Banking - Nurol Bank

TURKEY
Corporate Credit Rating
Banking
Updated
[Financial Institutions]
Long
Term
Short
Term
Nurol Yatırım Bankası A.Ş.
Financial Data
2014*
2013*
2012*
2011*
2010*
2009*
Total Assets (000,000 USD )
275.36
206.02
142.55
99.41
141.17
117.47
Total Assets (000,000 TRY)
638.53
438.91
253.40
187.78
217.06
174.72
Total Net Loans (000,000 TRY)
356.46
241.19
150.58
116.92
119.42
95.02
106.22
90.42
113.06
71.48
56.43
54.63
BBB-
A–3
Local Currency
BBB
A–3
Outlook
Stable
Stable
Equity (000,000 TRY)
Local Rating
AA (Trk)
A-1 (Trk)
Net Profit (000,000 TRY)
15.87
0.52
3.87
13.12
0.03
2.68
Stable
Stable
Market Share (%) **
0.0318
0.0249
0.0181
0.015
0.0215
0.021
Sponsor Support
1
-
ROAA (%)
3.74
0.09
2.11
6.91
-0.25
2.19
Stand Alone
AB
-
ROAE (%)
20.52
0.31
5.05
21.87
-0.87
6.52
Equity/T. Assets (%)
16.64
20.60
44.62
38.06
26.00
31.27
Foreign Currency
BBB-
-
CAR - Capital Adequacy Ratio (%)
16.89
14.20
19.01
17.23
18.55
24.72
Local Currency
BBB-
-
Asset Growth Rate (Annual) (%)
45.48
73.21
34.94
-13.49
24.23
30.64
Stable
-
National International
Foreign Currency
Sovereign*
Outlook
Outlook
FC
LC
Stable
* End of Year ** On Solo Basis Among the Turkish Banking Sector
-
*Affirmed by Japan Credit Rating Agency, JCR on July 11,2014
Analyst: Orkun İNAN
[email protected]
/ +90 212 352 56 73
NIM (%)
6.40
6.18
3.18
Market Share (%)
3.51
8.00
6.00
4.44
0.032
0.015
4.00
0.040
0.025
0.022
0.018
0.020
2.00
0.000
0.00
ROAE (%)
ROAA (%)
6.91
2.11
-0.25
21.87
8.00
3.74
4.00
2.00
0.09
20.52
6.00
30.00
20.00
5.05
-0.87
10.00
0.31
0.00
0.00
-10.00
-2.00
Growth Rate (%)
CAR (%)
18.55
17.23
19.01
14.20
16.89
73.21
20.00
15.00
10.00
80.00
45.48
34.94
20.00
5.00
0.00
2010







2011
2012
2013
2014
60.00
40.00
24.23
-13.49
2010
2011
0.00
2012
2013
2014
Company Overview
Nurol Yatırım Bankası A.Ş. (hereinafter “Nurol Bank” or the “Bank”),
incorporated on August, 1998, is a national private bank. The Bank provides
services in the field of Corporate Banking, Investment Banking and Treasury &
Financial Institutions through its diversified corporate clientele with a staff force
of 39 people in FYE2014.
Nurol Bank, with a total asset size of TRY 638.53mn, is one of Turkey’s small
private investment banks and ranks 38th in terms of assets size among the 51
banks in the Turkish financial market and had a 0.032% market share in the
entire banking sector as of FY2013.
The Company’s shareholding structure covers 3 entities, the main controlling
shareholders, “Nurol Holding A.Ş. (78.16%)“-one of well-known holdings in
Turkey- and “Nurol İnşaat ve Tic A.Ş. (15.96%)”-one of the World’s largest
international contractors- controlled by the “Çarmıklı Family”, principally focused
to 5 sectors, including Construction & Contracting, Defense & Production, Trading
& Service, Finance and Tourism sectors.
JCR Eurasia Rating has upgraded Nurol Yatirim Bank’s National Local Rating by
one notch to ‘AA (Trk)’ from ‘AA- (Trk)’.
-20.00
Strengths
Proven capability to achieve recurring capital gains based on
widened NIM,
Well established risk management supporting asset quality
despite ongoing loan growth,
Sound financial profile to react swiftly to external shocks ,
The emergence of new instruments to generate fresh revenue
streams supporting profitability margins,
Continuation of eye-catching headway in cleaning its high
related party exposure since 3Q2013,
Maintain liquidity position via matched funding profile and the
funding diversification,
Experienced and well-educated management team as well as
specialized knowledge of the Turkish financial sector.
Publication Date: May 22, 2015




Constraints
Capital adequacy ratio remaining well below the sector
average and well above the legal limit
Lopsided customer concentration driving vulnerability on asset
quality,
Absent alternative delivery channels to support continuity of
efficiency gains,
Upside risks via weakened TL and downside risks to growth
with sluggish policy response thereto exerting pressure on
profit margins while continuing to deteriorate asset quality
through weakened debt-servicing capabilities of the real
sector.
“Global Knowledge supported by Local Experience”
Copyright © 2007 by JCR Eurasia Rating. 19 Mayıs Mah., 19 Mayıs Cad., Nova Baran Plaza No:4 Kat: 12 Şişli-İSTANBUL Telephone: +90(212)352.56.73 Fax: +90 (212) 352.56.75
Reproduction is prohibited except by permission. All rights reserved. All information has been obtained from sources JCR Eurasia Rating believes to be reliable. However, JCR Eurasia
Rating does not guarantee the truth, accuracy and adequacy of this information. JCR Eurasia Rating ratings are objective and independent opinions as to the creditworthiness of a
security and issuer and not to be considered a recommendation to buy, hold or sell any security or to issue a loan. This rating report has been composed within the methodologies
registered with and certified by the SPK (CMB-Capital Markets Board of Turkey), BDDK (BRSA-Banking Regulation and Supervision Agency) and internationally accepted rating
principles and guidelines but is not covered by NRSRO regulations. http://www.jcrer.com.tr
[BANKING]
1.
Rating Rationale
In the assignment of Nurol Yatirim Bank’s ratings, quantitative
and qualitative assessments regarding profitability
indicators, funding and adequacy of capital, liquidity
profile, asset quality, efficiency and risk management
practices along with growth strategy and market shares
have been taken into consideration.
JCR Eurasia Rating has upgraded Nurol Yatirim Bank’s
National LC one notch to ‘AA (Trk)’ from ‘AA- (Trk)’ and has
affirmed International LC note as ‘BBB’ - the latter
positioned above the country ceiling with a ‘Stable’ outlook
on both ratings. JCR Eurasia Rating has also affirmed the
Bank’s International FC note as ‘BBB-’ in the long term and
‘A-3’ in the short term.
However, a possible rising rate environment is expected
to hamper banks’ margins, which would drive a notably
impact on capital and earnings.
Capitalization Level to Support Sustainability
Nurol Bank’s CAR improved as at the end of FY2014.
Additionally, this ratio remained to be above the
minimum CAR requirements (8%) set and the
recommended level (12%) by the BRSA.
The Bank has also remained compliant with and
performed well above the minimum requirements of
Common Equity Tier 1 Ratio (4.5%) and Tier 1 Ratio
(6%) set by the BRSA effective from January 1, 2014.
Improvement in Liquidity Management
Nurol’s international foreign currency is limited by the
country ceiling, while its international local currency is one
notch above the sovereign rating in local currency.
Additional rating actions on Nurol Bank’s international
notches are subject to changes in the sovereign rating.
These ratings were primarily based on Nurol Bank’s (i)
established and expanding earning generation supporting
profitability margins, (ii) diversified financial services
encouraging its solid market position (iii) improved
capitalization level maintained above the required and
further recommended levels and (iv) strengthened liquidity
position through generation of alternative funding sources.
Adequate liquidity level without funding gap or
violations remained compliant with BRSA parameters.
Nurol Yatirim Bank eases liquidity position via short term
bond issue and balanced assets and liabilities in terms of
maturity dates.
Sound Management Team
The Company benefits from improved financial
operations supported by robust and experienced
management team.
Operational Environment with Uncertainties Rising:
In addition, JCR Eurasia Rating continues to await the Bank to
maintain its improved financial ratios which includes easing
the blow on the company of the adverse macroeconomic
status. Particularly, JCR Eurasia Rating’s regards the Bank's
focus on operating efficiency and capital level.
The Key Rating Drivers are;
Strengthened Profitability Ratios
The strategic reorganisation initiated in 3Q2013 continues to
underpin profitability with regard to restructuring of costs
and product diversity. Nurol Bank has seen a significant
recovery in its profitability margins, stemming from robust
NIM during FY2014. Nurol Bank’s profitability margins have
proven to absorb a reduction in NII. The Bank's resilient
profitability is foreseen to be the first line of protection
against unexpected losses.
