Türk Ekonomi Bankası A.Ş 20092Q earnin… · 10 BNP PARIBAS JOINT VENTURE TEB Consolidated Balance Sheet TL Million Share Change Share Change Assets Liabilities Cash & banks 21%

Türk Ekonomi Bankası A.Ş.

Earnings Presentation

June 30, 2009

Overview

Makro Economic Environment and Banking Sector

3

BNP PARIBAS JOINT VENTURE2009 Macro Economic Developments

GDP growth: 13.8 % contraction

USD/TRY (eop): 1,6682 benchmark interest rate : %14.1

In the first quarter of 2009 the contraction in the Turkish economy was very strong. Due to the decrease in demand and the falling oil and commodity prices in the world economy, the CPI inflation was 7.89 (y/y). The Central Bank suprised the markets with dramatic interest rate cuts, 450bps between December and March. Unemployment increased very rapidly and reached 15.5% in January.

1st quarter

GDP growth: 8.2 % contraction (f)

Although some green shoots emerged, we are expecting another quarter of serious contraction. The unemployment rate slightly improved due to seasonality and the industrial production increased a few points giving the impression that Feb 09 was the peak. Inflation came down to an all time low of indicating a undershooting of target levels. Thus, the central bank continued to ease the policy rates by another 400 bps.USD/TRY (eop): 1,5742 benchmark interest rate : %11.9

2nd quarter

4

BNP PARIBAS JOINT VENTUREMacro Economic Developments

The slow-down that started in mid-2008 turned into a substantial contraction in the last quarter followed by a severe 13.8%, unseen since the WW2. Some green shoots emerge however recovery will likely be painstakingly slow

Industrial Production Index (yoy, %)GDP Growth (% yoy)

Source: Turkstat; TurkeyDataMonitor; TEB.

7.3

2.8 1.11.2

-6.4

0.3

-7.0

3.0

-8.2

-6.2

-13.8

-25

-20

-15

-10

-5

0

5

10

Mar

-08

Jun-

08

Sep

-08

Dec

-08

2008

Tot

al

Mar

-09

Jun-

09 (f

)

Sep

-09

(f)

Dec

-09

(f)

2009

(f)

2010

(f)

Net Exports

Change in Stocks

Private Investment

Gov. Cons. and Inv.

Consumption of Households

GDP

-17.4

-25

-20

-15

-10

-5

0

5

10

15

20

Jan-

07

Mar

-07

May

-07

Jul-0

7

Sep

-07

Nov

-07

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jan-09 Feb-09 Mar-09 Apr-09 May-09Total industry -21.3 -23.8 -20.8 -18.5 -17.4Intermediate goods -23.8 -24.4 -22.1 -20.0 -19.5Durable consumer goods -25.7 -25.5 -27.9 -15.4 -4.0Undurable consumer goods -10.2 -15.4 -8.6 -4.1 -8.0Energy -6.4 -11.0 -6.5 -6.9 -8.2Capital goods -45.1 -44.5 -42.0 -41.7 -35.8

5

BNP PARIBAS JOINT VENTURE

Macro Economic Developments

Unemployment rate continued its steep rise in 2009 placing Turkey in the 4th highest rank in the world. Although there is some improvement in capacity utilisation rate, the former carries a seasonality effect and the latter is partly due to a number of government incentives introduced in 2009.

Unemployment (%)

Source: Turkstat; TEB. Source: Turkstat; TurkeyDataMonitor.

14.9

18.2

8

10

12

14

16

18

20

Jan-

05

Apr

-05

Jul-0

5

Oct

-05

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Total (SA)Non-farm (SA)TotalNon-farm Jun-09,

72.7

60

65

70

75

80

85

90

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Capacity Utilisation Rate (%)

6

BNP PARIBAS JOINT VENTUREMacro Economic Developments

CPI Inflation and Core Inflation (% y/y) Benchmark Bond Yield vs. CBT Rates (Comp. Ann. %)

Source: Turkstat. Source: CBT, ISE

CPI and Core Inflation (%, y/y)

5.73

2.312.98

0

2

4

6

8

10

12

14

Jan-

07

Apr-

07

Jul-0

7

Oct

-07

Jan-

08

Apr-

08

Jul-0

8

Oct

-08

Jan-

09

Apr-

09

CPIH-IndexI-Index

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

Jan-

05

Apr

-05

Jul-0

5

Oct

-05

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Benchmark RateCBT o/n

Continuing decline in core inflation has led the CB to lower its policy rates further down which resulted in a very dramatic rate cut of 850 pbs since Nov 2008. The CB announced some more cuts in 2009 and no increase in 2010 implying its firm belief in the lack of inflationary pressures in the economy.

