earnings presentation - tskb...2q-18 3q-18 4q-18 1q-19 2q-19 nim nim exc. cpi&trading 12...

Earnings Presentation1H19–BRSA Bank-only Results

2Q-19 at a Glance

ROE 16.0% ROA 1.9%

Contraction in

loan bookNPL 2.2%

NIM 4.4% CAR @ 16.4%

17.9% 16.0% 14.8% 16.0%

17.9% 18.1% 18.0% 18.1%

2Q-18 2018 1Q-19 2Q-19

Annualized ROE & ROTE

ROE ROTE

277

407 383341

-105

-237-198

-146

172 170185 195

2Q-18 4Q-18 1Q-19 2Q-19

Net Banking Income Provisions&Tax Net Profit

TL mn

Quarterly Net Profit

44

229

69 5330

-59

42

-18

203

237

272306

2Q-18 4Q-18 1Q-19 2Q-19

Quarterly Net Banking Income

Net Banking Income exc. CPI&Trading Trading Gain/Loss CPI Income

5%QoQ

2

277383

407

Investor Relations I BRSA Unconsolidated Earnings Presentation 2Q-19

341

*Long term (LT) funding does not include securities issued (Eurobonds).**Swap adjusted.***Net Cost of Risk as of 1H19

Financial Guidance (%)1H19

Figures2019

Guidance

FX Adjusted Loan Growth -%2.2 ~5

Loans/Assets Ratio 73 ~75

Loans/Long Term Funding Ratio* 122 ~115

Fees & Commissions Growth 52 >35

OPEX Growth 23 <25

Net Interest Margin (adj.)** 4.4 3.5-3.8

Return On Equity 16.0 14-15

Return On Assets 1.9 1.5-1.7

Cost/Income Ratio 12.0 13-14

Capital Adequacy Ratio 16.4 >15

NPL Ratio 2.2 ~4

Net Cost of Risk 75 bps*** ~100 bps

1H19 Figures vs 2019YE Guidance

3


Quarterly and Yearly Net Income Surge

TL mn 1H-18 2H-19 YoY 1Q-19 2Q-19 QoQ

Net Interest Income 550.8 770.7 40% 372.0 398.8 7%

Trading Income 54.6 24.1 -56% 42.4 -18.3 -

(Derivative MtM Valuation 26.4 5.4 19.3 -13.8)

Net Commissions 8.5 13.0 52% 7.8 5.2 -32%

Dividend & Other 7.5 16.5 121% 11.1 5.4 -51%

Banking Income 627.7 824.3 31% 433.2 391.1 -10%

OPEX (-) 81.2 100.2 23% 49.7 50.5 2%

Net Banking Income 546.4 724.1 33% 383.4 340.7 -11%

Provisions (-) 148.2 236.5 60% 145.3 91.2 -37%

Tax Provisions (-) 67.5 107.5 59% 52.9 54.6 3%

Net Profit 324.5 380.1 17% 185.2 194.8 5%

Based on MIS data Swap costs are adjusted to net interest income. Interest Income from securities includes impairment expenses of marketable securities with provisions. 2Q19 Provisions include Other Income, Deferred Tax and Expected Credit Losses in the audited P&L excluding impairment expenses of marketable securities

Derivative valuation loss, FX positionincome held for general provisions

Stable and strong NIM

In line with inflation

4


Supportive FX Liquidity and Maturity Profile

52% 53% 52% 53%

11% 11% 11% 11%

20% 21% 21% 21%

4% 5% 5% 5%4% 4% 4% 4%6% 3% 5% 3%

2Q-18 4Q-18 1Q-19 2Q-19

Funding / Total Liabilities (exc. equity)

