[PPT] - Yap Kredi Investor Presentation Yap Kredi Investor Presentation PowerPoint Presentation

SLIDE 1

Yapı Kredi Investor Presentation Yapı Kredi Investor Presentation

Credit Suisse Trading the Silk Route Conference Opportunities in Turkey MENA and Kazakhstan Credit Suisse Trading the Silk Route Conference - Opportunities in Turkey, MENA and Kazakhstan

London, 25-26 February 2009

SLIDE 2

AGENDA

Current macro and sector outlook 2008 achievements and latest developments 2008YE preliminary highlights and 2009 outlook Appendix: Summary 9M08 results*

2

(*) BRSA Consolidated

SLIDE 3

Starting from end of Sep‘08, Turkish economy negatively impacted by the acceleration of international financial and economic turmoil but still expected to close 2008 with positive GDP growth of ~1% but still expected to close 2008 with positive GDP growth of ~1%

Sharp slowdown in GDP growth

in 4Q08 to -5 5%; contraction of

Current Macro and Sector Outlook

GDP (y/y growth, %)

1Q: 6.7% 2Q: 2.3% 3Q 0 5%

in 4Q08 to -5.5%; contraction of industrial output starting from July 2008 onwards

Expected GDP growth of 0.8% in 5.3 9.4 8.4 6.9 4.6 0.8 3.4

3Q: 0.5% 4Q: -5.5%

Expected GDP growth of 0.8% in

2008 and -1.0% in 2009 vs average annual growth of 6.8% between 2002-2007

0.8

1.0

2003 2004 2005 2006 2007 2008F 2009F 2010F Main factors behind expected

sluggish economic growth in 2009:

Industrial Output (y/y growth, %)

15.0 20.0 1Q: 7.3% 2Q: 4.1% 3Q: -1.4%

Weak domestic demand and

consumer confidence

Weak foreign demand for

exports

10 0

5.0

0.0 5.0 10.0 15.0 4Q: -12.5%

Volatility in financial markets High exchange rates Increasing unemployment

17.6
20.0
15.0
10.0

Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08

3

Note: 2009 Forecasts as 17 February

J J N A S F D

SLIDE 4

Continued downward trend in inflation since 2H08 mainly driven by sluggish demand and falling commodity prices, also encouraging aggressive rate cuts by CBT

Current Macro and Sector Outlook

aggressive rate cuts by CBT

Inflation on an upward trend in 1H08 due

to surge in international food and energy

CPI inflation (y/y growth, %)

prices while on a downward trend in 2H08 driven by stagnant demand and rapid fall in commodity prices (CPI: 6.8% 2009F vs 10 1% 2008)

18.4 9 7 10.1

10.1% 2008)

Central Bank aggressively pursuing

easing cycle from Nov’08 onwards (525 bps rate cuts in policy rate to 11 5%) with

9.3 7.7 9.7 8.4 6.8 5.8 2003 2004 2005 2006 2007 2008 2009F 2010F

bps rate cuts in policy rate to 11.5%) with bond rates declining in parallel

As a result, economic activity to pick up

earlier than anticipated, also with the h l f i li d f th t t

Benchmark Bond and Central Bank Policy Rates (%)

25% 27%

help of implied further rate cuts

Limited depreciation of TL so far

Key risk factors for disinflation in 2009:

High risk perception and capital flight

14.8%

15% 17% 19% 21% 23%

High risk perception and capital flight Weak TL and strong exchange rate

pass-through

Possible increase in commodity prices

in 2H09

12.2%

11% 13%

Dec-07 Jan-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09

Bond rate (annual compound) CB ON rate (annual compound)

4

in 2H09

Note: 2009 Forecasts as 17 February Bond rate (annual compound) CB ON rate (annual compound)

