BURGAN BANK AŞ PRESENTATION June 2013
KUWAIT - TURKEY - IRAQ - JORDAN - ALGERIA - TUNISIA Content
Macroeconomic and Banking Sector Outlook
Burgan Bank at a Glance
Financial Highlights & Transactional Growth Performance
1 Macro Economic Environment
Macro Forecasts 2009 2010 2011 2012F 2013F
Nominal GDP (TRY mln) 952.6 1098.8 1297.7 1416.8 1583.8 Nominal GDP (USD mln) 615.8 733.2 775.9 790.7 851.2 GDP Growth -4.8% 9.2% 8.8% 2.2% 3.5%
Exchange Rate - TRY/ USD (eop) 1,4873 1,5376 1,8889 1,7776 1,8900 Exchange Rate - TRY / USD (yoy change , -2.3% 3.4% 22.8% -5.9% 6.3% eop) Exchange Rate - TRY/ USD (avg) 1,5469 1,4986 1,6725 1,7918 1,8606 Exchange Rate - TRY / USD (yoy change , 19.1% -3.1% 11.4% 7.1% 3.8% avg)
CPI Inflation (eop) 6.5% 6.4% 10.4% 6.2% 7.0% CPI Inflation (avg) 6.3% 8.6% 6.5% 8.9% 7.1% PPI Inflation (eop) 5.9% 8.9% 13.3% 2.5% 6.0% PPI Inflation (avg) 1.2% 8.5% 11.1% 6.1% 4.3%
CBT Policy Rates (O/N, eop) 6.5% 6.5% 9.04% 5.55% 5.75% Yields on Benchmark Bond (eop) 9.06% 7.08% 11.04% 6.18% 7.00%
Source: TURKSTAT, CBT, Turkish Treasury, Burgan Yatırım Menkul Değerler AŞ 2 Growth: GDP Movements Economic Activity
Turkish economy expands beyond expectations in 2Q GDP Growth Rates 2007-2012
15% The Turkish economy expanded 4.4% yoy in 2Q13. 10% Seasonally-adjusted GDP expanded 2.1% qoq, implying a Burgan Estimates further acceleration in economic activity compared to 1Q. 5%
Private consumption was the engine of growth in 2Q13. 0% Private consumption expanded 5.3% yoy in 2Q13, while -5% private investments kept contracting (-2% yoy). -10% Similar to the previous quarter, public sector was one of Seas. Adjusted QoQ Growth -15% the major contributors to growth in 2Q13. Public 2007 2008 2009 2010 2011 2012 2013 consumption and public investments grew 7.4% and 36.7% yoy, respectively, representing 2.2pp contribution to 2Q13 GDP. Contribution to GDP Growth, 2010 – 2011
Inventory build-up (2.3pp) also supported the GDP in 8% Private Consumption Private Investments Public Cons. & Invest. Net Exports Inventories 2Q13. 4% Net exports, which had been the main source of growth throughout 2012, dragged down GDP growth by 3pp. 0% Leading indicators suggest economic activity has lost some momentum, albeit by a limited degree, as of the first two -4% months of 3Q13 with respect to 1H13. -8% Given recent volatility in interest rates and the TRL, we 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 remain in anticipation of weaker economic activity in 2H13 compared to 1H13. 3
Banking Sector – General Overview
Overview
As of June 30, 2013, there were 49 banks operating in Turkey, with a combined network of 11,445 domestic and foreign branches The sector employs 208,409 individuals (ca. 1% of total employment) Total asset size amounted to TRY 1.528bn as of June 30, 2013 , of which ca. 60.3% were invested in loans Depository banks hold ca. 96% of the financial system’s market share in terms of assets Approximately 90% of depository banks are private and hold 70% of total depository bank’s loans
Overview
