#1DEVELOPMENT INVESTMENT BANK OF TURKEY A "new" bank with 45 years banking history DEVELOPMENT INVESTMENT BANK OF TURKEY#22 Some Facts 1975 Founded in Ankara 2018 Got investment banking license 2019 Relocated to Istanbul from Ankara Member of ADFIAP financing sustainable development 205 ADFIMI Owned by Turkish Ministry of Treasury and Finance Shareholder Structure 99,08% Turkish Ministry of Treasury and Finance IIF INSTITUTE OF INTERNATIONAL FINANCE 0,92% Listed on BIST since 1991 EIF EUROPEAN INVESTMENT FUND DEVELOPMENT INVESTMENT BANK OF TURKEY#3TKYB History • Established as the State Industry and Laborer Investment Bank (DESİYAB) in 1975 • The Bank's charter act was enacted • The Bank's IPO in 1991 was realized • The Bank focused on expanding its relations and cooperation with development finance institutions • Loans were obtained from DFIs & extended as financing support for country's development 1970s 1980s 1990s 2000s 2010s 2018-... • The bank was renamed in 1988 as Development Bank of Turkey (TKB) (Intermediary role for allocation of government subsidizied loans to manufacturing and tourism sectors) ⚫ The Tourism Bank was merged with TKB in 1989 (The first financial institution supporting the tourism sector and the first Tourism Credit) • The bank's total assets exceeded US$ 1 billion • The Bank was restructured and renamed as The Development & Invesment Bank of Turkey • Head Office was relocated from Ankara to Istanbul • The Bank's capital was supported to reach TRY 850 million • First Asset Backed Securities was issued in the domestic market • "Climate Friendly Institution" certificate was obtained • One of the Founding Signatories of UNEP FI Principles for Responsible Banking 3 DEVELOPMENT INVESTMENT BANK OF TURKEY#44 10000 Vision, Mission & Values Our Vision Our Mission Our Values <0° > To always stand by our customers who invest in sustainable development To contribute to the structural transformation and fair capital distribution in our country in accordance with sustainable development priorities by meeting the financial and advisory needs of investing customers; to add value to employees and all other stakeholders with its dynamic, innovative, environmentally and socially responsive banking approach COMMITMENT TO SUSTAINABLE DEVELOPMENT -6000 <σ> BEING RELIABLE <%> BEING A SOLUTION PROVIDER <+> VALUING ITS EMPLOYEES & STAKEHOLDERS < BEING INNOVATIVE DEVELOPMENT INVESTMENT BANK OF TURKEY#55 TKYB Credit Rating (Fitch Ratings 2019) FOREIGN CURRENCY Long Term RATING BB- Short Term B LOCAL CURRENCY Long Term BB- Short Term NATIONAL Long Term Support Rating B AAA (TUR) 3 Support Rating Floor BB- DEVELOPMENT INVESTMENT BANK OF TURKEY#66 Our Ranking in the Turkish Banking System (As of 2019Q3) Year of Establishment # Bank Total Assets 1 Türkiye Cumhuriyeti Ziraat Bankası A.Ş. 1863 618.228 8 QNB Finansbank A.Ş. 2 Türkiye Halk Bankası A.Ş. 3 Türkiye İş Bankası A.Ş. 4 Türkiye Vakıflar Bankası T.A.O. 5 Türkiye Garanti Bankası A.Ş. 6 Yapı ve Kredi Bankası A.Ş. 7 Akbank T.A.Ş. 9 Türk Eximbank 1938 443.499 1924 434.745 1954 386.845 1946 374.335 1944 373.283 1948 351.448 1987 174.192 1987 157.546 TKYB is 21st among all banks 10 Denizbank A.