Q12020 Investor Presentation Albaraka Trk Participation Bank 20 - - PowerPoint PPT Presentation

Q1’2020 Investor Presentation

Albaraka Türk Participation Bank

20 May 2020

Agenda

1

Financial Highlights

2

Market Comparison

3

Appendix

Albaraka Turk – Q1’20 At a Glance 3

Balance Sheet Key Ratios (Million TRL) Q4’19 Q1’20 Q-Q (%) % Q4’19 Q1’20 YtD (bps) Total Assets 51.392 55.552 8,09

Total Funded Credits (Net)

29.749 33.890 13,92 CAR 14,97 14,49

• 48

Total NPLs 2.222 2.362 6,30 Deposits (incl. Interbank) 39.769 43.277 8,82 Tier 1 10,66 9,96

• 70

Shareholder’s Equity 3.822 3.780

• 1,09

NPL 7,19 6,71

• 48

Income Statement (Million TRL) Q1’19 Q1’20 Y-Y (%) Net Profit Share Income 196 373 90,12 Provisioning Stage III 42,61 47,08 447 Net Fees & Commissions 70 61

• 12,42

Provisions for Loan Loss 325 243

• 25.24

Net Profit Share Margin 2,10 2,41 31 Operating Expenses* 270 308 14,11 Net Profit 27 12

• 55,61

Cost/Income 55,89 54,41

• 148

* including personnel expenses

6

Q1’20 Main Highlights (Million TRL)

2,62 2,28 1,58 2,1 2,41

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Net Profit Share Margin*

* Trailing for last 4 quarters

4

44.594 43.886 46.295 51.392 55.552 26.498 27.771 27.140 29.749 33.890 30.628 33.045 34.794 39.769 43.277

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Total Assets Total Funded Credits Total Collected Funds

63 36 98 27 12

Q1'16 Q1'17 Q1'18 Q1'19 Q1'20 Net Profit 8,40 % 7,83 2,26 % 2,13 4,31 % 4,53

Q4'19 Q1'20

Common Equity Tier I Additional Tier I Additional Tier II

14,49 % 14,97 %

Funded Credits; 61,0% Securities Portfolio; 15,9% Other Liquid Assets*; 18,6% Other Assets; 4,6%

1.789 2.062 1.895 2.015 1.972 549 1.435 1.562 1.994 3.010 1.195 1.615 2.024 2.234 3.845

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Available for sale Held to Maturity Other Marketable Securities

3.533 5.112 5.481 8.827 6.243

7

Asset Composition

Composition of Total Assets (Q1’20) Liquid Assets (Million TRL)

5

Total Securities Portfolio (Million TRL) Securities Yield (%)

(*) Profit share income received from securities for the last 4Q/5Q average securities

*Liquid Assets includes Cash and Cash Equivalents, Financial Assets Measured at Fair Value through Profit/Loss, Financial Assets Measured at Fair Value through Other Comprehensive Income. * Other Liquid Assets includes Cash and Cash Equivalents and Derivative Financial Assets

7,32 8,75 10,06 11,60 12,92

Q1'20 Q4'19 Q3'19 Q2'19 Q1'19 15.510 12.663 15.266 17.215 16.114

34,8% 28,9% 33,0% 32,5% 29,0%

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Liquid Assets % of Total Assets

10,58% 10,76% 10,33% 10,92% 10,18%

2,62% 2,28% 1,58% 2,10% 2,41% 7,17% 7,46% 7,61% 7,13% 6,15%

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Credit Yield Net Profit Share margin Cost of Collected Funds

• 36

4

• 41
• 189

Q1'19 Profit Share Income Fees & Comm Trading Income Others Q1'20

1.302

6

Operating Performance Breakdown

Net Profit Share Income (Quarterly) (Million)

Key Movements in Income (Million TRL)

Cost & Yield Movement (%)

6

1.039 196 144 108 376 373

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

95 102 98

• 25
• 26
• 37

Fees and Commissions Received Fees and Commissions Paid

70 Q4’19

Net Fees and Commission Income (Million)

Q1’19 76 61 Q1’20

*USD equivalent

Total Funded Credits (including financial leasing, million) Yield on Performing Credits (%)

Profit share income received from credits for the last 4Q/4Q average credits

Funded Credits Portfolio

Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Corporate Credits 41.9 47.1 47.5 48.9 58,3 SME Credits 48.6 44.2 43.9 42.1 32,7 Retail Credits 9.6 8.7 8.6 9.0 9.1