Nurol Yatırım Bankası Anonim Şirketi
The tension in international and domestic politics and the
unrest in some bordering countries continue. These stiff
political headwinds are further aggravated by the
uncertainties of the upcoming election in June, 2015.
After the completion of the Fed tapering, a potential
drop in international capital flows to Turkey is expected
to drive in a raise in funding costs for Turkish Banks.
Upside risks via weakened TL while downside risks to
growth with sluggish policy response thereto also exert
pressure on profit margins while continuing to worsen
asset quality through impoverished debt payment
capabilities of the real sector.
Customer Concentration Risks
High credit risk concentration in cash and non-cash loans,
with the first 10 customers in each segment constituting
87.6% of the total cash and 64.9% of the non-cash loans
deteriorates asset quality.
1
[BANKING]
Deteriorating Asset Quality
Progressive degradation in NPLs, constituting 13.46% of
equity at the end of 2014 has imposed negative impacts on
asset quality. However, substantially all of non-performing
loans are expected to be collected by the Bank
management due to the strong collateral structure.
Significant factors that may be taken into consideration for
any future change in ratings and outlook status:
Positive – (I) Paid-in capital support for its capital base &
continuation of internal capital generation, (II) Financial
flexibility with new revenue streams along with supporting
NIM, and (III) An improvement in market share may result in
a positive rating action.
Negative – (I) A downturn in financial performance through
weak NIM generation, (II) A marked deterioration in asset
quality eroding capital ratios, (III) A possible recession in
Turkey resulting from corporate default risk, (IV) Slowdown
conditions in the banking sector may trigger a negative
rating result.
The assessment is primarily based on Nurol Yatirim Bank’s
audit report prepared in line with International Financial
Reporting Standards (IFRS) standards have been deployed
for the analysis of financial positions whereas special data
sets such as projections and clarifications provided by the
Bank. Additionally, audited financial statements which are
compiled according to Banking Regulation and Supervision
Agency (BRSA) regulations were utilized when comparing
with the banking sector.
2. Outlook
JCR Eurasia Rating has affirmed “Stable” outlooks on the
short and long term national and international ratings
perspectives of Nurol Yatırım Bank, considering the
recurrent and resilient nature of revenue streams supported
by clientele profile, balance sheet composition, adequate
capitalization level well above the legal and targeted
boundaries indicating the capacity to absorb incidental
losses as well as positive growth prospects in the Turkish
economy even under arising worrisome circumstances and in
the event that no further deterioration arises in the operation
environment of its major shareholders.
to be exerted by outflow of funds in the medium term,
(iii) length and management of temporary margin
contraction pressures to result from re-pricing of assets in
a changing interest rate environment and (iv) increasing
tension in international politics particularly pertaining to
Turkey’s neighbouring countries and in internal politics
pertaining to persistence and recurrence risk of the
current unrest.
3. Sponsor Support and Stand Alone
Sponsor Support notes and risk assessments reflect the
financial strength and expected assistance of the
controlling shareholders. It is considered that the utmost
shareholder has the tendency and satisfactory financial
strength to offer financial support when liquidity needs
arise in the short or long term perspective. Based on
these assessments, the Sponsor Support Note of the
Bank has been determined as “1”, which denotes a
strong external support possibility.
Nurol Holding, the main shareholder, is one of the
leading conglomerates in Turkey with over 9,000
employees.
On the other hand, even if the shareholders or public
authorities do not provide any assistance, the Bank is
expected to be able to manage its balance sheet risks
successfully given its own strong equity base and
capitalization levels which are adequate to absorb
incidental losses. Within this context, the Stand-Alone
Grade of the Bank has been determined as “AB” in
JCR Eurasia’s notation system, which signifies a strong
and credible bank.
4. Company Profile
a. History
A subsidiary of Nurol Holding, founded in 1998 as an
investment Bank, Nurol Yatırım Bankası A.Ş. continues its
operations since May 1999 via its a domestic branch in
Ankara as of 2014.
The general key considerations which would impede the
ratings are (i) the sovereign rating level of Turkey, (ii)
probable adversities in terms of external finance pressures
Nurol Yatırım Bankası Anonim Şirketi
2
[BANKING]
Nurol Holding A.Ş.'s Engaged Sectors
Construction and Contracting
Nurol İnşaat ve Tic. A.Ş.
Operate-Transfer tender. The construction cost of the
Project is approximately USD 7.5bn.
The following table shows the current shareholder
structure of Nurol Holding A.Ş. as of December,2014.
Nurol Gayrimenkul Yatırım Ort. A.Ş.
Otoyol Yatırım ve İşletme A.Ş.
Nurol Enerji Üretim ve Paz. A.Ş.
Shareholders Structure
2014 (TL)
Share %
258,454,622
33,30601
Enova Enerji Üretim A.Ş.
Defence and Production
Nurettin Çarmıklı
Nurol Makina ve Sanayi A.Ş.
Mehmet Oğuz Çarmıklı
258,454,621
33,30601
Nurol Makina ve Sanayi A.Ş. / Çelik İşletmeleri
Eyüp Sabri Çarmıklı
93,010
0.01199
FNSS Savunma Sistemleri A.Ş.
Gaye Çarmıklı
93,010
0.01199
Nurol Teknoloji San. ve Mad. Tic. A.Ş.
Gürol Çarmıklı
62,010
0.00799
Nurol Gulf W.L.L.
Gürhan Çarmıklı
62,010
0.00799
Financial Services
Erol Çarmıklı
258,454,621
33,30601
Gözde Çarmıklı
62,010
0.00799
Nurol Yatırım Bankası A.Ş.
Commercial and Services
Eda Çarmıklı Yolcu
62,010
0.00799
S. Ceyda Çarmıklı
62,010
0.00799
Botim İşletme Yönetim ve Tic. A.Ş.
Oğuzhan Çarmıklı
62,010
0.00799
RGM Turkey Gayrimenkul Yön. ve İşletme A.Ş.
Aynur Türkan Çarmıklı
30,529
0.00393
Nurol Havacılık A.Ş.
Müjgan Sevgi Kayaalp
30,529
0.00393
Tourism
Melih Kayaalp
8,141
0.00105
Turser Turizm Serv. ve Tic. A.Ş.
Semih Kayaalp
8,141
0.00105
Bosfor Turizm İşletmecilik A.Ş.
Hüseyin Hüsnü Doğan
179
0.00002
Club Salima Tatil Köyü ve Tur. İşl. A.Ş.
Uğur Cumhur Tevfik Doğan
179
0.00002
Sheraton Batumi Otel
İsmail Bozkurt
179
0.00002
179
0.00002
776,000.00
100.00
Nurol Holding A.Ş., is the holding company of Nurol
Group, engaged in 5 various industries, such as
Construction and Contracting & Defence and Production &
Finance & Commercial and Services, Tourism Sectors
through over 40 establishments, subsidiaries, affiliates and
project partnerships.. The Holding is of the most known
conglomerate headquartered in Ankara with operations
spread out over fifteen countries across three Continents.
Prime business activities are based in Turkey, the Middle
East, North Africa and the Turkic Republics.
Nurol Holding, trace back to the establishment of its
flagship company Nurol İnşaat ve Ticaret A.Ş which was
was incorporated in 1966 as a contracting company. The
company carries out operation in Infrastructure Projects,
Housing & Social Centre Projects, Manufacturing Facilities
& Industrial Plant Projects and Industrial District Sites &
Business Centre Projects. The Company completed many
major projects both in Turkey and abroad. As a consortium
leader Nurol, Özaltın, Makyol, Astaldi, Yüksel and Göçay
Joint venture group won the Gebze – İzmir Highway Built
Nurol Yatırım Bankası Anonim Şirketi
Ahmet Paşaoğlu
Paid Capital (000 TL)
b. Organization & Employees
The Board of Nurol Bank consists of ten members, three
of whom are independent members and a general
manager. According to Capital Market Board (CMB)
principles three of Board Members should be
independent and the members of the audit committee of
the BoD are accepted as independent members.
The Company’s organization structure includes 4Committee (pricing committee, credit, corporate, audit,
asset and liability, discipline and personnel, information
systems strategy) 2 chief assistant general managers, 2
assistant general managers.
3
[BANKING]
independent and the members of the audit committee of
the BoD are accepted as independent members.
c. Shareholders, Subsidiaries
The table below indicates the detailed shareholding structure
of the Bank. The greatest shareholder of Nurol Bank is Nurol
Holding A.Ş., which holds 78.16% of the shares. The
shareholding pattern is detailed in the following table.
Share %
Shareholders Structure
2014
2013
Nurol Holding A.Ş.
78.1578
78.1578
Nurol İnşaat ve Tic A.Ş.
15.9600
15.9600
Nurol Otelcilik ve Tur İşl. A.Ş.
