Performance Highlights in Q1-18​

• TRY 75,4 million in net profits in the first quarter of 2018, translating in an ROAA of 0.9%
• 20.3% capital adequacy ratio as per Basel III, of which 14,6% in CET1
• TRY 21.8 billion of loans funded by TRY 22.3 billion of deposits representing 97.5% loan to deposit ratio with a low reliance on wholesale funding

In details:

• Despite the heightened global and regional risk environment, the Turkish economy continued to show signs of resilience with preliminary indicators showing first quarter GDP growth remaining in positive territory. Nevertheless, investor sentiment continued to be dampened by concerns over growing external deficits, rising inflation, and a volatile currency market.
• Against this background, Odea Bank continued to pursue its strategy of balanced and targeted growth with an emphasis on improving efficiency, enhancing margins and preserving strong buffers on capital and liquidity. This approach has translated into the following key results for Q1-2018:
• A reported net income of TRY 75.4 million during Q1-2018, representing an ROAA of 0.9% and ROAE of 7.92%.
• Improved spreads on assets in Q1-2018 reaching 3.53% compared to 3.36% in Q4-2017 generating TRY 288 million of net interest margin, almost the same amount of the previous quarter albeit on a smaller asset base.
• Rigorous cost control resulting in a drop in general operating expenses shrinking by 17.4% from TRY 175 million in Q4-2017 to TRY 145 million in Q1-2018.
• This has helped improve the cost to income ratio to 46.7% from 49.4% for the year 2017.
• Net loans to customers contracted by 3.8%, from TRY 22.6 billion as at end-December 2017 to TRY 21.8 billion as at end-March 2018.
• Similarly, deposits declined by TRY 1.6 billion reaching TRY 22.3 billion as at Q1-2018. This has allowed the Bank to maintain a healthy liquidity position, with loan to deposit ratio standing at 97.5% (well within the sector low levels) and a primary liquidity representing 27% of total deposits.
• Proactive management of asset quality has resulted in a stock of NPLs that remained relatively flat during the period at around TRY 1.1 billion as at end-March 2018. NPL ratio in the same period saw a small increase from 4.7% to 4.9% due to contracting gross loans volume. NPLs are well covered with specific and free provisions coverage of 58%, reaching 131% when including collaterals and real guarantees.
• Capitalization remained solid with a total capital adequacy ratio standing at 20.3% as at end-March 2018, of which 14.6% in CET1 ratio.

  KEY FINANCIAL DATA

  in TRY Billion	31.12.16	31.03.17	30.06.17	30.09.17	31.12.17	31.03.18
  Assets	38.278,4	39.514,0	37.439,1	36.353,7	33.104,4	32.020,8
  Loans	26.447,8	27.064,8	26.780,5	24.917,2	22.631,5	21.781,3
  Deposits	29.254,4	30.333,9	28.382,3	27.187,3	23.910,4	22.334,1
  Shareholder's Equity	3.443,2	3.559,2	3.615,7	3.688,3	3.758,1	3.865,6
  Sub-loan	528,4	546,2	528,2	1.081,0	1.175,0	1.205,3
  Balance Sheet Ratios
  Loans to deposits	90,4%	89,2%	94,4%	91,7%	94,7%	97,5%
  Deposits to total assets	76,4%	76,8%	75,8%	74,8%	72,2%	69,7%
  Securities to total assets	3,5%	3,5%	3,6%	5,7%	7,5%	8,7%
  Liquidity(CB+Banks+Rev.repos) to deposits	31,6%	32,3%	28,6%	30,3%	28,3%	26,7%
  Credit Quality Ratios
  NPLs ratio	2,6%	3,0%	4,2%	4,3%	4,7%	4,9%
  Specific provisions to NPLs	43,8%	45,1%	40,8%	42,8%	41,4%	40,0%
  Total provisions to NPLs	111,8%	101,5%	78,3%	93,4%	89,3%	88,7%
  Capital adequacy ratio	15,0%	15,3%	16,0%	18,4%	20,3%	20,3%
  CET I ratio	12,2%	12,5%	13,1%	13,4%	14,7%	14,6%

  in TRY Billion	31.12.16	31.03.17	30.06.17	30.09.17	31.12.17	31.03.18
  Net interest income	1.148,2	391,6	758,1	1.067,3	1.358,9	287,7
  +Non interest income	303,6	-17,4	-75,3	110,4	133,5	22,8
  o.w. Free income	108,3	50,0	91,5	130,2	155,6	32,8
  o.w. Trading income(1)	181,8	-75,1	-179,7	-31,1	-36,2	-19,1
  o.w. Other income, net	13,5	7,7	12,9	11,3	14,0	9,1
  =Total operating income	1.451,8	374,2	682,8	1.177,7	1.492,3	310,5
  -Total general operating expenses	656,8	179,4	363,0	562,3	737,8	145,0
  =Pre-provision income	795,0	194,8	319,8	615,3	754,6	165,6
  -Loan loss provisions	530,4	76,9	129,5	321,4	353,4	68,4
  =Profits before tax	264,7	117,9	190,3	293,9	401,1	97,1
  -Tax	-64,3	-24,7	-40,0	-63,6	-80,6	-21,7
  =Net income	200,4	93,2	150,3	230,3	320,6	75,4

  Profitability Ratios	31.12.16	31.03.17	30.06.17	30.09.17	31.12.17	31.03.18
  Interest Spread to total assets	3,3%	4,0%	4,0%	3,8%	3,8%	3,5%
  Frees & commissions to total assets	0,3%	0,6%	0,6%	0,5%	0,5%	0,5%
  Cost of risk	2,1%	1,1%	1,0%	1,7%	1,4%	1,2%
  Cost to income	45,2%	47,9%	53,2%	47,7%	49,4%	46,7%
  Cost to average assets	1,9%	1,8%	1,9%	2,0%	2,1%	1,8%
  ROA	0,6%	1,0%	0,8%	0,8%	0,9%	0,9%
  ROE	8,4%	10,6%	8,5%	8,6%	8,9%	7,9%

  	31.12.16	31.03.17	30.06.17	30.09.17	31.12.17	31.03.18
  (1)Trading Income includes swap results (assimilated to interest paid) of:	-168,9	-66,1	-158,9	-216,1	-225,2	-16,1