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25 March 2013
Türkiye Finans Katılım Bankası A.Ş.
(“TFKB”)
March 2015
Genele Açık / Public 1
Strong Financial
Performance
Strong and Growing
Franchise
14th largest Turkish bank by assets as of 30 Sep 2014
32.1% market share (1) of assets among 4 participation banks (Islamic banks) in Turkey as of 2014 YE
- World Finance Awards; Best Islamic Bank in Turkey (Turkey’s Best Participation Bank Award) - March 2014
Strong Asset Quality & Risk
Management
Despite absence of NPL sales until 3Q14, NPL levels consistently below banking sector and participation bank peer
averages (2.5% as of 2014 YE) (1)
Increasing NPL coverage ratio in line with that of the participation bank average
Experienced Management
Team
Highly experienced management team with a proven track record in growing operations and profitability while maintaining
a robust capital structure and a strong risk management culture
CEO and EVPs have average 24 years experience in banking and business administration
(1) Comparison based on BRSA financials
(2) Cost to income ratio calculated as operating income excluding financial asset impairment
(3) Net cost of risk defined as net loan loss provisions over average net loans
Source: BRSA
TFKB Highlights
Strong and Supportive
Shareholder Base
National Commercial Bank, Saudi Arabia’s largest bank by total assets (rated A+/A1 by Fitch, S&P and Moody’s), is the
majority shareholder with a 67.03% stake
Share capital increased from TRY 292mn (pre-NCB’s majority stake acquisition in 2008) to TRY 2,600mn in 2014
Favorable Operating
Environment
Attractive demographics coupled with strong GDP growth
Stable political and macro environment, including healthy public debt to GDP ratio and subsiding inflation
Strictly regulated, well capitalized, and underpenetrated banking sector (in terms of lending) to underpin continued growth
Participation banking growing faster than conventional banks, still represents only 5.2% of total bank sector assets, as of
2014 YE
Trade Finance Initiatives
Serving to 2,7mn retail, 374k SME and 82k corporate clients, mainly SMEs
Offering a wide range of correspondent banking relationships and foreign trade services with a volume of USD 27.5bn as
of Q4 2014
Net profit growing at 13% CAGR between 2010-2014, outperforming Turkish banking sector and Turkish participation
banking average
Outperformed banking sector and participation bank industry averages in terms of asset, loan, deposit and net profit
growth as well as ROAE, as of 2014 YE
Low cost to income(2) ratio of 62.8%, outperforming participation bank industry
25 March 2013
1.Turkey: Country Overview
Genele Açık / Public
BBB- (Fitch), Baa3 (Moody’s) and BB+ (S&P*)
USD 813 billion (2014 IMF Estimates)
Turkish
Turkish Lira (TRY)
77,695,904 (2014)
783,562 km2
Istanbul
Ankara
Turkey: Overview of the Country
3
Background Information
Turkey: A Strong Emerging Market with Growth Potential
* Unsolicited Rating
** IMF World Economic Outlook (WEO) October 2014 Forecasts
Sources: IMF WOE Database, TURKSTAT
Geographical Location
2010 2011 2012 2013 2014 2015 (P)
Population (m) 73.7 74.7 75.6 76.7 77.7 78.2
Gross GDP (in USDbn equivalent) 731.5 774.7 788.6 821.9 813.3** 861.1
Real GDP growth (%) 9.2% 8.8% 2.1% 4.1% 3.0%** 3.0%
GDP per capita (in USD,000 equivalent) 10.0 10.4 10.5 10.8 10.5** 11.0
Inflation (CPI) 6.4% 10.4% 6.2% 7.4% 8.2% 7.0%
Unemployment (%) 11.1% 9.1% 8.4% 9.0% 9.5%** 9.9%
Rating
GDP
Official Language
Currency
Population
Area
Largest City
Capital
Genele Açık / Public
Turkey: Strong Macro Fundamentals
4
Annual GDP Growth (%) (2003/14 Averages) 2015/19 Average GDP Growth Forecasts (%)
Annual CPI Inflation (%) Inflation and Benchmark Bond Yield (%)
Source: TURKSTAT, CBRT, IMF, Bloomberg
3,2
Czech
Republic
2,6
Mexico
2,5
Hungary
1,3
Turkey
4,8
Russia
4,1
Poland
4,0
Brazil
3,3
South
AfricaMexico
3,7
PolandRussia
1,6
3,5
Turkey
3,5
South
Africa
2,6
Brazil
2,5
Czech
Republic
2,3
Hungary
1,9
0
10
20
30
40
50
60
70
2020201820162014201220102008200620042002
0
5
10
15
20
25
30
2008 2012201020062004 2016 20182014
Annual CPI Inflation Benchmark Bond Yields
Inflation
Turkey is the 17th largest economy
in the World as of 2013
Consistently outperformed peer
groups in terms of real GDP growth
between 2003-2014
Real GDP expected to grow at 3.5%
between 2015-2019, and still
continue to outperform many
emerging market economies
The structural reform programs,
recently released by the government,
will likely enhance the productivity
and boost the potential growth, as
well as the favorable demographics
Turkey is in a disinflation process in
the long-run
Low inflation also had a crucial role
to sustain high growth during the last
decade
Accordingly, benchmark rates
remained at single digit levels over
the past years as the risk premium
eased due to improvement in public
finance
Genele Açık / Public
Turkey: Sound Fiscal Management & Financial Markets
Budget and Primary Balances of GDP (%) 2013 Public Debt to GDP vs. Peers
Central Bank Policy Rates & Inflation Rates (%) 3M-Implied Volatility in FX Markets
Source: TURKSTAT, CBRT, IMF, Bloomberg
-12
-10
-8
-6
-4
-2
0
2
4
6
201120092007200520032001 201720152013
Primary Surplus
Budget Balance
79
66
57
464645
36
14
HungaryBrazilPolandMexicoCzech
Rep.
