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Türk Ekonomi Bankası A.Ş.

Earnings Presentation

June 30, 2010

2

BNP PARIBAS JOINT VENTURE2010 so far

It has been a trade off between growth and profitability for the banking sector.

TEB managed to set a balance between the two, achieving a loan growth that is up to the sector average and profitability that is 16% higher on a q-on-q basis despite the shrinking margins.

Improvement in the asset quality proved to be sustainable. Although part of the decline in the NPL ratio is due to the sales & write-offs as well as the loan growth, the cost of risk has been decreasing since the beginning of the year and it is down to 90bps as of June 30, 2010.

Limited exposure to marketable securities decreased the volatility in the earnings and it was a blessing this time around limiting our NIM contraction to 20bps on a q-on-q basis.

3

BNP PARIBAS JOINT VENTURETEB Consolidated Balance Sheet

Consolidated Balance Sheet

TRY Million Share Change Share Change

Assets Liabilities

Cash & banks 13% 2,371 2,940 -19.4% Deposits 59% 10,758 10,363 3.8%

M.sec + repos 14% 2,613 2,716 -3.8% Repos 2% 333 1,072 -68.9%

Loans + Trade rec. 68% 12,221 10,647 14.8% Funds Borrowed 19% 3,487 2,461 41.7%

Other Assets 4% 720 553 30.2% Other Liab. 6% 1,136 826 37.5%

Non- IE Assets 1% 171 182 -6.0% Total Liabilities 87% 15,714 14,722 6.7%

Total Assets 100% 18,096 17,038 6.2%Subordinated Loans 3% 469 483 -2.9%

Sh. Equity

Capital & Res. 10% 1,806 1,565 15.4%

Income 1% 107 268 n.m.

Total Sh. Equity 11% 1,913 1,833 4.4%

Total Liab + Equity 100% 18,096 17,038 6.2%

Reviewed Audited Reviewed Audited30.06.2010 31.12.2009 30.06.2010 31.12.2009

4

BNP PARIBAS JOINT VENTURETEB Consolidated Income Statement (q-on-q)

Consolidated Quarterly Income Statement

TRY Million 30.06.10 31.03.10 Change

Net Interest Income 204.4 221.1 -8%Marketable Securities Revaluation Differences 7.9 -14.1 -156%Adjusted Net Interest Income 212.3 207.1 3%

FX Gains / (Losses) 87.2 54.2 61%

Derivatives Trading -97.0 -63.8 52%Securities Trading Income 6.7 13.7 -51%Net Fees & Commissions Income 74.0 73.6 0%Other Operating Income 15.1 13.3 14%Net Banking Income 298.1 298.0 0.0%

Loan Loss Provisions -24.2 -44.1 -45%Net Operating Income 273.9 253.9 8%

Operating Expenses -201.2 -194.5 3%Provision for Taxes on Income -15.1 -9.6 57%

Net Income / (Loss) 57.6 49.8 16%

Reviewed Reviewed

5

BNP PARIBAS JOINT VENTUREEvolution of NIM and Cost/Income Ratio

Net Interest Margin: (Net interest income+Net FX gains/losses+Derivative Gains)/ (Avg. Liquid Assets+Marketable Securities+Credits) (Bank-only)

Source: TEB BRSA Bank-only and Consolidated Financials

Net Interest Margin Cost/Income Ratio

Cost/Income : Operating Expenses / Net Banking Income (Cumulative & consolidated)

6.60%6.38%

5.20%

6.35%

4.98%

6.03%6.32% 6.23% 6.23%

5.27%

5.82%

6.79%

6.39%

6.54%

6.31%5.90%

4.79%

2008/1Q

2008 /2Q

2008 /3Q

2008/4Q

2009/1Q

2009 /2Q

2009 /3Q

2009 /4Q

2010 /1Q

2010/2Q

Net Interest Margin (cumulative) Net Interest Margin (quarterly)

