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DenizBank

2013 EBRD Annual Meeting and Business Forum

HAKAN ATEŞ

CEO, DENIZBANK FINANCIAL SERVICES GROUP

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TURKEY AT A GLANCE

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Turkey: Within 1st 20 Biggest Economy and Population

GDP (USD bn) Population (mn)

Source: International Monetary Fund (IMF), TurkStat

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Growing at a Fast and Sustainable Pace

Source: International Monetary Fund (IMF), TurkStat

2002-2012 Average Real GDP Growth (%)

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The Model Works in Turkey: Growth Creates Jobs without Distorting Inflation Outlook

Inflation (%, CPI)

Source: Turkstat

• Growth creates jobs

• Unemployment is down to 10.6% from 16% at its peak during the crisis and below the 11% a the end of 2007 (before the crisis)

• High growth does not distort internal balance, i.e. inflation

• Inflation remains within the sustainable 5-10% band

Labor Force

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This is Due to Strong Fundamentals (I) Prudent Fiscal Policy

Debt to GDP (%, EU Defined)

Source: The Ministry of Finance

• Primary Budget Surplus Remained high at 3.4% of GDP a year since 2002.

• Public debt continues to go down; 36% at the end of 2012.

• Authorities target to decrease it further to 31% by 2015 according to the Medium Term Plan.

Budget Balance

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This is Due to Strong Fundamentals (II) Strong Banking Sector

Loans and Assets Annual Growth (%)

Source: BRSA

• Banking Sector is not leveraged with assets 7.5 times the equity (or 18% Capital Adequacy Ratio).

• Profitability is high enough to support the capital base to allow for high growth.

• The system grew by 19% CAGR a year in assets and 23% CAGR a year in loans since 2007.

• Client deposits make up 65% of the system’s liabilities.

ROE and CAR (%)

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Rating Companies Recognized the Countries Successful Economic Performance and Strong Fundamentals

Source: Bloomberg

Turkey’s Sovereign Ratings

Fitch MOODY’S S&P

BBB+ Baa1 BBB+

BBB Baa2 BBB

BBB- Baa3 BBB-

BB+ Ba1 BB+

BB Ba2 BB

BB- Ba3 BB-

B+ B1 B+

B B2 B

B- B3 B-

Investment Grade

2012

2002

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Rating Increases and Further Growth Potential Attract Foreign Investors

Source: CBRT

Foreign Capital Inflows and Current Account Deficit

• Higher inflows allow for the current account deficit to rise.

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So it creates Current Account Deficit; but in fact it is mostly due to energy import

Source: CBRT

Current Account Balance

• Turkey’s Non Energy Current Account SURPLUS was USD 5 bn in 2012

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GREEN ENERGY

SUSTAINABLE GROWTH

ENERGYEFFICIENCY

Energy → The main driver of GrowthGreen Energy + Energy Efficiency → The main drivers of Sustainable Growth

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Energy → The main driver of Growth

Total Electricity Consumption of the World (2010):

19.3 bn kWh

•Developing countries (population: 5,7 bn) per capita consumption: 1,530 kWh p.a.

• Developed countries (population: 1,3 bn) Per capita consumption: 8,820 kWh p.a.

Total Electricity Demand of the World (if electricity consumption

per capita of the Developing Countries reaches that of the

Developed Countries):

62 bn kWh

x 3.2

Considering global warming;

•the World can not produce 62 bn kWh p.a.

•Only, technologic innovations in green energy and investments in renewable energy & energy efficiency will allow sustainable energy production and growth!

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• Global warming is a great threat!

• Thanks to new technologies; devices are more energy efficient today.

• A refrigerator consumes 75% less electricity than a refrigerator in 1975.

• In order to produce $1 of GDP; we need 44% less energy than we needed in 1975.

• Energy efficiency should be adopted as an objective by both individuals and corporations!

• Renewable energy & energy efficiency are critical to sustainability, key to survival!

