Yap Kredi Investor Presentation Yap Kredi Investor Presentation - - PowerPoint PPT Presentation

Yapı Kredi Investor Presentation Yapı Kredi Investor Presentation

Ata Invest 4th Turkish Investor Conference Ata Invest 4th Turkish Investor Conference

New York, 6-7 October 2008

AGENDA

Current Macro and Sector Outlook Current Macro and Sector Outlook Competitive Positioning & Strategy 1H08 Results (BRSA Consolidated) 1H08 Results (BRSA Consolidated) Performance by Business Unit (Bank-only) 3 Year Strategic Plan 3 Year Strategic Plan Annex

2

A young and fast growing country

Turkey 2007

Current Macro and Sector Outlook

Population, mln GDP Euro bn 71 477 9

• Avg. age of population

29 GDP, Euro bn Per capita GDP, Euro 477.9 6,769 Inflation (CPI) 8.4%

• S&P
• Fitch

BB- BB- COUNTRY RATINGS Delta vs 2002

• One of the fastest growing markets, 17th largest economy in the world
• Large and young population, concentrated in top 10 cities (44%)
• Moody’s

Ba3

• Single party government since December 2002 with strong Parliamentary majority (two-third) enables

government to react promptly

• EU and IMF key anchors for sustainable growth; the nature of the relationship with the IMF to be

determined around November following the completion of the last stand-by arrangement 3 dete ed a ou d

• e

be

• o

g t e co p et o

• t e ast sta d by a a ge

e t

Underpenetrated banking sector, an opportunity for fast growth

Branches Per Million Inhabitants Underpenetrated Banking Sector in Terms of Both Individual Banking Products and Commercial Lending

Current Macro and Sector Outlook

100% 120% 140%

40% 50%

573

Million Inhabitants

Loans to non-financial companies /GDP Total Loans(1) /GDP

0% 20% 40% 60% 80% 100%

0% 10% 20% 30%

Eurozone 2006

107

Turkey 2007

2002 2003 2004 2005 2006 Hungary Poland MU12 Turkey

2002 2003 2004 2005 2006 Hungary Poland MU12 Turkey

2006 2007

(Loans+Deposits)/GDP

Loans to Households(2)/GDP Housing Loans / GDP

20% 30% 40%

237%

20% 30% 40% 50% 60% 0% 10% 2002 2003 2004 2005 2006 Hungary Poland MU12 Turkey

73%

Turkey 2007 Eurozone 2006

0% 10% 20% 2002 2003 2004 2005 2006 Hungary Poland MU12 Turkey

4

(1) Excluding lending to credit institutions (2) Excluding credit cards

Growth and inflation impacted by global and political uncertainties

Uncertainties in global and local

political environment led to a slowdown

Current Macro and Sector Outlook

GDP and CPI inflation y/y growth (%)

political environment led to a slowdown in the economy in 2007

Further economic slowdown in 2008;

strong export performance expected to

5.3 9.4 8.4 6.9 4 5 4.6 18.4 9.3 7.7 9.7 8.4 11.0 7.8

g p p p contribute to GDP growth of ~4%

Halt in disinflationary trend due to high

energy and commodity prices

4.5 4.2 2003 2004 2005 2006 2007 2008F 2009F GDP growth CPI Current account deficit expected to

remain high, along with economic growth and high international

Current Account Deficit (as % of GDP)

commodity prices. Contribution of FDI expected to continue to help finance the deficit

2.5 3.7 4.6 6.1 5.7 6.5 6.7 2.1 3.2 2.7 2.4 2.7 5.4 5.3 C/A Deficit C/A Deficit, FDI adj. Ongoing global economic imbalances

hindering full realization of growth potential

2003 2004 2005 2006 2007 2008F 2009F

5

Operating environment in 1H08

1Q08

• Expansion of the financial turmoil internationally

Current Macro and Sector Outlook

Expansion of the financial turmoil internationally Global tightening in liquidity

• Generally favorable operating conditions in Turkey

Still declining interest rate trend Strong lending growth, no negative signs of deterioration in asset quality

• Upward shift in interest rate trend towards the end of 1Q

Loans repricing both on retail and corporate

2Q08

• Continuation of adverse global liquidity conditions
• Less favorable operating conditions in Turkey mostly driven by political uncertainty
• Less favorable operating conditions in Turkey mostly driven by political uncertainty

Some signs of slowing economy, increasing inflation, declining consumer confidence Start of tightening cycle (+100 bps increase in CBT policy rate to 16.25%(1)) in parallel with interest rate increases internationally Sl d i t il l di ith li ht i l f d t i ti i t lit t d Slowdown in retail lending, with some slight signal of deterioration in asset quality trend (i.e. SME)

• Higher cost of funding due to reversal of interest rate trend putting pressure on NIM despite

loans repricing upward

(1) As of end of June 2008. Latest CBT policy rate: 16.75%

6

AGENDA

Current Macro and Sector Outlook Current Macro and Sector Outlook Competitive Positioning & Strategy 1H08 Results (BRSA Consolidated) 1H08 Results (BRSA Consolidated) Performance by Business Unit (Bank-only) 3 Year Strategic Plan 3 Year Strategic Plan Annex

7

Yapı Kredi at a glance

FINANCIAL HIGHLIGHTS

Competitive Positioning (BRSA Consolidated Figures in YTL, 30 June 2008)

Total Assets (bln) 64.6

LARGE NETWORK & LEADING BRAND

Unique competitive advantages Performing Loans (bln) 34.1 Deposits (bln) 39.5 AUM (bln) 6 2

LEADERSHIP IN KEY SEGMENTS/PRODUCTS SEGMENT FOCUSED ORGANISATION ALREADY IN

PLACE

AUM (bln) 6.2

• No. of Credit Cards (mln)

7.3

• No. of Active Customers (mln)(1)

5.9

PLACE

SOLID RISK PROFILE QUALITY REVENUE GENERATION...

