Odeabank Overview YE 2016 BRSA Financials Corporate Presentation - - PowerPoint PPT Presentation

Odeabank Overview

YE 2016 BRSA Financials Corporate Presentation

• As of December 2016, 52 banks operate in Turkey; 47 conventional and 5 participation banks.
• A brief outlook of the Turkish banking sector as of YE 2016;
• Total Assets

: TRY 2,73 trillion

• Total Loans

: TRY 1,73 trillion

• Total Deposits

: TRY 1,45 trillion

• Shareholders Equity

: TRY 300 billion

• Securities Portfolio

: TRY 352 billion

• Loans/Deposits

: 119%

• NPL

: 3,24%

• CAR

: 15,57%

• ROA

: 1,89%

• ROE

: 14,28% 2

Turkish Banking Sector

8% 7% 63% 13% 9%

Breakdown of Total Assets (YE 2016)

Cash & Equivalents Reserve Requirements Loans Securities Others 53% 5% 16% 4% 11% 11%

Breakdown of Total Liabilities (YE 2016)

Deposits REPOs Borrowed Funds Securities Issued Others SHE

• Asset size is USD 44,4 billion as of YE 2016
• Deposits reached USD 35,9 billion, Loans reached USD 17,3 billion
• Shareholders Equity is USD 3,78 billion
• 186 years of banking tradition and experience
• Rated by Moody’s, S&P and Fitch
• First GDR issue in the broad MENA region in 1995
• Accessed 17 times international markets through debt and equity issues
• Abiding by the Beirut and London Stock exchanges’ regulations
• Applying high corporate governance, compliance and AML standards
• Implementing since 2013 a formalized ESMS management system

Bank Audi in a nutshell…

Operating Environment

GDP Growth* Asset Growth** Loan Growth** Deposit Growth** Lebanon

2,0% 8,0% 5,1% 5,0%

Turkey

2,9% 14,6% 14,8% 14,9%

Egypt

3,8% 23,4% 22,6% 15,0%

MENA

3,2% 4,1% 5,0% 2,8%

*2016 estimates ** YTD growth domestic currency for Turkey and Egypt and in USD terms for MENA

Bank Audi

4

• Turkey ranks 1st in loans as of YE 2016
• Turkey is the 2nd largest hub after Lebanon

Bank Audi in a nutshell…

Bank Audi

26,05 10,80 2,94 4,60 0,00 5,00 10,00 15,00 20,00 25,00 30,00 Lebanon Turkey Europe MENA

Geographic Breakdown of Assets (in USD bn)

YE 2010 YE 2014 YE 2015 YE 2016 6,20 7,40 1,49 2,22

• 1,00

2,00 3,00 4,00 5,00 6,00 7,00 8,00 Lebanon Turkey Europe MENA

Geographic Breakdown of Loans (in USD bn)

YE 2010 YE 2014 YE 2015 YE 2016 104,0 69,0 116,0 181,0

• 50,0

100,0 150,0 200,0 250,0 300,0 Lebanon Turkey Europe MENA

Net Profits (in USD mn)

YE 2010 YE 2014 YE 2015 YE 2016

2016 Total Assets 44,396 Customer Deposits 35,955 Loan to Customers 17,344 Shareholders’ Equity 3,789 Net Profits 470 Branches* 201 Staff* 7.017

*Figures are in USD mn except

Group Overview - Financial Highlights

TRY mn YE 2016 YE 2015 Assets 38,278 32,082 Loans 26,447 21,806 Deposits 29,254 25,333 Sub Loans 528 1,310 Equity 3,443 1,347 # of branches 50 55 Headcount 1,681 1,538

Story of Odeabank  Odeabank is currently the 9th largest privately owned bank in Turkey by total assets.

