12
TURKEY Publication Date: May 16, 2013 Global Knowledge supported by Local Experience” Copyright © 2011 by JCR Eurasia Rating. Nispetiye Cad.Firuze Sok. Ceylan Apt. No:1-D:8 Akatlar/İSTANBUL Telephone: +90.212.352.56.73 Fax: +90 (212) 352.56.75 Reproduction is prohibited except by permission. All rights reserved. All of the information has been obtained from sources JCR ER believes are reliable. However, JCR-ER does not guaranty the truth, accuracy, adequacy of this information. A JCR ER Rating is an objective and independent opinion as to the creditworthiness of a security and issuer, not a recommendation to buy, hold, sell any security and to issue a loan. This rating report has been composed within the frameworks of SPK (Capital Markets Board of Turkey) regulations and internationally accepted rating principles and guidelines but is not covered by the NRSRO regulations. http://www.jcrer.com.tr Corporate Credit Rating Leasing Long Term Short Term International Foreign Currency BB B Local Currency BB B Outlook FC Stable Stable LC Positive Stable National Local Rating A- (Trk) A–1 (Trk) Outlook Stable Stable Sponsor Support 2 - Stand-Alone AB - Sovereign* Foreign Currency BB B Local Currency BB B Outlook FC Stable Stable LC Positive Stable *Assigned by Japan Credit Rating Agency, JCR on June 28, 2012 Analyst: Gökhan İYİGÜN / +90 212 352 56 74 [email protected] ŞEKER FİNANSAL KİRALAMA A.Ş. F i n a n c i a l D a t a 2012* 2011* 2010* 2009* 2008* Total Assets (000 USD) 156,994 111,105 125,951 108,712 119,219 Total Assets (000 TRY) 279,073 209,867 193,662 161,688 181,427 Equity (000 TRY) 44,150 40,454 35,491 31,182 15,838 Net Profit (000 TRY) 3,546 4,956 4,301 10,344 3,004 Market Share (%) 1.38 1.13 1.23 1.10 1.06 ROAA (%) 1.81 1.84 1.19 0.48 1.31 ROAE (%) 10.48 9.79 6.37 3.53 15.98 Equity/Assets (%) 15.82 19.28 18.33 19.29 8.73 Gross NPL (%) 12.22 16.43 17.59 16.15 9.73 Growth Rate (%) 32.98 8.37 19.78 -10.88 70.23 *End of year Company Overview Şeker Finansal Kiralama A.Ş. (Şeker Leasing, the Company), offering leasing services for the investment support of domestic and international assets and capital goods needed by SMEs (Small and Medium size Enterprises), was founded in 1997 and has been publicly traded since 2004 (with a 19.55% free float of its capital of TL 45mn as of FYE2010). The Company, being one of the five leasing companies in Turkey to be listed on the BIST-National Market, performs its activities via its headquarters and regional offices in Ankara, Bursa and Izmir as well as in the widespread branch network of Şekerbank T.A.Ş. (the Bank) and employs a staff force of 26 people. The Company actualized its first bond issuance in June 2012 as TRY 50mn and performed another TRY 50mn bond issuance in December 2012. Şeker Leasing had a 1.38% market share in the leasing sector worth a total of TRY 20.25bn as of FYE2012. The Company is a partially owned (50.95% stake) subsidiary of Şekerbank T.A.Ş. (the Bank), a mid-scale commercial bank in Turkey which was assigned a long-term national rating of „A+ (Trk)‟ by JCR- ER in 2012, and has a subsidiary named Sekar Oto Kiralama Turizm Kargo Taşımacılık Hizmeti ve Tic. Ltd.Şti., consolidated in its statements. The Company‟s long term national grade was upgraded one notch to „A- (Trk)with a ‘Stable’ outlook. Strengths Ongoing upward pattern in profitability ratios approximating sector averages Remarkably above sector average year-end growth rate and a market share curve with upward trend Relatively higher income generation capacity of equity mainly derived from consistently above sector average interest margin Continuance of the bond issuance contributing to profitability and liquidity management and overcoming the sector issues of short term borrowing and scarcity in alternative sources Positively differentiated collateral level and compatible provisioning policy regarding sector, contributing to asset quality Positive outlook of sector growth due to enhanced product diversity through recent legal regulation and relatively low sector penetration level Being one of the few leasing companies listed on the BIST Constraints Ongoing above sector average pattern in the „operating expenses to total income‟ ratio resulting in below sector average profit margins Relatively high NPL ratios, despite improvements, Continuously below sector average equity share in total resources and total assets, Continuing FX losses pressuring profitability, despite improvements High level of competition in the sector 1.38 1.13 1.23 1.10 1.06 0.00 2.00 Market Share (%) 33 8 20 -11 70 -200 0 200 Growth Rate (%) 1.81 1.84 1.19 0.48 1.31 0.00 2.00 ROAA (%) 10 10 6 4 16 0 20 ROAE (%) 16 19 18 19 9 0 50 2012 2011 2010 2009 2008 Equity/Assets (%) 12.2 16.4 17.6 16.2 9.7 0.00 20.00 2012 2011 2010 2009 2008 NPL (%)

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TURKEY

Publication Date: May 16, 2013 “Global Knowledge supported by Local Experience” Copyright © 2011 by JCR Eurasia Rating. Nispetiye Cad.Firuze Sok. Ceylan Apt. No:1-D:8 Akatlar/İSTANBUL Telephone: +90.212.352.56.73 Fax: +90 (212) 352.56.75

Reproduction is prohibited except by permission. All rights reserved. All of the information has been obtained from sources JCR ER believes are reliable. However, JCR-ER does not

guaranty the truth, accuracy, adequacy of this information. A JCR ER Rating is an objective and independent opinion as to the creditworthiness of a security and issuer, not a

recommendation to buy, hold, sell any security and to issue a loan. This rating report has been composed within the frameworks of SPK (Capital Markets Board of Turkey)

regulations and internationally accepted rating principles and guidelines but is not covered by the NRSRO regulations. http://www.jcrer.com.tr

Corporate Credit Rating

Leasing

Long Term Short Term

Inte

rnatio

nal Foreign Currency BB B

Local Currency BB B

Outlook FC Stable Stable

LC Positive Stable

Natio

nal

Local Rating A- (Trk) A–1 (Trk)

Outlook Stable Stable

Sponsor Support 2 -

Stand-Alone AB -

So

vere

ign

*

Foreign Currency BB B

Local Currency BB B

Outlook FC Stable Stable

LC Positive Stable

*Assigned by Japan Credit Rating Agency, JCR on June 28, 2012

Analyst: Gökhan İYİGÜN / +90 212 352 56 74 [email protected]

ŞEKER FİNANSAL KİRALAMA A.Ş.

