garanti bank investor presentation januarynot a2014
TRANSCRIPT
![Page 1: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/1.jpg)
Garanti Bank Investor Presentation January 2014
NOT A COINCIDENCE
![Page 2: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/2.jpg)
ROAE
17.7% BASEL II CAR
~15%
12.4 MILLION *
CUSTOMERS
2
WE ARE ADDING VALUE TO THE ECONOMY AND SOCIETY
2nd LARGEST PRIVATE BANK
by assets of
US $ 106 BN
Note: Figures are based on BRSA consolidated financials as of September 30, 2013 *As of January 22, 2014 **Banking revenues defined as; Net interest income adjusted with provisions and net trading gains/losses+Net Fees & Commissions
Focused on Relationship Banking with Broad Geographical Coverage & Omni-Channel Distribution Network > 1,000 branches*
> Leading internet and mobile banking > Largest financial call center > ~4,000 ATMs *
> Targeted investments to digital platforms
Robust Balance Sheet > Highly liquid > Well-capitalized (Basel II CAR: ~15%) > Low risk (NPL Ratio: 2.4%)
#1 IN BANKING REVENUES**
~50% Free Float > Jointly controlled by Dogus (24.23%) & BBVA (25.01%) > ~94% foreign ownership in the free float
![Page 3: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/3.jpg)
3
EMPOWERING
SUSTAINABLE
RESPONSIBLE
READY FOR FUTURE
![Page 4: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/4.jpg)
RESPONSIBLE TOWARDS SOCIETY
![Page 5: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/5.jpg)
ECOSYSTEM AWARENESS
Operating in a Large and Dynamic Economy
5
90
110
130
150
170
190
210
230
2002 2006 2010 2014 2018
EU27 LATAM CEEMEA TURKEY
Rea
l GD
P G
row
th (
Reb
ased
)
High and Sustainable Real GDP Growth
2003-9M13 CAGR: 18%
Avg. GDP growth *
>5% over 2002-2012 LATAM: 3.6%
EU 27: ~1.3% CEEMEA: ~4%
*Source: IMF. CEEMEA countries include Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, South Africa. LATAM Countries include Argentina, Brazil, Colombia, Ecuador, El Salvador, Mexico, Paraguay, Peru **Source: EBF Banking Sector Statistics Database 2012, ranking per total assets as of 2011 ***BRSA Monthly data for commercial banks as of September 2013. US$/TL:1.995
RESPONSIBLE
vs.
$ 748bn***
![Page 6: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/6.jpg)
6
Total Population by Age*
no growth in EU and negative growth in CEEMEA
Population to reach
*Source: Eurostat, as of 2010 **Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision
28%
27%
27%
29%
29%
43%
55%
58%
56%
58%
56%
50%
17%
16%
17%
14%
15%
7%
EU27
CzechRepublic
Hungary
Poland
Romania
Turkey
0-25 yrs 25-65 yrs 65+ yrs
74mn
21mn
38mn
10mn
10mn
500mn
ECOSYSTEM AWARENESS
Turkey with Young and Growing Population
vs.
59% under 35
RESPONSIBLE
![Page 7: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/7.jpg)
ECOSYSTEM AWARENESS
Underpenetrated Market with Strong Growth Potential
RESPONSIBLE
Attractive Demographics
Underpenetrated Market
7
58% 39%
13%
98%
56% 59%
329%
115% 113%
Bank Assets / GDP Customer Deposits / GDP Loans / GDP
Turkey - 2002 Turkey - 3Q13 Euro Area - 3Q13
Source: ECB, TUIK, BRSA for commercial banks
![Page 8: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/8.jpg)
75.8
115.3
60
100
140
Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13
8
Deposits fund 57% of assets*
Comfortable level of Loans/Deposits at 105%*
* BRSA monthly data for commercial banks, as of September 2013 ** CBRT Financial Stability Report, May 2013. Liquidity Ratios are as of April 2013.
