Presentation March 31, 2016 BRSA Bank-only Financials Investor - - PowerPoint PPT Presentation

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Presentation March 31, 2016 BRSA Bank-only Financials Investor - - PowerPoint PPT Presentation

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Earnings Presentation March 31, 2016 BRSA Bank-only Financials Investor Relations / BRSA Bank-only Earnings Presentation

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

March 31, 2016

BRSA Bank-only Financials

Earnings Presentation

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16

1

Timely & capital generative growth

2

Well- defended Core Banking NIM

3

Outperformance in diversified fee areas

4

Asset quality trends as guided

5

OPEX under control

SOLID START INTO 2016

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Solid start into 2016 – Marked by core operating income growth of 33%

3

Net Income (TL million)

862 938 1,041

1Q15 4Q15 1Q16

21%

11%

1 Excludes non-recurring items (Income from NPL sale, fee rebates and extra specific provisions) when annualizing Net Income for the remaining quarters 2 Please refer to the page 9 for details 3 Please refer to the page 19 for details

TL Million

1Q 15 4Q 15 1Q 16

(+) NII excld. inc. on CPI linkers 1,721 2,098 2,080 (+) Net Fees & Comm. 753 718 781 (-) Net Specific + General provisions excluding the

effect of collateral re-assessment2

  • 326
  • 569
  • 375

(-) Swap Cost

  • 123
  • 265
  • 266

(-) OPEX

  • 1,471
  • 1,574
  • 1,483

= CORE OPERATING INCOME 554 408 737

(+) Income on CPI linkers 212 539 410 (+) Net Trading & FX gains/losses 101

  • 87

19 (+) Income on subsidiaries 146 82 142 (+) Other income3 142 200 64 (+) Provision reversal due to collateral re-assessment 100 (-) Extra provisions related to collateral re-assessment

  • 153

(-) Taxation and other provisions

  • 292
  • 204
  • 278

= NET INCOME

862 938 1,041

YoY 21% NII growth YoY 4% fee growth

  • Adj. w/ acct. maintenance fees 12%

Net Specific CoR and Net Total CoR faring in-line with budget Swaps utilized opportunistically

   

YoY 33% growth

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

FC (% in total)

Accelerated asset growth driven by lending

4

61% 61% 61% 16% 15% 14%

4% 5% 5% 0% 0% 1%

9% 9% 9% 9% 9% 10%

1Q15 2015 1Q16

Composition of Assets1 (%, TL billion)

Other Non-IEAs FC Reserves* TL Reserves Securities Loans

232.2 254.3

14% 4%

1 Accrued interest on B/S items are shown in non-IEAs 2 Performing cash loans * CBRT started remunerating TL reserves in 1Q15 & FC reserves in 2Q15. However, the rate introduced on FC reserves is quite symbolic, generating non-material income as opposed to its large share in the asset
  • mix. Therefore, FC reserves considered as non-IEAs also for 2015&1Q16

Other IEAs TL (% in total) 57% 57% 58% 43% 43% 42%

264.3

Loans1,2/ Assets:

61%

IEA neden çok artmıs YP Zorunlu karşılık hariç artış: 1.8bn; Nakit değerler – Diğer kıymetli madenler Diğer aktifler’de Takas hesabı +851mn

+4% 0% (2%)

4Q15 1Q16

+4% +3% (2%) Securities Loans2 Assets

Quarterly Growth Increasingly customer driven asset mix

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

1Q15 2Q15 3Q15 2015 1Q16

75% 22% 25%

1Q15 2Q15 3Q15 2015 1Q16

TL FC

78% Trading 1.0% AFS 48.5% HTM 50.5%

1Q15 2Q15 3Q15 2015 1Q16

Total Securities (TL billion)

CPI: 47% Other FRNs: 28%

TL Securities (TL billion)

