Yap Kredi 9M15 Earnings Presentation Resilient commercial - PowerPoint PPT Presentation

Yapı Kredi 9M15 Earnings Presentation Resilient commercial performance in a challenging environment 27 October 2015

Volatile operating environment marked by currency depreciation and rising rates Macro Environment 3.029 2.907 2014 2Q15 3Q15 2.846 2.754 2.638 GDP Growth, y/y 2.9% 3.8% - 10.9% 10.6% 9.9% 2.300 Inflation (CPI) , y/y 8.2% 7.2% 7.9% 10.1% 10.1% 2.201 10.0% 9.8% 2.126 2.257 9.3% 2.192 9.1% 72.5 65.4 61.8 Consumer Confidence Index 9.1% 8.2% 8.7% 5.9% 5.9% - 8.4% Current Account Deficit/GDP 8.6% 8.4% 8.3% 8.0% 7.3% Unemployment Rate 9.9% 10.4% 10.4% Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Benchmark Bond Rate Average CoF USD/TL Banking Sector Recent Developments  Slowdown in GDP growth, rising inflation and decreasing 2014 1Q15 2Q15 3Q15 consumer confidence Loan Growth 19% 7% 6% 6% Private 17% 6% 5% 5%  Significant currency depreciation (avg. 25% TL depreciation as of 30 Sep’15) and rising rates (Benchmark rate 11.3% vs 10.0% in 2Q); State 21% 10% 6% 7% improving trend as of Oct’15 Deposit Growth 10% 7% 6% 6%  Banking sector resilient with ongoing loan growth (state banks NPL Ratio 2.8% 2.7% 2.7% 2.8% continuing to differentiate) and only slight uptick in NPL ratio (+7bps 15.7% 14.9% 14.8% 14.1% CAR q/q) Notes: All 3Q macro data as of Sep’15 unless otherwise stated; GDP growth for 3Q15 based on YKB economic research forecasts; Unemplo yme nt based on seasonally adjusted figures as of Jul’15 3Q15 sector and private banks volume and NPL ratio data based on BRSA weekly data as of 2 Oct’15; CAR based on BRSA monthly d ata as of Aug’15 2 Average CoF: Weighted average cost of outstanding funding of the CBRT via open market operations including O/N repo, one-week repo and one-month repo

Commercial performance intact with strong focus on effectively managing the volatile environment +512k customers Ongoing volume growth and remix Solid commercial performance acquired in 9M15 Adjusted T. RoAE 2 Loan-Deposit Spread Core Revenue Growth 3Q vs ytd Δ (quarterly) (y/y) 2Q Δ ytd Δ Private State Market YKB YKB 19% Banks Banks Sector Share (bps) +15bps 11.7% 10.6% Loans 8% 22% 17% 24% 20% 10.5% +24 2.6% 2.5% 12% Consumer Loans 6% 21% 8% 9% 8% 9.9% +108 11.2% Companies 1 8.6% 9% 26% 22% 31% 25% 9.7% +8 Deposits 8% 27% 19% 21% 20% 10.5% +51 9M15 Demand 2Q15 3Q15 9M14 9M15 9M14 12% 47% 19% 16% 18% 10.7% +214  Above sector volume growth with significant  Core spread +15bps  T. RoAE at 10.6%  Strong growth in outperformance in value generating consumer loans thanks to upward loan core revenues excluding one-offs and demand deposits repricing and remix Resilient fundamentals Loans/Deposits Ratio 3 Asset Quality Capital Adequacy Ratio (bank-only) (bank-only)  LDR maintained at YKB YKB: -3pp ytd comfortable levels Flat q/q Sector (Sector: +1pp) ~+40bps in vs sector: +7bps 4 Oct’15 112% 111%  Better than sector NPL ratio 110% ~15% 109% 109% ~15% evolution 109% 109% 108% 3.6% 3.6%  CAR impacted by significant currency depreciation and MtM 14.0% 12.9% of AFS 2014 1Q15 1H15 9M15 2Q15 3Q15 1H15 9M15 excl. impact of currency and MtM of AFS (1) Total loans excluding consumer loans and credit cards (2) T. RoAE adjustments include (post-tax): Fixed asset revaluation (TL-104 mln), Fee rebates (TL+130 mln), One-off specific provisions (TL+84 mln), Additional generic provisions (TL+193 mln) 3 LDR (incl.TL bonds and bank deposits) for sector based on BRSA monthly data as of Aug’ 15 (3) NPL ratio for sector based on BRSA weekly data as of 2 Oct’ 15 (4)

