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Agenda
1. Macro Economic / Banking Outlook
2. 2010 Year End Results
3. Market Comparison
Appendix
Turkey is positioning itself over positive expectations
Global economies seeking for debt stabilization
• Political warm up in MENA and GCC Region• Sovereign debt worries in several European countries• Increasing commodity and food prices, possibility of inflationary pressures in a still weak demand environment for developed countries
Turkey still has a few macroeconomic parameters to overcome
• High unemployment and CA deficit remain as structural problems• Though it has recorded a lower annual inflation at 6.4% in 2010, upward trend in commodity and energy prices threat the sustainability of the lower inflation platform,
• Maintained fiscal discipline through Medium Term Program which underlines price stability and completion of structural reformsconfidence ,
• Any faster recovery in Euro zoneespecially for Turkey’s trade partners, will improve its trade volume
• Strong Turkish Lira due to capital inflows, somehow weakened by the recent • Strong Turkish Lira due to capital inflows, somehow weakened by the recent measures of the CBRT,
• Likelihood of single-party government in the coming elections. Thus, increasing expectation of a sovereign rating update to investment grade
Turkey is positioning itself over positive expectations 3
Political warm up in MENA and GCC Region,Sovereign debt worries in several European countries,Increasing commodity and food prices, possibility of inflationary pressures in a still weak demand environment for developed countries.
High unemployment and CA deficit remain as structural problems,Though it has recorded a lower annual inflation at 6.4% in 2010, upward trend in commodity and energy prices threat the sustainability of the lower inflation
Maintained fiscal discipline through Medium Term Program which underlines price stability and completion of structural reforms -increased consumer
Any faster recovery in Euro zone and political stability in the MENA reginespecially for Turkey’s trade partners, will improve its trade volume,Strong Turkish Lira due to capital inflows, somehow weakened by the recent Strong Turkish Lira due to capital inflows, somehow weakened by the recent
party government in the coming elections. Thus, increasing expectation of a sovereign rating update to investment grade.
Banking sector is learning to play in a disciplinary CBRT policy ground
Banking Sector: Adapting to CBRT policies
• CBRT assessments that rapid credit expansion will increase current account deficit in 2011,�Widens its policy mix to include unorthodox RRR tool �Recommends banks to pursue a healthy lending growth path
• After the upward changes in TL reserve requirement ratio banks will prefer shifting to deposits with longer maturityAlternative funding sources introduced: Most of the banks seeking ways to prefer shifting to deposits with longer maturity
• Alternative funding sources introduced: Most of the banks seeking ways to issue domestic bonds,
• Pressure in margins forces• Opportunity for international expansion: Emphasis on branching and acquisitions abroad.
Participation Banks improved their funding base
• Closely following political developments in GCC and MENA regions, but it is the MENA region which has Turkish risk, rather than vice versa
• Maintained asset quality,• Improvement in funding sources�Expanded deposit base,�Expanded deposit base,�Reached alternative funding sources
• Continued moderate branch network expansion
Banking sector is learning to play in a disciplinary CBRT policy ground 4
CBRT assessments that rapid credit expansion will increase current
Widens its policy mix to include unorthodox RRR tool ,Recommends banks to pursue a healthy lending growth path ,
After the upward changes in TL reserve requirement ratio banks will prefer shifting to deposits with longer maturity,Alternative funding sources introduced: Most of the banks seeking ways to prefer shifting to deposits with longer maturity,Alternative funding sources introduced: Most of the banks seeking ways to
es banks to grow,Opportunity for international expansion: Emphasis on branching and
Closely following political developments in GCC and MENA regions, but it is the MENA region which has Turkish risk, rather than vice versa,
Improvement in funding sources,,,
Reached alternative funding sources (i.e. murabaha syndication, sukuk),Continued moderate branch network expansion.
AgendaAgenda
1. Macro Economic / Banking Outlook
2. 2010 Year End Results
3. Market Comparison
Appendix
Asset growth surpassed modest expectations
6,415
7,672
8,406
4,302
5,328 5,494
10%
YoY Growth: 31 %Total assets (million TRL)
17% 19% 19%
3% 3% 3%
90%
100%
Asset segmentation (%)
4,302
Dec.09 Sep.10 Dec.10
TL USD
75% 73% 78%
5% 5%
17% 19% 19%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Dec-10 Dec-09 Dec-08
Other Assets
Cash and Banks
Securities Portfolio
Funded Credits
6
•Obtained murabaha syndication credit andhigh growth in deposit base stimulated assetgrowth over year-end budget target (19%),
•Asset composition remains unchanged,
Securities portfolio (%)
(Amounted to TRL 435 million)
•Funded credits still the largest portion of thegrowing total assets.
