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Investor Presentation
August 2021
Ziraat Bank – More Than a Bank
158 Years of
Banking Legacy
More Than 38 mn.
Customers
Strong Local and
International
Franchise
Fully State Owned
Well Diversified
Funding Base
Sustainable Growth
Customer Oriented
Balance Sheet
Sound Capital
Structure
Prudent Risk
Management
1
Total Assets Cash Loans Non-CashLoans
Deposits Equity
Ziraat Bank – Undisputed Leader of Turkish Banking Sector
Turkish Economy Total Assets 6,730
Cash Loans(1) 4,087
Securities 1,138
Total Deposits(1) 4,039
Shareholders’ equity 631
Net Profit 34
ROAE 11.3%
ROAA 1.1%
Capital Adequacy Ratio 17.8%
Q2 21
2012
#1
Rankings(2)
(1) Loans include accruals and the loans granted to banks, Deposits
include accruals, and the banks’ deposits, securities include accruals.(2) Rankings are among top 7 Banks. The banks are determined as of unconsolidated assets for June
2021 and include: Ziraat Bank, İş Bank, Garanti Bank, Akbank, Yapı Kredi, Halkbank and Vakıfbank
Source: BRSA, Publicly available Earnings Reports for peer banks
Turkish Banking Sector (June 21)
2
2019 2020
GDP Growth (%) 0.9 1.8
GDP Nominal (USD bn) 761 717
Unemployment (Annual %) 13.7 13.2
CPI (Annual,%) 11.8 14.6
Current Acc. Balance/GDP (%) 0.9 (5.2)
Budget Balance /GDP (%) (2.9) (3.4)
Germany
Subsidiaries
International Branches
Bosnia & Herzegovina
KazakhstanRussia
Azerbaijan
Turkmenistan
Uzbekistan
Montenegro
UK
Georgia
Bulgaria
Saudi Arabia
Turkish Rep. of
Northern CyprusIraq
Kosovo
Greece
Bahrain
Ziraat Bank – Ziraat Finance Group
Local Subsidiaries
Ziraat Katılım Bankası (Participation Banking)
Ziraat Yatırım (Securities Brokerage & Investment House)
Ziraat Portföy (Asset Management)
Ziraat GYO (Real Estate Investment Trust)
Ziraat Teknoloji (IT)
Ziraat GSYO (Venture Capital Investment Trust)
Overseas Subsidiaries
Ziraat Bank Int. AG (Germany)
Ziraat Bank BH. (Bosnia)
Ziraat Bank Montenegro
Ziraat Bank Azerbaycan
Ziraat Bank Moscow
KZI Bank (Kazakhstan)
Turkmen Turk JSC Bank
UT Bank (Uzbekistan)
Ziraat Bank Georgia
Overseas Branches
United Kingdom
Greece
Bulgaria
Iraq
Saudi Arabia
Kosovo
Bahrain
Turkish Republic of Northern Cyprus
Presence in
17 countries,
114 service points
3
Ziraat Bank – Local Subsidiaries
ParticipationBanking
Startedoperations in
2015
TL 67 bn of asset size
TL 43 bn of loan book
110 branches
SecuritiesBrokerage
Started
operations in
1997
Bonds / bills sector share -
rank:
9% - #3
Repo / reverserepo sector share
- rank:
24% - #1
AssetManagement
The market leader, total
volume of assets managed with a market share of
18%.
Serving 23 investment funds,
9 exchangetraded funds, 75
pension funds, 36 legal entity, 106
individualportfolios
.
IT
Established in
2001. 2nd largest
domestic
software
developer in
Turkey. Provides
full scale IT
solutions to Ziraat
Bank and its
domestic/foreign
partnerships.
Real EstateInvestment
Trust*
Founded in November 2016. Istanbul Finance Center premisesin the portfolio.Total portfolio
amount of TL 5 bn.
Finalized it’s IPO with 25% offering
in May 2021.
Venture CapitalInvestment
Trust
Founded in November 2018 with TL 750 mncapital with the
aim of investing inenterprises with
high growthpotential.
