0 Investor Presentation August 2020 - Ziraat Bankası
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Investor Presentation
August 2020
Ziraat Bank – More Than a Bank
Fully State Owned
More Than 36 mn.
Customers 157 Years of
Banking Legacy
Sustainable Growth
Strong Local and
International
Franchise
Sound Capital
Structure
Customer Oriented
Balance Sheet Prudent Risk
Management
Well Diversified
Funding Base
1Ziraat Bank – Undisputed Leader of Turkish Banking Sector
Turkish Banking Sector (June 20)
Turkish Economy 2018 2019
Total Assets 5,356 Market Shares
GDP Growth (%) 2.6 0.9
Cash Loans(1) 3,394
• Cash Loans
GDP Nominal (USD bn) 784 754 Securities 903 16%
Unemployment (Annual %) 11.0 13.7 Total Deposits(1) 3,184
• Total Assets
CPI (Annual,%) 20.3 11.8 Shareholders’ equity 558
15%
Current Acc. Balance/GDP (%) (3.5) 0.2 Net Profit 31
ROAE 12.3% • Deposits
Budget Balance /GDP (%) (1.9) (2.9) 18%
ROAA 1.2%
Capital Adequacy Ratio 19.5%
Rankings (2)
Q2 20 #1
2012
Total Assets Cash Loans Non-Cash Deposits Equity
Loans
(1) Loans include accruals and the loans granted to banks, Deposits (2) Rankings are among top 7 Banks. The banks are determined as of unconsolidated assets for June
include accruals, and the banks’ deposits, securities include accruals. 2020 and include: Ziraat Bank, İş Bank, Garanti Bank, Akbank, Yapı Kredi, Halkbank and Vakıfbank 2
Source: BRSA, Publicly available Earnings Reports for peer banksZiraat Bank – Ziraat Finance Group
Germany
Presence in
UK
18 countries,
Bosnia & Herzegovina**
111 service points
Montenegro
Russia
Kosovo Kazakhstan
Bulgaria
Greece
Turkish Rep. of
Northern Cyprus
Iraq
Georgia Uzbekistan
Saudi Arabia Turkmenistan
Subsidiaries
Bahrain Azerbaijan
International Branches
Local Subsidiaries Overseas Subsidiaries Overseas Branches
Ziraat Katılım Bankası (Participation Banking) Ziraat Bank Int. AG (Germany) United Kingdom
Ziraat Yatırım (Securities Brokerage & Investment House) Ziraat Bank BH. (Bosnia) Greece
Ziraat Portföy (Asset Management) Ziraat Bank Montenegro Bulgaria
Ziraat GYO (Real Estate Investment Trust) Ziraat Bank Azerbaycan Iraq
Ziraat Teknoloji (IT) Ziraat Bank Moscow Saudi Arabia
Ziraat GSYO (Venture Capital Investment Trust) KZI Bank (Kazakhstan) Kosovo
Turkmen Turk JSC Bank Bahrain
UT Bank (Uzbekistan) Turkish Republic of Northern Cyprus
Ziraat Bank Georgia
3Ziraat Bank – Local Subsidiaries
GSYO
Participation Securities Asset IT Real Estate Venture Capital
Banking Brokerage Management Investment Investment
Trust Trust
Started Started Established in
Serving 4 2001. 2nd largest
operations in operations in pension Founded in Founded in
domestic November 2016. November 2018
2015 1997 companies, 3
major bank software Istanbul Finance with TL 750 mn
Bonds / bills distribution developer in Center premises capital with the
TL 40 bn of sector share - channels Turkey. Provides in the portfolio. aim of investing in
asset size rank: full scale IT Total portfolio enterprises with
TL 32 bn of 9% - #3 The market solutions to Ziraat amount of high growth
loan book leader, total Bank and its TL 2 bn. potential.
Repo / reverse volume of assets
96 branches repo sector share domestic/foreign
managed is TL partnerships.