There are 3 main bodies and institutions which are responsible for supervising and inspecting the financial system: The Banking Regulation and Supervision Agency (“BRSA”), which began its operations in 2000, oversees the environment in which banks and financial institutions operate The Central Bank of Turkey (“CBT”), aims to ensure stability in the financial system by regulating the money markets, protecting the value of the Turkish lira and determining the inflation target. It is responsible for setting the rediscount ratios and determining the reserve and liquidity requirements for the banking sector The Capital Markets Board of Turkey (“CMB”) is the regulatory and supervisory authority in charge of the securities markets Although not a regulatory body The Banks Association of Turkey is a prominent professional organisation, founded in 1958, with the aim of preserving the rights and benefits of banks as well as maintaining growth and fair competition within the sector. 4
Banking Sector – Ranking
Positioned within the Top 20 Banks in Turkey Number of Branches Total Assets (TRY bn) Total Loans(3) (TRYbn)
Ziraat Bankası 1528 İş Bankası 181.0 İş Bankası 111 İş Bankası 1265 Ziraat Bankası 168.9 Garanti Bankası 96,5 Akbank 966 Garanti Bankası 167.1 Akbank 91,5 Garanti Bankası 943 Akbank 156.3 Yapı ve Kredi Bankası 78.2 Yapı ve Kredi Bankası 929 Yapı ve Kredi Bankası 126.4 Ziraat Bankası 77.8 Halk Bankası 846 Halk Bankası 111.3 Vakıflar Bankası 69.8 Vakıflar Bankası 744 Vakıflar Bankası 106.8 Halk Bankası 69 Denizbank 623 Finans Bank 54.3 Finans Bank 37,8 Finans Bank 592 Türk Ekonomi Bankası 47.1 Türk Ekonomi Bankası 32.3 Türk Ekonomi Bankası 529 Denizbank 46.5 Denizbank 30.2 HSBC Bank 336 HSBC Bank 28.7 ING Bank 19.5 ING Bank 326 ING Bank 27.0 HSBC Bank 16.2 Şekerbank 278 Şeker Bank 14.2 Şeker Bank 10.1 103 Anadolu Bank Citibank 10.7 Alternatif Bank 5,3 Alternatif Bank 66 Alternatif Bank 8.0 Anadolu Bank 4.1 #16 Burgan Bank (1) 60 Odea Bank 7,8 Odea Bank 3.8 Tekstil Bankası 6,2 44 Anadolu Bank Fibabank 3,6 (2) Citibank 37 Fiba Bank 4.5 #18 Burgan Bank 2,9 Fiba Banka 34 #19 Burgan Bank 4,4 Tekstil Bankası 2.6 Turkland Bank 27 Tekstil Bankası 3,6 Citibank 1.8
0 500 1000 1500 2000 0 50 100 150 200 0 50 100 150 State Owned Domestic Foreign Owned
(1) Latest available. (2) Includes Promissory Notes. (3) Total loans and receivables = loans and receivables + loans under follow up - specific provisions. 5 Source: The Banks Association of Turkey (March 2013 statistical report - unconsolidated); Banking Sector – Recent Developments
The Turkish banking system faced structural and regulatory changes in 2012 on the back of new monetary policies implemented by the Central Bank of Turkey
Loan Growth . As of June 2013, the loan growth of the sector is 10.5% . The growth is primarily driven by SME loans having a share of 60.3% in the total growth amount.
. Deposits grew by 6.1% as of June 2013. The Banks shifted their funding from local deposits to Deposit Growth international funding facilities and bond issuances. This caused 0.5% drop in the share of deposits in total liabilities.
. As a result of the positive macroeconomic developments in the country, there is an increase of 16.6bn$ Funding in the funding provided from the international markets in the whole Banking system in general. Bond issuances became an alternative funding sources for the Banks.
. Net İncome of the sector reached to 13.9bnTL with an increase of 19.7% compared to the same period Net Income of 2012 . This is mainly driven by the increase in net interest income, trading income and FX income
Basel III . Banking sector maintains its healthy structure in 2013 Q2 which is also in line with Basel III requirements and applications.