Asset size sectorshare - rank:
12% - #2
GSYO
* The 1,173 million TL shares representing 25% of Ziraat GYO (REIT)‘s equity was offered to public on 28-30 April 2021 and started to be traded on Borsa Istanbul A.Ş.
as of 6 May 2021.
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.
4
Description The Bank’s Risk Group Share (%)Total Assets
(TL mn)
Shareholders’ Equity
(TL mn)
Ziraat Katılım Bankası A.Ş. 100 67,373 3,894
Ziraat GYO* 81.1 7,159 7,040
Ziraat GSYO 100 1,007 1,005
Ziraat Yatırım Menkul Değerler A.Ş. 99.6 781 535
Ziraat Portföy Yönetimi A.Ş. 99.8 172 157
Ziraat Teknoloji A.Ş. 100 91 18
Ziraat Bank – Overseas Subsidiaries
Active in Germany for fifty-
seven years,supplies an
extensive array of retail and
corporate banking products and
services throughseven branches.
Startedoperations in
1997. The first entirely foreign-owned bank in
Bosnia-Herzegovina.
Serves corporate,small-business,
and retailcustomers through 32
branches/offices.
Opened its doors for business in
2015.Headquartered in
Montenegro’s capital Podgorica,
the bank has three branches.
Commencedoperations in2015. Mainlyserves the
corporate banking segment, ZiraatBank AzerbaijanASC conducts its
operations through its
headquarters in Baku and 6 branches.
Commencedoperations in
1993, focusingprimarily on the
corporate banking segment.
The country’s first foreign-owned
financialinstitution in
1993. The bank serves retail and
corporate customersthrough 8 branches.
Founded in 1993. Headquartered in
Ashgabat, provides services
from 6 offices.
Founded as Uzbekistan`s first
foreign capitalbank in 1993. 5 branches in Tashkent (2), Yunusabad,
Semerkand andFergana.
Active in both retail and
commercial banking.
Established in 2017 by
transforming theforeign branchesin Georgia to a new subsidiary.
Operates through7 branches
located in Batumi, Marneuli, Tblisi,
Tsereteli, Varketili, Gldani
and Kutaisi.
Ziraat Bank
Int. AGZiraat Bank
BH. Ziraat Bank
Azerbaycan
Ziraat Bank
MoscowKZI Bank Turkmen Turk
JSC Bank
Ziraat Bank
Uzbekistan
JSC
Ziraat Bank
Georgia
Ziraat Bank
Montenegro
5
Description (City/ Country)The Bank’s Risk Group
Share (%)
Total Assets
(TL mn)
Shareholders’
Equity (TL mn)
Ziraat Bank International A.G. Frankfurt / GERMANY 100 16,140 2,782
Ziraat Bank BH d.d. Sarajevo / BOSNIA HERZEGOVINA 100 6,237 647
Kazakhstan Ziraat Int. Bank Almaty / KAZAKHSTAN 99.6 2,376 707
Ziraat Bank Azerbaycan ASC Baku/ AZERBAIJAN 100 1,780 380
Ziraat Bank Uzbekistan JSC Tashkent/ UZBEKISTAN 100 1,021 249
Ziraat Bank (Moscow) JSC Moscow / RUSSIA 99.9 912 437
Ziraat Bank Montenegro AD Podgorica / MONTENEGRO 100 723 174
Ziraat Bank Georgia Tbilisi/ GEORGIA 100 379 158
Ziraat Bank – Organizational Structure
• New CEO and two Board Members assigned at the General Assembly
in March 2021.
