Investor Presentation - August 2021 EUROMONEY World's Best Bank in the Emerging Markets - AKBANK | INVESTOR RELATIONS
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Investor World’s Best Bank
Presentation in the Emerging Markets
EUROMONEY
(2020)
August 2021
Content
01 Operating Environment
02 Akbank Overview
03 How Akbank is building its future
04 Financials
05 Looking Forward
06 Sustainability Approach
07 Annex
2
Turkey’s Growth Story
Preparing for a post-Covid economic Long-term Growth
environment Potential Remains Intact
Strong trend in economic activity supported by Outstanding $729 Bn 83.6mn
production and more resilient trend in services population
demographics GDP (1)
Decisive and tight monetary policy to combat
inflation Young 46% 15%
Under the Btw age of
population age 29 15-24
Lower need for fiscal support with budget
deficit/GDP targeted at 3.5% in 2021
73% 68% 16%
Loan/GDP Deposit/GDP Household
Untapped
Credit activity to be more balanced debt/GDP
potential (2) 5% 3%
Mortgage Pension
debt/GDP funds/GDP
3
(1) GDP data as of 1Q21
(2) As of March 2021
Turkish Economy: 2021 Outlook
GDP Growth Current Account Balance
(YoY, %) (USD, bn)
7.0 > 7.0
6.3 5.9
4.5
1.8
-1.4
-13.8
-22.0
-30.0
-37.3 -36.3
-10.3
1Q20 2Q20 3Q20 4Q20 1Q21 2020 2021F 1Q20(1) 2Q20(1) 3Q20(1) 2020 1Q21(1) 2021F
Inflation Policy Rate
(YoY, %) (1 Week Repo Rate)
20% 20%
16% 16%
12% 13%
9% 9%
5% 5%
Jan’20 Apr’20 Jul’20 Oct’20 Jan’21 Apr’21 Jul’21 Oct’21 Dec’21 Jan’20 Apr’20 Jul’20 Oct’20 Jan’21 Apr’21 Jul’21 Oct’21 Dec’21
4 (1) 12-month cumulative
Economic activity heat map
Q1'20 Q2'20 Q3'20 Q4'20 Q1’21 Apr’21 May’21 Jun’21
Growth (yoy, %) 4.5 -10.3 6.3 5.9 7.0
Industrial Production (yoy, %) 5.7 -16.6 8.5 10.2 11.2 66.3 40.7
Manufacturing PMI 50.6 42.7 54.7 52.0 52.9 50.4 49.3 51.3
Electricty Consumption (yoy, %) 2.7 -12.5 3.8 5.9 7.0 33.9 26.9 17.4
White Goods Sale (yoy, %) 11.2 -1.2 33.1 26.3 39.7 53.6 10.7
Automotive Sales (yoy, %) 44.8 18.7 156.2 39.6 57.0 121.6 72.0 9.3
Home Sales (yoy, %) 33.0 13.8 49.2 -30.0 -22.9 124.1 16.2 -29.1
Real Sector Confidence Index (s.a.) 103.9 75.2 103.4 109.2 109.3 107.4 107.1 109.8
Capacity Utilization Rate (s.a.) 76.2 63.5 72.7 75.2 75.6 76.2 75.2 76.3
Consumer Confidence Index (s.a.) 80.7 81.2 81.2 80.7 84.8 80.2 77.3 81.7
Services Sector Confidence Index (s.a.) 113.5 63.1 93.8 100.8 102.6 103.3 102.2 108.5
Retail Sector Confidence Index (s.a.) 122.5 90.0 115.1 117.1 108.9 103.1 100.9 105.7
Construction Sector Confidence Index (s.a.) 87.4 70.0 96.9 90.7 82.3 77.3 79.6 82.4
Unemployment Rate (s.a.) 13.0 13.4 13.3 12.9 13.1 13.8 13.2
Budget Balance (bn TRY) -29.6 -79.9 -31.1 -32.2 22.8 -16.9 -13.4 -25.0
Current Account Balance (bn $) -8.9 -12.4 -8.7 -7.4 -7.9 -1.7 -3.1
Export (yoy, %) -4.2 -26.1 -2.5 6.6 17.1 109.2 65.7 46.9
Import (yoy, %) 10.3 -16.3 10.8 12.0 9.6 61.1 54.0 38.9
Foreign Tourist Arrivals (yoy, %) -22.1 -97.9 -73.0 -59.4 -53.9 3,162 3,039
Best Average Worst
5 Sources: CBRT, Treasury, TURKSTAT, Akbank
Tight funding conditions to continue throughout the year
CBRT WACF vs Marginal TL Deposit Rates (%) 09-July Marginal TL Loan Rates (%) 09-July
19.0 22.4
19 24
22
17
17.8 20
15
20.7
18
13 16
15
11 13
9 11
7.4
9
7 7.2 7 8.5 8.2
5 5
Jan’20 Mar’20 May’20 Jul’20 Sep’20 Nov’20 Jan’21 Mar’21 May’21 Jul’21 Jan’20 Mar’20 May’20 Jul’20 Sep’20 Nov’20 Jan’21 Mar’21 May’21 Jul’21
CBRT WACF TL Deposit Rate Commercial Retail
TL Loan growth (1) - 13 week averages (%) FX Loan growth (1) - 13 week averages (%)
70
63.4 12 9.0
60 8
50 4
40 0
-4 09-July
30 09-July
-8 -2.7
20 11.8 -12
10
-11.1
-16
0 -20
Jan’20 Mar’20 May’20 Jul’20 Sep’20 Nov’20 Jan’21 Mar’21 May’21 Jul’21 Jan’20 Mar’20 May’20 Jul’20 Sep’20 Nov’20 Jan’21 Mar’21 May’21 Jul’21
Source: BRSA & CBRT & WACF weekly data dated July 09, 2021
6 (1) Excluding participation banks
01 Operating Environment
02 Akbank Overview
03 How Akbank is building its future
04 Financials
05 Looking Forward
06 Sustainability Approach
07 Annex
7
Our Core Values
01 02
We are We exist
built upon because of
your trust. our clients.
03 04 05
We do We stand We give
what’s right. out through back.
innovation.