Ş. 1997 148.280 11 Türk Ekonomi Bankası A.Ş. 1927 102.451 12 ING Bank A.Ş. 1984 56.716 13 Türkiye Sınai Kalkınma Bankası A.Ş. 1950 40.273 14 İller Bankası A.Ş. 1933 35.087 15 HSBC Bank A.Ş. 1990 33.069 TKYB is 4th among all development & investment banks 16 Odea Bank A.Ş. 17 Şekerbank T.A.Ş. 2011 31.742 1953 29.745 18 Alternatifbank A.Ş. 1991 28.182 # Ownership Bank Total Assets 19 Fibabanka A.Ş. 1984 21.545 20 Burgan Bank A.Ş. 1991 18.697 1 Türk Eximbank 157.546 21 Türkiye Kalkınma ve Yatırım Bankası A.Ş. 1975 18.469 2 22 ICBC Turkey Bank A.Ş. 1986 17.168 Türkiye Sınai Kalkınma Bankası A.Ş. 40.273 23 Anadolubank A.Ş. 1996 16.366 3 İller Bankası A.Ş. 35.087 24 Aktif Yatırım Bankası A.Ş. 1998 16.165 25 İstanbul Takas ve Saklama Bankası A.Ş. 1995 14.878 26 MUFG Bank Turkey A.Ş. 2012 13.590 27 Intesa Sanpaolo S.p.A.. 28 Citibank A.Ş. 29 Arap Türk Bankası A.Ş. 30 Deutsche Bank A.Ş. 2013 12.941 1981 12.498 456 Türkiye Kalkınma ve Yatırım Bankası A.Ş. 18.469 Aktif Yatırım Bankası A.Ş. 16.165 İstanbul Takas ve Saklama Bankası A.Ş. 14.878 1977 4.600 7 Nurol Yatırım Bankası A.Ş. 3.143 1988 3.779 31 Turkland Bank A.Ş. 1991 3.769 8 Pasha Yatırım Bankası A.Ş. 1.605 32 Birleşik Fon Bankası A.Ş. 1958 3.419 9 33 Nurol Yatırım Bankası A.Ş. 1998 3.143 BankPozitif Kredi ve Kalkınma Bankası A.Ş. 893 34 Bank of China Turkey A.Ş. 2017 1.742 10 | Merrill Lynch Yatırım Bank A.Ş. 567 35 Rabobank A.Ş. 2013 1.670 36 Pasha Yatırım Bankası A.Ş. 1987 1.605 11 GSD Yatırım Bankası A.Ş. 302 37 Turkish Bank A.Ş. 1981 1.257 12 Diler Yatırım Bankası A.Ş. 175 38 Bank Mellat 1984 1.009 39 BankPozitif Kredi ve Kalkınma Bankası A.Ş. 1998 893 13 Standard Chartered Yatırım Bankası Türk A.Ş. 103 40 JPMorgan Chase Bank N.A. 1984 749 41 Merrill Lynch Yatırım Bank A.Ş. 1992 567 42 GSD Yatırım Bankası A.Ş. 1998 302 State owned Development & Public&Privately owned 43 Habib Bank Limited 1982 242 ☐ 44 Diler Yatırım Bankası A.Ş. 1998 175 Investment Banks Development & Investment Banks Foreign owned Development & Investment Banks 45 Société Générale (SA) 1989 155 46 Standard Chartered Yatırım Bankası Türk A.Ş. 1990 103 47 Adabank A.Ş. 1984 60 Source: The Banks Association of Turkey DEVELOPMENT INVESTMENT BANK OF TURKEY#77 Financial Highlights Total Assets Loans Funds Borrowed 2017 mn TRY 2018 2019Q3 mn TRY mn TRY 2019Q3 mn USD Paid in Capital 8,983 15,715 18,469 3,218 6,929 13,642 14,676 2,557 500 7,585 13,589 14,715 2,564 Shareholder's Equity 1,256 1,417 2,259 393 Net Profit 128 160 360 63 350 850mn TL *350mn TL capital injection in 2019 fully paid in cash DEVELOPMENT INVESTMENT BANK OF TURKEY#88 Key Indicators 2017 2018 2019Q3 Total Loans/Assets 77,13% 86,81% 79,45% Equity/Assets 13,98% ROA 1,64% 1,27% 9,02% 12,22% 1,94% ROE 11,03% 12,40% 15,90% CAR 16,73% 14,18% 22,36% % Change 2018Q3 to 2019Q3 NIM 3,16% 2,94% 4,17% TOTAL ASSETS 13% NPL 1,76% 0,90% 0,81% LOANS (NET) 3% EQUITY 74% NET PROFIT 1153% NPL -5% DEVELOPMENT INVESTMENT BANK OF TURKEY#9Profit Growth 1151,40% Net Profit (m TL) 104 49 38 41 29 360 2014Q3 2015Q3 2016Q3 2017Q3 2018Q3 2019Q3 214,57% 156,65% 145,97% 134,47% 114,00% 102,47% 89,26% 86,12% 80,49% TKYB 2nd Bank 3rd Bank 4th Bank 5th Bank 6th Bank 7th Bank 8th Bank 9th Bank 10th Bank * 10 banks