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3Q05 BRSA Bank Only Financial Results

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Title: 3Q05 BRSA Bank Only Financial Results


1
3Q05 BRSA Bank Only Financial Results
27 October 2005
2
Highlights
  • Total assets increased 39 y-t-d, reaching TRY
    48.6bn (USD 35.5bn)
  • Continued growth in loan portfolio of 50 y-t-d
    and 63 growth in TL loans 90
    growth in SME loans and 88 growth in consumer
    loans realized y-t-d
  • Aggressive growth in customer deposits, up 52
    y-t-d, generated from 140 growth in TL customer
    deposits, mainly commercial in nature
  • Net commission income growth 55 y-o-y, driven by
    the strong growth in credit card and consumer
    loan related revenues
  • 23 growth in net profit, reaching TRY 1,132mn
    (USD 827mn)

3
Highlights
Total Assets (TRY billion)
Loans (TRY billion)
50 y-t-d
39 y-t-d
9
14
28
32
Deposits (TRY billion)
Net Profit (TRY million)
23
54 y-t-d
14
36
At YE04 prices
4
We have attained strong market share growth both
in loans and deposits
Deposits Market Shares ()
Loans Market Shares ()
Total Deposits
Total Loans
5
Profitability
Profitability performance (TRY mn.)
change
3Q05
3Q04
1, 960 461 1,624 1,132 3.6 24.7
1, 965 297 1,313 920 3.6 20.8
- 55 24 23
Net interest income Net fee income Income before
tax Net income ROAA () ROAE ()
At YE04 prices
6
Ratios
Balance sheet performance
3Q05
YE04
Interest Earning Assets / Total Assets Interest
Bearing Liabilities / Total Liabilities Gross
Loans / Total Assets Loans / Deposits Deposits /
Total Assets NPL Ratio Capital Adequacy Ratio
(Basel I)
91.6 83.7 40.7 63.2 64.5 1.7 22.7
91.1 77.4 37.6 64.1 58.7 1.6 36.2
Blocked demand deposits of POS merchants (TRY
587mn), which encompasses the character of a
demand deposit, is booked as Miscellaneous
Payables instead of deposits The sharp fall in
the Capital Adequacy Ratio is effected from the
share buy-back as well as increase in capital
requirement on credit card limits to 100 and
strong growth in loans
7
Composition of securities
Composition of securities (TRY bn.)
12.1
9.2
18
63
82
37
  • FX securities shifted to FRNs while TL
    securities shifted to fixed rate notes
  • Eurobonds amount to only USD 280mn (TRY 383mn)
  • 69 of securities are carried under
    available-for-sale securities, profits being
    booked under equity

8
Loans
Composition of Loans
SME Loans
TRY 19.5 bn.
up 50 y-t-d
up 90 y-t-d
TRY 12,9 bn.
Consumer Loans
  • TL loans surged 63 y-t-d, compared to 47 growth
    in the sector
  • Despite the strong growth, NPL ratio has been low
    at 1.7 and fully provisioned

up 88 y-t-d
Excluding credit card loans
9
Consumer and SME lending is now 65 of total
loans
Breakdown of Loans
Growth (y-t-d)
3
37
90
53
10
Segment based developments
11
Retail Banking - credit cards
Credit Card Loans1
Credit Cards Issuing Volume1
Market shares are cumulative
  • 15 growth in credit card loans y-t-d
  • New behavioral scoring system has allowed for
    better screening and evaluation

1 Amex is included
12
Retail Banking - consumer loans
Consumer Loans1 (TRY mn.)
88 y-t-d
3,778
3,125
2,010
  • Akbanks consumer loans market share is 15.7
  • Market share in mortgage loans is 16.5
  • Market share in car loans is 24.2

1 Numbers represent direct lending to
individuals, excluding credit cards
13
Retail Banking - small business
Small Business Loans1 (TRY mn.)
Only 4 in FX
  • Special credit packages for
  • Certain sectors and regions (pharmaceuticals,
    agriculture, tourism etc.)
  • Dealer networks of corporate clients (ie.
    Microsoft, IBM, Bosch, Arçelik)
  • Cross-sell ratio is 3.1x

1 Small business loans given to companies with
sales turnover ltUSD 2 mn are granted by the
retail banking unit
14
Commercial Banking
Commercial Loans1
2004
1H05
2004
3Q05
3Q05
1H05
TL cash loans
FX cash loans
(TRY mn.)
(USD mn.)
  • Commercial loans are also considered as a hook
    product, which paves the way for further
    marketing opportunities like cash management
    services and foreign trade products
  • 43 commercial banking centers
  • Cross sell ratio is 3.9x

1 Medium size companies with sales turnover btw.
USD 230 mn are serviced through our commercial
banking unit
15
Corporate Banking
  • Lending to new privatizations will provide strong
    growth in corporate loans
  • Loans to blue-chip companies like Ford, Unilever,
    Carrefour reached USD 3.4 billion registering a
    37 increase y-t-d
  • Project finance loans stand at USD 1.1 billion
  • Special and structured financial solutions for
    corporate needs like cash management products
    regulating the collection and payment cycle of
    companies
  • Excellent cross-sell opportunities (3.8x)

16
Asset management
Mutual Funds (TRY mn.)
  • Currently 2 in mutual funds
  • The underlying factors behind this
  • Superior channel management
  • Superior asset management performance
  • Effective marketing and communication