6 Banking Sector – Key Metrics
NIM (%) ROE (%) ROA (%) 2.8% 2.6% 2.5% 2,4% 25.0% 23.0% 2.4% 2.4% 21.0% 1.7% 19.0% 20.0% 2.0% 5.8% 15.5% 15.7% 5.2% 5.2% 5.0% 4.6% 15,3% 3.5% 4.1% 4.1%
'06 '07 '08 '09 '10 '11 '12 06/'13 '06 '07 '08 '09 '10 '11 '12 06/'13 '06 '07 '08 '09 '10 '11 '12 06/'13
Loan Growth (%) Deposit Growth (%) Loans and Deposits to GDP (%)
34.0% 12.0% 30.0% 29.0% 29.8% 25.1% (1) 19.0% 21.0% 20.0% (1) 16.6% 25.0% 16,5% 54% 55% 59% 23.0% 15.5% 46% 46% 11.0% 39% 41% 35% 7.0% 65% 53% 57% 42% 45% 26% 37% 33%
'07 '08 '09 '10 '11 12 06/'13 '05 '07 '09 '11 06/'13 '06 '07 '08 '09 '10 '11 '12 06/'13 Gross NPLs / Total Loans (%) Provisions / Gross NPLs (%) CAR (%) 5.0% 90.0% 87.0% 84.0% 80.0% 84.0% 82.0% 75.2% 75,0% 22.0% 21.0% 4.0% 4.0% 4.0% 19.0% 19.0% 18.0% 16.6% 17.9% 16.3% 3.0% 2.7% 2.9% 2.8%
'06 '07 '08 '09 '10 '11 '12 06/'13 '06 '07 '08 '09 '10 '11 '12 06/'13 '06 '07 '08 '09 '10 '11 '12 06/'13 Source: Banking Regulation and Supervision Agency. 7 (1) Compared to the same period of the previous year
Content
Macroeconomic and Banking Sector Outlook
Burgan Bank at a Glance
Financial Highlights & Transactional Growth Performance
8 Shareholders and Group Structure
Stable shareholders base and lean group structure
Shareholders Structure Group Structure
Other Minority Interests(1)
• Brokering business of the Group • Leasing Business of the Group • Burgan Yatırım Menkul Değerler AŞ is one of Turkey’s leading The transfer of 99.26% of the shares of the bank to Burgan Bank • Burgan Leasing collaborates investment houses and operates in S.A.K., Kuwait has been completed on December 21, 2012. closely with Burgan Bank, the following areas: supporting SMEs as well as Large i. Intermediation on the Istanbul Name changed to Burgan Bank AŞ on January 28, 2013 . Corporate clients Stock Exchange and Turkish Burgan Bank AŞ and its subsidiaries (Burgan Yatırım Menkul • The company has built long- Derivatives Exchange Değerler & Burgan Leasing) are fully owned subsidiaries of standing client relationships in transactions; Burgan Bank S.A.K., Kuwait as of December 21, 2012. several sectors including ii.Corporate finance; construction, manufacturing, iii.Market and macroeconomic agriculture and medicine researches; iv.Asset management
(1) Minority shareholders, mostly individuals stemming from the shareholders‟ structures of Tekfen Investment Bank and BankEkspres. 9 BURGAN BANK SAK
Established in 1977 in Kuwait Key Indicators(1) Member of the KIPCO Group - one of the largest holding companies in Burgan Bank Group 2Q ‘12 2Q ’13(2) the Middle East and North Africa with over 60 companies operating across 26 countries Revenue Growth (YoY) 12.8% 29.5% A footprint spread over the MENA region with a network of 145 branches Operating Profit Growth (YoY) 8.2% 40.9% across 5 countries Cost to Income Ratio 39.1% 33.7% Listed on the Kuwait Stock Exchange with a market cap of US$ 2.3 bn Jaws Ratio (YoY) (8)% 14.9% Five majority owned subsidiaries operating in : Loans to Cust. Deposits 81.9% 77.1%
Liquidity Ratio(3) 36.2% 37.6% Turkey NPL to Gross Loans 9.2% 4.2% NPL net of Collateral to Gross Loans 4.0% 1.9% Algeria ROE 12.7% 10.0% ROTE 21.0% 15.6%