ECOSYSTEM AWARENESS
Highly Liquid Banking Sector
Deposit-heavy funding structure
Comfortable liquidity
levels
Liquidity Adequacy Ratios** well-above required levels Total Liquidity Ratio – Weekly: 166%; Monthly: 120% FC Liquidity Ratio – Weekly: 167%; Monthly: 121%
Banking Sector External Debt Roll-over Ratio**
Continuous access to
international funding sources
RESPONSIBLE
![Page 9: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/9.jpg)
9 * Source: Latest data from the IMF-FSI database based on 2Q13 figures ** BRSA monthly data as of September 2013, commercial banks only
ECOSYSTEM AWARENESS
Well-Capitalized and Underleveraged
> Basel II CAR**: 15.1% (9M13)
> High ROAEs ** : ~15%
despite the low leverage
(9M13)
RESPONSIBLE
7.6x 7.6x 9.6x
11.8x
Turkey Russia Brazil South Africa
Leverage*
(2Q13)
14.0% 13.5%
12.3% 11.0%
Turkey South Africa Brazil Russia
Tier-I Ratio*
(2Q13)
![Page 10: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/10.jpg)
ECOSYSTEM AWARENESS
Standing out for Its Asset Quality
10
Non-performing loans/Total gross loans*
* Source: Latest data from the IMF-FSI database, most of which are based on 2Q13 figures ** Source: Latest data from the IMF-FSI database. Represents country averages most of which are based on 2Q13 figures Note: NPL and Coverage Ratios are based on BRSA weekly data for commercial banks, as of September 27, 2013
NPL ratio**
> No exposure to any toxic assets or problematic sovereign assets > Established & prudent underwriting procedures
RESPONSIBLE
EU 27 10.1%
CEEMEA 10.4%
LATAM 2.80%
TURKEY 2.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2006 2007 2008 2009 2010 2011 2012 1H13
0
5
10
1520
25
30
Turk
ey
Au
stri
a
Ne
the
rlan
ds
Bra
zil
UK
Bel
giu
m
Sou
th A
fric
a
Cze
ch R
ep.
Po
lan
d
Ru
ssia
Spai
n
Po
rtu
gal
Ital
y
Ukr
ain
e
Bu
lgar
ia
Slo
ven
ia
Hu
nga
ry
Ro
man
ia
Irel
and
Gre
ece
![Page 11: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/11.jpg)
11
ECOSYSTEM AWARENESS
Strictly Monitored and Prudently Regulated Environment
Main pillars of regulatory environment
> Strictly regulated & supervised by risk Based & autonomous agency (BRSA) since 2000
> Independent Central Bank > policies targeting both financial and price stability
> Deposit Insurance scheme (SDIF)
> Separate authority to regulate listed companies (CMB)
> Authorities highly experienced in crisis management
Prudent regulatory actions
> Conservative provisioning policies
> Basel II implementation started in July 2012, Basel III implementation will start in January 2014
> Buffers for possible downturns
> Higher provisioning and capital requirement for unsecured consumer loans > Supportive regulatory actions on credit card asset quality > Active utilization of Reserve Requirement Ratio (RRR) and Reserve Option Coefficent (ROC) to manage liquidity
RESPONSIBLE
![Page 12: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/12.jpg)
12
Savings / GDP (2007-2011 Average)
Source: IMF, World Economic Outlook Database, April 2013
ECOSYSTEM AWARENESS
How Authorities Address the Savings Challenge
> Incentives through private pensions Encourage more participants through direct government contributions
> Proliferation of gold deposits with effective use of RR tools Gold under-the -mattress will be revealed
> New severance scheme Severance payments will accumulate in a pooled fund, thus act like mandatory savings by government
> Withholding tax on deposits Lower rate for longer term deposits to encourage long term savings
RESPONSIBLE
22.9%
19.9% 21.1%
14.3%
CEEMEA EU27 LATAM Turkey
![Page 13: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/13.jpg)
13
ECOSYSTEM AWARENESS
How We Address Challenges for Financial Health
RESPONSIBLE
Savings Test
Accumulating Gold Account
Spend & Save Account
Savings Account
for Future
Pension Funds
![Page 14: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/14.jpg)
Mortgage
14
SHARING EXPERTISE FOR COMMON GOOD
Anatolian Meetings
Entrepreneur’s Handbook
Find Incentive
26,000 SME representatives, 87 meetings, 63 provinces
~ 8,500 applications
> 1st call center for mortgage > Team of 82 mortgage experts Women
Entrepreneur Executive
School
Women Entrepreneurs
Meetings
RESPONSIBLE
with 5,000 women
![Page 15: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/15.jpg)
15