F i n a n c i a l D a t a 2012* 2011* 2010* 2009* 2008*

Total Assets (000 USD) 156,994 111,105 125,951 108,712 119,219

Total Assets (000 TRY) 279,073 209,867 193,662 161,688 181,427

Equity (000 TRY) 44,150 40,454 35,491 31,182 15,838

Net Profit (000 TRY) 3,546 4,956 4,301 10,344 3,004

Market Share (%) 1.38 1.13 1.23 1.10 1.06

ROAA (%) 1.81 1.84 1.19 0.48 1.31

ROAE (%) 10.48 9.79 6.37 3.53 15.98

Equity/Assets (%) 15.82 19.28 18.33 19.29 8.73

Gross NPL (%) 12.22 16.43 17.59 16.15 9.73

Growth Rate (%) 32.98 8.37 19.78 -10.88 70.23

*End of year

Company Overview Şeker Finansal Kiralama A.Ş. (Şeker Leasing, the Company), offering leasing services for the investment support of domestic and international assets and capital goods needed by SMEs (Small and Medium size Enterprises), was founded in 1997 and has been publicly traded since 2004 (with a 19.55% free float of its capital of TL 45mn as of FYE2010). The Company, being one of the five leasing companies in Turkey to be listed on the BIST-National Market, performs its activities via its headquarters and regional offices in Ankara, Bursa and Izmir as well as in the widespread branch network of Şekerbank T.A.Ş. (the Bank) and employs a staff force of 26 people. The Company actualized its first bond issuance in June 2012 as TRY 50mn and performed another TRY 50mn bond issuance in December 2012. Şeker Leasing had a 1.38% market share in the leasing sector worth a total of TRY 20.25bn as of FYE2012. The Company is a partially owned (50.95% stake) subsidiary of Şekerbank T.A.Ş. (the Bank), a mid-scale commercial bank in Turkey which was assigned a long-term national rating of „A+ (Trk)‟ by JCR-ER in 2012, and has a subsidiary named Sekar Oto Kiralama Turizm Kargo Taşımacılık Hizmeti ve Tic. Ltd.Şti., consolidated in its statements.

The Company‟s long term national grade was upgraded one notch to „A- (Trk)‟

with a ‘Stable’ outlook. Strengths

Ongoing upward pattern in profitability ratios approximating sector averages

Remarkably above sector average year-end growth rate and a market share curve with upward trend

Relatively higher income generation capacity of equity mainly derived from consistently above sector average interest margin

Continuance of the bond issuance contributing to profitability and liquidity management and overcoming the sector issues of short term borrowing and scarcity in alternative sources

Positively differentiated collateral level and compatible provisioning policy regarding sector, contributing to asset quality

Positive outlook of sector growth due to enhanced product diversity through recent legal regulation and relatively low sector penetration level

Being one of the few leasing companies listed on the BIST

Constraints

Ongoing above sector average pattern in the „operating expenses to total income‟ ratio resulting in below sector average profit margins

Relatively high NPL ratios, despite improvements,

Continuously below sector average equity share in total resources and total assets,

Continuing FX losses pressuring profitability, despite improvements

High level of competition in the sector

1.381.131.231.101.06

0.00

2.00

Market Share (%)

33820-1170

-200

0

200

Growth Rate (%)

1.811.84

1.19

0.48

1.31

0.00

2.00

ROAA (%)

10106

4

16

0

20

ROAE (%)

16191819

9

0

50

20122011201020092008

Equity/Assets (%)

12.216.417.616.2

9.7

0.00

20.00

20122011201020092008

NPL (%)

LEASING

1 Şeker Finansal Kiralama A.Ş.

1. Rating Rationale

The Turkish Leasing Sector has been regulated and supervised by the Banking Regulation and Supervision Agency (BRSA) since 2006. The „Financial Leasing, Factoring and Financing Companies Law‟, No. 6361, came into effect on December 13, 2012. Moreover, the Regulation regarding organization and operating principals of financial leasing, factoring and financing companies entered into force on April 24, 2013. According to the most recent BRSA statistics, the total asset size of the Turkish Leasing Sector was TRY 20.25bn and involved 31 leasing companies, five of which are listed on the Borsa Istanbul (BIST) National Market, as of FYE2012.

The Company‟s consolidated independent audit report prepared in conformity with BRSA regulations, statistical data on the sector produced by BRSA and updated on March 1, 2013, JCR Eurasia Rating‟s own studies and records, information and clarifications provided by the Company and non-financial figures constitute the major basis of Şeker Leasing‟s ratings.

In addition to the Company‟s profitability figures, asset quality, equity structure, risk management practices, market shares, growth rates and expected support, the main shareholders‟ financial and non-financial positions were also taken into consideration while determining the risk assessment of the long-term international local currency and foreign currency grades as well as national grades. The driving forces behind the upgrade of the long-term national grade of the Company were;

A rapid increase in growth rate along with a remarkably above sector average (8.87%) year-end growth rate of 32.98%,

Upward trend in market share,

Ongoing upward pattern in profitability ratios approximating the sector averages,

Remarkable improvement in NPL ratios,

Continuance of the bond issuances resulting in a remarkable improvement in liquidity position.

Additionally, issues regarding profitability, performance, asset quality and liquidity such as;

Consistently above sector average operating profitability ratios,

Ongoing above sector average cumulative growth rates,

Above sector average interest margin over the years,

Decreasing adverse affects of FX positions,

Improvements in the ratio of „short-term borrowings to total assets‟ from 80.39% to 48.66%, falling below the sector average of 69.65%,

Remarkably above sector average collateral level,

Continuously increasing provisioning ratio along with an exceeding above sector average year-end figure,

Absence of off balance sheet guarantees and commitments

along with low level of sector penetration and recently changed sector legislation promising further growth are the

other supporting factors taken into consideration in the assessment of the Company‟s rating.

Moreover, points regarding the Company‟s profitability, capital adequacy and asset quality such as;

Continuously above sector average operating expenses,

Ongoing below sector average equity share in total resources and in total assets,

Ongoing above sector average (7.99%) NPL ratios despite improvements,

Relatively high and above sector average (32.25%) level of impaired receivables corresponding to

61.35% of equity,

Deterioration in internal equity generation capacity falling below sector averages,

Above sector average ratio of provisions to total income,

Below sector average trend in gross and net profit margins,

Continuing adverse affects of FX positions on profitability,

Relatively high share of loan and receivable‟s loss provisions in total loans and receivables

along with issues concerning the leasing sector such as a relatively high level of price competition and country wide issues of decelerated economic growth and increased dishonoured checks volume and number are the main factors exerting pressure on the Company‟s grades.

With respect to the above mentioned factors, JCR Eurasia Rating has assigned the long term international foreign currency and local currency ratings as ‘BB’, the same as that of the sovereign ratings of the Republic of Turkey, and upgraded the long term national local ratings one notch to ‘A- (Trk)’ in JCR Eurasia Rating‟s notation system, which denotes a high investment grade.

2. Outlook

A ‘Stable’ outlook has been assigned for the Company‟s

short and long term national grades, with the expectation of minimal changes in existing conditions, state of affairs and development trend due to probable positive future effects on cost of funding and liquidity management of the realized and potential bond issuances, low level of sector penetration along with recent sector legislation promising further room for future growth as well as ongoing above sector average operating expenses ratios and below sector average equity level.

