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MR. NICOLA LONGO DENTE HEAD OF INTERNATIONAL & MULTINATIONAL RELATIONSHIP BANKING. Istanbul, April 2012. Agenda. Turkey: An Emerging Global Market Place Turkish Financial Markets & Banking System Yapı Kredi & IMRB department.
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MR. NICOLA LONGO DENTE HEAD OF INTERNATIONAL & MULTINATIONAL RELATIONSHIP BANKING Istanbul, April 2012
Agenda Turkey: An Emerging Global Market Place Turkish Financial Markets & Banking System Yapı Kredi & IMRB department
Turkey is a young and dynamic country with significant growth potential • 8th largest economy in Europe, 17th largest in the World • Favourable demographics (43% under 25 years vs 28% in EU) with a rapidly growing population (15% vs 5% in EU)(1) • Sound relations with neighbouring countries, EU and NATO • Solid political and economic prospects • Stable political environment with single party government since 2002 enabling fast and effective decision making process • Government focused on sustainable growth with increased support for domestic investments in competitive areas Turkey 2011 EU 2010 Ratings 502 Population, mln 74 S&P Fitch Moody’s BB (2) BB+ (3) Ba2 43 29 Average Age of Population 17,052 GDP, USD bln 771 33,935 Per capita GDP, USD 10,420 2.7% Inflation (CPI) 10.4% (1) Nominal growth between 2000 and 2011 for Turkey and 2000-2010 for Eurozone (2) On 20 September 2011, S&P raised Turkey’s LC sovereign rating to investment grade level of 'BBB-/A-3' from 'BB+/B'. At the same time, all other ratings including FC sovereign rating of BB were affirmed (3) In November 2011,, Fitch Ratings revised the outlook of Turkey’s sovereign rating to stable from positive
Significant progress since 2001 in terms of stability... • Following a severe economic crisis in 2001, sound economic stability with consecutive years of positive growth except for periods of global turmoil • Sustained low inflation environment through • anti-inflationary program • structural reforms • large diversified economy • dynamic private sector • disciplined banking sector GDP Growth (%) 9.0 8.9 7.9 8.5 7.4 6.1 5.8 4.9 4.4 2009 2001 2005 2006 2008 2011 2007 2010 2002 2003 2004 - 4.7 - 7.5 Inflation – average (%) 54.4 45.0 25.3 10.6 10.5 8.8 9.6 8.6 6.5 8.2 6.3 2005 2006 2008 2011 2007 2010 2001 2002 2003 2004 2009
Solid/improving macroeconomic fundamentals with high growth potential and low leverage… • Strong growth environment in 2011 with start of soft landing from 4Q11 onwards. 2011 GDP growth realised at 8.5% • Pressure on inflation via TL depreciation and increased taxes/prices on certain goods • Sustained low interest rates • Still strong industrial productionand moderating consumer confidence index • Unemployment rate returning to pre-crisis single digit level • Start of some improvement in CAD from Nov’11 onwards • Strong fiscal discipline
... which increases the expectations of the world for Turkey... • The very recent economic performance of Turkey has paved the way for international organizations to regard Turkey as the fastest growing economy in Europe: • According to IMF, Turkey is expected to be among the top 3 fastest growing economies among OECD members during 2011-2016, with an annual average growth rate of 4.1% while the recent medium term plan declared by the Turkish government indicates 5.3% growth Annual Average Real GDP Growth (%) - OECD Countries 2011-2016
... since the opportunities provided by the local market are not comparable anywhere else in Europe Middle Class Consumptions % of income expenditure for each consumer goods class of the third quintile of income • Significant local market opportunities (~72 million inhabitants with rapidly growing income) • Istanbul, with over 12 million inhabitants, the main gate to the local market • Turkish economy is the second in terms of size among the countries of “enlarged” Europe • GDP per capita is the 10th among the 18 CEE countries (30th among 38 European countries)