8
Akbank at a glance
Outstanding State of the art ESG driven by Excellence in
Talent technology actionable targets Customer Experience
+ 12K Brand new data center TL 200 bn sustainable 714
employees Completed migration during pandemic loan financing until 2030 branches
‣ Uptime Tier 3 Certified ‣ 1st Turkish bank to issue green ‣ c. 60% are phygital with paperless
‣ +150K man-day gain (1) bond during Covid-19 (USD 50 & mobile experience designs
38 yrs mio)
avg age of employees 55% ‣ ~ TL 17 bn sustainable finance
provided in 1H21(2) 5.8 mio
Reduction in mainframe usage
Digital banking customers
Redesigned & flexible
working model for HQ 1st Increase # of financially
post- pandemic:
Large-scale Turkish bank to achieve empowered people +15 pp
agile transformation ‣ Akbank FAV for university Mobile NPS (3)
‣ c. 55% remote-working students
‣ c. 35% hybrid-working 35%
‣ c. 10% onsite
Reduction in time to market
Become a carbon- 1st
“NO PAN” Credit Card in Turkey
53% Harnessing AI & analytics neutral bank by 2025
for business solutions ‣ 60% of electricity sourced via
women employees wind power Digital POS
‣ Doubled analytical data in 2 yrs ‣ Easy & quick onboarding for
SME merchants
11% ‣ Intensive Data Governance Prog. Increase Social Return on
with +30 domains
PhD and Master’s Degree Investments
‣ AI powered underwriting
‣ Akbank Youth Academy to reach
with +3500 parameters
15K students in 2021
9 (1) Achieved with automating IT operations in 2020
(2) Based on bank-only MIS data, includes: Granted SME loans (assessed through ESMS) & renewable loans, and ESG-type Eurobond & syndicated loan purchases
(3) Since the beginning of 2020
Leveraging our strength while carrying out priorities
Superior CAR
Capital buffers 20.0%(1)
Low ‣ Solid growth
leverage 8.0x … to improve
‣ Customer acquisition
profitability ‣ CoC normalization
CIR
Low
39.8%(2)
Excellently
Cost base positioned…
Outstanding
… to continue ‣ People & Culture
talent building our ‣ Digitization & AI
future ‣ Sustainability
Cutting-edge
infrastructure
10 (1) w/o forbearances: Fixing FX rate for RWA calculation to average last 12 month FX rate
(2) Excludes FX gain from long FX position related with stage 1&2 provisions & LYY hedgeStrong Major Local Shareholder with Long-term Vision
SABANCI HOLDING
Sabancı Holding,
affiliated institutions
‣ One of the two largest multi-business enterprises in
and individuals (1) Turkey with total assets of TL 563 bn
‣ 6.5% of BIST capitalization with 11 public companies
and the Holding itself
49%
‣ Controlled by Sabancı Family, who is the majority
shareholder
‣ Mainly operates in banking, financial services, energy,
51% industrials, building materials and retail
‣ Market leaders in most of the sectors they operate in
‣ Joint-ventures with some of the most well-established
Free Float companies in the world
๏ Including; Ageas, Bridgestone, Carrefour, E.ON, Heidelberg
Cement, Marubeni, Skoda and Philip Morris
30% of all shares are held by foreign investors
‣ Akbank is the flagship of the Sabancı Group with the
highest share in revenues and profitability in the Group
11 (1) Shareholder composition calculation is based on the “Ordinary General Assembly Meeting Shareholder List” dated 24.03.2021Strong Presence in Financial Industry
/ Banking 100%
• Flagship of Akbank Group in Europe
• Total assets at EUR 4,207 mn and equity of EUR 856 mn
16% • Contribution to net income stands at 7% in 2Q21
/ Leasing 100%
1H21 • Net lease receivables market share of 9.7%
/ Brokerage 100%
84%
• Top 5 in equity market transactions as of June 2021
• One of the leading intermediary institutions in the Turkish Equity Offerings since 2010
14%
& consortium leader in 12 offerings with a total offering size of TL 8.3 bn
• Leader in corporate bond issuances (1) with 23.3% market share in 1H21
/ Asset Management 100%
1H20
• Total AuM with TL 68.5 bn
• Leader in pension fund management with TL 33.8 bn AuM, 18.2% market share (2)
• TL 23.9 bn AuM in mutual fund management with 12.1% market share
86% • TL 9.6 bn AUM in DPM
Bank-only Net Income Subsidiaries' Contribution / E-Money 100%
• Tosla, first mobile application of AkÖde was launched at Sep’19
• Tosla targets young users, provides core financial services in a way that is fun, simple,
fast & social
12 (1) Excluding issuances of banks and affiliated companies .All data are based on TSPB and BIST
(2) Among private institutionsBoard of Directors
Chairman
SUZAN SABANCI DİNÇER
AVERAGE
EXPERIENCE
Vice Chairman and
37 Years
Executive Board Member Executive Board Member
CEO
AHMET FUAT AYLA HAKAN BİNBAŞGİL
EYÜP ENGİN
EDUCATION
40%
Undergraduate
Member Member Member
CAN PAKER YAMAN TÖRÜNER EMRE DERMAN
40%
Graduate
Member
ÖZGÜR DEMİRTAŞ
Member
AYDIN GÜNTER
Member
TUĞRUL BELLİ 20%
PhD
Erol Sabancı is a Consultant to the Board
13Executive Team
CEO
HAKAN BİNBAŞGİL
AVERAGE
EXPERIENCE
25 Years
EVP, Corporate and EVP, Treasury CFO
Investment Banking ŞEBNEM MURATOĞLU TÜRKER TUNALI
LEVENT ÇELEBİOĞLU EDUCATION
EVP, Commercial Banking EVP, Credit Underwriting EVP, Strategy, Digital Banking
15%
MEHMET TUGAL EMRE ÖZBEN and Payment Systems Undergraduate
BURCU CİVELEK YÜCE
EVP, Retail Banking
BÜLENT OĞUZ
EVP, Credit Monitoring
and Collections
EVP, People and Culture
PINAR ANAPA
70%
EGE GÜLTEKİN Graduate
EVP, Private Banking and
Wealth Management
ALP KELER
EVP, Special Credits
ZEYNEP ÖZTÜRK
EVP, Technology and
Operations
İLKER ALTINTAŞ
15%
PhD
14International Advisory Board
Chairman
SUZAN SABANCI DİNÇER
Member Member Member Member
DR. HAMID BIGLARI SIR WINFRIED BISCHOFF LORD STEPHEN GREEN MICHAEL KLEIN
Member Member Member Member
LUBNA OLAYAN PROF. DANTE ROSCINI TOM DE SWAAN LORENZO BINI SMAGHI
Member Member Member
EYÜP ENGİN AHMET FUAT AYLA HAKAN BİNBAŞGİL
15Awards over the recent years
Best
IR Program Best Bank
World’s Best Bank Best Bank Best Private Bank
in Turkey for for Trade Finance
in the of Turkey in Turkey
Large Cap in Turkey
Emerging Markets EUROMONEY GLOBAL FINANCE
INSTITUTIONAL EUROMONEY
EUROMONEY (2013-2021) (2020)
INVESTOR (2020)
(2020)
(2020)
Best Payment Bank World's Best
Best Bank Best Banking of the Year
Services in Digital Bank
of Turkey Group in Turkey in Turkey
CEE
GLOBAL FINANCE WORLD FINANCE EUROMONEY
EMEA FINANCE THE BANKER
(2014-2021) (2014-2020) (2019)
(2020) (2020)
Most
Best Financial Best CEE & CIS
Best Bank Valuable
Institution Corporate IR Financial Inclusion
of Turkey Banking Brand
Borrower in Turkey Award
of Turkey
EMEA FINANCE EMEA FINANCE EXTEL EMEA FINANCE
(2014-2020) BRAND FINANCE
(2018) (2018) (2020)
(2011-2017)
1601 Operating Environment
02 Akbank Overview
03 How Akbank is building its future
04 Financials
05 Looking Forward
06 Sustainability Approach
07 Annex
17Akbank’s bifocal strategy
Run the Bank Crafting the future
Create superior customer
Risk & return focused growth
experience
Leverage digitization & advanced
Robust capital
analytics
Invest in our people and
c efficiency
Best-in-class
infrastructure
Our vision: To be the leading bank that drives Turkey into the future
18Our forward looking operating model
MS
TE IN
S
TE
SY
L INTELL
GR
IA
RT
C I
ATE
SMA
G
I
Customer
ARTIF
EN
D TOUCH
CE
Akbanker
SIM PRO
PL
PO
C +D
E
IN
ES IG
TS
SE ITAL
S
Design & Innovation People
Culture & Infrastructure
19People & Culture: Shaping the future of work
Adapting to new working model post-pandemic
‣ End-to-end redesign of all HR processes
‣ Inspired by resilience and adaptability during the pandemic
‣ Redesigned working model for HQ:
๏ c. 55% remote-working
๏ c. 35% hybrid-working
๏ c. 10% onsite
Our new hybrid approach will:
‣ Improve service quality with more efficient, flexible, dynamic teams
‣ Enable tapping into talent pools across the country
‣ Enhance talent retention and employee satisfaction
‣ Become more inclusive with full / part-time opportunities for the
