TÜRK EKONOM BANKASI A.. October 2006

Transcription

1 TÜRK EKONOM BANKASI A.. October

2 Outline TEB Financial Group Türk Ekonomi Bankası Financial Highlights Prospects Annexes»Economic Outlook»Banking Sector in Turkey 2

3 TEB Financial Group of Companies 3

4 TEB Financial Group of Companies * BNPP TEB Mali Yatırımlar 50% 50% Çolakolu 84.3% 15,7% free float TEB 100.0% 100.0% TEB Leasing TEB Factoring 100.0% TEB Investment 100.0% TEB NV */ Ownership percentages used in Consolidation 100% TEB Asset M. 4

5 BNP Paribas - TEB JV Official Closing completed at February 10, partnership at TEB Mali level Equal number of board members at TEB Mali level 4 board member for each group and CEO at Board at Bank level 5

6 TEB Financial Group of Companies TEB Investment TEB Leasing TEB Factoring 10 th largest brokerage house of Turkey with 2,6% market share (within top 5 in trading by foreign inst.) 4.0% market share, 10 th largest leasing company in Turkey as of 2Q th largest factoring company in Turkey with a 7.0% market share in the sector as of 2Q2006 TEB Asset Management TEB NV The Group manages one of the largest and best performing funds in Turkey with total AUM of TRL700 mio. Turkish specialist in the EU market, total asset size is EUR 750mio. as of 2Q2006 Growth through cross-selling 6

7 Türk Ekonomi Bankası 7

8 Turkish Banks Ratings M O O D Y ' S I N V E S T O R S E R V I C E S Bank Financial Strength FX Deposit FX Deposit Rating Outlook Rating Outlook Akbank D + positive B1/NP stable Garanti D + positive B1/NP stable TEB D + stable B1/NP stable Fortis D + stable B1/NP stable Finans D + stable B1/NP stable Deniz D + stable B1/NP stable Isbank D positive B1/NP stable Kocbank D negative B1/NP stable YKB E + stable B1/NP stable F I T C H R A T I N G S Individual Support LT FC LT LC LT Outlook National Akbank C 4 BB BB+ Positive AA (tur) Isbank C 4 BB BB+ Positive AA (tur) Garanti C 3 BB BB+ Positive AA (tur) TEB C / D 3 BB BB+ Positive AA (tur) Finans C / D 3 BB BB+ Positive AA (tur) Deniz C / D 4 BB - BB - RWP A (tur) Fortis D 3 BB BB + Positive AA (tur) Kocbank D 3 BB BB+ Positive AA (tur) YKB D / E 3 BB BB + Positive AA (tur) Rating Above Sovereign 8

9 Branch Network Mixed Branches : 99 2 Retail Branches : 31 Corporate Branches : 8 Private Branches : 1 Special Purpose Branches : 5 Total : branches covering 83.2% of GDP of Turkey 9

10 Corporate Banking Multinationals and corporates with over US$ 50 mio annual turnover Contribution to results: 31.1% of loans 33.7% of deposits 32.2% of customer contribution Leader in cash management services TEB Cash Management was awarded "The Most Innovative and Cost-effective Payments Processing Solution Award" in Excellence, in Payments Innovation Awards competition organized by the European Payments Consulting Association (EPCA). Project Finance solutions 10

11 International Trade 3 trade centers in cooperation with BNPP trade centers network Share of TEB in foreign trade (mio US$, %) (August 2006) TEB Export TEB Share TEB Import TEB Share TEB Total Volume TEB Share in Foreign Trade 3, , , Success story of synergy: Turkish Desks in Algeria, Ukraine and Egypt 11

12 Commercial Banking Corporates with less than US$ 50 mio annual turnover and suppliers and customers of corporate clients Contribution to results : 49.6% of loans 14.5% of deposits 54.0% of customer contribution Solution partner in SMEs TEB Academy Support Line Accounting Software Consultancy Structured Loans Solution Partner in SMEs 12

