investor presentation - vakıfbank · 2014. 1. 21. · investor presentation tas bank only results...
TRANSCRIPT
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Investor Presentation
TAS Bank Only Results1Q 2007
May, 2007
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History
Established in April 1954 under the special law “Türkiye Vakıflar Bankasi Türk Anonim OrtaklığıKanunu” to manage cash derived from revenues and expenditures of charitable organisationsset up during the Ottoman Empire period, conducting banking activities with branch offices in Ankara, Istanbul and IzmirIn 1957, made its first venture towards broadening its sevices by establishing Güneş Insurance CompanyOver the next 20 years continued to expand its geographic presence in Turkey reaching 206 branches by 1977Since the early 1990s, Vakifbank has increased the scope of its retail banking and diversified its loan portfolio by including equipment financing, enterprise loans, auto loans, mortgage loans, and credit cards. In 2000, Vakifbank began offering internet banking servicesVakifbank is now a full service commercial and retail bank headquartered in Ankara, providing retail, commercial and investment banking services through a network of 314 branches, 119satellite branches and five mobile branches, covering 81 Turkish citiesInternationally, Vakifbank has subsidiaries in Austria (which operates a branch in Frankfurt and a branch in Köln) and the Turkish Republic of Northern Cyprus and two branches in New York and Bahrain.
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Following successful IPO in November 2005, c. 25% of Vakifbank of is now listed
Main Shareholders General Directorate of Foundations The GDF manages foundations owning 58.45% of the shares in the Bank (43.0% in the form of Class A shares and 15.45% in the form of Class B shares). The GDF was established in 1924 to administer and regulate existing and future Turkish charitable foundations as a state entity directly reporting to the Prime Minister. Non-Affiliated Foundations The non-affiliated foundations are independent foundations with separate boards of trustees. They currently hold Class B shares, constituting 0.19% of the Bank’s equity. Vakifbank Pension Fund The Vakifbank Pension Fund has a 16.10% stake in the Bank’s capital as a Class C shareholder. The Bank’s employees contribute to the Vakifbank Pension Fund as opposed to the mandatory social security coverage provided by the state Social Insurance Institution. Other Shareholders The other shareholders consist of individual or legal entities that together own 0.08% of the Bank’s equity as Class C Shareholders. Free Float Public domestic and international shareholders.
Ownership structure
General Directorate
of Foundations58,45%
VakifBankEmployee
Pension fund16,10%
Other0,27%
Free float25,18%
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Vakıfbank: An Overview of 1Q 2007 resultsUSD=1.3571 YTL YTL mn USD mn YoY Growth QoQ Growth
Total Assets 38,051.1 28,112.2 11.8% 3.0%
Total Loans 18,443.5 13,590.4 36.4% 2.2%
Securities 11,519.7 8,488.5 10.6% 10.4%
Total Deposits 25,726.0 18,956.6 7.8% 3.6%
Shareholders’ Equity 4,282.4 3,155.6 6.3% (4.8%)
Net Interest Income 407.8 300.5 10.8% (5.6%)
Operating Income 640.3 471.8 22.7% (8.7%)
Net Income 219.0 161.4 6.0% 28.6%
Branch Network 314
Customer Number Over 6.8 million
YTL mn USD mn QoQ GrowthYoY Growth
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VakifBank is a market leader, particularly in retail and SME finance
Total market share (%) (31.12.2006)
8.1%
27.0%
9.9%
4.2%8.2% 8.6%
2.7%
14.6%11.1%
4.5%
20.2%
5.6%
Total Deposits
Public salary
accounts*
YTL deposits
Mutual funds
Total Loans Retail loans**
Credit Card
Commercial Installment
Loans
ATMs Branches Debit Card #
Credit Card #
Deposits / Funding Credits Distribution
Source: BRSA weekly reports, Capital Markets Board* VakıfBank estimates** Includes home, auto and other. Credit card loans, overdrafts not included
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Yield on Loans & Cost of Funding
Further move toward higher margin loans in YTL.Despite the repricing on YTL deposits, lower cost of YTL deposits.