disabled / disadvantaged
‣ Reduce our environmental footprint
‣ Further optimize low opex base through savings
‣ Optimize our real estate portfolio in due course
..all resulting in stakeholder value creation
20A few of new prominent digital features launched
User-centered Smart Daily Banking
‣ New brand attitude and look & feel ‣ AI-based personalized financial insights One-Stop Shop for Wealth Management
‣ Lean experience, simplified language & new tone ‣ AI and need-based smart offers ‣ New investment dashboard
of voice ‣ Campaigns and offers from favorite ‣ Aggregated view of all assets
‣ Personalized communication area brands powered w/ AI
‣ Total portfolio and asset performance tracking
‣ Native promo and sales areas ‣ Akbank Assistant chatbot: First point of help ‣ New and enriched investment product rail
integrated into mobile
‣ Mobile youth proposition: Akbank FAV ‣ FX platform with customized currency prices
‣ Explore tab with search & help capabilities
‣ Turkey’s first digital-first card ‣ Crypto-currency menu integrated with prominent
‣ Proactive money transfer & payment suggestions
‣ Add & rename “contacts” infrastructure crypto-platforms
‣ Personalized small talk & info sharings
‣ Lean money transfer experience ‣ New digital deposit product: WinWin Account
‣ Single factor login with biometrics with Easy Login
‣ Mobile-like customer experience through new ATMs Socialized Banking Experience in Money
‣ Corporate account aggregation services
‣ Akbank Mobile recognized with 3 key design awards: Transfers & Payments
๏ iF Design Best Mobile App Design ‣ E2E Digital Onboarding
‣ Mobile payments with QR, NFC, OCR and barcode
๏ A’Design Award & Competition
๏ Red Dot Award in Brand & ‣ Nearby money transfers
Communication Design ‣ Money transfers and payments with QR
‣ Money transfers to contacts and groups
‣ Linking IBAN with GSM no & ID Easy Address
‣ 24/7 interbank money transfers with FAST
‣ Istanbulcard registration and top-up payments
21Tosla
A brand new ‘‘fun & playful, simple & fast, and social’’ mobile platform
‣ New mobile platform targeting young users,
providing core financial services
๏ 7/24, free P2P transfers interactive with feeds
๏ Digital payments and contactless prepaid card
๏ Free and easy top-up & withdraw
‣ Quick and easy digital onboarding
‣ Social like its target audience – find and follow
friends, like, comment, engage
22Phygital Branch: Zero-based design creates competitive advantage
Hidden Teller Counter
Conversation Bar
Mobile RMs
E-teller
23Customer Driven Optimization
Branch Number Evolution Total Customer Evolution
(mn)
991 18.9
18.5
+5.5 mn 17.9
-277 17.4
902
16.5
841
800 15.4
781
771
14.4
716 714
13.4
2014 2015 2016 2017 2018 2019 2020 1H21 2014 2015 2016 2017 2018 2019 2020 1H21
24 Includes Malta branchEnhancing bottom-line impact through digital transformation
Digital banking in numbers (1) with 5.8 mio customers
01 02 03
Interaction Financial Engagement Performance
‣ +24% monthly app login (2) ‣ +56% # of financial transactions ‣ 2x digital customer x-sell compared to
‣ +22% # of mobile customers through mobile: non-digitals
conducting financial transactions ‣ 55% credit cards sold through digital
‣ +15 pp mobile NPS (2) ๏ +23% payments channels (3)
๏ +60% money transfers ‣ 83% GPLs sold through digital channels (3)
‣ 48% of bancassurance products sold
through digital channels (3)
‣ +11 pp share of mobile in financial
transactions
๏ +8 pp share in payments
๏ +4 pp share in money transfers
Active mobile customers visiting Akbank Mobile almost everyday
25 (1) Based on bank-only MIS data. Increase figures from Jun’20 to Jun’21
(2) Since the beginning of 2020
(3) Including non-branch channels, from Jan’21 to Jun’21New era in customer onboarding
‣ Easy and intuitive digital experience ‣ Strong value propositions* for digital savvies
๏ Process takes 6 to 8 min end-to-end
(including 3 to 4 min for video call)
๏ Uninterrupted single session ‣ Inclusive process for dormant customer
reactivation*
‣ Biometrics, NFC & Video Call
technologies enabled
‣ 24/7 service*
‣ Multiple product sales* from the very
beginning of customer onboarding
(*) Point of difference in the market
26 NFC: Near Field Communication01 Operating Environment
02 Akbank Overview
03 How Akbank is building its future
04 Financials
05 Looking Forward
06 Sustainability Approach
07 Annex
271H21: On course for FY ROE guidance 1H21
RoE
Net Income Profit Before Tax 12.8%
+4% (TL mn) +19% (TL mn) 1H21 Achievements
QoQ Effective tax rate:
1H21: 26% & 2Q21: 31%
QoQ
‣ Generated all time high profit before tax & net income
‣ Sustained pre-provision income despite significant NIM
45% pressure
2,885 43% 4,134 3,861 5,600
๏ Proactive securities positioning & strategic loan mix to
1H20 1H21 1H20 1H21 alleviate funding cost pressure in 2H
‣ Robust fee performance across the board
Revenue Pre-provision Income
‣ Advanced market share gains in retail (1) loans enhancing
+11% (TL mn) -10% (TL mn) profit mix
QoQ QoQ
11,169
‣ Demonstration of long term prudent risk management
8,975 confirmed with sound asset quality performance
1%
8,906 20%
6,165 8,558 8,484
‣ Preserved robust capital & solid liquidity buffers
2,262 2,810
1H20 1H21 1H20 1H21
Cheat sheet link
Swap adj. Net Interest Income
Fee income
28
(1) Consumer & SME according to MIS segmentationBalanced asset allocation drives sustainable long-term shareholder value
Assets Loan Breakdown
(TL bn) (net, TL bn)
537.8
478.3 7.1% 289.5
3.8%
12.4% 8.5% 262.7 Prudent Asset- Liability
10.2%
8.9% Management
9.1%
11.1%
35.2% 36.9%
21.4%
21.3%
Low Leverage
22.8% 24.3%
8.0x
54.9% 53.8%
42.0% 38.8%
Robust capital
(2)
2020 1H21 2020 1H21 20.0%
Loans (net) Securities Other
TL Business Banking Consumer incl. Credit Cards
Reserve Requirement Liquid assets(1)
FX Loans
Increased consumer share in loan mix to enhance profitability
29 (1) Cash and cash equivalents
(2) w/o forbearances: Fixing FX rate for RWA calculation to average last 12 month FX rateConsecutive consumer loan market share gains
TL Loans FX Loans
(net, TL bn) (net,USD bn)
Sector Sector
YtD Market YtD Market
Change Share (1) Change Share (1)
170.3 182.6 -1.1% 6.6%
+7.2% 7.3%
20.7
18.1 12.4 12.3
+14.4% 12.9%
41.7 49.5 +18.9% 7.3% 28% 35%
Multinationals
+1.6% 6.8% & corporates
with FX cash
flow generation
110.5 112.3
72% 65%
2020 1H21 2020 1H21
TL Business Banking Consumer Consumer Credit Card
Project Finance & Export Other
‣ TL loan growth in 1H driven by sustained performance in consumer loans inline with our strategy
‣ Market share gains in 2021:
๏ 80 bps in Consumer Loans, 90 bps in GPL(2), 10 bps in Consumer Credit Cards, 60 bps in Mortgage
‣ 69% of GPL originations were pre-approved, separately 30% were to salary customers
‣ Supported by accelerated marketing efforts & advanced analytical and digital capabilities
(1) Market share data based on bank only BRSA weekly data as of June 25, 2021
30 (2) General Purpose LoansProactive securities positioning to be NIM accretive
TL Securities FX Securities
(TL bn) (USD bn)
63
60 6.0
5.7 5%
38% 5% 24%
99% 99%
14%
7%
55% 63%
1% 1%
2020 1H21 2020 1H21
CPI Floating Fixed Floating Fixed
Total Securities
(TL bn)
115 ‣ CPI linkers & FRN reached c. 76% of TL Securities
102
13% ๏ CPI linkers valued with 14% Oct-Oct inflation estimate
55%
58% ๏ Every +1% CPI has c. TL 270 mn NI and +6bps NIM &
+40 bps ROE impact
45%
42%
‣ Strong FX liquidity utilized in NIM accretive Eurobond
2020 1H21 purchases
FX TL
31Maintained disciplined funding mix
Composition of Liabilities (%) Deposit Currency Split (TL bn)
Demand
Deposits
537.8 +14% YtD
6.0 31% 32%
478.3 12.4%
6.5
4.4
293 327 Sticky & low
7.5 14.2 12% cost RETAIL (1)
63% 62% DEPOSITS’
13.9 Share in TL
Deposit 76%
12.5 37% 38%
13.2 2020 1H21
TL FX Demand Deposit/ Tot. Dep.