• No. of Branches(2)

858

• No. of ATMs

2,220

... WITH LARGE CUSTOMER BASE NOT YET

FULLY EXPLORED FOCUS ON EFFICIENCY AND CUSTOMER SERVICE

• No. of Employees (3)

17,323 Paid-in Capital (mln) 3,427

FOCUS ON EFFICIENCY AND CUSTOMER SERVICE STRONG SHAREHOLDERS

8

(1) Bank-only (2) Bank: 791 including 1 off-shore branch in Bahrain (3) Bank: 14,821

Divisional structure, with business lines and product factories, implemented in 2007 implemented in 2007

• No 1 in credit cards (23.0%)

Competitive Positioning

NO 1 PLAYER IN THE MARKET

• #1 in Factoring

(market share: 19 4%)

7 3 M d ** 628 b h 27 b h 7 b h 121 b h

L

No 1 in credit cards (23.0%)

Credit Cards Retail Private Corporate Commercial Product Factories (market share: 19.4%)

LEADING POSITION

7.3 M cards** ~289K POS 354 direct sales force ~240K merchants 628 branches 3,245 RMs 2,220 ATMs 27 branches 238 RMs 7 branches 88 RMs 121 branches 530 RMs

• #1 in Leasing

(market share: 15.1%) Mcap: YTL 748,7 mln

L

LEADING POSITION

• #2 in Mutual Funds

(market share: 18.5%)

Mass Upper Mass SME Affluent HNW UHNW

• #3 in Private Pension Funds
• #4 in Brokerage

(market share: 4.3%) International Operations (market share: 15.2%)

• #4 in Life Insurance

(market share: 7.0%)

Li t d

• #7 in Non-life Insurance

(market share: 5.9%) Mcap: YTL 1,184 mln

L

9

Branch numbers by segment exclude 2 Free Zone, 1 off-shore and mobile branches Market shares as of 30 June 2008, market capitalisations as of 23 September 2008

L = Listed

HNW= High Net Worth UHNW=Ultra High Net Worth **Including 1.3 mln virtual cards

Leadership in key segments/products on the back of a strengthened franchise, large network and leading brand

POSITIONING – June ´08

g g g

Competitive Positioning Key Competitors - % Rank

• Mkt. Sh. %

# of Branches Deposits Zir 15, İş 12, Ak 9 Zir 19, İş 14, Ak 11, Gar 11, Halk 9 3 5 9.7 9.6 Assets 5 9.2

TOTAL

Loans Ak 14, Garan 14, İş 13 4 10.3 Zir 14, İş 14, Ak 13, Gar 12 Consumer Loans Credit Cards Asset Management

Retail AuM + B k

Ziraat 15, Ak 13, İş 13, Gar 12, Vak 9 Gar 22, Ak 15, İş 13, Finans 10 İş 21, Gar 14

(1) (2)

2 18.5 6 7.0 1 23.0

Yapı Kredi

Brokerage

Brokerage Corporate

Non Cash Loans Cash Loans İş 6, Finans 5, RJ 5, TEB 4, Ak 4 Ak 14, Garanti 13, İş 13 Gar 14, İş 11

(3)

Fourth Largest Private Bank by Assets

(4)

4 4.3 15.0 4 9.6 1 Leasing Factoring Life Gar 14, Deniz 11 Gar 15, TEB 9, Fiba 7 Başak 22 Anadolu 21 Avivasa 9 1 15.1 19.4 7 0 1 5 AxaOyak 12, Anadolu 11, KoçAllianz 9 Non-Life

Insurance

Life Başak 22, Anadolu 21, Avivasa 9 Avivasa 23, Anadolu 20 Pension 7.0 15.2 5.9 5 3 7

(1) Excluding credit card loans (2) Outstanding balance market share (3) Equity trading volumes (4) Cash Loans excluding credit card outstanding and consumer loans

10

Strategy focused on ensuring accelerated growth, profitability and efficiency and efficiency

Key Strategic Guidelines Key Objectives

Strategic Guidelines

Key Strategic Guidelines Key Objectives Leadership in the higher return on capital and growth FOCUS ON 5 MAIN BUSINESS TARGETS:

Expand branch network significantly

segments/businesses Strong investment in

Maintain leadership in Credit Cards with growing

focus on profitability

Growth in SME Banking on the back of

g network development and customer satisfaction

Growth in SME Banking on the back of

underpenetrated SME market

Bring individuals segment towards higher

fit bilit Efficient cost/income, most effective sales force and

• utstanding risk

profitability

reactivating dormant/low activity client base increasing penetration through cross selling

di l di i l th h

g management

expanding consumer lending mainly through

development of the mortgage market

Strong focus on cost & efficiency 11

AGENDA

Current Macro and Sector Outlook Current Macro and Sector Outlook Competitive Positioning & Strategy 1H08 Results (BRSA Consolidated) 1H08 Results (BRSA Consolidated) Performance by Business Unit (Bank-only) 3 Year Strategic Plan 3 Year Strategic Plan Annex

12

1H08 Key performance highlights

1H08 Results (BRSA Consolidated)

• 740 mln YTL of consolidated net income, up 61% YoY, 55% if normalized (1), confirming positive profitability and

growth trend

• C

lid t d li d(1) ROE f 31 1% ( +5 4 Y YN(1)) lid t d t d ROE f 32 2%

• Consolidated normalized(1) ROE of 31.1%, (up +5.4 pps YoYN(1)), consolidated reported ROE of 32.2%
• 2,453 mln YTL of revenues, up 30% YoY, 19% if normalized(1), driven by solid commercial performance both in

net interest income (+20% YoY) and fees (+37% YoY)

• Further market share gains driven by growth in consumer (+83% YoY, +33% YTD) and SME lending (+72% YoY,

+24% YTD) More than doubled sector growth in general purpose loans (+55% YTD 169% YoY) +24% YTD). More than doubled sector growth in general purpose loans (+55% YTD, 169% YoY),

• Healthy, above market deposit growth (+17% YTD, +23% YoY) resulting in 9.6% market share (+20 bps vs YE07)
• Leadership position in credit cards maintained in terms of market share in outstanding volume (23.0%), total

issuing volume (22.1%) and number of credit cards (18.0%), with sound profitability despite margin compression

–

Exceeded 10 mln cards on World platform as a result of Fortis and Vakıf brand sharing agreements

• Accelerated branch expansion well on track and ahead of plan

–

3rd largest branch network in Turkey (up from # 4 position in March), 791 branches and 9.7% market share +115 net new openings YTD +153 since launch of plan in July 07

–

+115 net new openings YTD, +153 since launch of plan in July 07

–

Revenues of new branches 26% above plan, costs 16% below plan

• Cost / Income down to 51% (vs 57% in 1H07), confirming strong focus on cost management and sustainable growth
• NPL ratio down to 3.9% from 5.8% at YE07 (stable vs 1Q08), also benefitting from portfolio disposal in 1Q08 with

specific coverage at 74%

• Successful completion of 920 mln YTL rights issue (99.85% subscription achieved). CAR at 13.2% at Group

level; 15.0% at Bank level

• Ongoing process of non-core asset divestiture; including insurance and REIT (YK Koray)

13

(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 provision in 2Q08. ROE annualized Note: Throughout the presentation, normalized figures, indicated with “N”, are shown where applicable. Otherwise, stated figures are shown

Key performance indicators

Consolidated Net Income

(mln YTL)

Consolidated ROE(*)

1H08 Results (BRSA Consolidated)

25.7% 32.2% 31.1% 460 740 716

55%

(2) (2)

5.4 pp

(1)

1H07 1H08 1H07 1H08

Cost / Income Consolidated ROA(**)

(1)

2.3% 2.2% 58.5% 50.9% 57.3% 51.1%

6.2 pp

(2) (2)

0.2 pp

(3)

2.0% 1H07 1H08 1H07 1H08

14

(*) 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 1H07 was 26.2% 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 provision in 2Q08 (3) Normalized to exclude the gross up effect of Superonline write-off on revenues and provisions in 2Q07

On a normalized basis, net profit up 55% YoY(1), confirming positive results

• f improved commercial focus and tight cost management despite

accelerated branch expansion plan and less positive environment in 2Q accelerated branch expansion plan and less positive environment in 2Q

Income Statement, mln YTL

1H07 1H08 % YoY %YoYN(1)

Revenues up 30% YoY, 19% if normalized(1)

1H08 Results (BRSA Consolidated)

Total Revenues 1,881 2,453 30% 19% Net Interest Income 1,142 1,370 20% 20% Non-Interest Income 739 1,083 47% 17% / F &C 470 643 37% 37%

19% if normalized(1) Revenue growth driven by 20% YoY growth in net interest income and

• /w Fees&Comm.