Yield on loans&securities
Cost of deposits
Spreads
2006 1Q07 2006 1Q07 4Q06 1Q07
YTL Loans 20.27% 20.33% YTL Loans 6.93% 4.47% 5.07% 4.93%
FX Loans 7.72% 7.14% FX Loans 3.64% 3.24%
YTL Securities 15.44% 17.72% YTL Securities 2.10% 1.86%
FX Securities 8.66% 7.13% FX Securities 4.58% 3.23%
YTL Deposits 13.34% 15.86%
FX Deposits 4.08% 3.90%
NIM
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Diversification of asset mix towards interest-earning assets
Breakdown of assets (YTLbn) Interest earning assets (YTLbn)
2.7 2.8 2.54.7 3.9 3.7
10.4 10.4 11.5
13.5 18.018.4
1.00.9 0.91.81.0 1.2
1Q06 2006 1Q07
Cash and central bank Interbank Securities
Loans Fixed assets Other
4.7 3.9 3.7
10.4 10.4 11.5
13.5 18.018.4
1Q06 2006 1Q07
Loans Securities Interbank
28.6
33.7
38.237.034.1
32.4
Strong growth in interest earning assets – increased by 17.9% YoY, 4% QoQ- driven by rapid expansion of loan portfolioContinued diversification away from securities–from 30.5% of total assets in 1Q06 to 30.1% in 1Q07
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Expansion of loan portfolio continued…
4,238 5,677 5,270
9,28512,366 13,174
13,523
18,043 18,444
1Q06 2006 1Q07
FX YTL
Loans (YTLmm) Comments
Loan portfolio registered 36.4%increase YoY
YTL loans grew by 41.9% while FX loans increased by 24.4% YoY
Strong growth on loan to deposit ratio with focus on profitability28.6%%
71.4%
Loan/Deposit (%)
56.6%72.6% 71.7%
1Q06 2006 1Q07
39.6%48.7% 48.3%
1Q06 2006 1Q07
Loan/Asset (%)
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…with strong focus on retail and SME lending…
Breakdown of loans by sector Comments
1Q06 1Q07 Good position in traditionally strong regions of central and eastern Turkey • Selective expansion in
Istanbul region To strengthen its retail franchise, VakifBank has 644SME portfolio managers, 418retail portfolio managers and 438 marketing associates as of 1Q07As a result of these initiatives, cross-selling ratio for SME portfolio managers is 2.27x and for retail portfolio managers is 2.26x as of 1Q07Sustainable growth rate of off-balance sheet
Commercial
49.4%
SME21.0%
Mortgages10.2%
Credit card4.9%
Overdraft3.0%
Auto1.9%
Other9.6%
Commercial
52.0%SME
19.6%
Mortgages11.3%
Credit card3.2%
Overdraft2.7% Auto1.1%
Other10.2%
Guarantees and Commitments (million YTL)
4,995 4,871 4,965
2,958 2,999 2,920
1Q06 2006 1Q07
Guaratees Commitments
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6,680
9,420 9,600
2,838
3,572 3,6151,380
1,994 2,076
661
642 584
410
458 492
251
221 198
1,303
1,829 1,879
1Q06 2006 1Q07
Commercial SME Mortgages * Credit cards
Overdraft Auto Other
…and in particular on high margin productsRetail, SME and COMM. loans (YTLmm)
18,043
13,523
*:Includes Housing Loans+TOKI.
18,444
Loan growths by product in 1Q07 (%)
YoY QoQ
Home Loans 44% 4%Gen. Pur. Consumer Loans 50% 3%Auto Loans -21% -10%
Total Retail Loans 42% 3%
Credit Cards -12% -9%
Overdraft 20% 7%
SME Loans 27% 1%
Com.&Cor. Loans 44% 3%
Total Loans 36% 2%
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Steady and significant improvement in asset quality
7.1%5.3% 5.3%
1Q06 2006 1Q07
Gross NPLs as % of gross loans Comments
Despite expansion of the loan portfolio, NPLs continued to decrease reaching 5.3% of total gross loan portfolio in 1Q07 compared to 7.1% in 1Q06Since 2003, loan loss provisions cover 100% of NPLs
-1.8p.p.