South
Africa
TurkeyRussia
Mexico
India
13,3
Czech Republic 12,2
Russia 12,1
10,1
15,2
Poland 14,8
Brazil
Hungary
South Africa
11,8
Turkey 11,4
Indonesia 10,4
15,5Mexico
4,50
Hungary
2,10
Poland
8,25
Russia
8,25
South
Africa
5,75
Brazil
11,75
Turkey
2,00
Czech
Republic
0,05
2010-2014 Averages
Prudent public spending has
significantly reduced budget deficit
for the last ten years
The Government’s Medium-Term
Program (MTP) also imply that the
tight fiscal policy will maintain in the
next three years
Furthermore, cautious public
borrowing has diminished Turkey’s
risk premium to the historical low
levels
At 36% Turkey’s public debt to GDP
ratio is significantly lower than the
many countries
Neutral real interest rates fell globally
after the Global Financial Crisis
Turkey can also maintain the low
real rates thanks to the healthy
public finance dynamics and growth
prospects
In addition to the strong
fundamentals, macro prudential
measures have lowered the volatility
in financial markets
5
CPI
Policy Rates
25 March 2013
2.Turkey: Banking Industry Overview
Genele Açık / Public
Loan Growth (%)(1) Deposit Growth (%)(1) Loans/Deposits (%)(1)
Gro
wth
&
Pe
ne
tra
tio
nA
sset
Qu
ali
ty
& C
ap
ita
l
NPL (%)(1) Coverage (%)(1) CAR (%)(1)
40.6
29.7 28.8
5.1
34.829.7
15.3
31.2
19.1
2006 2007 2008 2009 2010 2011 2012 2013 2014
22.0
15.4
27.3
12.0
19.7
12.410.4
22.1
11.6
2006 2007 2008 2009 2010 2011 2012 2013 2014
68.376.8 77.6 72.8
82.094.7 98.9
106.3 113.3
2006 2007 2008 2009 2010 2011 2012 2013 2014
3.8 3.6 3.7
5.4
3.7
2.7 2.9 2.8 2.8
2006 2007 2008 2009 2010 2011 2012 2013 2014
90.7 88.381.2 84.6 84.6 80.4
75.2 77.5 75.1
2006 2007 2008 2009 2010 2011 2012 2013 2014
16.8417.4 16.6
19.317.7
15.517.3
14.6 15.7
2006 2007 2008 2009 2010 2011 2012 2013 2014
Hig
h G
row
th
Po
ten
tia
l
CAR (%)(2) Total Deposits to GDP (%)(2) Total Loans to GDP (%)(2)
12.80%
13.30%
13.70%
14.60%
15.50%
15.50%
15.70%
15.90%
17.00%
Russia
Spain
Italy
South Africa
Brazil
Turkey
Poland
Mexico
Czech Republic
27%
51%
60%
71%
73%
79%
85%
140%
211%
Mexico
Poland
Turkey
Russia
Brazil
Czech Republic
South Africa
Italy
Spain
18%
55%
57%
66%
70%
72%
87%
96%
172%
Mexico
Russia
Poland
Czech Republic
Turkey
Brazil
South Africa
Italy
Spain
(1) BRSA for deposit taking banks Annual growth
(2) As of 3Q14:Turkey, 07/14: Mexico, 2Q14: Russia, SA& Czech Rep. ,4Q13: Spain, Italy and Poland
Source: BRSA for deposit taking banks only, IMF
Turkey Banking Sector: Robust and Well Positioned for Growth
7
Genele Açık / Public
Total Loans and Industry NPL Ratios
Turkey Banking Sector: Well Regulated and Healthy
8
Total Assets (TRY’000) &Assets to GDP (%)
Penetration Ratios as of 3Q14 (%) Tier 1 Capital Adequacy Ratios in G20*
Source: All data sourced from BRSA and ECB
834733
1.007
2008 2009 2010
1.732
2012
1.371
2013 2014
1.994
1.218
2011
+18%
Banking Sector Assets
795
683
526
393367
2008
1.047
20112009 20122010
+22%
1.241
20142013
Banking Sector Loans
2,83,8
5,6
3,82,8 2,82,9
NPL
6070
113
166168
311
Deposits/GDPLoans/GDPTotal Assets/GDP
EurozoneTurkey
13
15
18
17
14
14
14
14
13
13
12
12
12
12
11
11
10
10
9
United Kingdom
Mexico
South Africa
Germany
Turkey
Argentina
Saudi Arabia
United States
Indonesia
France
Brazil
Japan
Italy
Canada
Korea
Australia
China
India
Russia
* IMF Financial Soundness Indicators (FSI), Latest Data Available
1119492
8877
97
Assets to GDP
51 banks with a combined asset
base of TRY1.99 trillion in 2014 YE
Turkish banking sector asset
volume has grown at a CAGR of
19% between 2008-2013 and
represents 111% of GDP in 2013,
reflecting increasing prominence of
Turkish banking sector
Sector has low lending penetration
with low loan-to-GDP ratio of 70%
as of the third quarter of 2014,
despite the fast growth in the last
five years
Well capitalized sector did not
require government support during
2008-2009 financial crises
Strong regulatory environment
ensuring transparency in the sector
Strong asset quality, no exposure to
subprime or toxic assets
Low NPL ratio of 2.8% as of 2014
YE, reflects the assets quality and
soundness, as well as the high Tier
1 ratio
Genele Açık / Public