470 643 37% 37% Operating Costs

• 1,101
• 1,249

13% 6% HR

• 443
• 497

12% 12% N HR* 491 551 12% 12%

37% YoY growth in fees and commissions HR and non-HR costs up 12% YoY despite

Non-HR*

• 491
• 551

12% 12% Other**

• 167
• 201

20%

• 29%

Operating Income 780 1,204 54% 36% P i i 131 251 92% 29%

12% YoY despite accelerated branch expansion plan at Bank

• level. Total Costs up

13% YoY 6% if

Provisions

• 131
• 251

92% 29% Pre-tax Income 649 953 47% 38% Tax

• 117
• 213

82% 54% N t I 532 740 39% 34%

13% YoY, 6% if normalized(1) Operating income up 54% YoY, 36% if

Net Income 532 740 39% 34% Minority Interest

• 72

n.s. n.s. Consolidated Net Income 460 740 61% 55%

normalized(1) Cost of risk at 1.07%, 1.15% if normalized(1)

15

(1) Normalized to exclude the one-off effects of pension fund provisions on costs, general provision release on revenues and provisions and tax settlement expense on tax provisions in 1Q08. Also normalized to exclude one-off tax provision in 2Q08. 1Q07 normalized to exclude the gross- up effect of write-off on revenues and provisions (*) 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

Continued growth momentum in core banking activities, with further improvement of balance sheet mix p

Balance Sheet

bln YTL

1H07 2007 1H08 % YoY %YTD %QoQ

Loans up 19% YTD (43% YoY) despite slowing

1H08 Results (BRSA Consolidated)

Total Assets 52.4 56.1 64.6 23% 15% 6% Loans 23.8 28.7 34.1 43% 19% 7% TL 16.2 19.4 22.9 41% 18% 10%

YoY) despite slowing demand in 2Q Loans/Assets up to 53% (vs 51% at YE07) while

FC 7.6 9.3 11.2 47% 20% 1% Securities 15.0 14.5 14.3

• 5%
• 1%
• 3%

Deposits 32.1 33.7 39.5 23% 17% 9% TL 18.0 18.9 21.9 22% 16% 11%

( ) securities weight in assets down to 22% (vs 26% at YE07) %

TL 18.0 18.9 21.9 22% 16% 11% FC 14.1 14.8 17.6 25% 19% 7% Shareholders’ Equity 4.4 5.0 5.4 23% 8% 6% AUM 6.0 6.8 6.2 5%

• 9%
• 6%

Deposits up 17% YTD (23% YoY) with share of demand deposits over total at 16.6% stable vs

Ratios 1H07 2007 1H08 ∆YoY ∆YTD ∆QoQ Loans / Assets 45.4% 51.2% 52.8% 7.4 pp 1.6 pp 0.4 pp Securities / Assets 28.6% 25.9% 22.1%

• 6.5 pp
• 3.7 pp
• 2.0 pp

1Q08 Loans / Deposits ratio at 86% (vs 85% at YE07), at a comfortable level

Loans / Deposits 74.1% 85.2% 86.3% 12.2 pp 1.1 pp

• 2.0 pp

CAR 12.61% 12.81% 13.17% 0.6 pp 0.4 pp 0.5 pp

• /w Bank

12.30% 13.67% 14.96% 2.7 pp 1.3 pp 0.4 pp

a comfortable level CAR* at 13.2% at Group level and 15.0% at Bank level

16

(*) For additional information, please refer to slide 5. As of June 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) Note: Loan figures indicate performing loans

Strong fee & net interest income growth as main drivers of improved revenue performance confirming strength of commercial activity

Total Revenues

(mln YTL)

g g y

YE07 BRSA Consolidated

Revenues / Avg. IEAs

1H08 Results (BRSA Consolidated) 7.6% 7.9% 8.1% 7.8%

2,453

100% 19%

YoY Growth % Comp

1H07 1H08N 1Q08N 2Q08

26% 14% 18% 1,881 ,

+63%

Dividend, Trading &

12% -13%

(1)

+30%

(1)

Cumulative Quarterly

25% 26% 14%

Revenue growth mainly driven by net interest income (+20% YoY) and net fees and i i (+37% Y Y)

+37%

Net Fees & Comms. Trading & Other

28% 37%

61% 56%

commissions (+37% YoY) Improved revenue mix with higher share of fees at 28%(1) (vs 25% in 1H07) and net interest income at 60%(1) in total

+20%

Net Interest Income

60% 20%

1H07 1H08

Revenues / Avg. IEAs up at 7.9% on a six- month cumulative basis (+0.3 pp YoY) and down at 7.8% in 2Q08 (-0.3 pp QoQ) impacted by reversal of declining interest rate trend

1H08N(1)

17

(1) Normalized to exclude the one-off effects on revenues of general provision release in 1Q08. 1Q07 normalized to exclude the gross-up effect of write-off on revenues

Solid net interest income performance despite a tougher operating environment in 2Q

Net Interest Income

(mln YTL)

1 370

20% 1H08 Results (BRSA Consolidated)

YoY Growth

(1H08 – 1H07)

BANK(1)

QoQ Growth

(2Q08 – 1Q08)

15% 13%

Subs

+8%

1,142 1,370

+20%

Interest Income +9% +5%

• Avg. IEAs volume

+11% +7%

• Avg. Interest, %
• 29 bps
• 31 bps

( )

I E A

( Q Q )

85% 87%

Bank

+22%

Interest Expense +2% +6%

• Avg. IBLs volume

+11% +8%

• Avg. Interest, %
• 76 bps
• 16 bps

I B L

1H07 1H08

Interest income up 9% YoY at Bank level and up

• Avg. Spread

+47 bps

• 15 bps

BANK

30% 26% 23% 13% 12%

5% QoQ, driven by volume growth, with increased weight of higher margin consumer and SME loans

Interest expense up 2% YoY at Bank level and up

6% QoQ, driven by increased cost of funding due Interest Earning Assets(2)