13 Bank-Only Loan Portfolio June 2006 Loan Portfolio by Industry Loan Portfolio by Currency Financial Inst 3.6% Transportation Veh. 4.6% Construction 4.7% FX 40.2% Wholesale/Retail Tourism Chemicals 5.6% Others 23.9% 5.3% 5.3% Textile 10.6% YTL 59.8% Metal 8.5% Source: TEB (BRSA accounts) Consumer 15.5% Food, Beverage & Tobacco 8.6% Ready Wear 4.0% Well diversified loan portfolio 13

14 Non Performing Loans Non-Performing Loans as a % of Total Loans 30.0% 27.2% 20.0% 10.0% 0.0% 16.5% 10.7% 11.5% 11.5% 7.2% 6.0% 4.9% 4.5% 2.2% 2.4% 3.7% 3.8% 2.5% 2.1% 0.5% 0.0% 0.2% 0.6% 0.9% 1.3% 1.1% 1.1% 0.9% Q06 2Q06 TEB Sector Average Prudent approach, low NPL ratio 14 Source: CMB of Turkey announcements and BRSA; Bank-Only Accounts

15 Non Performing Loans 2Q 2006 Centralized credit policy Proven asset quality Established lending culture 10.0% 7.5% 6.1% 6.9% 5.0% 2.5% 0.9% 1.6% 2.4% 2.5% 2.6% 3.3% 3.6% 0.0% TEB Akbank Finans Deniz Garanti Fortis bank Vakıf YKB 15 Source: CMB of Turkey announcements; Bank-Only accounts

16 Retail Banking and Small Business Accelerated growth in Retail business with BNPP joint forces Introduction of new products Instant Credit Mobile Payment Bonus credit card scheme Introduction of Small Business Banking solutions Contribution to results : 19.3% of loans 30.7% of deposits 10.4% of customer contribution Non performing loan ratio is 0.5% Emphasis on wealth management Mutual fund volume TRL330 million 5 th bank wrt fund sales per branch 2.7% market share Cross selling via call center and branches 16

17 Retail Loans Retail Loans (1H 2006) Retail Loans Growth (1H 2006) 100% 13% 4% 15% 3% 14% 5% 17% 100% 90% 85% 75% 29% 75% 65% 41% 37% 32% 50% 50% 46% 38% 28% 25% 40% 46% 46% 25% 12% 20% 0% Q06 2Q06 0% Housing Auto Consumer Housing Auto Consumer Other TEB Sector Source: TEB; BRSA Accounts 17

18 AUM, 2Q 2006 TEB Share in AUM (%) AUM per Branch (000 YTL) Others 97.3% TEB 2.7% Q 2006 Koç 20,676 13,584 YKB 6,566 7,116 Garanti 8,484 6,948 HSBC 12,301 6,536 TEB 9,690 6,175 6,833 6,115 Ak 6,163 5,029 Vakıf 4,359 4,100 Oyak 2,952 2,658 Finans 4,456 2,624 Ziraat 1,546 1,531 Deniz 1,946 1,469 18

19 Private Banking To introduce new products and tailor-made solutions to private banking clients First Turkish bank to introduce private banking Private banking redefined in 2001; customers with min. US$ 1 mio are in this category Wealth Management Platin Card Tax consultancy and tax calculator Total funds managed: US$865 mio Contribution to results: 0.1% of loans 21.1% of deposits 3.4% of customer contribution Aim: Tailor-made service by more focus on customers and special products Leveraging Customer Base 19