- rank: 295 billion as of Asset size sector
21% - #1 March 2020. share - rank:
16% - #2
Total Assets Shareholders’ Equity
Description The Bank’s Risk Group Share (%)
(TL mn) (TL mn)
Ziraat Katılım Bankası A.Ş. ** 100 39.786 3.249
Ziraat GYO 100 2.923 1.834
Ziraat GSYO 100 883 881
Ziraat Yatırım Menkul Değerler A.Ş. 99.6 528 229
Ziraat Portföy Yönetimi A.Ş.* 99.8 114 102
Ziraat Teknoloji A.Ş. 100 73 13
*Ziraat Portföy Yönetimi A.S. purchased %100 shares of Halk Portfoy Yonetimi A.S. and Vakıf Portfoy Yonetimi A.S. as of 28/12/2018 and later, as of 31/01/2019
Halk Portfoy Yonetimi A.S. and Vakıf Portfoy Yonetimi A.S. merged as a single entity under the name of Ziraat Portfoy Yonetimi A.S.
** Ziraat Finansal Kiralama A.S. was merged with Ziraat Katılım A.S.
As of 22 April 2020, the Bank has sold its insurance subsidiary Ziraat Sigorta A.Ş. and pension subsidiary Ziraat Hayat
ve Emeklilik A.Ş. to Turkey Wealth Fund.
4Ziraat Bank – Overseas Subsidiaries
Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank Ziraat Bank
KZI Bank Turkmen Turk
Int. AG BH. Montenegro Azerbaycan Moscow Uzbekistan Georgia
JSC Bank
JSC
Active in Started Opened its doors Commenced Commenced The country’s first Founded in 1993. Founded as Established in
Germany for fifty- operations in for business in operations in operations in foreign-owned Headquartered in Uzbekistan`s first 2017 by
six years, 1997. The first 2015. 2015. Mainly 1993, focusing financial Ashgabat, foreign capital transforming the
supplies an entirely foreign- Headquartered in serves the primarily on the institution in provides services bank in 1993. branches in
extensive array of owned bank in corporate banking corporate banking 1993. The bank Branches in Georgia to a new
retail and Bosnia- Montenegro’s segment, Ziraat segment. serves retail and from 6 offices and Operu, subsidiary.
corporate banking Herzegovina. capital Podgorica, Bank Azerbaijan corporate one exchange Yunusabad and Operates through
products and Serves corporate, the bank has ASC conducts its customers office. Semerkand. 5 branches
services through small-business, three branches. operations through 7 located in Batumi,
Active in both
seven branches. and retail through its branches. retail and Marneuli, Tblisi,
customers headquarters commercial Tsereteli and
through 32 office in Baku and banking. Kutaisi.
branches/offices. 3 branches.
The Bank’s Risk Group Total Assets Shareholders’
Description (City/ Country)
Share (%) (TL mn) Equity (TL mn)
Ziraat Bank International A.G. Frankfurt / GERMANY 100 9.371 1.904
Ziraat Bank BH d.d. Sarajevo / BOSNIA HERZEGOVINA 100 3.892 252
Kazakhstan Ziraat Int. Bank Almaty / KAZAKHSTAN 99.6 1.610 529
Ziraat Bank Azerbaycan ASC Baku/ AZERBAIJAN 100 1.087 276
Ziraat Bank (Moscow) JSC Moscow / RUSSIA 99.9 819 313
Ziraat Bank Montenegro AD Podgorica / MONTENEGRO 100 596 129
Ziraat Bank Uzbekistan JSC Tashkent/ UZBEKISTAN 100 571 204
Ziraat Bank Georgia Tbilisi/ GEORGIA 100 285 123
5Ziraat Bank – Organizational Structure
• Transformation of business model in 2011-2015
• Segregation of sales and marketing functions
• Centralized operations
• Branch and customer segmentation
• Specialized departments for loan allocation process, management of loan portfolio and internal audit
Board
Internal
CEO Systems
Loan
Lending Banking
Retail Financial Internal SME Corporate Human Treasury Underwriting
Policies and Marketing Operations and
Banking Management Operations Banking Banking Resources Management and
Procedures Communations
Management
6Ziraat Bank – Digital Transformation
New Corporate Internet Branch
New Banking Software
Ziraat Mobile For Corporate
Clients New Mobile Branch
Mobile branch
App for devices not OmniChannel Experiance Internet and Mobile
compatible with iOS • Standardization of interface and Branch Assistant
and Android transaction flows
• Interaction between channels
Loan access through
Flexible limits Internet and Mobile
Transaction limits Money withdrawal by using QR