(bln YTL)

Interest Bearing Liabilities(2)

(bln YTL)

Other Other

44.3 53.9 41.5 50.8

21% 16% 14%

22%

4%

70% 74% 30% 54% 65% 33% 23% 13%

Q Q, y g to reversal of interest rate trend in 2Q08

Improvement of the overall spread (+47 bps) for

1H08 vs 1H07, but quarterly decline of 15 bps vs 1Q08 driven by higher cost of funding

Loans Securities Other Other Deposits 46% 16% 30%

1H07 1H08 1H07 1H08

18 1Q08 driven by higher cost of funding

(1) Based on quarterly BRSA bank-only financials (2) End of period

Loan growth driven by Consumer, SME and Commercial Banking, above the sector despite slowdown in the market

Composition of Total Loans(2)

1H08 Results (BRSA Consolidated)

Consumer and Commercial Installment Loan Quarterly Growth vs. Sector(1)

33 6% 32 9%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Consumer Loans

• 0.6%

8.0% 14.0% 20.4% 19.3% 11.6%

Sector 5.0% 10.6% 10.3% 10.9% 9.5% 7.8%

• Gen. Purpose
• 1.7%

14.1% 25.8% 38.3% 30.7% 18.3%

FC 33.6% 32.9%

p

Sector 9.1% 16.2% 13.2% 14.3% 10.8% 9.7%

Mortgage 2.8% 9.0% 12.5% 14.0% 15.5% 7.9%

Sector 5.2% 9.1% 10.6% 9.5% 10.3% 7.1%

Auto

• 9.3%
• 3.9%

0.2% 10.2% 6.7% 7.7%

FC Companies 20 8% 22.3% 21.6% Credit

Sector

• 6.0%
• 2.0%
• 1.7%

2.6%

• 1.4%

0.9%

• Comm. Instl.*

6.3% 11.7% 13.1% 17.3% 14.9% 7.0%

Sector 3.5% 14.4% 6.1% 8.0% 8.0% 8.0%

TL

78% 51%

6 0% 2 0% 1.7% 8.1% 8.8% 23.0% 20.8% Auto Credit Cards Commercial Installment*

Loan Growth by Business Unit(3)

SME YoY: 72% YTD: 24%

20.6% 24.6%

17% 39% 51% 24% 28% 7% 13% 19% 8% Retail Credit Cards Private Commercial Corporate

7.3% 8.1% 3.2% 6.0% 2.0% 1H07 1H08 Mortgage

• Gen. Purp.

Auto

YoY YTD

19

(1) Due to unavailability of consolidated data, sector figures are bank-only (2) Total performing loans as per BRSA consolidated figures (3) Loan growth as per MIS data. Please refer to Annex for definitions of Business Units (*) Proxy for SME loans as per BRSA reporting

Consistently strong performance in fees & commissions mainly driven by lending related fees

Fees up 37% YoY at Group level

GROUP: Net Fees & Commissions(1)

(mln YTL) 1H08 Results (BRSA Consolidated) 9% 10%

Fees up at 37% YoY at Bank level, mainly driven

by lending related fees

50% of Bank fees & commissions generated by

dit d 24% b l di d 9% b t

37% 470 643

S b

91% 90%

credit cards, 24% by lending and 9% by asset management

BANK: Composition of

Subs Bank 1H07 1H08

p Fees & Commission Received (1H08) BANK: Net Fees & Commissions

(mln YTL)

Insurance 1.6% Customer Derivative 4.1% Other*

549 722

composition 1H07 Credit Cards 55.7% Asset Mng. 10.5%

32%

Received

Credit Cards 50.1% Asset Management 8.9% Account

• Maint. 1.5%

9.9%

(123) (140) 426 582 1H07 1H08

Lending Related 18.4% Account Maint. 1.6% Insurance 1.5%

• Cust. Derivat.

0.3%

14%

Net Paid

37%

Lending Related 23.9%

1H07 1H08

20

Other* 12.1%

(*) Other includes money transfers, equity trading, campaign fees etc.

Cost growth under control despite accelerated branch opening plan at Bank level

GROUP: Composition of Costs

(mln YTL)

p

BANK: Composition of Costs

(mln YTL)

YoY %

1H08 Results (BRSA Consolidated)

YoY %

16% 17% 1,003 1,150

+15%

100% 6% 11%

• 28%

Growth % Comp

+21%

1,101 1,248

Subs(2)

0% +13%

100% 6% 8% 0%

Growth Comp

9% 8%

46% 45% 16%

48% 13%

Non HR** Other*

+13% 21%

B k

+15%

92% 6%

91% 92% 9%

38% 38% 1H07 1H08

+13%

1H08N(1)

40% 13%

HR

Bank

1H08N(1) 1H07 1H08 1H08N( )

• Total Group costs, up 13% YoY, 6% if normalized(1), driven by Bank costs (up 15% YoY, 6% YoY if normalized(1))
• Total Bank costs driven by 13% YoY increase in HR costs and 13% YoY increase in non-HR costs
• Bank costs impacted by accelerated network expansion, accompanied by tight control on running costs (0% growth

target in ‘08 budget) as well as ongoing efficiency measures (+400 headcount released from operational back office

1H07 1H08

target in 08 budget) as well as ongoing efficiency measures (+400 headcount released from operational back-office in 1H08 to be deployed in new branches) – Bank costs up 12% QoQ(1) driven by 15% QoQ increase in non-HR costs (impacted by higher advertising expenses in 2Q in comparison with a low 1Q) and 7% QoQ increase in HR costs (impacted by salary increase)

• Other Bank costs up 21% YoY driven by one-off pension fund increase partially compensated by 33% YoY decrease

21

(*) Includes pension fund provision expense and loyalty points on Wold card (**) Non-HR costs include HR related non-HR costs, advertising, rent, SDIF, taxes and depreciation (1) Normalized to exclude the one-off effects of pension fund provision in 1Q08 (2) Including consolidation adjustments

in World loyalty point expenses

Accelerated branch openings well on track and ahead of plan

• No. of Bank Branches
• As of end of June, YKB has the

3rd largest branch network in Realized Performance of New Openings vs. Plan

1H08 791 115 net openings

3rd largest branch network in Turkey (up from # 4 position in 1Q) with 9.7% market share in terms of number of branches

• No. of openings:

13% above plan Total Cum. Revenues 26% above plan

End-2009 Target: ~1,000 branches

160 net openings YTD (FY08 target achieved) 836 23 Sept 1H08 2007 676 791 115 net openings 82 openings (67 net)

• 153 net new openings as of

end of June since launch of plan in July 07 (51 in 1Q08 and 64 in 2Q08)

Total Cust. Business(2): 48% above plan Total Costs 16% below plan

• ~1,500 additional recruitments

to support the plan since launch (of which 215 in 2Q08)