FRNs: 8% FRNs: 8%

FC Securities (US$ billion) Total Securities Composition

FRN heavy securities portfolio remains as hedge against volatility

39.5

CPI: 45% Other FRNs: 30%

31.1 30.7 3.8 3.6

5%

40.8

CPI: 46% Other FRNs: 29% FRNs: 8%

3.4

CPI: 47% Other FRNs: 28%

3.7

FRNs: 8%

Unrealized MtM loss (pre-tax) ~TL 355mn

as of March-end vs. ~TL 545mn loss in YE15

1 Excluding accruals Note: Fixed / Floating breakdown of securities portfolio is based on bank-only MIS data.

76%

6% 1% 11%

Fixed: 92% Fixed: 92% Fixed: 92% Fixed: 93% Fixed: 26% Fixed: 25% Fixed: 25%

24%

5

3% 1%

CPI: 49% Other FRNs: 29% Fixed: 22% FRNs: 8% Fixed: 92%

7%

30.2

73% 27%

41.1 31.6

Fixed: 25%

(3%) (1%) 1% 4%

42.6

26% 74%

4%

31.2

(1%)

3.8

(1%)

41.8

(2%)

Securities1/Assets:

14%

hovering at its lowest level

– CPI linkers/ TL Securities 49%

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

1Q15 2Q15 3Q15 2015 1Q16

Total Loans1 Breakdown (TL billion)

TL (% in total) 63% 64% 62% 63% 64% FC (% in total) 37% 36% 38% 37% 36% US$/TL 2.575 2.655 3.005 2.908 2.812 3%

+

20.6 19.9 20.4 20.2 21.0

1Q15 2Q15 3Q15 2015 1Q16 2%

Credit Cards Consumer

(exc. credit cards)

65.7% 10.3% 24.0% 163.1

6

65.0% 10.6% 24.4% 144.5

1 Performing cash loans * Business banking loans represent total loans excluding credit cards and consumer loans

66.2% 10.4% 23.4% Business Banking*

Across the board growth in lending with sustained focus on profitability

2% (3%) 4% (1%)

148.4 158.9 3% 65.5% 10.7% 23.8% 158.3

in 3Q, yet…

7% 0%

13%

Accelerated TL lending growth backed by;

>TL Business banking loans: +7% vs. sector’s +3% >Lucrative consumer products: Mortgages & GPLs

TL Loans1 (TL billion)

91.4 95.4 97.7 99.5 104.1

1Q15 2Q15 3Q15 2015 1Q16 14%

4% 2% 5% 2%

FC Loans1 (US$ billion)

FC lending growth mainly driven by withdrawals from prior commitments of project finance loans

65.8% 10.4% 23.7% 205m) olarak görünüyor

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

17.1 17.3 17.5 17.2 17.7 10.0 10.2 10.3 10.5 11.5 1Q15 2Q15 3Q15 2015 1Q16 0% 48.0 50.2 51.8 52.6 53.6 14.6 15.0 15.4 15.9 17.0 1Q15 2Q15 3Q15 2015 1Q16 1.3 1.4 1.4 1.6 1.6 2.3 2.4 2.5 2.6 2.6 1Q15 2Q15 3Q15 2015 1Q16 2.8

Consumer Loans

65.2 67.2

Retail Loans1 (TL billion)

4.2

Auto Loans (TL billion)

4.2 27.2 27.8

General Purpose Loans2 (TL billion)

Healthy market share gains across all retail products

16.2 17.4 18.3 18.8 19.4 0.7 0.7 0.8 0.8 0.8 1Q15 2Q15 3Q15 2015 1Q16

Mortgage Loans (TL billion)

19.0

3%

13%

5% 3%

18% 7% 19.6 3.6

1%

16.9 3.8 62.5 18.2 3.9 20% 27.5

Commercial Instalment Loans Consumer Loans Commercial Instalment Loans

15%

13.3 14.0 14.7 15.0 14.9 1.5 1.7 1.8 2.0 2.1 1Q15 2Q15 3Q15 2015 1Q16

17.0 16.5 15.7 14.9 17.0

Credit Card Balances (TL billion)