14%
86%
Available for Sale
Held to Maturity
Supporting the growing economy, sustained funded credit growth
Total funded credits including financial leasing
(million TRL)
15%
4,686
5,497
6,297
YoY Growth: 34 %
4,686
3,143
3,8184,116
Dec.09 Sep.10 Dec.10
TL USD
• YoY 34 % growth in funded credits outperformed the banking and • YoY 34 % growth in funded credits outperformed the banking and participation banking sector averages thanks to 15 % growth in Q4’10
• Expanded deposit base and obtained murabahaenhanced credit growth,
• Credit-to-deposit rate at 91,5 as the end of 2010.
Supporting the growing economy, sustained funded credit growth 7
13%
Q4 2010 Currency Composition of Funded Credits (%)
63%
24%
TRL USD EUR
34 % growth in funded credits outperformed the banking and 34 % growth in funded credits outperformed the banking and participation banking sector averages thanks to 15 % growth in Q4’10,
murabaha syndication credit
of 2010.
High quality assets: NPL ratio moves down to pre
Non Performing Loans (million TRL)
150
200
250
NPL
0
50
100
150
2009 2010
NPL
Spesific Provisions
Collateral
Q4 2010 Composition of NPL (%)
29%
8%64%
Bank's own share
Bank's share in participation pools
Depositor's share in participation pools
High quality assets: NPL ratio moves down to pre-crisis level 8
NPL Trends
4.00%
5.00%
6.00%
• 86% of NPLs from funded credits and
0.00%
1.00%
2.00%
3.00%
Q409 Q110 Q210 Q310 Q410
Banking sector
Participation banks
Albaraka
• 86% of NPLs from funded credits and14% from non-funded credits,
• “Collateral-to-NPL” ratio is 119,3%,
• 92.4% of collaterals consist of real estate mortgages.
Primary sources of funding; collected funds driving growth
6,222
6,882
11%
YoY Growth: 26 %
Funds Collected Million TRL
5,465
6,222
3,665
4,321 4,498
Dec.09 Sep.10 Dec.10
TL
USD
11%
•11 % funds collected growth in the lastprojected growth in collected funds.
Primary sources of funding; collected funds driving growth 9
4%
Liability segmentation in Q4 2010 (%)
82%
4%
10%4%
Funds Collected
Murabaha Synd. CrditShareholder's Equity
Other Liabilities
last quarter helped us surpass the
Diversified funding base with longer maturity is being pursued
Composition of funding base (million TL)
5 %
5,000
6,000
7,000
8,000
Currency composition of participation accounts (%)
18 % 16 %
82 %
79 %
0
1,000
2,000
3,000
4,000
Q4'09 Q4'10
Syndicated Mur. Credits
Part. Acc.
Curr. Acc.
65%
23%
12%
TL
USD
EUR
Diversified funding base with longer maturity is being pursued 10
Emphasis on extending maturity for adaptingto recently implemented unorthodox RRR policy of CBRT.policy of CBRT.
