Investor Presentation 4Q19 V4 - Akbank€¦ · Robust export trend to continue in 2020 Outstanding...
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February 2020 Investor Presentation
Transcript of Investor Presentation 4Q19 V4 - Akbank€¦ · Robust export trend to continue in 2020 Outstanding...
February 2020
Investor Presentation
2
01
02
03
Annex
04
05
06
Operating Environment
Akbank Overview
How Akbank is building its future
Financials
Looking Forward
Content
Turkey’s Growth Story
(1) 2019E and 2020E Figures are based on New Economic Program (2) GDP data as of 3Q19
Back to growth after successful rebalancing Long-term Growth Potential Remains Intact
Commitment to fiscal discipline (1)
30.4%2018
32.8%2019E
Low government debt/GDP
Prudent monetary stance to re-anchor inflation expectations
Continued acceleration in economic activity towards its potential with an emphasis on both domestic demand and exports
Robust export trend to continue in 2020
Outstanding demographics
$734 BnGDP (2)
82.0mn population
Young population
Untapped potential
47%
16%
Under the age 29
Btw age of 15-24
65 mnInternet Users
73 mnMobile Internet users
77%Smartphone penetration
66% 65% 14%
4.9% 2.9%
Loan/GDP Deposit/GDP Household debt/GDP
Mortgage debt/GDP
Pension funds/GDP
3
33.2%2020E
4
Economic activity
Growth composition
Inflation
Monetary Policy
Fiscal Policy
External balances
Credit activity
Resilient with positive growth
1H driven by net exports, 2H pick-up in domestic demand
Disinflation trend continued, from 2018 peak of c. 25% to below 12%
1200 bps rate cut to 12%, in line with disinflation trend
Budget Deficit/GDP target below 3%
Reached positive Current Account Balance
Pick-up in TL loans supported growth
2019 Macro Overview: A rebalancing year
5
01
02
03
Annex
04
05
06
Operating Environment
Akbank Overview
How Akbank is building its future
Financials
Looking Forward
Our Core Values
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03
01
04
02
05We give back.
We are built upon your trust.
We exist because of our clients.
We do what’s right.
We stand out through innovation.
Strong Major Shareholder with Long-term Vision
%51,2
%48,8
Sabancı Holding, affiliated institutions and individuals (1)
Free Float
36% of all shares are held by foreign investors
(1) Shareholder composition calculation is based on the “Ordinary General Assembly Meeting Shareholder List” dated 25.03.2019.
‣ One of the two largest multi-business enterprises in Turkey with total assets of US$ 71 bn
‣ 9% of BIST capitalization with 12 public companies and the Holding itself
‣ Controlled by Sabancı Family, who is the majority shareholder
‣ Mainly operates in financial services, energy, retail, cement, industrial businesses
‣ Market leader in cement & energy distribution
‣ Joint-ventures with some of the most well-established companies in the world
๏Including; Ageas, Aviva, Bridgestone, Carrefour, E.ON, Heidelberg Cement, Marubeni and Philip Morris
‣ Akbank is the flagship of the Sabancı Group with the highest share in revenues and profitability in the Group
SABANCI HOLDING
7
8
STRONG LOCAL SHAREHOLDER WITH LONG-TERM VISION
Our DNA: Prudent, Consistent, Transparent
Visionary management
Seamless execution
INVESTING IN OUR FUTURE
Robust infrastructure, Excellent distribution
Revolutionary branch design
Akbank Lab: Collaborating with over 100 international FinTechs
New Akbank Innovation Campus (2019)
Young & dynamic team Avg. age 36
OUTSTANDING TALENT
Share of female employees: c. 53%
PhD & Masters Degree: 10% (Highest ranking among peers)
Drivers of Sustainable Value Creation
(1) Excluding issuances of banks and affiliated companies .All data are based on TSPB and BIST (2) Among private institutions
%12,0
%88,0
%5,0
%95,0
Bank-only Net Income Subsidiaries' Contribution
2018
2019
/ Banking
/ Leasing
/ Brokerage
/ Asset Management
• Flagship of Akbank Group in Europe • Total assets at US$ 5,033 mn and equity of US$ 863 mn • Contribution to net income stands at 6.8% in 2019
• Net lease receivables market share of 10%
• Top 4 in equity market transactions • Leader in equity margin trading with 15% market share in 3Q19 • Market leader in FX Markets Margin Trading both among bank affiliate brokerage
houses and overall competition in 2018 and as of 3Q19 • Leader in equity public offerings with TL 7.8 bn transaction size since 2010 • Leader in corporate bond issuances (1) with 34% market share in 2019