in terms of Net Profit increase (%) for 2018Q3 - 2019Q3 period Source: The Banks Association of Turkey 9 DEVELOPMENT INVESTMENT BANK OF TURKEY#1010 Loan Portfolio *mn TRY 87% Sectoral Distribution of Loans Other 1% Energy Distribution 8% 79% 77% 77% 14.676 13.642 6.929 Tourism 10% 5.426 2016 2017 2018 2019Q3 Loans Loans/Assets Manufacturing 11% Currency Distribution of Loans EUR 44% TRY 3% US$ 53% Financial Institutions/ Leasing 27% Energy 43% *Excluding loans given to state owned financial institutions for APEX lending, loans are extended only to the privately owned companies DEVELOPMENT INVESTMENT BANK OF TURKEY#1111 Funding Sources and Purposes (As of Sept'19) US$ 2.670 mn in total Purpose THE WORLD BANK JBIC ICBC IsDB البنك الإسلامي للتنمية Islamic Development Bank US$ 1.388mn CEB COUNCIL OF EUROPE DEVELOPMENT BANK BANQUE DE DEVELOPPEMENT DU CONSEIL DE L'EUROPE THE WORLD BANK EUR 1.165mn KFW afd AGENCE FRANÇAISE DE DÉVELOPPEMENT Black Sea Trade & Development Bank 川 European Investment Bank SME & MIDCAP 21% SME (Apex) 11% Renewable Energy&Energy Efficiency 52% Corporate &Trade Apex 12% Infrastructure 1% Tourism 3% DEVELOPMENT INVESTMENT BANK OF TURKEY#1212 What We Mainly Focus On Project Finance and Corporate Loans ■ Industrial Investments ■ Renewable Energy Investments ■ Energy & Resource Efficiency ■ Environmental Investments ■ Tourism Investments ■ Education and Health Investments ■ Wholesale Banking (APEX) Investment Banking Activities ☐ Capital Markets Advisory ■ Financial Advisory ☐ ■ Debt Restructuring Advisory ☐ ☐ M&A Turkey Development Fund Support development of tech-focused startup ecosystem and growth-oriented industries with Private Equity and Venture Capital Investments DEVELOPMENT INVESTMENT BANK OF TURKEY#1313 Turkey Development Fund Turkey Development Fund, and its sub-funds, aims at playing a major role in sustainable growth of Turkey by supporting strategically important sectors whilst boosting development of the start-up ecosystem through investing in new generation start-ups TDF supports development of the country with direct/indirect investments made through its funds managed by investment professionals with significant market experience and works toward more efficient utilization of the public funds in line with global benchmarks and best practices Current Investments Planned Funds Area of Interest Investment Fund 212 SIS İVCİ ISTANBUL VENTURE CAPITAL INITIATIVE Turkey's Specialised Investment Fund EUR 10mn invested to Turkey's first fund of funds structure (10 funds, 74 Companies, 10% Net IRR) 10mn € EUR 3mn commitment to 212 VC Fund (212 Regional Fund II) Investment Strategy Investment Focus Direct investments: Co-investing with VCs Venture Capital (VC) Technology and Innovation Fund 3mn € Private Equity (PE) Regional Development Fund . Fund of Funds (FoF): Investing in VCs Growth Equity: Growth-oriented investments in prioritized strategic sectors for development Regional Support: Prioritized sectors with regional development and job creation angle Technology centric, high growth bearing new generation startups • Venture proven capital funds with investment strategies and successful track records SMES/Mid-cap companies