20 Financial Highlights 20

21 Consolidated BRSA B/S Highlights Reviewed Audited Reviewed Audited YTL M illion Share Change Share Change Assets Liabilities Cash & banks 22.3% 2,035 1, % Deposits 66.4% 6,069 4, % Reserve Depo.s 3.0% % Repos 5.0% % M.sec + repos 12.9% 1,177 1, % Funds Borrowed 15.4% 1, % Loans + Trade rec. 57.9% 5,288 3, % Other Liab. 4.1% % Other Assets 3.2% % Total Liabilities 91.0% 8,309 6, % Fixed Assets 0.8% % Total Assets 100.0% 9,135 6, % Subordinated Loans 3.1% % Sh. Equity Capital & Res. 5.3% % Income 0.7% n.m. Total Sh. Equity 6.0% % Total Liab + Equity 100.0% 9,135 6, % 21 Source: TEB, Consolidated Accounts

22 Balance Sheet Growth Share Change Assets YTL (mio YTL) 48.6% 4, , % FX (mio USD) 51.4% 2, , % Loans YTL (mio YTL) 50.7% 2, , % FX (mio USD) 49.3% 1, , % Deposits YTL (mio YTL) 30.1% 1, , % FX (mio USD) 69.9% 2, , % 22 Source: TEB, Consolidated Accounts

23 Consolidated Balance Sheet Assets Composition Liabilities 100% 7.4% 7.0% 6.3% 7.0% 100% 7.1% 7.5% 5.3% 8.4% 5.8% 7.3% 7.2% 6.0% 75% 46.3% 47.8% 55.2% 57.9% 75% 13.8% 0.4% 17.0% 3.2% 14.2% 10.9% 15.4% 5.0% 50% 25% 0% 3.3% 9.0% 17.1% 12.9% 43.0% 36.2% 21.4% 22.3% Q06 50% 25% 0% 71.3% 66.1% 61.8% 66.4% Q06 Liquid Assets Marketable Sec. Loans Other Deposits Repos Funds Borrowed Equity Other 23

24 Marketable Securities (June 30, 2006) (000 YTL) Out of the FRNs, 29% have been repriced on July 13, 62% on August 23 and 9% will be repriced on November Source: TEB, BRSA Bank-Only Accounts

25 Loans Breakdown wrt Repricing (June 30, 2006) (000) TL (000) FX days 34,3% 684, days 22,6% 269, days 3,8% 76, days 15,7% 186, days 3,3% 65, days 15,6% 185, days 5,0% 99, days 14,8% 176, days 7,4% 147, days 6,3% 74,975 4 days 3,7% 73,126 4 days 8,815 0,7% O/N 42,5% 846,454 O/N 24,3% 289, , , , ,000 1,000, , , , , Source: TEB, BRSA Bank-Only Accounts

26 Retail Loans and Hedging (June 30, 2006) $ %#!"# 474, % Hedging 489, % % 103% 26 Source: TEB, BRSA Bank-Only Accounts

27 Fixed Rated Loans and Hedging (June 30, 2006) $ %#!"#!"# % % Source: TEB, BRSA Bank-Only Accounts

28 Consolidated BRSA Income Statement Re-Classified YTL Million Reviewed Reviewed Change Interest Income % Interest Expense % FX Gains / (Losses), net % Loan Loss and General Provisions % Adjusted Net Interest Income % Securities Trading Income % Net Fees, Commissions and AUM % AUM % Net Fees and Commissions % Other Operating Income % Non-interest Income % Non-interest Expense % Operating Profit % Provision for Taxes on Income % Net Income / (Loss) % Source: TEB, Consolidated Accounts 28

29 Profitability Ratios Adjusted Net Interest Margin */ Cost / Income 2Q % 2Q % 1Q06 4.0% 1Q % % % 0% 2% 4% 6% ROE (net) 0% 20% 40% 60% 80% ROA (net) 2Q % 2Q06 1.6% 1Q % 1Q06 2.2% % % 0% 10% 20% 30% 40% 0% 1% 2% 3% */ Adj. Net Int. Margin: (Net int. income+net comm. income fm cash loans-prov.s for loans and other+net monetary gain/loss+netfx gain/loss) / Interest Earning Assets Source: TEB, BRSA Consolidated Accounts 29

