Q1-2019Investor Presentation

Albaraka Türk Participation Bank15 May 2019

Agenda

1 Financial Highlights

2 Market Comparison

3Appendix

Albaraka Turk – Q1’19 At a Glance

3

(Million TRL) Q4’18 Q1’19 Q-Q (%) % Q4’18 Q1’19 Q-Q (bps)

Balance Sheet Total Assets 42.223 44.594 5,62CAR 14,66 13,57 -109

Total Funded Credits (Net) 26.185 26.498 1,20

Total NPLs 1.889 2.045 8,26Tier 1 9,98 9,45 -53

Deposits (incl. Interbank) 28.623 30.628 7,00

Shareholder’s Equity 3.261 3.257 -0,12NPL 6,88 7,36 48

ProvisioningStage III

47,31 52,26 495

(Million TRL) Q1’18 Q1’19 Y-Y (%)

IncomeStatement

Net Profit Share Income 250 196 -21,5%Net Profit

Share Margin2,80 2,55 -25

Net Fees & Commissions 40 70 75,0%

Provisions for Loan Loss 257 325 26.4ROAE 4,27 1,93 -234

Operating Expenses* 103 105 1,94%

Net Profit 98 27 -72,4%Cost/Income 59,93 42,88 -1705

* Includes personnel expenses

Key Ratios

6Q1’19 Main Highlights (Million TRL)

3,19 3,143,37

2,94

2,62

3,71

3,353,48

2,8 2,55

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

NPSM (Exc. JV Projects)* Net Profit Share Margin*

* Trailing for last 4 quarters

4

37.08440.456

44.71242.224

44.594

25.93827.689

29.79726.185 26.49826.099

27.71129.330

28.623 30.628

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Total Assets Total Funded Credits Total Collected Funds

36

98

27

Q1'17 Q1'18 Q1'19

Net Profit

7,56 % 7,16

2,42 % 2,29

4,68 %4,12

Q4'18 Q1'19

Common Equity Tier I Additional Tier I Additional Tier II

13.57 %14.66 %

1090 1.1441.492

1.230

1.789

629 564

515619

549995 941

927 1.117

1.195

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Available for sale Held to Maturity Other Marketable Securities

2.875

2.648

2.934

7Asset Composition

Composition of Total Assets (Q1’19) Liquid Assets (Million TRL)

5

Total Securities Portfolio (Million TRL) Securities Yield (%)

12,9212,84

11,11

10,029,78

Q1'19Q4'18Q3'18Q2'18Q1'18

(*) Profit share income received from securities for the last 4Q/5Q average securities

2.714

9.395 10.920 12.580 13.465 15.485

25,30%27,00%

28,10%31,90%

34,70%

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Liquid Assets % of Total Assets

Funded Credits; 59,4%

Securities Portfolio;

7,9%

Other Liquid

Assets*; 28,0%

Other Assets; 4,7%

*Liquid Assets includes Cash and Cash Equivalents, Financial Assets Measured at Fair Value

through Profit/Loss, Financial Assets Measured at Fair Value through Other Comprehensive

Income.

* Other Liquid Assets includes Cash and Cash Equivalents and Derivative Financial Assets

2.965

181 36 33 22

Q1'18 Profit ShareIncome

Fees &Comm

TradingIncome

Others Q1'19

1,029

6Operating Performance Breakdown

Income (Million TRL)

663 751 844

-413 -593 -648

Profit Share Income Profit Share Expense

250

Q4’18

Net Profit Share Income (Million TRL)

Key Movements in Income (Million TRL)

Cost & Yield Movement (%)

Q1’18

158 196

6

10,18% 10,04%10,47% 10,09% 10,58%

3,71%3,35%

3,48%2,80%

2,55%

5,83% 6,08% 6,41% 6,78% 7,17%

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Credit Yield Net Profit Share margin

Cost of Collected Funds

64.4%87.2%

64.8%

5.7%

11.3%

7.3%

3.3%

1.5%

5.2%26.6%

4.0%

22.7%

Q1'18 Q4'18 Q1'19

Others Trading Income Fees & Comm Profit Share Income

1.302

835

1.0291,302

Q1’19

*USD equivalent

Total Funded Credits (including financial leasing, million) Yield on Performing Credits (%)