Manufacturing, professional services, IT, pharma/healthcare, consumer goods DEVELOPMENT INVESTMENT BANK OF TURKEY#1414 Strong Risk Management Liquidity Risk Management • • As of the beginning of 2019, provision figures have been calculated in accordance with IFRS 9. Due to capital inflows and increases in subordinated loans, the Bank's CAR increased from 12.79 percent in September 2018 to 22.36 percent in September 2019. The NPL / Total Loans ratio decreased to 0.81% in 2019Q3 from 0,86% in 2018Q2 and 0.90% in 2018. With a liquidity ratio of 252,5% for a maturity of up to 12 months and 349,3% for a maturity of up to 3 months in 2019 Q3, TKYB is one of the best positioned bank in terms of liquidity risk in the Turkish Banking System. Our Bank does not carry currency risk. As of September 2019, the ratio of the foreign currency risk ratio (Foreign currency net general position / capital base) reported to the BRSA as 1,82% whose legal limits are set at +/- 20%. + Market Risk Management DG Operational Risk Management Credit Risk Management DEVELOPMENT INVESTMENT BANK OF TURKEY#1515 Environmental Policy We Became One of the Founding Signatories of UNEP FI Principles for Responsible Banking We are committed to reducing negative environmental impact, resource utilization and waste production by our activities while increasing positive environmental impacts; to continuously improving our system, complying with applicable legal requirements where transferring the environmental awareness to our stakeholders 6 PRINCIPLES INITIATIVE UNEP PRINCIPLES FOR RESPONSIBLE BANKING SHAPING OUR FUTURE FINANCE Alignment Impact Clients & Stakeholders Governance & Transparency & customers target setting accountability DEVELOPMENT INVESTMENT BANK OF TURKEY#16Professional Management Team 16 İbrahim Halil Öztop CEO & Board Member Executive Vice Presidents Zekai Işıldar HR & Operations Satı Balcı Financial Analysis & Engineering Ufuk Bala Yücel Loans & Legal Affairs Seçil Kızılkaya Yıldız Investment Banking Özgür Maraş Corporate Banking, IT& Financial Affairs Özlem Cinemre Treasury & FI a Average Experience 29 Years Gender Education 57% Female 43% Male %40 Master's %60 Bachelor's DEVELOPMENT INVESTMENT BANK OF TURKEY#1717 C TURKEY AT A GLANCE#1818 Turkey is One of the Biggest Economy in Europe GDP Based on Purchasing Power Parity, Trillion Dollar, 2018 Norway Czech Rep. Austria Romania Sweden Belgium Switzerland Netherlands Poland Spain Turkey Italy France United Kingdom Germany 1000 900 800 700 600 500 400 300 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (P) 2020 (P) 2021 (P) GDP (USD bn) Source: IMF, WEO Economic Outlook October 2019, TURKSTAT, New Economy Program, TKYB Economic Research 12 9.6 10 9.0 8 7.1 6.4 5.6 5.0 6 4 2 0 -2 -4 -6 0.8 -4.7 11.1 8.5 8.5 7.5 6.1 5.2 4.8 5.0 5.0 3.2 2.8 0.5 0 4000 2000 6000 8000 10000 12000 14000 2002 3581 1 600 5961 1900 1900 2003 2004 2005 2006 2007 2008 2009 ■GDP Per Capita (USD) 8,980 10,560 2011 11,205 2012 11,588 GDP Growth (%) 2010 2011 2012 2013 2013 12,480 2014 2014 12,112 2015 2015 11,019 2016 2016 10,883 2017 2017 10,616 2018 9,693 2018 2019 (P) 9,093 2019 (P) 2020 (P) 9,738 2020 (P) 2021 (P) 10,144 2021 (P) DEVELOPMENT INVESTMENT