4% 3% 2% 1% 1%

1 Including consumer, commercial instalment, overdraft accounts, credit cards and other 2 Including other loans and overdrafts 3 As of March 2016, as per Interbank Card Center data. Rankings are as of March 2016, based on monthly data Note: (i) Sector figures used in market share calculations are based on bank-only BRSA weekly data as of April 01, 2016, commercial banks only (ii) Rankings are as of 2015, among private banks. unless otherwise stated

5% 8% 3% 3% 6%

7

68.5

5%

70.6 20.2 27.8

7% 3% 5% 1%

29.1

Mar’16 QoQ Rank Consumer Loans 14.5% +18bps #1

  • Cons. Mortgage

14.4% +12bps #1

  • Cons. Auto

28.4% +139bps #1 GPLs 9.1% +39bps #2 Corporate CCs 13.1% +75bps #2 # of CC customers 14.6%3 +9bps #13 Issuing Vol. 19.9%3 +72bps #13 Acquiring Vol. 20.9%3 +32bps #13

Market Shares

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Strong asset quality – NPL ratio consistently below sector

8

Sector Garanti

2.7% 2.7% 2.7% 2.9% 3.1% 2.3% 2.4% 2.3% 2.7% 2.7%

1Q15 2Q15 3Q15 2015 1Q16

NPL ratio1 Net Quarterly NPLs (TL million)

Specific Coverage Ratio: 81%

  • vs. sector’s: 76%

458 469 518 904 531 149

  • 266
  • 220
  • 306*
  • 255
  • 272
  • 115
  • 79
  • 334
New NPL Collection Write-off NPL sale

1Q15 2Q15 3Q15 4Q15 1Q16

113 249 94 648

Net NPL

74

1 Sector figures are per BRSA bank-only weekly data 2 Total cash coverage includes specific, general and free provisions *In 3Q15 a big ticket commercial NPL amounting to TL176mn has been partially collected (Collection: TL76mn; Write-off: TL100mn)

Files as guided in the Operating Plan

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Comfortable provisioning levels preserved

9

495

153 4Q15 1Q16

Specific Provisions Collections

183

4Q15 1Q16

600 648 75 283

100

* *

* Effect of collateral re-assessment General Provision

44 64

4Q15 1Q16

495 312 375

  • 183

+64

1Q 16 Specific Provisions Collections 1Q 16 Net Specific Provisions 1Q 16 Net Total Provisions General Provisions

1Q16 Net Provisioning Evolution (TL million)

123bps 78bps 93bps Cost of Risk

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

27.0 29.6 33.0 31.5 33.1

1Q15 2Q15 3Q15 2015 1Q16

Deposits remain the major funding source while its growth & composition are actively managed with margin focus

10

8.1% 7.9% 8.5% 11.8% 12.2% 12.0% 11.6% 12.4% 12.5% 43.7% 42.8% 43.6% 5.4% 5.9% 6.0% 13.6% 13.2% 11.7% 5.9% 5.6% 5.7%

1Q15 2015 1Q16

Composition of Liabilities

Funds Borrowed Repos Time Deposits Other SHE Demand Deposits Bonds Issued

IBL: 69% IBL: 68% IBL: 67%

1 Growth figures are based on US$ terms 2 Based on bank-only MIS data 3 Based on bank-only BRSA weekly data as of April 1, 2016 , commercial banks only

1Q15 2Q15 3Q15 2015 1Q16

16%

3% 13% (6%) TL FC 5%1 0%1 (4%)1 (3%) 13% (3%) $25.7 $26.8 $26.8 $25.6 TL62.8 TL60.8 TL68.8 TL66.4

Demand Deposits (TL billion)

10% 11% 5% (5%)