Branch
defined specifically code
to a segment or a
customer Enhancing mobile transactions
Multiple language mobile branch
New Data Center
2013 2014 2015 2016 2017 2018
Ziraat Mobile
iOS and Android app
Ziraat Tablet
«Ziraat Onay» iOS POS Platform Robotic Automation
Security app providing Android Processes
approval to access Bankkart
internet banking «E – Devlet» • Website ChatBot
through Ziraat Integration • Mobile
Mobile • POS Website Web Based New
Product Banking Software
applications Corporate Website
through Digital Ecosystem
channels Ziraat Assistant Integration
Money withdrawal by Data Analytics
using QR code Excellence Center
7– Unique Service Delivery
• Special emphasis on digital channels during pandemic
Full scale digital mobilization to ensure operational continuity • Facilitating measures to promote non-branch transactions
during the Covid-19 outbreak • Increased transaction limits for ATM and digital channels
• Mutual use of ATMs among public banks for cost efficiency
92% of
2016 June 2020 banking transactions through
non-branch channels
Market Ranking Market Ranking
Share Share
Turnover 25.2% 1 29.2% 1 Banking Transaction
Credit Debit
15 Digital Banking Channel Distribution Internet Banking
Ownership 21.3% 1 21.4% 1 Customers: (%) Customers:
Turnover7 3.4% 8 6.0% 8 12.8 mn 21.6 mn
Ownership 6.9% 6 10.9% 4
9
Mid to Long Term Strategy
42
Low Credit Card NPL: 34
Gradual customer acquisition
2.6% vs 5.3% sector avg. and credit cartdmarket share
gain 8 5
Other Automatic Pay. Mobile Internet Branch ATM
Increase in market share of credit card 30% improvement Largest ATM network:
balance: in transaction 7,257 ATMs
From 3.3% in 2016 to 6.2% in June 2020 costs since 2016 13.7% market share
8Ziraat Bank – Financial Snapshot
June 2020 TL mn USD mn
Total Assets 796,569 117,384
June 2020
Loans(4) 544,914 80,300
Securities 169,955 25,045 ROAA(1) 1.1
Deposits 564,333 83,161 ROAE(1) 10.8
Funds Borrowed 32,843 4,840 Cost / Income Ratio(2) 33.0
Interbank Money Market 52,889 7,794 NIM (cum.) (3) 6.1
Shareholder`s Equity 85,686 12,627 Loans(4)(5)/Deposits 95.5
Loans/Assets 68.4
Securities/Assets 21.3
June 2020 TL mn USD mn NPL 2.3
Interest Income 16,182 2,385
Stage III Coverage(5) 72.9
Interest Expense 6,538 963
CAR 18.5
Net Interest Income 9,644 1,421
# of
Net Fees&Commissions 345 51
Branches(6) 1,758
OPEX(7) 3,429 505
Employees 24,480
Net Operating Profit 3,514 518
ATMs 7,257
Net Profit 2,638 389
(1) Average total assets and average shareholders’ equity represent weekly averages (4) Performing Loans (7) Including HR expenses
(2) İncludes dividend income (5) Intermediated loans of public funds are excluded 9
(3) Average interest earning assets represent weekly averages. (6) Including foreign branchesZiraat Bank – Assets/Liabilities
ASSETS LIABILITIES
TL bn
797 8.8% 21.3% 68.4% Q2 20 70.8% 12.6%10.8% 797
Q 5.1%
695 5.9% 21.3% 67.3% Q1 20 70.5% 14.0%9.7% 695
6.0%
650 21.2% 67.1% 2019 68.8% 14.9%10.8% 650
8.6%
10.7%
537 17.8% 68.9% 2018 61.6% 22.0% 537
10.2% 12.1%
434 16.2% 68.7% 2017* 61.3% 24.1% 434
Loans (1) Securities
Deposits Non Deposit Funds Equity Other
Reserve Req. & Liquid Assets Other Assets
Asset Growth : 14.5% (QoQ), 22.6% (Ytd)
Loan Growth : 16.5% (QoQ), 25.2% (Ytd)
Deposit Growth : 15.2% (QoQ), 26.2% (Ytd)
(1) Performing loans only
* All 2017 figures in the presentation are calculated over 01.01.2018 numbers for comparison purposes 10Ziraat Bank – Lending
Breakdown of Cash Loans
Total Loans(1) (TL bn,)
SME 5%
545 Other; 7%
Tourism 3% Agriculture
Corporate Retail
Energy
23%
21%
19%
7%
9% 28%
Corporate 95%
Construction 35%
8%
8%
77% Corporate 21% 7%
Finance 22%
19%
Retail 34%
9%
Manufacturing
9%
Service 15%
18% 37%
SME 45% SME
TL FX Trade
• Of business loans, • Accruals, intermediated loans of public funds
• Figures do not include loans extended through and foreign branch lending are excluded
foreign branches
Agricultural Loans (TL bn) Project Finance Loans Breakdown of Retail Loans(2) (TL bn.)