0.8822
0.8822
Nurettin Çarmıklı
0.8889
0.8889
Erol Çarmıklı
0.8889
0.8889
Mehmet Oğuz Çarmıklı
0.8889
0.8889
Eyüp Sabri Çarmıklı
0.7778
0.7778
Oğuzhan Çarmıklı
0.7778
0.7778
Gürol Çarmıklı
0.3889
0.3889
Gürhan Çarmıklı
0.3889
0.3889
Others
0.0000
0.0000
Paid Capital (000 TL)
45,000.00 45,000.00
d. Corporate Governance
Although Nurol Bank is not a publicly traded company, the
Bank carries out its operations under Banking Law and the
Banking Regulation and Supervision Authority (BRSA)
regulations. In order to comply with the Communiqué on
Corporate Governance Principles of Banks’ published on
November 1, 2006 by BRSA, the Bank has set up Corporate
and Remuneration committees, and disclosed its mission,
vision, values, periodic financials, annual reports and ethical
rules pursuant with the Communiqué of BRSA..
Nurol Bank has a Corporate Governance Committee
responsible for monitoring whether the Corporate
Governance Principles are complied with, expressing the
issues that may originate stemming from non-compliance and
submitting reformative activity to its Board of Directors.
However, the Bank has also established an Investor Relations
Department in 2014.
The Bank’s Board is composed of ten members and
qualifications of the members meet the terms expressed in
the principles. As can be seen in the resumes found on the
Bank’s website, the members possess the necessary
qualifications in terms of education, professional and
managerial experience. According to Capital Market Board
(CMB) principles, three of Board Members should be
Nurol Yatırım Bankası Anonim Şirketi
The Bank’s renewed web site provides amply information
and documentation in terms of transparency and contains
the capital and shareholder structure, curriculum vitaes of
the BoD and top management, articles of association and
organization chart, annual report, financial data, ethical
principles, audit committee reports and social
responsibility.
5. Sector
Analysis&
Environment
Operational
The Turkish Banking Sector, regulated by the Banking
Regulatory and Supervisory Agency (BRSA), consists of
deposit banks, development and investment banks and
participation banks – the latter operating in line with
Islamic principles on a profit-sharing model. The Banking
Sector enjoys the largest share across the wider Turkish
financial services industry with an asset size of USD857
bn (TRY1,994 bn) as of FYE2014.
In aggregate terms, the profitability performance of the
Turkish Banking Sector throughout FY2014 resembled
that of FY2013 and as such recorded a fall. The macroeconomic measures that have been taken for credit cards
and vehicle loans in particular to slow down the growth
in the current account deficit have brought about changes
and difficulties in the sector’s business models and
competitiveness.
The Turkish Banking Sector possesses the necessary fiscal
strength to lend support to economic activity and growth
and maintains its capability to reach external resources
and further prolong this capacity. The monetary
tightening regime pursued by the Federal Reserve (FED)
will raise the international cost of borrowing for the
sector. However, the domination of international funding
of the Turkish Banks by the European Banks will help to
limit such increases. In addition, the loose monetary
policies adopted by the European Central Bank will
contribute to the funding costs of the Turkish Banking
Sector.
Turkish Banking Sector manages its pricing policies and
balance sheet mechanisms in line with international risk
parameters. The interest of the state sponsored banks in
participation banking will provide the sector with
additional external fund markets.
4
[BANKING]
The Turkish Banking Sector currently has high levels of return
on assets, with high net interest margins and exhibits an
upward trend in non-interest income. Despite the relatively
low asset size, high level of profitability, large share of
deposits, high non-interest expenses and capitalization
levels, inflation and real growth rates were the major factors
that helped to maintain its performance throughout FY2014.
It is anticipated that the sector will preserve its growth
momentum for a long period. The sector’s capability to
create resources other than deposits which began in FY2012
accelerated throughout FY2014.
The number of banks operating in the sector increased to 51
as of FY2014, up from 49 in FY2013. Sizable levels of
investment in internet banking, ATM and POS systems are
maintained in order to ensure greater access to banking
services with further effectiveness. The level of assets, loans
and deposit concentration across the sector is quite
significant. As such, in all of the three mentioned fields, the
total market share of the five largest banks was
approximately 60%. The highest levels of concentration are
observed in the fields of deposits, loans and profitability,
respectively.
DECEMBER, 2014
TURKISH BANKING SECTOR
DEPOSIT BANKS
NUMBER NUMBER NUMBER
OF
OF
OF
BANKS BRANCHES STAFF
34
11,182
195,354

State Banks
3
3,500
55,851

Private Banks
11
5,455
95,838

SDIF Bank
1
1
227

Foreign Banks
19
2,226
43,438
DEVELOPMENT & INVESTMENT BANKS
13
41
5,524
PARTICIPATION BANKS
4
990
16,270
TOTAL
51
12,213
217,148
With the exception of international branches and deposit
guarantees, the legal framework of the Turkish Banking
Sector, which remains largely compliant with the EU
regulations, is currently in line with criteria for integration
into the global economy, the Basel criteria, and the Capital
Requirements Directives (CRD).
Competition is observed largely across the smaller players in
the sector whilst competitive behavior among large banks
remains limited due to the levels of concentration inherent in
the sector.
The Banking Sector is one of the industries with the highest
levels of exposure to national and international regulations,
constantly evolving customer demands, developing
technologies, and changes in political structure and society.
Nurol Yatırım Bankası Anonim Şirketi
As the level of interaction with the external environment
remains high, issues such as capital, liquidity, profitability
and cost management are expected to occupy an
increasingly significant role on banks’ agendas.
The Turkish Banking Sector, with an infrastructure shaped
according to the needs of innovative and sustainable
loans, deposit customers and investors, possesses a
dynamic structure in product and service offering. The
robust capital structure and the deepening of capital
markets will continue to confer competitive advantages
across the sector in the field of deposit collection and
domestic and international fund raising throughout
FY2015.
The Turkish Banking Sector, which currently lacks the
desired levels of scale and cost productivity, is
anticipated to change its organizational structure and
growth strategies throughout FY2015 accordingly. As
such, it is expected that the sector will increase its
strategic collaboration between domestic and
international institutions outside of the financial sector
from FY2015 onwards.
Despite the adoption of innovative techniques in the field
of branching across the Turkish Banking Sector, branches
maintain their significance among the different
distribution channels. The loan issuing capacity of the
Turkish Banking Industry remains above the globally
accepted optimum levels with the elasticity coefficients
despite interest rate volatility and regulatory pressures.
Legal regulations have led to improvement in the
resistance of banks against crises, while exerting
downward pressure on productivity and profitability.
However, the financial innovations that have been
constituted on a national and international basis have
helped to counteract the negative effects of regulatory
constraints.
Although banks continue to rely principally on deposits
for their financing needs, the utilization of alternative
resources is following a rising trend. In line with the
increase in funding opportunities resulting from
expansionary monetary policies pursued by developed
economies, banks’ international liabilities have
maintained an upward trend during the recent years. The
external debt rollover ratio of the sector has been
maintained at a level above 100% and the long term
nature of the international funds helps to extend the
maturity structure of liability composition. The issues of
securities by banks have accelerated and maintained
their growth trend.
5
[BANKING]
The ratio of non-performing loans to equity exhibited a
value of 12.87% in FY2012 and increased to 15.29% and
15.69% in FY2013 and FY2014, respectively. While there
was a nominal increase of 22.91% in the non-performing
loans throughout 2014, the lower nominal increase of
18.65% in total loans compared to that in non-performing
loans resulted in a mathematical increase in the share of nonperforming loans to total loans. The ratio of non-performing
loans to assets was 2.84% as of FYE2014.
The capital adequacy ratio of the sector was 17.90% at
FYE2012 and underwent a fall and attained a value of
15.30% by FYE2013. However, it recovered throughout
FY2014 and increased to 16.28% at FYE2014. The fact that
85.53% of the sector’s legal equity was constituted of core
capital proves that the sector maintains its robust equity
structure despite the fall from the 90% level observed in the
past.
The Banking Sector maintained its asset growth throughout
FY2014 principally resulting from the expansion in loans and
required reserves in a similar trend to that of FY2013. This
was largely funded via the increase in deposits, equity,
issued securities and rises in payables to banks.
The regulation, supervision and monitoring activities that
have been put in place following the fiscal crisis in 2000
along with their execution at an internationally accepted
high quality level has brought discipline into the sector. The
effects of legal regulations helped to increase the resistance
of banks against crises, whilst exerting downward pressure
on productivity and profitability. However, the innovations
that have been rolled out at the national and international
level helped to counter the negative effects of regulatory
constraints. In particular, the growth in loans was rather
subdued resulting from the macro-economic measures that
have been implemented in FY2014.