46% 36% 17% 1% TRL USD* EUR* Other Composition of Total Funded Credits (%) Currency Composition of Total Funded Credits* (Q1’20)

*Including USD & EUR indexed credits According to BRSA definition

7

Q1’19 Q4’19 Q1’20

YtD Y-Y

TL Credits, TL

13.243 14.205 15.707 10,57% 18,61%

FC Credits, $*

1.549 2.259 2.453 8,59% 58,36%

FC Indexed, $*

1.669 364 319

• 12,36% -80,89%

Total Credits, TL

25.938 29.749 33.890 13,92% 30,66%

16,2% 17,9% 10,9% 10,7% 6,4% 5,70%

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Yield on TL Loans, adjusted, trailing Blended Yield, adjusted Yield on FX Denominated Loans, trailing

77,5% 78,6% 78,4% 80,9% 83,1% 15,2% 14,1% 13,8% 11,9% 10,2%

7,4% 7,3% 7,7% 7,2% 6,7% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Group I Group II Group III

29.103 7,36 7,31 7,74 7,19 6,71

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Gross Funded Credits by Groups (including financial leasing, million)

218 213 183 257 229

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Cost of Risk (bps) NPL Ratio (%)

Specific provisions for credits for last 4Q/ 5Q average credits Including financial leasing & accruals and rediscounts

Provisioning (Stage III)

Asset Quality 8

35.204

1.069 1.104 1.152 947 1.112 52,3% 51,9% 52,2% 42,6% 47,08%

0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0%

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Lifetime ECL Impaired Credits (Stage 3) (Million TRL) Provisioning Ratio (%)

27.778 28.491 30.881

NPL Formation Trend (Quarterly)

Asset Quality 9

315 154 243 529 266 78 70 164

64

120 237 84 79 465 145 369 128 119 189

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Additions (million TRL) Recoveries (million TRL) Net NPL Formation (million TRL) Net NPL Formation Rate (bps)

NPL Inflow Sector Distribution (Q1’20) 28,9% 12,5% 11,6% 15,6% 10,0% 9,3% 12,2% Manufacturing Construction & Real Estate Trading Textile Transportation Education Others

27,8% 34,5% 11,3% 12,6% 4,7% 9,0%

Manufacturing Construction Trading Energy Hotels&Restaurants Others Stage II Credits Sector Distribution (Q1’20)

3.582 2.362 3.634 1.527

84

1.112 Stage 2 Stage 2 Stage 3 Stage 3 Risk amount Collateral Provision Stage II-III Coverage Q1’20 (Million TRL)

677

*Includes construction of power plant projects

25% 16% 15% 13% 13% 23% 27% 27% 30% 31% 52% 57% 58% 57% 56% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Fund Borrowed* Current Accounts Participation accounts

Composition of Total Liabilities (Q1’20,%) Composition of Funding Base (Million TRL) 77,9% 11,8% 6,8% 3,5% Funds Collected Wholesale Funding Shareholders' Equity Others 49.820

25%

39.978

Funding Profile 10

*Fund Borrowed includes Funds Borrowed , Borrowings from Money Market and Subordinated Loans

45.697

(Million TRL) Q4’19 Q1’20 YtD Growth % Funds Collected (incl. Bank deposits)

39.769 43.227 8,8

Wholesale Funding

5.928 6.543 10,4

Funds Borrowed

4.535 4.952 9,2

Syndicated Loans

• Wakala

979 1.708 74,6

Issued Lease Certificates & Sukuk

2.743 2.420

• 11,8

Other

813 824 1,3

Sub-Ordinated Debt (Tier 2)

1.375 1.571 14,2

Interbank

18 20 10,9

Shareholders’ Equity

3.822 3.780

• 1,1

Paid in Capital

900 1.350 50,0

Other Liabilities

1.873 1.952 4,2

Total Liabilities

51.392 55.552 8,1

39.231

205 250

100 200 300

2025 >2030

Tier 1 Sukuk (Perpetual) Tier 2 Sukuk Maturity Profile of Liabilities (Million USD) 40.881

6,15% 7,13% 7,61% 7,46% 7,17% 12,95% 14,67% 15,26% 14,11% 12,63% 1,73% 2,14% 2,35% 2,50% 2,56% 0,27% 0,30% 0,40% 0,68% 0,94% Q1'20 Q4'19 Q3'19 Q2'19 Q1'19 Blended TL FC Precious Metal