Incorporation

• March 2012

BRSA License Application

• June 2012

License

• October 2012

New Shareholders: IFC and EBRD

• August 2016

74% 8% 6% 3% 4% 3% 2% 0% 0% 0%

Shareholder Structure

Bank Audi sal - Audi Group European Bank for Reconstruction and Development (EBRD) International Finance Corporatation (IFC) IFC Financial Institutions Growth Fund L.P H.H Sheikh Dheyab Binzayed Binsultan Al-Nahyan Audi Private Bank sal Mohammad Hassan Zeidan Raymond Audi Samir Hanna Freddie Baz

• IFC and EBRD become shareholders at Odeabank

6

Current network;

• 50 branches in 16 cities
• 1681 staff

Direct Banking Channels

There are 5 types of branches under branch network model;

• Corporate and Commercial Centers; 7
• Commercial Centers; 1
• SME/Retail; 25
• Retail only;17

Internet Banking Mobile Banking SMS Banking ATM Self Service Contact Center Social Media Applications Our Presence in Turkey

7

4 8 11 13 16 19 20 22 26 26 29 33 32 29 31 33 38 5 10 15 20 25 30 35 40 45 Dec 2012 March 2013 June 2013 Sept 2013 Dec 2013 March 2014 June 2014 Sept 2014 Dec 2014 March 2015 June 2015 Sept 2015 Dec 2015 March 2016 June 2016 Sept 2016 Dec 2016

Evolution of Total Assets (in TRY bn)

Total Assets TRY Denominated FX Denominated 13% 0% 12% 4% 70% 0% 1%

Composition of Assets (YE 2016)

Cash and Balances with Central Bank Banks Reverse REPOs Securities Loans Tangible Assets Other 9% 79% 1% 1% 9% 1%

Composition of Liabilities (YE 2016)

Funds Borrowed Customer Deposits Money Market Balances Subordinated Loans Shareholders Equity Other

8 Loan/staff: TRY 8,22 mn Loan/branch: TRY 147 mn

NPL: 3,24%

Loan/staff: TRY 15,7 mn Loan/branch: TRY 528 mn

NPL: 2,60%

Sector Odeabank

Healthy and diversified loan growth

2 4 6 9 11 13 14 15 18 19 20 22 22 21 22 24 26 5 10 15 20 25 30 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16

Evolution of Loan Portfolio (in TRY bn)

43% 25% 20% 12%

Loan Breakdown by Segment (YE 2016)

Corporate Commercial SME Retail 50% 50%

Loan Portfolio by Currency (YE 2016)

TRY FX

9

Loans/Deposits is 90% Sector

119%

Deposit/staff: TRY 6,8 mn Deposit/branch: TRY 123 mn Deposit/staff: TRY 17,4mn Deposit/branch: TRY 585 mn

Sector Odeabank

Prudent asset-liability management…

2,5 6,6 8,3 10,1 12,4 15,0 16,8 17,8 21,0 21,1 23,4 26,1 25,0 22,5 24,2 25,5 29,2

• 5,0

10,0 15,0 20,0 25,0 30,0 35,0 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16

Evolution of Customer Deposits (in TRY bn)

24% 4% 11% 61%

Customer Deposits by Segment (YE 2016)

Corporate Commercial SME Retail 37% 63%

Customer Deposits by Currency (YE 2016)

TRY FX

10

Market Share

0,20% 0,50% 0,70% 0,90% 1,10% 1,20% 1,30% 1,30% 1,50% 1,40% 1,40% 1,48% 1,46% 1,42% 1,38% 1,45% 1,53% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 1,20% 1,40% 1,60% 1,80% Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

Market Share in Total Loans

Market Share in Total Loans 0,30% 0,80% 1,00% 1,10% 1,30% 1,60% 1,70% 1,70% 2,00% 1,90% 2,00% 2,06% 2,01% 1,81% 1,81% 1,90% 2,01% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

Market Share in Total Deposits

Market Share in Total Deposits

11

• In August 2016, pursuant to regulatory and corporate approvals Odeabank successfully completed a

TRY 1 billion capital increase. While Bank Audi Group remains a majority shareholder with a stake of more than 75%, IFC and EBRD acquired 9,788% and 8,009% of the Bank. Strong capitalization

• Tier I Capital : TRY 3.29bn
• Tier II Capital: TRY 781mn
• Total Capital : TRY 4.07bn
• Core Capital Adequacy Ratio : 12,22%
• Tier I Ratio

: 12,09%

• CAR

: 14,96%

12,22% 12,09% 14,96% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 16,00%

Core Capital Adequacy Ratio Tier I Ratio CAR

Strong Capitalization

3.291

782 500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500

Capitalization (in TRY mn)

Tier I Capital Tier II Capital

12

Profitability

• Healthy interest income generation;
• Increasing interest income from loan book
• 84.2% of interest income is generated from lending activities
• Fees & commissions income generation is improving