Nurol Yatırım Bankası Anonim Şirketi
MARKET SHARE %
2006
2007
2008
2009
2010
2011
2012
2013
2014
PARTICIPATION BANKS
2.75
3.34
3.52
4.03
4.30
4.61
5.13
5.55
5.23
DEVELOPMENT AND
INVESTMENT BANKS
3.07
3.25
3.13
3.24
3.07
3.42
3.85
4.05
4.24
DEPOSIT BANKS
94.18
93.41
93.35
92.73
92.63
91.97
91.02
90.41
90.53
As of FYE2014, deposit banks held the leading rank
among the banking sector assets with a 90.53% share,
followed by participation and development banks with
shares of 5.23% and 4.24%, respectively. The Turkish
Banking sector exhibited successive growth on a
cumulative basis for the last 9 years with an aggregate
cumulative growth rate of 390.09% for the 2005-2014
periods.
On USD terms, the Turkish Banking Sector exhibited
growth across all years with the exception of 2008 and
2011 where there was a contraction in asset size due to
the sudden devaluation of the Turkish Lira (TRY).
Examining the details of the FY2014 growth in greater
detail, reveals that participation and investment banks
recorded the greatest increase with a rate of 20.58%.
Participation banks had an annual growth rate of 8.50%
whilst deposit banks attained a growth rate of 15.28%.
Compared to the previous years, the low growth of
participation banking throughout FY2014 stemmed from
the ongoing problems associated with Bank Asya which
was largely publicized in the press.
Deposits, international borrowing and equity, which has
been increasing through internal profitability generation,
constituted the principal resources of growth for the
sector in the past. The growth observed throughout
FY2014 was driven first and foremost by increases in
general deposits, particularly that of foreign currency
deposits, followed by borrowings from international
banks, funding via repurchase agreements and finally
issued securities and bonds. The diversification of
resources extended maturities and eased liquidity
management. However, the share of equity among total
resources has declined to a level that was last observed
6
[BANKING]
9 years ago. There was an increase in deposit interest rates
and funding costs across the wider Turkish Banking Sector
from 1Q2013 onwards. Consequently, the sector’s growth
rate underwent a limited slowdown.
Deposits continue to enjoy the highest share with respect to
funding of the Banking Sector. However, their share among
total resources dropped to 53.77% at FYE2013 from
61.90% at FYE2005. In line with the development of capital
markets and integration of the system into the global
economic dynamics, the issue of capital market instruments
and resources obtained via direct borrowing started to play
an increasingly important role. In this regard, the share of
resources obtained through such means has increased to
28.07% at FYE2013 from 18.45% at FYE2007.
The share of securities among total assets maintained an
increasingly downward trend and fell to 15.99%. Loans, on
the other hand, increased to 62.85% at FYE2014 from
38.93% in FY2005. The highest level of growth among total
resources was observed across provisions for required
reserves and bank liquidity requirements. Provisions, which
constituted 3.68% of total assets at FYE2005, formed
8.62% of total assets at FYE2013. The desire to slow down
credit growth is the major factor that lies behind the increase
in provision rates across the sector.
The profitability indicators of the Turkish Banking Sector
began to exhibit a downward trend despite the maintenance
of relatively high levels throughout FY2014. The domination
of the sector’s funding structure by deposits is a factor that
increases the need for a branch network and operating
expenses and as such leads to downward pressures on the
sector profitability. On the other hand, banks reflect the
anticipated losses in their credit assignment processes fully
onto their interest margins in accordance with the principles
of prudence, weakening the return on assets. The high level
of non-interest expenses indicates that banks should improve
operational productivity.
Turkish Banking Sector
Profitability Indicators %
Interest Margin %
2014
2013
2012
2011
2010
2009
2008
2007
2006
3.80
4.02
4.42
3.86
4.61
5.87
5.23
5.03
4.81
ROAA (%)
1.69
2.01
2.33
2.27
2.95
3.21
2.54
3.37
3.20
ROAE (%)
14.81
16.62
18.49
17.90
21.85
25.50
20.56
26.90
25.36
Net Profit Margin %
25.81
25.91
30.42
30.65
36.14
33.20
27.83
35.82
32.01
Provision Expenses /
T. Revenues%
21.66
19.81
20.45
15.14
14.08
22.60
18.41
14.44
12.73
Despite the gradual drop in interest rates from 1H2014
onwards, the net interest margin generated by the Banking
Sector has currently not been negatively impacted by such
Nurol Yatırım Bankası Anonim Şirketi
developments. However, provision expenses maintain
negative pressures on banks’ balance sheets.
Net interest income constitutes the principle source of
revenue while the sector has difficulty in diversifying its
revenue streams. The effects of provision expenses in the
margins are greater compared to EU countries among
the different components. Net interest income forms the
principal source of revenue for the Turkish banking
system, constituting 68.12% of total banking revenues.
On the other hand, the ratio of non-interest expenses to
total revenues is lower than the levels observed in EU
countries.
The leading indicators of foreign currency position in the
sector, the ratios of “Total Foreign Currency Position to
Assets” and “Total Foreign Currency Position to Equity”,
attained values of 0.30% and 2.61% as of FYE2013. As
such, the effect of foreign currency position risk on the
sector’s revenue generating capacity is almost negligible.
The short covering of foreign currency position via off
balance sheet hedging methods has increased the rollover and counterparty risks across the Turkish Banking
Sector.
There is no liquidity deficit for the balance sheet
transactions across all maturities. The highest level of
excess liquidity was observed for the period of up to 7
days maturity and on a yearly basis due to the effects of
the increases in provisions. Liquidity deficit is observed in
all off-balance sheet transactions across different
maturities. However, the Turkish Banking System is in
liquidity surplus overall.
As of FY2014, the Banking Sector finances 52.79% of its
assets via deposits and participation funds. Despite the
creation of various tax incentives to increase the maturity
of the funding structure, the average maturity of banking
deposits was 72.77 days in 2014 compared to 74 days
in 2012.
Leasing and loan receivables from 62.22% of the total
asset size of the Turkish Banking Sector, whilst 15.99% of
total assets are constituted by debt securities, large
share of which belongs to government bonds. While the
share of debt securities across balance sheet items is in
decline, the share of loans is on the rise.
The credit, market and operational risks of the Turkish
Banking System are measured in accordance with
internal methodologies and the BRSA regulations.
External independent rating agencies have not yet taken
7
[BANKING]
part in the measurement of these risks, particularly credit
risk. According to data compiled by the BRSA, 90.08% of
total risks in the system are constituted by credit risk,
followed by operational risks and market risks with shares of
7.45% and 2.47% respectively. The aggregate monetary
measure of risk across the system is TRY1.66 bn.
Turkish Banking Sector
Turkish Devolopment and Investment Banking Sector
Nurol Yatırım Bankası A.Ş.
Annual Asset Growth Rates %
74.25
24.23
34.48
36.07
26.70
80
46.49
32.94
40
20.81
The Turkish Banking Sector hedges its balance sheet foreign
currency short position with an off balance sheet foreign
currency long position. The sector’s foreign currency net
general position has been low for a relatively long period of
time. The ratio of non-performing loans across the sector was
2.84% as of FYE2014 and remains low in comparison to
global averages. However, the pressures on economic
growth in 2015 are anticipated to lead to a fall in the asset
quality.
Across the sector, the share of equity to the overall asset size
was 13.17% at FYE2012 whilst the same ratio was 11.19%
at FYE2013, and declined to 11.64% at FYE2014.
Participation banks had the lowest equity to total resources
ratio.
On the other hand, despite the damage that has been done
to the reputation and appeal of development and
investment banks in developed markets due to their
deteriorating equity and asset composition, the sector in
Turkey maintains its appeal as it remains well-capitalized
with a high equity ratio.
14.57
20.86
12.57
20.58
26.38
15.11
2010
2011
2013
2014
Nurolbank recorded a remarkable growth, in total asset
size of 46.49% as of FY2014, following the increase of
74.25% in FYE2013 and outperformed both the Turkish
banking sector and Development & Investment banking
sectors’ growths of 15.11% and 20.58%, respectively in
the same period, growth performance is mainly driven
by the loan book. The Bank's strategy is to create a
diversified corporate loan book targeting high-quality
corporate credits with a range of customers. Nurol Bank
has focused on developing its capacity to offer a wide
range of products to its current and new corporate
clients.
Market Share in Turksh Banking Sector (%)
Market Share in Investment Banking Sector (%)
Trendline
0.750
0.701
0.80
0.70
0.617
0.60
0.471
0.438
0.50
0.40
0.30
0.20
0.022
Indices Relating to Size
Turkish Devolopment and Investment Banking Sector
Nurol Yatırım Bankası A.Ş.
Cumulative Asset Growth Rates %
300
263.00
212.88
159.49
54.07
64.36
147.80
139.11
2010
46.00
4.51
2011
250
200
150
100
107.72
50
20.81
14.57
42.21
2012
0
2013
0.018
0.025
0.032
0.10
2011
2012
2013
2014
Nurol Bank’s asset size market shares amongst all 15
development & investment banks and the entire Turkish
banking sector were 0.749% and 0.032%, respectively
at the end of FY2014 and displayed a slight increase
compared to the previous year. Nurol Bank ranked 38th
among 51 banks in terms of assets size base at the end
of FY2014.
ii. Indices Relating to Profitability
2014
The graph above shows the growth of the Nurol’s asset base
in comparison to the sectors. Over the reviewed period, the
asset base growth performance of the Bank demonstrated
an upward trend since FYE2010 with the exception of
FY2011.