• Total AuM with TL 44.3 bn • Leader in pension fund management with TL 24.1 bn AuM, 19% market share (2) • TL 12.3 bn AuM in mutual fund management with 11.1% market share • Leader in DPM with TL 6.1 bn AUM (2)
100%
100%
100%
100%
9
Strong Presence in Financial Industry
• Tosla, first mobile application of AkÖde was launched at Sep’19 • Tosla targets young users, provides core financial services in a way that is fun, simple,
fast & social
100% / E-Money
10
Board of Directors
CEO HAKAN BİNBAŞGİL
Member CAN PAKER
Member YAMAN TÖRÜNER
Chairman SUZAN SABANCI DİNÇER
Vice Chairman and Executive Board Member HAYRİ ÇULHACI
Executive Board Member EYÜP ENGİN
Executive Board Member AHMET FUAT AYLA
Member EMRE DERMAN
Member ÖZGÜR DEMİRTAŞ
Member AYDIN GÜNTER
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AVERAGE EXPERIENCE
EDUCATION
40%
40%
20%
Years
PhD
Undergraduate
Graduate
Erol Sabancı is a Consultant to the Board
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Executive Team
EVP, Corporate and Investment Banking LEVENT ÇELEBİOĞLU
EVP, Commercial Banking MEHMET TUGAL
EVP, Retail Banking BÜLENT OĞUZ
EVP, Private Banking and Wealth Management ALP KELER
EVP, Treasury ŞEBNEM MURATOĞLU
EVP, Credit Underwriting EMRE ÖZBEN
EVP, Credit Monitoring and Collections EGE GÜLTEKİN
EVP, Special Credits ZEYNEP ÖZTÜRK
CFO TÜRKER TUNALI
EVP, Strategy, Digital Banking and Payment Systems BURCU CİVELEK YÜCE
EVP, People and Culture PINAR ANAPA
EVP, Technology and Operations İLKER ALTINTAŞ
CEO HAKAN BİNBAŞGİL
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AVERAGE EXPERIENCE
EDUCATION
15%
70%
15%
Years
PhD
Undergraduate
Graduate
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International Advisory Board
Chairman
SUZAN SABANCI DİNÇER
Member DR. HAMID BIGLARI
Member LUBNA OLAYAN
Member SIR WINFRIED BISCHOFF
Member PROF. DANTE ROSCINI
Member LORD STEPHEN GREEN
Member TOM DE SWAAN
Member MICHAEL KLEIN
Member LORENZO BINI SMAGHI
Member HAYRİ ÇULHACI
Member EYÜP ENGİN
Member AHMET FUAT AYLA
Member HAKAN BİNBAŞGİL
Best Corporate IR
in Turkey EXTEL (2018)
World's Best Digital Bank EUROMONEY
(2019)
The Most Valuable
Banking Brand of Turkey
BRAND FINANCE (2011-2017)
The Most Valuable Brand
of Turkey BRAND FINANCE
(2015)
Bank of the Year in Turkey
THE BANKER (2018)
Best Bank of Turkey
EUROMONEY (2013-2019)
Best Bank of Turkey
GLOBAL FINANCE (2014-2019)
Best Bank of Turkey
WORLD FINANCE (2014-2019)
Best Bank of Turkey
EMEA FINANCE (2014-2019)
Best Private Banking Services Overall
in Turkey EUROMONEY (2010-2017)
Best Cash Management
in Europe EMEA FINANCE
(2017)
Best Foreign Exchange
Provider in Turkey GLOBAL FINANCE
(2016-2017)
Best Financial Institution Borrower
EMEA FINANCE (2018)
Awards over the recent years
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14
01
02
03
Annex
04
05
06
Operating Environment
Akbank Overview
How Akbank is building its future
Financials
Looking Forward
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Run the Bank
Risk & return focused growth
Robust capital
Crafting the future
Invest in our people and infrastructure
Leverage digitization & advanced analytics
Best-in-class efficiency
Create superior customer experience
Akbank’s bifocal strategy: Twenty-Twenty Vision
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Customer Acquisition & Activation
Leveraging Outstanding Infrastructure
Digital & Analytic Solutions
Corporate & Investment Banking Growth led by customized solutions and long-term partnerships
Focus With
‣ Leverage data for actionable insights to increase wallet share
‣Tailor-made product offers and efficiency gains empowered by analytics
‣Experienced CIB Team capable of engineering complex financial structures to fit customer needs
‣Synergies through transformed service model
‣Technology-driven team mobility
‣Support activities of MNCs with specialized RMs and customized products
‣Create opportunities to grow with exporters via tailored products
‣Financing sustainable investments in renewable energy and exporters
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Customer Acquisition & Activation
Leveraging Outstanding Infrastructure
Digital & Analytic Solutions
Commercial Banking Solid Strategy for Sound Growth
Focus With
‣Strengthened sales force mobility
‣Foreign trade transaction platform to offer customized solutions
‣Further focus on tourism, export and renewable energy
