21Concluding remarks - PDF document

21Concluding remarkswith robust track r
21Concluding remarkswith robust track record of economic activity and an underpenetratedbanking sectorkey competitive and proven track record of Key competitive Strongand committedshareholdersship in key segments / productsCustomer focused service modelHigh quality revenue generationFocus on efficiency and cost managementStrong potential for commercial effectivenessFocus on customer and employee satisfactionStrong and mutually beneficial relationship with UniCreditAGENDACompetitive Positioning and Strategic PrioritiesStrong and mutually beneficial Engine for growth profitabilityfocus and leading positi

ons in credit cards, leasing, factoring
ons in credit cards, leasing, factoring and asset management and 4th largest branch network in Turkeyaccelerated organic growthSkilled innovatorand benchmarkADC, IT efficiency and trainingshareholder with solidcommitment to growth in Know-how and managerial expertise in retail and SME, risk management, fficiency improvementsandcost managementPossibility for Turkish clients to leverage on UCG’sEuropean networkSynergies within UCG and access to management global reach Yap UniCredit Group but also contributes to the Group significantly products as well as in overall profitabilityAbove sector growth Focus

on further penetration of existing and p
on further penetration of existing and potential client base,cross-sellandproduct bundling, leveraging on enhanced CRM and MIS systemsStrong focus on high margin TL individual and SME Continuous effort to redesign processes to improve sales effectivenessContinuation of branch expansion planDynamic /proactive NPL portfolio management Ongoing improvement of monitoring processes /tools(especially SME)Centralisation of SME underwritingUpgrade of individual scoring modelGrowth & Commercial Efficiency Asset Quality Continuation of disciplined approach towards cost containmentEfficiency improvements (back-off

ice centralision and IT efficiency impro
ice centralision and IT efficiency improvements, simplification of processes)Continuation of investments in alternative distribution channels(migration of both transactions and sales activity to ADCs) to decrease cost to serveConstant focus on customer and employee satisfaction Continuation of medium term investmentsProactive loans/deposits managementdiversification of funding sourcesSustainabilitySustained revenue generation increased emphasis on product penetration / innovation and fee collection in light of margin compressionStrong ROE to continue to sustain business growth / contribute to capital bas

eProfitability2,504 3,192 3Q094Q091Q10
eProfitability2,504 3,192 3Q094Q091Q102Q103Q10Product / risis”in 2009 to “growth”in 2010; significant improvement potential in commercial effectiveness1 Excluding card-only clientsNote: BRSA Bank-only figures used for commercial effectiveness indicatorsLaunch of new product bundlesLaunch of new credit cards, asset management and insurance products~270,000 product bundle sales in 8 months~260,000 new cards sold 352 mln TL generated through new funds ytd~ 40,000 insurance contracts since AugActivation / Systems EnhancementsResultsFocus on retail customer acquisition~100,000 customer additions since 1

Qtarget achieved)Conversion of credit ca
Qtarget achieved)Conversion of credit card only clients~320,000 clients converted(82% of 2010 target) Loans per Employee (ths TL)Deposits per Employee (ths TL)27%Upgrade of commercial clientsImprovement in sales support toolsSimplification of credit granting process~1,400 clients upgraded (40% of 2010 target) 2,814 3,252 3Q094Q091Q102Q103Q1016%(Days)Sept-10Mortgages~1-2Commercial~40~5-1614%11%Launch of new ADC implementationsLoan payments via ATMs up 23% y/yCorporate internet transactions up 30% y/yCall center sales up 21% y/yHigher commercial productivity coupled with significant decline i

n response time6.5%5.8%4.3%6.3%4.3%3.8%
n response time6.5%5.8%4.3%6.3%4.3%3.8%3.5%3.5%5.2%4.2%20062007200820093Q10NPL Ratio EvolutionMore conservative Implementation of restructuring programsmanagement through Increased focus on collections Key actions taken to control asset qualityCapability of asset quality management further strengthened in 2009 via turning macroeconomic crisis into an Collections/NPL InflowsQuick MeasuresStructural Measuresscorecard in June’09credit process in Jan’10 leading to response times with ConsumerCorporateNPL ratio by Segment:SectorTotal Coverage*: 103%* Specific and general provisions / NPLs4.3%7.7%5.7%