23%

Demand deposits constitute >22% of total deposits

  • vs. 18% in the sector3

Active management of funding;  FC-led deposit growth to refrain from pricing competition in TL deposits  Higher level of swap utilization due to cost optimization  Opportunistic utilization of other funding sources

TL128.8 TL132.0 TL149.4 TL140.9

Total Deposits (TL/US$ billion)

$29.2 TL66.9 14%1 1% TL149.0 6%

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

On balance sheet alternative funding sources provide liquidity comfort

* Only long term issuances are accounted for in the analysis --TL bonds including TL Eurobond :TL3.6bn and GMTNs ~USD260mn

Apr’14: EUR 1.1bn with a maturity of 1 Nov’14: USD 1.3bn equivalent with a maturity of 1 July’14: EUR 500mn Eurobond issuance Apr’14: USD 750mn Eurobond issuance 11 Money Market funds ~$2.3bn & TL1.2bn

Avg TtM: 2.7yrs & 1yr, respectively

Bilateral & Postfinance Loans ~$1.5bn & TL0.5bn

Avg TtM: ~3.3yrs & ~4yrs, respectively

Funds Borrowed Bond Issuances

  • TL Bonds*: ~TL4bn, Avg TtM ~5mo.
  • TL Eurobond: TL750mn, @7.38%, Avg TtM ~2yrs
  • FC Eurobonds: USD3.2bn, Avg TtM ~3.4yrs

GMTNs* ~$360mn

Avg TtM: 2.4yrs

Loans funded via long-term on B/S alternative funding sources ease LtD

Adjusted LtD ratio (%,TL Billion)

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Capital generative growth strategy assures sound solvency ratios

12

1 New capital regulations on free reserves, FC RR, unsecured loan and mortgage risk weightings, effective as of March 31, 2016. Impact calculated as of March 31 2016. 2 BRSA monthly data as of February 2016, for commercial banks only 3 Among peers as of December 31, 2015 4 Within the scope of Basel-III alignment, BRSA introduced new capital buffers i.e. SIFI Buffer, Capital Conservation Buffer, Counter-Cyclical Buffer

Highest CET-1 ratio3:

among peers

CET-1 capital share in total: 94%

  • vs. sector’s 85%2

2016 Min CET1 Ratio 4.5%

  • Min. Tier-I Ratio

6.0% CAR 8.0% SIFI Buffer (Group 3) 0.5% Capital Conservation Buffer 0.625% Counter Cyclical Buffer 0.005% Required CET-1 ratio 5.63% Required CAR 9.13%

Sayılar DRAFT, en son değişiklik olup

  • lmadığı Risk ile kontrol edilmeli

15.0% 15.1% 14.1% 14.3% 14.1% 14.2%

2015 1Q16

CAR Common Equity Tier-I Total Tier-I

Capital adequacy ratios

23bps: Currency Impact 12bps: MtM difference 26bps: Dividend Payment 44bps: Regulation Impact1

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

14.2% 14.2% 14.6% 15.1% 15.4% 4.9% 4.9% 4.9% 4.9% 5.1% 1Q15 2Q15 3Q15 4Q15 1Q16

High level of funding costs at YE 2015, weighed on 1Q16 spread; yet rising lending yields will be increasingly supportive going forward

1 Based on bank-only MIS data and calculated using daily averages

13

9.2% 9.3% 9.7% 10.4% 10.9% 7.4% 7.3% 7.6% 8.1% 8.6% 1.9% 1.8% 1.7% 1.8% 2.1% 1.5% 1.5% 1.3% 1.4% 1.6% 1Q15 2Q15 3Q15 4Q15 1Q16 TL Time TL Blended FC Time FC Blended TL Yield FC Yield

Loan Yields1 (Quarterly Averages) Deposit Costs1 (Quarterly Averages)

Upward loan repricing continues in 2016

  • Mortgages: >40bps QoQ (in 2015: +350bps)
  • Auto: >150bps QoQ (in 2015: +320bps)
  • GPL: >55bps QoQ (in 2015: +385bps)
  • Comm. Overdraft: >50bps QoQ