• New organizational design for operational excellence
Board
Internal Systems Group
CEO
Retail Banking EVP
Corporate Banking EVP
Banking Operations and Corporate Communication EVP
Credit Risk Monitoring and Liquidation EVP
Payment Systems and Loan Processes EVP
Credit Allocation and Management EVP
Treasury Management and International Banking Group
Human Resources Group
Interior Operations Group
6
New Corporate Internet Branch
Ziraat Mobile For Corporate
Clients
OmniChannel Experiance• Standardization of interface and
transaction flows
• Interaction between channels
Money withdrawal by using QR
code
Enhancing mobile transactions
Multiple language mobile branch
New Data Center
Ziraat Bank – Digital Journey
AI-Powered Customer
Analytics
AI-Supported Mobile
Assistant
Digital Ecosystem
Integration
Global Banking
Software
Global Data Center
Mobile branch
App for devices not
compatible with iOS
and Android
Flexible limits
Transaction limits
defined specifically
to a segment or a
customer
Ziraat Tablet
iOS
Android
«E – Devlet»
Integration
Product
applications
through
channels
POS Platform
Bankkart
• Website
• Mobile
• POS Website
Corporate Website
Ziraat Assistant
Money withdrawal by
using QR code
New Banking Software
New Mobile Branch
Internet and Mobile
Branch Assistant
Loan access through
Internet and Mobile
Branch
Robotic Processes
Automation
Web Based New
Banking Software
Cyber Security
Center
Payment Methods
with QR
7
– Efficiency
8
2018 2019 2020 Q1 21 Q2 21
9392
9089
8
49
57
31
Other Automatic Pay. Mobile Internet Branch ATM
Banking Transaction
Channel Distribution (%)
Non-Branch Channels Usage (%)
Increased transaction limits for ATM and non-branch channels
Mutual use of ATMs among public banks for cost efficiency.
Full scale digital mobilization to ensure operational continuity
during the Covid-19 outbreak and full lockdown.
Gradual customer acquisition and credit card market share
gain strategy.
Increase in market share of credit card turnover:
From 3.4% in 2016 to 10.1% in Q2 21.
Unique Service Delivery
Largest ATM
network:
7,257 ATMs
13.9% market share
Active Digital
Banking
Customers:
16 mn
22% improvement
in unit transaction
costs in 2020
Internet Banking
Customers:
26 mn
New service and product offering to digital customers.
93
AI-Powered Customer
Analytics
AI-Supported Mobile
Assistant
Digital Ecosystem
Integration
Global Banking
Software
Global Data Center
Digitalization Agenda
Key Ratios
ROAA(1) 0.4
ROAE(1) 3.7
Cost / Income Ratio(2) 52.4
NIM (cum.) (3) 3.4
Loans(4)(5)/Deposits 90.0
Loans/Assets 61.6
Securities/Assets 24.7
NPL 2.2
Stage III Coverage(5) 76.8
CAR 16.6
# of
Branches(6) 1,752
Employees 24,489
ATMs 7,257
TL mn USD mn
Total Assets 1,035,727 120,123
Loans(4) 638,125 74,010
Securities 256,324 29,728
Deposits 702,590 81,486
Funds Borrowed 44,215 5,128
Interbank Money Market 122,840 14,247
Shareholder`s Equity 91,179 10,575
Ziraat Bank – Financial Snapshot- Q2 2021
Balance Sheet
P&L TL mn USD mn
Interest Income 23,328 2,706
Interest Expense 16,068 1,864
Net Interest Income 7,260 842
Net Fees&Commissions 1,173 136
OPEX(7) 3,521 408
Net Operating Profit 1,301 151
Net Profit 778 90
(1) Average total assets and average shareholders’ equity represent weekly averages
(2) İncludes dividend income
(3) Average interest earning assets represent weekly averages.
(4) Performing Loans (7) Including HR expenses
(5) Intermediated loans of public funds are excluded
(6) Including foreign branches
9
67.8%
17.9%
8.8%
5.5%
Deposits
Non Deposit
Funds
Shareholder’s
Equity
Others
1,036
61.6%
24.7%
10.0%
3.7%
Loans(1)
Securities
Reserve Req. &
Liquid Assets
1,036
Others
Ziraat Bank – Assets/Liabilities
ASSETS LIABILITIES
(TL bn)
(1) Performing Loans
Assets
15.4%Cash Loans
16.0%
Deposits
17.4%
Market Penetration
Asset : 3.8% (QoQ), 9.9% (YtD)
Loan : 3.9% (QoQ), 8.8% (YtD)
Deposit : 7.3% (QoQ), 11.5% (YtD)
10
Growth Rates
Q2 21
52%
35%
13%
EUR
USD
TL
Only bank to extend
government subsidized
agro loans
63%Market Share
37%
52%
10%
Q2 21
GPL Housing Credit Card and Other
24%
54%
21%
Energy Infrastructure Other
25%
37%
38%
Corporate
SME
Retail
74%
26%
TL FX
Ziraat Bank – Lending
Total Loans(1) (TL bn.)