68.30%

57.90%

61.05%

66.38%

2008 2009/1H 2009 2010/1H

6

BNP PARIBAS JOINT VENTUREBreakdown of Fees and Commissions Income

(*) Cash Loans are classified under Net Interest Income

Non Cash Loans13%

Other21%

Import Letters of Credits

2%

Inquiry and Company Searches

5%

EFT, Swift and Agency

2%

Credit Card30%

Asset Under Management

11%

Insurance3%

Cash Loans (*)13%

Source: TEB BRSA Bank-Only Financials

Cash Loans (*)14%

Non Cash Loans14%

Insurance5%

Other22%

Asset Under Management

10%

Import Letters of Credits

1%

Inquiry and Company Searches

8%

EFT, Swift and Agency

2%

Credit Card24%

Q2 09 Q2 10

7

BNP PARIBAS JOINT VENTUREQuarterly Growth in TEB vs. Banking Sector

Source: BRSA, TEB Bank-Only BRSA Financials

Loan Growth

11.2%

7.8%6.5%

1.6%0.0%

2.0%4.8%

6.2%

9.1%

14.0%

7.7%

-8.3% -9.1%

-4.0%

10.3% 10.6%7.9%

-0.3%

6.9%8.3%

Q1 - 2008 Q2 - 2008 Q3 - 2008 Q4 - 2008 Q1 - 2009 Q2 - 2009 Q3 - 2009 Q4 - 2009 Q1 - 2010 Q2 - 2010

Deposit Growth

8.0%5.4% 3.4%

7.9%

2.0% 1.0%4.1%

6.8%4.2% 5.7%

24.2%

-14.0%

8.0%-2.9%

8.1%

1.3%3.2%3.0%-0.7%

4.2%

Q1 - 2008 Q2 - 2008 Q3 - 2008 Q4 - 2008 Q1 - 2009 Q2 - 2009 Q3 - 2009 Q4 - 2009 Q1 - 2010 Q2 - 2010

SectorTEB

8

BNP PARIBAS JOINT VENTUREStructure of Loans

Loans - Currency Mix

69% 76% 74% 78% 76% 77%

31% 24% 26% 22% 24% 23%

2006 2007 2008 2009 2010/1Q 2010/2Q

TL FC

Retail Loans

6% 7%

20% 18% 17%

33% 42% 41%43%33%

16% 10%7%

35%34%30%28%26%

29%24%

2007 2008 2009 2010/1Q 2010/1H

Housing Auto Consumer Credit Card


Loans (TRY Million)

2,939

4,886

6,864

8,5059,675

8,991

10,4732.37% 2.31% 2.38%2.27%

1.92%

2.39%2.22%

2005 2006 2007 2008 2009 2010/1Q 2010/2Q

Volume Market share

9

BNP PARIBAS JOINT VENTUREBreakdown of Loans by LoB

Source: BRSA, TEB BRSA Bank-Only Financials

Million TRY ∆ Volume

Corporate 2,350.35 23.1% 2,187.70 25.3% 7.4%

Commercial 4,041.03 39.7% 3,464.19 40.0% 16.7%

Big Commercial 2,008.95 19.7% 1,777.61 20.5% 13.0%Medium Comm. 2,032.08 19.9% 1,686.58 19.5% 20.5%

Small Business 1,504.10 14.8% 1,184.90 13.7% 26.9%

Retail 2,266.83 22.3% 1,806.16 20.8% 25.5%

Private 25.11 0.2% 21.02 0.2% 19.5%

2009 YE2010/2Q

10

BNP PARIBAS JOINT VENTURE

Other14%

Metal8%Consumer

20%

Tourism7%

Mining2%Misc. Services

5%

Wholesale/Retail4%

Food, Beverage & Tobacco

9%

Construction8%

Textile8%

Elect. & optical appliance2%

Machinery3%

Agriculture3%

Transportation Veh.2%

Chemicals5%

Bank-Only Loan Portfolio

Loan Portfolio by Industry 30.06.2010

Source: TEB, BRSA Bank-Only Financials

11

BNP PARIBAS JOINT VENTURENon Performing Loans

Non-Performing Loans as a % of Total Loans

Source: BRSA statistics and BRSA Bank-Only Financials

2.3%3.7%

4.6% 4.9% 4.7% 4.1%3.1%

4.4%

0.0% 0.2% 0.5% 0.6%

3.8%2.5% 2.1%

1.3%0.9% 1.1% 0.9%1.8%

4.8%5.2%

5.2%4.7%

3.5%4.3%

2.2% 2.4%

7.2%

10.7%11.5%

6.0%

11.5%

16.5%

27.2%

4.9%3.7% 3.6%

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Q120

092Q

2009

3Q20

094Q

2010

1Q20

102Q

TEB Sector Average

Coverage ratio: %53.68

12

BNP PARIBAS JOINT VENTUREImprovement in the Asset Quality

Cost of Risk (quarterly)