Additionally, JCR Eurasia Rating has assigned ‘Positive’ and ‘Stable’ outlooks on the international long and short term local currency rating perspectives of Şeker Leasing, respectively, those of the sovereign rating‟s outlooks of the Republic of Turkey.

Key dynamics that can cause a change in the current outlook status include the affects of the global economic outlook on the Turkish economy, Turkey‟s sovereign rating which is currently following an upward trend, as well as developments in the non-financial economy in need of financing. Other factors also kept under consideration are

LEASING

2 Şeker Finansal Kiralama A.Ş.

the Company related issues such as future profitability and developments that will affect the asset quality and liability profile.

3. Sponsor Support and Stand Alone

Sponsor support grades and their risk estimations reflect the financial and non-financial state and expected support of the main shareholders of Şeker Leasing, namely; Şekerbank T.A.Ş. and Şekerbank Voluntary Pension Fund. It is considered that the main shareholders have the capacity to provide financial and efficient operational support as and when required. Based on these assessments, the Sponsor Support grade of Şeker Leasing has been determined as

(2).

The Stand-alone grade has been constituted with respect to the Company‟s asset quality, equity structure, risk management practices, market shares, growth rates and the development of existing risks in the markets and business environment. We, as JCR-ER, are of the opinion that Şeker Leasing has reached a level of adequate experience and facilities to manage the occurring risks in its balance sheet through internal means, provided that it maintains the current customer level and efficiency in the market without any assistance by its shareholders. Within this context, the Stand-Alone grade of Şeker Leasing has been determined as (AB) in JCR-ER‟s notation system.

4. Company Profile

Şeker Leasing was established in 1997 and has been publicly traded since 2004, under the code SEKFK. It was one of the five leasing company listed on the BIST-National Market and had a 19.55% free float of its capital of TRY 45mn as of FYE2012.

The company offers leasing services of investment support for domestic and international assets and capital goods needed by SMEs via the widespread branches of Şekerbank T.A.Ş., its headquarters and regional offices in Ankara, Bursa and Izmir.

Şeker Leasing‟s Board has 7 members, including one

executive and two independent members. The actual labor force of the headquarters and regional offices involved 26 people as of FYE2012. Of the existing staff, 65.38% graduated from universities, 15.38% from high school, 11.54% with associate degree and 7.69 % with post graduate degrees.

The organizational chart of the Company consists of eight departments, five of which (credit, IT, operating and insurance, accounting and financing, support personnel) report to the financial and administrative affairs directorate, two (marketing, legal consultancy) report to the general manager and one (internal audit) directly reports to the Board. Moreover, three representative office supervisors and a financial crimes specialist report directly to the general manager.

The following table provides the Company‟s 2012 year-end shareholder structure and realized changes over time. There was no change in the Company‟s capital structure since 2009. The majority shareholder of Şeker Leasing is

Şekerbank T.A.Ş, with an issued capital of TRY 1,000mn and a consolidated asset size of TRY 15.21bn as of FYE2012.

Şeker Leasing was founded in 1997 with a capital of TRY 250k and has been listed on the ISE since 2004 (with a 19.55% free float of its capital of TRY 45mn as of FYE2011).

The Company offers leasing services and investment support for domestic and international assets and capital goods needed by SMEs via the widespread branches of Şekerbank T.A.Ş., its headquarters and regional offices in Ankara, Bursa and Izmir.

The Company has a subsidiary, with a 99% stake, named Sekar Oto Kiralama Turizm Kargo Taşımacılık Hizmeti ve Tic. Ltd.Şti. (Sekar), with total assets of TRY 9mn as of FYE2011, which provides the Şeker Group with rent-a-car services and is consolidated fully in financial statements.

5. Sector Analysis

According to BRSA‟s 2012 year-end data updated on March 1, 2013, the total assets size of the Turkish Leasing Sector advanced to TRY 20.25bn from TRY 18.60bn with a growth rate of 8.87% as of FYE2012. On the other hand, the total net profit of the sector decreased 14.84% to TRY 434.32mn and accordingly profitability ratios of the sector detoriorated.

Financial leasing transactions began in Turkey in 1983 under the regulation and inspection of the Undersecretariat of the Treasury. The first factoring company was established in 1986. Subsequent to the Banking Law enacted towards the end of 2005, leasing transactions fell under the supervision and regulation of the Banking Regulation and Supervision Agency (BRSA). Recently, The „Leasing, Factoring and Financing Companies‟ draft law passed into law with the acceptance of the Turkish Parliament General Assembly dated November 21, 2012 and entered into force on the date of publication, December 13, 2012. Moreover, the Regulation regarding organization and operating principals of financial leasing, factoring and financing companies entered into force on April 24, 2013. The key provisions of the stated law and regulation related to the Turkish Leasing Sector are as follows;

The capital base of the companies advanced to TRY 20mn from TRY 7.5mn along with a 3-year adaptation period,

Companies are required to reserve to meet realized or potential losses derived from leasing receivables within the framework of the principles and procedures set by the BRSA,

2012 2011 2010 2009 2008 2007

Şekerbank T.A.Ş. 50.95 50.95 50.95 50.95 49.24 46.56

Şekerbank T.A.S. Personel Munzam

Sosyal Güvenlik ve Yardımlaşma Vakfı15.89 15.89 15.89 15.89 15.60 14.75

Şekerbank T.A.S. Personeli Sosyal

Güvenlik ve Yardımlaşma Sandığı Vakfı8.11 8.11 8.11 8.11 7.59 7.18

Seker Yatırım Menkul Değerler A.Ş. 3.85 3.85 3.85 3.85 3.72 4.25

SS. Eskişehir Pancar Ekicileri Kooperatifi 1.65 1.65 1.65 1.65 1.86 2.12

Public 19.55 19.55 19.55 19.55 21.99 25.14

TOTAL 100.00 100.00 100.00 100.00 100.00 100.00

Paid Capital (TRY/000) 40,000 35,000

Şeker Finanasal Kiralama A.Ş.

Shareholders Structure

45,000

Share %

LEASING

3 Şeker Finansal Kiralama A.Ş.

The associations of three sectors (leasing, factoring and financing companies) will unite under one roof within six months from the date of entry into force of the law. The companies will be a member of the established association within one month,

The related companies are subject to permission to set up domestic and international branches. Moreover, an organizational structure that covers only the branches is permitted.

Leasing companies will be able to offer new products other than financial leasing such as operating leasing and sale & lease back,

All goods regardless of their complementary and add-on natures and software may be subject to leasing,

The lessors (leasing companies) are not responsible for the defective goods provided from a third party at the request and selection of the lessee,

Companies are required to meet and sustain the minimum standard ratio (equity to total assets) of 3% along with an adaptation period until the end of 2013.

Although the act does not involve provisions about certain points desired by the sector, such as recognizing provisions as an expense, not being liable to the Banking Insurance Transaction Tax (BITT) and to benefit from „address information sharing‟ system, it is expected that it will contribute to more effective execution of sector activities, ensuring positive prospects regarding sector growth.