... and the Turkish competitive environment has improved in recent years thanks also to reforms towards EU regulations... Competitiveness Index Ease of Doing Business Corruption Perception Index • Productivity 62% of average EU • Corporate tax rate is only 20%, income tax from 15/35% • 3G technology development zones, 263 organised individual zomes and 20 free zones • Flexible labor market, high skills, contained costs • Minimum wage of EUR 294vs EUR 1,398 in France, working hours per week 53 vs 40-42 in the rest of EU, sick days per employee at 4.6 vs 6.6 in Germany and 8.3 in France • Competitive product price/quality ratio • Regulation more favorable to foreign investments • Free dividend flows • Efficient and cost effective shipment goods with reliable intermodel transportation services • Rated 6.83 vs 5.40 in Italy by IMD World Competitiveness Yearbook 2010 Best CZ HU CZ BG HU RO IT IT TK RU TK IT RO CZ BG HU TK RO RU BG UA UA UA RU Worst NOTES: Competitiveness Index (World Economic Forum): takes into account 90 variables (e.g. infrastructures, technological development, average instruction level, macroeconomic context) Ease of Doing Business (World Bank): takes into account indicators such as time and costs needed to start a business, recruit manpower and perform import/export transactions Corruption Perception Index (Transparency International): scoring of the perceived corruption at public and private level
... which attracts to the country significant foreign investments • Foreign investors are massively present in Turkey; especially in key sectors such as financial services and energy • In 2011, Turkey attracted total FDI of US$ 15.7 bln, implying a 73% y/y growth vs 2010 Turkey - Foreign Direct Investments (FDI) – bln $ 2011 Top Sectors – FDI to Turkey 2011 Top 10 Countries – FDI to Turkey
In a nutshell, why Turkey? The experience of more than 4.000 foreign-invested businesses – including more than 100 of the Fortune Top 500 companies – confirms Turkey as an important investment location, and there is more potential to be exploited
Agenda Turkey: An Emerging Global Market Place Turkish Financial Markets & Banking System Yapı Kredi & IMRB department 10
One of the key answers for “why Turkey?” is “Strong Banking System” • Significant growth potential (mainly retail driven)on the back of underpenetrated marketoffering wide product and service range • Highly attractive for foreign joint ventures and partnerships • Well regulated banking sector with strong capitalisation, state bank reformsand supervision in line with EU standards • High technology usage and qualified workforce • Strong profitability, robust volume growth, sound liquidity and improvement in asset quality • In 2011, profitability and funding under presssure by tightening monetary policy, still at competitive levels vs CEE (1) (2) (1)Average of 2007-2008-2009-2010 and 2011 used for Loans / GDP, Loans/ Deposits, NPL Ratio, CAR and ROAE , (2) excluding four participation banks
Underpenetrated banking sector, an opportunity for rapid growth Branches per million inhabitants - # • The Turkish financial system is healthy and well regulated • However, when compared to the banking sectors of Eurozone, banking penetration is still low • As one of Europe’s fastest growing economies, Turkey and the banking sector represent an attractive opportunity for foreign investors due to the significant potential and room for further growth 461 128 Eurozone Turkey (Loans + Deposits) / GDP 251% 98% Eurozone Turkey Loans to Households / GDP 60% 15% Eurozone Turkey 2010 figures for Eurozone and Turkey
Key Banking Players in Turkey Top 10 Players in the Turkish Banking System , in terms of Total Assets ( bn EUR, Dec-11) • Total of 48 banks (including 4 participation banks, ie Islamic finance instutitions); 28 with direct foreign-ownership (excluding shares traded on the ISE) • Turkish banking sector predominantly controlled by local groups, albeit with increasing share of foreign capital. According to the BRSA, share of global capital in the sector is 42% as of 9M11 • Top 10 Turkish banks control 87% of total assets, of which 3 are state-owned (Ziraat, Vakıf & Halk) and 6 are either foreign-owned or have a strategic foreign partner (Garanti, Akbank, Yapı Kredi, Finansbank, TEB, Denizbank)
Agenda Turkey: An Emerging Global Market Place Turkish Financial Markets & Banking System Yapı Kredi & IMRB department 14