7

BNP PARIBAS JOINT VENTUREDevelopments In Banking Sector

Source: BRSA, TEB Bank-Only BRSA Financials

Loan Growth

11.2%7.8% 6.5%

1.6%0.0%

14.0%

6.9% 7.7%

-8.3% -9.1%

-4.0%

-0.3%

Q1 - 2008 Q2 - 2008 Q3 - 2008 Q4 - 2008 Q1 - 2009 Q2 - 2009

Deposit Growth

8.0%5.4% 3.4%

7.9%

2.0% 1.0%

24.2%

3.2%

-14.0%

-2.9%1.3%

3.0%

Q1 - 2008 Q2 - 2008 Q3 - 2008 Q4 - 2008 Q1 - 2009 Q2 - 2009

SectorTEB

NPL

3.00% 2.99% 3.02%

3.51%

4.26%4.74%

3.74%

4.64%

1.81% 1.96%

1.44%

2.34%

Q1 - 2008 Q2 - 2008 Q3 - 2008 Q4 - 2008 Q1 - 2009 Q2 - 2009

2009 1H

TEB’s Performance – Financial Results

9

BNP PARIBAS JOINT VENTURETEB Highligts of the 2nd Quarter

A solid net income growth,NIM expansion benefiting from decreasing funding costs in spite of the decline in the loan portfolio, Continuing profitability from management of securities portfolio,Positive results from cost cutting projects, Increasing fees and commission income due to investments in retail business,Continuing credit card expansion,One of the highest CARs in the sector as well as major world banks, Focus on asset quality, intentional reduction in the loan book, coverage up to57% from 52%,New scoring systems and close monitoring adapted to face the new risky environment,

10

BNP PARIBAS JOINT VENTURETEB Consolidated Balance Sheet

TL Million Share Change Share Change

Assets Liabilities

Cash & banks 21% 3,197 4,025 -21% Deposits 61% 9,274 10,496 -12%

M.sec + repos 14% 2,069 2,071 0% Repos 4% 537 202 166%

Loans + Trade rec. 60% 9,072 10,269 -12% Funds Borrowed 14% 2,165 3,470 -38%

Other Assets 4% 613 582 5% Other Liab. 6% 949 926 2%

Non- IE Assets 1% 175 190 -8% Total Liabilities 85% 12,925 15,094 -14%

Total Assets 100% 15,126 17,137 -12%Subordinated Loans 3% 496 495 0%

Sh. Equity

Capital & Res. 10% 1,558 1,361 14%

Income 1% 147 187 n.m.

Total Sh. Equity 11% 1,705 1,548 10%

Total Liab + Equity 100% 15,126 17,137 -12%

Reviewed Audited30.06.2009 31.12.2008 30.06.2009 31.12.2008Reviewed Audited

11

BNP PARIBAS JOINT VENTURETEB Consolidated Income Statement

Million TL Reviewed Reviewed Change30.06.09 30.06.08

Net Interest Income 417.5 395.1 6%Marketable Securities Revaluation Differences -2.2 -0.7 213%Adjusted Net Interest Income 415.3 394.4 5%

FX Gains (Losses) 93.7 -0.7 nmDerivatives Trading -68.3 29.8 nmSecurities Trading Income 47.2 -13.8 nmNet Fees and Commissions 140.6 110.7 27%Other Income 16.5 64.7 -74%Net Banking Income 645.1 585.1 10%

Loan Loss Provisions -91.0 -48.9 86%Net Operating Income 554.1 536.2 3%

Operating Expenses -373.5 -384.4 -3%Provision for Taxes on Income -33.2 -28.9 15%

Net Income/ (Loss) 147.4 123.0 20%

12

BNP PARIBAS JOINT VENTUREImproved NIM and Cost/Income Ratio

6.60%6.38%

6.03%

6.32% 6.23%

5.27%

5.82%

6.79%

6.39%

6.54%

2008/1Q 2008/2Q 2008/3Q 2008/4Q 2009/1Q 2009/2Q

Net Interest Margin (cumulative) Net Interest Margin (quarterly)

Net Interest Margin: (Net interest income+Net FX gains/losses+Derivative Gains)/ (Liquid Assets+Marketable Securities+Credits) (Bank-only)

Source: TEB BRSA Bank-only and Consolidated Financials

Net Interest Margin Cost/Income Ratio

Cost/Income : Operating Expenses / Net Banking Income (Cumulative & consolidated)