5.8%6.3%10.0%7.5%7.5%6.8%12.6%7.6%7.4%2.
5.8%6.3%10.0%7.5%7.5%6.8%12.6%7.6%7.4%2.5%3.0%1.4%1.8%200820091Q102Q103Q1063%84%200820093Q10Unique track record and execution capability in pursuing growth Cost Evolution (y/y growth)30% increase in branch networkSuccessful execution of retail growth strategy strong improvement in headcounin order to continue to self-finance branch expansion plan Branch and Headcount Increase-2%19%20062007200820099M10Cost / Income20062007200820099M10SectorBranch Headcount Sector1 Adjusted to exclude the effect of one-offs in 2007-3%-3%2007200820099M1030%26%20%20%USEUYKBEMTurkeyFees / CostsFees / RevenuesSou

rce:ECB and Deutsche Bank Research. EU i
rce:ECB and Deutsche Bank Research. EU indicates EU27 countries also including UK, Germany, France, Italy, Hungary, Spain anRomania. EM includes Latin America, Asia, Africa, Middle East and CEE regions also covering countries such as Brasil, China, India, Russia, Poland, Hungary, Korea and UAEOutperformancein FeeGenerationSustained focus on cash management and trade finance Focus Areas to Increase Fee Generation74%65%52%49%43%USYKBEUTurkeyEMMortgage10.3%Gen Pur6.6%Auto 1.6%Commercial Installment8.4%Credit Cards17.4%Companies20.3%Companies35.4%18%56%26%9M099M104.8%4.2%YKBPrivate PeersHigh quality earn

ings driven by Strong Loan Composition
ings driven by Strong Loan CompositionSustainable Revenue CompositionRetail focused loan composition buted by high yielding credit cards / SMELocal currency focused loan composition Strongfocus on higher yielding project in foreign currency lending Composition of Loans65%61%35%39% Kredi Private PeersBy CurrencySpreads%By ProductRetail: 44%Composition of RevenuesFeesStrong fee generation capability Fees’share in revenues at 26%Increasingly diversified fee composition driven Composition of FeesNet Interest MarginCredit Cards 41.3%Lending Related 35.4%Asset Management 8.1%Account Maint. 4.1%Insuran

ce 1.7%Other9.5%Individual SMECredit Ca
ce 1.7%Other9.5%Individual SMECredit CardsPrivate Corporate CommercialOtherIndividual SMECredit CardsPrivate Corporate CommercialOtherıKredi as “bank of the real economy”with strong retail focusCustomer-business focused strategyShare of loans in assets at58%Share of securities in assets at 20%Loans / Assets20%36%YKBPeer Avg58%48%YKBPeer AvgBalance SheetTraditionally strong retail focus with margin productsCompositionRevenue 56%60%* Retail includes individual, SME, credit cards and private segmentsNote: SMEs are companies with turnover less than 5 mln USD Branch Networkt underpenetrated mark

et also due to successful execution of a
et also due to successful execution of accelerated 862 branches in 71 cities, covering 88% of Turkey640 862 July 2007Sep 2010Contribution of New Branches to Retail 9M10Revenues14%Loans14%Deposits35%AGENDA12.8%14.2%16.5%16.4%16.0%2007200820099M099M1059.0%53.3%41.3%39.1%40.3%2007200820099M099M101,0191,2651,5531,282 1,870 2007200820099M099M1023.5%26.3%22.7%25.0%29.8%2007200820099M099M10…resulting in delivery ofconsistentlystrong performanceand solid profitability accompanied by prNote: BRSA consolidated financials 1Calculations based on the average of current period equity (excluding current p

eriod profit) and prior year equity. Ann
eriod profit) and prior year equity. Annualised24%23%46%(mln TL)Cost / IncomeReturn on Average EquityCapital Adequacy Ratioexpansion planservice modelRestructuringof streamline subsidiaries under YapıKrediƒEfficiency initiativesin systems / Track record of successfulexecut9Mergerand Relaunch of GrowthBack to GrowthKrediandIT systems integrationsubs(factoring, management full capital baserestructuringexpansion management / efforts, also with migration to capital basevia capitalincreaseTemporary expansionmanagement / credit risk managementcustomer base / customer related branch openin

gsgrowthdiscipline / Emphasis on innovat
gsgrowthdiscipline / Emphasis on innovation, new client acqusitionservice model supportedby integration of productfactoriesBranch numbers by segment exclude 2 free zone, 1 off-shore and mobile branchesSegment figures as of Sept 2010, market capitalisations as of 24 Nov 2010= Listed*Including 1.5mlnvirtual cardsMassAffluent7.7 M cards*~390K POS152 direct sales force395K merchants715 branches3,446 RMs2,452ATMs32branches207RMs3 branches70RMs106branches563RMs#1 in Factoring(market share: 24.9%) #2in MutualFunds(market share: 18.7%) #3 in Brokerage(market share: 6.1%) #6 in Non-life Insurance(market share:

6.0%)#2 in Health Insurance(market share
6.0%)#2 in Health Insurance(market share: 16.7%) Mcap: TL1,124mln#1in Leasing(market share: 20.6%)Mcap: TL 1,864 mln #3in Private PensionFunds(market share: 15.5%) #6 in Life Insurance(market share: 4.7%)Retail BankingCorporate / Comm. BankingPrivate BankingCredit Cards Individual CommercialCorporateProduct Factories:Product Factories:LInternational OperationsOther Product Factories50%50%Minority ShareholdersYapKredi: fourth largest private bank in Turkey with leading positions in key segments 7FINANCIAL HIGHLIGHTS(BRSA Consolidated Figures, 30 Sep 2010)Total Assets (bln)82.0Performing Loan

s (bln)47.7 Deposits (bln)49.3AUM(bln)8.
s (bln)47.7 Deposits (bln)49.3AUM(bln)8.5No.of Credit Cards (mln)No. of ATMs2,452No. of Employees(1)Including 1.5 mln virtual cards(2)Bank-only (3)Bank-only including 1 off-shore branch(4)Bank: 14,402(5) Including mortgages, general purpose and auto loans (6) Credit card outstanding volume(7) Equity trading volume(8) Cash loans excluding credit card outstanding volume and consumer loansMARKET POSITIONING(30 Sep 2010)Yap Kredi#of Branches DepositsConsumer Loans(5)Credit Cards(6)Brokerage(7)Asset ManagementLeasing Factoring RetailNon Cash Loans Non-Life Life Cash Loans(8)Fourth Largest Private Bank by

AssetsPensionLoansTOTALCorporateAuM
AssetsPensionLoansTOTALCorporateAuM + BrokerageInsurance62319.28.318.76.114.520.6 24.977.7119.84.7 15.59.86.0RankMkt. Sh. %510.2 25.6AGENDAKredi at a GlanceCompetitive Positioning and Strategic PrioritiesContinuation of positive and stable macroeconomic Positive macroeconomic environment and banking sector outlook to be sustained in the upcoming period Solid GDP growth in line with / above 5% over the next 3-5 yearst to be maintained with inflation below 10%Turkey expected to reac in excess of 20% to continueProfitability to be maintained driven by strong Sustainable ROE of ~20%, also with some C

ost of risk to continuously decline driv
ost of risk to continuously decline driven by asset quality improvementBanking sector to remain strong in terms of both growth and profitabilitySignificantvolume growth potential (mainly retail driven) on the back of underpenetratedmarketWell regulated banking sector with strong capitalisationand profitabilitySuccessfully coped with the challenging operating environment in2009 due to:low consumer indebtednessstrong capital adequacylimited dependency on wholesale borrowinglow short FX position riskrational/disciplined behaviourof banksSound profitability maintained so far in 2010 with strong volumegrowth.

Declining but still very strongNIM and h
Declining but still very strongNIM and high ROE despite strong capitalisationTurkish banking sector is among 9M10No of Banks50Loans / GDP15%37%39%42%Retail Loans / GDP3%12%13%14%Loans/Deposits44%82%77%82%Borrowings / Liab.10%13%11%12%ROAE18%18%23%21%31%17%19%18%NPL ratio, gross11.8%3.5%5.2%4.2%5.5%4.9%5.6%4.4%Note: Penetration data as of 20091 Private credit includes loans to individuals and companiesEurozone459Branches per mlnInhabitantsTurkey90%305%TurkeyMortgagesConsumerLoans5.5%15.7%....%10%39%319%162%TurkeyEurozone Loan Types / GDP4.5%43%Private Cr

edit63%Credit cards-3.4%6.8%-5.7%6.2%8
edit63%Credit cards-3.4%6.8%-5.7%6.2%8.4%0.7%-4.7%7.0%199920002001200220032004200520062007200820092010E199920002001200220032004200520062007200820092010E95%38%56%26%21%17%16%199920002001200220032004200520062007200820092010ETurkey is a big and attractive country with strong fundamentals7th largest economy inWorld with a large and young populationStrong ties with neighboring countries with Sovereignrating outlook upgrades despite crisis environment in 2009, confirming improved outlookStable political outlook,strengthened TurkeyEurozonePopulation, mln72.6Per capita GDP GDP(EURbn)Average age of population2

8% of population below 30 years51%31%GD
8% of population below 30 years51%31%GDP GrowthInflationInterest RatesSector Loansgrowth within macro Disinflationary trend since 2001 leading decline in interest rates in line with disinflationStrong link between bankingsector and economic : 11.7%2Q10: Avg. 7%Avg. 13%Avg. 26%Avg. 22%: 9.6%2Q10: Sept-108.1%Note: 2010 estimates represent YapKredi Economic Research forecastsInterest rate refers to benchmark bond rate9M10: 21%-9%13%-29%-3%199920002001200220032004200520062007200820092010EAGENDACompetitive Positioning and Strategic PrioritiesıKredi PresentationUniCredit CEE Day 20102 December