Participation Banks in Turkey
9
3Q14 Turkish Banking Sector(1) - Ranking by Asset Size (TRY bn)
Participation Bank Industry Evolution (BRSA)
Participation Banks
238 231215
202
169150 147
75 70 6139 33 33 32 22 22 21 16
Ziraa
t
İş B
ankası
Ga
ranti
Akb
ank
Yap
i K
redi
Ha
lkba
nk
Vakifba
nk
Fin
ansb
an
k
De
niz
TE
B
ING
HS
BC
Kuveyt
TF
KB
Od
ea
AlB
ara
ka
Seker
Asya
56.170.3
96.1104.2
4.6% 5.1% 5.5% 5.2%
2011 2012 2013 2014
Assets Share in Sector
CAGR
17%
39.247.9
61.3 65.2
5.6% 6.2% 6.5% 6.2%
2011 2012 2013 2014
Deposits Share in Sector
CAGR
14%
38.548.0
62.0 64.1
5.6% 6.0% 5.9% 5.2%
2011 2012 2013 2014
Loans Share in Sector
CAGR
14%
2.9%
11.6%
16.3%
4.7%
1.0%
14.5%
NPL ROAE CAR
Banking Industry Participation Banking
(1) Unconsolidated BRSA numbers
(2) Loans currently excludes lease receivables
(3) ROAE defined as current period income over average of current and preceding year equity
Source: All data sourced from BRSA or respective bank financial statements
Asset Growth (TRY bn) Deposit Growth (TRY bn) Loan(2) Growth (TRY bn) 2014 Key Ratios(3) (%)
Participation banks comply with general Islamic
principles, mainly the prohibition of interest and the
concept of profit and loss sharing
Participation banks are fully authorized to engage in all
banking activities and are subject to all local regulations
Currently four participation banks operate in Turkey with
a total asset base of TRY 104.2bn representing 5.2%
market share in the banking sector, as of 2014 YE
In 2014, participation banks underperformed the sector
because of difficulties faced by one of the participation
banks
25 March 2013
3. Türkiye Finans: Business Overview
Genele Açık / Public 11
Türkiye Finans At a Glance
Key Financials & Operational Highlights
*Cash Loan includes Net NPL, Leasing and Accruals
** ROAE defined as net income over average of preceding and current year equity
*** Rating upgrade occurred as of 13 Nov. 2012
Source: All data sourced from BRSA, Company FIlings
2014 YE Türkiye Finans vs. Bank Sector
15.1%18.3%
11.6%
33.3% 32.8%
11.8%
Asset Growth Cash Loan* Growth ROAE**
Bank Sector Turkiye Finans
2011 2012*** 2013 2014
Outlook Stable Stable Stable Stable
Long-Term – FC BBB- BBB BBB BBB
Short-Term – FC F3 F3 F3 F3
Long-Term – LC BBB BBB+ BBB+ BBB+
Short-Term – LC F3 F2 F2 F2
Viability Rating bb- bb- bb- bb-
Support Rating 2 2 2 2
National Rating AAA (tur) AAA (tur) AAA (tur) AAA (tur)
Republic of
Turkey – FCBB+ BBB- BBB- BBB-
Republic of
Turkey – LCBB+ BBB BBB BBB
Turkish full-service participation bank operating under Islamic banking principles
14th largest bank in the Turkey banking sector and 2nd largest participation bank
among four participation banks by asset size as of 3Q14
32.1% asset market share among participation banks as of 2014 YE
Activities focused on core business segments: (i) retail banking (ii) corporate
banking (iii) treasury (iv) international banking
Named “Best Islamic Bank in Turkey” by Islamic Finance news magazine in 2014
Serving 2,7mn retail, 374k SME and 82k corporate clients. Number of credit cards
are 425k and employing 4,478 people
Outperformed banking sector and participation bank industry averages in terms of
asset, loan, deposit and net profit growth as well as ROAE, as of 2014 YE
Tier I capital ratio of 12.0% and CAR of 12.5%, well above regulatory
requirements
Senior unsecured rating of BBB from Fitch, one notch higher than Turkish
sovereign rating
Türkiye Finans - Fitch Ratings
In TRY mn 2012 2013 2014 YoY Growth
Total Assets 17,617 25,127 33,495 33%
Total Loans 13,068 18,290 24,292 33%
Total Deposits 11,430 15,142 19,113 26%
Shareholder’s Equity 2,125 2,522 3,154 25%
Net Profit 284 329 334 2%
Operational
Highlights
Number of Branches 220 250 280 12%
Number of Employees 3,595 3,990 4,478 12%
Key Financial Ratios
NPLs / Total Loans 2.8% 2.5% 2.5%
ROAA 1.8% 1.5% 1.1%
ROAE 15.2% 14.2% 11.8%
Tier I Ratio 13.9% 12.3% 12.0%
CAR 14.8% 12.8% 12.5%
Genele Açık / Public
Türkiye Finans Core Segments
12
TFKB offers a wide banking platform with a mature
product offering
TFKB has established a national footprint, with 10