1.95%

2.41%

1.80%

0.90%

2.42%

1.35%

1.91%

1.98%

2008/3Q 2008/4Q 2009/1Q 2009/2Q 2009/3Q 2009/4Q 2010/1Q 2010/2Q

Cost of Risk : loan loss provisions/ average loans for the period (bank-only)Source: BRSA statistics and TEB, BRSA Bank-Only Financials

Net NPL inflows (Quarterly)TL Million

11987 98 94

53 50

-27 -30 -42 -42 -39 -42

-31 -40

-75

NPL inflows

Collections

Sales

Q1 0992

Q2 0957

Q3 0956

Q4 0921

Q1 10-26 -67

Q2 10

4.9%4.4%

5.9%5.4%

3.1%

4.1%4.4%

4.2%

1Q10 2Q10

TEB TEB w/no NPL Sales Sector Sector w/no NPL Sales

13

BNP PARIBAS JOINT VENTUREBreakdown of Deposits by LoB


Million TRY ∆ Volume

Corporate 2,551.02 26.3% 1,964.91 20.9% 29.8%

Commercial 1,617.25 16.6% 1,536.00 16.3% 5.3%

Big Commercial 985.50 10.1% 837.24 8.9% 17.7%Medium Comm. 631.75 6.5% 698.76 7.4% -9.6%

Small Business 891.21 9.2% 821.16 8.7% 8.5%

Retail 3,379.34 34.8% 3,504.79 37.3% -3.6%

Private 1,278.42 13.2% 1,567.87 16.7% -18.5%

2009 YE2010/2Q

14

BNP PARIBAS JOINT VENTUREStructure of Deposits

Deposits - Currency Mix

44% 51% 60% 62% 60% 60%

56% 49% 40% 38% 40% 40%

2006 2007 2008 2009 2010/1Q 2010/2Q

TL FC

Deposits - Time/Demand Mix

19% 20% 15% 22% 21% 23%

81% 80% 85% 78% 79% 77%

2006 2007 2008 2009 2010/1Q 2010/2Q

Demand Time


Deposits (TRY million)

3,242

5,400

7,083

9,2729,359

9,422

9,755

1.29%

1.66%

1.92%2.04%

1.77%1.69% 1.77%

2005 2006 2007 2008 2009 2010/1Q 2010/2Q

Volume Market share

15

BNP PARIBAS JOINT VENTUREMarketable Securities

Source: BRSA, TEB BRSA Bank-Only Financials

Total

Fixed 65%

Floating35%

Total

TL94%

FC6%

TRY

Fixed 62%

Floating38%

AFS74%

HTM17%

Trading9%

16

BNP PARIBAS JOINT VENTURECapital Increases and CAR

Source: TEB BRSA Bank-only and Consolidated Financials

Year 2005 2006 06/2007 11/2007 2008 2009

Bonus Issue - - 23,500 445,000 - -% - - 30.71% 445% - -

Rights Issue - 18,700 - 210,000 345,000 -% - 32.35% - 210% 45.69% -

Previous Paid-in Capital 57,800 57,800 76,500 100,000 755,000 1,100,00.00

Current Paid-in Capital 57,800 76,500 100,000 755,000 1,100,00.00 1,100,00.00

Capital Increases(Thousand TL)

CAR

12.58%13.99%

17.17% 17.53% 16.95%

15.45%14.75%

18.80%17.70%

16.31%15.42%

13.17%

16.47%

18.07%14.87%14.07%

15.38%

17.65%18.50%

19.48%

2008/1Q 2008/2Q 2008/3Q 2008/4Q 2009/1Q 2009/2Q 2009/3Q 2009/4Q 2010/1Q 2010/2Q

Consolidated Bank-Only

17


Business Lines- Corporate Banking

• Contribution to results (as of 2010 1H):• 23.1 % of loans • 28.2 % of deposits • 13.1 % of customer contribution