‣Redesign Trade Finance infrastructure
‣ Innovative cash management solutions
‣Efficient Portfolio Management with Financial Intelligence Platform
‣Tailor-made product offers and efficiency gains empowered by analytics
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Customer Acquisition & Activation
Leveraging Outstanding Infrastructure
Digital & Analytic Solutions
‣New, tailored value propositions (youth, pensioners, occupational groups)
‣On-demand & on-site customer acquisition
‣Digital customer acquisition
‣Strategic partnerships
‣New service model in branches
‣Migration to self-service
‣Enhanced mobile sales power
‣Customer-centric processes and screens
‣Superior digital customer experience
‣ Infrastructure transformation to expand capabilities
‣Enhanced sales force and channels empowered by Financial Intelligence Platform
‣Analytics driven customized pricing
Retail Banking Growth Across All Segments and Products
Focus With
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‣Further market share gain
‣ Innovative product development to maintain leadership in number of investment products
‣Create state-of-the-art mobile investment experience
‣Further digitize investment sales processes
‣Advanced training programs for RMs
Wealth Management Unique consolidated organization creates unique opportunities
Increase fee contribution through
2017 Dec'19
Mutual Funds AUM
Mutual Funds AUM and Market Share (Billion TL, %)
15.8%
18.3%
4.7
12.3
162%
(1)
(1) CMB data
Market Share (Non-money market)
Design & Innovation Culture
20
Akbanker
Customer
INTEG
RATED TO
UC
H PO
INTS
SMA
RT S
YSTEMS
PROCESSES
SIMPLE + DIG ITAL
ART
IFIC
IAL INTELLIGENC
E
Our forward looking operating model
People & Infrastructure
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‣Young & dynamic team: Avg. age 36
‣Share of female employees: c. 53%
‣Share of female executives: c. 40%
‣PhD & Masters Degree: 10% (Highest ranking among peers)
Outstanding Talent
People & Culture: Drivers of sustainable value creation
Centers of Excellence
‣Future Trends
‣Design
‣Advanced Analytics
‣Robotics
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‣ New brand attitude, design and language
‣ Intuitive and socialized banking experience
‣ Analytics-driven sales and communication capabilities
‣ Intelligent engagement
Reimagining banking experience with Akbank Mobile
‣New mobile platform targeting young users, providing core financial services
๏7/24, free P2P transfers interactive with feeds
๏Digital payments and contactless prepaid card
๏Free and easy top-up & withdraw
‣Quick and easy digital onboarding
‣ Social like its target audience – find and follow friends, like, comment, engage
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Tosla A brand new ‘‘fun & playful, simple & fast, and social’’ mobile platform
Conversation BarHidden Teller Counter
E-teller
Mobile RMs
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Phygital Branch: Zero-based design creates competitive advantage
25 Includes Malta branch
2014 2015 2016 2017 2018 2019
771781
800
841
902
991
Branch Number Evolution Total Customer Evolution (mn)
-220
2014 2015 2016 2017 2018 2019
+4.5 mn
13.4
14.4
15.4
16.5
17.4
17.9
Customer Driven Optimization
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Commission / Employee (TL.000)
2013 2014 2015 2016 2017 2018 9M19
147
88101
377
233266
(Loan + Deposit) / Branch (TL mn) Revenue / Branch (TL mn)
(Loan + Deposit) / Employee (TL mn)
2013 2014 2015 2016 2017 2018 9M19
234
166217
567
490428
2013 2014 2015 2016 2017 2018 9M19
9.2
6.48.4
25.6
20.8
15.2
Revenue / Employee (TL.000)
2013 2014 2015 2016 2017 2018 9M19
15.2
9.310.6
34.1
23.9
25.1
2013 2014 2015 2016 2017 2018 9M19
Akbank Peers Average Sector
600
360413
1,536
1,065
845
Strong Momentum in all Efficiency Metrics (as of 9M19)
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01
02
03
Annex
04
05
06
Operating Environment
Akbank Overview
How Akbank is building its future
Financials
Looking Forward
28
In 2019 Akbank
‣ Expanded its NIM well ahead of guidance
‣ Achieved superior fee generation
‣ Preserved best-in-class CIR
‣ Realized better than guidance CoC
‣ Reinforced its capital strength
Despite
‣ Negative CPI adjustment
‣ Delayed loan growth
‣ Low leverage at 7.1x
‣ Proactive NPL recognition
Best positioned to capture healthy & profitable growth
What to remember?