ACTIVE LISTENING & DEVELOPING ACCORDINGLY
RESPONSIBLE
Social Platforms
Customer Centricity
Index
Market Research
Investor Perception
Study
Employee Idea Platforms
To Sustain
High Quality & Corporate
Governance
![Page 16: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/16.jpg)
16
79 cities ~3,500 schools ~84,500 teachers
More than 44,000 students since 2002 at ~70 centers
CREATING VALUE FOR SOCIETY THROUGH SOCIAL RESPONSIBILITY PROJECTS
12 GIANT MEN
Basketball Schools
A key cultural Institution for contemporary art in Turkey
More than 16 years of continuous support
RESPONSIBLE
![Page 17: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/17.jpg)
EMPOWERING IN ALL POSSIBLE DIMENSIONS
![Page 18: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/18.jpg)
18
SINGLE POINT OF CONTACT FOR ALL FINANCIAL NEEDS
EMPOWERING
Commercial
Payment Systems
Digital Banking
SME
Corporate
Consumer
![Page 19: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/19.jpg)
EMPOWERING
19
OMNI-CHANNEL CONVENIENCE
Save Time for Customers Along with the Freedom It Offers
Internet Banking
Mobile Banking
Social Media
Call Center
ATMs
Omni Channel Strategy Providing seemless experience across
all channels
~2.6mn active users
~190 mn transactions/year
26% market share in financial transactions volume
• >180 type of transactions
• Serving non-bank customers
through cardless transactions
• Cash deposits/withdrawals: 101%
• >4 mn calls/month • Centralized branch calls
• Special offerings a first-of-its-kind application in Europe
• Money transfer
• Consumer loan application via secure full form
#1 in mobile banking >790k mobile banking users 36% market share in financial transactions volume
A new banking experience targeting socially active & connected customers
• Digital Wallet – credit, debit, identity and loyalty cards under one roof
• Location based offers based on check-ins from foursquare
• First in Europe: speech recognition, speech command
Reached 150K downloads and is now on Android
![Page 20: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/20.jpg)
20
CULTURE OF PARTICIPATION & SHARING IN DECISION MAKING
Management Information
at all levels for performance monitoring
> Bank level
> Business line level
> Region level
> Branch level
> Sales person level
> Customer level
A single source of data & common understanding
> Single data dictionary
> Standardized management reports
> Consolidated data into MR platform
Platform for management and legal reporting
> Transparency
> Accountability
> Governance
EMPOWERING
Performance Management
Successful Decision Making
![Page 21: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/21.jpg)
SUSTAINABLE FOR A BETTER LIFE
![Page 22: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/22.jpg)
22
CARING FOR ENVIRONMENT Manage the Impact
EMPOWERING
Performance Management
> Applies Environmental and Social Loan Policies
to every loan without any monetary limit
> Applies Environmental and Social Impact Assessment System
to loans with an investment amount more than $20 million
> Environmental Policy and Environmental Management System
certified to ISO14001
![Page 23: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/23.jpg)
23
EMPOWERING
Performance Management First Turkish bank to receive A level rating from GRI
with its Sustainability Report – 2013
Received “2012 Turkey - Carbon Performance Leadership” award
Joined United Nations Environment Programme – Finance Initiative
(UNEP-FI) in 2011
Signed up to UN Global Compact and became the first Turkish Bank
to join TBCSD* in 2012
CARING FOR ENVIRONMENT Being Transparent and Innovative
* Turkish Business Council for Sustainable Development
![Page 24: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/24.jpg)
24
INNOVATIVE BUSINESS MODEL
SUSTAINABLE
Process Technology
People
![Page 25: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/25.jpg)
Training hours per employee: 55hrs per annum
25
THE MOST VALUABLE ASSET: HUMAN CAPITAL
SUSTAINABLE
I International
quality standards
Performance Based
Incentive
> First Turkish company to receive the Investors in People (IIP) achievement certificate in 2005. > The first and only Gold IIP
certificate in Turkey in 2012
Measured by customer satisfaction, service quality, efficiency and profitability
vs.
