The following tables present certain selected statistical and other information for the Group (or, when information about the Group is not readily-available or relevant, the Bank) as of the indicated dates and for the periods indicated. Except as specifically noted herein, the selected statistical and other information should be read in conjunction with the IFRS Financial Statements (including the notes thereto) included herein and the information included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
I. Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential A. Average Balance Sheet and Interest Data
The following tables set out the average balances of assets and liabilities, and the interest earned or paid on such amounts, of the Group for the indicated years. For purposes of the following tables, the average for each year is calculated as the average of the amounts on each of the end of the preceding year and December 31 of such year and: (a) non-accruing credits have been treated as non-interest-earning assets and (b) loan fees have not been included in interest income.
2010 2011 2012 Average Balance Avg. Yield Interest Income Average Balance Avg. Yield Interest Income Average Balance Avg. Yield Interest Income
(TL thousands, except percentages)
ASSETS
Average Interest-Earning Assets
Deposits in banks(1)... 6,861,969 2.80% 192,459 3,723,899 1.87% 69,748
2,635,108 2.57% 67,780
Balances that do not have foreign
currency risk(2)... 4,172,368 1,579,394 634,305
Balances bearing foreign currency
risk(2)... 2,689,601 2,144,506 2,000,803
Investment securities ... 18,700,544 8.52% 1,593,549 18,982,394 7.52% 1,426,694 19,147,774 8.51% 1,630,108 Balances that do not have foreign
currency risk(2)... 14,905,871 14,851,635 15,002,944
Balances bearing foreign currency
risk(2)... 3,794,673 4,130,759 4,144,830
Loans and advances to customers... 39,982,480 10.54% 4,213,998 52,020,504 9.77% 5,084,965 64,267,934 11.09% 7,126,001 Balances that do not have foreign
currency risk(2)... 27,346,500 34,962,156 44,715,354
Balances bearing foreign currency
risk(2)... 12,635,980 17,058,348 19,552,580
Total for Average Interest-
Earning Assets... 65,544,992 9.15% 6,000,006 74,726,797 8.81% 6,581,407 86,050,816 10.25% 8,823,889 Balances that do not have
foreign currency risk(2)... 46,424,739 51,393,184 60,352,603
Balances bearing foreign
currency risk(2)... 19,120,253 23,333,613 25,698,213
Average Non-Interest-Earning Assets
Cash and cash equivalents... 1,912,165 3,050,696 3,808,578
Derivatives ... 23,259 99,566 131,782
Equity shares... 192,173 208,109 244,488
Non-performing loans net of
allowances ... 146,121 104,389 149,109
Tangibles ... 850,607 805,499 832,884
Equity participations... 11,471 12,167 10,988
Other assets and accrued interest... 3,414,917 6,156,218 9,482,466
Total Average Non-Interest-
Earning Assets... 6,550,713 10,436,642 14,660,293
Total Average Assets... 72,095,704 85,163,439 100,711,109
(1) Comprises balances with banks, interbank funds sold and reserve deposits at the Central Bank.