Iraq Rating
Jordan Bank Sovereign
Moody’s A3 Aa2 Tunis S&P BBB+ AA
Fitch BBB+ AA
(1) Figures are reported after consolidation adjustments (2) Excluding Burgan Bank Turkey contribution in 2Q „13 10 (3) Liquid assets comprises of Cash&Cash eq. , Treasury bills&bonds and due from Banks&OFIS
Corporate Governance and Organisational Structure
Risk Management Board of Directors Group
Audit Committee Risk Committee
Internal Audit & Control Credit Committee Remuneration Committee
Chief Executive Officer
ExCo A&L Committee
Loan & Products Ethics Committee Committee Businesses
Executive Vice Executive Vice Senior Deputy CEO Executive Vice President President President Burgan Yatırım Wholesale Banking Treasury & Capital Menkul Değerler Retail Banking Private Banking Markets AŞ
Burgan Leasing GM Service& Support
Executive Vice Executive Vice Executive Vice Executive Vice Legal Council CFO President President President President Financial Control & Information Human Operations Legal Department Credit Approval Budget Planning Technologies Resources
11 Burgan Bank At a Glance
Financial Highlights Financial Highlights (BRSA Consolidated, 31 December 2012; mln TRY) (BRSA Consolidated, 30 June 2013; mln TRY)
Total Assets : 4,643 Total Assets : 5,500 Loans (1) : 3,293 Loans (1) : 3,852 Deposits : 3,189 Deposits : 2,844 Securities : 441 Securities : 864 Equity : 659 Equity : 636 Net Profit(2) : 29 Net Profit : -16
# of Branches : 60 # of Branches : 60 # of Employees : 1,070 # of Employees : 1,112 Capital Adequacy : 15.76% Capital Adequacy : 13.75% Tier I Capital : 14.72% Tier I Capital : 12.75%
(1) Including Factoring and Leasing Receivables 12 (2) underlying profit excluding one-off goodwill write-off amounting to 64mln TRY
Distribution Network - Overview
Growing distribution network. Doubled since 2006 60 branches in the main Turkish cities(1)
Coverage Burgan Bank is Kırklare li Zonguldak present in number Kocaeli Kastamo Tekirda Istanbul of key cities / areas g Karabüknu Samsun which together Ordu TrabzonRize account for ca. 90% Bolu Çankırı Çoru m of the Turkish Çanakkal Bursa economy e Balikesir Eskisehir Ankara Yozga Sivas Kütahy t a Kırşehi Manisa Afyo r İzmir Uşak n Kayseri Malatya Penetration of Turkish Economy Aksara Aydın Ispa Konya y Diyarbakır Denizli rta Niğde K.Mara Deposits: 92% ş Mugla Adana Osmaniye Loans: 86% Karam Antalya Gaziantep Şanlıurf Exports: 87% an a Imports: 94% Mersin Hata y Historical Branch Evolution
Alternative Distribution Channels +5 +1 +12 +6 • Internet Banking +5 • Phone Banking 54 59 60 31 36 42 42 • ATMs - 60 unit own network, part of national ATM 2006 2007 2008 2009 2010 2011 2012 sharing agreement
13 (1) Including free trade zone and central large corporate branch Subsidiaries: Burgan Leasing
Burgan Finansal Kiralama A.Ş. (Burgan Leasing) is Burgan Leasing main highlights in the sector :
wholly owned subsidiary of Burgan Bank A.Ş. 1st in the peer group (4th overall) with “Lease Receivables / Total Assets” ratio 89%. Leasing activities started in 1989 within the Sector average is 86%.