Effect of increased loan pricings will be more visible in the coming periods Strategically shaped deposit mix (TL vs. FC) to actively manage costs… «New TL deposit pricings are heading south since YE15» …yet; high level of funding costs at 4Q-end affected 1Q16 average Loan-to- Time Deposit spread:

  • 20bps QoQ
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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Quarterly NIM

491 462

Loans CPI linkers Other Interest Income Items Deposits

4Q 15 NIM 1Q 16 NIM

Funds Borrowed & Bond issuance Sec.

  • exc. CPI

+34

  • 24
  • 33
  • 5

+4

Repos Other Interest Exp. Items

  • 2
  • 3

Flat NIM -- excluding the temporary impact of change in CPI linker income valuation methodology

14

4.9% 4.6% 4Q15 1Q16

Reported: (29bps)

* In order to eliminate the quarterly volatility in NII, valuation methodology of CPI linkers has been changed -- expected inflation (8% for 2016) will be used in the calculation. Accordingly, in 1Q16, income on CPI linkers is TL410mn, ~TL130mn lower vs. 4Q15.

CPI linkers’ income would be flat QoQ, if the methodology had remained the same.

1Q16 vs. 4Q15 Margin Evolution (in bps)

  • Healthy & strong growth eased LtD

spread suppression

  • Impact of deposit costs on NIM

fully offset by contribution of loans

Opportunistically utilized swap funding

  • Higher level of swap utilization vs.

slightly lower cost of swap funding in 1Q, resulted in flattish swap costs QoQ

Effect of valuation methodology change in CPI linkers*

4.9%

Flat

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Higher than expected performance across diversified fee areas suggests double digit growth momentum in fees

15

1 Net Fees and Commissions breakdown is based on bank-only MIS data

Net Fees & Commissions1 (TL Million)

2016B 2016B

Non-Cash Loans

Payment systems

19% YoY Growth

Money transfer

14%

2016B

18% 10% 13% Şubesizden

Insurance

2016B

14% 5% > Supported with strong merchant commissions > Backed by non-life & life

  • comm. , esp. due to strong

loan originations , absorbing the regulatory pressures on pension side

Above budget performance in diversified fee areas

11%

Digital channels taking a more prominent role In non-cash Financial Transactions, Online Banking share: 45% Mobile Banking share: 37% ATM share: 11% Banking Service fees driven via digital channels make up ~37% & is on an increasing trend 4.2 million digital customers with 22% YoY increase 3M15 3M16

16.0% 8.3% 3.4% 9.0% 5.3% 1.4% 43.7% 12.9% 14.8% 8.9% 1.1% 10.0% 5.6% 1.2% 48.8% 9.6%

4%

753 781 Higher than expected growth performance in fees veiled by the base effect of 1Q15

  • Account maintenance fees, which typically hit 1Q

& 3Q, are suspended in Feb 16 due to the pending court case

  • Brokerage Fees’ distribution percentages

changed from 75% to 20%. The application started in October 2015, therefore 1Q15 fee base was inflated vs. 1Q16

Cash Loans Non-Cash Loans Brokerage Money Transfer Insurance Asset Mngt Payment Systems Other

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

3M15 3M16

OPEX in line with expectations

1%

Operating Expenses (TL million) 1,471 1,483

16

High fee rebates & tax fine in 1Q15 creating base effect

  • ~%40 of the fee rebates in 2015 booked in 1Q15
  • TL81mn founder share tax penalty expense
1 Income defined as NII+Net F&C - Provisions + Net Trading Gains/Losses + Other Income+ Income on subsidiaries

OPEX/Avg. Assets:

2.3%

2016B: ~CPI

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Outstanding NIM performance

  • Timely and profitable loan growth
  • Actively managed funding mix
  • CPI linkers continued to serve

as hedge

Sound Asset Quality

  • NPL ratio consistently below sector
  • Total Cash Coverage ratio: 157%
  • Net Specific CoR and

Net Total CoR faring in-line with budget

Highest fee base among peers

with ~14% market share1

  • Higher than expected performance

across diversified fee areas suggests double digit growth momentum

  • Digital channels taking a more

prominent role

  • Sustained sound solvency ratios
  • CET-1 constitutes 94% of capital,

highest among peers1

  • Strong solvency ratios comfortably

meeting the additional capital requirements

Dynamic B/S management Risk-return balance priority Capital Generative Growth Sustainable Revenue Sources

Result: Solid business model assures recurring strong results

1 Ranking as of December 2015, based on bank-only financials for fair comparison with the sector. Sector figures are per BRSA monthly data, commercial banks only

17

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Appendix

18

  • Pg. 21 Key Financial Ratios
  • Pg. 19 Quarterly and Annual Summary Income Statement
  • Pg. 20 Summary Balance Sheet
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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16 19

Quarterly and Annual Summary Income Statement

TL Million

2014 1Q15 2Q15 3Q15 4Q15 2015 1Q16

Net Interest Income 7,443 1,933 2,508 2,163 2,637 9,241 2,490
  • Income on CPI linkers
1,722 212 608 116 539 1,475 410
  • Other
5,721 1,721 1,900 2,047 2,098 7,766 2,080 Swap cost
  • 435
  • 123
  • 251
  • 234
  • 265
  • 874
  • 266
Net fees and comm. 2,949 753 702 750 718 2,923 781 Specific & General Prov.
  • 1,597
  • 538
  • 409
  • 533
  • 644
  • 2,123
  • 712
  • Specific prov
  • 1,164
  • 351
  • 307
  • 303
  • 600
  • 1,561
  • 648
  • Extra provisions related to collateral re-assessment
  • 153
  • Other
  • 1,164
  • 351
  • 307
  • 303
  • 600
  • 1,561
  • 495
  • General prov
  • 433
  • 186
  • 102
  • 230
  • 44
  • 563
  • 64
  • Regulatory Impact
  • 163
  • 22
  • 38
  • 16
  • 15
  • 91
  • Other
  • 270
  • 164
  • 65
  • 214
  • 29
  • 471
  • 64
Trading & FX gains 240 98 14 19
  • 87
43 19 Dividend income 2 5 5 Other income 528 354 138 150 275 917 348
  • Collections & Provision reversal due to collateral re-assessment
316 212 124 125 75 536 283
  • Provision reversal due to collateral re-assessment
100
  • Collections
316 212 124 125 75 536 183
  • Provision reversal post tangible asset revaluation
40 40
  • Revaluation surplus on investment property
46 33 33
  • Free Provision Reversal
85 85
  • NPL sale
49 15 1 1 17 30
  • Provision reversal rel.to founder share tax penalty
81 81
  • Other
118 47 14 24 41 126 34 OPEX
  • 4,779
  • 1,471
  • 1,331
  • 1,507
  • 1,574
  • 5,883
  • 1,483
  • Impairment Losses on Tangible Assets
  • 56
  • 56
  • Fee Rebates
  • 219
  • 118
  • 66
  • 71
  • 55
  • 310
  • 60
  • Tax fines
  • 81
  • 83
  • 163
  • Other
  • 4,560
  • 1,273
  • 1,265
  • 1,353
  • 1,463
  • 5,355
  • 1,423
Other Provision & Taxes
  • 1,161
  • 291
  • 307
  • 244
  • 204
  • 1,046
  • 278
  • Other provisions
  • 209
  • 55
  • 15
  • 17
  • 8
  • 95
  • 37
+Free provision reversal 35 35 +Free provisions
  • 105
  • 35
  • 35
+Other
  • 104
  • 20
  • 15
  • 17
  • 43
  • 95
  • 37
  • Tax
  • 951
  • 236
  • 292
  • 227
  • 196
  • 951
  • 241
TAS27 IMPACTS 483 148 8
  • 34
82 204 142
  • FX gains/losses
55 3
  • 92
  • 157
  • 245
  • Income on subsidiaries
439 146 82 91 82 400 142
  • Taxation
  • 11
  • 1
18 31 49