LDR (2) (%)
61.2 60.8 153
147 147
94 95 94
Sector’s
Total LDR at
47 51 49 100% (3)
2020 1H21 2020 1Q21 1H21
Deposit Equity Funds Borrowed & Bonds Issued Other Repo TL LDR LDR FX LDR
32 (1) Consumer & SME according to MIS segmentation
(2) Bank-only. TL LDR includes domestic TL bond issuances and merchant payables
(3) Based on BRSA weekly data dated June 25, 20211st benchmark sustainable Tier 2 among Turkish deposit banks
Wholesale Funding vs FX Liquidity Buffer Wholesale Funding Maturity Profile
(USD mn) Total: USD 7.5 bn
(USD bn)
Avg. maturity: ~ 3yrs
2Q Avg. 10NC5 Tier 2 notes have issuer call dates
FX LCR scheduled in 2022 & 2023 & 2026 respectively (4)
Syndicated loans: c. USD 1.5 bn
276%
932 952
13.3 940 752
507 627 551 557 538 519
210 422
2.6 29
1H21 3Q21 4Q21 1Q22 2Q22 2H22 2023 2024 2025 2026 2027 2028 2029 ≥2030
(1)
ST portion of Wholesale Funding
Covered Bond (3) Eurobond GMTN Multilateral Securitisation
FX Liquidity Buffer (2)
Syndicated Loan Tier 2 Trade Finance Green Bond
‣ In June, issued first ever benchmark sustainable Tier 2 among Turkish deposit banks
๏ Intra-day execution with c. 3x oversubscription
๏ The book attracted c. USD 1.4 bn demand from more than 150 investors
๏ Priced at 6.80%, same as the senior eurobond issued in July 2020
๏ 105 bps positive impact on CAR
‣ Total ESG-linked funding share increased from c. 20% to c. 30%
Balances based on principal outstanding and bank-only MIS data
(1) ≤ 1 year tenor
33 (2) Consolidated FX liquidity buffer includes FX reserves under ROM, swaps, money market placements and CBRT eligible unencumbered securities
(3) USD equivalent of TL 1.4 bn Covered Bond issuances
(4) Call exercise in year 5 is subject to BRSA approvalSuccessful Wholesale Borrowings
‣ USD 500 million, 10NC5, priced at 6.80% (same as the senior eurobond issued in July 2020)
Sustainable ‣ First benchmark sustainable Tier 2 issuance among Turkish deposit banks
2Q21
Tier 2 ‣ Intra-day execution with c. 3x oversubscription
‣ Book attracted c. USD 1.4 bn demand from more than 150 investors
‣ 39% of the issuance was allocated to ESG investors
‣ USD 500 million, long 5 year, 144A/RegS senior unsecured
Eurobond 3Q20 ‣ First Turkish bank to issue Eurobond during Covid-19 pandemic
‣ Strong institutional demand with c. 3x oversubscription at peak
‣ Granular spread of institutional investors primarily from Continental Europe (39%), UK (31%), US (19%)
Syndicated Loans ‣ April 2021 ESG-linked Syndicated Loan ~ USD 675 million
๏ USD 344.5 million, 367 days tranche @ Libor+2.50%
๏ EUR 279 million, 367 days tranche @ Euribor+2.25%
๏ 35 banks (8 new) from 18 countries committed 126% of total renewal amount at c. USD 792 million,
with final roll-over ratio at 107% and renewal amount of USD 675 million
๏ Akbank’s first ESG-linked loan with performance criteria linked to gender balance, non-lending to
Syndicated Loans
greenfield coal power plant projects & electricity sourcing of the Bank from renewable sources
‣ October 2020 Syndicated Loan ~ USD 800 million
๏ USD 388 million, 367 days tranche @ Libor+2.50%
๏ EUR 348.5 million, 367 days tranche @ Euribor+2.25%
๏ Deal attracted 36 banks (9 new) from 19 countries across Europe, America, Asia & Middle East
3Q20
‣ USD 50 million, c. 4 year, RegS senior unsecured
Green Bond
‣ Milestone green bond transaction reflecting Akbank’s sustainability goals
34NIM accretive asset repricing & strategic CPI positioning
Quarterly NIM Breakdown (bps) ‣ Positive impact of asset repricing & CPI to continue in 2H
‣ Swap cost increased with higher utilization and rates
+40
+12 +3 274 ‣ Higher funding cost creates downside risk in FY NIM
240
+44 guidance, to be partially mitigated by CPI linker buffer
-36 -22
S -7 ๏ CPI linkers currently valued at 14%
๏ Every +1% CPI has c. TL 270 mn NI and +6bps NIM &
1Q21 Swap Deposit Borrowing Loan CPI 2Q21
NIM Cost Cost Yield Impact
Securities Other
NIM +40 bps ROE impact
Quarterly Total Swap Cost (1) CPI Linker Interest Income (TL mn)
(TL mn)
-590
-976 1,602 1,728
-1,566 -1.411 (a) (b)
-1.954 1,088
741 784
2Q20 3Q20 4Q20 1Q21 2Q21
2Q20 3Q20 4Q20 1Q21 2Q21 Impact of change in CPI estimation: (a) from 9% to 11.9% is TL 785 mn
2021 Oct-Oct CPI linker valuation estimate: 14% (b) from 11% to 14% is TL 491 mn
35 (1) Includes short and long-term swapsAcross the board outstanding fee performance well above FY guidance
Net Fees & Comm. Payment Systems
-7.8% (TL mn)
QoQ +48% YoY
Predominantly related with volume increase in both
24.2% acquiring & issuing
Flat excl. 1Q
LYY fee impact Bancassurance
2,262
2,810 +45% YoY
New product launch
Digital Bancassurance sales +84% YoY
Digital premiums/Total +14 pp YoY (1)
1H20 1H21
Fees & Commissions Income by product Money Transfers
(%)
Wealth Management
+32% YoY
Bancassurance
Supported by strong volume growth
14
21 8 Money Transfers
Business Loans
6 Wealth Management
4
4
Other
+30% YoY
ESG & tech. focused product innovation
Consumer Loans
Payment Systems 43 Accelerated customer acquisition driven by new digital services
36 (1) Based on MIS dataConfident with FY Opex guidance despite higher inflation outlook
Opex Opex Breakdown
+7% (TL mn) 1H21 (1H21,%)
QoQ CIR:
39.8%
Regulatory
4,327 Depreciation & Maint.
