Investor Presentation, September 2019

1 • About Ziraat Finance Group

• ZiraatBank BH d.d. at a glance

• Transformation and business model

• Key financial indicators

• Appendix

2 Ziraat Finance Group

3 T.C. Ziraat Bankasi A.S. - More Than a

Rankings

Q3 2019 1 1 1 1 1

Total Assets Cash Loans Non-cash Deposits Equtiy Loans

(1) Loans include accruals and the loans granted to , Deposits include accruals, and the banks’ deposits, securities include accruals. (2) Rankings are among top 7 Banks. The banks are determined as of unconsolidated assets for September 2019 and include: , İş Bank, Garanti Bank, , Yapı Kredi, and Vakıfbank Source: BRSA, Publicly available Earnings Reports for peer banks 4 • About Ziraat Finance Group

• ZiraatBank BH d.d. at a glance

• Transformation and business model

• Key financial indicators

• Appendix

5 Ziraatbank at a glance with map of network

The Bank

Owned by 100 % of Turkish state owned bank Appetite to T.C.Ziraat Bankasi grow locally A.Ş. First domestic Owner of 32 branches and bank with More than Commercial intention to foreign equity 60K bank grow further customers

Our Network

Federation of Bosina and Republika Srpska Herzegovina Banja Luka Branch Srebrenica Branch Corporate Branch Zenica Branch Dobrinja Branch Bijeljina Branch Sarajevo Branch Jelah Branch Mostar Branch Ferhadija Branch Kakanj Branch Konjic Branch Butmir Branch Maglaj Branch Bihać Branch Tuzla Branch Visoko Branch Cazin Branch Lukavac Branch D.Moštre Branch S. Most Branch Brčko Distrikt Travnik Branch Gračanica Branch Ilidža Branch Brčko Branch Srebrenik Branch Novi Grad Branch I.Š. Mostar Branch Centar Tuzla Branch Vogošća Branch Goražde Branch Hadžići Branch

6 ZiraatBank BH d.d.

First domestic Banking Sektor (FBiH) Q3 2019 (M BAM) Participation in the banking sector bank with Assets 23,742 foreign capital Assets (1996) Loan 14,907 4% Deposits 18,965 Loan Capital 32 Branches 3,159 5% 308 Employees Strong Capital Adequacy 18,0% Deposits Share Capital ROA 1,47% 4% ROE 10,80% Branches (number) 539 Branches 6% Employees (number) 6,745

100 K Credit line customers supporting Rankings the Bosnian economy Q3 2019 8. 8. 10. 12. 9.

Financial Bridge with Assets Loan Deposits Profit Employees

7 Over 22 Years of Banking Legacy

Current Investment in The bank has capital 200 M New Head passed a billion BAM Office in assets and building, takes Investment Increase in significant part Ziraat Bank in new capital for in the market Bosnia dd Implementation banking First 40M BAM becomes of GPRS software member of implemented wireless POS Becomes a member chip credit The first bank in The Bank Deposit terminals 2018 BiH with foreign of the SWIFT group issues the Insurance card in BiH Aug. capital. The and also member first Maestro Agency 2017 bank's core of BAMCARD card in BiH. 2016 Dec. Sarajevo. 2015 Date of Entity capital was 10M Oct. incorporation BAM. 2013 Feb. /establishment 2005 Oct. 2001 Feb. 2000 Oct. 1997 Aug. 1997 Aug. 1996 Mar. Oct.

