.2 Mortgage Stage I 1Q18 1Q19 21.2 GPC QoQ YoY 221.6 201.8 124.9 Com.& 107.5 11.1% 26.0% Total Loan Growth 91.5 Corp. 12.8% TL Loan Growth 14.7% 1Q18 4Q18 1Q19 FC Loan Growth ($) 4Q18 1Q19 1.3% 7.4% Breakdown of Loans (TL billion) Breakdown of FC Loans CGF Loans 246.3 221.6 195.4 $15.6 27% $15.4 (TL bn) 1Q18 2018 1Q19 $14.6 36% 37% FC 29% Total CGF 24.8 26.6 29.8 11% 62% Guarantee Limit TL 158.1 140.2 137.9 22.7 28.0 32.8 Originated Amount 63% 64% 71% Project Finance Outstanding Amount After 19.7 19.6 23.1 Export Loans Redemptions 1Q18 4Q18 1Q19 Working Capital and Other www.vakifbank.com.tr 9 1 Other includes credit cards, overdraft and auto loans.
Earnings Presentation Bank Only 1Q19 INVESTOR RELATIONS Breakdown of Loan Portfolio Breakdown of Construction Loans Sector Breakdown of Cash Loans Manufacturing Retail Loans 15% 19% Stage III TL 1.6 billion 5.4% Stage II Construction TL 6.0 billion 20.3% 11% Stage I TL 22.1 billion Other 1Q19 1Q19 13% Energy 74.4% 8% Limited concentration Real Estate in retail developers 4% Wholesale & Retail Trade Selective approach to 15% Logistic& Tourism 11% construction Transportation 4% Breakdown of Project Finance Breakdown of Energy Loans Other Service (Including tourism, health, 10% education) Distribution 10% 33% Breakdown of Production Energy 1Q19 Share of Renewable: 52% 1Q19 36% Share of Local Coal: 39 39% 67% Share of Other: 9% 44% Infrastucture Production www.vakifbank.com.tr 10
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