Maturity structure of funds collected (%)
17.01%17.54% 17.01%
47.59%
10.53%
3.94%
3.39%
17.54%
No maturity
1 month
1-3 months
3-6 months
6-12 months
12 months and above
Stick to policy of controlling off balance sheet growth
Off Balance Sheet (Million TRL)
Q4 ’08 Q4 ’09
Letter of Guarantee 2,444 3,214
Letter of Credit 262 348
Others* 281 308
Total: 2,987 3,870Total: 2,987 3,870
Off Balance Sheet (%)*
9% 9% 10%9% 8% 8%
Others
* Revocable credit limits not included
82% 83% 82%
2008/12 2009/12 2010/12
Letter of Credit
Letter of Guarantee
* Revocable credit limits not included
Stick to policy of controlling off balance sheet growth 11
Q4 ’10
3,687
471
335
4,4934,493
Risk appetite set for LG’s“LG’s-to-total assets” ratio to be pulled towards 30-35% in 5 years time (2010 Year-end: 44% down from 50 % in 2009)
Income-costs dynamics normalized
450
500
(Million TRL)
16%
30%
24%
3%
18%
18%
70%
67%
24%
50
100
150
200
250
300
350
400
YoY Growth: 7%
6.5%
6%
16%
6%12%
6%
3%
0
50
2009/12 2010/12 2009/12
Income Cost
12
26%
28% NET PROFIT
16%17%
30% 23%
24% 25%
24%28% NET PROFIT
Net PS Income
Net Fee Income
Net Trading Income
Other Income
Staff Costs
Provisions
Other Costs
Tax
YoY Growth:1%
6% 7%
16%
2009/12 2010/12
Income Cost
Breakdown of income
138
61
from participation pools
from Bank's own sources
Breakdown of Profit Share Income (million TL)
467 commission income from
funded credits
13.07%
10.34%Yield
6.5%
6.58%
5.67%
5.30%
4.68%
N.Profit Share Margin
SpreadQ4'10
Q4'09
13
5222
19 from non funded credits
from C.C. And POS
commissions
Breakdown of Fee&Commmission Income (million TL)
22from other banking
services
Breakdown of Other Income (million TL)
1616
57
from net trading income
other operating income
Year on Year Change Quarterly
(000 TRL) Dec’09 Dec’10 % Change 3Q10 4Q10
Net Profit Share Income 307,505 316,158 3 76,094 84,096
Income-costs dynamics normalized
Net Fee
Income 80,717 82,916 3 21,865 22,423
Net Trading
Income 25,331 16,318 -36 5,609 4,124
Other Income27,311 56,861 108 11,769 17,920
Staff Costs106,474 117,292 10 28,743 30,348
Provisioning 133,856 108,721 -19 24,982 25,242
Other Costs68,777 80,563 17 20,181 22,652
Tax
26,478 31,633 19 8,737 7,749
Net Profits 105,279 134,044 27 32,695 42,572
14
Quarterly Change
% Change Notes
84,096 11
Smaller increase in NPSI was due to the higher
commission income from funded credits whereas
profit share income fell as a result of continuing
contraction in margins.contraction in margins.
22,423 3
Decreased income from POS transactions due to
lower BKM rates was compansated by healthy
commission income from non-funded credits.
4,124 -26No extraordinary trading income recorded in 2010
compared to 2009.
17,920 52High recollection performance boosted other
income.
30,348 6Well managed staff costs albeit with a rise in the
number of staff.
25,242 1Specific provisioning costw were at a slower pace
due to the low NPL formation.
22,652 22Cost increase was mainly due to new branch
openings and head office relocation expenditures.
7,749 -11
Provisions for deferred tax reduced by TRL 1,571
thousand (it was reduced by only TRL 103 thousand
in Q3 2010).
42,572 30
AgendaAgenda
1. Macro Economic / Banking Outlook
2. Q3 2010 Financial Results
3. Market Comparison
Appendix
Total Growth
Percent 2009 (12 Months)
AlbarakaParticipation
BanksBanking Sector
Asset Size 34.0 30.5 13.8
Total Credits* 31.3 31.0 6.9
Deposits* 37.6 40.2 13.2
*Accruals and rediscounts excluded
16
2010 (12 Months)
Banking Sector Albaraka
Participation Banks
Banking Sector
13.8 31.04 28.88 20.75
6.9 35.96 28.94 33.43
13.2 26.07 23.88 19.90
Market Share
Percent 2009 (12 Months)
ALBRK/ALBRK/PB’S
ALBRK/BankingSector
Asset Size 19.1 0.8
Total Credits* 18.3 1.1
Deposits* 20.4 1.1
*Accruals and rediscounts excluded
17
2009 (12 Months) 2010 (12 Months)
PB’s/ ALBRK/ PB’s/PB’s/BankingSector
ALBRK/PB’S
ALBRK/BankingSector
PB’s/BankingSector
4.0 19.4 0.83 4.3
6.1 19.3 1.15 5.9
5.2 20.7 1.11 5.4
Ratios
Percent 2009 (12 Months)
AlbarakaParticipation
Banks
CAR 15.33 15.27
NPL Ratio* 3.81 4.86
Provisioning Ratio 88.81 67.94
ROAA (IBT) 2.35 2.98
ROAE (NI) 15.67 17.35
Yield 13.08 13.81
Spread 5.67 6.27
Net Profit Share Margin 6.58 7.28
