HİZMETE ÖZEL

2015 Year-EndEarnings Presentation

Albaraka Türk

HİZMETE ÖZEL

Agenda

1Macroeconomic / Banking Outlook

2 2015 Year-end Financial Results

3Market Comparison

Appendix

4

HİZMETE ÖZEL

Macroeconomic Outlook

Uncertainties were high in third and fourth quarter due to the coalition debates and re-election decision. After the results of re-election shows returning to one-party rule in Turkey uncertainties have been lowered.

The effects of global market volatility were felt in the Turkish economy as well. However, reduced domestic uncertainty limited these effects.

A loss of pace in economic activity driven by external demand. But The GDP remains on a steady, moderate upward track.

Inflation rose amid developments in food prices and the exchange rate. Due to the cumulative depreciation in the Turkish lira, annual core goods inflation surged in

this period and the core inflation trend maintained its high level.. Energy price developments affect inflation favorably, while other cost factors limit the

improvement in the core inflation trend The slowing domestic demand and the changes in real exchange rates drive imports lower.

Demand from the European Union economies continues to support exports, despite elevated geopolitical risks in other export markets

1

Volatilities in financial markets continue amid uncertainties about global monetary policies and concerns over global growth.

Global growth again fell short of expectations in 2015. The fall in international commodity prices, especially energy, continued into the fourth quarter.

Since late 2014, EMs have been witnessing a rapid increase in capital outflows, primarily due to weak economic activity, the global interest rate outlook, and geopolitical factors.

After seven years of the most accommodative monetary policy in U.S. history, the Fed as widely expected, approved a quarter-point increase in its target funds rate.

Interest rate volatility experienced some decline right after the anticipated first Fed rate hike . China’s economy has continued to disappoint in expectations that the slowdown would abate and

possibly reverse.

Global Economy

Turkish Economy

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Banking Industry and Participation Banks

2

In 2015, net profit of banking sector raised 5,7% At the same period, credit growth rate reached 20,3% while NPL amount raised 30,6%. The loan growth, which had been pulled down to reasonable levels, recently lost some

pace further due to the elevated uncertainties in external and domestic markets. While loan growth is weak, the uptrend in the amount of non-performing loans (NPL)

continues and the NPL ratios are increasing. While the annual growth of loans is at reasonable level, the ratio of loans to GDP recently

increased due to the exchange rate developments. Commercial loans grow faster than consumer loans in line with the desired loan

composition. Retail loan growth is below both the previous year’s level and the average of the past few

years. The weak growth can be mainly attributed to the increased retail loan rates and decreased consumer confidence due to domestic and international uncertainties.

The exchange rate-adjusted loan growth slightly decreased in the second half of the year due to heightened uncertainties.

Banking Industry

In the year of 2015, participation banks grew under the banking sector. However, Participation banks excluding Bank Asia Continues to growing higher than

the banking sector. The plan to establish new publicly owned participation banks has been realizing and

continuing branch network expansion. Ziraat Katılım opened in 29th May. Vakıf Katılım will open in 26th Feb. Number of total branches reached to 1080.