Gross NPLs and provisions (YTLmm)
1,026,6131,002,047
1,036,8721,026,6131,002,047
1,036,872
1Q06 2006 1Q07Gross NPLs Provisions
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Securities portfolio evolution
Fixed; 55.6%
Floating; 44.4%
Comments
The securities portfolio increased by 10.6% YoY, 10.4% QoQ and its share in total assets continued to decline—from 30.5% in 1Q06 to 30.1% in 1Q07
Portfolio of securities available for sale stood at 95.0% of total securities portfolio in 1Q07
For the 1Q07; average yield on YTL security portfolio is 21.9% and average yield on FX security portfolio is 7.1%
Securities (YTLmm)
661 470 486
9,394 9,914 10,987
365 4847
1Q06 2006 1Q07
Trading securities portfolio Portfolio available for sale Securities held to maturity
Security portfolio breakdown by interest 1Q07
YTL
Fixed; 56.6%
Floating; 43.4%
FX
10,42011,52010,432
6.3%
90.2%
0.4%
95.4%
4.2%
0.5%
95.0%
4.5%
3.5%
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Strong growth in external borrowings supporting the expansion of loan portfolio
23.9 24.8 25.7
13.7 5
4.80.70.4 0.444.5 4.3
1.82.3 3.034.1
37.038.2
1Q06 2006 1Q07
Other Shareholders equity Provisions Funds Deposits
Breakdown of liabilities&shareholders equity (YTLbn) Comments
Total liabilities&shareholders equity grew by 11.8% YoY and 3.0% QoQ, driven by increase in external funding and continued expansion of deposit baseExternal Borrowings increased by 23% YoYDeposits posted a 7.8% growth YoY and accounted for 67.1% of total liabilities and shareholders’equity
23.9 24.8 25.7
13.518.0 18.4
1Q06 2006 1Q07
Deposits Loans
Loans and customer deposits (YTLbn)
56.6% 72.6%
Loans/Deposits
9.0%
10.9%
70.1%
12.2%
13.5%
67.0%
11.3%
12.6%
67.1%
71.7%
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YTL-demand10.5%
YTL-term61.0%
FX-demand
3.2%
FX-term25.3%
Deposit base composition and evolution
Customer deposit breakdown by type and currency Comments
Ensured strong profitability by maintaining liquidity levels andcontrolling interest expenses through controlled 7.8% YoY and 3.6% QoQ growthYTL Deposit growth was 14.8% where FX Deposit growth was -9.3% YoY.Focus on retail deposits, with an increase of 60.8% YoY
YTL-demand
8.7%
YTL-term67.1%
FX-demand
3.9%
FX-term20.3%
Deposit composition by type
1Q06Amount % Amount %
1Q07
¹ Represents deposits taken from retail customers² Represents deposits taken from government related corporates, SMEs and other entities which are not individuals³ Totals do not include Interbank deposits and accrued interests for deposits
(YTLmm)
Total: YTL25,726.0 million
1Q06 1Q07
Saving deposits¹ 4,053 17.5% 6,519 25.9%Demand 657 2.8% 674 2.7%Term 3,396 14.7% 5,845 23.2%Public and Commercial² 12,264 53.0% 12,469 49.5%Demand 1,851 8.0% 1,562 6.2%Term 10,413 45.0% 10,907 43.3%Foreign currency 6,800 29.5% 6,224 24.7%Demand 755 3.3% 1,007 4.0%Term 6,045 26.2% 5,216 20.7%Total³ 23,117 100% 25,212 100%
Total: YTL23,873.4 million
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Focus on Retail DepositsState deposits evolution
Retail Deposits (mmYTL)
7,031
9,766
29.5%38.0%
1Q06 1Q07
Retail Deposits
Share of retail deposits
3,264 3,245
13.7% 12.6%
1Q06 1Q07
Demand DepositsShare of demand deposits
Demand Deposits (%) Comments
VakifBank did not experience a significant withdrawal of state deposits after IPOMuch less pressure felt after two largest deposit departures in Q3 2005 and Q1 2006Thanks to focus on retail deposits and control on cost of deposits, share of state deposits decreased and saving deposits increased
State deposits (YTLmm)
2,992
4,853
7,307
5,442 5,607
20.7%
27.6%31.8%
21.9%21.8%
2003 2004 2005 2006 1Q07
State Deposits Share of state deposits
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Strengthened capitalisation to support rapid growth
Paid in share capital 1,279.0 2,500.0 2,500.0
Adjustment to paid-in capital 605.8 0 0Share premium 1,172.1 723.9 723.9Reserves 421.8 264.6 534.4Profit 210.7 769.7 219.0
Prior year income/loss 0 39.2 7.9
General provisioning ( upto 25% of Tier 1) 0 21.0 0
Total core capital 3,689.4 4,318.5 4,075.0
Supplementary capital 546.0 235.3 261.3Total capital 4,235.4 4,398.2 4,336.3Deductions (414.2) (220.9) (259.5)
Total shareholders’ equity 3,821.2 4,332.7 4,076.8
RWA 15,718.5 20,623.1 20,664.9Market risk 1,586.8 1,349.3 294.3
CAR 22.1% 19.7% 19.5%
Capital position Comments
The bank successfully raised YTL1,45mm through an IPO in November 2005
In General Assembly, the bank has decided to pay YTL 384.9mm to the shareholders and YTL 96.9mm will be paid to D Group shareholders (free float). After the dividend payment date existing and bonus shares will be merged.