organization of Tekfen Finance and Investment Lowest NPL ratio in the sector with 3.22%. Bank Sector Average is 7.23%
Became a seperate company in 2001 under the 3rd in the peer group (8th overall) with ROE 12.47%. name of Tekfen Finansal Kiralama A.Ş. 3rd in the peer group (10th overall) in The name of the company changed to EFG Net Receivables / Number of Employees Finansal Kiralama A.Ş. in 2008 with net receivables of USD 7,267,857 per Burgan Bank S.A.K. the main subsidiary of Kipco employee.
Group acquired 99,26% of the shares of Eurobank Portfolio size is USD 167.3mln and is well Tekfen A.Ş. on 21 December 2012, the latter diversified in terms of tenor and sectors possesses 99,99% of EFG Leasing. On 28 January exposed. 2013 the name of the bank has changed to Burgan Bank A.Ş. and the name of the company to Burgan Finansal Kiralama A.Ş. (Burgan Leasing)
14 Subsidiaries: Burgan Yatırım Menkul Değerler AŞ
Burgan Securities is wholly owned subsidiary of Burgan Founded in 2001 as HC Istanbul. Bank A.Ş. Acquired by EFG Eurobank in April 2005. In Burgan Yatırım Menkul Değerler is a brokerage company providing : 2007 became a subsidiary of Eurobank
Corporate finance advisory, TekfenA.Ş. and the name changed to EFG Institutional brokerage, Istanbul Securities. Research and The name of the company changed to Burgan Asset management services. Securities in 2013 after the acquisition of Burgan Bank A.Ş. by Burgan Bank S.A.K., Kuwait
Burgan Securities Shareholder’s Equity Burgan Securities Transaction Volume (US$ mln) (US$ bln)
41,7 66,9 37,0 US$ 32 61,6 US$ 16 34,7 36,2 million 53,1 47,4 45,7 billion 26,1 37,2 23,1 31,7 27,6 15,6 12,6 17,5 10,6 8,0 4,4 3,2 3,9 0,9 1,6
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Audited, IFRS ISE and TURKDEX Volume 15 General Overview
A mid-size bank with a focus on the corporate segment and a fast growing presence in selective retail business leveraging mainly on corporate owners, suppliers, executives and employees of corporate clients
Commercial Targets mainly commercials with the aim to grow corporate business and to Banking develop cross selling opportunities. The division contributes with TRY 3.0 bn of total loans and TRY 1.7bn of deposits Private Banking SME Targets Small and Medium Enterprises and related retail customers focusing mainly on affluent customers and leveraging on SME’s owners, suppliers and employees. Banking The division contributes with TRY 0.59bn of total loans and TRY 0.21bn of deposits
Encompasses three main business lines: Treasury i) Treasury Sales to Institutional, Corporate and household clients; ii) Trading and & Capital Investment Portfolios; iii) Asset & Liability Management Markets One of the major players in local Fixed Income market, very active player in FX markets and one of the most successful Treasury Sales Teams in Turkey
Leading investment house providing equity brokerage (7.59% market share in terms of Equity foreign investors volumes traded on the Turkish Derivatives Exchange and 3.2% market Brokerage share in terms of foreign investors volumes traded on the Istanbul Stock Exchange as of May 2013). Expanding Advisory and Asset Management activities