SLIDE 5

Easing trend in current account deficit driven by deceleration in economic activity starting from end of Sep’08; positive contribution

f FDI to financing of current account deficit

Current Macro and Sector Outlook

f FDI to financing of current account deficit

Slowdown in exports in 4Q08,

along with weak global demand

Foreign Trade (USD bn)

along with weak global demand

Larger contraction in imports

coupled with stagnant domestic demand and falling commodity

107 132 110 129 170 202 155 184 60 100 140 180 220 260

demand and falling commodity prices

Expected decline in exports and

imports in 2009 by 17% and 23%,

20 60 2000 2001 2002 2003 2004 2005 2006 2007 2008F 2009F 2010F

Exports Imports

p y , respectively, driven by weak foreign and domestic demand

As a result, current account

Current Account Deficit (as % of GDP)

deficit becoming less of an external financing risk in 2009

In 2008, net FDI inflows reached

4.6

5 9 5 7

2.9
3.1
3.2
2.7
2.4
2.7
3.6
1.5
1.2
6
4
2

2 4

USD 17.7 bln, despite global problems; expected USD 12.5 bln net FDI in 2009

6.1
5.9
5.7
10
8

2000 2001 2002 2003 2004 2005 2006 2007 2008F 2009F 2010F

CA/GDP CA- FDI adj

5

j

Note: 2009 Forecasts as 17 February

SLIDE 6

Turkey less affected by the global financial turmoil than most other emerging market peers

5Y Credit Default Swaps (USD, bps)

emerging market peers

Turkey has been relatively less

Vs 3Q08

Turkey has been relatively less

affected by the global financial crisis as evidenced by comparative CDS spreads with major CEE countries

795 748 432

Russia Turkey

+179 bps +487 bps 1 175 b

Ongoing talks for a new IMF stand-by

deal providing further stability in Turkey vs most peers

413 833 795

Latvia Kazakhstan

+1,175 bps +570 bps 41 b

Expectation regarding the

completion of the IMF deal still continuing despite some

473 617 413

Romania Croatia

+417 bps +482 bps

recent uncertainty

Turkey is relatively less vulnerable in

terms of capital outflows vs other CEE i l f l d

172 245

Slovakia Poland Bulgaria

+425 bps +320 bps +183 bps

CEE countries as a result of lower and further reduced current account deficit

379 193

Hungary Czech Rep. Slovakia Current 4Q08 3Q08

+183 bps +260 bps +389 bps

6

g y 3Q08

SLIDE 7

Despite a challenging fourth quarter, the banking sector is still solid in terms of liquidity and capitalization

Banking Sector 1Q08 ∆ 2Q08 ∆ 3Q08 ∆ 4Q08 ∆ 2008 6-Feb-09 Total Loans 11% 8% 6% 2% 30%

1%

TL Loans 7% 10% 7%

4%

22%

2%

Current Macro and Sector Outlook

q y p

Solid loan growth in the first 3 quarters of

2008 followed by contraction in both TL and FC loans in all categories (except for credit

TL Loans 7% 10% 7% 4% 22% 2% FC Loans (in USD) 12% 6% 4%

6%

16%

4%

Consumer Loans 9% 8% 8%

2%

24%

1%

Mortgage 10% 7% 5%

2%

21%

1%

Auto

2%

1% 1%

10%
9%
5%

General Purpose 10% 10% 11% 1% 33% 0%

FC loans in all categories (except for credit cards) in 4Q due macroeconomic slowdown and banks’ cautious stance

Rising trend in NPL ratio as a function of

loan contraction and asset quality

General Purpose 10% 10% 11%

1%

33% 0% Credit Cards 5% 11% 4% 6% 29%

1%

Corporate 13% 7% 6% 2% 32%

1%

Total Deposits 8% 5% 3% 8% 27% 0% TL 7% 5% 7% 5% 27%

1%

FC (i USD) 0% 10% 3% 9% 3% 5%

deterioration in SME, credit cards and consumer loans

Banking sector still sound and healthy:

Implementation of intensive restructuring

in aftermath of 2001 crisis thoroughly

FC (in USD) 0% 10%

3%
9%
3%
5%

NPL Ratio 3.1% 3.0% 3.0% 3.5% 3.5% 3.8% Loans / Deposits 82% 84% 87% 82% 82% 81% CAR 16.0% 15.3% 16.1% 16.5% 16.5% n/a

in aftermath of 2001 crisis thoroughly addressing weaknesses

No imminent liquidity problems and

limited reliance on wholesale funding

Sector well capitalised with CAR well

Sector NPL Ratio

3 5% 3.8% 3.8% 6.3% 6.6% 7.1%

4 0% 5.0% 6.0% 7.0%

above regulatory limits vs peer countries

No toxic assets on banks’ balance sheets Limited FX risk

Effective measures taken by Central Bank:

O i f i t b k FX d it k t

Sector NPL Ratio

Credit Cards Total Loans

3.5% 3.5% 1.3% 2.3% 2.6% 3.8% 3.5% 3.7%

1.0% 2.0% 3.0% 4.0% ec-07 n-08 eb-08 ar-08 pr-08 ay-08 n-08 ul-08 g-08 p-08 ct-08 v-08 ec-08 n-09 eb-09

Opening of interbank FX deposit market

where CBT acts as intermediary

Reduction of FX reserve requirement

from 11% to 9% resulting in an additional foreign currency liquidity of ~USD 2.5 bln

Commercial Loans Consumer Loans De Ja Fe Ma Ap Ma Ju Ju Au Se Oc No De Ja 06-Fe

g y y 7

Source: Weekly BRSA data as of 26 December ** Deposit banks

SLIDE 8

Profitability of the banking sector impacted by the negative developments in the second half of 2008; ROAE at 16.6%

2007 2008 Banking Sector Jan-Dec Jan-Dec % chg Total Revenues 39,839 44,062 11%

Banking sector revenue growth of 11% y/y; driven by

Current Macro and Sector Outlook (mln YTL)

Net Interest Income 25,140 29,697 18% Non-Interest Income 14,700 14,365

2%
/w Fees & Comm.

7,963 9,695 22%

/w Other

6,737 4,670

31%

growth of 11% y/y; driven by 18% y/y growth in net interest income and 22% y/y growth in fee income. Non- interest income negatively

Operating Costs 18,714 22,075 18% HR costs 7,617 9,285 22% Non-HR costs 11,097 12,791 15% Operating Income 21,126 21,987 4%

interest income negatively impacted by FX losses as a result of exchange rate volatility in 4Q08 O i 18% /

Provisions 3,516 6,167 75% Pre-tax Income 17,610 15,819

10%

Tax 3,234 3,163

2%

Net Income 14,376 12,656

12%

Operating costs up 18% y/y, driven by branch network expansions throughout the year

, ,

Provisions up 75% on the back of asset quality deterioration accelerating from 2H08 onwards

22% 26%

Sector Return on Average Equity (%)

Net income down by 12% y/y ROAE at 16.6% as of Dec’08

16.6%

10% 14% 18%

8

10%

Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08

SLIDE 9

AGENDA

Current macro and sector outlook 2008 achievements and latest developments 2008YE preliminary highlights and 2009 outlook Appendix: Summary 9M08 results*

9

(*) BRSA Consolidated

SLIDE 10

Key 2008 achievements

Commercial business on track generating sustained and profitable growth
Growth driven by branch expansion

I d f k t t i t / d t l th h fi t i f b i d l lti i

Increased focus on key strategic segments/products, also through fine tuning of business model, resulting in

market share gains

Proven capability to combine profitability with growth/market share gains through constant focus on

revenues, customer satisfaction and efficiency

Continued attention to customer and employee satisfaction with clear improvement trend
Continued attention to customer and employee satisfaction with clear improvement trend
Strong leverage on innovation as another key driver for sustainable growth
Significant improvement in Alternative Delivery Channels bringing YKB back to leadership in innovation and

technology

Despite agressive branch openings improvement in C/I ratio due to rigid cost management & strong efficiency effort
Despite agressive branch openings, improvement in C/I ratio due to rigid cost management & strong efficiency effort
Sound positioning through prudent banking in a deteriorating environment
Proven capability to revise strategy to focus on profitable and healthy growth vs. market share driven volume

increase

Strong capital base

Strong capital base

Timely and successful capital increase of YTL 920 mln completed in Aug’08
Termination of divestiture processes of YK Sigorta / YK Emeklilik and YK Koray not constraining capital

adequacy and liquidity

Sound liquidity and funding position

q y g p

Secured USD 1 bln one-year syndicated loan facility in Sep’08 with all-in cost of Libor+0.75%
As declared in July08, fully paid back the USD 700 mln two-year syndication maturing in Dec’08
Stable deposit base (71% of TL deposits contributed by individuals)
Comfortable loans/deposits ratio