Vakifbank increased the bank’s paid-in-capital from YTL-1,279,000,000 to YTL-2,500,000,000, which implies issuing 0.954652 new bonus shares per existing 1 share.
1Q06 2006YE 1Q07(YTLmm)
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Net banking income posted healthy growth
Net banking income grew by 18.9% YoY (YTLmm) 1Q06 1Q07 2005 2006Net interest income 368.0 407.8 1,319.4 1,585.3
Net F&C income 73.5 67.4 293.7 288.4
Net trading income 35.6 48.7 175.7 47.8
Dividend income 0.6 19.9 10.3 16.6
Other operating income
44.3 96.5 129.0 343.3
Total operating income
522.0 640.3 1,928.0 2,281.3
Total operating expenses (-)
173.2 241.5 731.7 935.3
Operating profit 348.8 398.8 1,196.3 1,346.0
Provisions (-) 62.3 125.4 444.9 323.4
Tax provisions (-) 79.9 54.4 223.9 252.9
Income from investments and associates
0 0 0 0
Net monetary gain/loss
0 0 0 0
Net income 206.6 219.0 527.6 769.7
Net banking income composition (YTLmm)
368 407.8
73.567.4
44.3
96.5
35.648.7
1Q06 1Q07
Net interest income Net F&C income Net trading income Other
521.4
620.418.9%
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Strong growth in interest income & non-interest income
Non-interest income composition (YTLmm)
36 49
7467
44
971
20
1Q06 1Q07
Trading Income Net F&C Other Dividend
Net F&C income % of operating income
154
233
51.3%
Net interest income(YTLmm)
14.1% 12.6% 10.5%
1Q06 2006 1Q07
NET F&C Inc.Interest income (YTLmm)
36.7% 32.1% 32.2% 29.3%
52.3% 56.4% 53.0% 57.4%
11.0% 11.5% 14.8% 13.3%
2005 2006 1Q06 1Q07Securities Loans Other
3,592 4,409 1,022 1,30027.1%22.7%
368 408
1Q06 1Q07
10.8%
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Operating expenses under control
Controlled growth in costs, despite going through restructuring at branch and headquarter level.
15 mn YTL of other provisioning comes from employee dividend provisioning in 1Q07 which is required by BRSA under new accounting standards.
Cost over assets (%)
Other expenses composition (YTLmm)
173 241935
46.6% 38.9% 42.3%
8.8%6.8% 6.3%
44.6% 54.3% 51.4%
1Q06 2006 1Q07
Other Expenses Amortisation Personnel Expenses
47.181.7
7.0
18.0
8.2
25.8
1Q06 1Q07NPL General Other
Provisioning Expenses (YTLmm)
62.3
125.4
2.0% 2.5% 2.5%
1Q06 2006 1Q07
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Demonstrated ability to withstand margin pressure
5.18 5.07 4.93
1Q06 4Q06 1Q07
NIM (%)
ROE (%) Cost/Income (%)
Despite rate hikes on deposits and slowdown on loan demand NIM slightly decreased by 14 bps QoQ and 25 bps YoYFurther growth in loans/assets expected to provide more support to Vakifbanks NIMReturn on average assets (ROAA) is 2.33% in 1Q07 and 2.21% in 2006.NIM= Net Interest Income / Average Interest Earning Assets (Interbank + Securities + Loans)
33.241.0 37.7
1Q06 4Q06 1Q07
20.517.2
20.5
1Q06 4Q06 1Q07
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Peer group comparison
ROE (%) Cost/Income (%)
21.3 19.7
30.2
20.5
YKB Akbank Garanti Vakifbank
60.2
33.740.8 37.7
YKB Akbank Garanti Vakifbank
Net Profit/Number of Employee (thousandYTL)Loans/Number of Employee (thousandYTL)
14.0
34.730.6
28.0
YKB Akbank Garanti Vakifbank
1,669.9
2,453.2 2,417.5 2,357.6
YKB Akbank Garanti Vakifbank
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Balance Sheet Details for 1Q 2007: Assets(Thousand YTL) 1Q2007 1Q2006 Growth %
Cash&Balances with Central Bank 2,547,844 2,698,987 (5.6)
Interbank 3,742,666 4,658,221 (19.7)