A Turkish financial services group with committed and strong shareholders As per 30 June 2011 50% 50% • Leading industrial and services group active in energy, auto, consumer durables and finance • Sales ~9% of Turkey’s GDP and exports ~11% of Turkey’s exports* • Only Turkish company in the Fortune 500 (172th) • Leading Italian financial institution (6th largest Eurozone bank by assets) • Full-service group engaged in a wide range of banking, financial and related activities • Operations in 22 countries 99.9% 81.8% UniCredit Menkul Değerler (UCM) Percentages indicate Yapı Kredi’s total direct and indirect shareholding L = Listed * Source: Turkish Institute of Statistics, CBRT and Koç Holding Financials ) 87.3%YKY,12.7% Yapı Kredi ) 67.24% Yapı Kredi, YK Holding BV 32.76% ) 99.84% Yapı Kredi, 0.16% YKL 4.) 99.93%YKS, 0.04% YKF, 0.04% YKY 5.) 74.01% Yapı Kredi, 7.95% YKF, 11.99% YKY 6.) 99.8% Yapı Kredi, 0.1% YKL, 0.1% YKY 15 15
Yapı Kredi 4th largest private bank in Turkey FINANCIAL HIGHLIGHTS BRSA Consolidated Figures, 31 Dec 2011 • Healthy, robust and customer business focused balance sheet • Strong liquidity and funding position • Proven capability of cost control and efficiency improvements • Solid risk profile • Focus on value generating segments with leadership in key products • Large network and leading brand • Diversified, high quality revenue mix • Commitment to sustainable growth and commercial effectiveness • Committed shareholders Total Assets (bln Euro) 49.3 Performing Loans (bln Euro) 29.1 Deposits (bln Euro) 27.8 AUM (bln Euro)3.4 # of Credit Cards (mln)(1)8.3 # of Active Customers (mln)(2) 6.2 # of Branches(3)907 # of ATMs 2,697 # of Employees(4) 17,350 Paid-in Capital (mln Euro) 1,824 (1) Including virtual credit cards (2) Bank-only (3) Bank-only including 1 off-shore branch (4) Bank: 14,859
Leadingpositions in keysegments Ranking Market Share Dec 2011 Total (1) Retail (2) AuM + Brokerage Turkey’s 4th largets Bank in terms of total assets (3) (4) Corporate Insurance (1) Including mortgages,general purpose and auto loans, (2) Credit card outstanding volume,(3) Equity trading volume, (4) Cash loans excluding credit card outstanding volume and consumer loans
Part of Unicredit network which consists of… • Employees: ~180,0001 • Customers: ~ 40 million • Branches: ~ 10,2001 • Banking operations in 22 countries • International network in ~50 countries • Operating income: EUR 19,108 mn (9M11) • Operating profit: EUR 7,446 mn (9M11) • Assets: EUR 950,296 mn; • BBB+/A2/A- long-term ratings2(S&P, Moody’s, Fitch ) • Core tier I at 8.74% Strong Positioning in: • Austria: # 1(16.3%) 3 • Italy : # 2 (13.5%) 3 • Germany: # 3 (3.5%) 3 • CEE: # 1 (7.0%) 3 … and in CEE overall: • Azerbaijan • Bosnia-Herzegovina • Bulgaria • Croatia • Czech Republic • Estonia • Hungary • Kazakhstan • Kyrgyzstan • Latvia • Lithuania • Poland • Romania • Russia • Serbia • Slovakia • Slovenia • Turkey • Ukraine International Markets • UK • Americas • Asia • it’s the largest bank in Poland, Croatia, Bosnia-H. and Bulgaria • it’s among the top5 in Ukraine, Turkey, Czech Republic and Kazakhstan • Among thetop10 in Romania, Baltics, Russia, Slovenia, Hungary&Serbia 1 As of 30 September 2011; Including all employees and branches of subsidiaries consolidated proportionately, such as Koç Financial Services branches (Source: Investors Rellations, UniCredit)2 Latest confirmation/update as of 13January 2012 for S&P; 16 February 2012 for Moody’s;06 February 2012 fpr Fitch (Source: Investors Relations , UniCredit)3 Ranking and market shares in brackets; market shares in terms of total loans as at 10 February 2010 (source: UniCredit Research)
Yapi Kredi your banking partner in Turkey...why? • It is the ideal commercial banking partner and the entry point for International investorsin Turkey thanks to its vast network and diversified products range (cash management, trade finance, project finance, treasury products, and investment banking servicesetc.) • Centralized coverage function of International & Multinational companies in Turkey, alsovia a dedicated branch. You can rest assured that your business in Turkey will be followed keeping into consideration your group of ownership in the framework of your group global treasury needs • It is part of UniCredit network the largest of any bank In Central and Eastern Europe • It operates with direct subsidiaries in Azerbaijan, The Netherlands, and Russia • It is directly active in investment banking (M&A), leasing, factoring, insurance products