regional offices; Akdeniz, Ankara, Ege, G.Dogu Anadolu,
Istanbul Anatolian, Istanbul European I, Istanbul
European II, Karadeniz, Kayseri and Marmara
As at 31 Dec 2014, TFKB had 280 branches and 530
ATMs
Türkiye Finans Banking Platform National Presence
* Operating income includes net profit share income, net fee and commission income
** Total liabilities exclude equity
Source: Company Disclosed BRSA Consolidated Financial Statements, Company sourced information
Consumer
Banking
Accounts for 28.3% of operating income*, 12.1% of total
assets, and 27.2% of total liabilities** as at 2014 YE
Serves approximately 3.2 million customers across
various products including retail accounts, credit/debit
cards, consumer loans, mortgages, financings, and
investment products
Serves through 280 branches as well as alternative
distribution channels including ATMs, internet banking,
24-hr telephone banking, and POS terminal payment
locations
Corporate
Banking
Accounts for 72.3% of operating income*, 61.2% of total
assets, and 33.6% of total liabilities ** as at 2014 YE
Serves 81,904 commercial businesses and 373,699
SME clients through various products including cash
loans, non-cash loans, financial leasing, foreign trade
and exchange services
Treasury
Accounts for 21.9% of total assets, and 27.5% of total
liabilities ** as at 2014 YE
Focuses on providing i) treasury products to customers,
ii) proprietary trading, iii) liquidity and market risk
management
International
Banking
Correspondent banking relationships with
approximately 1,100 banks in 132 countries
Offers a wide range of in-bound and out-bound services
and foreign trade transaction volume was USD 27.5bn
as at 2014 YE
Genele Açık / Public
1991: Anadolu Finans
Kurumu founded
1999: Eight years later,
Boydak Group acquired
Anadolu Finans
2001: Ülker Group, acquired
Faisal Finans and changed its
name to Family Finans
2005: Türkiye Finans founded
from the merger of Family
Finans and Anadolu Finans
History & Vision 2017
13
1991-2005 2008 2009-2014 2014- 2017
Source: Offering circular, company presentation, company annual report, BRSA
2008: The National
Commercial Bank, the largest
bank by asset size in Saudi
Arabia, acquired an initial
60% stake followed by an
additional 4.68%
Share capital increased from
TRY 292mn to TRY 800mn
Asset base stood at TRY
7.0bn, cash loan book at TRY
5.6bn, and net profit at TRY
165mn, as of 31 Dec 2008
As of 31 Dec 2008, Türkiye
Finans had 3,185 employees
and operated a national
footprint of 174 branches
2009-2014: Asset base grew
at a CAGR of 31% to
TRY33,5BN, cash loans grew
at a CAGR of 28% to
TRY24,3BN, and net profit
grew at a CAGR of 14% to
TRY334MM
Share capital increased to
TRY2,600MM, as of 31 Dec
2014
As of 31 Dec 2014 Türkiye
Finans has 4,478 employees
and operates 280 branches
across a national
geographical footprint,
reaching 3.2mm customers
2014 and Beyond: Aims to
achieve 2% market share of
total financing in Turkey by
2017 up from 1.9%, as of 31
Dec 2014
Plans to reach 345 branches
in 2017 to capture market
share and regional growth
Aims to increase its deposit
base by an average of 22%
p.a. until 2017
Further penetration into SME
and consumer banking
Further diversification of
assets and liabilities to
catalyze growth
Focus on alternative
distribution channels
Founded from Merger of
Anadolu and Family FinansNCB Acquires Majority Stake Strong Financial Performance
Vision 2017: Executing for
Growth
Genele Açık / Public
Total share capital: TRY 2,600mn
On March 31, 2008, The National Commercial Bank acquired a
60% share of Türkiye Finans
In 2008, Türkiye Finans’ share capital was increased from TRY
292mn to TRY 800mn
In 2012, Türkiye Finans’ share capital was increased by TRY
850mn to TRY 1,650mn, of which TRY 150mn was paid-in cash
and TRY 700mn of retained earnings
Beginning of 2013, share capital was increased to TRY 1,775mn,
through TRY 125mn paid-in cash
With the General Assembly dated 29/08/2014, share capital
increased to TRY 2,600mn with TRY 225mn of it being paid in cash
and the remaining TRY 600mn coming from retained earnings.