Participation Banks

HİZMETE ÖZEL

Agenda

1Macroeconomic / Banking Outlook

2 2015 Year-end Financial Results

3Market Comparison

Appendix

4

HİZMETE ÖZEL

Net Profit302,9 mn

TRL

Total Assets29,6 bn TRL

Total Credits19,5 bn TRL

Equity2,1 bn TRL

ROAE: %15,57NPSM: %3,93

NPL: %2,40

Loan/Deposits: %96

CAR: %15,27

%19,9 GrowthSustainable Profitability

%28,3 Sustainable Asset Growthand Strong Asset Quality

%20,5 Funded creditsGrowth

%17,5 Equity Growth

Albaraka Türk 2015 Year-end Snapshot3

HİZMETE ÖZEL

Coverage

Albaraka Türk branches

İstanbul 87 Hatay 2 Elazığ 1 Edirne 1 Burdur 1

Ankara 17 Kütahya 2 Erzurum 1 Maraş 1 Van 1

İzmir 6 Manisa 2 Eskişehir 1 Nevşehir 1 Yalova 1

Bursa 6 Diyarbakır 2 Giresun 1 Ordu 1 Zonguldak 1

Adana 5 Samsun 2 Afyon 1 Osmaniye 1 Mardin 1

Konya 9 Balıkesir 2 Isparta 1 Rize 1 Muş 1

Kocaeli 5 Denizli 2 Karaman 1 Sakarya 1 Bitlis 1

Kayseri 4 Şanlıurfa 2 Karabük 1 Adıyaman 1 Uşak 1

Antalya 5 Bolu 1 Kastamonu 1 Sivas 1 Amasya 1

Tekirdağ 3 Çanakkale 1 Ordu 1 Yozgat 1 Erbil 1

Gaziantep 3 Çorum 1 Çankırı 1 Siirt 1

Trabzon 3 Düzce 1 Malatya 1 Batman 1

Mersin 3 Aksaray 1 Aydın 1 Tokat 1

123 137

167202

213

2011 2012 2013 2014 2015

Total Number of Branches

2.601

2.758

3.057

3.510

3.736

2011 2012 2013 2014 2015

Total Employees Size

13

Albaraka Türk 2015 Year-end Snapshot4

HİZMETE ÖZEL

23.04624.817

27.046

29.213 29.562

9.870 9.627 10.206 9.738 10.265

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

TRL USD*

Growth in Total Assets

Funded Credits

66%

Securities Portfolio

6%

Liquid Assets25%

Other Assets3%

*USD equivalent of total assets

YtD Growth: 28,3% in TRL terms QoQ Growth: 1,19% in TRL terms

Total Assets (million TRL) Asset Segmentation (Q4’15)

5

+28,3%

8,047,96

7,79

7,61

7,18

Q4'15Q3'15Q2'15Q1'15Q4'14

9,539,47

9,54

9,85

10,07

Q4'15Q3'15Q2'15Q1'15Q4'14

+8 bps

Growth in Funded Credits

660861 926 971 1.052

783

705703

746763

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Available for sale Held to Maturity

1.443

1.565 1.630 1.7171.814

*USD equivalent of total funded credits

Total Funded Credits (including financial leasing, million)

Total Securities Porfolio ( TRL million)

6

Ytd Growth: 20,5% in TRL terms QoQ Growth: 0,5% in TRL terms

16.18417.398

18.730 19.399 19.505

6.931 6.749 7.068 6.466 6.773

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

TRL USD*

Credit Yields(1) (%)

(1) Profit share income received from credits for the last 4Q/4Q average credits

Securities Yield(2) (%)

(2) Profit share income received from securities for the last 4Q/4Q average securities

25,7%

+6 bps

86 bpYtD Growth

HİZMETE ÖZEL

Funded Credits PortfolioComposition of Total Funded Credits* (%)

Q4’14 Q1’15 Q2’15 Q3’15 Q4’15

Corporate Credits 36,5 36,3 38,7 39,8 38,9

SME Credits 51,0 50,1 46,6 45,9 46,7

Retail Credits 12,5 13,8 14,6 14,2 14,3

Total 100.0 100.0 100.0 100.0 100.0

*According to BRSA definition

Currency Composition of Total Funded Credits* (Q4’15)

57%29%

14%

TRL

USD*

EUR*

*Including USD & EUR indexed credits

58 58 62 62 62

1.6

99

1.9

65

2.3

90

2.3

82

2.4

31

101120

130 124 124

79

146

158 173 171

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Credit Cards

Housing

Vehicle

Consumer

Total Retail Credits* (%)

Retail credits (excluding installment based

commercial credits and corporate credit cards)

grew to 2.787 million TRL in 2015 up from 1.937

million TRL in in 2014

Housing finance is primary segment among retail

credits

7

+43,9%

*Excluding installment based commercial credits and corporate credit cards

HİZMETE ÖZEL

87,9

80,075,4

70,5

60,0

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

2,02

2,202,33

2,60

2,40

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

327

383

437

503468

287306

330356

281268311

330

438 439

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

NPA Spesific Provisions Collateral

Asset Quality

Non-performing Loans (TRL million)