57.90%57.00%

68.30%66.30%65.70%

66.90%

2008/1Q 2008/1H 2008/3Q 2008/4Q 2009/1Q 2009/2Q

13

BNP PARIBAS JOINT VENTURELiquidity

Source: BRSA, TEB BRSA Consolidated Financials

3792

3104

3839 4025 4190

3197

37.30%

29.63%

35.53%38.35% 39.10%

34.48%

2008/1Q 2008/1H 2008/3Q 2008/4Q 2009/1Q 2009/2Q

Liquid Assets Liquid Assets/Deposits

14

BNP PARIBAS JOINT VENTUREBreakdown of Loans

Source: BRSA, TEB BRSA Bank-Only Financials

Million TL ∆ Volume

Corporate 1,793.60 24.9% 2,135.46 25.4% -16.0%

Commercial 2,885.10 40.0% 3,442.98 40.9% -16.2%

Big Commercial 1,385.30 19.2% 1,680.84 20.0% -17.6%Medium Comm. 1,499.80 20.8% 1,762.14 20.9% -14.9%

Small Business 990.34 13.7% 1,056.59 12.6% -6.3%

Retail 1,366.79 18.9% 1,475.99 17.5% -7.4%

Private 13.28 0.2% 19.16 0.2% -30.7%

20082009 2Q

15


Other13%

Metal8%Consumer

15%

Tourism6%

Mining3%Misc. Services

4%

Wholesale/Retail6%

Food, Beverage & Tobacco

10%Construction

9%

Textile9%

Elect. & optical appliances

3%

Machinery3%

Agriculture3%

Transportation Veh.3%

Chemicals5%

Bank-Only Loan Portfolio

Loan Portfolio by Industry 30.06.2009

Source: TEB, BRSA Bank-Only Financials

Well diversified loan portfolio

16

BNP PARIBAS JOINT VENTURENon Performing Loans

Non-Performing Loans as a % of Total Loans

Source: CBR of Turkey announcements and BRSA Bank-Only Financials

2.3%3.7% 4.6%

0.0% 0.2% 0.5% 0.6%

3.8%2.5% 2.1% 1.3%0.9% 1.1% 0.9%

1.8%

4.7%3.5% 4.3%

2.2% 2.4%

7.2%

10.7% 11.5%

6.0%

11.5%

16.5%

27.2%

4.9% 3.7% 3.6%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Q1 20092Q

TEB Sector Average

Coverage ratio: %56.28

Including general provisions: %71.29

17

BNP PARIBAS JOINT VENTUREBreakdown of Deposits

Source: TEB BRSA Bank-Only Financials

Million TL ∆ Volume

Corporate 1,744 21.6% 2,223 23.9% -21.5%

Commercial 1,093 13.5% 1,177 12.7% -7.2%

Big Commercial 621 7.7% 644 6.9% -3.6%Medium Comm. 472 5.8% 533 5.7% -11.5%

Small Business 652 8.1% 654 7.0% -0.3%

Retail 3,184 39.5% 3,292 35.4% -3.3%

Private 1,349 16.7% 1,950 21.0% -30.8%

20082009 2Q

18


TL (1000 TL) Jan 08 Mar-08 Jun-08 Sep-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 ChangeTL Time Deposit 3,409,087 3,366,102 3,650,190 4,017,723 4,374,869 3,899,826 3,970,607 4,053,295 3,664,050 3,540,549 3,542,070 4%0-100K Deposit 513,159 578,685 701,985 828,405 1,009,007 983,128 965,343 965,343 912,896 918,678 949,751 85%Share 15.05% 17.19% 19.23% 20.62% 23.06% 25.21% 24.31% 23.82% 24.91% 25.95% 26.81%

Total Term Deposits / Core Deposits (0-100K)

TEB HAS STEADILY INCREASED ITS CORE DEPOSIT BASE

Deposits between 0-100 thousand TL were 15% of total deposits while this rate increased to 26.8% by June 09.