USD 9.1 bn cash 152
74.3
TL 8% USD 0.4 bn non-cash 6%
59% EUR 28% 19% 24% 51%
Market Share Housing Loans
Market Share
13% 33%
Only bank to extend
government subsidized
USD
agro loans 64% 43%
45%
Q2 20 Energy Infrastructure Q2 20
Telecom Other GPL Housing Credit Card and Other
(1) Performing Loans
(2) Accruals are excluded 11Ziraat Bank – Funding
Total Deposits (TL bn,) Breakdown of Deposits
564
68% 55% 55%
10%
22%
90%
45%
23%
32%
Other Deposits TL FX
Retail SME Corporate
Public Deposits
Q2 20
Demand Time
Non-Deposit Funds (TL bn.) Loan to Deposit(1) (%)
100,5
100
15% 95,5
33% USD 9.6 bn
Total External Funding
Making up 65% of Total
Non-Deposit Funds
52%
Q2 20 Q2 20
Money Markets Funds borrowed Bonds issued Ziraat Sector (2)
(1) Performing Loans/Total Deposit
Intermediated loans of public funds are excluded 12
(2) Deposit banksZiraat Bank – Asset Quality
NPL (%) Cost of Risk (1) (%)
4,4 NPL Segment Distribution
Corporate 2.4%
2,3
SME 3.5%
Retail 0.8%
1.5
Q2 20
Sector Ziraat
Loan Classification (TL bn)
13,0 Stage III Stage II Loans/Total Loans 6.6%
Stage III Coverage 72.9%
69.2%
Restructured Loans (3)/Total Loans 8.7%
35,8
Stage II Total Coverage 131.6%
Cash Coverage(2) 153.9%
69.2%
TL 2.840 million Free Provisions serve as a buffer
496,1 Stage I
Q2 20
(1) CoR: Expected Credit Loss-Reversals /Average Loan Amount
(2) Excluding intermediated loans for public funds
(3) Includes payment holidays during the COVID 19 outbreak. 13Ziraat – Profitability & Capitalization
Net Profit (TL mn) Capital Ratios (%) Cost/Income Ratio(1) (%)
18,5
2,638
CAR
Tier-1 17,5
CET-1
1,714
15,6
33,0%
BRSA Target 12.0%
Regulatory
Minimum 8.0%
Q2 19 Q2 20 Q2 20
OPEX(2) (TL mn) Net Fees&Commissions (TL mn)
-23 791
+81 Payment
Systems
Personnel Other 7%
Other
Expenses 19%
1,930 38%
24%
1,469 Non
IT&Comms. 4% 345 37% Cash
Loans
1,499 Rental;1% 26%
893 13% Insurance
Promotions 10% 7% 4% 11%
Depreciation
Q2 19 Q2 20
Tax Money
SDIF Transfer
HR OPEX
Premium
Q2 19 Q2 20
(1) Includes dividend income
(2) OPEX breakdown as for H1 2020
14APPENDIX
15– Balance Sheet Summary
IFRS9
TL mn 2017 2018 2019 Q1 20 Q2 20 % Change QoQ % Change Ytd
CASH AND CASH
48,571 46,238 57,389 41,829 46,692 11.6% -18.6%
EQUIVALENTS
SECURITIES 70,628 95,374 130,335 148,115 169,955 14.7% 30.4%
LOANS 298,033 371,871 435,917 467,930 557,913 16.0% 24.5%
-Gross NPL 4,774 7,460 12,690 12,939 12,999 0.5% 2.4%
-Expected Credit Loss (-) 4,211 8,385 13,011 14,009 16,777 19.8% 28.9%
OTHERS 17,364 23,673 26,435 23,555 22,009 -10.6% -16.7%
TOTAL ASSETS 434,596 537,156 649,756 695,438 796,569 14.5% 22.6%