Private Banking Assets (USD mn.)
Volume
Market share ()
  • Wide range of domestic and international
    investment products
  • Top quality investment advisory service
  • Cross-sell ratio in private banking is 3.7x

17
Breakdown of customer assets
TRY 49 bn
140 y-t-d
TRY 39 bn
Market share
12
15
21
14
20
  • Total customer assets surged 27 y-t-d compared
    to 12 for the sector
  • Akbanks market share for total customer assets
    constitutes 15 of the market versus 13 in YE04

18
Income statement - composition of interest income
Composition of interest income
TRY bn.
3.8
3.4
At YE04 prices
  • Growth in TL loans has had a dramatic impact on
    interest income

19
Net fees and commissions
Net Fees Commissions (BRSA, TRY mn.)
Fees and commissions revenue contribution
Corporate loan related
Asset management fees
Consumer loan related
Money transfer fees
55
Other
Merchant commissions
Credit cards commissions
At YE04 prices
  • Net fee and commission income growth is mainly
    due to the rapid growth in credit card and
    consumer loan related revenues
  • We continue to implement and increase fees in all
    our product base

20
Improving fee income ratios in line with targets
Net fees commissions/operating expense
Net fees commissions/operating income
  • We are rapidly approaching our medium term fee to
    income target of 25

21
Efficiency ratios
Operating expense/average assets ()
Cost/income ()
  • Restructuring of branches will largely be
    finalized at YE05
  • Centralization together with the new technology
    infrastructure continue to allow us to keep
    operational costs subdued

22
Net interest margin
NIM ()
NIM (after FX loss, loan provision)
3Q04 and YE04 figures are after monetary loss
23
Income statement summary
Income statement summary (3Q05, TRY million)
167
-257
136
-843
461
-492
1,960
1,132
Net fees income
Tax
Net income
NII
Net trading income
Other income
Operating expense
Provisions
  • Asset switch to TL loans from TL securities
    continues to affect interest income positively
  • A y-o-y increase of 55 in net commissions has
    had an important impact on profitability

24
Free capital comparison
Free Capital 1H05 (BRSA, TRY mn.)
Total Equity (BRSA, TRY mn.)
AKBANK
  • Buy-back of founders shares has reduced equity
  • Akbank will continue to optimize its capital
    structure through its dividend policy of 30 min.
    - 50 max. cash dividend payment
  • Akbanks strong free capital is a major cushion
    against the effects of any market volatility

25
Balance sheet highlights
Shares ()
Change Y-t-d ()
BRSA (TRY mn.)
2004
3Q05
2004
3Q05
TOTAL ASSETS Cash and Due from
Banks Securities Loans TOTAL
LIABILITIES Deposits Funds Borrowed TOTAL
EQUITY
34,913 1,995 15,238 12,939 28,686 19,918
4,845 6,227
48,636 2,488 21,334 19,464 42,654 30,760
6,876 5,982
6 44 37 57 14 18
5 44 40 63 14 12
39 25 40 50 49 54 42 -4
26
Income statement highlights
BRSA (TRY mn.)
3Q04
3Q05
Change ()
Interest Income Interest Expense Net Interest
Income FX Gain (Loss), Net Provision for Loan
Losses Net Interest Income after FX,
Income/Loss NPL Prov. Fees and Commissions
(Net) Profit on Trading Securities
(Net) Operating Profit Operating
Expenses Monetary Loss Income Before
Tax Tax Net Income
3,369 (1,404) 1,965 (100) (94) 1,771 297 2
65 2,544 (668) (423) 1,313 (392) 920
3,801 (1,840) 1,960 9 (223) 1,746 461 127
2,735 (843) - 1,624 (492) 1,132
13 31 - - 137 -1 55 -52 8 26 - 24 26
23
Amounts are expressed in terms of the
purchasing power of TL at 31 December 2004
27
Balance sheet highlights in USD
Shares ()
BRSA (USD mn.)
2004
3Q05
2004
3Q05
TOTAL ASSETS Cash and Due from
Banks Securities Loans TOTAL
LIABILITIES Deposits Funds Borrowed TOTAL
EQUITY
25,490 1,456 11,125 9,447 20,943 14,542
3,537 4,547
35,501 1,816 15,572 14,207 31,135 22,453
5,019 4,366
6 44 37 57 14 18
5 44 40 63 14 12
Figures are stated with exchange rates
effective at respective dates
28
Income statement highlights in USD
BRSA (USD mn.)
3Q04
3Q05
Interest Income Interest Expense Net Interest
Income FX Gain (Loss), Net Provision for Loan
Losses Net Interest Income after FX,
Income/Loss NPL Prov. Fees and Commissions
(Net) Profit on Trading Securities
(Net) Operating Profit Operating
Expenses Monetary Loss Income Before Tax
Tax Net Income
2,774 (1,343) 1,431 6 (163) 1,274 336 93
1,996 (615) - 1,186 (359) 827
2,141 (894) 1,247 (63) (59) 1,125 189 168
1,616 (424) (268) 834 (249) 585
Figures are stated with exchange rates
effective at respective dates
29
Disclaimer Statement
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 Companys 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 is strictly confidential and may not be
reproduced, distributed or published for any
purpose.
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