3,898
11.0% 11 IT
11
1,696 QoQ YoY 9
1,546 Change Change
Marketing 17
HR 9.4% 9.7% 13
Other
2,352 2,632 Non HR 6.0% 11.9%
HR 39
1H20 1H21
HR Non HR
‣ CIR to gradually improve along with revenue enhancement
๏ CIR calculation excludes FX gain from long FX position related with stage 1&2 provisions and LYY hedge
37Proactive IFRS 9 implementation regardless of staging forbearance
Staging Breakdown Quarterly New NPL Evolution (1)
(TL mn, Gross Loans) (TL mn)
NPL Ratios by Segment
279.2 307.3 (%) 2,729
6.2% 5.5% Business 6.4
9.4% 11.1% Consumer 2.9 2,048
Credit Cards 3.7 763
613 554
265
84.4% 83.4% 77 25 154 41
498 680 701 691 708
3Q20 4Q20 1Q21 2Q21
2020 1H21
Stage 1 Stage 2 Stage 3 New NPL Collections Net New NPL Write off
(excl. write off )
‣ BRSA forbearances: ‣ Negative net new NPL inflow in 1H21
๏ 30-90 days files: only TL 0.6 bn in Stage 1
๏ 90-180 days files: TL 1.3 bn (If all were booked as NPL,
‣ Broad- based collection performance remains strong
despite full lock down during 2Q21
NPL ratio impact would be +c. 40 bps)
… with strong coverages. ‣ No NPL sale
38 All restructured loans (TL 24.9 bn) are followed under Stage 2
(1) Bank-onlyBalances on deferred loans are well covered
Segmental Breakdown of Deferred Loans Staging Breakdown & Coverages (TL bn,%)
(Outstanding principal amounts, TL bn)
7% of
Total Gross
Loans with
c. 8%
Coverage Coverage 1.6% 13.5%
Business Banking Consumer incl. Total
Credit Cards
9.6 11.5
22.2 21.0
15.2 12.9 3.8 4.7
0.9 7.0 8.1
3.2 2.6 Stage 1 Stage 2
5.8
4Q- Ending Balance 1H- New Inflows 1H-Payment 1H- ending balance
‣ Total deferred risk principal amount to date is at TL 34 bn
‣ 4Q20 outstanding risk of TL 22.2 bn down to TL 21.0 bn (7% of gross loans) as of 1H21
๏ Total coverage at 8.1% up 90 bps YtD
๏ c. 60% Business Banking & c. 40% Consumer incl. credit card
๏ 75% have matured installments (1) & strong repayment performance
39
Based on MIS data
(1) Based on number of customersCoC evolution demonstrates long-term prudent risk management
Provision Build & Coverages Net CoC Breakdown (bps)
Total (excl. free provisions)
provisions
reached Net CoC excl. Currency Impact (bps)
TL 18 bn (1) 6%
295 220 115 92 37 231 64
317 294 106 259
4% 101 59 79
1Q19 1H19 9M19 2019 1Q20 1H20 9M20 2020 1Q21 1H21
2Q20 3Q20 4Q20 1Q21 2Q21 1H20 1H21
Provision Build Gross Coverage %
Stage 1+2 (net) Stage 3 Currency Impact Stage 3 Recoveries
(%) 2020 1H21 ‣ Solid coverage ratios
Stage 1 Coverage 0.6 0.5
Stage 2 Coverage 16.4 16.1 ‣ FX provisions are hedged
Stage 3 Coverage 62.4 65.2 ‣ 1H CoC evolution underlines better FY performance vs
Free Provisions TL 1,150 mn TL 1,150 mn guidance
Stage 2+3 Coverage 37.3 34.7
(incl. free provisions) ‣ Every +10 bps change in CoC has +40 bps ROE impact
40
(1) Excluding MtM for LYYCapital remains a source of strength with robust buffers
CAR Evolution (QoQ, bps)
Without forbearances (1)
20.0%
+51 Sensitivity of Solvency Ratios:
+105
18.5% ‣ 10% TL depreciation: c. 70 bps
+35 +4
-13 ‣ 100 bps interest rate increase : c. 30 bps
-39 12.08%
(2)
‣ 1% NPL increase : c. 25 bps
1Q21 Market Credit Risk Securities Derivatives New Tier 2 Profit 2Q21
Risk MtM Impact Issuance
(%, TL bn) CAR Excess Capital (3) Tier 1 Excess Tier 1 (3) CET-1 Excess CET-1(3)
Without forbearances (1) 20.0% 32.4 16.0% 24.2 16.0% 30.3
With forbearances (1) 20.9% 34.5 16.8% 26.1 16.8% 32.0
(1) For 2Q21, fixing FX rate for RWA calculation to average last 12 month FX rate & for 1Q21, fixing MtM losses of securities & FX rate for RWA calculation to
average last 12 month FX rate
(2) Min Basel III required: Including buffers (Capital Conservation Buffer: 2.50%, D-SIB Buffer: 1.50%,
41 Countercyclical Capital Buffer: 0.08%)
(3) Basel III min. requirements: CAR: 12.08%, Tier-1: 10.08%, CET-1 8.58%2021: On track to meet FY ROE guidance
1H21 2021G vs. Guidance
Loan mix in favor of
TL Loan Growth +7.2% ~ 20% Slight downside risk profitability
FX Loan Growth (in USD) -1.1% Flattish
Leverage 8.0x > 8x
ROE 12.8% Mid-teens
Due to increase in
NIM (swap adj.) 2.7% 20-30 bps contraction Downside risk funding costs
Net fees&com. growth +24.2% High-teens Better performance
Opex growth +11.0% Mid-teens
Cost/ income (1) 39.8% ≤34% Slight upside risk Due to NII miss
NPL (2) 5.5%01 Operating Environment
02 Akbank Overview
03 How Akbank is building its future
04 Financials
05 Looking Forward
06 Sustainability Approach
07 Annex
43Strong ROE recovery in 2021
Low-teens Mid-teens
2020 2021
Loan growth with Solid NII Improving Low Lower CoC after Hedged LYY
risk & return in generation fees operating significant position
focus cost base provision build
Inline 10 bps CoC c. 180 bps
with improvement: negative ROE
growth c. 40 bps impact in 1H20
strategy ROE impact ahead of hedge
4401 Operating Environment
02 Akbank Overview
03 How Akbank is building its future
04 Financials
05 Looking Forward
06 Sustainability Approach
07 Annex
45ESG Strategy: Mitigate environmental footprint while increasing
positive impact
Sustainable Finance Ecosystems Management
Responsible Products & Services ‣ ‣ Digitalization
Impact Investing ‣ ‣ Financial Inclusion
To be the
leading bank
that drives
Turkey into the
future
People & Community Climate Change
Future of Work ‣ ‣ Operational Emissions
Diversity & Inclusion ‣ ‣ Portfolio Impact
Community Investment ‣ ‣ Portfolio Exposure
Integrated Governance Financial Performance
46Actionable targets for positive impact
SUSTAINABLE TL 200 bn TL 15 bn AuM ECOSYSTEMS Extend digital & innovative
FINANCE Sustainable loan Sustainable MANAGEMENT products & services
financing until investment funds
Supporting a more Enhancing
sustainable economy 2030 2030 businesses &
financial health
Increase sustainable financing Increase number of financially
secured by the bank until 2030 empowered people
Improve the Increase Social Become a carbon- Decrease impact
PEOPLE & effectiveness of
CLIMATE
Return on neutral bank of loan portfolio
COMMUNITY investment on our Investments for
CHANGE through eliminating
Mitigating operational
on climate
Empowering our people people community operational
and communities emission & portfolio change until
investments emissions until
impact 2025 2030
Enhance the effectiveness of Akbank Mitigate climate-related risks &
volunteerism in community investments impact on portfolio
47Sustainability Governance
Committee
Members:
Executive Board 4
Member, meetings
Independent Board per year
Sustainability Committee Member, CEO,
CFO, SVP of IR &
Sustainability