(Approved by BRSA at 18/11/2014)
Prominent Turkish conglomerate
founded in 1957 carrying out its activities
in miscellaneous fields from furniture,
textile, chemistry, marketing, iron-steel,
logistics, energy to informatics as leader
of the industry
Consolidated annual turnover of
TRY6.15bn, in 2013
Active in 8 sectors, with 45 companies
and staffs c. 14,000 employees
7 of Boydak Group companies ranked
among Top500 industrial firms in Turkey
14
Türkiye Finans Ownership Structure
Founded in 1953, is the largest bank in
Saudi Arabia by asset size and the largest
bank in the Arab world in terms of capital
Majority owned by government of Saudi
Arabia through Ministry of Finance’s Public
Investment fund
Total asset base of US$116.8bn,
shareholder equity of US$11.9bn, and net
income of US$1.852 bn, as of Sept. 30
2014
Serves c. 3.5mn clients, operates 329
branches and has 7,119 employees as of
30 Sept. 2014
Ratings: Fitch: A+ / S&P: A+ / Moody’s: A1
Leading Turkish conglomerate in the food
and beverage sector, founded in 1944
Consolidated annual turnover of TRY
15.7bn, in 2013
Acquired premium chocolate company,
Godiva in 2007
Operates 68 companies, 58 factories,
and staffs c.41,000 employees
13 of Ülker Group companies ranked
among Top500 industrial firms in Turkey
Strong and supportive shareholder base – share capital increased by TRY 2,308mn (of which TRY 750mn has been paid in cash) between 2007 and Sept 2014
Source: Company Disclosed IFRS Consolidated Financial Statements, offering circular, company presentation, company annual reports
67.03%
22.34%
10.57%
NationalCommercialBank
Boydak Group
Ülker Group
25 March 2013
4. Türkiye Finans: Financial Overview
Genele Açık / Public
23%27%
30%
43%
33%
29%30%
25%
37%
8.5%
21%
20%
11%
25%
15%
2010 2011 2012 2013 2014
TFKB Participation Bank Industry Banking Sector
Loan Evolution (TRY mn)
Asset Base Growth vs. Peers(2) (BRSA)
Asset Composition
16
Asset Base(1) Evolution (TRY mn)
Consistent higher asset growth than banking sector average Healthy asset growth with 33% CAGR during 2010-14 period
Total loans(3) grew at 29% CAGR between 2010 and 2014 period Growth in cash loan book outperforming banking sector for the last 3
years
Cash Loan(4) Growth vs. Peers(2) (BRSA)
16.9% 16.2% 18.8% 19.1% 17.1%
74.7%76.5%
72.5%
69.4%
68.8%
5.7%
4.6%
3.8%
5.6%
5.6%
2.7%
2.8%
5.0%
5.9%
8.5%
10,656
13,528
17,617
25,127
33,490
2010 2011 2012 2013 2014
Cash Cash Loans & Leases Securities Fixed & Other Assets
CAGR
33%
35%39% 36%
34%32%
65%
61%64%
66%
68%
12,256
16,886
19,872
26,352
33,705
0
5000
10000
15000
20000
25000
30000
35000
2010 2011 2012 2013 2014
Non-Cash Loans Cash Loans
CAGR
29%
30.2%
40.0%
32.8%
21.2%
35.1%
3.9%
16.1%
32.1%
18.3%
2012 2013 2014
TFKB Participation Bank Industry Banking Sector(1) Reserve deposits at Central Bank of Turkey are included in the cash category for the purpose of this analysis;
(2) Comparison based on BRSA financials
(3) Total loans defined as cash and non-cash loans;
(4) Cash loans includes Net NPL, Leasing and Accruals
Source: BRSA Consolidated Financial Statements, BRSA, Company Filings
Genele Açık / Public
Performing Cash Loans by Customer Segmentation
Loan Portfolio Structure & Quality
17
2Q14 Cash Loan Book – Sector Breakdown
• Depending on regulatory changes made by the BRSA in 2014, the share of consumer
loans in performing cash loans declined.
