Mighty oaks from little acorns

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1 Earnings announcement for 30.September.2005 consolidated financial results according to BRSA Mighty oaks from little acorns Total assets increased 36% (10% q-o-q) and reached TRY 10,974mn (USD 8,176mn) in nine months. Denizbank is now the sixth largest private bank in terms of consolidated assets. Total loans soared 65% y-t-d (7% q-o-q), while both TL and FX loans improved by 65%. Including the leasing and factoring receivables according to the IFRS standards, loan growth was 76%. SME loans were the fastest mover so far as it outperformed the consumer loan growth, excluding credit cards. SME, consumer and corporate loans increased 196%, 147% and 110%, respectively. Among the consumer loans, home loans registered the largest increase by growing six-fold y-t-d and 34% since the previous quarter. Due to the ongoing campaigns towards various professional segments, general purpose loans were also robust and expanded 164% y-t-d (17% q-o-q). Denizleasing receivables also recorded a 77% increase and reached TRY 183mn of size since its consolidation in 1Q05, due to the booming commercial mortgage sector. Customer deposits surged 24% since January (9% q-o-q), due to the rapidly growing client base together with the expanding franchise. TL deposits soared 42% while FX deposits increased 19% y-t-d. As a result of the Bank s emphasis on the SME sector, commercial deposits were the major contributor to growth with an increase of 46%. A syndicated loan facility has been initiated during the quarter with a minimum size of USD 500mn, on top of the recent USD 300mn of securitization that was signed on June 24th. The former was later signed on October 25th with a size of USD 650mn. Fees and commissions continued to be strong in line with the recently implemented banking transaction fees and credit card growth. Net commissions figure approached TRY 102mn with a 32% y-o-y rise. Net profit rose 48% y-o-y and reached TRY 181mn (USD 135mn). Provisions for NPLs slowed down significantly in the third quarter paralell to the recovery in the sector. (TRY 1 = USD )

2 Securities The share of government securities (incl. G7 bonds and equity) in assets remained at 20% q- o-q. Rapidly rising loan book has more than compensated for the profitability that securities can not offer anymore. The currency composition of the portfolio shifted towards TL in comparison to the last quarter, however, as TL securities now make up 66% of total versus 58%. Detailed breakdown of securities is given in the below table. 9/30/2005 TRY FX TOTAL TRY 000 Fix Floating Total Fix Floating Total Fix Floating Total TRD 145,811 90, ,551 93,978 4,587 98, ,789 95, ,116 AFS 114,180 1,093,194 1,207, , , , ,849 1,298,979 1,713,828 HTM 0 24,115 24,115 48, , ,372 48, , ,487 Equity Toplam 259,991 1,208,049 1,468, , , , ,738 1,524,693 2,227,431 There were no Zoren equity sale in the third quarter. We plan to divest all Zorlu Energy shares in our holding by Loans Total loans reached TRY 5,663mn (USD 4,219mn), recording 76% y-t-d growth albeit a slower third quarter when compared to the first half. Still, Denizbank recorded the fastest loan growth among the sector so far this year. The quarterly increases were 37%,19% and 7% for 1Q, 2Q and 3Q, respectively. Due to the continuing demand for consumer and small business loans, TL portion of the book expanded by 5.4% q-o-q. For the same period, FX loans posted 10% growth mainly as a result of the project finance loans that were allocated to the booming mass housing and energy projects. The currency composition of the book slightly tilted towards FX, as it now consists 48% of the total versus 47% last quarter. As revealed in the y-t-d growth figures, SME loans are likely to be the champion of Denizbank s comprehensive focus and extensive knowledge of this sector paid well and SME loans reached TRY 678mn (USD 505mn), placing the Bank among the top three in terms of size. With initiative products specifically tailored for small businesses, SME laons grew 25% q-o-q and 196% y-t-d. Its share in the loan book improved further to 12.0% from 10.2% q-oq. Currently, small business loans provide the highest yield (except for credit cards) for Denizbank. We believe the transition of this business segment from the grey area of the economy to the recorded side via the Banks represents a great banking potential. Agricultural loans recorded another robust quarter with 38% q-o-q growth. The size of the book reached TRY 162mn from TRY 117mn and a thousand new clients were added to the portfolio in the same period. This particular sector is considered as one of the niches and the branch network is strategically positioned around the Aegean region. There are currently 74 branches that are servicing the farmers. Consumer loans (excluding credit cards) surged 147% and reached TRY 672mn (USD 501mn) y-t-d (15% q-o-q). In line with the Bank s target, its share in total loans continued to increase and constituted 11.9% versus 11.1% in the last quarter. Due to the ongoing strong