Preliminary
Committees Sustainable Finance Ecosystem Management Climate Change People & Communities
Loans Digitalization Operational Emissions Future of Work
Stakeholder
Teams Funding Financial Inclusion Portfolio Impact Diversity & Inclusion
Wealth Management Portfolio Exposure Akbank Volunteerism
Community Investments
Investor Relations & Sustainability Department:
‣ Holistic ESG approach in coordinating bank-wide efforts to achieve shared sustainability
goals
‣ Conducts materiality analysis to identify key issues, periodically rethinking and improving
sustainability strategy
48Akbank’s sustainability performance at a glance
Sustainable finance People & Culture Climate change Community investment
Supporting our Reskilling our people for Reducing our impact on Creating shared value
businesses for a more future of work environment
sustainable economy
53% First company in Turkey to Long-running Arts & Culture
Environmental and Social women employees • be featured in CDP 2010 initiatives
Assessment Global 500 Report • Akbank Jazz Festival (31 yrs)
for project finance, new 35% • become signatory of UN • Akbank Children’s Theatre
investment and SME loans Global Compact, Carbon
women executives (49 yrs)
Price Communique • Akbank Art Center (28 yrs)
Largest ESG-linked loan deal
in Turkey, EUR 650 mn
30 hrs
signatory training per employee LEED Gold
Green Building Certification Founding sponsor of
First Green Bond Women’s Empowerment for Akbank’s new Data Endeavor Turkey
USD 50 mn issued in 2020 Principles, 30% Club, Center
with c. 4 yrs maturity Valuable 500, Bloomberg
Gender Equality Index, Clear, transparent emissions + 1K
100% of energy generation OMFIF Gender Balance reporting & targeting since Akbank volunteers
PF loans to renewables since Index 2012
2016 (1) member
49 (1) 84% of PF energy generation loans are renewable as of 2Q211Q21 Key ESG highlights
E S G
‣ Non-financing activities (1) scope expanded to include:
๏ New coal (thermal) power plant projects
๏ Coal mining, coal transportation and power plants operating with coal for SMEs
‣ Environmental & Social Risk Assessment for new commercial loans reduced from USD 50 mn to 10 mn
‣ Sustainable Finance Framework (2) launched, outlining social and green eligibility criteria
‣ Akbank’s first ESG-linked syndicated loan, USD 675 mn (April 2021)
‣ 2 ESG-themed funds launched by Akportföy, reaching ~ TL 370 mn AuM
‣ Sustainable finance (3) provided in Q1 ~ TL 6 bn
‣ Entered Bloomberg Gender Equality Index 2021, scoring higher than global & sector averages
‣ Top-rated EM bank in OMFIF Gender Balance Index
‣ First Turkish company to join Valuable 500, a global initiative supporting disability inclusion
‣ Launched Akbank Youth Academy, aiming to reach 15K students by FY2021
(1) https://www.akbankinvestorrelations.com/en/images/pdf/Non-Financing-Activities-List.pdf
(2) Sustainable
Finance Framework (SFF) in line with International Capital Market Association Green Bond Principles (GBP), Social Bond Principles
(SBP), Sustainability Bond Guidelines (SBG), and Green Loan Principles (GLP)
https://www.akbankinvestorrelations.com/en/whosale-funding/detail/Sustainable-finance/600/1468/0
50
(3) Based on bank-only MIS data, includes: Granted SME loans (assessed through ESMS) & renewable PF loans, and ESG-type Eurobond purchases2Q21 Key ESG highlights
E S G
‣ 1st deposit bank in Turkey to issue sustainable Tier 2 (USD 500 mn)
‣ New products for transition to low-carbon economy, such as:
๏ Green Trade Finance Campaign, (1st in Turkey)
๏ Rooftop PV Investment Loans
‣ Sustainable finance provided in Q2 at ~ TL 11 bn(1) (1H reached ~ TL 17bn)
‣ AuM of ESG-themed funds launched by Ak Portföy almost doubled QoQ, reaching ~ TL 700 mn
in 1H
๏“Innovative Companies in Health Sector” fund secured rating by Refinitiv, 1st in Turkey
‣ 60% of the bank’s electricity sourced from renewable resources (up from 20% in Q1)
‣ New policies to foster governance & culture: Diversity and Inclusion Policy, Human Rights Policy,
Zero-Tolerance to Violence Policy
Based on bank-only MIS data, includes: Granted SME loans (assessed through ESMS) & renewable loans, and ESG-type Eurobond & syndicated loan
(1)
purchases
51Sustainable Finance Framework aligned with international
standards
Use of proceeds Management of proceeds
‣ Green & social eligibility criteria incl. renewable energy, ‣ Robust governance and reporting processes that
affordable housing and employment generation enable transparency and efficiency
‣ In line with International Capital Market Association ‣ Projects to be added on an ongoing basis
Green Bond Principles (GBP), Social Bond Principles
(SBP), Sustainability Bond Guidelines (SBG), Green
Loan Principles (GLP)
Project evaluation & selection Reporting & external verification
‣ Sustainable Finance Preliminary Committee (SFPC) ‣ Second Party Opinion by Sustainalytics
to ensure allocation in line with eligibility criteria
‣ Annual allocation reports publicly announced
‣ Akbank’s Environmental and Social Credit Policies
applied in all lending practices ‣ Limited assurance from independent auditors
52Financial inclusion: Empowering businesses through partnerships
‣ HR solutions for SMEs ‣ Digital accounting ‣ Affordable platform to ‣ Free money transaction
solutions for micro SMEs operate in online for merchants
‣ Personnel & payroll commerce
management, ‣ Value-added offers for ‣ POS commission rate
performance
invoice & e-invoice ‣ Special offers: offers
management competitive POS
evaluation analytics commission rates, ‣ Budget for salary
‣ Online income and cashback, commercial payments
‣ Integrated salary expense monitoring installment loans with
payment option via favorable interest rates ‣ Chip-money campaign
akbank.com ‣ Payments via for commercial credit
akbank.com cards
53Financial inclusion: Empowering youth
‣ Akbank FAV(1) for university students ‣ Turkey’s first online scholarship ‣ Mobile platform targeting young users,
under 26 (12K students) platform with 1.4 mn students providing core financial services
‣ Free membership via Akbank Mobile ‣ Digital account opening integrated ‣ 24/7, free P2P transfers interactive
with E-bursum with feeds, spend & split among
‣ No fees for daily banking transactions friends
‣ Automated Akbank FAV membership
‣ Overdraft accounts w/ 0% interest for Akbank account owners ‣ Digital payments and contactless
rate for weekends prepaid card
‣ Online Training Platform - 7K students