Non-Performing Loan Ratio vs. Peers(2) (BRSA)
• Despite absence of NPL sales until 3Q14, NPL levels consistently below
banking sector and participation bank peer averages
Non-Performing Loan Coverage(2) vs. Peers(3) (BRSA)
79% 77% 76% 76% 75%
1% 1% 0%
16%15% 19% 20% 19%
5% 8% 5% 4% 5%
2010 2011 2012 2013 2014
Corporate Foreign Institutions Consumer & Retail Export Other
Trade & Commerce
29%
Manufacturing25%
Retail18%
Construction13%
Services5%
Transportation & Communication
2%
Agriculture & Fishing
1%
Other7%
3.0%
2.3%
2.8%2.5%
2.5%
3.5% 3.1% 3.1%
3.5%
4.7%
3.7%
2.7%2.9% 2.8%
2.9%
2010 2011 2012 2013 2014
TFKB Participation Bank Industry Banking Sector
73.0% 73.4%
61.8%
75.1%
63.2% 61.8%
75.2% 76.3% 73.8%
2012 2013 2014
TFKB Participation Bank Banking Sector
(1) Gross cost of risk defined as gross loan loss provision over average net loans. Net cost of risk defined as net loan loss provisions over average net loans.
(2) Calculated using allowances for individually impaired loans;
(3) Comparisons based on BRSA and excludes performing lease receivables
Source: IFRS Consolidated Financial Statements, BRSA, offering circular
• Financing portfolio comprises 16 different industries
Genele Açık / Public
7.7%16.9%
16.2%
18.8%
19.1%
82.6%
74.7%76.8%
74.0%
72.7%
6.9%
5.7%
4.8%
3.9%
5.8%
2.9%
2.7%
2.2%
3.3%
2.4%
9,286
11,915
15,361
22,604
30,340
2010 2011 2012 2013 2014
Deposits Funds Borrowed Provisions Other
Funds Borrowed Highlights2014 YE Liquidity Ratios(1) (BRSA)
Liability and Liquidity Profile
18
Liabilities Evolution (TRY mn) Maturity of Funds Borrowed (TRY mn)
127 TL
1,178 TL
1,399 TL
2,163 TL
3,701 TL
334 TL
1,105 TL
1,928 TL1,939 TL
2010 2011 2012 2013 2014
Short-term Long-term
23%
130%
27%
108%
27%
120%
Liquid Assets* / Total Assets Loans / Total Deposits**
TFKB Participation Bank Industry Banking Sector
Deposits continue to be major source of funding, while the share of funds
borrowed within total liabilities has been significantly growing with the
intention of diversifying the funding base
TFKB borrowed four syndication loans which will mature in June 2015
amounting to USD 593,500,000 and EUR 85,500,000. The portion
amounting to USD 340,000,000 and EUR 13,500,000 of syndication loans
was borrowed in June 2013 and the remaining portion was borrowed in
June 2014.Average maturity of funds borrowed increased from 725 days as
of 31 Dec 2012 to 974 days as of 31 Dec 2013
Funds borrowed mainly comprise largely bilateral financing agreements
except a syndicated murabaha financing with two tranches (1 year and 2
years)
The split of borrowing maturities at 2014 YE was 34% long term and 66%
short term borrowing
(1) Comparison based on BRSA financials;
* Liquid assets defined as cash & equivalents, reserve requirements, inter and central bank money market receivables, AFS and trading government securities, and repo receivables
** Total deposits include accruals
Source: BRSA Consolidated Financial Statements, BRSA, offering circular
CAGR
34%
Genele Açık / Public
Deposit Structure
19
40.2%
69.0%62.8%
59.8%
31.0%37.2%
Current Account (DemandDeposit)
Profit Sharing Accounts Total Deposits
Retail Corporate
Demand22.5%
Up to 1 month15.8%
Up to 3 month52.3%
Up to 6 month2.9%
Up to 1 year2.6%
More than 1 year3.9%
Turkish Lira65.1%
Foreign Currency34.9%
Türkiye Finans offers two types of deposits
– Current accounts (i.e. demand deposit)
– Participation accounts: a profit sharing account where any
profits earned are shared between account holders and
Türkiye Finans
Returns on participation accounts are linked to the return on the
investment pool; thus no promised rate of return to account
holders
52.3% of total deposits have a maturity of 1-3 months
* Excluding precious metal
Source: BRSA Consolidated Financial Statements
2014 YE Total Deposits* by Currency2014 YE Customer Deposits by Account*
2014 YE Total Deposits by Maturity
Genele Açık / Public
Revenue Structure
20
Operating Income Evolution (TRY mn)