Moreover, the Credit Bureau of Turkey (KKB) made the „Check Report‟ available for the use of factoring and leasing companies in August 2012, partially due to a significant increase in the number of dishonored checks in 2012. It is expected that the use of the „Check Report‟ will provide more effective credit risk management through information sharing and more robust decision making through accurate measurement of customers‟ commercial risks.

As of FYE2012, there were 31 leasing companies operating in the sector through 18 branches, 75 representative offices and 1.249 employees. According to BRSA‟s September 2012 statistics, the number of customers stood at 45k.

Among the 31 financial leasing companies, only the shares of Vakıf Leasing, Is Leasing, Finans Leasing, Seker Leasing, Yapı Kredi Leasing and Fon Leasing (in the second national market) are publicly traded. Of the 31 companies operating in the sector, 18 are owned by banks and approximately 90% of the sector is controlled by these leasing companies.

The Turkish factoring sector held a small 0.76% share of the general financial system as of September 30, 2012. Excluding banks, the Central Bank of Turkey (CBT) and Istanbul Stock Exchange (ISE), the factoring sector comprised an 11.32% share in the same period.

Market Share of Leasing Sector (%) 2008 2009 2010 2011 2012 (*)

In the Financial System 1.51 1.03 0.89 0.97 0.92

In the Non-Bank and Non-ISE Financial System

16.68 12.36 10.47 11.10 13.75

Source: BDDK, (*): September 2012

The combined asset size of the leasing companies stood at TRY 20.25bn with an equity size of TRY 4.61bn at the end of 2012. The leasing sector has expanded significantly over its 26 year history and followed a clear upward trend through 2008. Although the industry shrank by 14.61% in 2009 due to tax changes, it continued to develop following 2009. Between 2008 and 2012, the cumulative growth was 47.84%.

Leasing receivables constitute the largest portion (84.50%) of sector assets, and „borrowings and others‟ the largest portion (72.75%) of resources. The most significant portion (68.67%) of total resources is met through short-term bank loans. On the other hand, some companies have been able to provide funds through bond issuances since 2011. Funding through bond and commercial bill issuance gained acceleration in 2012 and reached TRY 826.31mn as of FYE2012, with a share of 4.08% of total resources. Accordingly, 8 debt instrument issuance applications were made by 7 leasing companies and 7 realized in 2012, partially overcoming the sector problem of inability to create a diversity of resources.

The sector‟s non-performing receivables to total receivables

ratio (NPL) improved to 7.99% FYE2012 from 8.57% FYE2011, which was remarkably over that of the banking sector (2.86% FYE2012). Moreover, the share of non-performing receivables in equity decreased slightly to 32.25% from 33.90% in 2012, which represents the high level of leasing sector‟s risk perception and weakens asset quality.

Additionally, as of FYE2012, the financial leasing sector‟s profitability ratios of ROAA and ROAE decreased from 3.40% to 2.87% and from 14.54% to 12.71%, respectively while the same ratios of the banking sector stood at 2.33% and 18.49%, respectively. Taking the ratio of equity to total assets into account, the sector possessed a higher equity. The financial leasing sector‟s „Equity/Total Asset‟ ratio was 22.76% for 2012 and that of the banking sector was 13.27%.

The total leasing receivables amount of the sector during 2012 was TRY 3,388mn in which construction sector ranked first with a 19.44% share, metal industry and processed

Turkish Financial

Leasing Sector

Number of… 2008 2009 2010 2011 2012

Companies 50 47 35 31 31

Branches 18 18 16 17 18

Representation 80 76 68 72 75

Employees 1,427 1,280 1,286 1,217 1,258

Customers 73,577 60,010 50,428 43,294 45,089

Contracts 121,627 98,596 82,615 76,258 72,920

So urce: B R SA

Some Operational Indicators

8.87

18.13

7.57

-14.61

25.15

47.84

35.80

14.96

6.87

25.15

-20

-10

0

10

20

30

40

50

60

20122011201020092008

Turkish Leasing Sector Asset Growth Rates %

ANNUAL CUMULATIVE

LEASING

4 Şeker Finansal Kiralama A.Ş.

item production sector second with 16.87% and textile and textile products third with 9.59%. Additionally, medical equipments, properties and office equipment were also treated in the financial leasing transactions.

6. Financial Analysis

6.1. Profitability & Performance

The Turkish Leasing Sector‟s growth trend following 2009 decelerated in 2012 and an 8.87% total assets growth rate was actualized as of FYE2012. On the other hand, the Company‟s asset growth rates exhibited a fluctuating pattern in the same period and a remarkably above sector average growth rate of 32.98% was achieved as of FYE2012.

Mostly above sector average growth rates during the last five years, except 2011, resulted in an uninterrupted above sector average pattern in the Company‟s cumulative growth with a 2012 year-end value of 161.85%.

Accordingly, the mostly above sector average growth rates culminated in a continuously increasing trend in the Company‟s market share. The market share of the Company increased by 30.19% since 2008 and reached a ratio of 1.38% as of FYE2012.

Company profitability ratios ROAA and ROAE continuously remained below the sector averages since 2008. Both the ROAA and ROAE ratios of the Company followed an improvement trend following 2009. While both sector profitability ratios deteriorated in 2012, the ROAE of the Company improved and the ROAA decreased slightly, diminishing the spread between sector average ratios. Funding of the Company‟s above sector average growth with mostly external sources led to a decrease in equity level and accordingly an increase in ROAE.

The Company‟s „Pre-Tax Profit to Total Income‟ ratio has exhibited an upward trend since 2009 and realized a value of 28.03% FYE2012. Although the Company‟s pre-tax profit increased 19.20% from TRY 3.72mn to TRY 4.43mn in 2012, the net profit decreased from TRY 4.96mn to TRY 3.55mn due to income and expense effects of deferred taxes in 2011 and 2012, respectively. Continuing income effect of deferred taxes since 2008 turned into expense effect in 2012.

The interest margin of the Şeker Leasing progressively stood over the sector averages over the last five years and contributed to Company‟s profitability ratios.

8.87

18.13

7.57

-14.61

25.15

32.98

8.37

19.78

-10.88

70.23

-20-1001020304050607080

20122011201020092008

Annual Asset Growth Rates %

TURKISH LEASING SECTOR

ŞEKER FİNANSAL KİRALAMA A.Ş.

47.84 35.80

14.96 6.87

25.15

161.85

96.91

81.71

51.71

70.23

0

20

40

60

80

100

120

140

160

180

20122011201020092008

Cumulative Asset Growth Rates %

TURKISH LEASING SECTOR

ŞEKER FİNANSAL KİRALAMA A.Ş.

1.38

1.13

1.23

1.10

1.06

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

20122011201020092008

Market Share (%) trend line

1.811.841.19

0.481.31

2.873.403.45

1.92

3.82

10.48

9.79

6.37

3.53

15.98

12.7114.5414.26

9.40

21.44

0

5

10

15

20

25

20122011201020092008

ROAA & ROAE Comparison

ROAA ŞEKER FİNANSAL KİRALAMA A.Ş.

ROAA TURKISH LEASING SECTOR

ROAE ŞEKER FİNANSAL KİRALAMA A.Ş.