T. Guarenteed DFI Funding Unguarenteed DFI Funding

Securities Issued Subordinated Debt

Syndication & Other Repo &Money Market

USD mn

6,616 6,383

$695 mn Non-Withdrawn DFI Funding

• Inclusiveness 48%

• Climate + Environment 45%

• Sustainable Infrastructure 7%

6,878

5

6,542


-217 - - - - - -

-114 -142

-534 -507 -454 -389

-1,888

-

-350

-350 -300

-

-350

-- - - -

-300 *

-

-300

3Q-19 4Q-19 2020 2021 2022 2023 >=2024

Syndication DFI Funding Eurobond Tier 2

Maturity Profile of External Debt USD mn

* Tier 2 bond has issuer call in 2022

Resilient Balance Sheet Composition

2Q-18 2018 1Q-19 2Q-19

Loans Securities Cash & MM Non IEAs

38.3

35.0

TL bn

3.02.3

2.3 2.6

2Q-18 4Q-18 1Q-19 2Q-19

FX Loans ($) TRY Loans

TL bn

74%

3%

14%

9%

91%

CurrencyBreakdown

Asset Composition

28.227.2

74%

14%

9%

78%

7%

4%8%

41.6

14%

30.6

6

5.0$5.1$5.3$

Total Loans


41.6

72%

14%

9%

5%

1%29.8

4.8$

Loan Portfolio Details

10%

2%

4%

4%

4%

4%

4%

5%

8%

10%

12%

36%

Other

Textile

Health & Education

Tourism

Non-residential Real Estate

Chemistry and Plastics

Construction

Metal and Machinery

Electricity/Gas Distribution

Telecom/Logistics

Finance

Electricity Generation

Other: %4 Food&Beverage, %2 Automative,%1 Packaging, %3 Other

Average Maturity (Years)

6.7

3.7

1.6

Investment Loans

APEX Loans

Working Capital Loans

Loans by Type

Investment; 71%

Working Capital;

20%

APEX; 9%

Investment Working Capital APEX

Electricity Generation;

86% Renewable Energy; 90% in Feed in Tariff

Finance;

74% APEX Loans

Non Residential Real Estate;

50% Energy&Resource Efficiency

7

5.4

* «The loan under Financial Assets at Fair Value Through P/L» (former OTAŞ Loan) is included in Gross Loans.


Prudently Managed Asset Quality

* The loan under Financial Assets at Fair Value Through P/L (former OTAŞ loan) is included in Stage 2 Loans** Net Cost of Risk is calculated for the first half of the year.

June’19 Net CoR75 bps

Excluding currencyimpact

61 bps Net CoR **

8

87.0% 86.8%

78.0%

83.0%

88.0%

1Q-19 2Q-19

Stage 1 Loans

10.9% 11.0%

10.5%11.4%

0.0%

5.0%

10.0%

2.0%

7.0%

12.0%

17.0%

1Q-19 2Q-19

Stage 2 Loans

2.1% 2.2%

26.9%

26.1%

20.0%

25.0%

30.0%

35.0%

0.1%

5.1%

10.1%

1Q-19 2Q-19

Stage 3 Loans

Coverage Ratio

TL Mn.

31.03.2019

GrossAmount

Share in Total Coverage Ratio Provisions (-)

Stage 1 25,930 87.0% 0.5% 134

Stage 2 * 3,240 10.9% 10.5% 339

Stage 3 618 2.1% 26.9% 166

Gross Loans ** 29,789 100.0% 2.2% 639

Free Provisions 240

TL Mn.

30.06.2019

GrossAmount

Share in Total Coverage Ratio Provisions (-)

Stage 1 26.578 86.8% 0.63% 167

Stage 2 3.375 11.0% 11.4% 384

Stage 3 682 2.2% 26.1% 178

Gross Loans ** 30.635 100.0% 2.4% 729

Free Provisions 240

Stage 2 & NPL Portfolio under Focus

9

37%51%

63%49%

1Q-19 2Q-19

Stage 2 Loans

Restructured SICR

3.2 3.4TL bn

SICR Loans are in the restructuring

process

• Single file NPL (92% of the NPL portfolio) has beenrestructured.

NPL inflow is minor

8% 8%

92% 92%

1Q-19 2Q-19

NPLs

Single file Other

TL mn618 681

Electricity Generation

33%

Food&Beverage23%

Telecom/Logistics

22%

Electricity/Gas Distribution

13%

Other9%

Stage 2 Sectoral Breakdown

• Diversified sectoral breakdown in Stage 2- 64% of Electricity Generation Loans are RE, all

of which are under feed-in tariff- OTAŞ (LYY) loan is illustrated under

telecom/logistics risk.

Favorable Yields on Securities support Profitability

12.9%

37.1%

18.1% 19.0%

12%15% 16% 17%

2Q-18 4Q-18 1Q-19 2Q-19

TL Sec. Yield TL Sec. Yield exc. CPI

TL Security Yields

3,594 3,896 4,085 4,043

278 309

303 309

2Q-18 4Q-18 1Q-19 2Q-19

TL FX($)

% 64

TL mn

%62 Floating

TL Securities Portfolio Breakdown

Securities / Assets : 14%

Float%22

Float%21

Float%21

Float%19

CPI%40

CPI%46

CPI%44

CPI%43

Fixed%37

Fixed%33

Fixed%34

Fixed%38

2Q-18 4Q-18 1Q-19 2Q-19

Duration: 1.2 yrs in Fixed bonds, 1.9 yrs in Floating bonds,

3.3 yrs in CPIs in TL Sec. Portfolio.