29
(1) Rolling CPI (2) CIR calculation excludes FX gain from long FX position related with stage 1&2 provisions (3) Bank-only, adjusted for financial assets measured at fair value through P&L
ROA
ROE
NIM (swap adj.)
Net fees&com. growth
Opex growth
Cost/ income (2)
CAR
Tier 1
LDR (3)
NPL
Net CoC
1.4%
10.9%
4.1%
33.4%
18.6%
32.9%
19.7%
16.9%
91%
6.6%
281 bps
2019 Results ≥1.4%
≥12%
≥3.5%
> 20%
~CPI (1)
≤35%
~16%
~13.5%
Max 105%
<6%
< 300 bps
2019 Guidance
2019 Results: Strong operating performance
‣Significant beat in NIM and fee income growth
‣ CoC below guidance despite proactive NPL recognition
‣ROE slightly below guidance impacted by LYY MtM adjustments (-1.5 pp) and delayed growth
‣Set aside TL 100 mn free provision
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Revenue (TL bn)
2018 2019
Fee income Swap adj. Net Interest Income
13.3
3.7
17.012.9% YoY
14.2
5.0
19.2
Net Income (TL mn)
Pre-provision Income (TL mn)
2018 2019
6.2% YoY
5,709 5,352
(1)
OPEX (TL mn)
2018 2019
18.6% YoY
5,8026,882
Cost to Income (3)
(%)
2018 1Q19 1H19 9M19 2019
32,333,4 33,8 34,0
32,9
(1) Excluding TRY 250 mn free provision reversal in 2Q18 (2) For comparability, FY18 CPI is adjusted to 8.58% (vs 25.2%) which has an impact of TRY 2.6 bn on 2018 PPI (3) CIR calculation excludes FX gain from long FX position related with stage 1&2 provisions as well as impact of free provision reversal
Sound core operating performance
+15% QoQ
-3% QoQ
+4% QoQ
32% QoQ
CPI adjusted PPI (2)
2018 2019
35.0% YoY
10,442
13,042 14,0928.1% YoY
c. 2 pp impact of SDIF
premium increase and depreciation
expense from major
investments
31
Quarterly Total Swap Cost (3) (TL mn)
4Q18 1Q19 2Q19 3Q19 4Q19
-697 -530 -656
(a) from 17% to 25.2% is TL 1.2 bn gross (b) from 14% to 12% is - TL 190 mn gross (c) from 12% to 10% is - TL 295 mn gross (d) from 10% to 8.58% is - TL 303 mn gross
CPI Linker Income (TL mn)
(1) Excluding CPI impact (2) 4Q19 other impact mainly consists of lower interest income from RR
(3) Includes short and long-term swaps
-765
Impact of change in CPI estimation:
Quarterly NIM Breakdown (bps)
380
+43
-33
+2
-17471
413
CPI-adj. NIM
3Q19 NIM
Securities (1) Other (2)Deposit Cost
CPI Impact
SwapBorrowing Cost
4Q19 NIM
Loan Yield
+124-86
NIM significantly exceeds guidance despite CPI adjustment
-746 4Q18 1Q19 2Q19 3Q19 4Q19
2,030 (a)
740 589 (b) 442
(c)403 (d)
2019 FY NIM Breakdown (bps)
+64
+40
+6
-10 414397
CPI-adj. NIM
2018 FY NIM
Securities (1) OtherDeposit Cost Swap
Borrowing Cost
Loan Yield
2019 FY NIM
CPI Impact
+14
-83
314
+25 -14
32
Payment Systems
+22% YoYStrong performance in both acquiring & issuing
Strong performance in both cash and non-cash loan fees+69% YoYBusiness Loans
Supported by increased transactions and repricing+17% YoYMoney Transfers
Strong performance in both lending and non-lending+41% YoYBancassurance
(1) Based on bank-only MIS data
Net Fees & Comm. (TL mn)
2018 2019
3,718
33.4% YoY
4,958
+8% QoQ
26
678
22
49
Fees & Commissions by product (%)
Payment Systems
Business Loans
Money TransfersBancassurance
Wealth ManagementConsumer Loan
Other
Remarkable beat in fee income growth
Strong innovative product development & state-of-the-art investment experience in mobile
+22% YoYWealth Management
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The World's Best Digital
Bank EUROMONEY
Digital Banking in Numbers (1)
Digital customers
5.1 mn
Share in non-credit linked fees
49%
Digital customer cross-sell versus non-digital
2x
(1) Based on bank-only MIS data (2) Including non-branch channels
69%
GPLs sold through digital channels (2)
Credit cards sold through digital channels (2)
55%
Simple, digital and experience focused operating model
34
2018 9M19 2019
Loans (net) Securities OtherReserve Requirement Liquid assets
354.7
(2)
13.2%
7.5%
56.8%
16.0%
6.5%
Assets (TL bn)
Loan Breakdown (net, TL bn)+9.2%
YoY
2018 9M19 2019
TL Business Banking Consumer incl. Credit CardsFX Loans
201.3
(2)
41.7%
38.0%
20.3%
+6.5% YoY
Strong capital
19.7%
Unique growth opportunity