8 Bosnia and Herzegovina

CAPITAL CITY Sarajevo Year 1991 2013 AREA 51.197 km2 Total population 4.377.033 3.531.159 POPULATION 3,5 million Bosnians 1.902.956 (43,5 %) 1.769.592 (50,1 %) LOCAL CURRENCY Konvertibl Mark (KM) Croats 760.852 (17,4 %) 544.780 (15,4 %) 1 EUR=1,96 KM (Fixed) Serbs 1.366.104 (31,2 %) 1.086.733 (30,8 %) 1 USD=1,71 KM (2018) Other 347.121 (7,9 %) 130.054 (3,7 %) ADMINISTRATIVE STRUCTURE Bosnia and Herzegovina consists of two entities: Urban Population 1.729.768 (39,5 %) 1.506.691 (42,7 %) • Federation of Bosnia and Herzegovina (10 Rural Population 2.647.265 (60,5 %) 2.024.468 (57,3 %) Cantons ) • Republika Srpska Average age - 39,5 RATING B Positive (Standard & Poors) Urban - 39,7 AIRPORTS Sarajevo, Banja Luka, Tuzla, Mostar Rural - 39,4 Ports Ploce Croatia ports NATURAL RESOURCES Steel, coal, lead, manganese, bauxite Population density 85 /km² 69 /km² Urban 1.138 /km² 991/km² MAJOR INDUSTRIAL AREAS Installation of motor vehicles, tanks and aircraft, Textiles, Tobacco products, Furniture made of wood, Rural 53 /km² 41 /km² Small household appliances Area 51.222,84 km² 51.222,84 km² Macro Economic Indicators 2017 2018 2019* GDP (M BAM) 31.376 32.954 33.828 Residential area by ethnic majority Bosnian 14.600,82 km² (28,5 %) 15.171,49 km² (29,6 %) GDP per capita (BAM) 8.886 9.415 9.580 Croatian 9.093,51 km² (17,8 %) 8.212,42 km² (16,0 %) Average Net Wage (BAM) 851 879 928 Serbian 26.742,12 km² (52,2 %) 25.019,34 km² (48,8 %) Foreign Direct Investment ( M BAM) 780 784 861 Other 786,39 km² (1,5 %) 2.819,59 km² (5,5 %) Growth (%) 3,2 3,2 2,7 Inflation (%) 1,2 1,4 - Number of municipalities by ethnic m 142 142 Unemployment (%) 20,5 18,4 15,7 Bosnian 63 54 Croatian 25 24 Current account deficit ( B BAM) 1.48 1.37 1.16 Serbian 54 64 Current account deficit of % GDP 4,7 4,2 - Foreign trade(milyon BAM) 29.832 31.852 18.811 Labor force (2017 forecast) - 1.500.000 Export 11.385 12.258 10.976 Service - 765.000 (51 %) Import 18.447 19.594 18.255 Industry - 450.000 (30 %) Public debt ( M BAM) 11.009 11.120 - Agriculture - 285.000 (19 %) External debt 7.853 8.205 8.222 Internal debt 3.156 2.915 3.002 2019* - 3rd quarter of 2019 9 Federation of Bosnia and Herzegovina - Employment and Wage Distribution (31.12.2018)

Number of Number of Net fee Gross fee Canton Name employment unemployed (BAM) (BAM) TOTAL WOMEN TOTAL WOMEN

TOTAL ( FBiH) 519.800 215.317 329.907 188.503 889 1.365

Sarajevo canton 154.041 67.500 62.561 38.973 1.096 1.702

Tuzlanski canton 96.461 35.701 79.378 46.982 797 1.215

Zeničko-dobojski canton 82.688 32.572 58.577 33.396 763 1.164

Hercegovačko-neretvanski canton 54.133 24.729 30.703 16.858 970 1.495 Srednjobosanski canton 50.957 20.576 34.777 17.847 723 1.091

Unsko-sanski canton 37.687 15.992 38.172 20.429 840 1.286

Zapadnohercegovački canton 19.322 7.776 10.820 6.136 796 1.216 Livanjski canton 10.723 4.470 7.388 3.926 884 1.350

Bosansko-podrinjski canton 7.291 3.281 3.169 1.836 796 1.220

Posavski canton 6.497 2.720 4.362 2.120 773 1.180

Federal Bureau of Statistics www.fzs.ba 10 Bosnia and Herzegovina - Foreign Trade