Our main products TRANSFER Transfer withcustomerreference DDS (Direct Debit System) CHEQUE Chequeendorsement Chequecollections Elec. chequesystems BANKO™ BankingAuto. Platform CASH OPERATIONS Cash-in-transitservices CASH POOLING Cash concentrationintrabank. Cash management services • TRANSFER & EFT • BANKO™ Banking Autom. Platform • CHEQUE • Continuouscheque • LEGAL PAYMENTS • Tax payments • SSK payments • ELEC. ACC. SUMMARY- MT940 • * SWIFT MT101 • INTERNET BANKING • * EUROPEAN GATE * Transferstolocalbanks in local • currencyandbooktobooktransfers • in allcurrencies Import/Export Treasury marketingunit (customerrelationsmngmt) • Exportcollections & ExportLoan • Exportletters of credit • Forfaiting • Exportreceivablesbacked • financing(guaranteedby Yapı Kredi • Factoring) • Exportreceivablesbackedfinancinginsuredby Türk Eximbank • Importpayments • ImportLoan • Post-Financing • PromissorynoteAvalizationanddiscounting • Import l/c (w/ or w/o discount) • Buyer’s Credit • B-A / Banker Acceptance • Forwards (FX & TL) • Futures (FX & Comm.) • Options (FX & TL) • Swaps (FX & TL) • IRS (FX& TL) • FX / TL • FX / FX • Gold / FX • Gold / TL 20
Summary of financing possibilities in Turkey Information on taxes are given as Indication and might not be complete. Please consult with your tax adviser for details. CONDITIONS/ TAX ISSUES TYPES • FX Loans: • * Fund transfer in FX received from abroad • canbe freely utilized, unless related to (i.) import/export, (ii.) financing or (iii.) capital injection • * Financing in FX from ‘abroad’ < 1 year and 1 week maturity is taxed at 3%-RUSF(KKDF) on capital amount on single utilization. Additional Withholding Tax and VAT might apply. • No RUSF on FX loan granted domestically, even immaturity < 1year1week • * Granted, beside to exporters (who are not subject to limitations), also to any company in case of: • Transactions with average maturity exceeding one year and with an amount no less than MUSD 5 (5%BSMV tax; no RUSF in case of commercial loans; 3% RUSF on capital amount in case of personal loans) • - commercial and professional purpose transactions which do not exceed the amount of receivables kept as foreign exchange in the branches in Turkey. (extended only for commercial and professional purpose; not to persons; so exempted from RUSF) For daily needs; no tax applied Overdraft Custom/tax Max. maturity: 7 days ; no tax Workingcapital payments Legal payments Max. maturity: 30 days; no tax (KKDF) Max. maturity: 7 days; no tax Blocked cheques YTL loans No limitation for maturity; 5% tax on interest No maturity limitation; 5% BSMV tax for the portion exceeding 24 months maturity Export loan Short term loans (FX) Export related documentation to be presented ; no tax Eximbank loan 5% BSMV tax on interest additional 5% BSMV tax applied on profits out of FX rate developments at the date of repayment ST loans(FX indexed) Foreign Currency indexed loan For FX loans: investment incentive certificate should be presented 5% BSMV tax applied Investment loan FX IndexedLoans : *The lender grants a line in FX to be utilized in TL * At maturity the repayment will be in FX or the equivalent in TL Advantages: lower interest rates based uponLibor/ Euribor Investment loan in Turkey BSMV(Banka ve Sigorta Vergisi) is th Banking and Insurance Transaction Tax, on all revenues,including interest received by banks and insurance companies in Turkey with respect to their banking and insurance transactions. 21 21
YOUR CONTACTS IN IMRB AT YAPI KREDI Nicola Longo Dente Head of International & Multinational Relationship Banking Nicola.email@example.com Tel. + 90 212 3397988 Mobile + 90 530 9773862 Sales Support & Dual Coverage: International Banking Branch: Ufuk Bor (TR,ENG,IT,FR) Demet Altıntaş Kılıççı (TR,ENG) Head of Sales Support International&Multinational Corporates Relationship Manager Ufuk.Bor@yapikredi.com.tr Demet.Kilicci@yapikredi.com.tr Tel: +90 212 3397791 Tel: +90 212 3396572 Mobile: +90 530 291 85 88 Mobile:+90 533 8150780 Esra Omuzluoğlu (TR,ENG,GER) Nilden Zeynep Özveren (TR,ENG,FR) Sales Support Specialist International&Multinational Corporates Relationship Manager Esra.Omuzluoglu@yapikredi.com.tr Zeynep.Ozveren@yapikredi.com.tr Tel:+90 212 3397592 Tel: +90 212 3396590 Mobile: +90 532 6518479 Mobile: +90 533 4100919 Cenk Erker (TR,ENG,IT) Hanife Yaşar Oğuz (TR,ENG,GER) Sales Support Specialist Operations Manager Cenk.Erker@yapikredi.com.tr Hanife.Oguz@yapikredi.com.tr Tel: +90 212 3397795 Tel: +90 212 3396523 Mobile: +90 532 6752208 Mobile: +90 532 5703121 Şebnem Batgı (TR,ENG,GER) Sales Support Specialist Sebnem.Batgi@yapikredi.com.tr Tel: +90 212 3397502 Mobile: + 90 532 5967181 Aysun Under (TR,ENG,GER) Sales Support Associate Aysun.Under@yapikredi.com.tr Tel: +90 212 3397304 Mobile: + 90 532 4578988