ROAE TURKISH LEASING SECTOR

28.0327.27

18.20

9.86

19.25

0

5

10

15

20

25

30

35

20122011201020092008

Pre-Tax Profit/Total Income

6.68 6.78 6.63 9.45

10.39 12.1312.2912.72

14.05

16.98

5.45 5.50 6.09 4.60 6.59

3.04 3.42

4.47 4.43 4.80

0

2

4

6

8

10

12

14

16

18

20122011201020092008

Interest Margin %

Interest Rate for Costly Liabilities (avg.) %Interest Rate for Earning Assets (avg.) %Margin %Sector Margin %

LEASING

5 Şeker Finansal Kiralama A.Ş.

The foreign exchange losses applied downward pressure on the Company‟s pre-tax profit over the last four years. On the other hand, the adverse effect of FX losses decreased over time and stood at 8.46% of the pre-tax profit as of FYE2012 with a year-end FX loss value of TRY 375k.

The share of the operating expenses in the Company‟s total income exhibited an ongoing above sector average pattern since 2008. The spread, reaching its lowest level in 2011, rose in 2012 due to a 26.92% increase in total operating expenses against a 15.93% increase in total income.

6.2. Capital Adequacy

The recent regulation of BRSA mandates that the equity ratio (standard ratio) of the company‟s equity to total assets should be at least 3%. The Company materialized a below sector average (22.76%) standard ratio of 15.82% as of FYE2012.

The Company realized two bond issuances with a nominal value of TRY 50mn each in 2012. Accordingly, total liabilities of the Company increased 84.18% as of FYE2012. On the other hand, the Company‟s equity performed a 15.82% increase. A remarkably higher increase in total resources led to a decrease in the ratio of „equity to total resources‟ with a below sector average (29.47%) year-end value of 18.79%.

6.3. Liquidity

The Company‟s continuously above sector average ratio of „short term borrowings to total assets‟ decreased remarkably to a below sector average (69.65%) value of 48.66% as of FYE2012 due to the aforementioned bond issuances amounting to TRY 100mn and short term loan repayments amounting to TRY 36mn.

Moreover, the year-end bank deposits amounting to TRY 46mn derived from cash inflow generated by TRY 50mn bond issuance on December 21, 2012 lead to a steep improvement in the Company‟s liquid assets level.

Accordingly, the Company‟s liquid assets levels compared to its assets and total liabilities stood at 16.50% and 19.60% as of FYE2012, respectively, remarkably ascending above the respective sector averages of 7.69% and 9.96%.

-8.46%

-19.74%

-35.44%

-69.68%

14.22%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

20122011201020092008

FX Gain (Loss), net / Profit Before Tax

31.00

39.21

26.52

37.46

30.09

48.28

44.10

44.70

66.50

49.96

0

10

20

30

40

50

60

70

80

20122011201020092008

Total Operating Expenses/Total Income %

TURKISH LEASING SECTOR ŞEKER FİNANSAL KİRALAMA A.Ş.

3.00

12.82

16.2815.33

16.29

5.734.35

15.82

19.28 18.33 19.29

8.73 7.35

0

5

10

15

20

25

201220112010200920082007

Standard Ratio (Equity / Total Assets) %

Free Equity / Total Assets Ratio %

Realized Equity / Total Assets Ratio %

29.47 28.96 32.39 31.35

21.09 22.38

18.79

23.88 22.44 23.89

9.56 7.93

0.00

10.00

20.00

30.00

40.00

50.00

201220112010200920082007

TURKISH FACTORING SECTOR

ŞEKER FİNANSAL KİRALAMA A.Ş.

Equity / Total Resources (%)

69.6573.3072.2673.63

80.40

48.66

80.3981.3980.53

91.10

40.00

50.00

60.00

70.00

80.00

90.00

100.00

20122011201020092008

Short Term Borrowings / Total Assets (%)

TURKISH LEASING SECTOR

ŞEKER FİNANSAL KİRALAMA A.Ş.

16.50

2.050.48

4.22

1.23

4.385.035.214.594.73

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20122011201020092008

Liquid Assets + Marketable Securities / Total Assets (%)

Net Interest and Commission / Total Assets (%)

9.9611.94

26.83

15.24

10.10

19.60

2.540.59

5.23

1.35

0.00

5.00

10.00

15.00

20.00

25.00

30.00

20122011201020092008

Liquid Assets + Marketable Securities / Total

Liabilities (%)

TURKISH LEASING SECTOR

ŞEKER FİNANSAL KİRALAMA A.Ş.

LEASING

6 Şeker Finansal Kiralama A.Ş.

6.4. Asset Quality

The Company had a total assets size of TRY 279.07mn (TRY 209.87mn FYE2011), of which a 90.50% (88.77% FYE2011) share was composed of total earning assets, as of FYE2012. The share of total earning assets, with a 2012 year-end dispersion of 74.01% loans and receivables and 16.50% bank and other earning assets, has remained steadily between 88.73% and 93.45% since 2008. The earning assets weighted dispersion contributes to the Company‟s asset quality.

NPL ratios of Şeker Leasing, exhibited an increasing and fairly above sector average pattern between 2008 and 2010. The improvements of the NPL starting in 2011 accelerated in 2012. Despite the above sector average improvement, the Company‟s NPL ratio exercised a one and a half times sector average year end value of 12.22% with a decreasing adverse effect on asset quality.

On the other hand, the Company took steps to improve impaired loans portfolio via its strong collateral structure with the „collateral to receivables‟ 2011 year end ratio of 227.89%, contributing to asset quality.

Additionally, the Company‟s below sector average provisioning ratio rose to the above sector average value of 55.62% as of FYE2012, contributing to asset quality.

6.5. Risk Management

The Credit department, credit committee and Board of Directors of Şeker Leasing are responsible for the follow up of lease receivables. All lending decisions are approved within the credit committee or the Board.

In addition, the Company has an internal scoring analysis process. According to the results of this process, the Company‟s risk levels of leasing receivables concentrated in the “A” (very well) scoring categories as of FYE2012. Moreover, the concentration in the “A+” (excellent) category improved to 15.13% from 10.12%. In all, 76.99% of the leasing receivables were in „B+‟ or higher score categories.

The Company manages its credit risk by limiting transactions regarding some specific sectors as well as the continuous control and reevaluation of debtor credibility. Additionally, the Company also tries to take into account the sector and regional concentration in managing its credit risk. Moreover, the Company obtains additional security for its receivables if possible.

The Company‟s leasing receivables followed a sector dispersion of 21.68% in the mining, metal and chemical industry, 19.66% in construction and 11.95% in finance, amounting to a total of 53.29% as of FYE 2012, all of which are accepted within the international reference values.

The Company‟s top 10 customers composed 43.02% (39% FYE2011) of the total receivables portfolio as of FYE2012, 57.58% (50.56% FYE2011) the top 20 and 71.86% (67.05% FYE2011) the top 50. All ratios increased compared to previous year‟s concentration rates, pressuring asset quality.