Effective loan book remix via significantly above sector growth in value generating areas while maintaining conservative underwriting principles Loans Loan Remix (FX adjusted 4 ) 1Q vs 2Q vs 3Q vs ytd Δ 2014 Δ 1Q Δ 2Q Δ Market vs 2014 1% Share Private 9M15 Auto -1 pp YKB YKB Sector TL bln 29% Banks Comm -2 pp Total Loans 1 153.7 8% 5% 8% 22% 17% 20% 10.5% Install 32% Mortg TL 97.1 7% 5% 4% 16% 11% 13% 10.4% flat 27% Retail 29% FC ($) 18.6 -2% 3% 2% 3% -1% 3% 10.7% 38% GPL +3 pp Cards 14% 14% Consumer Loans 28.8 6% 8% 6% 21% 8% 8% 9.9% Mortgages 12.6 5% 7% 3% 15% 12% 14% 9.7% vs 2014 TL 46% General Purpose 15.8 9% 9% 9% 30% 5% 5% 10.1% Corp/ +3 pp 59% 57% Comm Credit Cards 19.4 2% 3% 4% 9% 6% 6% 21.4% 54% FC -3 pp Companies 2 105.5 10% 5% 9% 26% 22% 25% 9.7% Share q/q ytd y/y TL 48.9 9% 4% 2% 16% 15% 17% 8.8% Project Finance 59% 4% 9% 24% 2014 9M15 FC ($) 18.6 -2% 3% 2% 3% -1% 3% 10.7% LT Investments 32% 3% -1% -4% ST Loans 9% -7% -1% 0% SME 3 49.3 10% 15% 9% 37% 17% 16% 13.9% Comm. Install. 12.0 9% 4% 1% 14% 17% 19% 6.4% Loan Market Share  Loan growth +22% ytd (12% FX-adj 4 ) with solid growth in 4Q +75 bps (8% q/q) mainly driven by TL 16.2% 15.9% 15.9% 15.5% ytd Among private banks  Evident outperformance vs private peers (+75bps market share gain ytd) 10.5% 10.4% 10.4% +24 bps 10.2%  Ongoing remix towards value generating areas and Among ytd conservative approach to FX lending (+3% ytd, in line with total sector) Dec'14 Mar'15 Jun'15 Sep'15 Note: Balance sheet volumes for sector and private banks based on BRSA weekly data as of 2 Oct ’15. SME market share based on BRSA monthly data as of Aug’15 . FC-indexed loans included in TL loans (1) Total performing loans 4 (2) Total loans excluding consumer loans and credit cards (3) SME definition: <TL 40 mln annual turnover as per BRSA. YKB internal SME definition: <US$ 10 mln annual turnover (share of TL: 95%) (4) FX adjustment utilizes 2014-end USD/TL rate 2.32 as constant