37,1 37,7 17,8 7,4

TRL USD EUR Others

Total Funds Collected (Million TRL) Cost of Funds Collected*

*USD equivalent of FC accounts *Profit share expense to depositors for the last 4Q/5Q average participation accounts

Currency Composition of Funds Collected (Q1’20,%) Maturity Composition of Funds Collected (Q1’20,%)

35,1 18,5 38,8 3 4,5 Current Acc. Up to 1 month Up to 3 months Up to 1 year >1year

Funding Profile (Collected Funds) 11

Q4’19 Q1’20 YtD Funds Collected 39.769 43.277 8,8% Current Accounts 13.902 15.211 9,4% Current Accounts TL 4.199 4.385 4,4% Current Accounts, FC, $ 1.637 1.651 0,9% Participation Accounts 25.867 28.065 8,5% Participation Accounts TL 10.497 11.666 11,1% Participation Accounts FC, $ 2.593 2.500

• 3,6%

Off Balance Sheet Composition (%) LGs*-to-Total Assets

18,6% 18,8% 17,7% 17,0% 15,9% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Guarantees & Sureties (TRL million)

*Revocable credit limits not included.

Off Balance Sheet Growth 12

*Below 20% of LGs to Total Assets is targeted

40 60 55 69 55 7 10 8 10 10 53 30 37 21 35

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

LG LC Others

20.648 13.753 12.675 16.066 14.832

Q1’19 Q2’19 Q3’19 Q4’19 Q1’20

Growth (%)

YtD Y-Y

Letter of Guarantee

8.304 8.251 8.192 8.718 8.826 1,2% 6,3%

Letter of Credit

1.423 1.328 1.180 1.330 1.662 25,0% 16,8%

Others*

424 409 347 383 369

• 3,7%
• 13,0%

Total:

10.151 9.998 9.722 10.431 10.857 4,1% 7,0%

14

Income- Cost Dynamics 13

(Million TRL) Y-Y Notes Q1’19 Q1’20 % Net Profit Share Income

196 373 90,1%

Profit Share income decreased by 4,2% While Profit share Expenses decreased by 32,8% YoY. Downward cost of funding leading stronger Net Profit Share Income. Net Fee Income

70 61

• 12,4%

Circa 12,4 % Y-o-Y contraction in this line item is mostly stemming from new CBRT commissions on required reserves for FC deposits. Net Trading Income

67 26

• 61,5%

The FX gains has declined due to the decrease in demand caused by FX tax and USD 205 Million tier1 issuance changed to square position. Other Income

296 106

• 64,2%

Less Provision reversals led to other operating income being below last year. Provisioning

325 243

• 25,2%

Provisioning expenses decreased due to less NPL Inflow. Personnel Expenses

165 179 8,4%

Other Costs

105 129 23,2%

Increase in other expenses, which is above CPI, is stemming from legal dues (Taxes, Duties, Charges etc.) Net Profits

27 12

• 55,6

Agenda

1

Financial Highlights

2

Market Comparison

3

Appendix

Percent % Q4’19 Q1’20

Albaraka Türk Participation Banks Banking Sector Albaraka Türk Participation Banks Banking Sector CAR

14,97 18,04 18,43 14,49 18,64 17,90

NPL Ratio

7,19 4,53 5,27 6,71 4,09 4,98

Provisioning Ratio (Stage 3)

42,61 63,88 65,17 47,08 69,30 68,59

Loan/Deposits

74,80 78,21 106,00 78,31 78,72 104,02

Asset Yield

8,53 10,14 11,11 7,99 9,31 10,57

Asset Spread

2,33 3,49 3,80 2,63 3,76 4,22

Net Profit Share Margin

2,10 3,99 4,41 2,41 4,14 4,73

Op Costs / Avg. Assets

2,43 2,11 1,99 2,38 2,12 2,03

Cost/Income*

55,89 35,84 36,65 54,41 34,20 32,31

Credits / Branches (000‘TRL)

129,344 145,358 250,464 147,346 164,877 268,747

Staff / Branches

16,48 13,60 17,99 16,16 13,64 18,03

CA / Deposits

34,96 33,53 24,71 35,15 37,72 27,09

*Cost: Operating Costs, Income: NPSI, Net Fees and Commissions Income, Other Income Net Trading Income