Sector EXPORT - Bosnia and Herzegovina 11/2019 M BAM TURKEY Export Products 11/2019 M BAM Name of country Volume Share Name of country Volume Share 1,580 14% Animal and vegetable fats and oils 95 0.9% Croatia 1,344 12% Iron and steel 47 0.4% Foreign Trade 29.231 1,257 11% Furniture, mattress, bed carrier 37 0.3% Italy 1,229 11% Inorganic chemical products 21 0.2% • Export 10.976 Austria 1,030 9% Explosives 7 0.1% • Import 18.255 Slovenia 951 9% Weapons and ammunition; Fittings & Accessories 7 0.1% Montenegro 411 4% Paper and cardboard; paper, paper products 7 0.1% Turkey 267 2% Nuclear reactors, boilers, machinery, mechanical watches 6 0.1% Hungary 258 2% Iron and steel products 5 0.0% France 243 2% Cereals 5 0.0% Top 10 Total 8,570 78% Top 10 Total 237 2.2% Foreign Trade with Turkey 1.020 Total 10,976 100% Total 267 2.4% IMPORT - Bosnia and Herzegovina 11/2019 M BAM Imports from Turkey Products 11/2019 M BAM • Export 267 Name of country Volume Share Name of country Volume Share • Import 753 Croatia 3,241 18% Nuclear reactors, boilers, machinery and mechanical 71 0.4% Serbia 2,544 14% Articles of apparel and clothing accessories, knitted or crocheted 71 0.4% Slovenia 1,639 9% Plastics and articles thereof 71 0.4% Germany 1,636 9% Articles of apparel and clothing accessories, except knitted crochets 66 0.4% Italy 1,552 9% Iron and steel 41 0.2% Austria 972 5% Electrical equipment for ignition and starting of engines 34 0.2% Turkey 753 4% Iron and steel products 29 0.2% Hungary 699 4% Furniture, mattress, bed carrier 25 0.1% SDA 506 3% Aluminum and aluminum products 25 0.1% China 504 3% Fruit for eating; citrus peel or melon and watermelon 24 0.1% İlk 10 Toplam 14,046 77% Top 10 Total 456 2.5%

Toplam 18,255 100% Total 753 4.1%

FOREIGN TRADE BALANCE -7,279

11 Bosnia and Herzegovina - Foreign Investment

FBiH Banking Sector Foreign Capital Distribution (%) 38.8 41.0

18.0 13.4 14.6 15.5 7.3 6.8 6.8 6.8 5.4 5.7 4.7 5.0 4.5 4.8 0.20.3 0.2 0.2

Austria Turkey Italy Russia Germany B.A.E. Slovenia Saudi Arabia Croatia Other

31.12.2018 31.12.2017 12 Banking Sector Position

Assets, M BAM Loans, M BAM

FBiH Sector ZiraatBank BH FBiH Sector ZiraatBank BH

23,742 23,082 14,583 14,923 14,907 22,094 22,456 14,326 20,210 13,179 12,270 18,382

1,020 1,015 1,017 990 973

792 728 743 757 740 634 850

2016 2017 2018 Q1 Q2 Q3 2016 2017 2018 Q1 Q2 Q3 2016 2017 2018 Q1 Q2 Q3 2016 2017 2018 Q1 Q2 Q3 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019

Market Share Rankings Market Share Rankings 2018 Q3 2019 2018 Q3 2019 2018 Q3 2019 2018 Q3 2019 Total Assets Total Assets Total Assets Total Assets Total Loans Total Loans Total Loans Total Loans 4,6% 4,3% 7/15 place 8/15 place 5,1% 4,9% 7/15 place 8/15 place

13 Banking Sector Position

Deposits, M BAM Profit, K BAM

FBiH Sector ZiraatBank BH FBiH Sector ZiraatBank BH

18,306 18,965 17,604 17,801 15,815 14,176 686 668 665 620 638 506 255,355 239,973 250,924 -34,743 173,248 181,681 89,809