11
19%
21%
8%
9%
15%
9%
Breakdown of Retail Loans(2) (TL bn.)
638
Breakdown of Cash Loans
Project Finance Loans
USD 7.6 bn cash
Agricultural Loans (TL bn.)
95 166USD 0.3 bn non-cash
(1) Performing Loans
(2) Accruals are excluded
• Of business loans,
• Figures do not include loans extended through
foreign branches
• Accruals, intermediated loans of public funds
and foreign branch lending are excluded
Housing Loans
Market Share
31%
SME 4%
Corporate 96%
Corporate 22%Retail 32%
SME 46%
Agriculture
Manufacturing
Trade
Service
Finance
Construction
Energy
Tourism 3%
Other
19%
21%
8%
8%
11%
16%
6%
8%
58%
22%
20%
Retail SME Corporate
90.0
94.2
Q2 21
Ziraat Sector
67%
33%
Q2 21
Time Demand
90%
10%
Other DepositsPublic Deposits
Ziraat Bank – Funding
48%52%
TL FX
Total Deposits (TL bn,)
703
12
Breakdown of Deposits
66%
24%
10%
Q2 21
Money Markets Funds borrowed Bonds issued
185
Non-Deposit Funds (TL bn.) Loan to Deposit(1) (%)
(1) Performing Loans/Total Deposit
Intermediated loans of public funds are excluded
(2) Deposit banks
(2)
USD 10.8 bnTotal External Funding
Making up 51% of Total
Non-Deposit Funds
589.7
48.4
14.3
Q2 21
3.7
2.2
Q2 21
Sector Ziraat
Ziraat Bank – Asset Quality
NPL (%)
13
Total Coverage(3)148.0%
Stage III Coverage 69.2%76.8%
Cost of Risk(2) (%)
(1) Includes loans excluded from segment classification,
intermediated loans from public funds and overseas branch lending
(2) CoR: Expected Credit Loss-Reversals /Average Loan Amount (Annualized figure)
(3) (S1 + S2 + S3 provisions)/ NPL
(4) Includes payment holidays during the COVID 19 outbreak.
Loan Classification (TL bn)
Stage III
Stage II
Stage I
NPL Ratios by Segment
Corporate 2.0%
SME 3.0%
Retail 1.2%
0.6
Restructured Loans(4)
in Total Loans: 8.0%Stage II Loans/Total Loans
7.6%
TL 3.5 bn
Total Free Provisions
(No additional free provision
in H1 2021)
47%
32%
12%
9%Other(1)
RetailCorporate
SME
Total NPL by Segment
2,638
778
Q2 20 Q2 21
Depreciation
PersonnelExpenses
IT&Comms.