10

Comfortable loans/deposits ratio

SLIDE 11

Successful execution of branch network expansion in 2008

YKB’s Branch Network(1)

2007 +185 net

Total Revenues 32% above plan Realizations vs Plan(2)

2008 Net Openings 1Q08: +49 Latest developments

Performance of New Openings(2,3) Customer Business Generation by New

676 branches +185 net

penings

Total Revenues 32% above plan Total Cust. Business(2): 47% above plan Total Costs 16% below plan

861 branches

Territorial Distribution of Branches

1Q08: +49 2Q08: +66 3Q08: +44 4Q08: +26

Behind plan

Performance of New Openings( , )

(No. of Branches)

Customer Business Generation by New Openings since launch of plan(2)

(mln YTL)

Mass &

1,120

Territorial Distribution of Branches

Mid/small 7%

37%

38% 62%

In line with/ above plan SME Mass & Uppermass Top 4 cities Mid/small cities 93%

426 103 591 63% 57% 37% 43% 38%

As of end of 2008 YKB has 861(1) branches (vs 676 branches in 2007) with 9 9% market share

Deposits AUM Loans Cust. Business(4)

426 2007 2008

As of end of 2008, YKB has 861(1) branches (vs 676 branches in 2007) with 9.9% market share
185 net new openings in 2008, 223 net new openings since launch of plan in July 2007
While YKB remains committed to long term growth, as a result of acceleration of global volatility, branch

expansion plan for 2009 has been revised putting in temporary the targeted branch openings 11

(1) Including one off-shore branch in Bahrain (2) As of October 2008 (3) Including branches open for more than 2 months (4) Customer business: loans + deposits + AUM

SLIDE 12

Transaction migration to Alternative Delivery Channels continues to bring incremental benefits despite branch expansion g

Alternative Delivery Channel (ADC) Utilization* vs. Branch Utilization

Total of 1,629 advanced ATMs (Tele24 Plus) as of Nov’08 (+602 YTD)

Latest developments

55%

Utilization vs. Branch Utilization

Plus) as of Nov 08 (+602 YTD) (Total # of ATMs: 2,330) As a result of installation of advanced ATMs between July’07 and Nov’08:

69% 61%

Share of ADCs in total transactions

39% 47% 52% 54% 54% 55%

159% increase in ATM usage for

depositing cash

84% increase in ATM usage for Branch ATM

61%

33% 32% 32% 30% 14% 15% 14% 14% 15%

credit card payments Introduction of innovative services:

Barcode based ATM bill payment

system first in Turkey

Branch I t t & 14%

14% 14% 15%

system, first in Turkey

Coin dispenser functionality to

existing ATM network

Corporate internet platform Internet & Call Center

2008 IMI Conferences award for the “Best Call Center”, PC Magazine award for “Best Internet Bank”

(Launch of project) July 07 Dec 07 Mar 08 Jun 08 Sept 08 Nov 08

12

(*) All migration transactions with no limits and all customer types

SLIDE 13

While taking preventive measures in light of changed environment during the first nine months of 2008, YKB revised strategy to manage new scenario from Oct’08 onwards

Latest developments

manage new scenario from Oct 08 onwards

Measures already taken in 9M08 Additional new measures from Oct’08 onwards

R

i i f b th t il d t l i

Selective lending growth with

Profitability & Funding

Repricing of both retail and corporate loan margins

upward (inclusive of lending fees & commissions)

Selective lending growth with

significant upward repricing

Focus on ensuring liquidity while
ptimizing cost of funding

More selective criteria with regards to loan underwriting

and monitoring

Reduced branch authority in SME/Individual lending Strengthened collection process in credit cards & SMEs Reduced exposure to certain sectors

Credit

Stronger focus on asset quality

and credit risk

Review and reclassification of

entire client portfolio in terms of riskiness

Reduced exposure to certain sectors

(i.e. transportation, textile, construction)