with risk & return in focus
Optimized asset composition
Low leverage
7.1x
(1) Cash and cash equivalents (2) For comparability, 2018 total loan figure excludes leasing receivables and adjusted for financial assets measured at fair value through P&L
53.4%
20.4%
11.5%
8.6%6.1%
379.3
2.1%6.9%
(1)
39.8%
39.9%
20.3%
202.6 5.9%0.6%
Strategic asset allocation drives sustainable long-term shareholder value
387.2
55.4%
21.6%
10.6%
6.9%5.5%
37.8%
41.1%
21.1%
214.5
35
Broad-based TL loan growth gained pace in 4Q19
Increased business activity with diversified customer acquisition drives: ‣ Commercial loan growth at +9.1% QoQ, ‣ Consumer loan growth at +11.3% QoQ, led by c. 20% growth in GPLs
๏ 60% of 2019 GPL originations were pre-approved, separately 41% were to salary customers
TL Loans (net, TL bn)
2018 9M19 2019TL Business Banking Consumer Credit Card
117.4
(1)
12.1
76.4
28.8
+15.3%
+9.3%
+12.9%
7.6%
7.1%
10.5%
YoY Change
Market Share (2)
+13.6% 7.8%
+9.1%
+11.3%
+6.1%
QoQ Change
+9.3%
2018 9M19 2019
Project Finance & Export Other
16.0
(1)
34%
66%
FX Loans (net,USD bn)
YoY Change
Market Share (2)
-14.1%
QoQ Change
-4.5% 6.8% 122.012.8
80.8
28.330%
70%
14.3
Multinationals & corporates with FX cash
flow generation
(1) For comparability, 2018 total loan figure excludes leasing receivables and adjusted for financial assets measured at fair value through P&L (2) Market share data based on bank only BRSA weekly data as of December 27, 2019
133.313.6
88.2
31.5 13.7
26%
74%
36
Balanced loan portfolio (1) (% of Total Gross Loans)
Retail Loans 22.5
Services 8.1
Finance 6.2
Food 3.6
Transport Vehicles & Sub-industry 4.0
Transportation & Logistics 2.6
Petrochemicals 2.4
Other (2) 16.7
Textile & Ready-made 3.6
Construction 3.9 ‣ c. 60% in FX ‣ c. 70% of FX loans are government guaranteed (debt assumption) ‣ 5.3% of Stage 2 and 5.1% of Stage 3 are construction loans
Tourism 2.9
Retailer 4.9
Metal & Fabricated Metal Products 3.1
Real Estate 9.3 ‣ LTV 65-80%, with recent valuations &
assuming Decree 32 to be implemented perpetually (despite 2 yr limitation)
‣ 20% of total has FX cash collateralization ‣ 14.7% of Stage 2 and 24.6% of Stage 3 are
real estate loans
Energy Generation 6.2 ‣ 100% of PF loans since 2016 are renewable ‣ 77% of total energy generation are renewable ‣ 52% are government guaranteed (feed-in tariff) ‣ 7.0% of Stage 2 and 5.7% of Stage 3 are
energy generation loans
(1) Consists of consolidated performing and non-performing loans & excludes leasing receivables and adjusted for financial assets measured at fair value through P&L (2) Loan concentration below 2%
37
Yield enhancement with dynamic securities management
2018 1H19 9M19 2019
FX TL
Total Securities (TL bn)
46%
54%
57 65
50%
50%
77
1Q19 2Q19 3Q19 4Q19
CPI (real rate) TL Securities (excl. CPI) FX
Security Yields (1)
4.24.6
16.916.3
2.02.1
(1) Based on MIS data
43%
57%
4.8
17.7
2.2
+47% YoY +8% QoQ
‣ Significant market share gain in securities during low loan growth environment
‣ Strategic positioning in 2019 will continue to be NIM accretive in 2020
84
42%
58%
4.9
17.1
2.3
38
Securities mix change ahead of easing interest rate cycle
2018 1H19 9M19 2019
CPI Floating Fixed
13%
60%
31
27% 11%
59%
30%
33
TL Securities (TL bn)
+58% YoY +10% QoQ
2018 1H19 9M19 2019Floating Fixed
FX Securities (USD bn)
99% 99%
5.0
1% 1%
5.6
99%
1%
+20% YoY 0% QoQ
9%
49%
42%
44 6.0
Proactive positioning in both fixed rated TL and FX securities ahead of easing interest rate cycle
Avg. maturity c. 1.5 yrs (Fixed TL) and c. 3.5 yrs (FX) NIM accretive
48
8%
47%
45%
99%
1%
6.0
39
Maintained disciplined funding mix while growing
(1) MIS data (2) Bank-only, adjusted for financial assets measured at fair value through P&L. TL LDR includes domestic TL bond issuances and merchant payables (3) Based on BRSA weekly data dated December 27, 2019
2018 9M19 2019
Deposit Equity Funds Borrowed Other TL Repo FX Repo
Composition of Liabilities (%)
12.3
58.8
17.3
2.9
7.61.1
Deposit Currency Split (TL bn)
2018 9M19 2019
TL FX Demand Deposit/ Tot. Dep.