2010 2011 2012 Average Balance Avg. Rate Paid Interest Expense Average Balance Avg. Rate Paid Interest Expense Average Balance Avg. Rate Paid Interest Expense
(TL thousands, except percentages)
LIABILITIES
Average Interest-Bearing Liabilities
Deposits from customers ... 37,838,749 6.86% 2,595,455 43,918,330 6.57% 2,886,907 51,143,107 7.72% 3,947,888 Balances that do not have foreign currency
risk(1)... 25,764,385 30,630,623 36,863,493
Balances bearing foreign currency risk(1)... 12,074,364 13,287,707 14,279,615
Funds Borrowed... 5,722,408 1.86% 106,186 7,850,601 1.98% 155,602 8,542,673 2.09% 178,898
Short-term debt ... 2,801,100 4,291,768 4,962,817
Balances that do not have foreign currency
risk(1)... 137,731 228,326 2,557,345
Balances bearing foreign currency risk(1)... 2,663,369 4,063,442 2,405,472
Long-term debt... 2,921,309 3,558,833 3,579,856
Balances that do not have foreign currency
risk(1)... 78,181 62,373 29,940
Balances bearing foreign currency risk(1)... 2,843,128 3,496,460 3,549,917
Repurchase agreements and deposit from
banks ... 9,241,761 5.01% 462,863 9,821,701 6.04% 593,671 11,086,161 3.82% 423,459 Balances that do not have foreign currency
risk(1)... 6,943,358 5,613,757 4,041,558
Balances bearing foreign currency risk(1)... 2,298,403 4,207,944 7,044,603
Debt securities issued ... - 493,000 3.26% 16,088 1,432,874 12.09% 173,243
Balances that do not have foreign currency
risk ... - 493,000 987,306
Balances bearing foreign currency risk... - - 445,569
Subordinated liabilities ... - - 1,630,188 0.65% 10,647
Total for Average Interest-Bearing
Liabilities... 52,802,918 5.99% 3,164,504 62,083,632 5.88% 3,652,268 73,835,003 6.52% 4,734,135 Balances that do not have foreign
currency risk(1)... 32,923,654 37,028,079 44,479,640
Balances bearing foreign currency
risk(1)... 19,879,264 25,055,553 27,725,175
Average Non-Interest-Bearing Liabilities
Deposits-demand ... 6,590,145 8,244,338 10,122,664
Accrued interest and other liabilities ... 3,971,343 5,183,862 5,493,903
Trading liabilities... - - 272,248
Current and deferred tax liabilities ... 103,556 72,782 103,026
Total Average Non-Interest-Bearing
Liabilities... 10,665,043 13,480,982 27,691,200
Total Average Liabilities ... 63,467,960 75,584,614 101,526,203
Shareholders’ Equity and net profit ... 8,627,744 9,845,325 11,699,360
(1) TL and foreign currency expense breakdown for these periods is not available in the IFRS Financial Statements.
The following table shows the net interest earnings and net yield for the Group for each of the years indicated.
2010 2011 2012
(TL thousands, except percentages)
Net interest earnings(1)... 2,835,502 2,929,139 4,089,754
Net yield(2)... 4.3% 3.9% 4.8%
(1)Net interest earnings represents the difference between total interest earned and total interest paid. (2)Net yield represents the net interest earnings as a percentage of total average interest-earning assets.
B. Net Changes in Interest Income and Expense – Volume and Rate Analysis
The following table provides a comparative analysis of net changes in the Group’s interest earned and interest paid by reference to changes in average volume and rates for the years indicated. Changes in net interest income are attributed either to changes in average balances (volume change) or changes in average rates (rate change) for interest-earning assets and sources of funds on which interest is earned or expensed. Volume change is calculated as the change in volume
multiplied by the current rate, while the rate change is calculated as the change in rate multiplied by the previous volume. Average balances represent the average of the opening and closing balances for each of the indicated years. For purpose of the following tables, non-performing loans have been treated as non-interest-earning assets.
