Investor Presentation June 2019 • Ziraat Bank at a glance • Transformation and the business model • Key financial indicators • Appendix 2 More Than a Bank 155 years of banking legacy 100% State More than owned 35 mn customers Sound and Full Spectrum improving Financial financial Services structure Strong national and international franchise 3 Undisputed Leadership in Turkish Banking Space Turkish Economy Turkish Banking Sector(1) Q2 19 (TL bn) Ziraat Market Shares (1) 2017 2018 Total Assets 3,706 (2) GDP growth (%) 7.4 2.6 Cash Loans 2,297 Total Assets Securities 578 16% GDP (USD bn) 851 784 Total Deposits(2) 2,225 Unemployment (annual) (%) 10.5 11.0 Total loans Shareholders’ equity 390 18% CPI (annual) (%) 11.9 20.3 Net Profit 10 Current Account Balance/GDP (%) (5.6) (3.5) Deposits ROAE 11.3% Budget Balance/ GDP (%) (1.5) (1.96) 18% ROAA 1.1% Source: Turkstat, CBRT Capital Adequacy Ratio 17.3% Rankings (3) Q2 19 #1 2 4 5 7 Total Assets Cash Loans Non-Cash Deposits Equity Loans 2012 1)Deposit banks only 2) Loans include accruals and the loans granted to banks, Deposits include accruals, and the banks’ deposits, securities include accruals. 3) Rankings are among top 7 Banks. The banks are determined as of unconsolidated assets for March 2019 and include: Ziraat Bank, İş Bank, Garanti Bank, Akbank, Yapı Kredi, Halkbank and Vakıfbank Source: BRSA, Publicly available Earnings Reports for peer banks 4 Financial Snapshot TL mn Q2 19 (%) Q2 19 Securities 116,364 Loans(1) 412,303 ROAA(1) 0.8 Total Assets 610,360 ROAE(1) 8.1 Deposits 392,606 Cost / Income Ratio(2) 47.6 Funds Borrowed 36,938 (3) Interbank Money Market 65,097 NIM (cum.) 4.5 Shareholder’s Equity 60,367 Loans(4)(5)/Deposits 103.5 Loans/Assets 67.5 Securities/Assets 19.1 TL mn Q2 19 NPL 2.1 Interest Income 17,181 Total Coverage(5) 113.4 Interest Expense 11,124 CAR 16.0 Net Interest Income 6,057 # of Net Fees&Commissions 791 Branches 1,764 OPEX* 2,362 Employees 24,533 Net Operating Profit 1,949 ATMs 7,206 Net Profit 1,714 *Including personnel expenses (1) Average total assets and average shareholders’ equity represent weekly averages (2) İncludes dividend income (3) Average interest earning assets represent weekly averages. (4) Performing Loans (5) Intermediated loans of public funds are excluded 5 Ziraat Finance Group Germany Presence in UK Correspondent banking 18 countries, Bosnia & relation with Herzegovina** 100 service points Montenegro 1,800 banks in the world Russia Kosovo Kazakhstan Bulgaria from more than 140 Greece Turkish Rep. of countries Northern Cyprus Iraq Georgia Uzbekistan Saudi Arabia Turkmenistan Subsidiaries Azerbaijan International Branches Bahrain Local Subsidiaries Overseas Subsidiaries Overseas Branches Ziraat Katılım Bankası (Participation Banking) Ziraat Bank Int. AG United Kingdom (Germany) Ziraat Sigorta (Insurance) Greece Ziraat Bank BH. (Bosnia) Ziraat Hayat ve Emeklilik (Life & Pension) Bulgaria Ziraat Bank Montenegro Ziraat Yatırım (Securities Brokerage & Investment House) Iraq Ziraat Bank Azerbaycan Ziraat Portföy* (Asset Management) Saudi Arabia Ziraat Bank Moscow Ziraat GYO (Real Estate Investment Trust) Kosovo KZI Bank (Kazakhstan) Ziraat Teknoloji (IT) Bahrain Turkmen Turk JSC Bank Ziraat GSYO (Venture Capital Investment Trust) Turkish Republic of Northern Cyprus UT Bank (Uzbekistan) Ziraat Bank Georgia **Ziraat Portföy Yönetimi A.S. purchased %100 shares of Halk Portfoy Yonetimi A.S. and Vakıf Portfoy Yonetimi A.S. as of 28/12/2018 and later, as of 31/01/2019 Halk Portfoy Yonetimi A.S. and Vakıf Portfoy Yonetimi A.S. merged under Ziraat Portfoy Yonetimi A.S. entity 6 Local Subsidiaries GSYO Venture Real Estate Investment Capital Participation Securities Insurance Pension Asset IT Investment Trust Banking brokerage Management Trust 2nd largest Started Underwrote TL Manages 24 TL 1 billion of Leader of the software Founded in Founded in operations on 29 6.4 billion private mutual funds and premium amount. Turkish life developer in November 2016. November 2018 May 2015. sector bond and 79 pension funds. One of the top insurance Turkey (2015). Istanbul Finance with TL 750 mn bill issues. The company has ten non-life industry since its Holding both ISO Center premises capital. inception, TL 554 127 private and 30 TL 29.0 bn of insurers in Turkey 9001 Quality in the portfolio millions of corporate asset size Total trading in terms of premium, 22.6% customers. Management volume of TL 398 TL 19.5 bn of premium market share. System and ISO billion fixed The total volume loan book production. of assets 27001 income and repo 84 branches managed by the Information company is TL Security Merged with 43.4 billion as of Management Ziraat Leasing on June 2019. 