NIM(2) vs. Peers(1) (BRSA) Net Profit Share Growth vs. Peers(1) (BRSA)
Net Profit Share Evolution (TRY mn)
Strong net profit share performance with a 13% CAGR between
2010-2014
Lending activity has driven top-line growth with profit share income
accounting for 76% of total income in 2014 YE
Türkiye Finans’ NIM outperforming participation banking peer
averages over the past four years
473574
792874
1,09883
96
108
128
149
135
151
149
180
197
691
821
1,049
1,182
1,444
2010 2011 2012 2013 2014
Net Profit Share Income Net Fees and Commissions Other Non-Profit Share
CAGR 3
20%
206232
284
329 334
2010 2011 2012 2013 2014
CAGR 3
13%
(1)Comparisons based on BRSA financials; defined as net profit share income before provisions; defined as net interest income before provisions for conventional banks
(2) NIM is defined as net profit share (or net interest income for conventional banks) over average earning assets defined as loans and advances to banks and loans, lease receivables and advances to customers and investment and securities
(3) CAGR Assumes annualized income figures
Source: BRSA, offering circular
22%16%
2%14% 15%
-92%
19%5% 0%
2012 2013 2014
TFKB Participation Bank Industry Banking Sector
4.8%
4.9%
5.5%
4.4%
4.1%
4.5%
4.4%
4.8%
4.3%
3.9%
4.7%
4.0%
4.7%
4.4%
4.2%
2010 2011 2012 2013 2014
TFKB Participation Bank Industry Banking Sector
Genele Açık / Public
Cost Management
21
Cost to Income(1) vs. Peers (BRSA) Operating Expense Evolution (TRY mn)
2014 YE Breakdown of Operating Expenses Operating Expenses to Average Assets
353 392
461
567
719
2010 2011 2012 2013 2014
Personnel50.6%
Administrative26.6%
Depreciation & Amortization
6.8%
Other16.0%
3.6%3.2%
3.0%2.7%
2.5%
2010 2011 2012 2013 2014
(1) Comparison based on BRSA financials. TFKB cost to income ratio calculated as operating income excluding financial asset impairment; Participation Bank and Bank sector cost to income nets capital market transactions, nets
fx gains/losses, and excludes fees and commissions expenses
Source: BRSA Consolidated Financial Statements, BRSA
57.2%55.9% 54.8% 56.7%
61.9%
58.4%60.6%
62.9% 64.5%
88.9%
48.1% 52.7% 51.6% 55.1%
58.0%
2010 2011 2012 2013 2014
TFKB Participation Bank Industry Banking Sector
Genele Açık / Public
Profitability
Net Profit Evolution (TRY mn) ROAA(1) vs. Peers (BRSA)
ROAE(2) Relative to Peers (BRSA)
Outperformed bank sector and participation bank average in
terms of ROAE for the last 4 years
206232
284329 334
2010 2011 2012 2013 2014
CAGR
13%
1.3% 1.3%1.1%
1.2%
Banking Sector ALBRK* TFKB KVYT
15.8% 15.3% 15.2%14.2%
11.8%
2.1% 1.9% 1.8% 1.5%1.1%
2010 2011 2012 2013 2014
ROAE ROAA
(1) Comparison based on BRSA financials; ROAA defined as net profit over average of preceding and current year-end equity and assets
(2) Comparison based on BRSA financials and ROAE calculated as net profit over average of current and preceding year-end equity
Source: BRSA
15.8% 15.3% 15.2%14.2%
11.8%
15.4%13.8% 13.5% 13.0%
1.0%
18.0%
14.2% 14.4%13.1%
11.6%
2010 2011 2012 2013 2014
TFKB Participation Bank Industry Banking Sector
ROAE & ROAA Evolution
22
Genele Açık / Public
Capitalization
23
Capital Adequacy Ratio(2) (BRSA)Shareholder’s Equity(1) Evolution (TRY mn)
Evolution of Capital Ratio
13.7% 13.9%12.3% 12.0%
0.5%0.9%
0.5%0.5%
14.2%14.8%
12.8% 12.5%
2011 2012 2013 2014
Tier 1 Ratio Tier 2 Ratio CAR
50% 79%
65% 56%
49%
4% 4%
5%5%
4%
46%17%
30%
39%
47%
1,406
1,611
2,124
2,522
3,154
2010 2011 2012 2013 2014
Share Capital Reserves Retained Earnings
8.0%
12.0% 12.5%
Regulatory Minimum BRSA Recommendation TFKB
CAGR
22%
In TRY mn 2011 2012 2013 2014
Tier I 1,555 1,980 2,403 3,040
Tier II 63 129 97 127
Adjustments (1) (1) (2) (3)
Total Regulatory
Capital1,617 2,108 2,498 3,165
RWA 11,358 14,279 19,499 25,384
Tier I Ratio 13.7% 13.9% 12.3% 12.0%
CAR 14.2% 14.8% 12.8% 12.5%
Capital ratio above BRSA recommendations
(1) Comparisons based on BRSA financials
Source: Consolidated Financial Statements, BRSA
Key Capitalization Ratios