TL Time Deposit / Core Deposit (0-100K) Evolution

2,250,000

2,750,000

3,250,000

3,750,000

4,250,000

4,750,000

Jan 08 Mar-08 Jun-08 Sep-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

TL Time Deposit TL Core Deposit (0-100K)

19

BNP PARIBAS JOINT VENTUREMarketable Securities

Source: BRSA, TEB BRSA Bank-Only Financials

Total

Fixed 47%

Floating53%

Total

TL96%

FC4%

AFS56%

HTM43%

Trading1%

TL

Fixed 45%

Floating55%

20

BNP PARIBAS JOINT VENTURECapital Increases and CAR

Year 2005 2006 06/2007 11/2007 2008

Bonus Issue - - 23,500 445,000 -% - - 30.71% 445% -

Rights Issue - 18,700 - 210,000 345,000% - 32.35% - 210% 45.69%

Previous Paid-in Capital 57,800 57,800 76,500 100,000 755,000

Current Paid-in Capital 57,800 76,500 100,000 755,000 1,100,00.00

(Thousand TL)Capital Increases

Source: TEB BRSA Bank-only and Consolidated Financials

CAR

12.58%13.99%

17.17%

13.17%

16.47%18.07%14.87%

14.07%15.38%

17.65%18.50%

19.48%

2008/1Q 2008/1H 2008/3Q 2008/4Q 2009/1Q 2009/2Q

Consolidated Bank-Only

21


Business Lines- Corporate Banking

• Contribution to results (as of 09 2Q):• 24.9 % of loans • 21.6 % of deposits • 13.3 % of customer contribution

Cross-sell ratio : 5.69xNPL ratio : 0.41 %

Corporate Loans (YTL Million)

989

1536 1642

2135

1815 1794

2005 2006 2007 2008 20091Q 2009/2Q

Spreads of Corporate Loans

1.77 1.77 1.832.27

5.15

4.34

1.42 1.37 1.37 1.65

2.662.3

2008/1Q 2008/1H 2008/3Q 2008/4Q 2009/1Q 2009/1H

TL FC

22

BNP PARIBAS JOINT VENTUREBusiness Lines- Commercial Banking

• Contribution to results (as of 092Q) : • 40.0 % of loans • 13.5 % of deposits • 49.1 % of customer contribution


Commercial Loans (YTL Million)

975

501

1410

925

1621 16181681 1762

15101609

13851500

Big Commercial (10-100 mio$) ME (2-10 mio $)

2005 2006 2007 2008 20091Q 2009/2Q

Spreads of Commercial Loans

7.55 7.16 6.77 6.92

10.619.67

2.66 2.56 2.48 2.73

4.72 4.19

2008/1Q 2008/1H 2008/3Q 2008/4Q 2009/1Q 2009/1H

TL FC

23


Business Lines- Small Business

Small Business Loans (YTL Million)

35

313

867

1057 1051 990

2005 2006 2007 2008 20091Q 2009/2Q

• Contribution to results (as of 092Q):• 13.7 % of loans • 8.1 % of deposits • 24.2 % of customer contribution


Spreads of Small Business Loans

10.23 9.97 9.32 9.2

12.64 12.29

0.82 0.77 0.64 0.63

4.88 4.63

2008/1Q 2008/1H 2008/3Q 2008/4Q 2009/1Q 2009/1H

TL FC

24

BNP PARIBAS JOINT VENTUREBusiness Lines- Retail Banking



CC: Credit card loans

FC loans are negligable in amount

Retail Loans (YTL Million)

386

679

1143

14741281

1367

2005 2006 2007 2008 20091Q 2009/2Q

Spreads of Retail Loans

4.77 4.64 4.41 4.57

6.525.75

2.55 2.40 2.25 2.26

4.083.59

2008/1Q 2008/1H 2008/3Q 2008/4Q 2009/1Q 2009/1H

Retail incl. CC Retail

25

BNP PARIBAS JOINT VENTUREPrivate Banking


Cross-sell ratio : 4.43xNPL ratio : -

Private Banking Assets (Billion US$)

0.7

1.3

1.81.6 1.5

2007 2006 2007 2008 2009/1Q

26

BNP PARIBAS JOINT VENTUREContact Details

Investor Relations+90 212 2512121http://www.teb.com.tr

Çiğdem Başaran (ext. 1532)[email protected]

27


Disclaimer

The information and opinions obtained in this document have been compiled or arrived at by TEB from sources believed to be reliable, but no representation or warranty is made as to their accuracy, completeness or correctness. All opinions and estimates contained in this document constitute TEB’s judgement as of the date of this document and are subject to change without notice. This document is published for the assistance of the recipients, but is not to be relied upon as authoritative or taken in subtitution for the exercise of judgement by any recipient. TEB does not accept any liability for any direct or consequential loss arising from any use of this document or its contents. This document is strictly confidential and may not be reproduced, distributed or published for any purpose.

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Türk Ekonomi Bankası A.Ş 20092Q earnin… · 10 BNP PARIBAS JOINT VENTURE TEB Consolidated Balance Sheet TL Million Share Change Share Change Assets Liabilities Cash & banks 21%