Investing in people
Fortune 500 corporations
avg. of 35hrs
![Page 26: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/26.jpg)
26
PIONEER WITH ITS TECHNOLOGY SUPPORTED OFFERINGS
SUSTAINABLE
IT Vision Investing in Technology
Full In-House Development
Custom-Fit Solutions
Driver (Integral Part of Management)
![Page 27: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/27.jpg)
52 New Products in 9M13
27
SUSTAINABLE
PIONEER WITH ITS TECHNOLOGY SUPPORTED OFFERINGS
5-Minute Loan
FAST INNOVATIVE
A Total of 557 Products
Introducing Many Firsts
> 1st private bank to launch SME support package (1996)
> Started to offer «firsts» in cash management solutions (1997)
> 1st chip-based installment credit card loyalty program in Turkey - Bonus Card (2000)
> Turkey’s 1st cardless transactions via ATMs (2005)
> Cep-T paracard: Turkey’s 1st prepaid card
enabling SIM based secure service (2011)
> World’s 1st banking application for Windows 8 (2012)
> iGaranti: First-of-its-kind financial service leading the future of banking business and the revolution of conventional banking approach. (2013)
![Page 28: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/28.jpg)
28
SUSTAINABLE
PIONEER WITH ITS TECHNOLOGY SUPPORTED OFFERINGS
> 1st bank in Turkey to create “paperless banking” operating environment and 1st bank in the world with ID scanning facilities in branches (2006). > Digital Banking: 81% of the transactions are carried out via digital channels.
Advanced CRM > Segmentation: Propensity Modelling > Personalized Product Offers
![Page 29: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/29.jpg)
29
LESS IS MORE
SUSTAINABLE
> 1st Bank to set up centralized operations in Turkey > 99% Operational Centralization Ratio
> Electronic Data Warehousing > Highest per branch efficiencies in terms of assets, customer deposits, loans and ordinary banking income
Smarter Touch-Points for All
![Page 30: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/30.jpg)
30
MANAGING WHAT WE MEASURE
SUSTAINABLE
WE KNOW...
What to Measure
Why to Measure
How to Measure
Risk-Return Balance
Customer Satisfaction
Key Performance Indicators
![Page 31: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/31.jpg)
SUSTAINABLE
OUR JOURNEY TO SUCCESS
Asset (TL bn)
Performing Loans (TL bn)
Customer Deposits (TL bn)
Shareholders` Equity (TL bn)
Net Profit (TL mn)
Market Share
Rank*
Market Share
Rank*
Market Share
Rank *
2000 9M13 Growth CAGR
6.6%
#4
12.7%
#2
+6.1pps
8.5%
#5
12.7%
#2
+4.2pps
5.0%
#5
12.3%
#2
+7.3pps
6.6 189.8 29x 30%
2.5 112.5 45x 35%
3.4 103.9 34%
0.6 22.1 36x 32%
205 3,080** 15x** 25%**
COMFORTABLE LIQUIDITY
SOUND SOLVENCY LOW RISK
#1 IN MORTGAGES
HIGHEST DEMAND / TOTAL
DEPOSIT RATIO 20%
ROAE 2006 – 9M13 Avg.
> 20%
40x
Note: Figures are based on BRSA Bank-only financials for fair comparison * Ranks are among private banks. ** 2012 Bank only Net Income used in calculation for fair comparison.
![Page 32: Garanti Bank Investor Presentation JanuaryNOT A2014](https://reader036.vdocuments.us/reader036/viewer/2022062918/62ba6d4bd0e2676df06a201a/html5/thumbnails/32.jpg)
READY FOR FUTURE