• Total Bank branches at 791(1)

Performance of New Openings(3)

(No. of Branches)

Customer Business Generation by New Openings since launch of plan

(mln YTL)

778

• Total Bank branches at 791

as of end of June, covering 70 cities as of end of 2Q (59% in top 4 cities vs 63% at YE07)

• Of the new branch openings in

In line with/ Behind plan

399

Mass & Uppermass

778

9% 62%

• Of the new branch openings in

1H08, 32% in top 4 cities, 68% spreading throughout the country

In line with/ above plan

309 70

Deposits AUM Loans Cust. SME 91%

38%

22

(1) Including one off-shore branch in Bahrain (2) Customer business: loans + deposits + AUM (3) Including branches open for more than 2 months Note: All figures indicated on this page are as of June 2008 unless otherwise indicated and refer to Bank only

Deposits AUM Loans Cust. Business(2)

Aggressive transaction migration to ADCs continues to bring incremental benefits despite accelerated branch expansion

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

Total of 1,375 advanced ATMs (Tele24

1H08 Results (BRSA Consolidated)

Utilization vs. Branch Utilization

Total of 1,375 advanced ATMs (Tele24 Plus) as of 1H08 (+348 YTD) (Total # of ATMs: 2,220) As a result of installation of advanced

68% 61%

Share of ADCs in total transactions

ATMs between July 07 and June 08:

• 107% increase in ATM usage for

depositing cash 69% increase in ATM usage for

Branch ATM

39% 47% 52% 54% 61%

• 69% increase in ATM usage for

credit card payments

• 10% increase in ATM usage for

withdrawing cash

Branch I t t &

39% 33% 32% 15% %

Launch of new internet platform for corporates & SMEs (June 08) expected to trigger increase of usage in 2H08

Internet & Call Center

14% 15% 14%

Leadership of internet platform and call center confirmed by PC Magazine 2008 award

(Launch of project)

July 07 Dec 07 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08

23

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

Successfully completed YTL 920 mln rights issue

Capital Adequacy Ratio

Capital increase aimed at:

• further supporting long-term growth

plan and leadership ambitions,

15.5%

p p ,

• reducing leverage, and
• strengthening capital base to provide a

cushion for regulatory changes and financial volatility

14.61% 14.96%

Full capital increase effect

13.6%

Full capital increase effect

financial volatility Paid in capital up by 920 mln YTL to 4,347 mln YTL KFS, controlling shareholder, fully took up

12.70% 13.17%

its rights of 81.8% (~750 mln) 99.85% subscription achieved Remaining ~YTL 1.4 mln (nominal) rump sold on the ISE between 7 8 and 11 August

Mar-08 Jun-08 Mar-08 Jun-08

(1) (1)

sold on the ISE between 7,8 and 11 August

GROUP BANK

* Subject to obtainment of all regulatory approvals (1) As of June 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)

24

Preventive measures taken to sustain growth and profitability in view of economic slowdown and macro/political uncertainty p y

1H08 Operating Environment

Under such macro conditions, Yapı Kredi confirms its commitment to profitable growth by:

Continuing investment in sustainable growth

Cost Management /

Giving higher priority to profitability and healthy growth vs market share driven volume increase Focusing on cost management coupled with tight control on running costs

• Repricing of both

More selective criteria Revised budget No deviation from

Pricing / Profitability Credit Process Cost Management / Efficiency Organic Growth

p g retail and corporate loan margins upward (inclusive of lending fees & commissions) with regards to loan underwriting and monitoring

Reduced branch

authority in g internally and took active steps to take costs under control

Increased efficieny

program release target accelerated branch

• pening plan

Close monitoring of

revenue and profitability of new authority in SME/Individual lending

Strengthened collection

process in credit cards & SMEs

Reduced exposure to

program release target from ~500 headcount to ~750 headcount

Froze new hiring at HQ

level R d d d ti i / profitability of new branch openings

Reduced exposure to

certain sectors (i.e. transportation, textile, construction)

Reduced advertising/

communication budget 25

NPL ratio down to 3.9% from 5.8% at YE07 (stable vs 1Q08), also benefitting from portfolio disposal in 1Q08 benefitting from portfolio disposal in 1Q08

Gross and Net NPL Ratio(1), Specific Coverage General Provisioning

1H08 Results (BRSA Consolidated)

80.3% 79.8% 75.0% 73.5%

7.0% 5.8% 5.7% 5.3% 3.9% 3.9% 1.5% 1.2% 1.0% 1.1% 1H07 2007 1Q08 1H08 1.9% 1.2% Standard Watch

• More selective criteria with regards to underwriting and

monitoring of loans; strenghtened collections process

1H07 2007 1Q08 1H08 Gross NPL Ratio Net NPL Ratio Standard Watch 2007 1H08

Cost of Risk(2)

• SME scorecard project positively progressing, with

expected completion within 2008

• New NPLs driven by SMEs and credit cards in line with

expectations with no material deterioration in overall asset

Total Cost of Risk

1.06% 1.15%

p quality, but higher level of attention on SMEs

• Normalized cost of risk at 1.15% impacted by higher general

provisions; specific cost of risk at 0.91%, stable vs 2007

Specific Cost of Risk

(3) (4)

0.91% 0.91% 2007N 1H08N

26

(1) Excludes factoring receivables and financial lease receivables (2) Cost of risk = total loan loss provisions / total gross loans (3) Normalized to exclude the gross up effect of write-off in 2Q07 (4) Normalized to exclude the one-off effect of general provision release in 1Q08

2007N 1H08N

AGENDA

Current Macro and Sector Outlook Current Macro and Sector Outlook Competitive Positioning & Strategy 1H08 Results (BRSA Consolidated) 1H08 Results (BRSA Consolidated) Performance by Business Unit (Bank-only) 3 Year Strategic Plan 3 Year Strategic Plan Annex

27

Revenue performance by Business Unit

QoQ

(2Q08 – 1Q08)

• vs. Budget

I d i l t i

Weight in Bank Revenues Drivers of revenue growth

Performance by BU

YoY

(1H08 – 1H07)

Revenues

(YTL mln)

583 Retail

9% 25%

• Improved commercial momentum in

consumer and SME lending coupled with accelerated branch expansion

32%

+

426 Credit Cards*

0.2% 8%

• Higher revolving ratio and fee collection

despite higher cost of funding and continuation of interest rate cap reduction by Central Bank

24%

=

63 Private

11% 41%

• Growth in customer business,

positively impacted by performance of structured deposits

3%

+

105 Corporate

7% 4%

• Repricing focus to improve return on

capital coupled with selective volume growth

6%

• 300

Commercial

6% 25%

• Strong volume growth with increased

focus on revenue oriented initiatives

17%

+

28

(*) Net of loyalty point expenses on World cards Note: all figures based on MIS data