BANK OF TURKEY#1919 2002 66.0 2003 66.8 2004 67.6 2005 68.4 2006 69.3 2007 70.2 2008 71.1 2009 72.0 2010 73.1 2011 30 Favorable Demographics is One of the Key Strengths Share of Youth (15-29) in the Total Population (%) Youth 25 20 20 15 10 5 2012 74.2 0 2013 75.2 Turkey 2014 76.1 2015 US Norway Canada Poland UK OECD 77.2 2016 78.2 2017 79.3 2018 2019 (P) 193803 60.0 58.1 58.0 57.4 ■ 2015 ◊ 1970 Age Dependency Ratio By Countries (% of working age population) -2018 57.0 Netherlands Finland Hungary Germany Greece Italy Colombia China Bulgaria ◆ 2060 56.0 81.4 55.2 55.1 2020 (P) 55.0 54.0 54.8 82.4 54.1 2021 (P) 52.0 83.4 65 50.0 70 84.4 75 80 48.0 ■Population (million) 85 46.0 44.0 Source: UN, OECD, TKYB Economic Research Italy UK Estonia Latvia EU Bulgaria Netherlands OECD Croatia 53.5 53.2 49.1 Germany Turkey DEVELOPMENT INVESTMENT BANK OF TURKEY#2020 30 10 40 70 70 72.1 65.7 60 60 57.5 50.8 50 Public Debt Has Diminished Thanks to Fiscal Discipline 80 240 General Government Gross Debt (% of GDP, 2019 Q2) 43.9 88 80 44.7 38.2 36.5 40.1 31.4 32.8 32.5 38.1 40 27.6 28.2 40 33.2 32.7 28.8 30.1 0 28.3 2011 2012 2013 2014 EU Defined General Government Debt/ GDP (%) 12 11.2 10 8.6 8 6 5.3 5.0 4 3.5 2 1.6 1.8 1.0 10 1.3 0.6 0 2011 20 20 ■Central Government Budget Deficit / GDP (%) Source: Ministry of Treasury and Finance, Eurostat, TKYB Economic Research 2015 2016 2017 2018 2020 (P) 2021 (P) 2019 (P) Maastrich Criteria: 60% Japan 120 160 200 Greece Italy Cyprus Portugal USA France Belgium Spain Canada United Kingdom Croatia Austria Hungary Slovenia Ireland Germany Finland Maastricht Criteria: 60% Netherlands Slovakia Poland Malta Latvia Lithuania Sweden Denmark Romania Czechia Turkey Bulgaria Luxembourg Estonia 1.9 1.0 1.1 1.0 1.1 2012 2013 2014 2015 2016 1.5 2.0 2.9 2.9 2.9 III 2017 2018 2019 (P) 2020 (P) 2021 (P) EU (28 Countries) Euro Area (EU-19) Greece Italy Portugal Belgium France Spain 2018 2019 Q2 General Government Gross Debt (% of GDP) 2011 2012 2013 2014 2015 2016 2017 81.6 84.0 85.8 86.6 84.6 83.4 81.7 80.0 80.5 86.9 89.9 91.8 92.0 90.1 89.2 87.1 85.1 86.4 172.1 159.6 177.4 178.9 175.9 178.5 176.2 181.1 180.2 116.5 123.4 129.0 131.8 131.6 131.4 131.4 132.2 138.0 111.4 126.2 129.0 130.6 128.8 129.2 124.8 121.5 121.2 102.6 104.3 105.5 107.5 106.4 106.1 103.4 102.0 104.7 87.8 90.6 93.4 94.9 95.6 98.0 98.4 98.4 99.6 98.9 85.0 71.8 United Kingdom Austria Hungary Germany Netherlands Turkey 69.5 85.7 95.5 100.4 99.3 99.0 98.1 97.1 80.8 84.1 85.2 87.0 87.9 87.9 87.1 86.8 82.4 81.9 81.3 84.0 84.7 83.0 78.2 73.8 80.5 78.4 77.2 76.7 76.7 76.0 73.4 70.8 79.4 80.7 78.2 75.3 71.6 68.5 64.5 60.9 61.7 66.2 67.7 67.9 64.6 61.9 57.0 36.5 32.7 31.4 28.8 27.6 28.3 28.2 68.2 61.2 52.4 30.1 50.9 32.2 DEVELOPMENT INVESTMENT BANK OF TURKEY#210 5 5 15 10 35 30.9 30 25.1 25 28.2 23.7 21.9 20.6 18.9 19 20 18 17.9 18.4 16.6 16.3 16.8 17.3 15.3 15.6 15.6 Sound and Solid Banking System with a Significant Potential for Growth Banking Sector: Capital Adequacy Ratio (%) Target Rate 12 % Legal Limit 8% Capital Adequacy Ratio in Selected EM's (%, Sep 2019) 2019 (P) 60 70 110 100 90 90 80 50 50 56 56 40 20 24 22.5 21 19.6 18.7 18.4 18.3 18.1 18 17.9 17.9 17.4 18 15.7 15.2 18 