3 demand for real estate, mortgage loans rose 554% y-t-d (34% q-o-q) to reach TRY 197mn (USD 147mn). As a result of various campaigns towards teachers, army members and public workers, general purpose loans also soared 164% y-t-d (17% q-o-q) and approached TRY 320mn (USD 238mn). There was a slight contraction in the car loan portfolio q-o-q, despite a 29% y-t-d increase. Number of credit cards reached 1,376,143 adding 161,052 cards in one quarter and 516,032 cards in nine months. Market share in terms of number of cards has constantly been increasing since the beginning of the year to reach 4.7% from 4.3% q-o-q, and from 3.2% y-td. Parallel to the increasing number of Denizbank cards, issuing volume also jumped by a robust 56% q-o-q, recording the highest quarterly growth so far. On the other hand, credit card loans reached TRY 352mn (USD 262mn), posting a modest 4% q-o-q increase, in line with the sector. The deterioration of the loan quality has stopped in the 3Q, reflected by the diminishing credit card NPLs for the Bank. Consequently, the share of credit card, consumer and SME loans in total reached 30.1% versus 27.8% q-o-q. Our target is to lift this share to 54% by 2008, hence compensating for the anticipated margin decline in the sector by the switch to high yield products. Deposits Customer deposits reached TRY 6,334mn (USD 4,719mn), implying a y-t-d increase of 24% versus the sector s average of 16%. The quarterly growth of 9% was better than the growth in the 1Q but slightly less than the growth for the 2Q. TL deposits soared 42% y-t-d, still making up 36% of total deposits. FX deposits rose by 16% versus the sector s 2% y-t-d. Term and currency composition of deposits are given below in detail. TRY TL Deposits 2,272,458 1,597,490 Demand 588, ,504 Time 1,683,841 1,195,986 FX Deposits 4,061,176 3,511,908 Demand 816, ,890 Time 3,244,456 2,777,018 TOTAL 6,333,634 5,109,398 Currently, Denizbank has the largest branch network among the mid-size banks with its 223 branches (as of ). Rapidly increasing number of clients are the major contributor to the expanding deposits, as the number of individual clients reached 1.2 mn from 1mn since the beginning of the year. Securitization DenizBank secured a syndicated loan in the amount of USD 650 million in two tranches. One tranch is USD 300 million with a 1-year term at L+0.45% and the second is USD 350 million with a 2-year term at L+0.80%. The facility was initiated with USD 500 million whereas the demand reached USD 760 million. The consequent syndicated loan amount was USD 650 million in line with the requirements of the bank. The loan was co-arranged by 25 banks and the signing took place on October 25, 2005 in Istanbul.

4 Income DenizBank posted TRY 181mn (USD 135mn) of net profit. After adjusting for TRY 17mn of Zoren proceeds in the 1Q and TRY 26mn of tax reversal in the 2Q, the net quarterly bottomline figures were TRY 54mn and TRY 30mn, respectively. Thus, the TRY 52mn of 3Q bottomline is better than the second quarter figure. Net interest income improved 28% y-o-y and 55% q-o-q. On quarterly basis, TRY 140mn of 3Q NII was the highest recorded so far this year. Favoring the bottomline, loan loss provisions also decreased to TRY 9mn from TRY 31mn in the previous quarter. Loans/Deposits ratio remained flat at 86% q-o-q. Net fees and commissions increased by 32% y-o-y and reached TRY 102mn (USD 76mn). The robust performance is mainly owed to the growing contribution from credit cards. Breakdown of the commission income is given below. TRY Cash loans 9,153 7,006 Non cash loans 24,875 22,905 Credit card commissions 43,494 25,115 Brokerage fees 41,845 55,657 Remittance commissions 3,011 2,195 Insurance services 2, Others 9,175 10,964 Total 134, ,613. The ROAE and ROAA ratios were recorded at 25.6% and 2.5%, respectively. Capital adequacy ratio was 15.2%.

5 DenizBank Investor Relations: IR Department Head Mr. Sehsuvar Aladag IR Officer Ms. Yeliz Korasli IR Officer Ms. Ayse Ozbay Erozan You can also reach us at The earnings release and investor presentation are posted on our website at