20%
61%
39%
22%
209
+17% YoY +4% QoQ
Sticky & low cost RETAIL &
SME DEPOSITS’ Share in TL
Deposit 77% (1)
2018 9M19 2019
TL LDR LDR FX LDR
LDR (2) (%)
130
95
64
Sector’s Total LDR at
103% (3)62.2
13.6
13.8
7.20.32.9
63%
37%
236
22%
51
91
13763.2
14.0
13.9
6.30.22.4
61%
39%
245
51
90
138
Demand Deposits +26% YoY
40
Well-diversified borrowing mix
2020 2021 2022 2023 2024 2025 2026 2027 2028 ≥2029
Covered Bond Eurobond GMTNMultilateral Securitisation Syndicated LoansTier 2 Trade Finance
3,135
1,011
541694
513951
57
538 422
46
Maturity Profile of Wholesale Borrowings (USD mn)
Wholesale Borrowings (USD mn,%)
Covered Bond (1) 303; 3.8%
Eurobond 1,500; 19.0%
Multilateral 222; 2.8%
Securitisation 2,931; 37.1%
Syndicated Loans
1,767; 22.3%
Tier 2 900; 11.4%
Trade Finance 274; 3.5%
GMTN 11; 0.1%
Remaining average maturity ~ 3 years
‣ Wholesale funding reduced down to c. USD 8 bn (c. USD 10 bn in 2018) ‣ Reduction mainly led by c. USD 2 bn decrease in short-term wholesale liabilities ‣ Successful roll-over of syndicated loan in October 2019 with 1.43x over-subscription & 31 banks from 19 countries
Balances based on principal outstanding and bank-only MIS data (1) USD equivalent of TL 1.8 bn Covered Bond issuance (2) Tier 2 bonds have issuer call scheduled at 2022 and 2023, respectively
(2)
(1)
Total: ~ USD 8 bn Avg. maturity: ~ 3yrs
41
Successful Wholesale BorrowingsBasel III Compliant Tier II
Syndicated Loans
DPR Securitization
Covered Bond
* Signing date
1Q18
1Q18
1Q19
‣ USD 400 million, 10NC5
‣ Lowest Basel III compliant Tier II spread to mid-swaps ever recorded in Turkey
‣ USD 795 million
‣ Maturities up to 7.5 years
‣ TL 200 million
‣ 5 years maturity
‣ March 2019* Syndicated Loan- USD 700 million
๏ USD 356 million, 367 days tranche @ Libor+2.50%
๏ EUR 303 million, 367 days tranche @ Euribor+2.40%
๏ 34 banks from 15 countries participated with a record oversubscription of 1.60x reaching a commitment amount of USD 950 million vs USD 600 million targeted size.
๏ 8 new lender banks
‣ October 2019 Syndicated Loan- USD 810 million
๏ USD 402 million, 367 days tranche @ Libor+2.25%
๏ EUR 373.5 million, 367 days tranche @ Euribor+2.10%
๏ Targeted size indicated as USD 700 million, received over USD 1 billion of orders, post scale back facility size increased up to USD eq. 810 million showing 1.43x oversubscription.
๏ 31 banks from 19 countries participated under the loan.