DEPOSITS 266,384 331,066 447,251 490,053 564,333 15.2% 26.2%
FUNDS BORROWED 29,065 34,172 34,528 33,282 32,843 -1.3% -4.9%
INTERBANK MONEY
56,258 68,351 49,275 49,683 52,889 6.5% 7.3%
MARKET
PROVISIONS 3,283 2,832 3,819 4,998 5,829 16.6% 52.6%
SHAREHOLDERS’ 52,531 57,401 70,065 67,597 85,686 26.8% 22.3%
EQUITY
27,075 43,334 44,818 49,825 27,989 -43.8% -37.5%
OTHERS
16– Income Statement Summary
TL mn 2017 2018 2019 Q2 19 Q1 20 Q2 20 % Chg. QoQ % Chg. YoY
INTEREST INCOME 35,463 53,054 65,602 17,181 16,051 16,182 0,8% -5,8%
-From Loans 28,357 41,028 52,764 13,459 12,543 12,497 -0,4% -7,1%
-From Securities 6,193 10,977 11,966 3,434 3,555 3,624 1,9% 5,5%
INTEREST EXPENSE 18,561 31,138 40,290 11,124 7,169 6,538 -8,8% -41,2%
-On Deposits 12,249 19,675 27,989 7,651 5,005 4,682 -6,5% -38,8%
NET INTEREST INCOME 16,902 21,916 25,312 6,057 8,882 9,644 8,6% 59,2%
NET FEES & COMMISSIONS 2,217 2,638 3,590 791 859 345 -59,8% -56,4%
OTHER OPERATING INCOME 1,378 1,434 1,614 379 722 854 18,3% 125,3%
OPEX(1) 6,490 7,691 9,797 2,362 1,151 3,429 13,2% 45,2%
NET OPERATING PROFIT 10,287 10,034 7,648 1,949 3,945 3,514 -10,9% 80,3%
NET PROFIT 7,940 7,961 6,187 1,714 1,871 2,638 41,0% 53,9%
Source: Unconsolidated Financial Statements
(1) OPEX includes personnel expenses and other provision expenses 17– Key Financial Ratios
(%) 2017 2018 2019 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20
ROAA(1) 2.0 1.6 1.1 0.8 0.8 1.1 1.1 1.1
ROAE(2) 18.4 15.2 10.1 8.1 8.1 10.1 10.5 10.8
Cost / Income Ratio(3) 32.5 34.3 40.8 47.6 47.0 40.8 36.5 33.0
NIM (cum.) (4) 4.8 5.0 5.0 4.5 4.4 5.0 6.4 6.1
Loans(5)(6)/Deposits 109.7 110.6 96.0 103.5 103.2 96.0 94.3 95.5
Loans/Assets 68.7 68.9 67.1 67.5 68.3 67.1 67.3 68.4
Securities/Assets 16.3 17.8 20.1 19.1 19.7 20.1 21.3 21.3
NPL 1.6 2.0 2.8 2.1 2.3 2.8 2.7 2.3
Stage III Coverage(6) 100 73.9 66.4 71.9 69.2 66.4 69.7 72.9
CoR 0.7 1.2 1.3 - - - - -
CAR 15.2 14.8 17.0 16 16.9 17.0 16.4 18.5
Leverage (7) 8.2 8.4 8.3 9.1 8.5 8.3 9.3 8.3
# of
Branches(8) 1,781 1,773 1,758 1,764 1,737 1,758 1,757 1,758
Employees 24,554 24,647 24,563 24,533 24,380 24,563 24,642 24,480
ATMs 7,085 7,155 7,239 7,206 7,230 7,239 7,253 7,257
(1) Average total assets represent monthly averages until 2017 and weekly averages since Q1 18 (5) Performing Loans
(2) Average shareholders’ equity represent monthly averages until 2017 and weekly averages since Q1 18 (6) Intermediated loans of public funds are excluded
(3)
(4)
İncludes dividend income
Average interest earning assets represent weekly averages.