Above sector deposit growth and ongoing funding diversification Funding Deposits Liability Breakdown ytd Δ Other Market 10% 11% 1Q vs 2Q vs 3Q vs Share 9M15 Shareholders’ Equity YKB Private Sector 11% 9% 2014 Δ 1Q Δ 2Q Δ Total Deposits 136.3 11% 5% 8% 27% 19% 20% 10.5% 21% Borrowings 21% TL 65.4 2% -3% 4% 4% 0% 5% 9.7% Repos 4% 3% FC ($) 23.3 10% 11% -1% 21% 11% 10% 11.5% Customer 1 132.4 9% 6% 8% 26% 20% 20% 11.0% Deposits 55% 55% Demand 24.4 14% 15% 12% 47% 19% 18% 10.7% TL Bonds 3.8 9% 2% 5% 17% -6% -4% 13.4% Repos 10.6 9% 0% 58% 71% 17% 15% 7.0% 2014 9M15 Borrowings 52.8 12% -2% 15% 27% 23% 27%  Deposit growth +27% ytd (11% FX-adj 2 ) driven by FC Segment Deposit Growth Demand / Total Deposits deposits due to shift by companies and private 9M15 (ytd) customers. Ongoing strong growth in TL in individuals Market Corp/Comm 21% share +214 bps  Strong evolution in demand deposits (+47% ytd vs 18% TL -26% 17% ytd FC ($) 32% +18% sector) Individual 26% 16% 15%  Increased usage of repo in 3Q due to favourable TL 20% FC ($) 9% rates (8.8% vs 11.1% avg TL time deposit cost). Share SME 19% in total still low (4% vs 7% peer average 3 ) TL 8% FC ($) 10%  Funding diversification ongoing (i) ~US$ 1.2 bln Private 29% syndication rolled over at 101% and improved pricing TL 0% (Libor/Euribor+0.75% vs 0.9% in 2014) (ii) US$ 575 FC ($) 31% 2014 1Q15 1H15 9M15 mln DPR transaction with 5-12 yr maturity Note: Balance sheet volumes for sector based on BRSA weekly data as of 2 Oct’1 5 except for TL bonds and borrowings which are based on BRSA monthly data as of Aug’15 (1) Excluding bank deposits (2) FX adjustment utilizes 2014-end USD/TL rate 2.32 as constant 5 (3) Peer average as of 1H15

Solid commercial performance partly overshadowed by one-off impacts, adjusted Tangible RoAE at 10.6% Income Statement Net Income (excl. one-offs) 1Q14 2Q14 3Q14 1Q15 2Q15 3Q15 q/q 9M14 9M15 y/y excl. one-offs Total Revenues 1,938 2,149 2,201 2,409 2,565 2,352 -8% 6,288 7,326 17% +5% 1,577 Core Revenues 1,862 2,090 2,067 2,150 2,526 2,466 -2% 6,019 7,141 19% 1,504 Operating Costs 935 1,029 1,009 1,185 1,228 1,249 2% 2,974 3,661 23% Operating Income 1,003 1,120 1,192 1,224 1,337 1,103 -18% 3,314 3,665 11% 1,442 1,274 Provisions 463 443 515 571 731 650 -11% 1,421 1,953 37% Specific Provisions 343 322 374 394 403 416 3% 1,039 1,213 17% 9M15 9M14 Generic Provisions 88 94 114 144 235 243 3% 296 622 110% Pre-tax Income 540 677 677 654 606 453 -25% 1,893 1,712 -10% Tangible ROAE 1 (excl. one-offs 2 ) Net Income 429 501 513 501 455 318 -30% 1,442 1,274 -12% 11.7%  Strong core revenue evolution (+19% y/y) driven by both fees and NII 10.6%  Costs +23% y/y due to growth investments and impact of fee rebates ; physical investment needs almost fully finalized as of 9M15. Excl. fee rebates, 11.2% 8.6% costs +20% y/y  Provisions +37% y/y mainly driven by credit card regulation and currency depreciation impact on generic provisions 9M15 9M14  Net income -12% y/y (+5% adjusted for one-offs 2 ) Note: (1) Tangible RoAE calculation based on the average of current period equity (excluding current period profit) and prior year equity. Annualised (2) T. RoAE adjustments include (post-tax): Fixed asset revaluation (TL-104 mln), Fee rebates (TL+130 mln), One-off specific provisions (TL+84 mln), Additional generic provisions 6 (TL+193 mln)