‣ Special discount & cashback offers for ‣ Free and easy top-up & withdrawal
debit/credit card transactions
‣ Social features: find and follow friends,
like, comment, engage
54 (1) Akbank FAV addresses the needs and preferences of youth through targeted products and servicesInvesting in our future through culture and skills
‣ Akbank Academy
๏ Next-generation technology & infrastructure
๏ 24/7 access to online training; 30 hrs training/employee (52% online)
๏ Key skills for future of work: social, cognitive and technological
๏ Digital trainings during remote work (10,104 webinars, 37,739 views)
๏ Diversity & inclusion trainings
‣ Reflection of the Future Program: personalized development plans for all Akbankers
‣ Centers of Excellence: specific expertise & training in 8 areas (eg. robotics process automation, design-thinking,
next-gen marketing)
‣ Youth: Future Club, Shadow Program, Generation to Generation Project, Switch (reverse-mentorship)
‣ Multi-disciplinary learning culture, with programs to integrate key skills into corporate culture
‣ First Turkish company to join Valuable 500, supporting disability inclusion
‣ Entered Bloomberg Gender Equality Index 2021, scoring higher than global and sector averages
‣ Became top EM bank and ranked among top 5 banks globally in Official Monetary and Financial Institution Forum’s
Gender Balance Index 2021
55Creating shared value by investing in our communities
‣ Akbank Art Center (700 events/yr)
‣ Akbank Jazz Festival (5K artists, 500K viewers in 31 yrs)
‣ Akbank Children’s Theater (2 mn children in 49 yrs) Volunteering
Arts & Culture ‣ Contemporary Art Education Program (30K in 11 yrs)
Part of who we are /
‣ Sakıp Sabancı Museum: Ai Weiwei, Rodin, Dali, Anish Kapoor, Marina
corporate culture
Abramovic
‣ Contemporary Istanbul (reached 74K people in 2019)
Akbank Volunteers from
all over the country
‣ Founding sponsor of Endeavor Turkey
‣ Case Campus Bootcamp, Startup Campus, ScaleUp Campus,
Entrepreneurship 40 Ambassadors
EndeavorConnect
‣ Akbank Entrepreneur Development Program (with Sabancı University)
Continuous support during the
pandemic
‣ Center of Excellence in Finance, started online education in 2020
«Good State of the City»
‣ Akbank Thinking Club, Akbank Unichallenge, AI Academy
«Good State of Home»
Education ‣ Akbank Children: Heroes of the Economy
(6K youth working with
‣ Family-Owned Business Academy
16 NGOs)
‣ Computer donations (+4K computers since 2015)
56Reducing our impact on the environment (2020)
First Turkish company
to be featured in 5.8 mn tons
Minimizing the effect of our loan
CDP 2010 Global 500 Report CO2 emissions prevented by
portfolio on climate change
(founding sponsor of CDP in Turkey) renewable projects financed
GHG Emissions reduction: Scope Scope 1 & 2 Emissions dropped to
1+2 emissions achieved the 58,068 tons; intensity figure 50%
intensity target set for 2020 percent less than 2014 base year
Reducing paper use: Digital
Saving 56 mn sheets of paper,
solutions for efficient natural
~4K trees
resource consumption
Energy-efficient technology &
1.4 power usage efficiency, LEED
infrastructure: Data and Living
Gold Green Building Certification
Center
Technological waste recycled back
Waste disposal: Recycling-oriented
to economy: Toner cartridges, PCs,
waste management policy
monitors, POS equipments
57Governance structure for long-term, sustainable decision-making
‣ Split roles for Chairman & CEO
‣ Board structure in compliance with CMB(1) legislation
‣ Remuneration policy
๏ Remuneration of Board Members and Senior Management in line with the regulations of the BRSA(1) and CMB(1)
๏ Total compensation quarterly disclosed in annual report
‣ Donation policy
๏ Maximum limit approved annually at General Assembly
๏ Total donations disclosed in annual report
‣ Chief Risk Officer reports directly to the BoD
๏ 1st bank in Turkey to integrate Machine Learning scorecards into credit processes
๏ Cutting edge methods and tools
Prudent Risk
Management ‣ Chief Information Risk Officer reports directly to the BoD, aspirational global best practice
๏ 1st financial institution in Turkey
๏ Recognized as best practice, mandatory as of 2021 according to the new banking regulation
๏ Top priorities: Cybersecurity, data security/privacy and fraud risk management
58 (1) CMB: Capital Markets Board; BRSA: Banking Regulation and Supervision AgencyRobust application of policies through training & monitoring
Policies Approach Training
Ethical
Drawn to enlighten us in all kinds of transactions, behaviors and decisions ‣ For all employees: Code of Ethics,
Principles
Information Security, Data Leakage,
Anti-bribery & Compliance with the anti-bribery and anti-corruption laws and regulations, clean Law on Protection of Personal Data,
Anti-Corruption banking rules, ethical principles and universal guidelines Anti-corruption, Sustainability
Dividends Distribute cash and/or shares to a maximum of 40% of its distributable profit ‣ Specialized trainings: International
Sanctions/Combating Proceeds of
Crime training, Sustainable Banking
Disclosures In close and transparent communication with shareholders and Assessment of Environmental
and Social Risks, SME Loans and
SEMS, Clean Banking
Gifts and Hospitality Strict principles with regard to the giving and receiving gifts
Remuneration Aligned with BRSA and CMB’s Corporate Governance Principles Monitoring
Donations and Aligned with Capital Markets Law and Banking Law,. donations up to max 0.4%
Contributions of equity ‣ 24/7 Ethics Hotline
‣ In case of a possible breach:
๏ Evaluation by Internal Control
Compensation Aligned with Labor Law
๏ Directed to Executive Vice
President and Internal Audit
Cookies Provide facilities to users visiting our website and further improve the modus operandi
59 For further information, please see https://www.akbankinvestorrelations.com/en/corporate-governance/detail/Policies/164/502/001 Operating Environment
02 Akbank Overview
03 How Akbank is building its future
04 Financials
05 Looking Forward
06 Sustainability Approach
07 Annex
60Gross Loan Sector Breakdown
Other (1) 16.6 Consumer Loans (3) 25.3
Services 2.3 Real Estate 7.7
‣ LTV c. 80%, with recent valuations &
assuming Decree 32 to be implemented
Metal & Fabricated Metal Products 2.8 perpetually (despite 2 yr limitation)
‣ c. 20% of total has FX cash collateralization
Tourism 3.1
‣ Well-known brands Energy Generation 7.5
‣ 100% of PF loans since 2016 are renewable
‣ 84% of PF energy generation loans are renewable