Diversified revenue composition driven by an increasingly retail focused loan portfolio and high quality deposit mix p g q y p

Performance by BU

Revenues & Volumes by Business Unit(1) 1H08 (Bank-only)

32.3% 28.0% 39.2%

Retail (incl. SME)

21.9% 5.8% 21.2% 3.5% 0.7% 24.4% 23.6%

Credit Cards(2) Private C t

16.6% 28 2% 21.0%

Corporate Commercial T

18.2% 28.2% 15.3% Revenues Loans Deposits

Treasury & Other

(3)

29

(1) Please refer to Annex for definitions of Business Units (2) Net of loyalty point expenses on World card (3) Other revenues adjusted by NPL sales and collections for 1Q08 Note: Loan and deposit allocations based on monthly averages (source: MIS data)

AGENDA

Current Macro and Sector Outlook Current Macro and Sector Outlook Competitive Positioning & Strategy 1H08 Results (BRSA Consolidated) 1H08 Results (BRSA Consolidated) Performance by Business Unit (Bank-only) 3 Year Strategic Plan 3 Year Strategic Plan Annex

30

Key pillars of 3 Year Strategic Plan (2008-2010)

3YP centered on ambitious organic growth via network expansion strong commercial focus accompanied by continuous

3 Year Strategic Plan

• ~340 branch openings between 2008-2010 to exceed 1,000 branches in 2010

ambitious organic growth via network expansion, strong commercial focus accompanied by continuous attention on costs and on capital management, with increasing focus on customer satisfaction Network

• 340 branch openings between 2008 2010 to exceed 1,000 branches in 2010
• Acquire new customer business with increasing presence in mid size cities
• Rapid growth in SME segment; profitable growth in mortgage and consumer lending
• Maintain leadership in credit cards with growing focus on profitability

Network Expansion

• Maintain leadership in credit cards with growing focus on profitability
• Reinforce leadership in Private and Affluent segments also through introduction of new

enhanced service model

• Continuous strenghtening of Commercial segment based on profitability and return on capital;

focus on overall client/product profitability in Corporate segment

Strong Commercial Focus

p p y p g

• Productivity enhancements on existing network, also leveraging on strong collaboration

among network and product factories

• Continuous strong focus on efficiency improvement and tight cost management

Continuous Attention on Cost/Income

g y p g g

• Active strategic portfolio management for better capital usage/allocation
• RWAs reduction measures to reduce capital absorption and boost value creation

Capital Management

p p 31

Key Targets (2010)

Revenue Growth (CAGR 2007-2010) ~18%

3 Year Strategic Plan

ROE in the range of 20% Cost / Income <50% NPL Ratio <3% Specific Cost of Risk ~1.0% Number of Branches** ~1,000 Capital Adequacy Ratio ~13%* , Full Time Employees** ~17,000

32

Source: 3 Year Strategic Plan based on IFRS YK Group financials (*) Both at Bank and Group level. Including possible impact of Basel II. If excluded, CAR at YK Group and Bank level: ~14% (**) At Bank level. At Group level, No. of Branches: ~1,100, No of FTE: ~20,000

AGENDA

Current Macro and Sector Outlook Current Macro and Sector Outlook Competitive Positioning & Strategy 1H08 Results (BRSA Consolidated) 1H08 Results (BRSA Consolidated) Performance by Business Unit (Bank-only) 3 Year Strategic Plan 3 Year Strategic Plan Annex

33

Annex

• Detailed performance by Business Unit
• Detailed performance by Business Unit
• Other

34

Definitions of Business Units

Retail:

Annex

• SME: Companies with turnover less than 3 mln USD
• Uppermass: Individuals with assets between 10K -70K USD
• Mass: Individuals with assets less than 10K USD

Commercial: Companies with annual turnover between 3-50 mln USD Corporate: Companies with annual turnover above 50 mln USD Private:

• Ultra High Net Worth: Individuals with assets above 500K USD
• High Net Worth: Individuals with assets between 150K - 500K USD
• Affluent: Individuals with assets between 70K – 150K USD

35

53% of retail banking revenues generated by SME business, constituting 7% of total retail clients

Retail

Retail Banking(1) - Composition of Active Clients & Total Revenues

(YTL 1H08)

g

~420K active SME clients ti 53% f t t l R t il

Performance by BU

7%

(YTL, 1H08)

583 mln

generating 53% of total Retail revenues Highest rate of growth on an annual basis driven by SME segment (+31%

SME

YoY Growth

5.8 mln +25% 8.8 bln 14.3 bln

7% 7% 53% 49% 19% basis driven by SME segment ( 31% YoY) Mass sub-segment generating 31%

• f total Retail revenues with ~5 mln

Upper Mass +31%

54%

clients

Mass sub-segment revenues growing at 21% YoY U b t t 86% 16% 19% Uppermass sub-segment generates 16% of total Retail revenues

Mass +15%

31% 32% 27%

+21%

# of Clients Revenues Loans Deposits

36

(1) Please refer to Annex for definitions of Business Units

Retail (mass & uppermass) banking driven by accelerated branch expansion and focused growth in consumer lending,

• utperforming market and peers

Retail (Mass & Uppermass)

• utperforming market and peers

Mln YTL 1H07 1H08 YoY YTD Revenues 229 273 19%

• Performance by BU

Retail banking revenues up 19% YoY driven by improved commercial momentum in

Revenues/

• Cust. Business(1)

Revenues 229 273 19% Loans 2,454 4,485 83% 33% Deposits 10,449 11,532 10% 6% AUM (eop) 2, 356 2,498 6%

• 6%

commercial momentum in consumer lending(2) as well as branch expansion General purpose loan growth mainly due to implementation of

3.10% 3.07%

% of Demand in R. Deposits 16.1% 14.5%

• 1.6 pp
• 0.3 pp

% of TL in Retail Deposits 63.4% 69.2% 5.8 pp 1.7 pp % of TL in

y p CARMA(3) Auto loan market share improving due to partnerships (Ford Finans)

% of TL in Retail Loans 100% 100% 0 pp 0 pp

Upward loan repricing starting from February’ 08 accompanied by

• ngoing efforts on improving

deposit pricing

1Q08 2Q08

5.4% 5.8% 7 3% 7.6% 7.7% 9.5% 10.3%

Mortgage Market Share(2)

• Gen. Purpose Loan Market Share(2)

240 bps 220 bps

Auto Loan Market Share(2)

90 bps 3.4% 3.4% 3.8% 4.6% 6.8% 6.8% 7.0% 7.3% 8.1% 8.1% 8.2% 8.9%

As of 12 Sept:

6.2%

As of 12 Sept:

8.1%

As of 12 Sept:

11.0%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

37 37

Note: all loan and deposit figures based on monthly averages except for revenues/customer business ratio which is based on 3-month average. MIS data (1) Customer business: Loans + Deposits + AUM (2) Consumer lending includes loans that are granted to individuals only. Market shares based on BRSA bank-only figures (3) CARMA= Centralized Automated Risk Management Approach based on loan offerings with pre-approved limits for ~1.3 mln existing customers