6267

60 6370

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Cost of Risk** (bps)

NPL Ratio*

** Spesific provisions for credits for last 4Q/ 4Q average credits

*Including financial leasing & accruals and rediscounts

Provisioning Ratio (%)

8

8 bps

HİZMETE ÖZEL

19% 21% 23% 21% 23%

17% 15% 15% 14% 16%

65% 65% 62% 64% 61%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Fund Borrowed Current Accounts Participation accounts

Composition of Total Liabilities (Q4’15, %) Composition of Funding Base (TRL million)

69

18

76

Funds Collected

Wholesale Funding

Shareholders'Equity

Other Liabilities

20.448 22.146 23.937 25.967

+29,4%

26.461

Total Liabilities9

HİZMETE ÖZEL

5,34%5,33%5,53%5,61%5,73%

7,84%7,66%7,77%7,74%7,84%

1,89%1,94%2,10%2,30%

2,56% 2,51%2,43%2,47%2,49%

2,47%

Q4'15Q3'15Q2'15Q1'15Q4'14

Average TL FC Precious Metal

Total Funds Collected

16.64317.544 18.348

20.438 20.346

7.128 6.805 6.924 6.813 7.065

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

TRL USD*

Total Funds Collected (million)

Cost of Funds Collected**

*USD equivalent of total collected funds

**Profit share expense to depositors for the last 4Q/4Q average participation accounts

5630

122

TRL

USD

EUR

Others

Currency Composition of Funds Collected (Q4’15, %)

Maturity Composition of Funds Collected (Q4’15, %)

21

5

64

22 6 Current Acc.

Up to 1 month

Up to 3 months

Up to 6 months

Up to 1 year

>1year

10

+22,2%

HİZMETE ÖZEL

Off balance sheet growth11

Off Balance Sheet Composition (%)

76 76 74 74 74

7 6 5 6 6

17 18 21 20 20

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

LG LC Others

LGs-to-Total Assets

29,8%29,3%

28,2%

26,8%

26,1%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Off Balance Sheet (TRL million)

Q4’14 Q1’15 Q2’15 Q3’15 Q4’15

Growth (%)

Q-Q YtD

Letter of Guarantee 6.873 7.276 7.617 7.844 7.730 -1,4 12,5

Letter of Credit 589 548 520 626 640 2,2 8,5

Others* 1.545 1.713 2.150 2.101 2.041 -1,5 32,1

Total: 9.007 9.536 10.288 10.570 10.411 -2,8 15,6

*Revocable credit limits not included.

HİZMETE ÖZEL

Income- Cost Dynamics12

(000 TRL)

Year on Year Change Quarterly Change Notes

Q4’15 Q4’14 % Q4’15 Q3’15 %

Net Profit

Share Income885.681 698.973 26,71 243.055 232.751 4,43

Profit share expense increased by 30,6% while PSI

raised by 28,8% YoY basis. Joint venture projects

returns reached to TL 54.862 in 3Q 2015 (2014: TL

57,388)

Net Fee

Income135.997 128.336 5,97 41.799 22.326 87,22

Slow growth in 2015 but Higher Net Fee income

inQ415

Net Trading

Income52.570 53.257 -1,29 11.618 -10.424 n.m.

Lower FX trading income due to high volatility in

exchange rates on YoY basis.

Other Income 113.407 96.819 17,13 34.001 32.535 4,51Reversal of prior year provisions in 2015 is higher

than 2014

Provisioning 157.143 149.576 5,05 35.098 35.098 -3,02Lower coverage ratio in 2015 compared with the

2014 figures.

Other Costs 654.203 502.438 30,20 154.559 154.559 16,78YoY increase in other costs due to increase in FX

rates, new branch openings and transformation

project.