30 Ratios Loans / Deposits Marketable Sec. / Assets 2Q % 2Q % 1Q % 1Q % % % 0% 25% 50% 75% 100% Capital Adequacy Ratio 0% 5% 10% 15% 20% 2Q06 1Q % 14.1% 13.20% 12.5% 13.76% 12.3% 0% 4% 8% 12% 16% Bank Only Source: TEB, BRSA Consolidated Accounts Consolidated 30

31 Comparative Ratios; 2Q % Adjusted Net Interest Margin 7.50% 6.0% 5.00% 4.9% 4.4% 4.2% 3.9% 3.5% 2.50% 2.9% 2.6% 1.5% 0.00% Fortis Finans Vakıf Akbank T EB YKB Garanti Deniz bank /* Adj. Net Int. Margin: (Net int. income+net comm. income fm cash loans-prov.s for loans and other+net monetary gain/loss+netfx gain/loss)/int. Earning Assets Cost / Income 100.0% 80.0% 60.0% 40.0% 38.9% 40.9% 49.0% 49.8% 51.8% 61.9% 73.2% 75.8% 83.7% 20.0% 0.0% Akbank Vakıf bank Finans Garanti TEB Deniz Fortis YKB Source: CMB, Bank-Only Accounts 31

32 Comparative Ratios; 2Q2006 Loans / Deposits % 113.8% 111.5% 109.7% % 93.2% 83.4% 82.6% 77.9% 80.00% 71.2% 66.6% 60.00% 40.00% 20.00% 0.00% Fortis Denizbank Finans Garanti YKB TEB Akbank Vakıfbank bank Marketable Securities / Assets 50.00% 40.00% 30.00% 21.8% 26.6% 27.7% 30.2% 35.9% 35.9% 20.00% 10.00% 9.5% 12.8% 15.9% 0.00% Deniz Finans TEB Fortis YKB Garanti Vakıf Akbank bank Source: CMB, Bank-Only Accounts 32

33 Comparative Ratios; 2Q2006 ROE 50.0% 40.0% 30.0% 38.2% 29.7% 26.5% 26.3% 21.1% 16.7% 20.0% 10.0% 12.1% 8.1% 0.0% -10.0% -4.1% Finans Akbank T EB Garanti Vakıf sbank Deniz Fortis YKB ROA 5.0% 4.0% 3.8% 3.4% 3.0% 2.6% 2.5% 2.2% 2.0% 2.0% 1.0% 0.0% -1.0% 1.3% 1.1% -0.3% Finans Akbank Vakıf Garanti bank T EB Deniz Fortis YKB Source: CMB, Bank-Only Accounts 33

34 Comparative Ratios; 1H2006 Loan Growth 60% 48.8% 43.0% 40% 35.3% 34.8% 34.9% 33.2% 29.0% 25.5% 25.2% 20% 0% Garanti Fortis Vakıf bank Deniz T EB YKB Akbank Finans 46.4% Customer Deposit Growth 37.9% 40% 20% 18.6% 17.9% 16.9% 14.0% 6.5% 4.4% 1.2% 0% TEB Finans Akbank Isbank Garanti Fortis Deniz YKB Vakıf Source: CMB, Bank-Only Accounts 34

35 Comparative Ratios; 1H2006 Assets Growth 45% 30% 38.7% 31.8% 28.7% 28.3% 15% 16.5% 12.7% 10.1% 7.2% 4.5% 0% Finans T EB Fortis Garanti YKB Deniz bank Akbank Vakıf 115% 103.1% Net Profit Growth 75% 66.8% 61.1% 60.4% 56.1% 50.5% 35% 18.9% -5% -45% -85% -42.8% -72.9% Vakıf Fortis Garanti bank Finans T EB Akbank Deniz YKB 35 Source: CMB, Bank-Only Accounts