69% is in AFS portfolio.

Private sector bonds: 3.4% of total portfolio

10

CPI Effect


Strong Profitability compansates Currency Impact

10.4% 11.1% 10.7% 11.1%

2Q-18 2018 1Q-19 2Q-19

Tier I (CET 1) CAR

15.2%

12.0%

8.5%

Solvency Limits (%) 2019

Capital Conservation Buffer 2.500

Counter Cyclical Buffer 0.011

CET 1 7.011

Tier 1 Ratio 8.511

CAR 10.511

35.5 37.4 40.4 41.2

3.7 4.2 3.3 4.6 5.4 6.0 6.4 6.8

2Q-18 2018 1Q-19 2Q-19

Evolution of RWA and Equity

RWA Core Equity Total Capital

TL bn16.2% 16.4%

11.1

-0.8

-0.2

11.1

1.1

4Q-18 Δ RWA Δ MtM 2Q- Net Income 2Q-19

Tier 1 (CET1) Evolution

11


16.0%

3.9%

4.9%

4.5%

4.4%

4.1%

2Q-18

4Q-18

1Q-19

2Q-19

Annualized NIM

CPI normalized NIM

3.9%4.6%

5.4%

4.5% 4.3%

3.3% 3.3% 3.3% 3.7% 3.9%

2Q-18 3Q-18 4Q-18 1Q-19 2Q-19

NIM NIM exc. CPI&Trading

12

Sustained Core NIM Generation


3.1 3.2 3.1 3.4 3.5

2.8

1.3

0.6

2.7 2.8

2Q-18 3Q-18 4Q-18 1Q-19 2Q-19FX Loans TRY Loans+ MM

426

-58.5 -92.9 -113.9 -97.9

2Q-18 4Q-18 1Q-19 2Q-19

Quarterly Swap Costs TL mn

Quarterly NIM

Quarterly Spread

Low Cost Base on the back of Efficient Business Model

13.1%10.8% 11.1% 12.0%

2Q-18 2018 1Q-19 2Q-19

Cost to Income

27 27 28 30

9 12 10 11

5 4 12 9

2Q-18 4Q-18 1Q-19 2Q-19

Quarterly OPEX

Personnel Expenses Adm. Expenses Other Op. Expenses

* Adjusted after free provisions

**ΔTotal operating income after free provisions - ΔOPEX

TL mn

34%

47%40%

31%

13%24%

16%8%

2Q-18 2018 1Q-19 2Q-19

Positive JAWS Ratio

Δ Banking Income Jaws Ratio

2Q-18 2018 1Q-19 2Q-19

Cumulative OPEX

Personnel Expenses Adm. Expenses Other Op. Expenses

TL mn

66%

13%22% 62%

11%

23%

163

81

13


100

58%

21%

21%

56%21%23%

50

Appendix


Appendix: Balance Sheet

(TRY mn)30/06/2018 31/12/2018 30/06/2019

TRY FX TOTAL TRY FX TOTAL TRY FX TOTAL

Cash and Banks 102 1,103 1,205 600 1,340 1,940 1,208 1,727 2,935

Securities 3,594 1,262 4,856 3,894 1,585 5,479 4,051 1,790 5,840

Loans (Gross) 2,898 24,231 27,129 2,233 25,994 28,227 2,655 27,948 30,603

Provisions -43 -256 -299 -94 -416 -511 -75 -622 -698

Subsidiaries 568 36 604 1,343 42 1,385 1,005 45 1,050

Other 747 767 1,515 904 873 1,777 1,013 887 1,900

Total 7,866 27,143 35,009 8,881 29,417 38,298 9,855 31,775 41,630

ST Funds 144 2,451 2,595 169 1,928 2,097 229 2,215 2,444

LT Funds - 19,768 19,768 - 21,521 21,521 - 23,309 23,309

Securities Issued - 7,496 7,496 - 8,499 8,499 - 9,687 9,687

Repo* 80 196 276 - 137 137 - 199 199

Other 678 471 1,148 905 420 1,325 798 397 1,195

Equity 3,792 -66 3,726 4,788 - 69 4,719 4,862 - 67 4,796

Total 4,694 30,316 35,009 5,862 32,436 38,298 5,889 35,741 41,630

* TL security funding only15


• TSKB Financial Institutions&Investor RelationsMeclisi Mebusan Cad. 81

Fındıklı 34427 İstanbul

[email protected] www.tskb.com


earnings presentation - tskb...2q-18 3q-18 4q-18 1q-19 2q-19 nim nim exc. cpi&trading 12...

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