. Burgan Bank operates through an integrated business model, able to respond with success to the increasing number of customers and transaction volume Customer Centric Segmentation and proactive Coverage Wide and high value added banking products and services 60 modern and fully refurbished branches located in 21 leading industrial and business cities across the country Newly implemented, highly scalable IT system Experienced and well regarded senior management 16 Servicing Model Model
Targeted servicing and distribution model with branches dedicated to Wholesale and Retail to respond better to the different needs Distribution Network (1)
Large Corporate Business Centres Combo Branch Retial Branch Alternative Branch 1 8 36 14.. Channels 1 Description: Business Dev. Description: Description: Description: Description: . Internet Banking & Marketing . Based in Istanbul . SME- focused . Combined . Small Business New platform • Segment (at Head Office) branches with no branches and Personal launched in 2010 with Marketing retail banking containing Banking focused additional functionality • Lead . Dedicated EVP operations both corporate branches and superior security Generation for the branch and retail providing only . Telephone Banking • Reporting & Phone banking . Generally upper- banking with retail banking financial trans. Co-ordination Segment Served: floor locations, shared operations services enabled since July particularly for 2011 . Large Corporates new BCs Segment Served: Segment Served: Outbound call Credit & Risk Only functionality to support Segment Served: . SMEs cross-sell efforts . SBBs . ATMs
. SBBs . Individuals Current network . SMEs composed by 60 EMV . Individuals . Private Banking compatible units
Centralized Enhanced functionality enabling financial Operations transactions such as Center FX Mutual Fund, Credit Card and other transactions
Treasury & Trade Cash Brokerage / Private Factoring Leasing Capital Market Finance Management Asset Mngmnt Banking Served through RMs or through Head Office upon direct request from customers
(1) Excludes free trade zone. 17 Segment Focus
Mainly focusing on Commercial customers within an annual turnover range of 5-65 mln USD and SME customers within an annual turnover below 5 mln USD
USD, Annual turnover Segment / Threshold(1) Strategy Segment profile Coverage(1) • Very large corporates and/or conglomerates with Corporate international operations and relations with major global financial institutions • > 65 mln Maintain EVA- Covered by • Major industrial and service companies, including large positive relationship Large ~ 2k(2) companies conglomerates and their subsidiaries, multinationals and state-owned enterprises Corporates Be among top-5 • They have an institutional structure with professional Unit banks management • This segment represents ~75% of exports and 15-20% 65 mln USD of GDP Commercial Be among top-3 • Generally low capitalized, mid-sized • 5 – 65 mln banks manufacturing, retail and distribution companies • Usually need external financing to finance growth Covered by ~100k companies 13 mln USD • Organizational structure semi-professional, yet Commercial owners are typically involved in day to day Focus Banking Unit Become “Home Bank” management
5 mln USD SME (Mid and • Typically domestic trade, service and small Micro Corporates) manufacturing companies operating locally Covered by • Managed directly by the owners; company and Small and ~2 mln companies owner wallet are inseparable Medium • Relatively high level of unregistered sales Enterprise Banking Unit