Syndicated Loans
Prudent IFRS 9 implementationStage 2 loans (1) share
2018 9M19 2019FX TL
33%
67%
14.2% (TL 31.4 bn)
13.5% (TL 28.9 bn)
‣ 77% of Stage 2 loans are non-delinquent
‣ Only 8% of Stage 2 loans are past due 30 days
‣ All restructured loans (c. TL 17.8 bn, flat QoQ) are followed under Stage 2
‣ Excluding write off and NPL sale impact Stage 3 coverage increases above 60%
Real Estate
Energy Generation
Construction
% of Total Stage 2
14.7
7.0
5.3
Coverage (%)
6
30
25
(1) Loan figures exclude leasing receivables and adjusted for financial assets measured at fair value through P&L 42
Stage 2 Coverage
Stage 3 Coverage
Free Provisions
2019
11.1%
56.2%
TL 650 mn
31%
69%
13.2% (TL 30.1 bn)
40%
60%
9M19
11.9%
58.1%
TL 650 mn
New NPL formation to ease in 2020 NPL Ratios by Segment
(%)
Business Consumer Credit Cards Total
2018 (1)
3.1 4.1 4.9 3.6
Real Estate
Energy Generation
Construction
% of Total Stage 3
24.6
5.7
5.1
Coverage (%)
52
42
56
‣Major drivers of NPL ratio in 4Q19:
๏ Prudent classification of a large commercial file (c. +90 bps)
๏ Write-off’s and NPL sale (c. -70 bps)
‣Positive collection performance trend expected to continue in 2020
New NPL Collections Net NPL
2Q19 4Q191Q19
1,4521,089
363
1.,3881,095
293
Quarterly New NPL Additions and Recoveries (2)
(TL mn)
(1) For comparability 2018 Loan figures exclude leasing receivables and adjusted for financial assets measured at fair value through P&L (2) Bank-only 43
9M19 5.7 5.5 6.4 6.0
3,3752,868
506
3Q19
2019 7.1 4.8 6.0 6.6
4,288 3,722
567
CoC peaked and set to improve
2019 CoC & Provision Breakdown
CoC excludes MtM adjustments for financial assets measured at fair value through P&L (negative c. TL 940 mn in 2019 for LYY)
CoC improvement to start in 1Q20
1Q19 1H19 9M19 2019
5.975
3.565
2.223
1.046
Net Provision Expense (TL mn)
Cumulative CoC & Provision Evolution
CoC (bps)
197 208
44
225
Stage 1+2 (net)
Stage 3
Stage 3 Recoveries
Currency Impact
Net CoC
690
3,368
(435)
(58)
3,565
416
6,148
(639)
50
5,975
281
44
212
(27)
(4)
225
20
289
(30)
2
281
TL, mn TL, mnbps bps
9M19 2019Provisions
45
Superior capital position CAR Evolution
(QoQ, bps)
19.5%
Securities MtM
Impact
Impact of Currency on RWA
ProfitCurrency Impact of
Tier 2
2019Derivatives Change in Volume of Securities
Increase in RWA of Loans
Market Risk
+8 +16 -8-45
-2 +48
+41
9M19
2019 Min Basel III required (1)
-45
12.57%
Solvency Ratios
2019
CAR: 19.7% Tier 1: 16.9%
Excess Capital
TL 22.8 bn
Acc. to 2019 minimum Basel III required 12.57%
Excess Tier 1
TL 20.3 bn
Acc. to 2019 minimum Basel III required 10.57%
Well-positioned to generate profitable growth with solid capital buffers
(1) Including buffers (Capital Conservation Buffer: 2.50%, D-SIB Buffer: 2.00%, Countercyclical Capital Buffer: 0.07%)
19.7%
46
01
02
03
Annex
04
05
06
Operating Environment
Akbank Overview
How Akbank is building its future
Financials
Looking Forward
47
2020 Economic Outlook: Back to growth
Economic activity
Growth composition
Inflation
Monetary Policy
Fiscal Policy
External balances
Credit activity
GDP forecast at c. 4% yoy
Domestic demand contribution to increase, investment appetite to pick up in 2H
Gradual disinflation trend to continue
Expect moderate rate cuts, inline with inflation
Budget deficit/GDP to remain < 3%
CAD to be limited
TL driven loan growth to accelerate
48(1) CIR calculation excludes FX gain from long FX position related with stage 1&2 provisions
TL Loan Growth
FX Loan Growth (in USD)
Leverage
ROE
NIM (swap adj.)
Net fees&com. growth
Opex growth
Cost/ income (1)
NPL
Net total CoC
High-teens
Low-single digit
> 8x
Mid-teens
≥4.0%
High-single digit
Mid-teens
≤34%
<6%
~ 200 bps
2020B
Cutting-edge infrastructure
Create unique growth opportunity to achieve mid-term
ROE target of high-teens
Robust capital buffers
Low leverage
Outstanding talent
2020 Guidance Outlook: Addressing the numerator
49
What to remember?