196 2,620 547 1,245 1,410

2016 2017 2018 Q1 Q2 Q3 2016 2017 2018 Q1 Q2 Q3 2016 2017 2018 Q1 Q2 Q3 2016 2017 2018 Q1 Q2 Q3 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019

Market Share Rankings Market Share Rankings 2018 Q3 2019 2018 Q3 2019 2018 Q3 2019 2018 Q3 2019 Total Deposits Total Deposits Total Deposits Total Deposits Total Profit Total Profit Total Profit Total Profit 3,8% 3,5% 9/15 place 10/15 place -13,6% 0,6% 15/15 place 12/15 place

14 Banking Sector Position

ROA (%) ROE (%)

1.60 1.60 1.00 1.30 1.20 1.46 12.00 11.80 10.80 6.50 8.50 8.70

0.03 0.28 0.23 0.25 0.19 1.67 1.28 1.44 1.09 0.16 -21.16 -3.54

ZiraatBank Sector ZiraatBank Sector Total Income / Average Assets (%) Net Interest Income / Average Assets (%)

6.46 5.80 5.67 3.58 3.44 3.49 4.91 4.95 4.98 2.86 2.83 3.08 5.58 3.38 5.40 5.00 3.20 4.80 4.60 4.67 2.90 2.80 2.60 2.67

ZiraatBank Sector ZiraatBank Sector

15 • About Ziraat Finance Group

• ZiraatBank BH d.d. at a glance

• Business model

• Key financial indicators

• Appendix

16 Strategic Plan

We are boosting productivity through operational We continue to offer a distinctive customer centralization, digitalization, automated processes experience on digital channels by developing and decision support systems. technology-oriented, innovative products and services.

Continously invest in alternative channel distribution

Financial bridge between Turkey and Bosnia

Well-educated, talented and dedicated workforce

Focus on increasing the portfolio of retail customers

Loan placements to Banks on the primary and secondary markets

17 • About Ziraat Finance Group

• ZiraatBank BH d.d. at a glance

• Business model

• Key financial indicators

• Appendix

18 Assets Composition

Successfully diversifying asset base (000 BAM) Growth prospects in line with strategies

+2.275 (+0,22%)  Total assets grew Q2 2019 o Q3 2019 by 2,75%, Q3oQ3 vs

+27.171 sector by 4,3% and total loans decrease by 2,24% (+2,75%)  Strong focus to finance the Commerce and Manufacturing 1.014.880 972.982 989.984 1.017.155 Sectors. 1.020.380

850.403  BAM and *Other values are equally denominated on balance sheet (BAM assets 50% of total assets, other 739,536 values 50% of total assets) 792,873 756,504 * 95% of other values is EUR currency index loans 743,348 661,167 728,077 Composition of assets Q3 2019 (%) 50,860 64,294 61,112 62,051 105,201 105,714 MM Lends 107,677 103,145 22.91% 46,611 86,029 53,326 42,751 219,234 116,257 91,080 28,634 218,755 183,494 233,010 158,978 121,910 159,942 Liquid Assets 5,566 4,892 8.46% 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Provisions for Loans eventual MM Lends Liquid Assets Provisions for eventual losses Other Assets Loans 72.71% losses -10.39%

Other Assets 6.32% 19 Loan Composition

Loan portfolio by customer segmentation (%) Currency breakdown of loans Q3 2019 (%) 661.167 792.873 728.077 743.348 756.647 739.537 739.537 5.3% 5.30% 7.8% Bank 27.0% 27.1% 28.7% 28.2% 28.2% 29.8% BAM 51.7% 10.0% Retail 27.8%

73.0% 72.9% Foreign Corporate 71.3% 66.5% 64.1% 64.9% Currency* 48.3%

62.2%

2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q3 2019 * 95% of other values is EUR currency index loans Corporate Retail Bank