Nurol Yatırım Bankası Anonim Şirketi
0.015
0.00
2010
Turkish Banking Sector
24.23
0
-40
2012
a. Financial Indicators & Performance
95.20
20
-20
-15.87
6. Financial Analysis
i.
60
According to the IFRS-compliant financials, Nurolbank
gained a net profit of TRY 15.87mn in FYE2014, a
striking improvement of 29.75% compared to the TRY
516k net profit of FY2013. In the same period, the
Turkish banking sector’s net profits exhibited a drop of 0.28% and while the development & investment banking
sector’s net profit figure demonstrated an increase of
36.11%.
8
[BANKING]
Nurol Bank’s financial performance was deteriorated in
FYE2013 due to high operating expenses and high funding
costs. However, an improvement in profitability ratios has
indicated the Bank’s higher-yielding credit assets strategy in
FYE2014.
Net Interest Income / Total Income
Net Fee and Commision Income / Total Income
Total Operating Income / Total Income
100%
24.61%
52.10%
69.42%
ROAA Nurol Yatırım Bankası A.Ş.
ROAA Turkish Devolopment and Investment Banking Sector
ROAA Turkish Banking Sector
ROAA Comparison
3.52
2.95
2.94
2.78
2.27
4.0
2.43
2.28
2.01
1.69
3.0
1.0
-0.30
0.0
-1.0
2011
2012
2013
2014
In tandem with increasing ROAA figures of the development
& investment banking sector, Nurol Bank’s ROAA increased
to 3.89% in FYE2014 from -0.30% in FYE2013.Moreover,
Nurol Bank’s profit from operating activities before income
tax figure expanded by 62.84% to TRY20.17 mn in FY2014
y-o-y.
13.64%
20.58%
2009
2010
23.23
21.85
16.62
14.81
8.10
7.21
18.00%
1.60%
9.84%
2011
2012
2013
20%
24.96%
-10.16%
2014
7.81
9.34
The Bank’s gross profit margin and coverage of total
income to total expense ratio fluctuated in a wide range
over the reviewed period.
Interest Rate for Costly Liabilities (avg.) %
Interest Rate for Earning Assets (avg.) %
Margin %
Interest Margin %
25
14.0
11.81
10.23
15
10
6.75
6.81
5
4.16
4.15
5.07
12.0
10.13
7.85
10.0
8.43
6.72
8.0
6.0
4.0
0
-0.33
2010
-1.11
2011
2012
2013
-5
2014
The share of NII within the total income composition of Nurol
Bank continued to narrow slightly in relative terms for the 3
consecutive periods to 65.19% in FYE2014 from 66.04% in
FYE2013 and from 70.46% in FYE2012. Additionally, the
share of net fee and commission income was one of the main
drivers of profitability ratios in FYE2014.
Meanwhile, Nurol Bank’s interest income mix remained
dominated by loans and advances to customers and
marketable securities.
Nurol Yatırım Bankası Anonim Şirketi
0%
65.19%, 19.10% of total income was contributed by net
interest income, net fee & commission income,
respectively, as of December 31, 2014. Thus, 84.28%
of the Bank’s total income resulted from sustainable
streams and was engendered mainly through core
banking activities, indicating the maintenance of the
profitability level.
20
11.76
7.64
16.26%
65.81%
-20%
ROAE Comparison
17.90
60%
85.20%
40%
16.94%
ROAE Nurol Yatırım Bankası A.Ş.
ROAE Turkish Devolopment and Investment Banking Sector
ROAE Turkish Banking Sector
18.49
80.40%
2.0
2.33
1.99
-0.09
2010
73.90%
27.32%
5.0
3.89
3.52
80%
9.58%
2.59
2.66
2010
2011
3.51
2.28
2012
2013
2.0
3.38
0.0
2014
Nurol Bank’s net income figure showed a level that was
higher than expectation thanks to by outstanding earning
asset growth rate and ongoing strong collection
achievement during FY2014. Nurol Bank’s interest margin
increased to 3.38% in FYE2014 from 2.28% in
FYE2013. Nurol Bank’s concentration on a relatively
client triggers it to charge higher interest rates on its loan
book.
Particularly, the Bank’s performance in the profitability
field through the reviewed period was stronger than
both the Turkish banking sector and Development &
Investment banking sector with the exception of the
FYE2014.
9
[BANKING]
b. Asset Quality
Nurol Yatırım Bank executes its credit risk by the allocation
of loan limits for customers and customer groups as well as
the definition of limits for sectors. Allocation limits,
monitoring, controlling and auditing credit activities are
managed under the Bank’s credit risk management policy
and procedures are approved and implemented by the
Board of Directors as well as in the frame work of Banking
Law.
Nurol Yatırım Bankası A.Ş.
Turkish Devolopment and Investment Banking Sector
Turkish Banking Sector
23.92
28.23
NPL %
30
25
20
2.72
0.83
2.84
0.23
0.91
2.74
0.28
0.97
2.86
1.48
2.70
2.06
3.65
15
2011
2012
2013
98.93
73.84
100
64.10
70.14
76.39
67.14
60.57
75.18
73.58
79.38
77.39
88.72
84.41
120
80
15.42
60
40
20
0
2010
2011
2012
2013
2014
Nurol Bank remained behind the sector averages in its
loan loss provisions (LLR) to impaired loans in FYE2014.
Moreover, the Bank reported tough losses in FYE2014,
impaired
loans representing an amount
of
TRY1.91mn..However, Nurol Bank’s earnings are highly
sufficient to absorb expected loan losses.
As stated in last year's outlook report, the management
made a clean sweep of related party exposure during
2014. Consequently, 7% and 44% of the Bank’s cash
and non-cash loans in FYE2014, decreased from 54%
and decreased from 58% in FYE2013, are given to
group companies. Additionally, interest and commission
income from related parties accounted TRY21.95mn in
FYE2014 for cash loans and TRY161k for non-cash loans.
c. Funding & Adequacy of Capital
10
5
0
2010
80.83
The Bank’s risk management framework includes the credit,
market, liquidity and operational risks. The Bank has set up
Audit, Credit, Corporate Governance, Asset and Liability,
Remuneration and Information System Committees and
Internal Control, Internal Audit, and Risk Management
Departments under the Internal System in line with BRSA
regulations in order to establish a thorough and
comprehensive risk management system. The Bank is
exposed to market risk, liquidity risk, operational risk and
principally credit risk.
Nurol Yatırım Bankası A.Ş.
Turkish Devolopment and Investment Banking Sector
Turkish Banking Sector
Loans Loss Reserves / Impaired Loans %
2014
The Bank’s gross non-performing loans portfolio at the end
of FY2014 deteriorated to 2.72% from 0.23% on IFRS
basis. As of FY2014, the non-performing loans portfolio of
Nurol Bank as a proportion of its equity increased to
13.46% (FY2013: 0.61%) – but staying well below both the
Turkish banking sector and Turkish Development & Investment
banking sector.
As an investment bank, Nurol Bank is not entitled to
collect customer deposits. The Bank meets its funding
needs through issued debt securities, borrowed funds
from domestic institutions, current balances of its loan
customers, equity, and obligations under repurchase
agreement.
Equity
Other Borrowing
Resource Distribution %
100%
31.27
The Bank expects that NPLs pertaining to the previous years’
activities will not be reflected in FYE2015 financial
statements. In addition, substantially all of non-performing
of non-performing loans is expected to be collected due to
the strong collateral structure such as real estate mortgage
and protocol with customers.
Non-Costly Liabilities
2.58
26.00
1.82
20.60
38.06
44.62
16.64
80%
1.83
32.63
2.32
60%
6.15
66.15
72.18
40%
77.56
59.62
50.74
49.23
20%
0%
2009
2010
2011
2012
2013
2014
Nurol Bank’s collected fund, including issued debt
securities and current balances of loan customers,
accounted for the largest share in total fund resources
with a rate of 50.74% as of December, 2014.
Nurol Yatırım Bankası Anonim Şirketi
10
[BANKING]
The second largest fund resource was non costly liabilities,
consisting of bank loans which increased by 30.79% and
obligations under repurchase agreement.
CAR (%) Nurol Yatırım Bankası A.Ş.