TaxSDIF Premium
Promotions
Rental;1%
Other
16%1.499 1.297
1.930 2.224
Q2 20 Q2 21
HR OPEX
16.6
15.5
13.4
Q2 21
CARTier-1CET-1
Ziraat – Profitability & Capitalization
BRSA Target 12.0%
Regulatory
Minimum 8.0%
Net Fees&Commissions (TL mn)
14
Capital Ratios (%) Cost / Income Ratio(1) (%)Net Profit (TL mn)
345
1,173
Q2 20 Q2 21
Payment Systems
NonCash Loans
Money Transfer
Insurance
Other13%
25%
12%
21%
29%
(1) Includes dividend income
OPEX (TL mn)
52.4%
37%
11%4%
20%
7%
4%
APPENDIX
15
– Balance Sheet Summary
16
TL mn 2018 2019 2020 Q1 21 Q2 21% Change
QoQ
% Change
YtD
CASH AND CASH EQUIVALENTS 46,237 57,389 91,038 107,324 103,620 -3.5% 13.8%
SECURITIES 95,374 130,335 225,621 237,017 256,324 8.1% 13.6%
LOANS 379,331 447,983 600,660 627,557 652,413 4.0% 8.6%
-Gross NPL 7,460 12,690 13,895 13,539 14,288 5.5% 2.8%
-Expected Credit Loss (-) 8,386 13,011 18,757 19,360 20,627 6.5% 10.0%
OTHERS 23,673 26,435 29,816 25,958 23,369 -10.0% -21.6%
TOTAL ASSETS 537,156 649,756 942,601 997,856 1,035,727 3.8% 9.9%
DEPOSITS 331,066 447,251 629,874 654,822 702,590 7.3% 11.5%
FUNDS BORROWED 34,172 34,528 36,950 38,887 44,215 13.7% 19.7%
INTERBANK MONEY MARKETS 68,351 49,275 116,401 143,113 122,840 -14.2% 5.5%
PROVISIONS 2,832 3,819 7,059 7,251 7,264 0.2% 2.9%
OTHERS 43,334 44,818 59,039 67,316 67,639 0.5% 14.6%
TOTAL LIABILITIES 479,755 579,691 849,323 911,389 944,548 3.6% 11.2%
SHAREHOLDERS’ EQUITY 57,401 70,065 93,278 86,467 91,179 5.4% -2.3%
– Income Statement Summary
Source: Unconsolidated Financial Statements
(1) OPEX includes personnel expenses and other provision expenses17
TL mn 2018 2019 2020 Q2 20 Q1 21 Q2 21% Chg
QoQ
% Chg
YoY
INTEREST INCOME 53,054 65,602 69,476 16,182 20,329 23,328 14.8% 44.2%
-From Loans 41,028 52,764 52,330 12,497 15,420 16,937 9.8% 35.5%
-From Securities 10,977 11,966 16,696 3,624 4,615 5,993 29.9% 65.4%
INTEREST EXPENSE 31,138 40,290 34,862 6,538 13,940 16,068 15.3% 145.8%
-On Deposits 19,675 27,989 22,812 4,682 9,082 10,287 13.3% 119.7%
NET INTEREST INCOME 21,916 25,312 34,615 9,644 6,389 7,260 13.6% -24.7%
NET FEES & COMMISSIONS 2,638 3,590 3,093 345 1,043 1,173 12.5% 240.0%
OTHER OPERATING INCOME 1,434 1,614 5,182 854 1,178 929 -21.1% 8.8%
EXPECTED CREDIT LOSS 4,702 6,313 10,691 3,207 1,501 2,035 35.6% -36.5%
-Stage 1 Provisions 477 594 1,340 632 64 111 73.4% -82.4%
-Stage 2 Provisions 2,081 1,298 5,505 1,812 696 886 27.3% -51.1%
-Stage 3 Provisions 2,143 4,421 3,846 762 742 1,038 39.9% 36.2%
OTHER PROVISION EXPENSES 17 112 2,648 1,106 74 39 -47.3% -96.5%
OPEX(1) 7,691 9,797 12,092 3,429 3,264 3,521 7.9% 2.7%
NET OPERATING PROFIT 10,034 7,648 10,834 3,514 1,220 1,301 6.6% -63.0%
NET PROFIT 7,961 6,187 7,825 2,638 962 778 -19.1% -70.5%
(1) Average total assets represent weekly averages
(2) Average shareholders’ equity represent weekly averages
(3) İncludes dividend income
(4) Average interest earning assets represent weekly averages
– Key Financial Ratios
(5) Performing Loans
(6) Intermediated loans of public funds are excluded
(7) Annualized figure
(8) Leverage = (Assets/Shareholders’ Equity)-1
18(9) Including foreign branches
(%) 2018 2019 Q1 20 Q2 20 Q3 20 2020 Q1 21 Q2 21
ROAA(1) 1.6 1.1 1.1 1.1 1.0 1.0 0.4 0.4
ROAE(2) 15.2 10.1 10.5 10.8 10.0 9.7 4.2 3.7
Cost / Income Ratio(3) 34.3 40.8 36.5 33.0 35.2 33.3 53.9 52.4
NIM (cum.) (4) 5.0 5.0 6.4 6.1 5.8 5.0 3.3 3.4