Moreover, the Company‟s „collateral-to-total receivables‟ ratio was 227.89% as of FYE2012 with an almost straight trend over the last years, fairly above the sector average of approximately 62%. Additionally, the matter of collateral level has been lessened via customer portfolio

mostly matched with Şekerbank‟s.

Borrowings at both fixed and variable interest rates prompt the Company‟s exposure to interest rate risk. The Company controls stated risk through an appropriate

74.01%86.72%87.91%84.51%

92.22%

16.50%2.05%0.48%4.22%1.23%

9.50%11.23%11.61%11.27%

6.55%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

20122011201020092008

Asset Distribution

Other Assets Associates and Equity Share

Securities Banks and Other Earnings Assets

Loans and Receivables

7.99 8.57

12.20 12.25

6.58

12.22

16.43 17.59

16.15

9.73

0

4

8

12

16

20

20122011201020092008

NPL %

TURKISH LEASING SECTOR ŞEKER FİNANSAL KİRALAMA A.Ş.

61.4870.73

86.01

114.07

86.66

227.89

253.35

223.59

299.39

202.54

40.00

90.00

140.00

190.00

240.00

290.00

340.00

20122011201020092008

Collaterals / Total Receivables %

TURKISH LEASING SECTOR

ŞEKER FİNANSAL KİRALAMA A.Ş.

50.13 50.45 48.76

41.97 39.49

55.62

44.24

38.11 38.80

45.58

0

10

20

30

40

50

60

70

20122011201020092008

Loss Reserves / Impaired Receivables %

TURKISH LEASING SECTOR

ŞEKER FİNANSAL KİRALAMA A.Ş.

LEASING

7 Şeker Finansal Kiralama A.Ş.

distribution of fixed and variable rate obligations. While all the Company‟s financial assets were fixed rated, 30.78% of the company financial liabilities were floating rated as of FYE2012. Moreover, the Company‟s financial statement had a variance range of (+/-) TRY 6,365 in the case of 1% increase or decrease in interest rates as of FYE2012.

Şeker Leasing is exposed to currency risk due to its transactions in Euro and USD. The Company‟s financial statement had a variance range of (+/-) TRY 2.163 in the case of an increase or decrease of 10% in exchange rates with the assumption that all other variables remain constant as of FYE2012.

The funding unit of the Company reports expected cash flows daily and is managed in coordination with asset and liability committee (ALCO) through monthly meetings. The Company makes an effort to diversify its funding sources and reduce mismatches of assets and liabilities to avoid liquidity risk. Within this scope, funding through bond issuances continues.

The „borrowings and funding loans‟ of the Company had a dispersion of 56.50% short term borrowings and 43.50% bond issuances as of FYE2012. As of FYE2011, credit lines worth TRY 322mn were extended to Şeker Leasing by 15 different banking institutions and only 36.82% of this total line was drawn upon, with a free line amounting to TRY 203mn.

6.6. Budget and Bond Issue

In the event that favourable market conditions are met, the Company plans to meet a part of its external financing needs from the growth of its leasing services volume through bond issuances. The estimated budget projection submitted by the Company is shown in the table below. The budget projection covers bond issuance related issues and is based on the financial statements figures of provisional tax return. Şeker Leasing projected a 2013 year-end asset size of TRY 315mn through a 15.52% annual growth rate.

Integrating the above stated projected growth with the last five years‟ growth series results in a cumulative assets

growth rate of 195.56% from 2008 to FYE2013, and is compatible with the balance of current financial statements.

7. Corporate Governance

The Board of Şeker Leasing consists of 7 members, five of which are non-executive. Audit and Corporate Governance committees have been established under the authority of the Board, and a board member is responsible for credit. The Company shares are traded on the BIST and there is no limitation for the share transfer. The Company‟s web site provides sufficient information and disclosed documentation in terms of transparency; such as, the shareholder structure, audit reports, annual reports, articles of association, general assembly meeting documents, disclosure policy and code of ethics. Moreover, a Shareholder Relations Unit has been established within the scope of compliance to corporate governance principles and two independent board members are appointed in accordance with the recent CMB regulations. On the other hand, some of the Company shares have privileges written into the articles of association, such as the right to nominate the majority of the board. Additionally, the Company‟s remuneration policy regarding board members and executive managers is not disclosed. Moreover, the dividend policy and board members‟ and executive managers‟ CVs are not published on the Company web site. These constraints are factors pressuring the Company‟s compliance level to corporate governance

principles. Within the context of social responsibility, a TRY 36k aid and donations amount was realized by the Company in 2012.

Actual Budgeted

2012 2013

Cash & Cash Equiv alents 45,981 3,931

Leasing Receiv ables (net) 194,440 272,419

Ov er Due Loans 27,087 28,500

Allowance for Loan and Receiv ables Losses -15,067 -16,850

Other Assets 20,250 27,000

Total Assets 272,691 315,000

Bank Loans 123,013 160,501

Issued Bonds 98,402 100,000

Other Liabilities 9,571 8,142

Equity 41,705 46,357

Total Liability 272,691 315,000

Profit & Loss 3,597 4,652

Annual Asset Growth % 32.98 15.52

Equity/Total Asset % 15.29 14.72

ROAA % 1.81 1.89

ROAE % 10.48 12.64

Budget TRY (000)

102.15

297.99 352.99

416.33 463.51

491.67

70.23 51.7181.71 96.91

161.85195.56

67.70 -89.52 60.18 71.57

137.91 172.06

-200

-100

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013

Cumulative Equity Growth Rate %

Cumulative Asset Growth Rate %

Cumulative Liability Growth Rate %

LEASING

8 Şeker Finansal Kiralama A.Ş.

(Year end) (Year end) (Year end) (Year end) (Year end) (Year end) (Year end) (Year end) As % of As % of As % of

ŞEKER FİNANSAL KİRALAMA A.Ş. 2012 2012 2012 2011 2011 2010 2010 2009 2012 2011 2010 2012 2011 2010

BALANCE SHEET - ASSET USD TRY TRY TRY TRY TRY TRY TRY Assets Assets Assets Growth Growth Growth

TRY (000) (Converted) (Original) (Average) (Original) (Average) (Original) (Average) (Original) (Original) (Original) (Original) Rate Rate Rate

A-TOTAL EARNING ASSETS (I+II+III) 142,084.83 252,570.00 219,433.50 186,297.00 178,739.00 171,181.00 157,321.50 143,462.00 90.50 88.77 88.39 35.57 8.83 19.32

I- LOANS AND RECEIVABLES (net) 116,185.31 206,531.00 194,262.00 181,993.00 176,123.50 170,254.00 153,447.00 136,640.00 74.01 86.72 87.91 13.48 6.89 24.60

a) Factoring Receivables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Financing Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Lease Receivables 109,423.38 194,511.00 179,263.00 164,015.00 157,200.00 150,385.00 136,307.50 122,230.00 69.70 78.15 77.65 18.59 9.06 23.03

d) Over Due Loans 15,237.96 27,087.00 29,663.00 32,239.00 32,170.50 32,102.00 27,823.50 23,545.00 9.71 15.36 16.58 -15.98 0.43 36.34

e) Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

f) Receivable from Customer due to Brokerage

Activities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

g) Allowance for Loan and Receivables Losses (-) -8,476.04 -15,067.00 -14,664.00 -14,261.00 -13,247.00 -12,233.00 -10,684.00 -9,135.00 -5.40 -6.80 -6.32 5.65 16.58 33.91