CAR (%) Turkish Devolopment and Investment Banking Sector
CAR (%) Turkish Banking Sector
60.27
70
58.64
60
48.14
50
34.21
32.69
32.83
17.90
15.30
16.28
17.23
19.01
14.20
16.89
2011
2012
2013
2014
24.72
18.94
30
16.46
20.62
18.55
40
20
10
0
2009
2010
The Bank’s Capital Adequacy Ratio (CAR) was calculated as
16.89% at the end of FY2013, up 268 base points from the
previous year and stood above the minimum CAR
requirements set by the Basel Accord (8%), BRSA (12%) and
the banking sector (16.28%)
Core Capital
Supplementary Capital
95.39%
81.19%
71.41%
120%
100%
80%
4.61%
60%
18.81%
28.59%
9.23%
90.77%
93.63%
6.37%
5.48%
94.52%
Own Fund Structure
40%
20%
0%
2009
2010
2011
2012
2013
7. Risk Profile & Management
a. Risk Management Organization & its
Function – General Information
The Bank has exposure to Credit, Market, Liquidity and
Operational Risks from its use of financial instruments
and activities. The risks are executed under the risk
management frame and implementation communiques.
The Bank’s risk management policies and strategies are
reviewed regularly to reflect changes in market
conditions and according to arising needs. A separate
risk management department was established within the
Bank, which reports to the Board and is entitled to carry
out risk management operations independent of
executive activities.
The Board of Directors has the overall responsibility of
establishing and supervising the Bank’s risk management
framework. The Bank has set up Assets and Liabilities
Committee, Audit Committee, Liquidity Risk Management
Committee, Market Risk Committee, Credit Risk
Committee, Operational Risk Committee under the BoD.
In addition to these, an Anti-Fraud Monitoring Committee,
Sustainability Committee, Internal Control Unit and
departments of Risk Management, Internal Audit, AntiFraud Monitoring and Compliance were also set up for
further surveillance. These departments report directly to
the Board of Directors.
b. Credit & Market Risks
2014
Tier 1 Capital or Core Capital is the principal measure of a
bank’s financial strength. According to the audited IFRS
report, Nurol Bank’s Tier 1 capital raised to TRY96.17mn. in
FYE2014 from TRY58.19mn in FYE2013.
Creditworthiness of borrowers is reviewed regularly in
compliance with the legislation by the internal risk rating
models. The Bank utilizes an internal risk rating model for
its corporate, commercial and MSE loan portfolio.
Credit risk of the Bank is principally derived from loans
& advances to customers and the securities portfolio. The
Bank extended 45.48% of assets as loans at the end of
FY2014 (FY2013: 73.21%) and continued its increase,
the growth performance is mainly driven by the loan
book, constituting the 55.82 % of the total assets in
FYE2014 (FY2013: 54.95%).
Nurol Yatırım Bankası Anonim Şirketi
11
[BANKING]
Concentration in Cash Loan Portfolio %
Customer
Concentration
2014
2013
2012
2011
First 10
87.6
81.2
95.1
98.5
First 20
98.6
99.0
100.0
99.9
First 50
100.0
100.0
100.0
100.0
Concentration in Non Cash Loan Portfolio %
Customer
Concentration
2014
2013
2012
2011
First 10
64.9
75.4
79.0
87.2
First 20
86.1
91.4
93.8
96.4
First 50
99.9
100.0
100.0
100.0
The Bank’s customer concentration with top ten and twenty
customers represented 87.6% and 98.6% in cash loan book
while non-cash loan book’s customer concentration with top
ten and twenty customers accounted at 64.9% and 86.1%
as of December, 2014.
Cash Loan Book Composition % (First-5)
Textile
29.0
Mining
15.6
Infrastructure
15.0
Other
7.5
Transportation / Shipping
6.7
Non Cash Loan Book Composition % (First-5)
Road (Land-Railway-Tunnel)
25.2
Energy
20.7
Banks
12.0
Superstructure Commitment
6.9
Infrastructure Commitments
6.7
Nurol Bank has exposure to concentration risk where its
business activities focus particularly on a similar type of
customers and industrial sectors in Turkey. The Group has
large sectorial concentrations in cash loan book and non-cash
loan book.
monitors its market risk operations and takes the
required evaluations in accordance with the
“Communique on Measurement and Evaluation of Capital
Adequacy of Banks’. In the field of market risk, the Nurol
Bank is mostly exposed to currency exchange and
interest rate movement risks, respectively.
The Bank’s foreign currency risk exposure is restricted
and complies with BRSA regulations. The Bank’s interest
rate risk is also limited and risk arising from interest rate
fluctuations is monitored on a daily basis and managed
by the asset and liability committee.
c. Liquidity Risk
Appropriate and timely measures through a corporate
procedure in the event of a liquidity crisis which may
arise from market conditions or the Bank’s own balance
sheet structure are taken by the relevant organizational
units, namely the Risk Management Department, through
the management of the liquidity risk by the Assets and
Liabilities Committee (ALCO). The liquidity risk is also
monitored by the Liquidity Risk Management Committee
within the context of specified early warning signals,
cash flow projections, stress levels and possible actions to
be taken.
In overcoming the liquidity risk considering short and long
term liquidity requirements, the Bank has been in an
effort to develop alternative funding channels and to
diversify its funding sources through instruments including
mainly bonds.
BRSA stipulated in its Communiqué dated 1 November
2006 that the weekly and monthly liquidity ratios on a
bank-only basis for foreign currency assets/liabilities
and total assets/liabilities should stand at a minimum of
80% and 100%, respectively. In addition to the fact that
Nurol Bank remained compliant with BRSA’s parameters,
the Bank’s first maturity bracket improved while second
maturity bracket deteriorated (to 210% from 203% for
the first maturity bracket and to 129% from 157% for
the second).
Additionally, Nurol Bank was applied for bond issue up
to TRY285 mn. in May, 2015.
Market risk occurs due to change in market and equity
prices, interest and foreign currency exchange rates related
with the Bank’s on and off balance sheet position. The Bank
Nurol Yatırım Bankası Anonim Şirketi
12
[BANKING]
8. Budget & Debt Issue
Within the framework of projections and budgeting activities
of Nurol Bank, the financial assumptions and estimations
spanning between the years of FYE2015 and FYE2017 have
been established (including bond issue of TRY285mn in
FY2015). Projected financial statement remains disciplined
and continues to increase the results of its operation
efficiency through increasing NIM thanks to expanding
product mix and cost efficiency.
Despite difficult conditions resulting from the fluctuations in
the financial markets, Nurol Bank has projected a mild
growth of 0.77% in asset size and 0.07% in loans base with
an increase of 29.41% in interest income profit as of yearend 2015 in line with its healthy and sustainable growth
policy. Nurol Bank forecasts the net profit to drop 16.50 %
in FYE2015 in line with the Turkish banking sector’s decline in
profit margins. However, the Bank’s management expects a
net profit growth of 10% in FYE2016 and FYE2017.
According to the base scenario developed by the Nurol Bank
Management, some of the planned topics are shown in the
graphs below;
Cumulative Equity Growth Rate %
As of the first quarter of 2015, Nurol Bank’s total assets
decreased by 6.20% based unconsolidated financial
statements complying with BRSA regulations. In the same
period, the equity of Nurol Bank increased by 1.20%,
compared to 2014 year end.
ROE - Pretax Profit / Equity (avg.)
25
ROA - Pretax Profit / Total Assets (avg.)
21.87
20.52
20
15
10
2.19
5.05
-0.25
2.11
0
2010
3.74
2.34
2.44
2015
2016
0.31
0.09
-0.87
-5
2009
14.18
6.91
6.52
5
13.82
2011
2012
2013
2014
Nurol Bank’s strategy of focusing on profitability via
efficiency gains in the sector rather than asset growth.
The profitability ratios of ROAA and ROAE based on the
assumptions and parameters are expected to remain its
level during the 2012 to 2016 forecast period.
Cumulative Asset Growth Rate %
Cumulative Liability Growth Rate %
500
436.71
387.92
400
265.47
345.63
343.57
343.26
300
305.12
268.29
190.19
200
106.97
100
33.76
24.23
30.85
151.21
94.46
102.80
2014
2015
145.39
123.08
65.53
45.04
0
3.30
7.48
16.87
-100
-89.08
-200
2010
2011
2012
2013
2016
2017
The Bank management projects the loan book of Nurol Bank
constitute approximately 69 % of the total assets between
FY2015 and FY2017.
Interest Expense
Net Interest Income
Profit from Operating Activities Before Income Tax
Interest Income
120,000
95,713
100,000
87,012
79,101
80,000
61,125
60,000
41,321
28,015
20,000
20,173
0
-20,000
2009
45,453
33,110
40,000
2010
2011
2012
2013
2014
49,999
45,714
37,780
15,000
2015
Nurol Yatırım Bankası Anonim Şirketi
41,558
16,500
18,150
2016
2017
13
[BANKING]
Nurol Yatırım Bankası A.Ş.