SME banking generating highest revenue growth among retail sub-segments due to strong volume increase

Retail (SME)

g g

Performance by BU

Revenues/ (Customer Business(1))

Mln YTL 1H07 1H08 YoY YTD Revenues 237 310 31%

• (Customer Business

)

Revenues 237 310 31% Loans 2,505 4,317 72% 24% Deposits 2,518 2,752 9%

• 6%

AUM (eop) 441 498 13%

• 20%

8.55% 8.81%

% of Demand in SME Deposits 37.0% 38.4% 1.4 pp 5.2 pp % of TL in SME Deposits 64.3% 65.7% 1.4 pp

• 1.9 pp

% of TL in SME Loans 97.6% 97.6% 0.0 pp 0.2 pp

1Q08 2Q08

SME revenues up 31% YoY driven by consistent focus on lending as well as branch expansion

1Q08 2Q08

~45K SME clients acquired during first 6 months of 2008 (total number of SME clients: ~420K) SME loans up 72% YoY driven by dedicated service model and unique product offerings Increased focus on credit risk management resulting in limitations on branch manager authority. Launch of new SME scorecard planned within 2008

38 38

Note: all loan and deposit figures based on monthly averages except for revenues/customer business ratio which is based on 3-month average. MIS data (1)Customer business: Loans + Deposits + AUM

Solid revenue contribution by credit cards in line with budget, despite regulatory changes putting pressure on margins

Credit Cards

p g y g p g p g

~ 659K new World cards issued and +155 personnel added to Direct

1H07 1H08 YoY Revenues (mln YTL) 456 491 8%

Performance by BU

p Sales Force (total number: 354) in 1H08 to maintain leadership position Credit card revenues up 8% YoY

Net Revenues(1) (mln YTL) 375 426 14% # of C. Cards(2) (mln) 6.5 7.3 12% # of Merchants (ths) ~203 ~240 18% # of POS (ths) ~ 219 ~289 32%

Credit card revenues up 8% YoY and profitability sustained in 2Q08 due to higher revolving ratio despite higher cost of funding

# of POS (ths) 219 289 32% Revolving Ratio (%) 30.9 31.7 0.8 pp Activation (%) 82.9 86.5 3.6 pp

Credit Card Volumes & Market Shares(3)

Volumes (bln YTL):

7.0 19.2 18.7

Focus on optimizing loyalty point expenses Co-branding agreement with Fortis and Vakıf launched in June and

Credit Card Volumes & Market Shares

Market Shares: 23.0% 22.1% 21.5% 18.0%

and Vakıf launched in June and August , respectively. Implementation

• f agreement with Anadolu planned

within 2008 8 h l di d

Outstanding Issuing Acquiring

• No. of Cards

8th largest credit card programme in Europe with $23.5 bln of issuing volume in 2007, according to recently published The Nilson Report

#1 #1 #2 #1

39 39

(1) Net of loyalty point expenses on World card (2) Including virtual cards (1H07: 1.2 mln, 1H08: 1.3 mln) (3) Market shares and volumes based on bank-only 6-month cumulative figures

Private banking significantly contributing to Bank’s total asset gathering growth through new tailor-made product offerings

Private

g g g g p g

Performance by BU

Revenues/ (Customer Business(1))

Mln YTL 1H07 1H08 YoY YTD Revenues 44 63 41%

• (Customer Business

)

Revenues 44 63 41%

• Loans

150 208 39% 13% Deposits 7,585 8,893 17% 30% AUM (eop) 1,642 1,670 2%

• 15%

1.19% 1.23%

% of Demand in Private Deposits 4.2% 4.4% 0.2 pp 0.1 pp % of TL in Private Deposits 51.6% 52.3% 0.8 pp 3.5 pp % of TL in Private Loans 100% 100% 0 pp 0 pp

Private banking revenues up 41% YoY driven by growth in customer business

1Q08 2Q08

Deposit volume growth up 17% YoY (30% YTD) positively impacted by performance of structured deposits and contributing 24% of Bank’s total deposits in 2Q08 Positive development in project, launched in 1Q08, to review strategic approach on ffl t/ i t t t d (i) d fi l iti d h d i affluent/private customer segments and (i) define new value proposition and enhanced service model (ii) review product offerings

40

Note: all loan and deposit figures based on monthly averages except for revenues/customer business ratio which is based on 3-month average. MIS data (1) Customer business: Loans + Deposits + AUM

Selective growth in Corporate banking driven by ongoing repricing focus to improve return on capital

Corporate

p g p p

Performance by BU

Revenues/Loans

Mln YTL 1H07 1H08 YoY YTD Revenues 102 105 3% Revenues 102 105 3%

• Loans

5,366 6,676 24% 8% Deposits 4,995 7,654 53% 60% AUM (eop) 282 160

• 43%
• 7%

3.26% 3.22%

% of Demand in Corp. Deposits 14.3% 8.8%

• 5.5 pp
• 7.8 pp

% of TL in Corporate Deposits 60.2% 52.8%

• 7.4 pp
• 5.5 pp

% of TL in Corporate Loans 31.2% 18.3%

• 13.0 pp
• 8.5 pp

1Q08 2Q08

Corporate banking revenues up 3% YoY impacted by pricing pressure despite volume growth (loans +24% YoY, deposits +53% YoY) Upward loan repricing starting from January of on cash and non-cash lending p p g g y g Selective slowdown in big ticket corporate lending due to pricing driven profitability concerns resulting in loan growth of 8% YTD Increasing focus on cash management products and high margin areas including trade finance, j t fi d i iti fi l l i d f t i d t project finance and acquisition finance; leverage on leasing and factoring products Review strategy on non-cash loans, mainly letter of credit and letter of guarantees (8.4% YTD decline in letter of guarantees) due to revised regulatory environment

41

Note: all loan and deposit figures based on monthly averages except for revenues/loans ratio which is based on 3-month average. MIS data

Commercial banking revenues driven by strong volume growth with increased focus on revenue oriented initiatives

Commercial

g

Performance by BU

Revenues/Loans

Mln YTL 1H07 1H08 YoY YTD Revenues 240 300 25%

• Loans

5,899 8,894 51% 19% Deposits 4,825 5,590 16%

• 3%

AUM (eop) 221 238 8%

• 20%

7.50% 7.00%

( ) % of Demand in Commercial Deposits 25.6% 25.4%

• 0.2 pp

1.1 pp % of TL in Commercial Deposits 47.3% 45.2%

• 2.1 pp
• 7.8 pp

% of TL in Commercial Loans 57.9% 49.2%

• 8.7 pp
• 5.4 pp

1Q08 2Q08

Commercial banking revenues up 25% YoY driven by strong loan growth of 51% YoY Upward repricing on cash and non-cash lending starting from Jan ‘08 due to increased focus on p p g g g revenues / RWAs Review strategy on non-cash loans, mainly letter of credit and letter of guarantees due to revised regulatory environment Increasing focus on cash management products and high margin areas including trade finance, project finance and acquisition finance; leverage on leasing and factoring products