Credit check on sizeable disbursements

Credit Process riskiness

Tightened application, scoring,

limit assignment and collateralization

Decreased loan-to-value; reduced

debt-to-income (i e auto loans) Cost Management & Efficiency

Revised budget internally Increased efficieny program release target Froze new hiring at HQ level Reduced discretionary costs (advertising events projects)

debt-to-income (i.e. auto loans)

Additional cost stretch on
perating expenses
Further push on efficiency

Efficiency

Reduced discretionary costs (advertising, events, projects)

Organic Growth

Close monitoring of revenue and profitability of new

branch openings

Branch network expansion put
n hold

13

SLIDE 14

AGENDA

Current macro and sector outlook 2008 achievements and latest developments 2008YE preliminary highlights and 2009 outlook Appendix: Summary 9M08 results*

14

(*) BRSA Consolidated

SLIDE 15

Preliminary YKB 2008YE results

Preliminary bank-only 1Q08 ∆

2Q08 ∆ 3Q08 ∆ 4Q08 ∆ 2008 Total Loans

11% 7% 7% 7% 35%

2008YE preliminary highlights

Total Loans

11% 7% 7% 7% 35%

TL

7% 10% 8% 1% 29%

FC (in USD)

8% 5% 5%

3%

15%

Total Deposits

7% 9% 2% 9% 30%

TL

5% 11% 4% 8% 31%

FC (in USD)

0% 12%

1%
11%
2%

7% loan growth in 4Q08 (2008: 35%) as a result of devaluation and 1% TL loan growth (2008: 29%) 9% deposit growth in 4Q08 (2008: 30%) as a result of devaluation and 8% TL deposit growth (2008: 31%) 31%) Revenues overall in trend with previous quarter; lower volumes compensated by positive trend in fees and commissions SME, credit card and consumer loans driving NPL ratio up, leading to increase in provisions in line with market trend Clear improvement in cost income vs 2007 despite some end of year seasonal pick up in 4Q CAR above 14% both at Bank level and at consolidated level

15

Note: The figures presented in the table above are preliminary BRSA Bank-only figures of Yapı Kredi Bank which are subject to change till official announcement

SLIDE 16

Yapı Kredi approach towards 2009

2009 Outlook

Low visibility on 2009 outlook and trends due to constantly changing operating environment and policy actions environment and policy actions 2009 budget based on management of such environment with a flexible approach and the aim to maintain profitability in line with 2008 Q t l b d t i t d t li t t / ff t t i d diti Quarterly budget review expected to align targets / efforts to revised conditions Expected 2009 revenue growth above 10% subject to market evolution as a combination

f sluggish volume growth and repricing

Increase in cost of risk (~35-40 bps vs 2008) Impact of increased cost of risk to be counterbalanced with additional cost cutting initiatives and efficiency improvement, resulting in cost growth slightly above 5% in 2009 (core costs almost flat vs 2008), with further improvement in cost/income vs 2008

Cost management
Headcount management (flat vs 2008; ongoing operational HC release)
Increased commercial productivity
Released salary pressure
No branch opening investment except for already committed openings

16

SLIDE 17

Objectives and priorities in 2009

In light of the macroeconomic slowdown, YKB will continue to realign its strategy and priorities with a stronger emphasis on maintaining profitability vs growth YKB will take advantage of this period in order to further improve its efficiency and productivity so as to be best

2009 outlook

YKB will take advantage of this period in order to further improve its efficiency and productivity so as to be best positioned for growth when macroeconomic conditions stabilize Continue to Focus on Long Term Actions to Achieve Sustainable Growth ■ Firm commitment to growth also through branch network expansion once positive signals of recovery are visible ■ Maintaining major strategic projects to continue to foster efficiency ■ Further improvement of divisionalised organization through revised segmentation criteria/new and enhanced service model (affluent banking, corporate and commercial banking) ( g g) ■ Maintaining profitable growth of credit card business (strengthen direct sales force, reduce merchant discounts, bonus point and installment expenses) ■ Optimization of revenues/RWAs (better pricing and capital allocation); ongoing search for RWA optimization measures to reduce capital absorption p p ■ Continued focus on improvement of customer satisfaction ■ Productivity enhancements on existing network through better MIS tools and revised incentive systems ■ Additional optimization at operational level ■ Continuation of transaction migration project to increase efficiency ■ Further systems integration to reduce running cost basis (migration of credit card operations to open platform) ■ Stronger collaboration among network and product factories (better integrate insurance/bancassurance to increase cross sell) 17 )