Loans(5)(6)/Deposits 110.6 96.0 94.3 95.5 90.7 92.3 92.9 90.0
Loans/Assets 68.9 67.1 67.3 68.4 63.9 62.2 61.5 61.6
Securities/Assets 17.8 20.1 21.3 21.3 23.8 23.9 23.8 24.7
NPL 2.0 2.8 2.7 2.3 2.1 2.3 2.2 2.2
Stage III Coverage(6) 73.9 66.4 69.7 72.9 76.1 77.0 78.7 76.8
CoR 1.2 1.3 1.1(7) 1.5(7) 1.4(7) 1.2 0.4(7) 0.6(7)
CAR 14.8 17.0 16.4 18.5 18.2 18.2 17.7 16.6
Leverage (8) 8.4 8.3 9.3 8.3 9.9 9.1 10.5 10.4
# of
Branches(9) 1,773 1,758 1,757 1,758 1,758 1,752 1,752 1,752
Employees 24,647 24,563 24.642 24,480 24,350 24,673 24,560 24,489
ATMs(9) 7,155 7,239 7,253 7,257 7,293 7,274 7,264 7,257
– Non-Deposit Funding
19
April 2021; USD 293 mn & EUR 873 mn; LIBOR+ 250 & EURIBOR+ 225 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
• KfW loan; 2014; EUR 150 mn
• AFD loan; 2014; EUR 100 mn
• CEB loan; 2014; EUR 100 mn
Syndication
IFIs
• USD 1.7 bn Eurobonds outstanding• April 2017; USD 600 mn RegS/144A; 5.125% coupon rate; 5y
• September 2017; USD 500 mn RegS/144A; 5.125% coupon rate; 6y
• February 2021; USD 600mn RegS/144A; 5.375% coupon rate; 5y (Sustainability Bond)
• USD 200 mn 5y securitised funding
• April 2019; EUR 1.4 bn AT-1 issuance under GMTN Programme
FC Bonds/Bills
– 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.
Launched in 2018. To increase interest in
agriculture among youth, teach agricultural
production and investment, train educated
and conscious young farmers, give young
people an entrepreneurial awareness in
the field of agriculture
Ziraat Bank Young Farmers Academy
Ziraat Bank Banking Museum
Established in 1981. Turkey’s first museum
devoted to banking. Occupying the ceremonial
hall of the Bank’s original headquarters building
in Ankara, the museum provides a look at the
Bank’s 158-year history.
Both in keeping with its efforts to support sports in
general and in recognition of their contributions
both to social wellbeing and the Bank’s public face,
Ziraat Bank served as the Turkish Cup name
sponsor.
Ziraat Bank the Turkish Cup name sponsor
Ziraat Bank Sports Club
Ziraat Bank has been supporting volleyball
through the Ziraat Bank Sports Club established
in 1981.
The Ziraat Bank Art Collection
The Ziraat Bank art collection consists of
more than 2,500 works, the majority of
which are oil paintings but which
also include watercolors, gouaches,
pastels, prints, ceramics, and sculptures.
20
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 t
his presentation has been obtained from sources which we believe to be reliable, we cannot guarantee that the information is without fault or entirely accur
ate. The information contained in this presentation has not been independently verified. No representation or warranty express or implied is made as to, an
d no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The information an
d opinions in this 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 presentation or otherwise arising in connec
tion with this presentation. This presentation cannot be interpreted as an advice to anyone and is also strictly confidential and may not be reproduced, distr
ibuted or published for any purpose.
For further information please contact
Financial Institutions and Investor Relations Department
Eski Büyükdere Cad. No: 39 B Blok, 6. Kat
Maslak-İstanbul/Turkey
Phone: (+90) 212 363 11 91
E-mail: [email protected]
www.ziraatbank.com.tr