Financial Ratios - Sector Comparison 15

Agenda

1

Financial Highlights

2

Market Comparison

3

Appendix

(Million TRL)

Q4’19 Q1’20 Growth

Cash and Balances with Central Bank

8.796 6.631

• 24,6%

Banks

4.187 3.699

• 11,7%

Financial Assets

6.226 8.803 41,4%

Funded Credits

29.749 33.890 13,9%

Cash Credits

28.415 32.583 14,7%

NPL

2.222 2.361 6,3%

Provisions (Stage III)

947 1.112 17,5%

Net Financial Leasing Receivables

244 259 6.2%

Associates

70 65

• 7,0%

Fixed Assets

1.547 1.540

• 0,4%

Assets Held For Sale and Investment

124 132 6,0%

Other Assets (inc. Tax Assets)

692 792 14,5%

Total Assets

51.392 55.552 8,1%

Funds Collected

39.769 43.277 8,8%

Funds Borrowed

4.535 4.952 9,2%

Debts

1.756 1.826 4,0%

Provisions (inc. Taxes)

135 145 7,9%

Tier II Sukuk

1.375 1.571 14,2%

Shareholders’ Equity

3.822 3.780

• 1,1%

Capital

900 1.350 50,0%

Capital Reserves (inc. Premium)

1.345 924

• 31,3%

Profit Reserves

1.430 1.493 4,4%

Total Liabilities

51.392 55.552 8,1%

Summary Balance Sheet 17

(Million TRL)

Q1’19 Q1’20 Growth

Profit Share Income

844 809

• 4,2%

Profit Share Expense

648 436

• 32,8%

Net Profit Share Income

196 373

90,1%

Net Fees and Commissions Income

70 61

• 12,4%

Fees and Commissions Received

95 98

3,7%

Fees and Commissions Paid

25 37

49,5%

Net Trading Income

67 26

• 61,5%

Other Operating Income

296 106

• 64,2%

Total Operating Profit

464 387

• 16,6%

Provisions for Loan Losses and Other Receivables

325 243

• 25,2%

Personnel Expenses

165 179

8,4%

Other Operating Expenses

105 129

23,2%

Operating Profit Before Tax

34 15

• 56,3%

Tax Provision

7 3

• 59,1%

Net Profit

27 12

• 55,6%

Summary Income Statement 18

THANK YOU

Disclaimer

THIS PRESENTATION AND THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL AND MAY NOT BE REPRODUCED, CIRCULATED, DISTRIBUTED OR PUBLISHED (IN WHOLE OR IN PART) OR DISCLOSED BY RECIPIENTS TO ANY OTHER PARTY. BY VIEWING THIS PRESENTATION, YOU AGREE TO BE BOUND BY THE FOREGOING LIMITATIONS. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase any securities of Albaraka Türk Katılım Bankası A.Ş., nor shall any part of it form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities

• f the Bank. The information contained in this document is published for the assistance of recipients, but is not to be relied upon authoritative or taken in substitution for the exercise of

judgment by any recipient. The Bank does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document or its content. Any purchase of shares of the Bank should be made solely on the basis of sound financial analysis on the part of the investor, with no liabilities arising against the Bank. The information used in preparing these materials was obtained from or through the Bank or the Bank’s representatives or from public sources. Although prepared in good faith and from sources believed to be reliable, no reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its accuracy, completeness or fairness. The information in this presentation is subject to verification, completion and change. The projections, forecasts and estimates of the Bank contained herein are for illustrative purposes only and are based on management’s current views and assumptions. Such projections, forecasts and estimates involve known and unknown risks and uncertainties that may cause actual results, performance or events to differ materially from those anticipated in this

• presentation. The Bank expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in this presentation to reflect any change in

events, conditions, assumptions or circumstances on which any such statements are based unless so required by applicable law. Investors should note many different risk factors could adversely affect the outcome and financial effects of the plans and projections described herein. As a result, you are cautioned not to place undue reliance on any forward-looking

• statements. The Bank, its advisers and each of their respective members, directors, officers and employees disclaim any liability in case projections and plans given in this document are not

realised.

Contact Us Investor Relations Address : Saray Mahallesi Dr.Adnan Büyükdeniz Caddesi No:6 34768 Ümraniye/ İSTANBUL E-mail : yim@albarakaturk.com.tr Tel : +90 216 666 03 03 Fax : +90 216 666 16 20 website : www.albaraka.com.tr