Breakdown of Loans, Q3 2019 Tourism 7% Construction Bank 6% 5.0% Retail Agriculture Manufacturing 30.0% 7% Energy 37% 3%

Service 19% Corporate 65.0%

Commerce 21%

20 NPL

NPL (%) NPL ratio by segments (%) 23.7% 22.5% 22.0% 22.9%

11.7% 9.0% 9.7% 8.5% 8.5% 8.2% 7.8% 7.6% (%) Retail Corporate Total ZiraatBank 7,3 29,6 22,9 Sector 5,8 9,4 7,6 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019

ZiraatBank Sector

21 Liabilities Composition

Composition of liabilities (000 BAM ) Composition of liabilities Q3 2019 (%)

+2.275 Equity (+0,22%) 17%

+27.171 (+2,75%)

1.020.380 1.014.880 1.017.155 972.982 989.984 Non-Deposit Funds 850.403 10%

Deposits Other 65% 8% 667,961 637,750 664,629 686,175 620,296

506,439 Story about growing 18,653 23,873 21,957 19,356 81,397 81,524 156,466 156,466 166,245 156,466 97,792 97,792  Total Liabilities grew Q2 2019 o Q3 2019 by 2,75%, Q3oQ3 vs sector by 3,5% and total deposits increase by 4,21% 155,762 158,383 171,800 172,347 173,045 173,210  Substantially all Bank deposits are insured up to the

2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 applicable limits set by the Deposit Insurance Agency up to 50.000 BAM. Equity Non-Deposit funds Other Deposits

22 Diversified and widespread deposit base

Deposits by customer segmentation (%) Currency breakdown of deposits Q3 2019 (%)

506.439 686.175 667.691 614.965 637.750 664.629 664.629 2.0% 0.0% 0.0% 0.0% Banks 13.4% 7.4% 0.0%

42.6% 47.5% 47.2% 45.9% 43.1% BAM 45.9% 38.7%

49.0% 51.0% Retail Foreign 55.4% 47.9% 49.6% 52.6% 52.7% 54.0% 54.0% Currency

2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q3 2019 Corporate

Corporate Retail Banks Retail Banks Demand vs Time deposits Q3 2019 (% of total)

34.8% 27.3% 28.4% 30.2% 31.2% 33.4% Demand 33.4% Retail

65.2% 72.7% 71.6% 69.8% 68.8% 66.5% 51.0% 49.0% Time 66.5%

2016 2017 2018 Q1 Q2 Q3 2019 2019 2019 Corporate Time Demand Demand Q3 2019

23 Profitability

Net Profit ( BAM K ) (18.209) -34,743 20,405 9.890 (10.676) 1410 Net Interest Operating Direct Expenses Operating Net Profit Income Income Expenses

2,620 196 547 1,245 1,410 Other Facility and Utility Foreign Loan Fees Expenses 2016 2017 2018 Q1 Q2 Q3 Exchange 22% 2% 2019 2019 2019 Earnings 11% 20% 48% Personnel Expenses

65% 32%

Fees for Services Other Renderd

24 • About Ziraat Finance Group

• ZiraatBank BH d.d. at a glance

• Business model

• Key financial indicators

• Appendix

25 Balance Sheet Summary

(000) BAM 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 % Change % Change Q3oQ2 Q3o2018 Cash and cash equivalents and 158,978 218,755 219,234 159,942 183,494 233,010 27.0% 6.3% deposits held with other inst. Cash and non interest dep 54,150 179,944 173,323 132,016 142,429 214,031 50.3% 23.5% accounts

Interest dep. account 104,828 38,811 45,911 27,926 41,065 18,979 -53.8% -58.7%

Placements with banks 5,566 4,892 121,910 116,257 91,080 86,029 -5.5% -29.4%

Loans and receivables 661,167 792,873 728,077 743,348 756,504 739,536 -2.2% 1.6%

Loans 634,077 751,089 596,179 604,748 615,080 584,195 -5.0% -2.0%

Receivables 27,090 41,784 131,898 138,600 141,424 155,341 9.8% 17.8%

Other Assets 53,326 46,611 50,860 61,112 62,051 63,788 2.8% 25.4%

Provisions for eventual losses 28,634 42,751 105,201 107,677 103,145 105,714 2.5% 0.5%