Net Fee Income / Avg. Assets 2.10 2.43
Op Costs / Avg. Assets 3.35 4.19 Op Costs / Avg. Assets 3.35 4.19
Cost/Income** 41.3 44.9
Credits / Branches (000 ‘TRL) 46,491 44,458
Staff / Branches 19 21
CA / Deposits* 18.81 19.33
*Accruals and rediscounts excluded
** Cost: Operating Costs,
Income: NII/NPSI, N. Fee and Com.Income, Other Income
18
2010 (12 Months)
Banking Sector Albaraka
Participation Banks
BankingSector
20.62 14.09 15.07 18.96
5.51 3.14 3.56 3.77
83.53 85.68 70.67 84.03
3.27 2.29 2.51 3.03
20.30 17.40 15.46 18.08
11.14 10.34 10.68 9.46
4.24 4.68 5.21 4.17
5.67 5.30 5.92 4.92
1.52 1.99 1.25 1.37
3.22 3.10 3.87 2.983.22 3.10 3.87 2.98
38.3 43.8 49.8 43.6
43,398 55,187 51,884 52,941
19 20 21 19
15.60 17.01 19.31 15,92
Agenda
1. Macro Economic Review
2. Q3 2010 Financial Results
3. Market Comparison
Appendix
Summary Balance Sheet
(Thousand TRL)
Cash and Banks
Financial Assets
Funds Utilized
Funded Credits
NPL
Provisions
Net Financial Leasing Receivables
Investments Held to Maturity (Net)
Associates
Fixed Assets
Assets Held For Sale and Investment
Other Assets (inc. Tax Assets)
Total Assets
Funds Collected
Syndicated Loans
Debts (inc. Taxes)
Provisions
Shareholders’ Equity
Capital
Capital Reserves (inc. Premium)
Profit Reserves
Profits
Past Periods
Current Year
Total Liabilities
Dec. ’10 Dec. ’09 Growth (%)
1,431,948 1,225,143 16.9
59,141 31,592 87.2
6,296,815 4,685,994 34.4
6,017,335 4,392,412 37.0
190,850 170,087 12.2
20
-163,520 -151,062 8.2
25,920 53,483 -51.5
376,204 296,007 27.1
2,000 6,000 -66.7
194,497 141,631 37.3
18,070 4,902 268.6
27,626 23,645 16.8
8,406,301 6,414,914 31.0
6,881,590 5,464,645 25.9
374,807 -
195,511 173,494 12.7
101,758 66,110 53.9
852,634 710,665 20.0
539,000 539,000 -
31,109 12,738 -
148,147 53,302 -
134,378 105,626 -
335 347 -
134,044 105,279 -
8,406,301 6,414,914 31.0
Summary Income Statement
(Thousand TRL)
Profit Share Income
Profit Share Expense
Net Profit Share Income
Net Fees and Commissions Income
Fees and Commissions Received
Fees and Commissions Paid
Net Trading Income
Other Operating Income
Total Operating Profit
Provisions for Loan Losses
Other Operating ExpensesOther Operating Expenses
Net Operating Profit
Tax Provision
Net Profits
Dec ’10 Dec ’09 Growth (%)
666,508 656,019 1.6
350,349 348,513 0.5
316,158 307,505 2.8
21
82,916 80,717 2.7
92,930 89,501 3.8
10,014 8,785 14.0
16,318 25,331 -35.6
56,861 27,311 108.2
472,253 440,864 7.1
108,721 133,856 -18.8
197,676 175,251 12.9
165,676 131,757 25.7
31,633 26,478 19.5
134,044 105,279 27.3
Thank you
Disclaimer
THIS PRESENTATION AND THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL AND MAY NOT BE REPRODUCED, CIRCULATED, DISTRIBUTED OR
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 of
any part of it form part of or be relied on in connection with any contract or investment decision relating thereto, nor does
information contained in this document is published for the assistance of recipients, but is not to be relied upon authoritat
The Bank does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document The Bank does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document
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
believed to be reliable, no reliance may be placed for any purposes whatsoever on the information contained in this presentat
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 man
estimates involve known and unknown risks and uncertainties that may cause actual results, performance or events to differ ma
disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in this present
circumstances on which any such statements are based unless so required by applicable law. Investors should note many differe
of the plans and projections described herein. As a result, you are cautioned not to place undue reliance on any forward
members, directors, officers and employees disclaim any liability in case projections and plans given in this document are no
23
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 of 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 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
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.