BALANCE SHEET - ASSET
(000)
A- TOTAL EARNING ASSETS ( I+II+III )
I- LOANS AND LEASING RECEIVABLES (net)
a) Short Term Loans
b) Lease Assets
c) Medium & Long Term Loans
d) Over Due Loans
e) Others
f) Receivable from Customer due to Brokerage Activities
g) Allowance for Loan and Receivables Losses (-)
II- OTHER EARNING ASSETS
a) Balance With Banks -Time Deposits
b) Money Market Placements
c) Reserve Deposits at CB (*)
d) Balance With CB- Demand Deposits
III- SECURITIES AT FAIR VALUE THROUGH P/L
a) Treasury Bills and Government Bonds
b) Other Investment
c) Repurchase Agreement
B- INVESTMENTS IN ASSOCIATES (NET) + EQUITY SHARE
a) Investments in Associates (Net)
b) Equity Share
C- NON-EARNING ASSETS
a) Cash and Cash Equivalents
b) Balance With Banks - Current Accounts
c) Financial Assets at Fair Value through P/L
d) Accrued Interest from Loans and Lease
e) Other
- Intangible Assets
- Property and Equipment
- Deferred Tax
- Other
TOTAL ASSETS
Nurol Yatırım Bankası Anonim Şirketi
FYE
2014
USD
(Converted)
268,523
153,718
64,895
5,320
78,162
6,166
0
0
-825
87,253
47,096
36,678
3,284
194
27,552
16,602
10,950
0
0
0
0
6,835
81
4,258
0
0
2,496
440
210
0
1,845
275,358
FYE
FYE
FYE
FYE
FYE
FYE
FYE
As % of
As % of
As % of
2014
2014
2013
2013
2012
2012
2011
2014
2013
2012
TRY
TRY
TRY
TRY
TRY
TRY
TRY
Assets
Assets
Assets
(Original) (Average) (Original) (Average) (Original) (Average) (Original) (Original) (Original) (Original)
622,677
517,452
412,226
320,766
229,306
196,490
163,673
97.52
93.92
90.49
356,456
298,823
241,190
195,883
150,576
133,750
116,923
55.82
54.95
59.42
150,484
157,403
164,321
134,954
105,586
96,789
87,992
23.57
37.44
41.67
12,336
14,965
17,594
8,797
0
19
38
1.93
4.01
n.a
181,250
118,166
55,082
49,953
44,824
36,738
28,652
28.39
12.55
17.69
14,298
7,427
556
489
421
11,517
22,613
2.24
0.13
0.17
0
2,014
4,027
2,014
0
0
0
n.a
0.92
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
-1,912
-1,151
-390
-323
-255
-11,314
-22,372
-0.30
-0.09
-0.10
202,330
141,804
81,277
47,526
13,774
18,653
23,531
31.69
18.52
5.44
109,210
84,012
58,814
35,832
12,849
12,235
11,620
17.10
13.40
5.07
85,053
52,033
19,012
9,506
0
5,181
10,361
13.32
4.33
n.a
7,616
3,808
0
0
0
0
0
1.19
n.a
n.a
451
1,951
3,451
2,188
925
1,238
1,550
0.07
0.79
0.37
63,891
76,825
89,759
77,358
64,956
44,088
23,219
10.01
20.45
25.63
38,499
51,241
63,983
39,653
15,322
19,271
23,219
6.03
14.58
6.05
25,392
25,584
25,776
37,705
49,634
24,817
0
3.98
5.87
19.59
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
15,850
21,266
26,681
25,388
24,095
24,103
24,111
2.48
6.08
9.51
187
151
114
199
283
358
432
0.03
0.03
0.11
9,875
7,944
6,013
5,619
5,225
4,476
3,727
1.55
1.37
2.06
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
5,788
13,171
20,554
19,571
18,587
19,270
19,952
0.91
4.68
7.34
1,021
1,056
1,090
952
813
675
536
0.16
0.25
0.32
488
534
580
689
798
722
646
0.08
0.13
0.31
0
0
0
0
0
130
260
n.a
n.a
n.a
4,279
11,582
18,884
17,930
16,976
17,743
18,510
0.67
4.30
6.70
638,527
538,717
438,907
346,154
253,401
220,593
187,784
100.00
100.00
100.00
FYE
2014
Growth
Rate %
51.05
47.79
-8.42
-29.89
229.05
2,471.58
-100.00
n.a
390.26
148.94
85.69
347.36
n.a
-86.93
-28.82
-39.83
-1.49
n.a
n.a
n.a
n.a
-40.59
64.04
64.23
n.a
n.a
-71.84
-6.33
-15.86
n.a
-77.34
45.48
FYE
2013
Growth
Rate %
79.77
60.18
55.63
n.a
22.89
32.07
n.a
n.a
52.94
490.08
357.73
n.a
n.a
273.08
38.18
317.59
-48.07
n.a
n.a
n.a
n.a
10.73
-59.72
15.08
n.a
n.a
10.58
34.07
-27.32
n.a
11.24
73.21
FYE
2012
Growth
Rate %
40.10
28.78
19.99
-100.00
56.44
-98.14
n.a
n.a
-98.86
-41.46
10.58
-100.00
n.a
-40.32
179.75
-34.01
n.a
n.a
n.a
n.a
n.a
-0.07
-34.49
40.19
n.a
n.a
-6.84
51.68
23.53
-100.00
-8.29
34.94
14
[BANKING]
Nurol Yatırım Bankası A.Ş.
BALANCE SHEET LIABILITIES & SHAREHOLDERS' EQUITY
(000)
A- COST BEARING RESOURCES ( I+II )
I- DEPOSIT
a) TL Deposit
b) FC Deposit
c) FC & LC Banks Deposits
II- BORROWING FUNDING LOANS & OTHER
a) Borrowing From Domestic Market
b) Borrowing From Overseas Markets
c) Borrowing from Interbank
d) Securities Sold Under Repurchase Agreements
e) Subordinated Loans & Others
B- NON-COST BEARING RESOURCES
a) Provisions
b) Current & Deferred Tax Liabilities
c) Trading Liabilities (Derivatives)
d) Other Liabilities
C- TOTAL LIABILITIES
D- MINORITY INTEREST
E- EQUITY
a) Prior Year's Equity
b) Equity (Added From Internall & External Resourses At This
Year)
c) Profit & Loss
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Nurol Yatırım Bankası Anonim Şirketi
FYE
2014
USD
(Converted)
139,705
0
0
0
0
139,705
117,494
0
0
22,211
0
89,846
1,283
283
953
87,327
229,551
0
45,807
38,993
FYE
FYE
FYE
FYE
FYE
FYE
FYE
As % of
As % of
As % of
2014
2014
2013
2013
2012
2012
2011
2014
2013
2012
TRY
TRY
TRY
TRY
TRY
TRY
TRY
Assets
Assets
Assets
(Original) (Average) (Original) (Average) (Original) (Average) (Original) (Original) (Original) (Original)
323,961
332,198
340,434
232,595
124,756
118,358
111,960
50.74
77.56
49.23
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
323,961
332,198
340,434
232,595
124,756
118,358
111,960
50.74
77.56
49.23
272,456
244,724
216,992
145,590
74,187
85,207
96,226
42.67
49.44
29.28
0
0
0
0
0
0
0
n.a
n.a
n.a
0
0
0
0
0
0
0
n.a
n.a
n.a
51,505
87,474
123,442
87,006
50,569
33,152
15,734
8.07
28.12
19.96
0
0
0
0
0
0
0
n.a
n.a
n.a
208,344
108,198
8,051
11,820
15,588
9,969
4,349
32.63
1.83
6.15
2,974
2,785
2,595
2,641
2,686
2,535
2,383
0.47
0.59
1.06
657
649
640
1,469
2,298
1,443
587
0.10
0.15
0.91
2,211
1,145
79
64
48
112
176
0.35
0.02
0.02
202,502
103,620
4,737
7,647
10,556
5,880
1,203
31.71
1.08
4.17
532,305
440,395
348,485
244,415
140,344
128,327
116,309
83.36
79.40
55.38
0
0
0
0
0
0
0
n.a
n.a
n.a
106,222
98,322
90,422
101,740
113,057
92,266
71,475
16.64
20.60
44.62
90,422
101,740
113,057
92,266
71,475
63,951
56,426
14.16
25.76
28.21
FYE
2014
Growth
Rate %
-4.84
n.a
n.a
n.a
n.a
-4.84
25.56
n.a
n.a
-58.28
n.a
2,487.80
14.61
2.66
2,698.73
4,174.90
52.75
n.a
17.47
-20.02
FYE
2013
Growth
Rate %
172.88
n.a
n.a
n.a
n.a
172.88
192.49
n.a
n.a
144.11
n.a
-48.35
-3.39
-72.15
64.58
-55.13
148.31
n.a
-20.02
58.18
FYE
2012
Growth
Rate %
11.43
n.a
n.a
n.a
n.a
11.43
-22.90
n.a
n.a
221.40
n.a
258.43
12.72
291.48
-72.73
777.47
20.66
n.a
58.18
26.67
-29
-67
-11,609
-23,151
7,280
37,710
19,822
1,934
-0.01
-5.27
14.88
-99.71
-161.39
1,849.84
6,842
275,358