(1)Thresholds are indicative. Client segmentation and respective coverage would be an annual exercise based on client profile, needs and behavior (2) Includes smaller subsidiaries of large conglomerates 19 Content
Macroeconomic and Banking Sector Outlook
Burgan Bank at a Glance
Financial Highlights & Transactional Growth Performance
19 Income Statement
P&L 2011-2012 Consolidated, mln TRY 2010 2011 2012 ∆ 2Q2013 Interest on Loans 166 215 355 65% 154 Interest on Securities Portfolio 193 109 67 -39% 20 Interest on Money Market Transactions 53 75 41 -45% 2 Interest on Mandatory Reserves & Other Interest Inc. 21 57 54 -7% 23 TOTAL INTEREST INCOME 433 456 516 13% 199 Interest on Deposits -112 -132 -211 60% -83 Interest on Funds Borrowed -142 -96 -61 -36% -10 Interest on Repo and Money Market Transcations -39 -58 -23 -60% -5 Other Interest Expense -21 -42 -24 -43% -9 TOTAL INTEREST EXPENSE -315 -328 -319 3% -107 NET INTEREST INCOME 118 128 197 54% 92 Provision for Loans -20 -20 -42 110% -38 NET INTEREST INCOME AFTER PROVISIONS 98 108 155 44% 54 Derivative and Foreign Exchange Profit/Losses 1 4 13 225% 14 Profit/Losses on trading account securities 26 39 10 -74% 4 Net Fees and Commisions Income 59 55 34 -38% 13 Other Income 9 8 13 63% 7 TOTAL OPERATING INCOME AFTER PROVISIONS 193 214 225 5% 92
TOTAL OPERATING EXPENSE -155 -180 -188 4% -109 PROFIT / LOSS BEFORE TAX 38 34 37 9% -17 Tax Provision -8 -9 -8 -11% 1
NET PROFIT 30 25 29(1) 16% -16
(1) underlying profit excluding one-off goodwill write-off amounting to 64mln TRY 20 Balance Sheet
Assets 2011 - 2012 (Consolidated, mln TRY) 2010 2011 2012 ∆ 2Q2013
Cash and Central Bank 210 349 363 4% 465 Banks 687 443 213 -52% 18 Loans(1) 1,906 2,702 3,293 22% 3,852
Securities 1,469 1,382 441 -68% 864 Tangible /Intangible Assets 126 118 52 -56% 53
Other Assets 93 142 281 98% 248
Liabilities Deposits 1,872 2,175 3,189 47% 2,844
Repo & Money Market 673 846 88 -90% 650 Borrowings 1,085 1,206 442 -63% 1,093 Subordinated Loans 185 0 0 0 0 Other Liabilities 164 229 265 16% 277
Shareholders’ Equity 511 680 659 -3% 636
Total Assets 4,490 5,136 4,643 4, -10%4 5,500
(1)Including Factoring and Leasing Receivables and Net NPL 21 Ratio Analysis
Key Ratios(1) 2010 2011 2012 2Q2013
Capital Adequacy Ratio 18.7% 15.5% 15.76% 13.75% Strong capital and liquidity ratios Loan(2) / Deposit Ratio 101.8% 124.2% 103.3% 135.4%
• Burgan Bank has a 13.75% NPL Ratio 6.2% 4.1% 5.2% 5,2%(3) Capital Adequacy Ratio
• Loan to deposit ratio is 135.4% ROAE 6.96% 4.78% 4.55% -4.98% as of 2013 Q2.
ROAA 0.72% 0.54% 0.60% -0.64%
Provision Coverage 57.3% 67.3% 63.1% 66.5%
Cost/Income Ratio 72.6% 76.9% 70.4%(4) 84.2%
(1) Consolidated figures (2) Including factoring and leasing receivables and net NPL 22 (3) After the sales of NPLs in July, 2013 , NPL ratio came down to 2,47% (4) Excluding goodwill write-off CapitalCapital
2010 2011 2012 2Q 2013
Consolidated Consolidated Consolidated Consolidated
+ CORE CAPITAL 403,339 583,339 612,806 597,832
+ SUPPLEMENTARY CAPITAL 156,227 25,825 43,352 46,838
(-) DEDUCTIONS FROM CAPITAL -383 -362 -340 -330
SHAREHOLDERS EQUITY A (Capital Base) 559,183 609,351 655,818 644,340
AMOUNT SUBJECT TO CREDIT B RISK 2,519,417 3,512,283 301,276 332,352