(7)
(8)
Leverage = (Assets/Shareholders’ Equity)-1
Including foreign branches
18– Non-Deposit Funding
April 2020; USD 415 mn & EUR 597 mn; LIBOR+ 225 & EURIBOR+ 200
Syndication bps p.a.;367 days of maturity,
• IBRD loans; 2010&2013; USD 200 mn, USD 67 mn and USD 300 mn
• EIB loans; 2012-2017; 7 loans; each EUR 100 mn and IPARD EUR 100 mn
IFIs • KfW loan; 2014; EUR 150 mn
• AFD loan; 2014; EUR 100 mn
• CEB loan; 2014; EUR 100 mn
• USD 1.6 bn Eurobonds outstanding
• April 2016; USD 500 mn RegS/144A; 4.75% coupon rate; 5y
• April 2017; USD 600 mn RegS/144A; 5.125% coupon rate; 5y
FC Bonds/Bills • September 2017; USD 500 mn RegS/144A; 5.125% coupon rate; 6y
• USD 45.7 mn outstanding private placements under GMTN Programme
• April 2019; EUR 1.4 bn AT-1 issuance under GMTN Programme
• TRY 750 mn, due August 2020, TLREF* + spread
• TRY 1086 mn, due August 2020, TLREF + spread
TL Bonds/Bills • TRY 718 mn, due September 2020, TLREF + spread
• Dec. 18; Inaugural TRY 1 bn Covered Bond in local markets
*Turkish Lira Overnight Reference Rate
19– Corporate Social Responsibility
Ziraat Bank conducts enduring social responsibility projects whose aims are to protect cultural values, to contribute to the communal heritage,
and to uphold traditions and customs.
Ziraat Bank Banking Museum Ziraat Bank the Turkish Cup name sponsor The Ziraat Bank Art Collection
Established in 1981. Turkey’s first museum Both in keeping with its efforts to support sports in The Ziraat Bank art collection consists of
devoted to banking. Occupying the ceremonial general and in recognition of their contributions more than 2,500 works, the majority of
hall of the Bank’s original headquarters building both to social wellbeing and the Bank’s public face, which are oil paintings but which
in Ankara, the museum provides a look at the Ziraat Bank served as the Turkish Cup name also include watercolors, gouaches,
Bank’s 157-year history. sponsor. pastels, prints, ceramics, and sculptures.
Ziraat Bank Sports Club
Ziraat Bank Young Farmers Academy Ziraat Bank has been supporting volleyball through
the Ziraat Bank Sports Club. The club has
Launched in 2018. To increase interest in launched a campaign to make the sport appealing
agriculture among youth, teach agricultural to children all over the country. Ziraat Bank has
production and investment, train educated set its eye on the goal of nurturing volleyball
and conscious young farmers, give young players who are talented enough to wear the
people an entrepreneurial awareness in national colors through its “Ten National Athletes
the field of agriculture in Ten Provinces” project.
20For further information please contact
Investor Relations Department
Eski Büyükdere Cad. No: 39 B Blok, 6. Kat
Maslak-İstanbul/Turkey
Phone: (+90) 212 363 11 01
E-mail: investorrelations@ziraatbank.com.tr
www.ziraatbank.com.tr
DISCLAIMER
The information contained in this presentation has been prepared by T.C. Ziraat Bankası A.S. for informational purposes only.
Although the information in this presentation has been obtained from sources which we believe to be reliable, we cannot guara
ntee that the information is without fault or entirely accurate. The information contained in this presentation has not been indep
endently verified. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fair
ness, accuracy, completeness or correctness of the information or opinions contained herein. The information and opinions in t
his presentation are provided as at the date of this presentation and are subject to change without notice. T.C. Ziraat Bankası
A.S. does not accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this p
resentation or otherwise arising in connection with this presentation. This presentation cannot be interpreted as an advice to a
nyone and is also strictly confidential and may not be reproduced, distributed or published for any purpose.You can also read