2012/2011
Increase (decrease) due to changes in
Volume Rate Net Change
(TL thousands) Interest Income
Deposits with banks... (28,006) 26,038 (1,968) Investment securities ... 14,079 189,335 203,414
Loans and advances to customers... 1,357,990 683,046 2,041,036
Total interest income... 1,344,063 898,419 2,242,482 Interest Expense
Deposits from customers ... 557,702 503,279 1,060,981
Funds borrowed ... 14,493 8,803 23,296
Repurchase agreements and deposit from customers ... 48,299 (218,511) (170,212)
Debt securities issued ... 113,636 43,519 157,155
Subordinated liabilities ... 10,647 - 10,647
Total interest expense... 744,777 337,090 1,081,867 Net change in net interest income ... 599,286 561,329 1,160,615
2011/2010
Increase (decrease) due to changes in
Volume Rate Net Change
(TL thousands) Interest Income
Deposits with banks... (58,776) (63,935) (122,711) Investment securities ... 21,184 (188,039) (166,855)
Loans and advances to customers... 1,176,708 (305,741) 870,967
Total interest income... 1,139,116 (557,715) 581,401 Interest Expense
Deposits from customers ... 399,632 (108,180) 291,452
Funds borrowed ... 42,182 7,234 49,416
Repurchase agreements and deposit from customers ... 35,054 95,754 130,808
Debt securities issued ... 16,088 - 16,088
Total interest expense... 492,956 (5,192) 487,764 Net change in net interest income ... 646,160 (552,523) 93,637 II. Investment Portfolio
The Group’s securities portfolio comprises trading securities (i.e., debt and equity securities that the Group principally holds for the purpose of short-term profit taking, which are reflected on the balance sheet as “financial assets at fair value through profit or loss”) and investment securities (i.e., held-to-maturity securities and available-for-sale securities). The Group also enters into purchases (sales) of securities under agreements to resell (repurchase) substantially identical investments at a certain date in the future at a fixed price. Securities sold under repurchase agreements continue to be recognized in the balance sheet and are measured in accordance with the accounting policy for the related security portfolio as appropriate.
As of December 31, 2012, the size of the Group’s aggregate investment portfolio decreased by 3.5% to TL 19,174,814 thousand from TL 19,873,273 thousand as of December 31, 2011, an increase of 6.2% from TL 18,706,864 thousand as of December 31, 2010. In 2011, the increase was a result of the Group’s asset growth and increased treasury activity. In 2012, the share of the investment portfolio decreased within the Group’s total assets as the Group focused on
Pursuant to market practice, the Group pledges securities to acquire funding under security repurchase agreements. The securities so pledged amounted to TL 9,982,787 thousand as of December 31, 2012, TL 6,875,677 thousand as of December 31, 2011 and TL 8,995,041 thousand as of December 31, 2010, comprising 52.1%, 34.6% and 48.1%, respectively, of the Group’s securities portfolio on such dates. Such securities are included in the tables in this section.
A. Book Value of Investments
The following table sets out a breakdown of securities (on a book-value basis) held by the Group as of the dates indicated: As of December 31, 2010 2011 2012 (TL thousands) Trading Portfolio ... 218,109 361,663 296,532 TL-denominated ... 181,969 177,518 213,871
Foreign currency-denominated and indexed... 36,140 184,145 82,661
Investment Securities... 18,488,755 19,511,610 18,878,282
Held-to-maturity ... 4,362,245 5,979,238 4,261,060
TL-denominated ... 2,911,012 4,343,224 4,198,301
Foreign currency-denominated and indexed... 1,451,233 1,636,014 62,759 Available-for-sale ... 14,126,510 13,532,372 14,617,222
TL-denominated ... 11,471,177 10,612,324 10,560,203
Foreign currency-denominated and indexed... 2,655,333 2,920,048 4,057,019
Total ... 18,706,864 19,873,273 19,174,814
The following table sets out the Group’s total consolidated securities portfolio in Turkish currency and in foreign currencies as of the dates indicated:
As of December 31,
2010 2011 2012
(TL thousands)
TL-denominated securities ... 14,564,158 15,133,066 14,972,375
Foreign currency-denominated and indexed securities... 4,142,706 4,740,207 4,202,439
Total securities... 18,706,864 19,873,273 19,174,814 Trading Portfolio (Financial Assets at Fair Value through Profit or Loss)
As of December 31, 2012, the size of the Group’s trading portfolio decreased by 18.0% to TL 296,532 thousand from TL 361,663 thousand as of December 31, 2011, an increase of 65.8% from TL 218,109 thousand as of December 31, 2010. The Group’s portfolio of trading securities principally comprises Turkish government debt, investment participation bills and equity. The Group acts as a market-maker for Turkish government debt. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies-Fair Value of Financial Instruments.” As noted above, trading securities are debt and equity securities that the Group principally holds for the purpose of short-term profit taking. These include investments and derivative contracts that are not designated as effective hedging instruments under Turkish law. All trading derivatives in a net receivable position (positive fair value) are reported as trading assets, whereas all trading derivatives in a net payable position (negative fair value) are reported as trading liabilities.