Tax 73.915 72.921 1,36 20.600 16.109 27,87 -

Net Profits 302.863 252.631 20,36 91.002 71.422 27,41 -

HİZMETE ÖZEL

Agenda

1Macroeconomic / Banking Outlook

2 2015 Year-end Financial Results

3Market Comparison

Appendix

4

HİZMETE ÖZEL

Total Growth – 201513

Percent 2015 2014

Albaraka

Türk

Participation

Banks

Banking

Sector

Albaraka

Türk

Participation

BanksBanking Sector

Asset Size 28,3 15,4 18,2 34,1 8,5 15,1

Total Credits* 20,5 16,0 20,3 34,2 4,3 18,2

Deposits/Collected Funds** 22,2 13,3 17,9 32,9 5,7 11,7

18,2%

15,1%

26,4%

12,6%

21,0%

28,3%

33,9%

39,7%

17,8%

24,4%

20152014201320122011

Asset Size GrowthBanking Sector

Albaraka Türk

* Including Leasing Receivables, Interest (Profit Share) and Income Accruals and Rediscounts from Loans, Loans Extended to Banks

** Including Deposit (Participation Funds) Interest (Profit Share) Rediscounts and Deposit (Participation Funds) Collected from Banks

HİZMETE ÖZEL

Market Share– 201514

Percent 2015 2014

Albaraka

Türk/

Participation

Banks

Albaraka

Türk/ Banking

Sector

Participation

Banks/ Banking

Sector

Albaraka

Türk/

Participation

Banks

Albaraka

Türk/ Banking

Sector

Participation

Banks/ Banking

Sector

Asset Size 24,6 1,3 5,1 22,1 1,2 5,2

Total Credits* 23,6 1,3 5,4 22,7 1,3 5,6

Deposits/Collected Funds** 26,9 1,5 5,7 24,9 1,5 5,9

* Including Leasing Receivables, Interest (Profit Share) and Income Accruals and Rediscounts from Loans, Loans Extended to Banks

** Including Deposit (Participation Funds) Interest (Profit Share) Rediscounts and Deposit (Participation Funds) Collected from Banks

Albaraka Türk; 24,6%

Participation Banking;

5,1%

Banking Sector Participation Banking Sector

HİZMETE ÖZEL

Capitalization

10,8

10

9,52

9,58

9,8

14,16

12,8

12,17

12,11

15,27

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

CAR Tier I

Capital Adequacy Ratio (%)

15

+1,11bps

+3,16bps

250 million USDTier 2 Sukuk

Issued

HİZMETE ÖZEL

Profitability & Efficiency

15,35

15,08

15,57

Q4'14 Q3'15 Q4'15

Net Profit Share Margin(%) ROAE(NI) (%)

4,083,91 3,93

Q4'14 Q3'15 Q4'15

Cost/Income (%)

51,35

54,96 55,06

Q4'14 Q3'15 Q4'15

Loan/ Deposits (%)

97,24

94,9295,87

Q4'14 Q3'15 Q4'15

16

HİZMETE ÖZEL

Ratios17

Percent 2015 2014

Albaraka Türk Participation

BanksBanking Sector Albaraka Türk

Participation

Banks

Banking

Sector

CAR 15,27 14,91 15,60 14,15 14,53 16,30

NPL Ratio 2,40 5,25 3,08 2,02 4,46 2,84

Provisioning Ratio 59,95 59,06 74,59 87,85 61,78 73,84

Loan/Deposits 95,87 108,24 123,37 97,24 106,61 113,96

ROAA (IBT) 1,36 0,60 1,48 1,59 0,36 1,70

ROAE (NI) 15,57 3,88 10,54 15,35 0,93 11,52

Asset Yield 8,59 8,39 8,70 8,88 8,39 8,88

Asset Spread 4,18 4,43 4,05 4,24 4,50 4,12

Net Profit Share Margin 3,93 4,51 4,13 4,12 4,37 4,31

Net Fee Income / Avg. Assets 1,07 0,94 1,00 1,30 1,15 1,12

Op Costs / Avg. Assets 2,39 2,67 2,30 2,52 2,87 2,37

Cost/Income* 55,06 50,94 47,01 51,35 50,50 46,02

Credits / Branches (000‘TRL) 91.575 76.444 125.645 80.117 71.916 104.933

Staff / Branches 17,54 15,33 17,73 17,75 16,41 17,76

CA / Deposits 20,91 27,15 19,14 20,28 24,50 18,85

*Cost: Operating Costs, Income: NII/NPSI, Net Fees and Commissions Income, Other Income