Profit share income received from credits for the last 4Q/4Q average credits

Funded Credits Portfolio

Q1’18 Q2’18 Q3’18 Q4’18 Q1’19

Corporate Credits 40.2 39.6 41.4 41.7 41.9

SME Credits 46.9 49.2 48.9 48.1 48.6

Retail Credits 12.8 11.2 9.7 10.2 9.6

46%

36%

18%

TRL

USD*

EUR*

Composition of Total Funded Credits* (%) Currency Composition of Total Funded Credits* (Q1’19)

*Including USD & EUR indexed credits*According to BRSA definition

7

Q1’18 Q4’18 Q1’19 QoQ YoY

TL Credits, TL 13.243 12.092 12.175 -0,69% -8,06%

FC Credits, $* 1.549 1.933 1.972 2,02% 27,31%

FC Indexed, $* 1.669 735 581 -20,95% -65,19%

Total Credits, TL 25.938 26.185 26.498 1,20% 2,16%

13,4%

16,6%

9,8%10,9%

6,4% 6,4%

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Yield on TL Loans, adjusted, trailing

Blended Yield, adjusted

Yield on FX Denominated Loans, trailing

5,34 5,576,22

6,887,36

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Gross Funded Credits by Groups (including financial leasing, million)

243227 232

216 218

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Cost of Risk** (bps)

NPL Ratio (%) *

** Specific provisions for credits for last 4Q/ 5Q average credits

*Including financial leasing & accruals and rediscounts

Provisioning (Stage III)

Asset Quality

8

31.272

27.44227.04828.887

848929

1.168

8931.069

58,7%57,7%

60,1%

47,3%52,3%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Lifetime ECL Impaired Credits (Stage 3) (Million TRL) Provisioning Ratio (%)

27.778

84,0% 80,3% 76,2%73,7% 77,6%

10,7% 14,2%17,6%

19,4% 15,1%5,3%

5,6%6,2%

6,9% 7,3%

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Group I Group II Group III

NPL Formation Trend

Asset Quality

92

87

20

9

45

4

43

9

31

5

56

44 1

17

25

3

78

23

1

16

5

33

6

18

6

23

7

372

250

475

272

363

1Q'18 2Q'18 3Q'18 4Q'18 Q1'19

Additions (million TRL) Recoveries (million TRL)

Net NPL Formation (million TRL) Net NPL Formation Rate (bps)

NPL Inflow Sector Distribution

Source: Albaraka Turk

12,0%10,9%

30,2%

7,7%

25,7%

5,19%

Communication Construction&Real EstateManufacturing OthersTrading Transportation

35,60%

14,20%

20,50% 7,90%4,00%

17,80%

Manufacturing Others

Construction&Real Estate Trading

Transportation Energy

Stage II Credits Sector Distribution

4.209

2.045 2.861

1.337

96

1.069

Stage 2 Stage 2 Stage 3 Stage 3

Risk amount Collateral Provision

Stage II-III Coverage (Million TRL)

*Includes construction of power plant projects

21% 24% 27% 24% 25%

19%21% 21% 23% 23%

60% 56% 52% 53% 52,0%

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19Fund Borrowed* Current Accounts Participation accounts

Composition of Total Liabilities (Q1’19,%) Composition of Funding Base (Million TRL)

69%

21%

7%3%

Funds Collected

Wholesale Funding

Shareholders'

EquityOthers

32,885

21.6%

36,295

Funding Profile

10

*Fund Borrowed includes Funds Borrowed , Borrowings from Money Market and Subordinated Loans

39,978

(Million TRL) Q4’18 Q1’19 YoY Growth Comp.