II-BANKS AND OTHER EARNING ASSETS 25,899.53 46,039.00 25,171.50 4,304.00 2,615.50 927.00 3,874.50 6,822.00 16.50 2.05 0.48 969.68 364.29 -86.41

a) Banks 25,899.53 46,039.00 25,171.50 4,304.00 2,615.50 927.00 3,874.50 6,822.00 16.50 2.05 0.48 969.68 364.29 -86.41

b) Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Balance With Banks-Current Accounts 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

III-SECURITIES AT FAIR VALUE THROUGH P/L 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

a) Treasury Bills and Government Bonds 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Other Investment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Repurchase Agreement 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

B- INVESTMENTS IN ASSOCIATES

(net)+EQUITY SHARE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

a) Investments in Associates (net) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Equity Share 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

C-NON-EARNING ASSETS 14,909.43 26,503.00 25,036.50 23,570.00 23,025.50 22,481.00 20,353.50 18,226.00 9.50 11.23 11.61 12.44 4.84 23.35

a) Cash and Cash Equivalents 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Financial Assets at Fair Value through P/L 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Asset Held For Sale And Discontinued

Operations (net) 123.76 220.00 144.50 69.00 105.00 141.00 247.50 354.00 0.08 0.03 0.07 218.84 -51.06 -60.17

d) Other 14,785.67 26,283.00 24,892.00 23,501.00 22,920.50 22,340.00 20,106.00 17,872.00 9.42 11.20 11.54 11.84 5.20 25.00

- Intangible Assets 7.31 13.00 27.00 41.00 50.50 60.00 72.50 85.00 0.00 0.02 0.03 -68.29 -31.67 -29.41

- Property and Equipment 4,686.66 8,331.00 7,195.00 6,059.00 5,693.50 5,328.00 4,404.00 3,480.00 2.99 2.89 2.75 37.50 13.72 53.10

- Deferred Tax 7,566.94 13,451.00 13,946.00 14,441.00 13,754.50 13,068.00 11,870.00 10,672.00 4.82 6.88 6.75 -6.86 10.51 22.45

- Other 2,524.75 4,488.00 3,724.00 2,960.00 3,422.00 3,884.00 3,759.50 3,635.00 1.61 1.41 2.01 51.62 -23.79 6.85

TOTAL ASSETS 156,994.26 279,073.00 244,470.00 209,867.00 201,764.50 193,662.00 177,675.00 161,688.00 100.00 100.00 100.00 32.98 8.37 19.78

LEASING

9 Şeker Finansal Kiralama A.Ş.

(Year end) (Year end) (Year end) (Year end) (Year end) (Year end) (Year end) (Year end) As % of As % of As % of

ŞEKER FİNANSAL KİRALAMA A.Ş. 2012 2012 2012 2011 2011 2010 2010 2009 2012 2011 2010 2012 2011 2010

BALANCE SHEET-LIABILITIES+EQUITY USD TRY TRY TRY TRY TRY TRY TRY Assets Assets Assets Growth Growth Growth

TRY (000) (Converted) (Original) (Average) (Original) (Average) (Original) (Average) (Original) (Original) (Original) (Original) Rate Rate Rate

C- COST BEARING RESOURCES (I+II) 131,754.61 234,207.00 201,459.00 168,711.00 163,166.50 157,622.00 143,911.50 130,201.00 83.92 80.39 81.39 38.82 7.04 21.06

I-PAYABLES 4,495.39 7,991.00 6,386.00 4,781.00 6,827.00 8,873.00 6,535.50 4,198.00 2.86 2.28 4.58 67.14 -46.12 111.36

a) Factoring Payables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Lease Payables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Other 4,495.39 7,991.00 6,386.00 4,781.00 6,827.00 8,873.00 6,535.50 4,198.00 2.86 2.28 4.58 67.14 -46.12 111.36

II-BORROWING FUNDING LOANS & OTHER 127,259.23 226,216.00 195,073.00 163,930.00 156,339.50 148,749.00 137,376.00 126,003.00 81.06 78.11 76.81 38.00 10.21 18.05

a) Fund Borrowed-Short Term 71,902.57 127,814.00 145,872.00 163,930.00 156,339.50 148,749.00 137,376.00 126,003.00 45.80 78.11 76.81 -22.03 10.21 18.05

b) Fund Borrowed-Long Term 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c ) Marketable Securities For Issued (net) 55,356.66 98,402.00 49,201.00 0.00 0.00 0.00 0.00 0.00 35.26 n.a n.a n.a n.a n.a

d) Securities Sold Under Repurchase Agreements 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

e) Subordinated Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

D- NON COST BEARING RESOURCES 402.79 716.00 709.00 702.00 625.50 549.00 427.00 305.00 0.26 0.33 0.28 1.99 27.87 80.00

a) Provisions 162.58 289.00 240.50 192.00 158.00 124.00 110.50 97.00 0.10 0.09 0.06 50.52 54.84 27.84

b) Current & Deferred Tax Liabilities 216.02 384.00 447.00 510.00 467.50 425.00 316.50 208.00 0.14 0.24 0.22 -24.71 20.00 104.33

c) Trading Liabilities (Derivatives) 24.19 43.00 21.50 0.00 0.00 0.00 0.00 0.00 0.02 n.a n.a n.a n.a n.a

d) Other Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

E- TOTAL LIABILITIES 132,157.40 234,923.00 202,168.00 169,413.00 163,792.00 158,171.00 144,338.50 130,506.00 84.18 80.72 81.67 38.67 7.11 21.20

F- MINORITY INTEREST 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

F- EQUITY 24,836.86 44,150.00 42,302.00 40,454.00 37,972.50 35,491.00 33,336.50 31,182.00 15.82 19.28 18.33 9.14 13.98 13.82

a) Prior Year's Equity 22,757.65 40,454.00 37,972.50 35,491.00 33,336.50 31,182.00 23,510.00 15,838.00 14.50 16.91 16.10 13.98 13.82 96.88

b) Equity (Internal & external resources added during the year) 65.82 117.00 45.00 -27.00 -23.00 -19.00 2,490.50 5,000.00 0.04 -0.01 -0.01 -533.33 42.11 -100.38

c) Minority Interest 18.56 33.00 33.50 34.00 30.50 27.00 13.50 0.00 0.01 0.02 0.01 -2.94 25.93 n.a

d) Profit & Loss 1,994.82 3,546.00 4,251.00 4,956.00 4,628.50 4,301.00 7,322.50 10,344.00 1.27 2.36 2.22 -28.45 15.23 -58.42

TOTAL LIABILITY+EQUITY 156,994.26 279,073.00 244,470.00 209,867.00 201,764.50 193,662.00 177,675.00 161,688.00 100.00 100.00 100.00 32.98 8.37 19.78

USD 1 = TRY 1.7776 1.8889 1.5376 1.4873

LEASING

10 Şeker Finansal Kiralama A.Ş.