SLIDE 18

Priority actions/crash programs aimed at maintaining profitability and addressing current environment and addressing current environment

2009 outlook

Strong focus on monitoring collection and work-out Corporate/commercial: still sound asset quality with focus on reviewing portfolios to manage exposures at risk through strenghtened collateral or eventually exits/restructuring exposures at risk through strenghtened collateral or eventually exits/restructuring SME: reinforcement of monitoring; work-out unit set up mid-2008 to tackle and address increasing files at risk Credit Cards & Individuals: Continued centralization process with strong emphasis and additional resources for Asset Quality Continued centralization process with strong emphasis and additional resources for soft collection up to 90 days Revised approach to legal follow-up to improve collection and recoveries Strong emphasis on maintaining high liquidity position mainly by a sustained position on deposit market Still long on liquidity both in terms of FX and TL with: Signficant counterbalance capacity as a result of considerable bond porftolio and availability for repos and refinancings Conservative approach to FX lending to manage limited access to FX and internatonal Liquidity Suspension of branch expansion, not deviation Cutting of all discretionary costs pp g g markets Headcount freeze at HQ level and headcount release from subs Additional efficiency opportunities Revised approach to compensation in line with current environment Fine tuning of subsidiary business models to improve cooperation, avoid duplications and to exploit Cost Control 18 g y p p p p cost synergies; possible simplification of Group structure

SLIDE 19

AGENDA

Current macro and sector outlook 2008 achievements and latest developments 2008YE preliminary highlights and 2009 outlook Appendix: Summary 9M08 results*

19

(*) BRSA Consolidated

SLIDE 20

Key performance indicators

Consolidated Net Income

(mln YTL)

Consolidated ROE(*)

Summary 9M08 results (BRSA Consolidated)

725 1,102 1,077 28.5% 32.0% 31.3%

(2)

2.8 pp 49%

(2) (1)

9M07 9M08

Cost / Income Consolidated ROA(**)

( )

9M07 9M08 9M07 9M08 57.2% 50.5% 56.4% 50.6%

5.8 pp

2.24% 2.19%

(2) (3) (2)

0 10 pp

9M07 9M08 2.09% 2.19% 9M07 9M08

0.10 pp

9M07 9M08

20

(*) Calculations based on beginning of the year equity. Annualized (**) Calculations based on net income/end of period total assets. Annualized (1) Calculations based on restated equity and net income; ROE as of 9M07 was 28.7% based on reported equity and net income (2) Normalized to exclude the one-off effects of pension fund provisions on costs, general provision release on revenues and tax settlement expense on tax provisions in 1Q08. Also normalized to exclude one-off tax risk provision in 2Q08 (3) Normalized to exclude the gross-up effect of Superonline write-off on revenues and provisions in 2Q07

9M07 9M08

SLIDE 21

Net profit up 49%(1) y/y and 7%(1) q/q driven by positive commercial performance and rigid cost management despite worsening market conditions despite worsening market conditions

Income Statement, mln YTL

9M07 9M08 YoY YoYN(1) QoQN(2)

Revenues up 26% y/y, 19% if normalized(1) 3Q revenues

Summary 9M08 results (BRSA Consolidated)

Total Revenues 2,856 3,608 26% 19% 0% Net Interest Income 1,746 2,075 19% 19% 1% Non-Interest Income 1,110 1,533 38% 18%

3%

if normalized(1). 3Q revenues stable vs 2Q Revenue growth driven by 19% y/y growth in net

/w Fees&Comm.