Funds Collected (incl. Bank deposits)

28,623 30,628 7.0% 69%

Wholesale Funding 8,828 9,350 5.9% 21%

Funds Borrowed 6,852 7,499 9.4% 17%

Syndicated Loans 1,665 1,764 5.9% 4%

Wakala 1,211 1,199 -1.0% 3%

Issued Lease Certificates & Sukuk

3,463 4,187 -20% 9%

Other 514 349 -32% 1%

Sub-Ordinated Debt (Tier 2) 1,204 1,313 9.1% 3%

Interbank 772 537 -30% 1%

Shareholders’ Equity 3,261 3,257 -0.1% 7%

Paid in Capital 900 900 - 2%

Tier 1 Sukuk 776 - 2%

Others 1,510 1,359 -10.0% 3%

40,155

350

205 250

0 100 200 300 400 500

>2020

2019

Senior Sukuk Tier 1 Sukuk Tier 2 Sukuk

Maturity Profile of Liabilities (Million USD)

37,452

37

38

20

6

TRL

USD

EUR

Others

7,17%6,78%

6,41%6,13%5,88%

12,63%11,31%10,34%

9,58%9,10%

2,56%

2,47%2,33%2,13%1,94%

0,94%1,21%1,41%1,36%1,25%

Q1'19Q4'18Q3'18Q2'18Q1'18

Blended TL FC Precious Metal

Total Funds Collected (Million TRL)

Cost of Funds Collected*

*USD equivalent of FC accounts

*Profit share expense to depositors for the last 4Q/4Q average participation accounts

Currency Composition of Funds Collected (Q1’19,%)

Maturity Composition of Funds Collected (Q1’19, %)

32

19

42

3 4

Current Acc.

Up to 1 month

Up to 3 months

Up to 1 year

>1year

Funding Profile (Collected Funds)

11

Q4’18 Q1’19 YoY

Funds Collected 28,623 30,628 7,0%

Current acc./ Total Funds Col. 30.49% 32.14%

Current Accounts 8,729 9,842 12,8%

Current Accounts TL 2,810 2,886 2,7%

Current Accounts, FC, $ 1,121 1,240 10,6%

Participation Accounts 19,895 20,785 4,5%

Participation accounts TL 8,970 8,447 -5,8%

Participation Accounts FC, $ 2,069 2,199 6,3%

Q1’18 Q2’18 Q3’18 Q4’18 Q1’19Growth (%)

YoY

Letter of Guarantee 7,387 8,004 8,910 8,575 8,304 12%

Letter of Credit 1,020 1,178 1,266 1,230 1,423 39%

Others* 122 137 205 242 424 248%

Total: 8,530 9,319 10,382 10,046 10,151 19%

Off Balance Sheet Composition (%) LGs*-to-Total Assets

20,4%19,8% 19,9%

20,3%

18,6%

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Guarantees & Sureties(TRL million)

*Revocable credit limits not included.

Off Balance Sheet Growth

12

*Below 20% of LGs to Total Assets is targeted

62 59 5869

40

8 9 8

10

7

30 32 3421

53

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

LG LC Others

13.544 15.413 20.64812.003 12.444

14Income- Cost Dynamics

13

(Million TRL)

YoY Notes

Q1’18 Q1’19 %

Net Profit Share Income 250 196 -21,5%Profit Share income increased by 21% While Profit share Expenses incresed by 57% YoY. Upward pricing of Funded Credits in 2H19 is expected to lead stronger Net Profit Share Income.

Net Fee Income 40 70 75,0%Circa 75,0% Y-o-Y expansion in this line item is mostly driven by higher POS commissions and custody services, despite the deceleration in economic activity leading to slower growth in Funded Credits.

Net Trading Income 34 67 97,1%$205 mln Tier-1 capital sukuk shaped stronger FX gains in the 2019 1Q. This USD-denominated capital has acted as an organic hedge to TL depreciation.

Other Income 273 296 8,4%Provision reversals from stage 2 credits led to 2019 1Q total operating income being above the same period of last year.

Provisioning 257 325 26,4%Provisioning expenses related to Stage 3 credits put pressure on the provisioning expenses. Nevertheless, our total coverage ratio dropped to 62.6%, while Stage-3 coverage ratio increases to 52.3%.

Personnel Expenses 122 165 35,2% HR costs grew by 35,2 which is higher than CPI.