TOTAL ASSETS 850,403 1.020,380 1,014,880 972,982 989,984 1,017,155 2.7% 0.2%

DEPOSITS 506,439 686,175 667,961 620,296 637,750 664,629 4.2% -0.5%

Interest deposits 326,854 482,654 473,071 429,616 436,413 437,799 0.3% -7.5%

Non interest deposits 179,585 203,521 194,890 190,680 201,337 226,830 12.7% 16.4%

Loans and other borrowings 166,245 156,466 156,466 156,466 97,792 97,792 0.0% -37.5%

Subordinated dept 0,00 0,00 0,00 0,00 58,675 58,675 0.0% -

Total Equity 155,763 158,383 171,800 172,347 173,045 173,210 0.1% 0.8%

Others 21,957 19,356 18,653 23,873 22,722 22,849 0.6% 22.5%

26 Income Statement Summary

% Change % Change (000) BAM 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q3oQ2 Q3o2018 Net interest income 29,174 34,229 34,048 6,939 13,783 20,405 48.0% -40.1% Interest income 37,277 43,039 42,909 9,104 18,109 26,886 48.5% -37.3% Interest expense 8,103 8,81 8,861 2,165 4,326 6,481 49.8% -26.9% Operating income 12,502 11,710 12,495 2,817 5,984 9,890 65.3% -20.8% Total non interest expense 39,349 42,263 81,247 9,209 18,522 28,885 55.9% -64.4% Business and direct expenses 16,470 18,449 54,478 3,366 6,525 10,676 63.6% -80.4% Operating expense 22,879 23,814 26,769 5,843 11,997 18,209 51.8% -32.0% Income tax 888 1,056 41 0 0 0 - -100.0% Net profıt 196 2,62 -34,743 547 1,245 1,410 13.3% 95,9%

27 Key Financial Ratios

(%) 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019

ROAA 0.03% 0.29% -3,54% 0,22% 0,25% 0,19%

ROAE 0.16% 1.67% -21,16% 1,27% 1,44% 1,09%

Liquid Assets/Total Assets 19.34% 21.88% 33,22% 28,18% 27,57% 31,19%

Loans/Deposits 125.20% 109.46% 79,81% 88,24% 88,71% 81,02%

Loans/Assets 74.56% 73.61% 52,53% 56,26% 57,15% 52,94%

Deposits/Assets 59.55% 67.25% 65,82% 63,75% 64,42% 65,34%

Interest Income / Interest Expense 432.59% 460.31% 453,54% 395,85% 394,04% 390,20%

Equity / Total Liability 18.32% 15.52% 16,93% 17,71% 17,48% 16,24%

Net Interest Income / Interest Assets 4.19% 3.95% 3,53% 2,76% 2,75% 2,70%

Cost / Income Ratio 61,30% 59,05% 65,11% 68,52% 69,56% 68,83%

# of

Branches 30 30 32 32 32 32

Employees 299 326 332 323 313 308

ATMs 53 54 55 57 62 66

28 For further information please contact: Treasury & FI Department

Zmaja od Bosne 47 c, 12 Kat. Sarajevo/Bosnia and Herzegovina

Phone: (+387) 33 955 039 E-mail: [email protected] www.ziraatbank.ba

DECLAIMER The information contained in the presentation has been prepared by ZiraatBank BH d.d. For informational purposes only. Although the information in this presentation has been obtained from sources which we believe to be reliable, we cannot guarantee that the information is without fault or entirely accurate. This presentation cannot be interpreted as an advice to anyone and is also strictly confidential and may not be reproduced, distributed or published for any purpose.

29 Investor Presentation, June 2018 www.ziraatbank.ba 30