17.5 16 14 12 11.5 10 8 14.1 15 13.3 CO 6 12.6 12.2 6.0 4 12 2 0 9 Brazil Hungary Thailand Malaysia Mexico Korea 21 Source: BRSA, TURKSTAT, IMF-FSI, TKYB Economic Research China Chile India Russia 2002 2003 2004 2005 2006 2007 5551 50 50 57 59 102 102 102 97 94 92 81 82 83 78 68 62 62 2010 2011 2012 Turkish Banking Asset Size / GDP (%) 2013 2014 2015 2016 2017 2018 2019 (P) 4.7 3.7 3.5 3.7 5.3 3.7 2.7 2.9 2.8 2.9 3.1 3.2 3.0 3.9 50 5.0 Banking Sector: NPL Ratio (%) 2014 2015 2016 2017 2018 2019 (P) DEVELOPMENT INVESTMENT BANK OF TURKEY 106#2222 22 Continuously Improving Investment Environment 100 90 93 80 70 60 60 50 40 30 20 20 91 57 40 59 59 73 65 99 71 71 49 55 55 2013 2014 2015 55 55 2016 2017 Ease of doing business rank Starting a Business (Duration, Days) Thailand 4.5 Hungary 7 Turkey 7 Mexico 8.4 China 8.6 OECD (High Income) Russia 9.3 10.1 Europe & Central Asia India Croatia Bulgaria 12.9 16.5 22.5 Czech Republic Poland South Africa 0 10 20 20 Source: World Bank, OECD, TKYB Economic Research 23 24.5 30 69 69 2018 60 43 33 2019 37 37 40 40 40 40 2020 Starting a Business (Number of Procedures) China OECD (High Income) Thailand Poland Europe & Central Asia Hungary Turkey 30 50 25 20 15 10 10 0 5 5.3 South Africa Bulgaria Mexico Czech Republic Crotia India Brazil Turkey Lithuania Slovak Rep. Hungary Poland 0 4 4.9 5 5 5.2 6 7 7 7 7.8 8 8 10 10.6 2 4 6 8 10 12 Taxes on Income and Profit (% of GDP) 11.4 Mexico Latvia Korea Spain Japan France OECD Netherlands UK Switzerland Germany ՏՈ Italy Canada Sweden Belgium Denmark DEVELOPMENT INVESTMENT BANK OF TURKEY#2323 23 Strong Recovery is Expected in 2020 Following the Rebalancing GDP Growth (2019E, %) 9.0 7.0 5.0 Turkey 2017 Current Account Balance / GDP (2019E,%) India China Indonesia Turkey 2020 3.0 Turkey 2018 1.0 S.Africa -1.0 Mexico Brazil Turkey 2019 Malaysia Russia -3.0 -6.5 -5.5 -4.5 -3.5 -2.5 -1.5 -0.5 0.5 1.5 2.5 3.5 4.5 5.5 Source: New Economy Program, Bloomberg, TKYB Economic Research Size of the bubble is proportional to the 2019 estimated Inflation DEVELOPMENT INVESTMENT BANK OF TURKEY#24Disclaimer Statement Türkiye Kalkınma ve Yatırım Bankası A.Ş. (the "TKYB") has prepared this presentation document (the "Document") thereto for the sole purposes of providing information which include forward looking projections and statements relating to the TKYB (the "Information"). No representation or warranty is made by TKYB for the accuracy or completeness of the Information contained herein. The Information is subject to change without any notice. Neither the Document nor the Information can construe any investment advise, or an offer to buy or sell TKYB shares. This Document and/or the Information cannot be copied, disclosed or distributed to any person other than the person to whom the Document and/or Information delivered or sent by TKYB or who required a copy of the same from the TKYB. TKYB expressly disclaims any and all liability for any statements including any forward looking projections and statements, expressed, implied, contained herein, or for any omissions from Information or any other written or oral communication transmitted or made available. 24 24 DEVELOPMENT INVESTMENT BANK OF TURKEY