36 Economic Outlook 36

37 Turkey: Basic parameters Population (mid-year, thousand) 44,438 50,306 56,203 61,644 67,461 72,065 Unemployment rate (%) GNP ($ bn) GNP per capita ($) 1,539 1,330 2,682 2,759 2,965 5,008 GDP per capita in PPP ($) 1,170 3,489 4,663 5,572 6,810 8,141 CPI inflation (yoy, %) Current account balance ($ bn) Current account balance / GNP (%) FX reserves (year-end, $ bn) FX reserves / Imports (%) Foreign trade volume ($ bn) Foreign trade volume / GNP (%) FDI ($ bn)

38 Post-2001 macro performance Macro performance was impressive during The only exception was the growing current account deficit Key macroeconomic indicators during GDP ($ bn) Real GDP growth (%) CPI Inflation (%) PPI Inflation (%)* Budget Balance (% GDP) Budget Primary Balance (% GDP) Government Gross Debt (% GDP) Government Net Debt (% GDP) Current Account Balance ($ bn) Capital Account Balance ($ bn) * WPI for the period and PPI afterwards 38

39 Turkey-specific reasons behind the increasing risk perception... The growing current account deficit Poor inflation readings in recent months Rapid growth in government spending Signs of reform fatigue (both IMF & EU) The government s mishandling of the central bank governor appointment Inreasing political tension after a high level judge was shot dead on May 17 Presidential & general elections on the horizon 39

40 ... coincided with adverse external developments The Fed, ECB & BoJ were all in a tightening mood Emerging market asset prices were at historically high levels Rising oil and other commodity prices (Turkey is a net oil & commodity importer) Bottomline: A general fall in global risk-taking appetite while at the same time Turkeyspecific risk perception was on rise 40

41 TRY continued to appreciate until May, a key reason behind the CA deficit 180 Real Effective Exchange Rate (CPI based) crisis crisis

42 TRY was the hardest hit currency among other emerging market currencies Turkey S. Africa Hungary Poland Iceland Brasil Mexico Slovakia Czech Rep. Argentina Israel Performance vs USD in % (10 May - 23 June) Russia 10 May - 23 June

43 The sharpest recovery was also seen in TRY but it was less than full Turkey S. Africa Hungary Poland Iceland Brasil Mexico Slovakia Czech Rep. Argentina Israel Performance vs USD in % (23 June - 16 August) Russia 23 June - 16 August

44 Turkey s stock market was also the hardest hit among other emerging markets Turkey Hungary Russia Brasil Poland Argentina Czech Rep. Mexico Israel Stock Exchange Performances (in Local Currency Units) Slovakia S. Africa 10 May - 23 June

45 But the stock market recovery was not the sharpest and it was less than full Turkey Hungary Russia Brasil Poland Argentina Czech Rep. Mexico Israel Stock Exchange Performances (in Local Currency Units) Slovakia S. Africa 23 June - 16 August

46 Turkey s CDS spreads widened sharply, getting close to Argentina s Argentina CDS spreads, 5 years Turkey Brasil Mexico S. Africa Russia Hungary Poland 10 May Jun Aug

47 Looking Ahead A less benign global outlook ECB and BoJ likely to continue hike interest rates; the Fed s behaviour is data-dependent Oil & other commodity prices high if not rising Signs of global inflation pressures Domestic outlook is not as bright as it used to be Current macro picture raises question marks (especially inflation and the current account) Elections are on the horizon and political noise is increasing The EU: Troubled waters ahead 47

48 Two scenarios: With and without another EM sell off Relatively positive scenario Relatively negative scenario (No EM sell off) (Another EM sell off in 4Q06) GNP Growth Rate (%) CPI Inflation (%) TRY / $ Rate TRY / Rate (*) Central Bank O/N Rate (%) Bencmark Bond Rate (%) Current account ($ bn) Current account (% GNP) (*) $ / rate was assumed to be

49 Contact Details Investor Relations Levent Çelebiolu (ext. 1341) Güzin Üstün (ext. 1306) 49

50 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. 50