1 March 2019 System certifications The Bank’s Risk Group Share Total Assets Shareholders’ Description (%) (TL mn) Equity (TL mn) Ziraat Hayat ve Emeklilik A.Ş. 100 9,239 770 Ziraat Sigorta A.Ş. 100 1,815 510 Ziraat Yatırım Menkul Değerler A.Ş. 99.6 216 127 Ziraat Portföy Yönetimi A.Ş.** 99.8 83 76 Ziraat Katılım Bankası A.Ş. *** 100 28,842 2,770 Ziraat GYO 100 2,119 1,702 Ziraat GSYO 100 826 825 Ziraat Teknoloji A.Ş. 100 61 11 * As of 30 June 2019 **Ziraat Portföy Yönetimi A.S. purchased %100 shares of Halk Portfoy Yonetimi A.S. and Vakıf Portfoy Yonetimi A.S. as of 28/12/2018 and later, as of 31/01/2019 Halk Portfoy Yonetimi A.S. and Vakıf Portfoy Yonetimi A.S. merged as a single entity under the name of Ziraat Portfoy Yonetimi A.S. *** Ziraat Finansal Kiralama A.S. was merged with Ziraat Katılım A.S. 7 Overseas Subsidiaries Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank KZI Bank Turkmen Turk Uzbekistan Int. AG BH. Montenegro Azerbaycan Moscow Georgia JSC Bank JSC Active in The first Opened its Commenced Commenced The country’s Founded in Branches in Established in Germany for entirely doors for operations in operations in first foreign- 1993. Operu and May 2017 by fifty-one years, foreign-owned business in July 2015. 1993, focusing owned Headquartered Yunusabad. transforming supplies an bank in July 2015. Mainly serves primarily on financial in Ashgabat, Active in both the branches extensive Bosnia- the corporate the corporate institution in retail and in Georgia to a array of retail Herzegovina. Headquartered banking banking 1993. The provides new in services from commercial and corporate Serves segment, segment. bank serves banking subsidiary. banking corporate, Montenegro’s Ziraat Bank retail and 5 offices and products and small- capital Azerbaijan corporate one exchange services business, and Podgorica, the ASC conducts customers office through nine retail bank has one its operations through branches. customers branch through its branches through 30 located in the headquarters located in the branches/offic same city. office in Baku cities ofAlmaty, es and İçerişehir Astana, Aktau branch. and Shymkent. The Bank’s Risk Total Assets Shareholders’ Description (City/ Country) Group Share (%) (TL mn) Equity (TL mn) Ziraat Bank International A.G. Frankfurt / GERMANY 100 8,602 1,580 Ziraat Bank BH d.d. Sarajevo / BOSNIA HERZEGOVINA 100 3,300 577 Ziraat Bank (Moscow) JSC Moscow / RUSSIA 100 797 264 Kazakhstan Ziraat Int. Bank Almaty / KAZAKHSTAN 99.6 981 425 Ziraat Bank Azerbaycan ASC Baku/ AZERBAIJAN 100 649 225 Ziraat Bank Montenegro AD Podgorica / MONTENEGRO 100 520 91 Ziraat Bank Georgia Tbilisi/ Georgia 100 266 108 Turkmen Turkish Joint Stock Commercial Ashgabat/ Turkmenistan 50 Bank 5,296 216 Ziraat Bank Uzbekistan JSC Tashkent/ Uzbekistan 100 419 167 * As of 31 June 2019 8 • Ziraat Bank at a glance • Transformation and the business model • Key financial indicators • Appendix 9 Strategic Pillars Customer driven business model Modern IT Ziraat Finance Group Making customers’ life Maintaining IT investments Addressing customers’ easier and establishing for techno-intensive needs through an sustainable relationship business model integrated approach with customers 05 01 03 02 04 Process excellence Organizational development Ensuring increased efficiency Continuous development through the continuous to improve service quality improvement and development of business processes for value added business model. 10 Organizational Structure • Transformation of business model in 2011-2015 • Segregation of sales and marketing functions • Centralized operations • Branch and customer segmentation • Specialized departments for loan allocation process, management of loan portfolio and internal audit • Individual Performance System Retail Banking Loan Policies and Internal Systems Procedures (Audit, Risk Management) Loans Underwriting and Treasury Management Management and International Banking Banking CEO Operations and Communication Interior Operations Corporate Human Banking Resources Marketing SME Enterprise Banking Architecture 11 Digital Transformation New Corporate Internet Branch New Banking Software Ziraat Mobile For Corporate Mobile branch Clients New Mobile Branch App for devices not Web site compatible with iOS OmniChannel Experiance New ATM Software and and Android • Standardization of interface internet and transaction flows • Interaction between Internet and Mobile branch Flexible limits Transaction limits channels Branch Assistant upgraded defined specifically to a segment or a Money withdrawal by using Loan access through customer QR code Internet and Mobile Branch Enhancing mobile transactions Muliple language mobile branch New Data Center 2013 2014 2015 2016 2017 2018 2019 POS Platform Ziraat Mobile Ziraat Tablet iOS and Android app iOS Bankkart Android