Genele Açık / Public
Foreign Trade Volumes
24
Non-Cash Loans (USD bl) Foreign Trade Volumes (USD mn)
L/C volumes (USD Mn) L/G volumes(USD Mn)
0.3
2011
3.3
2.9
0.4
3.6
0.3
2012
3.8
3.5
+10%
+4%+16%
2014
4.4
4.0
0.4
2013
4.0
+21%
22.230
20132012
13.588
2014
+54% 26.828
+6%
14.457
2011
755
363
13Q4
306
449
+4%
14Q4
782
419
Unconfirmed L/Cs
Confirmed L/Cs
218
13Q4
69
205
148
+27%
71
14Q4
276 Counter L/Gs
Direct L/Gs
L/Gs
L/Cs
Genele Açık / Public
Awards and Recognition
25
World Finance - World Finance 100 – January 2015
Islamic Finance News Magazine Awards - Turkey’s Best Participation Bank Award - January 2015
Islamic Finance News Awards – The Most successful bank in the category of «Turkey Operations» in
2014. – January 2015
Global Financial Market Review Awards - Turkey’s Best Participation Bank Award - December 2014
CIO 2014 Award - Agile Transformation Project – November 2014
LACP / 2013 Vision Awards - Türkiye Finans’ 2013 Annual Report won 6 awards - August 2014
1. Gold Award and Best Annual Report - Commercial Banks’ Annual Reports
2. Bronze award - financial information presentation
3. One of the Top 20 Annual Report of Turkey
4. One of the 100 Best Annual Report of the World
5. One of the Top 80 Annual Report of the Africa, Central Asia and Europe
6. Gold Award - 2013 Interactive (Web) Annual Report
Global Banking and Finance Review Magazine; 4 Awards – July 2014
1.Turkey’s Best Common Brand Credit Card
2.Turkey’s Fastest Growing Retail Bank
3.Turkey’s Fastest Growing Commercial Bank
4.Turkey’s Fastest Growing SME Bank
World Finance - World Finance Awards; Best Islamic Bank in Turkey (Turkey’s Best Participation Bank
Award) - March 2014
MasterCard - 2013 Fastest Growing Bank – March 2014
25 March 2013
Appendix
Genele Açık / Public
BRSA 2010 YE - 2014 YE Balance Sheet
27
Balance Sheet Highlights (TRY'000) 2010 2011 2012 2013 2014 CAGR
Cash & CB 1.434.467 1.917.837 2.818.168 3.836.254 5.156.624 38%
Due from Banks 363.046 268.400 507.028 954.203 572.606 12%
Investments / Securities 603.750 644.494 679.388 1.459.694 2.464.891 42%
Loans (Net) 7.999.620 10.402.875 13.067.769 18.289.610 24.396.681 32%
- Performing Loans 7.913.437 10.327.232 12.971.058 18.172.359 24.168.211 32%
- NPLs 243.842 245.497 358.259 441.072 597.317 25%
- Sp. Provisions 157.659 169.854 261.548 323.821 368.847 24%
Fixed & Other Assets 290.977 294.747 544.151 586.818 899.108 33%
Total Assets 10.691.860 13.528.353 17.616.504 25.126.579 33.489.910 33%
Customer Deposits 8.397.896 9.509.165 11.429.536 15.141.680 19.112.390 23%
Due to Banks* 126.812 1.511.956 2.503.943 4.813.322 6.292.726 165%
Other Liabilities 761.056 893.573 1.557.863 2.649.196 4.934.511 60%
Shareholders' Funds 1.406.096 1.613.659 2.125.162 2.522.381 3.150.283 22%
Total Liabilities & Equity 10.691.860 13.528.353 17.616.504 25.126.579 33.489.910 33%
*Include Funds Borrowed and Money Market Balances
Source: TFKB Consolidated Financial Statements
Genele Açık / Public
BRSA 2010 YE - 2014 YE Income Statement
28
Income Statement Highlights (TRY'000) 2010 2011 2012 2013 2014 CAGR
Profit Share Income 889.675 1.049.201 1.410.356 1.566.233 2.172.475 25%
Profit Share Expense 416.692 474.742 618.245 692.151 1.072.132 27%
NRFF 472.983 574.459 792.111 874.082 1.100.343 24%
Net Fees & Commission Income 83.035 95.939 108.231 128.272 148.597 16%
Trading Income 57.239 66.349 56.700 71.677 25.657 -18%
NOR 613.257 736.747 957.042 1.074.031 1.274.597 20%
OPEX 353.176 392.404 460.645 567.003 720.802 20%
- Staff Expenses 190.704 210.236 242.839 287.003 350.426 16%
- Other Operating Expenses 162.472 182.168 217.806 280.000 370.376 23%
Net Operating Income (NOI) 260.081 344.343 496.397 507.028 553.795 21%
Net Credit Expenses (Provisions) 85.501 135.128 226.379 202.750 299.462 37%
Other Income / Expense 78.199 84.206 91.808 108.234 171.201 22%
Taxes -47.250 -61.834 -78.253 -83.235 -91.107 18%
Net Income (NI) 205.529 231.587 283.573 329.277 334.427 13%
Source: TFKB Consolidated Financial Statements