After initial recognition, securities that are classified as held-for-trading are measured at estimated fair value. Changes in the estimated fair value are included in the Group’s IFRS Financial Statements of income included elsewhere in this Base Prospectus within gains less losses from securities. In determining estimated fair value, trading securities are valued at the last trade price (if quoted on an exchange) or the last bid price (if traded over the counter). When market prices are not available or if liquidating the Group’s position would reasonably be expected to affect market prices, fair value is determined by reference to price quotations for similar instruments traded in different markets or management’s estimates of the amounts
The following table sets out a breakdown of the Group’s trading portfolio as of the dates indicated:
As of December 31,
2010 2011 2012
(TL thousands)
Turkish government bonds and treasury bills(1)... 176,800 137,726 121,695
Turkish government eurobonds(2)... 12,490 14,188 14,820
Investment participation bills ... 1,031 5,144 4,099
Common shares ... 79 2,131 2,709
Other... 27,709 202,474 153,209
Total trading portfolio... 218,109 361,663 296,532
(1) Turkish currency-denominated securities. (2) Foreign currency-denominated securities.
Investment Portfolio
As noted above, investment securities comprise held-to-maturity securities and available-for-sale securities. Held-to- maturity securities are financial assets with fixed or determinable payments and fixed maturities that the Group intends and has the ability to hold to maturity. The Group cannot classify any financial asset as held-to-maturity if the Group has, during the current fiscal year or during the two preceding fiscal years, sold or transferred any held-to-maturity securities before their maturities as per IAS 39. Available-for-sale securities are financial assets that are not held for trading purposes or held-to- maturity. Available-for-sale instruments include certain debt and equity investments. The Group classifies investment securities depending upon the intention of management at the time of the purchase thereof, though such can be re-classified if the intention of management later changes.
Held-to-Maturity Portfolio. The Group’s portfolio of held-to-maturity securities consists principally of Turkish Lira-
denominated Turkish government bonds and treasury bills, foreign currency-indexed Turkish government bonds, Turkish government eurobonds, foreign private sector bonds and corporate eurobonds.
The following table sets out certain information relating to the Group’s portfolio of held-to-maturity securities as of the dates indicated:
As of December 31,
2010 2011 2012
(TL thousands)
Turkish government bonds and treasury bills(1)... 2,911,012 4,343,224 4,198,301
Turkish government eurobonds(2)... 1,401,260 1,581,438 9,312
Foreign government bonds ... 10,805 - -
Other ... 39,168 54,576 53,447
Total held-to-maturity portfolio... 4,362,245 5,979,238 4,261,060
(1) Turkish currency-denominated securities. (2) Foreign currency-denominated securities.
As of December 31, 2012, the size of the held-to-maturity portfolio decreased by 28.7% to TL 4,261,060 thousand from TL 5,979,238 thousand as of December 31, 2011. The share of the Group’s total investment securities held in its held- to-maturity portfolio decreased to 22.58% of its total investment securities as a significant portion of the Group’s portfolio of Turkish government eurobonds was reclassified as available-for-sale securities from held-to-maturity securities. In 2011, this portfolio increased 37.1% from TL 4,362,245 thousand as of December 31, 2010. This increase was attributable to the classification of a greater amount of newly acquired Turkish government securities as held-to-maturity securities. This change was due to the Group’s intent to sell such securities in order to minimize their negative impact on capital levels.
Available-for-Sale Portfolio. The Group’s portfolio of available-for-sale securities consists of Turkish government
As of December 31,
2010 2011 2012