Cross-sell ratio : 5.50xNPL ratio : 0.92 %

Corporate Loans (TRY Million)

989

1536 1642

2135 20922350

2005 2006 2007 2008 2009 2010/1H


Spreads of Corporate Loans

1.77 1.77 1.832.27

5.154.34

3.482.75

1.42 1.37 1.37 1.652.66 2.3 2.33 2.4

1.39 1.30

2.02 1.82

2008/1

Q20

08/1H

2008/3

Q20

08/4Q

2009/1

Q20

09/1H

2009/9

M20

09/YE

2010/1

Q20

10/1H

TL FC

18

BNP PARIBAS JOINT VENTUREBusiness Lines- Commercial Banking

• Contribution to results (as of 2010 1H) : • 39.7 % of loans • 14.7 % of deposits • 36.5 % of customer contribution(14.0% + 22.5%)

Cross-sell ratio : 6.16x and 6.12xNPL ratio : 3.77 % and 4.46%

Commercial Loans (TRY Million)

975

501

1410

925

1621 16181681 17621778 1687

2009 2032

Big Commercial (10-100 mio$) ME (2-10 mio $)

2005 2006 2007 2008 2009 2010/1H


Spreads of Commercial Loans

7.55 7.16 6.77 6.92

10.619.67

8.577.60

2.66 2.56 2.48 2.734.72 4.19 3.80 3.65

2.31 2.04

4.03 3.53

2008

/1Q20

08/1H

2008

/3Q20

08/4Q

2009

/1Q20

09/1H

2009

/9M20

09/YE

2010

/1Q20

10/1H

TL FC

19

BNP PARIBAS JOINT VENTUREBusiness Lines- Small Business

• Contribution to results (as of 2010 1H):• 14.8 % of loans • 9.2 % of deposits • 27.1% of customer contribution



Small Business Loans (TRY Million)

35

313

867

10571185

2005 2006 2007 2008 2009 2010/1H

Spreads of Small Business Loans

10.23 9.97 9.32 9.2

12.64 12.29 11.93 11.53

8.75

0.82 0.77 0.64 0.63

4.88 4.63 4.53 4.59

8.274.83

5.07

2008

/1Q20

08/1H

2008

/3Q20

08/4Q

2009

/1Q20

09/1H

2009

/9M20

09/YE

2010

/1Q20

10/1H

TL FC

20

BNP PARIBAS JOINT VENTUREBusiness Lines- Retail Banking

• Contribution to results (as of 2010 1H):• 22.3 % of loans • 34.8 % of deposits • 21.3 % of customer contribution


CC: Credit card loans

FC loans are negligable in amount

Retail Loans (TRY Million)

386

679

1143

1474

18061986

2005 2006 2007 2008 2009 2010/1Q


Spreads of Retail Loans

4.77 4.64 4.41 4.57

6.525.75 5.99 5.83

4.46 4.25

2.55 2.40 2.25 2.26

4.08 3.59 3.89 3.93 3.90 3.58

2008

/1Q20

08/1H

2008

/3Q20

08/4Q

2009

/1Q20

09/1H

2009

/9M20

09/YE

2010

/1Q20

10/1H

Retail incl. CC Retail

21

BNP PARIBAS JOINT VENTUREPrivate Banking

• Contribution to results (as of 20101H):• 0.2 % of loans • 13.2 % of deposits • 2.0 % of customer contribution

Cross-sell ratio : 4.17xNPL ratio : -

Private Banking Assets (Billion US$)

0.7

1.3

1.81.6

1.41.2 1.1

2007 2006 2007 2008 2009 2010/1Q 2010/2Q


22

BNP PARIBAS JOINT VENTUREContact Details

Investor Relations+90 212 2512121http://www.teb.com.tr

Çiğdem Başaran (ext. 1532)[email protected]

23


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.

türk ekonomi bankası a.Ş...metal consumer 8% 20% tourism 7% mining 2% misc. services 5%...

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