Food 3.2 ‣ c. 60% are government guaranteed (feed-in tariff)
Retailer 3.3
‣ Financially strong sponsors Finance 5.3
‣ Nation-wide supermarket chains
with high business volume
Conglomerate 4.2
Textile & Ready-made 3.4
Construction 3.7
‣ c.60% in FX Transport Vehicles & Sub-industry 4.0
‣ 80% of FX loans are
government guaranteed (debt
assumption) Transportation & Logistics 3.9
‣ Increasing business volume in logistics with
Petrochemicals Production 3.8 changing shopping habits
‣ High capacity docks in different locations
‣ Financially strong companies with high and
SME (2) loans’ share in total gross loans at 6% stable cash flows
Consists of consolidated performing and non-performing cash loans & excludes leasing receivables and adjusted for financial assets
measured at fair value through P&L
61 (1) Loan concentration below 2%
(2) According to MIS segmentation
(3) Including credit cardsFX loan portfolio breakdown
FX Loans
(net,USD bn)
Sector
YtD Market
Change Share (1) Breakdown of PF Loans
-1.1% 6.6% (%)
12.4 12.3
Infrastructure
28% 35% Multinationals Energy
& corporates 16
with FX cash
flow generation 21
32 Other
72% 65%
31
2020 1H21 Real Estate
Project Finance & Export Other
(1) Market share data based on bank only BRSA weekly data as of June 25, 2021
62Staging & coverage ratios of main sectors
2Q21
Stage 2 Loans % of Total Stage 2 Coverage (%) Coverage pp (YtD) Coverage pp (QoQ)
Real Estate (1) 28.8 12 (2) (2)
Energy Generation 9.2 31 1 2
Tourism 4.7 19 10 Flattish
Retailer 1.4 15 4 2
Construction 1.2 26 6 5
Transportation & Logistics 0.6 13 Flattish 1
2Q21
Stage 3 Loans % of Total Stage 3 Coverage (%) Coverage pp (YtD) Coverage pp (QoQ)
Real Estate 21.3 59 Flattish Flattish
Retailer 11.7 55 8 5
Construction 9.6 81 6 4
Energy Generation 5.1 52 7 4
Tourism (2) 2.5 56 10 9
Transportation & Logistics 0.6 76 3 1
(1) Real estate’s share in Stage 2 is at 5.1% with 21.4% coverage, excluding one excessively collateralized real estate loan
63 (2) Adjusted for one excessively collateralized fileSubsidiaries’ contribution
1H20 1H21
14% 16%
Bank-only net income
Subsidiaries' Contribution
86% 84%
Subsidiaries’ Net Income (TL mn)
681
392
75
44
123 Ak Asset Management
247 Ak Investment
74% Ak Lease
61 YoY 94 Akbank AG
Aköde
178
284
-14 -19
1H20 1H21
64Snapshot of Results
Profitability (%) 1Q20 1H20 2020 1Q21 1H21
ROE 9.6 10.4 10.9 12.9 12.8
ROE, Quarterly 9.6 11.4 12.1 12.9 12.9
ROA 1.3 1.4 1.4 1.6 1.6
ROA, Quarterly 1.3 1.5 1.5 1.6 1.6
Swap Adj. NIM 4.83 4.63 4.12 2.40 2.58
Swap Adj. NIM, Quarterly 4.83 4.42 3.61 2.40 2.74
CIR (1) 33.8 31.6 33.8 40.0 39.8
CIR, Quarterly 33.8 29.6 38.5 40.0 39.6
(%)
Total LDR (2) 84 98 94 95 94
TL (2) 126 138 153 147 147
FX 48 54 47 51 49
Leverage (x) 7.8 7.7 7.6 8.2 8.0
Asset Quality (%)
NPL Ratio 6.7 6.2 6.2 5.8 5.5
Stage 3 Coverage 58.8 61.5 62.4 63.7 65.2
Stage 2/ Total Gross Loans 12.2 11.9 9.4 9.5 11.1
Stage 2 Coverage 11.8 15.1 16.4 16.8 16.1
Net CoC 2.01 2.59 2.27 1.01 0.79
Net CoC, Quarterly 2.01 3.17 1.06 1.01 0.59
Solvency (3) (%)
CAR 18.8 20.4 19.8 18.5 20.0
CET-1 16.0 17.4 16.9 15.5 16.0
Tier-1 16.0 17.4 16.9 15.5 16.0
(1) CIR calculation excludes FX gain from long FX position related with stage 1&2 provisions and LYY hedge. The calculation excludes insurance
penalty of TL 71 mn for 1Q20, 1H20 & also BRSA penalty of TL 117 mn for 2020
65 (2) Bank-only, TL LDR includes domestic TL bond issuances and merchant payables
(3) w/o forbearances: For 2Q21, fixing FX rate for RWA calculation to average last 12 month FX rate. For 1Q21 & 2020, fixing MtM losses of
securities & FX rate for RWA calculation to average last 12 month FX rate & for 1Q20 & 1H20 to YE 2019Balance Sheet Highlights
2020 1Q21 1H21 QoQ (%) YtD (%)
Consolidated (TL mn)
Cash and due from Banks 60,576 76,323 84,320 10 39
Securities 101,926 106,843 115,052 8 13
TL 59,540 62,336 62,774 1 5
FX (USD) 5,713 5,346 6,023 13 5
Loans (net) 262,658 281,814 289,481 3 10
TL 170,310 175,986 182,585 4 7
FX (USD) 12,447 12,711 12,315 (3) (1)
Other 53,157 52,310 48,986 (6) (8)
Total Assets 478,317 517,290 537,839 4 12
Deposits 292,519 310,008 326,905 5 12
TL 108,362 118,963 122,693 3 13
FX (USD) 24,821 22,946 23,526 3 (5)
Funds Borrowed and Bonds Issued 66,287 70,962 76,488 8 15
Repo 20,907 37,029 32,111 (13) 54
Other 35,679 36,253 35,024 (3) (2)
Equity 62,924 63,038 67,311 7 7
Total Liabilities and S/H Equity 478,317 517,290 537,839 4 12
66Income Statement Highlights
Consolidated (TL mn) 1Q21 2Q21 QoQ(%) 1H20 1H21 YoY(%)
Net Interest Income incl. swap cost 2,782 3,383 22 8,906 6,165 (31)
NII 4,193 5,337 27 10,234 9,530 (7)
o/w CPI-linker income 1,088 1,728 59 1,388 2,816 103
Swap Cost (1,411) (1,954) 39 (1,328) (3,365) 153
Fees and Commissions (Net) 1,462 1,348 (8) 2,262 2,810 24
Net Trading Gain (Loss) 2,031 1,480 (27) 1,145 3,511 207
LYY hedge gain/ (loss) 1,105 436 (61) - 1,541 -
ECL hedge gain/ (loss) 62 154 150 315 216 (31)
Other 864 890 3 830 1,754 111
Other Income 267 59 (78) 143 326 128
Operating Expense (2,087) (2,240) 7 (3,898) (4,327) 11
Pre- Provision Income 4,455 4,029 (10) 8,558 8,484 (1)
Provision for Loan Losses, net of collections (697) (427) (39) (2,936) (1,123) (62)
Stage 1+2 (net) (515) (185) (64) (1,286) (700) (46)
Stage 3 (621) (517) (17) (1,822) (1,138) (38)
Stage 3 Recoveries 500 430 (14) 486 930 91
Currency Impact (fully hedged) (62) (154) 150 (315) (216) (31)
Other Provisions (1,201) (559) (53) (1,761) (1,761) -
LYY MtM gain/ (loss) (1,203) (548) (54) (1,283) (1,751) 36
Free Provisions - - - (250) - -
Other 2 (11) - (228) (10) -
Income Before Tax 2,557 3,043 19 3,861 5,600 45
Tax (529) (937) 77 (975) (1,466) 50
Net Income 2,028 2,106 4 2,885 4,134 43
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68Investor Relations & Sustainability Team
Ebru Güvenir Institutional Investor Awards
Senior Vice President
ebru.guvenir@akbank.com
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İlknur Kocaer, CFA Feride Doğan in Turkey for IR in Turkey
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ilknur.kocaer@akbank.com 2020 2020
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for IR in Turkey in Turkey
for Large Cap for Large Cap
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Investor Relations Manager IR & Sustainability Manager
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Address : Akbank Genel Müdürlüğü Sabancı Center 4. Levent 34330, İstanbul
Email : investor.relations@akbank.com
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