Securities 11,519,681 10,420,095 10.6
Trading Securities 485,633 660,577 (26.5)
Available for Sale Portfolio 10,986,629 9,394,218 17.0
Held to Maturity Securities 47,419 365,300 (87.0)
Loans 18,443,545 13,522,720 36.4
Subsidiaries&Investments 438,579 623,746 (29.7)
Property&Equipment 894,673 1,000,383 (10.6)
Other 564,073 1,204,163 (53.2)
Total Assets 38,151,061 34,128,315 11.8
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Balance Sheet Details for 1Q 2007: LiabilitiesOff-Balance Sheet Details for 1Q 2007
(Thousand YTL) 1Q2007 1Q2006 Growth %
Deposits 25,725,988 23,873,367 7.8
Funds&Funds Borrowed 4,756,604 3,690,025 28.9
Other 2,976,643 1,875,534 58.7
Provisions 409,380 659,332 (37.9)
Shareholder’s Equity 4,282,446 4,030,057 6.2
Total Liability 38,151,061 34,128,315 11.8
Off-Balance Sheet
Guarantees 4,964,962 4,994,952 (0.6)
Commitments 2,919,566 2,957,681 (1.3)
Derivatives 1,225,544 247,187 395.8
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P&L for 1Q 2007(Thousand YTL) 1Q2007 1Q2006 Growth %
Net Interest Income 407,758 368,002 10.8
Net F&C Income 67,426 73,514 (8.3)
Dividend Income 19,941 603 3206.0
Net Trading Income 48,733 35,618 36.8
Other Income 96,480 44,289 117.8
Total Revenues 640,338 522,026 22.7
Operating Expenses (241,456) (173,162) 39.4
Provisions (125,429) (62,298) 101.3
Tax Provisions (54,426) (79,942) (32.0)
Net Income 219,027 206,624 6.0
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Subsidiaries and affiliates
Türkiye Vakıflar Bankasi T.A.O
Financial Subsidiaries Non-Financial Subsidiaries
Vakıf Yatırım Menkul Degerler A.Ş 99%
Vakifbank International A.G 90%
World Vakıf Off Shore Banking Ltd. 82%
Vakıf Finans Factoring Hizmetleri A.Ş 78%
Vakıf Deniz Finansal Kiralama A.Ş 69%
Vakıf Finansal Kiralama A.Ş 59%
Vakıf Emeklilik A.Ş 54%
Güneş Sigorta A.Ş 36%
Vakıf Girişim Sermayesi Yatırım Ortaklığı A.Ş 31%
Vakıf Gayrimenkul Yatırım Ortaklığı A.Ş 28%
Kıbrıs Vakıflar Bankası Ltd. 15%
Vakıf Menkul Kıymetler Yatırım Ortaklığı A.Ş 12%
Vakıf Sistem Paz.Yaz.Ser.Tic San A.Ş 73%
Vakıf Enerji ve Madencilik A.Ş 66%
Taksim Otelcilik A.Ş 51%
Ataköy Mağazacılık Ticaret A.Ş. 46%
İşkur İşçi İşadamı Kimya Kur. A.Ş. 25%
Vakıf Gayrimenkul Ekspertiz ve Deg. A.Ş 20%
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THANK YOU
[email protected]+90-212-3167120+90-212-3167121
HistoryFollowing successful IPO in November 2005, c. 25% of Vakifbank of is now listedVakıfbank: An Overview of 1Q 2007 resultsVakifBank is a market leader, particularly in retail and SME financeYield on Loans & Cost of FundingDiversification of asset mix towards interest-earning assetsExpansion of loan portfolio continued……with strong focus on retail and SME lending……and in particular on high margin productsSteady and significant improvement in asset qualitySecurities portfolio evolutionStrong growth in external borrowings supporting the expansion of loan portfolioDeposit base composition and evolutionFocus on Retail DepositsState deposits evolutionStrengthened capitalisation to support rapid growthNet banking income posted healthy growthStrong growth in interest income & non-interest incomeOperating expenses under controlDemonstrated ability to withstand margin pressurePeer group comparisonBalance Sheet Details for 1Q 2007: AssetsBalance Sheet Details for 1Q 2007: LiabilitiesOff-Balance Sheet Details for 1Q 2007P&L for 1Q 2007Subsidiaries and affiliates