Other Costs 103 105 1,9%Despite the continued branch expansion (+11 branches YoY) to 231headline cost growth remained below 19,3% inflation. The growth in

Net Profits 98 27 -72,4%Worsening asset quality related higher provisioning expenses, rising cost aof funding depressed net profit in 2019 1Q

Agenda

1 Financial Highlights

2 Market Comparison

3Appendix

Percent % Q4’18 Q1’19

Albaraka TürkParticipation

BanksBanking Sector Albaraka Türk

ParticipationBanks

BankingSector

CAR 14.66 15.76 17.27 13.57 15.48 16.35

NPL Ratio 6.88 3.74 3.81 7.36 4.06 3.94

Provisioning Ratio (Stage 3) 47.31 63.30 68.32 54.26 66.53 68.83

Loan/Deposits 91.48 96.62 117.25 86.52 89.59 113.86

ROAA 0.33 1.48 1.78 0.15 1.38 1.64

ROAE 4.27 13.93 13.55 1.93 13.11 12.71

Asset Yield 8.29 9.64 10.49 8.46 10.01 10.98

Asset Spread 2.81 3.23 3.37 2.60 3.05 3.36

Net Profit Share Margin 2.80 4.21 4.26 2.55 4.06 4.23

Op Costs / Avg. Assets 2.89 2.10 1.84 2.88 2.09 1.85

Cost/Income* 59.93 35.70 34.39 42.88 34.48 33.04

Credits / Branches (000‘TRL) 113.848 121.472 219.358 114.709 126.508 232.359

Staff / Branches 17.34 14.08 17.96 17.01 14.88 17.88

CA / Deposits 30.49 32.75 21.32 32.14 33.19 22.80

*Cost: Operating Costs, Income: NPSI, Net Fees and Commissions Income, Other Income Net Trading Income

Financial Ratios - Sector Comparison

15

Agenda

1 Financial Highlights

2 Market Comparison

3Appendix

(Million TRL) Q4’18 Q1’19 Growth (%)Cash and Balances with Central Bank 5,918 5,306 -10%Banks 5,217 7,223 38%Financial Assets 2,949 3,530 20%Funded Credits 26,185 26,498 1%

Cash Credits 25,174 25,399 1%NPL 1,889 2,045 8%Provisions 893 1,069 -100%Net Financial Leasing Receivables 380 334 -12%

Associates 40 46 15%Fixed Assets 687 1,006 -100%Assets Held For Sale and Investment 650 656 1%Other Assets (inc. Tax Assets) 578 330 -43%

Total Assets 42,224 44,594 6%Funds Collected 28,623 30,628 7%Funds Borrowed 6,852 7,499 9%De bts 2,192 1,794 -18%Provisions (inc. Taxes) 90 102 13%Tier II Sukuk 1,204 1,313 9%Shareholders’ Equity 3,261 3,257 0%

Capital 900 900 0%Capital Reserves (inc. Premium) 846 863 2%Profit Reserves 1,301 1,431 10%

Total Liabilities 42,224 44,594 6%

Summary Balance Sheet

17

(Million TRL) Q1’18 Q1’19 Growth (%)

Profit Share Income 662 800 21%

Profit Share Expense 413 648 57%

Net Profit Share Income 250 152 -39%

Net Fees and Commissions Income 40 70 75%

Fees and Commissions Received 59 95 61%

Fees and Commissions Paid 19 25 32%

Net Trading Income 34 67 97%

Other Operating Income 273 296 8%

Total Operating Profit 475 420 -12%

Provisions for Loan Losses and Other Receivables 257 281 9%

Other Operating Expenses* 225 270 20%

Operating Profit Before Tax 115 34 -70%

Tax Provision 17 7 -59%

Net Profit 98 27 -72%

Summary Income Statement

18

* including personnel expenses

THANK YOU

Disclaimer

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 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 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 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.

Contact Us

Investor Relations

Address : Saray Mahallesi Dr.Adnan Büyükdeniz Caddesi No:6 34768 Ümraniye/ İSTANBULE-mail : yim@albarakaturk.com.trTel : +90 216 666 03 03Fax : +90 216 666 16 20 Internet : www.albaraka.com.tr