USD Rates 1=TRY
15,867
638,527
2.3189
8,192
538,717
516
438,907
2.1304
2,194
346,154
3,872
253,401
1.7776
8,494
220,593
13,115
187,784
1.8889
2.48
100.00
0.12
100.00
1.53
100.00
2,975.00
45.48
-86.67
73.21
-70.48
34.94
15
[BANKING]
FY
FY
FY
FY
FY
2014
2013
2012
2011
2010
Net Interest Income
a) Interest Income
b) Interest Expense
Net Fee and Commission Income
a) Fee and Commission Income
b) Fee and Commission Expense
Total Operating Income
Net trading income (+/-)
Foreign Exchange Gain or Loss (net) (+/-)
Gross Profit from Retail Business
Premium Income from Insurance Business
Income on Sale of Equity Participations and Consolidated Affiliates
Gains from Investment Securities (Net)
Other Operating Income
Taxes other than Income
Dividend
Provisions
Provision for Impairment of Loan and Trade Receivables
Other Provision
Total Operating Expense
Salaries and Employee Benefits
Depreciation and Amortization
Other Expenses
Profit from Operating Activities before Income Tax
Income Tax – Current
Income Tax – Deferred
Net Profit for the Period
33,110.00
61,125.00
28,015.00
9,699.00
11,710.00
2,011.00
-3,949.00
5,092.00
-11,932.00
0.00
0.00
0.00
1,386.00
1,505.00
0.00
0.00
1,945.00
1,571.00
374.00
16,742.00
7,937.00
784.00
8,021.00
20,173.00
0.00
4,306.00
15,867.00
14,234.00
32,500.00
18,266.00
3,187.00
4,967.00
1,780.00
283.00
-1,935.00
3,475.00
0.00
0.00
0.00
-1,914.00
657.00
0.00
0.00
624.00
135.00
489.00
16,764.00
8,920.00
563.00
7,281.00
316.00
0.00
-200.00
516.00
12,149.00
20,097.00
7,948.00
2,673.00
3,540.00
867.00
1,618.00
-803.00
715.00
0.00
0.00
0.00
1,346.00
360.00
0.00
0.00
-492.00
-516.00
24.00
12,271.00
5,335.00
587.00
6,349.00
4,661.00
0.00
789.00
3,872.00
5,948.00
11,526.00
5,578.00
2,315.00
3,066.00
751.00
15,906.00
-1,058.00
934.00
0.00
0.00
13,327.00
1,988.00
715.00
0.00
0.00
-200.00
-1,547.00
1,347.00
10,382.00
4,133.00
806.00
5,443.00
13,987.00
0.00
872.00
13,115.00
5,030.00
10,699.00
5,669.00
2,637.00
2,974.00
337.00
1,987.00
0.00
395.00
0.00
0.00
0.00
40.00
1,521.00
0.00
31.00
1,377.00
1,377.00
0.00
8,759.00
4,058.00
293.00
4,408.00
-482.00
0.00
-511.00
29.00
Total Income
Total Expense
Provision
Pre-tax Profit
50,792.00
28,674.00
1,945.00
20,173.00
21,553.00
20,613.00
624.00
316.00
17,243.00
13,074.00
-492.00
4,661.00
25,227.00
11,440.00
-200.00
13,987.00
9,654.00
8,759.00
1,377.00
-482.00
Nurol Yatırım Bankası A.Ş.
INCOME STATEMENT
(000) TRY
Nurol Yatırım Bankası Anonim Şirketi
15
[BANKING]
Nurol Yatırım Bankası A.Ş.
FY
FY
FY
FINANCIAL RATIOS %
2014
2013
2012
3.74
20.52
51.66
9.43
3.83
6.51
2.95
177.14
46.78
30.15
32.96
6.40
8.94
49.01
172.01
31.24
39.72
0.75
0.03
45.48
0.09
0.31
21.18
6.23
2.90
8.43
0.15
104.56
16.36
-4.24
77.78
4.44
5.37
18.26
101.73
2.39
1.47
0.62
0.02
73.21
2.11
5.05
18.69
7.82
2.85
10.19
1.76
131.89
41.26
-3.36
71.17
6.18
5.72
13.67
158.64
22.46
27.03
0.47
0.02
34.94
-0.07
17.55
16.64
15.07
0.73
17.42
15.79
15.79
16.89
52.62
16.40
20.68
-20.48
0.46
20.60
13.26
3.07
12.12
16.33
16.33
14.20
43.67
20.22
18.79
52.76
5.42
44.62
23.26
9.31
14.36
32.58
32.58
19.01
57.91
43.98
22.33
99.31
93.85
91.74
94.31
96.32
88.59
99.57
91.63
96.33
93.26
87.12
91.39
99.42
84.42
98.57
89.98
80.06
79.14
0.53
8.79
3.99
13.46
13.37
15.66
94.13
61.05
0.16
66.38
0.23
0.61
70.14
3.85
18.70
52.91
0.17
-11.80
0.28
0.37
60.57
4.67
10.46
39.18
I. PROFITABILITY & PERFORMANCE
1. ROA - Pretax Profit / Total Assets (avg.)
2. ROE - Pretax Profit / Equity (avg.)
3. Total Income / Equity (avg.)
4. Total income / Total Assets (avg.)
5. Provisions / Total Income
6. Total Expense / Total Liabilities (avg.)
7. Net Profit for the Period / Total Assets (avg.)
8. Total Income / Total Expenses
9. Non Cost Bearing Liabilities + Equity- Non Earning Assets / Total Assets
10. Non Cost Bearing Liabilities - Non Earning Assets / Total Assets
11. Total Operating Expenses / Total Income
12. Net Interest Margin
13. Operating ROAA (avg.)
14. Operating ROAE (avg.)
15. Interest Coverage – EBIT / Interest Expenses
16. Net Profit Margin
17. Gross Profit Margin
18. Market Share in Turkish Devolopment and Investment Banking Sector
19. Market Share in Entire Banking System
20. Growth Rate
II. CAPITAL ADEQUACY (year end)
1. Equity Generation / Prior Year’s Equity
2. Internal Equity Generation / Previous Year’s Equity
3. Equity / Total Assets
4. Core Capital / Total Assets
5. Supplementary Capital / Total Assets
6. Tier 1 / Risk Waighted Asset
7. Capital / Total Assets
8. Own Fund / Total Assets
9. Standard Capital Adequacy Ratio
10. Surplus Own Fund
11. Free Equity / Total Assets
12. Equity / Total Guarantees and Commitments + Equity
III. LIQUIDITY (year end)
1. Liquidity Management Success (On Demand)
2. Liquidity Management Success (Up to 1 Month)
3. Liquidity Management Success (1 to 3 Months)
4. Liquidity Management Success (3 to 6 Months )
5. Liquidity Management Success (6 to 12 Months)
6. Liquidity Management Success (Over 1 Year & Unallocated)
IV. ASSET QUALITY
1. Loan and Receivable’s Loss Provisions / Total Loans and Receivables
2. Total Provisions / Profit Before Provision and Tax
3. Impaired Loans / Gross Loans
4. Impaired Loans / Equity
5. Loss Reserves for Loans / Impaired Loans
6. Total FX Position / Total Assets
7. Total FX Position / Equity
8. Assets / Total Guarantees and Commitments + Assets
Nurol Yatırım Bankası Anonim Şirketi
15
[BANKING]
The Rating Results Issued by JCR-ER
National
International
May 22,2014
July 31,2013
Long-Term
Short-Term
Long-Term
Short-Term
Long-Term
Short-Term
Foreign Currency
BBB-
A-3
BBB-
A-3
BBB-
A-3
Local Currency
BBB
A-3
BBB
A-3
BBB-
A-3
FC
Stable
Stable
Stable
Stable
Stable
Stable
LC
Stable
Stable
Stable
Stable
Stable
Stable
AA (Trk)
A-1 (Trk)
AA- (Trk)
A-1 (Trk)
A+ (Trk)
A-1 (Trk)
Stable
Stable
Stable
Stable
Positive
Stable
1
-
1
-
1
-
AB
-
AB
-
AB
-
Foreign Currency
BBB-
-
BBB-
-
BBB-
-
Local Currency
BBB-
-
BBB-
-
BBB-
-
Stable
-
Stable
-
Stable
-
Stable
-
Stable
-
Stable
-
Outlook
Local Rating
Outlook
Sponsor Support
Stand-Alone
Sovereign*
October 23,2014
Outlook
Analysts
FC
LC
(*) Affirmed by Japan
Credit Rating Agency on
July 11, 2014
(*) Affirmed by Japan
Credit Rating Agency on
July 11, 2014
(*) Assigned by Japan
Credit Rating Agency on
May 23, 2013
Mr. Orkun İNAN
Mr. Orkun İNAN
Mr. Şevket GÜLEÇ
Nurol Yatırım Bankası Anonim Şirketi
18