BRSA Income Statement (in TRY mn) YE 2016 YE 2015 ∆%

• I. Net Interest Income

1.151 976 18%

• II. Net Fees & Commissions Income

105 99 7%

• III. Net Trading Income

182

• 216

NA

• VI. Other Operating Income

14 6 120%

• V. Total Income (I+II+III+IV)

1.452 865 68%

• VI. Other Operating Expenses
• 657
• 533

23%

• VII. Provisions for Loan Losses ad Other Receivables
• 530
• 259

105%

• VIII. Net Operating Profit (V-VI-VII)

265 74 258%

• IX. Tax Provision
• 64
• 24

172%

• X. NET PROFIT / LOSS (VIII-IX)

200 50 298% 2015 2016 Spread 2,34% 2,84% Non Interest Income / Average Assets 0,66% 1,61% Asset Utilization 2,99% 4,45% Net Operating Margin 7,26% 14,32%

• .w. cost to income

61,39% 45,13%

• .w. credit cost

29,53% 36,97%

• .w. tax cost

1,82% 3,58% ROAA 0,22% 0,64% Leverage 12,60 11,35 ROACE 2,74% 7,23%

Key Ratios*

*IFRS figures

13

Funds Borrowed

• IFI Loans
• USD 50mn ‘’SME Loan’’ from IFC in 2013
• EUR 20mn ‘’Renewable Energy and Energy Efficiency Loan’’ from Proparco in 2014
• USD 81mn ‘’Green Mortgages Loan’’ from IFC in 2015
• EUR 30mn ‘’MSME Loan’’ from EBRD in 2015
• EUR 20mn ‘’Micro Loan‘’ from EFSE in 2015
• USD 11mn ‘’Renewable Energy and Energy Efficiency Loan‘’ from GGF in 2015
• USD 25mn ‘’Trade Finance Loan‘’ from OFID in 2016
• EUR 20mn ‘’Renewable Energy and Energy Efficiency Loan‘’ from Proparco in 2016
• EUR 100mn ‘’Loan for SMEs and MidCaps’’ from EIB in 2016
• USD 35mn ‘’Renewable Energy and Energy Efficiency Loan’’ from FMO in 2016

Disclaimer

This presentation and document are for information purposes only and are intended only for the initial direct recipient hereof. They may not be reproduced or redistributed to any other

• person. They shall not and do not constitute either an offer to purchase or buy or a solicitation to purchase or buy or an offer to sell or exchange or a solicitation to sell or exchange any

securities of Bank Audi and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. Certain statements in this Investor Presentation may constitute “forward-looking statements”. These statements appear in a number of places in this Investor Presentation and include statements regarding Bank Audi’s intent, belief or current expectations. These forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “is expected to”, “will”, “will continue”, “should”, “approximately”, “would be”, “seeks”, or “anticipates” or similar expressions or comparable terminology, or the negatives thereof. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results, performance or achievements of Bank Audi may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. There are many factors which could affect Bank Audi’s actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. In addition, even if Bank Audi’s results of operations, financial condition and the development of the industry in which it operates are consistent with forward-looking statements contained herein, those results or developments may not be indicative of results or developments in subsequent periods. Bank Audi does not undertake to update any forward-looking statements made herein. Past results are not indicative of future performance. While the information contained in this presentation and document has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by Bank Audi sal or any of its subsidiaries or affiliates or by any of their respective directors, officers, employees or agents as to or in relation to the accuracy or completeness thereof or for any loss arising from any use thereof and any and all such liability is expressly disclaimed. This document is not to be relied upon as such in any manner as legal, tax or investment advice and shall not be used in substitution for the exercise of independent judgment and each recipient hereof shall be responsible for conducting its own investigation and analysis of the information contained herein. Except where otherwise indicated, the information provided in this document is based on matters as they exist as of the date stated or, if no date is stated, as of the date of preparation and not as of any future date, and the information and opinions contained herein are subject to change without notice. None of Bank Audi sal or any of its subsidiaries or affiliates accepts any obligation to update or otherwise revise any such information to reflect information that subsequently becomes available or circumstances existing or changes occurring after the date hereof. This presentation may not and will not be made directly or indirectly and this document may not be and will not be distributed in any jurisdiction in which it is unlawful to make such presentation or distribution under applicable laws and regulations. Persons who attend this presentation or receive this document are required to make themselves aware of and adhere to any and all restrictions applicable to them. 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