NET INCOME 3,674 862 1,076 530 938 3,407 1,041

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Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16 20

Summary Balance Sheet

1 Includes banks, interbank, other financial institutions 2 Includes funds borrowed and sub-debt

(TL million)

Mar-15 Jun-15 Sep-15 Dec-15 Mar-16

YoY Change Cash &Banks1 15,511 13,762 23,526 15,774 20,397 32% Reserve Requirements 19,844 20,073 21,967 21,286 21,178 7% Securities 39,536 40,799 41,147 42,641 41,831 6% Performing Loans 144,473 148,385 158,861 158,304 163,131 13% Fixed Assets, Affiliates & Associates 5,777 5,966 6,354 8,121 8,398 45% Deferred Tax 594 373 264 382 461

  • 22%

Other 6,520 6,574 8,607 7,835 8,932 37% TOTAL ASSETS 232,256 235,932 260,725 254,343 264,330 14% Deposits 128,803 132,043 149,358 140,899 149,021 16% Repos & Interbank 12,598 11,855 13,583 15,068 15,756 25% Bonds Issued 13,695 13,969 15,042 14,199 15,010 10% Funds Borrowed2 31,872 32,561 34,126 33,598 31,026

  • 3%

Other 17,970 17,805 20,470 19,598 21,877 22% SHE 27,317 27,700 28,146 30,981 31,640 16% TOTAL LIABILITIES & SHE 232,256 235,932 260,725 254,343 264,330 14%

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SLIDE 21

Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16

Key financial ratios

21

1 When annualizing Net Income for the remaining quarters, excludes non-recurring items (Income from NPL sale, fee rebates and extra specific provisions) 2 Excludes fee rebates, regulatory effects on general provisions, income on NPL sales, administrative & tax fines and free provisions 3 Please refer to slide 11 for details

Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Profitability ratios ROAE (Cumulative)1 14.5% 15.3% 12.5% 12.1% 14.1% Comparable ROAE2 15.0% 16.2% 14.0% 13.8% 14.4% ROAA (Cumulative)1 1.7% 1.8% 1.5% 1.4% 1.7% Comparable ROAA2 1.8% 1.9% 1.6% 1.6% 1.7% Cost/Income 56.1% 52.7% 56.9% 57.0% 52.9% NIM (Quarterly) 4.1% 5.1% 4.2% 4.9% 4.6% Liquidity ratios Loans/Deposits 112.2% 112.4% 106.4% 112.4% 109.5% Loans/Deposits adj. with on-balance sheet alternative funding sources3 79.3% 76.8% 72.8% 75.0% 75.1% Asset quality ratios NPL Ratio 2.3% 2.4% 2.3% 2.7% 2.7% Coverage 81.0% 81.1% 80.9% 81.0% 80.8% Solvency ratios CAR 14.5% 14.3% 13.8% 15.0% 15.1% Tier I Ratio 13.5% 13.3% 12.9% 14.1% 14.3% Leverage 7.5x 7.5x 8.3x 7.2x 7.4x

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SLIDE 22

Investor Relations / BRSA Bank-only Earnings Presentation 3M16 Investor Relations / BRSA Bank-only Earnings Presentation 3M16 22

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.

/garantibankasi

Investor Relations Levent Nispetiye Mah. Aytar Cad. No:2 Beşiktaş 34340 Istanbul – Turkey Email: investorrelations@garanti.com.tr Tel: +90 (212) 318 2352 Fax: +90 (212) 216 5902 Internet: www.garantiinvestorrelations.com