AMOUNT SUBJECT TO MARKET C RISK 183,850 87,825 5,913 16,229
D AMOUNT SUBJECT TO OPERATIONAL RISK 293,423 320,994 25,628 26,202
CAPITAL ADEQUACY RATIO 18.67% 15.54% 15.76% 13.75% (A/(B+C+D) )
TIER I 13.45% 14.87% 14.72% 12.75%24
Funding Structure: Burgan Bank
As of 2Q 2013, Burgan Bank’s main funding sources are Customer Deposits, Money Market Deposits and Borrowings representing 83,4% of total liabilities and deposits representing 51.7% of total liabilities
1
0,9 4,1% 1,9% Consolidated mln TR Dec-10 Dec-11 Dec-12 June-13 0,8 11,8% 15,0% 16,5% 9,5% Deposits 1,872 2,175 3,189 2,844 0,7 19,9% 0,6 Borrowings 1,085 1,206 442 1,093 24,2% 23,5% 0,5 Money Markets (repo) 673 846 88 650
0,4 68,7% Subordinated Loans 185 0 0 0 0,3 51,7% Other Liabilities 164 229 265 277 41,7% 42,3% 0,2 Shareholders' Equity 511 680 659 636 0,1 Total Liabilities 4,490 5,136 4,643 5,500 0 Dec '10 Dec '11 Dec '12 June '13
Subordinated Loans Money Markets (repo) Borrowings Deposits
24 Asset Quality Quality
Non Performing Loans Ratio Coverage Rate of Provisions
80
70 10,1 60
50
6,2 40 5,2 5,2 67,3 66,5 4,1 30 63,1 53,2 57,3 20
10
0 2009 2010 2011 2012 2Q 2013 2009 2010 2011 2012 2Q 2013
NPL Ratio Provisions
NPL Ratio is 5.2 % as of 2Q 2013 Specific provisioning is in line with BRSA regulations
25 Loans in Detail
Loan Breakdown(1) ...Supporting Real Sector •Total Loans reached to 3.3mlnTRY as of 1Q 2013 11,7% 9,6% 7,2% •Burgan Bank’s loan portfolio comprise 2,3% companies mainly in manufacturing, 17,1% wholesale, tourism, and construction 47,3% sectors 4,8% •Tourism is a niche sector for Burgan Bank
Construction Manufacturing Tourism Wholesale and Trade Transportation and Telecom Services Other
(1) As of 30 June 2013, mln TRY. 26 Transaction Volumes Transaction Volumes
2011 – 2012 2009 2010 2011 2012 ∆ 08-2013 Payments (# of items)
EUR 12,565 13,856 12,866 13,292 3.3% 9,735
USD 15,939 21,789 22,912 24,777 8.1% 17,442
Total Trade Finance (USD mio) 1,106 1,465 1,793 1,973 8.6% 1,257
LCs issued (import) 143 197 257 317 21.7% 177
Collections (export) 71 37 44 56 26.5% 34
27 Treasury Transactions (volumes USD mio)
2011-2012 2009 2010 2011 2012 ∆ 08-2013 Trading
TRY Spot 8,214 16,800 16,447 12,017 -28% 5,779
FX Spot 9,571 12,933 8,462 4,758 -44.5% 2,990
CCY Swap 2,214 4,533 7,155 5,629 -22.34% 5,584
Bonds Local CCY(TRY) 18,250 33,000 39,560 15,885 -83% 7,937
CIRS 0 20 30 0 0 0
Sales
FX Forward 240 525 1,074 1,285 19.6% 939
FX Options 190 472 755 572 -24.24% 652
IRS 16 57 35 84 140% 69
28 Contact Details
FINANCIAL INSTITUTIONS TREASURY AND CAPITAL MARKETS
Mr. Mutlu Akpara, Executive Vice President Mrs. Şehnaz Günay, Head of FI (90 212) 371 36 70 (90 212) 371 37 40 [email protected] [email protected] Mr. Bilge Gönen, Head of FX Desk Mrs. İnci Yılmaz, Unit Manager, FI (90 212) 371 36 76 (90 212) 371 37 41 [email protected] [email protected] Mrs. Aslı Koçer, Head of Treasury Sales Ms. Ezgi Yıldırım, Manager, FI (90 212) 371 36 81 [email protected] (90 212) 371 37 42 Mr. Arda Turerer, Head of ALM [email protected] (90 212) 371 36 42 [email protected]
Esentepe Mahallesi, Büyükdere Caddesi Tekfen Tower, 209 34394 Şişli İstanbul – Turkey Tel: (90) (212) 371 37 37 / Telefax: (90) (212) 371 42 65 SWIFT : TEKFTRIS REUTERS: TKFB Internet : http://www.burgan.com.tr
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