ŞEKER FİNANSAL KİRALAMA A.Ş. 2012 2011 2010 2009 2008

INCOME STATEMENT TRY (000)

Net Interest Income 13,165.00 10,895.00 10,469.00 8,034.00 9,008.00

A) Interest income 26,625.00 21,960.00 20,011.00 21,996.00 22,716.00

a) Factoring Interest Income 0.00 0.00 0.00 0.00 0.00

b) Financing Loans Interest Income 0.00 0.00 0.00 0.00 0.00

c) Lease Income 26,310.00 21,950.00 20,008.00 21,976.00 22,498.00

d) Banks 315.00 10.00 3.00 20.00 218.00

B) Fınancial Expense 13,460.00 11,065.00 9,542.00 13,962.00 13,708.00

Net Fee and Commission Income -940.00 -331.00 -375.00 -607.00 -418.00

a) Fee and Commission Income 0.00 0.00 0.00 0.00 0.00

b) Fee and Commission Expense 940.00 331.00 375.00 607.00 418.00

Total Operating Income 3,213.00 2,342.00 815.00 426.00 1,241.00

Interest Income from Other Operating Field 0.00 0.00 0.00 0.00 0.00

Foreign Exchange Gain or Loss (net) (+/-) -375.00 -734.00 -752.00 -579.00 269.00

Gross Profit from Retail Business 0.00 0.00 134.00 0.00 0.00

Gains or Loss on Derivative Instruments (+/-) -214.00 0.00 0.00 84.00 0.00

Income on Sale of Equity Participations and Consolidated Affiliates 0.00 0.00 0.00 0.00 0.00

Gains from Investment Securities (net) 0.00 0.00 0.00 0.00 0.00

Other Operating Income 3,802.00 3,076.00 1,433.00 921.00 972.00

Taxes other than Income Tax 0.00 0.00 0.00 0.00 0.00

Dividend 0.00 0.00 0.00 0.00 0.00

Provisions 3,371.00 3,172.00 3,574.00 1,415.00 3,027.00

Provision for Impairment of Loan and Trade Receivables 3,371.00 3,172.00 3,574.00 1,415.00 3,027.00

Other Provision 0.00 0.00 0.00 0.00 0.00

Total Operating Expense 7,634.00 6,015.00 5,213.00 5,607.00 4,912.00

Salaries and Employee Benefits 3,308.00 2,932.00 2,958.00 2,717.00 2,454.00

Depreciation and Amortization 0.00 0.00 0.00 0.00 0.00

Other Expenses 4,326.00 3,083.00 2,255.00 2,890.00 2,458.00

Profit from Operating Activities before Income Tax 4,433.00 3,719.00 2,122.00 831.00 1,892.00

Income Tax – Current 23.00 51.00 0.00 12.00 0.00

Income Tax – Deferred 864.00 -1,288.00 -2,179.00 -9,525.00 -1,112.00

Net Profit for the Period 3,546.00 4,956.00 4,301.00 10,344.00 3,004.00

Total Income 15,813.00 13,640.00 11,661.00 8,432.00 9,831.00

Total Expense 8,009.00 6,749.00 5,965.00 6,186.00 4,912.00

Provision 3,371.00 3,172.00 3,574.00 1,415.00 3,027.00

Pretax Profit 4,433.00 3,719.00 2,122.00 831.00 1,892.00

LEASING

11 Şeker Finansal Kiralama A.Ş.

ŞEKER FİNANSAL KİRALAMA A.Ş.

2012 2011 2010 FINANCIAL RATIO %

I. PROFITABILITY & PERFORMANCE

1. ROA - Pretax Profit / Total Assets (avg.) 1.81 1.84 1.19

2. ROE - Pretax Profit / Equity (avg.) 10.48 9.79 6.37

3. Total Income / Equity (avg.) 37.38 35.92 34.98

4. Total income / Total Assets (avg.) 6.47 6.76 6.56

5. Provisions / Total Income 21.32 23.26 30.65

6. Total Expense / Total Resources (avg.) 3.96 4.12 4.13

7. Net Profit for the Period / Total Assets (avg.) 1.45 2.46 2.42

8. Total Income / Total Expenses 197.44 202.10 195.49

9. Non Cost Bearing Liabilities + Equity- Non Earning Assets / Assets 6.58 8.38 7.00

10. Non Cost Bearing Liabilities - Non Earning Assets / Assets -9.24 -10.90 -11.32

11. Total Operating Expenses / Total Income 48.28 44.10 44.70

12. Interest Margin 6.00 6.10 6.65

13. Operating ROAA = Operating Net Incomes / Assets (avg.) 7.32 7.33 6.56

14. Operating ROAE = Operating Net Incomes / Equity Capital (avg.) 42.30 38.93 34.99

15. Interest Coverage – EBIT / Interest Expenses 132.93 133.61 122.24

16. Net Profit Margin 22.42 36.33 36.88

17. Gross Profit Margin 28.03 27.27 18.20

18. Market Share 1.38 1.13 1.23

19. Growth Rate 32.98 8.37 19.78

II. CAPITAL ADEQUACY (year end)

1. Equity Generation / Prior Year‟s Equity 0.29 -0.08 -0.06

2. Internal Equity Generation / Previous Year‟s Equity 8.77 13.96 13.79

3. Equity / Total Assets 15.82 19.28 18.33

4. Equity / Total Liabilities 18.79 23.88 22.44

5. Free Equity / Total Receivables Ratio 17.34 18.88 17.68

6. Tangible Assets / Total Assets 2.99 2.89 2.75

7. Intangible Assets / Total Assets 0.00 0.02 0.03

8. Equity / Total Guarantees and Commitments + Equity 0.16 0.19 0.12

III. LIQUIDITY (year end)

1. Liquid Assets + Marketable Securities / Total Assets 16.50 2.05 0.48

2. Liquid Assets + Marketable Securities / Total Liabilities 19.60 2.54 0.59

3. Short Term Borrowings / Total Assets 48.66 80.39 81.39

4. Net Interest and Commission / Total Assets 4.38 5.03 5.21 5. Liquid Assets + Marketable Securities / Equity 104.28 10.64 2.61

IV. ASSET QUALITY

1. Loan and Receivable‟s Loss Provisions / Total Loans and Receivables 6.80 7.27 6.70

2. Total Provisions / Profit Before Provision and Tax 43.20 46.03 62.75

3. Impaired Receivables / Gross Receivables 12.22 16.43 17.59

4. Impaired Receivables / Equity 61.35 79.69 90.45

5. Loss Reserves for Receivables / Impaired Receivables 55.62 44.24 38.11

6. Collaterals / Total Receivables 227.89 253.35 223.59

7. Total FX Position / Total Assets 155.97 194.73 155.38

8. Total FX Position / Equity 985.87 1,010.21 847.84

9. Assets / Total Guarantees and Commitments + Assets 1.00 0.96 0.64