42

Note: all loan and deposit figures based on monthly averages except for revenues/loans ratio which is based on 3-month average. MIS data

Annex

• Detailed performance by Business Unit
• Detailed performance by Business Unit
• Other

43

Share of securities in total assets progressively decreasing with 91% of securities portfolio invested in HTM p

Securities Composition by Type Securities Composition by Currency

(mln YTL) Annex

52%

AFS Trading

15,004 14,518 14,290

4.8%

FC

• 1.6%

6% 7% 7% 2% 2% 2% 48% 49% 48% 52% 51% 52%

HTM TL FC (21% FRN) (19% FRN) (14% FRN)

92% 91% 91% % 1H07 2007 1H08

TL (70% FRN) (76% FRN) (75% FRN)

1H07 2007 1H08

• Held to maturity (HTM) mix in total securities even higher at bank level at 96%
• FX open position is kept minimal, restricted with VaR and position limits; monitored on a daily basis

p p p p y

• 5% decline in total securities YoY, share of securities in total assets declined to 22% (vs. 26% at YE07)

44

FRN: Floating Rate Notes

Accelerated branch openings expected to provide stronger value creation

No of Branches in Turkey

Number of branches is rapidly

Branch Penetration

Annex

expanding…. ...with room for further expansion: 559 new branches

6,106 6,849 7,618

Correlation = 90% NL UK CH Correlation = 90% NL UK CH

8,174

and 8,288 new employees so far in 2008

2002 2006 2007

GDP per capita

TR, 2006 10 20 30 40

GDP per capita

TR, 2006 10 20 30 40

1H08

YAPI KREDI IS READY TO EXPLOIT THIS POTENTIAL

Branch Profit and Volumes : BENCHMARKING

Retail volumes/ branch Retail profit/branch Retail volumes/ branch

EUR Million

Retail profit/branch

EUR Thousands

Favorable market conditions in terms of branch profitability Strong capability and drive of YKB to reach break-even Launch of accelerated branch opening plan in July 2007 with

Germany France Italy B l i 31 42 56 681 241 309 334 383 Germany France Italy B l i

EUR Million EUR Thousands

31 42 56 681 241 309 334 383

target to reach 1,000 branches by end-2009 through opening

• f 350 new branches (~160 new branches in 2008)

Belgium Spain Portugal 431 Turkey ‘06 19 29 22 31 134 163 241 Belgium Spain Portugal 431 Turkey ‘06 19 29 22 31 134 163 241

45

Focus on SME banking...Further room for profitability in individuals segment...

Profitable growth in SME banking with a differentiated approach in an underpenetrated market

Fast and Outstanding Service for SMEs

Annex

g Dedicated service model with over 1100 specialized micro and macro RMs Simplified proprietary credit underwriting process Bundled product offerings with insurance coverage, working capital and asset based financing options Bundled product offerings with insurance coverage, working capital and asset based financing options Unique offering in the market through disbursement of Grant Programs supplied by national & int.l institutions Specialized consultancy services free of charge: Basel II meetings, SME fairs, value creating online platform p y g g , , g p 2,000 SMEs reached through Anatolia Meetings already in 1H08, 135 customized loan agreements signed with Chambers of Commerce and Trade Associations Activation of low activity customer base (Target to reach ~500K active customers by end-2009) Expand customer base through reactivation of dormant/low activity clients

Further room for profitability in individuals segment

Increase penetration through aggressive cross-selling Expand consumer lending(2) to achieve close to 10% natural market share (7.4% as of 12 Sept) Relaunch branch efficiency programs to reduce cost to serve 46

(1) YKB’s SME definition: Loans extended to companies with annual turnover less than 3 mln USD

y p g

(2) Lending to individuals (includes general purpose loans, auto loans, housing loans) All data as of 1Q08 unless otherwise indicated

International borrowings diversify YKB’s funding base g y g

Syndications: 1 7 bln USD outstanding Syndications: 1.7 bln USD outstanding

• Dec 2008: USD 700 mln, Libor + 62.5 bps, 2 years
• Sept 2009: USD 1,000 mln, Libor + 75 bps, 1 year

Securitizations: Largest issuance of 1.4 bln USD in Dec 2006 and March 2007 (7-8 year, 6 tranches, LIBOR+18 bps - 35 bps). No maturing loan or payment in 2008 & 2009 Subloans: €1 050 mln Subloans: €1,050 mln

• €500 mln - YKB March 2006 (10NC5, Libor+2.00% p.a.)
• €350 mln - Koçbank April 2006 (10NC5, Libor+2.25% p.a.)
• €200 mln - YKB June 2007(10NC5, Libor+1.85% p.a.)

Sace Loan: €100 mln received in January 2007 to support trade finance transactions (5 years all in Euribor+1 20% p a ) (5 years, all-in Euribor+1.20% p.a.) EIB Loan: €100 mln July 2008 to support SME sector in Turkey (10 years). No payment in 2008 & 2009

47

The KFS Group comprises Yapı Kredi, its domestic product factories and international subsidiaries

L

50% 50%

L

Annex

50% 50%

81.8%

L

94%5 99% 100% 100%4 100%3 100%2 99.98%

L L

99.97%1 100%6

1 YK Y: 87 3% YK B: 12 6% Othe r YK B subsidiarie s: 1.YK Y: 87.3%, YK B: 12.6% 2.YK B: 67.24%, YK Ho lding BV: 32.76% 3.YK B: 99.84%, YK L : 0.16% 4.YK B: 99.8%, YK Y: 0.10%, YK L : 0.10% 5.YK B: 74.01%, YK F : 7.95%, YK Y: 11.99% 6.YK S: 99.93%, YK F : 0.04%, YK Y: 0.04% Othe r YK B subsidiarie s: (1.) Ya pı

Kre di Inve stme nt T rust Owne rship: YK

B:11.1%, YK Yatırım: 45%, F re e F lo at: 44% (2.) BCP (Banque de Co mme rc e e t de Plac e me nts). Owne rship: YK B: 31%, Othe r: 69% (3.) Ya pı

Kre di Kora y (RE IT ) Owne rship: YK

B: 30%, F re e F lo at: 45%, Othe rs: 25% (no n-financ ial sub., no t c o nso lidate d) (4.) YK Kültür- Sa na t Ya yı

nc ı lı k (Culture , art and publishing).

48

= % ownership

L

= Listed

( ) ( g) Owne rship: YK B: 100% (no n-F inanc ial sub., no t c o nso lidate d)

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

49