755 1,020 35% 35% 11% Operating Costs

1,633
1,821

12% 7%

7%

HR

666
751

13% 13%

1%

interest income (stable NIM) and 35% y/y growth in fees and commissions HR and non HR costs grew

Non-HR*

724
816

13% 13%

10%

Other**

243
254

4%

29%
19%

Operating Income 1,223 1,787 46% 34% 8%

HR and non-HR costs grew by 13% y/y despite accelerated branch expansion plan at Bank level Total Costs up 12%

Provisions

197
383

94% 48% 11% Pre-tax Income 1,026 1,404 37% 31% 7% Tax

173
299

73% 54% 3%

level. Total Costs up 12%

y/y, 7% if normalized(1) due to rigid cost management Operating income up 46%

Net Income 853 1,105 30% 27% 8% Minority Interest

128
3

n.s. n.s. n.s. Consolidated Net Income 725 1,102 52% 49% 7%

g p y/y, 34% if normalized(1) Cost of risk at 1.11%, 1.16% if normalized(1)

21

(1) Normalized to exclude the one-off effects of pension fund provisions on costs, general provision release on revenues and tax settlement expense on tax provisions in 1Q08. Also normalized to exclude one-off tax risk provision in 2Q08. 2Q07 normalized to exclude the gross-up effect of Superonline write-off on revenues and provisions (2) 2Q08 normalized to exclude one-off tax risk provision (*) Non-HR costs include HR related non-HR costs, advertising, rent, SDIF, taxes and depreciation (**) Oher includes pension fund provisions and loyalty points on World card

SLIDE 22

Growth in core banking activities leading to further improvement of balance sheet mix p

Balance Sheet

bln YTL

9M07 2007 9M08 % YoY %YTD %QoQ

Loans up 27% ytd (44%

y/y). 3Q growth at 7%

Summary 9M08 Results (BRSA Consolidated)

Total Assets 54.3 56.1 65.9 21% 17% 2% Loans 25.5 28.7 36.5 44% 27% 7% TL 17.7 19.4 24.7 40% 27% 8% FC 7.8 9.3 11.8 53% 27% 5%

y/y). 3Q growth at 7%

Loans/Assets up to 55%

(vs 51% at YE07) while securities weight in assets down to 20% (vs 26% at

FC 7.8 9.3 11.8 53% 27% 5% Securities 14.6 14.5 13.2

10%
9%
8%

Deposits 32.6 33.7 40.3 24% 20% 2% TL 18.4 18.9 22.8 24% 21% 4%

down to 20% (vs 26% at YE07)

Deposits up 20% ytd (24%

y/y) with share of demand

FC 14.2 14.8 17.5 23% 18%

1%

Shareholders’ Equity 4.8 5.0 5.7 19% 15% 7% AUM 6.1 6.8 6.3 4%

8%
5%

deposits over total at 17.0% vs 16.6% in 2Q08

Loans / Deposits ratio at

91% (vs 85% at YE07), at a

Ratios 9M07 2007 9M08 ∆YoY ∆YTD ∆QoQ Loans / Assets 46.8% 51.2% 55.4% 8.6 pp 4.2 pp 2.6 pp Securities / Assets 26.9% 25.9% 20.0%

6.9 pp
5.9 pp
2.1 pp

Loans / Deposits 78 0% 85 2% 90 5% 12 5 pp 5 3 pp 4 2 pp

( ), comfortable level

Capital adequacy ratio* at

13.7% at Group level and 15 4% at Bank level

Loans / Deposits 78.0% 85.2% 90.5% 12.5 pp 5.3 pp 4.2 pp Capital Adequacy Ratio 13.4% 12.8% 13.7% 0.2 pp 0.9 pp 0.5 pp

/w Bank

12.9% 13.7% 15.4% 2.5 pp 1.7 pp 0.4 pp

15.4% at Bank level

Refocusing growth in TL

loans in 3Q 22

(*) Does not include full effect of YTL 920 mln capital increase. As of September 08, YTL 670 mln of capital commitment of KFS was incorporated in Tier 2 as approved by BRSA (YTL 330 mln in 1Q, YTL 340 mln in 2Q) . Including the full impact of capital increase, CAR would be ~16% at Bank level and ~ 14% at Group level Note: Loan figures indicate performing loans

SLIDE 23

Enquiries : Yapı Kredi Investor Relations Yapı Kredi Investor Relations yapikredi_investorrelations@yapikredi.com.tr

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