Excellently positioned
Profitability to advance
Fully committed to building our future
‣ Solid growth
‣Customer acquisition
‣CoC normalization
0301
02
‣ People & Culture
‣ Digitization & AI
‣ Design & Innovation
‣ Robust capital
‣ Low leverage
‣Outstanding infrastructure
50
01
02
03
Snapshot of Results
Balance Sheet Highlights
Income Statement Highlights
Annex
Snapshot of Results
51(1) For comparability, 2018 total loan figures exclude leasing receivables and adjusted for financial assets measured at fair value through P&L (2) CIR calculation excludes FX gain from long FX position related with stage 1&2 provisions as well as impact of free provision reversal
(TL mn)
Total Assets
Loans (net) (1)
Deposits
Net Profit
Net interest income
Net fee income
(%)
ROE
ROA
Leverage
NIM
NIM after swap
Cost to Income (2)
CAR
Tier 1
2018 354,682
201,332
208,630
5,709
15,596
3,718
13.6
1.6
8.1x
4.62
4.0
32.3
16.8
14.3
3Q19 379,261
202,614
235,832
1,361
4,331
1,228
10.8
1.4
7.4x
5.02
4.13
34.3
19.5
16.7
2019 387,172
214,471
244,712
5,352
16,938
4,958
10.9
1.4
7.1x
4.93
4.14
32.9
19.7
16.9
YoY 9%
7%
17%
(6%)
9%
33%
(2.7)
(0.2)
(1.0)
0.3
0.1
0.6
2.9
2.6
QoQ 2%
6%
4%
(3%)
13%
8%
(0.8)
(0.1)
(0.3)
0.5
0.6
(4.6)
0.2
0.2
4Q19 387,172
214,471
244,712
1,325
4,898
1,327
10,0
1.4
7.1x
5.56
4.71
29.7
19.7
16.9
Consolidated (TL mn)
Cash and Due from Banks
Securities
Loans (net) (1)
Other
Total Assets
Deposits
Funds Borrowed and Bonds Issued
Repo
- TL Repo
- FX Repo
Other
Equity
Total Liabilities and S/H Equity
2019
47,901
83,602
214,471
41,199
387,172
244,712
53,755
10,107
763
9,343
24,236
54,362
387,172
2018
49,618
56,782
201,332
46,950
354,682
208,630
61,506
14,275
3,918
10,357
26,484
43,787
354,682
Balance Sheet Highlights
2019
12.4
21.6
55.4
10.6
63.2
13.9
2.6
0.2
2.4
6.3
14.0
2018
14.0
16.0
56.8
13.2
58.8
17.3
4.0
1.1
2.9
7.6
12.3
52 (1) For comparability, 2018 total loan figure excludes leasing receivables and adjusted for financial assets measured at fair value through P&L
Shares (%)
53
Consolidated (TL mn)
Interest Income
Interest Expense
Net Interest Income
Trading Gain (Loss)
- Securities
- Other
Provision for Loan Losses, net of collections
Fees and Commissions (Net)
Operating Expense
Other Income
Other Provisions (1)
Income Before Tax
Tax
Net Income
2019
36,498
(19,560)
16,938
(1,146)
296
(1,442)
(5,975)
4,958
(6,882)
224
(1,190)
6,927
(1,574)
5,352
2018
35,445
(19,849)
15,596
(637)
(1,112)
475
(5,765)
3,718
(5,802)
418
(391)
7,136
(1,427)
5,709
Change (%)
3.0
(1.5)
8.6
-
-
-
3.7
33.4
18.6
(46.5)
-
(2.9)
10.3
(6.2)
Income Statement Highlights
(1) 2019 figure includes c. TL 940 mn MtM adjustment for LYY and TL 100 mn free provision
54
Ebru Güvenir Senior Vice President
Extel Awards
İlknur Kocaer, CFA Vice [email protected]
Bilgi Aslankurt Manager
Nazlı Çelem Manager
Burak Songül Manager
AddressEmail IR Website
: Akbank Genel Müdürlüğü Sabancı Center 4. Levent 34330, İstanbul: [email protected] : https://www.akbank.com/en-us/investor-relations/Pages/default.aspx
Investor Relations and Sustainability Team
Best Corporate for IR in Turkey
2018
Best CEO for IR in Turkey
2018
Best IR Professional
in Turkey 2018
Best CFO for IR in Turkey
2019
Disclaimer Statement
55
The information and opinions contained in this document have been compiled or arrived at by Akbank from sources believed to be reliable and in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. All opinions and estimates contained in this document constitute the Company’s judgement as of the date of this document and are subject to change without notice. The information contained in this document is published for the assistance of recipients, but is not to be relied upon as authoritative or taken in substitution for the exercise of judgement by any recipient. The Company does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document or its contents. This document may not be reproduced, distributed or published for any purpose.