HİZMETE ÖZEL

Agenda

1Macroeconomic / Banking Outlook

2 2015 Year-end Financial Results

3Market Comparison

Appendix

4

HİZMETE ÖZEL

Summary Balance Sheet18

(Thousand TRL) Dec’15 Dec'14 Growth (%)

Cash and Banks 7.387.412 4.777.420 54,63%

Financial Assets 1.073.849 665.371 61,39%

Funded Credits 19.505.392 16.183.692 20,52%

Cash Credits 18.370.399 15.434.332 19,02%

NPL 468.413 326.975 43,26%

Provisions 280.847 287.261 -2,23%

Net Financial Leasing Receivables 947.427 709.646 33,51%

Investments Held to Maturity (Net) 762.890 783.309 -2,61%

Associates 25.469 14.961 70,24%

Fixed Assets 545.411 513.465 6,22%

Assets Held For Sale and Investment 22.819 27.678 -17,56%

Other Assets (inc. Tax Assets) 238.757 79.962 198,59%

Total Assets 29.561.999 23.046.424 28,27%

Funds Collected 20.346.178 16.643.218 22,25%

Funds Borrowed 4.104.688 3.215.998 27,63%

Debts 1.457.345 626.912 560,41%

Provisions (inc. Taxes) 310.317 296.943 4,50%

Tier II Sukuk 1.239.557 472.426 162,38%

Shareholders’ Equity 2.103.914 1.790.927 17,48%

Capital 900.000 900.000 0,00%

Capital Reserves (inc. Premium) 200.910 160.196 25,42%

Profit Reserves 696.531 470.137 48,15%

Profits 306.473 260.594 17,61%

Prior Periods 3.610 7.963 -54,67%

Current Year 302.863 252.631 19,88%

Total Liabilities 29.561.999 23.046.424 28,27%

HİZMETE ÖZEL

Summary Income Statement19

(Thousand TRL) Dec’15 Dec'14 Growth (%)

Profit Share Income 1.935.159 1.502.306 28,81%

Profit Share Expense 1.049.478 803.333 30,64%

Net Profit Share Income 885.681 698.973 26,71%

Net Fees and Commissions Income 135.997 128.336 5,97%

Fees and Commissions Received 187.627 161.173 16,41%

Fees and Commissions Paid 51.630 32.837 57,23%

Net Trading Income 52.570 53.257 -1,29%

Other Operating Income 113.407 96.819 17,13%

Total Operating Profit 1.188.174 977.565 21,54%

Provisions for Loan Losses 157.143 149.576 5,06%

Other Operating Expenses 654.253 502.438 30,22%

Net Operating Profit 376.778 325.552 15,74%

Tax Provision -73.915 -72.921 1,36%

Net Profits 302.863 252.631 19,88%

HİZMETE ÖZEL

THANK YOU

HİZMETE ÖZEL

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forecasts and estimates involve known and unknown risks and uncertainties that may cause actual results, performance or events to differ materially from those anticipated in this

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events, conditions, assumptions or circumstances on which any such statements are based unless so required by applicable law. Investors should note many different risk factors could

adversely affect the outcome and financial effects of the plans and projections described herein. As a result, you are cautioned not to place undue reliance on any forward-looking

statements. The Bank, its advisers and each of their respective members, directors, officers and employees disclaim any liability in case projections and plans given in this document are not

realised.

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E-mail : yim@albarakaturk.com.tr

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