For Sustainable Growth;

CO2 emissions since 1850 (red); exponential growth (blue); cuts to hit climate target (dashed). Source: guardian.co.uk

• The world must limit the global temperature increase to 2˚C!

• We must rapidly decrease using fossil fuels to stop global warming!

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Authorities are Taking Necessary Steps to Increase Energy Investments in Turkey

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The New Investment Incentive Program

Specifically designed to encourage investments with the potential to reduce dependency on the energy imports.

According to the amended Renewable Energy Law at the end of 2010 the feed in tariffs are as follows:

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Renewable Energy – Installed Capacity

2012:

Current electricity consumption in Turkey: ~242 TWh

Total installed capacity in electricity generation: ~57 GW

Renewable energy plants’ share: ~ 39%.

2023 Target:

The envisaged electricity consumption in Turkey: ~500 TWh (CAGR: 7.5%)

Total installed capacity in electricity generation envisaged: ~105 GW

Renewable energy plants’ share: ~ 30%

15,000 MW additional nuclear capacity will shift the installed capacity mix.

14%29% 28% 26% 26% 27% 26% 26%

26%

30% 34% 39% 39% 40% 41% 41%

40%

41% 39% 35% 34%33%

32%33%

34%

28,332 31,846 35,587 36,82438,844 40,565

40,836

41,817

0

20,000

40,000

60,000

80,000

100,000

120,000

2006 2007 2008 2009 2010 2011 2012 2023F

MW

Annual Development of Turkey's Installed Capacity

Renewables

Natural Gas

Thermal

Nuclear

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Renewable Energy - Generation

In terms of generation; renewables, natural gas, nuclear and other thermal power plants are expected to have an equal share of 25%.

30% 25%

43%

25%

27%

25%

25%

0%

25%

50%

75%

100%

2012 - Actual 2023 - Forecast

Generation Mix by Energy Resources

Thermal Natural Gas Renewables Nuclear

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Renewable Energy Installed Capacity Growth

Turkish renewable energy market mainly consisted of hydro power plants.

Starting from 2008, wind power plant investment have accelerated.

In the coming years, solar power plants will further boost.

Renewable installed capacity (MW)

2001 2012 CAGR (2001-2012)

Total 11,700 22,200 6%

Hydro 11,640 19,700 5%

Wind 18 2,200 55%

Geothermal 16 150 23%

Other 26 160 18%

99.5% 99.5% 99.5% 99.5% 99.5% 99.1% 98.4% 96.8% 93.9%91.3%

89.7%88.4%

5.1%

7.6%

9.1%

10.2%

1.6%3.2%

1.0%

1.1%

1.2%

1.4%

11,70912,305 12,640 12,707 12,976 13,186

13,607

14,282

15,504

17,343

19,095

22,191

0

5,000

10,000

15,000

20,000

25,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MW

Annual Development of Turkey's Renewable Energy Installed Capacity

Other

Geothermal

Wind

Hydro

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As DenizBank; our track record in energy is a testament to our commitment to support

the sustainable growth objectives of Turkey.

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DenizBank Key Facts & Figures

Diversified Loan Portfolio with Significant Growth (2006-2012):

48% CAGR!!

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• Total ENERGY transaction size: USD 7.3 bn

• Total Renewable energy transaction size: USD 6.5 bn

• DenizBank ENERGY loan amount: USD 2.3 bn.

• DenizBank Renewable loan amount: USD 1.7 bn34%: Renewables

12%: Other

DenizBank Renewable Energy Track Record

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DenizBank Renewable Energy Track Record

Thorough

Environmental Due

Diligences

All complying Equator

Principles !

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DenizBank Renewable Energy Track Record 2006 - 2013

HYDROPowerPlants

ENDA

Refinancing of Tuzla GPP

$ 22MSole Arranger

2010

ENDA

Refinancing of Tuzla GPP

$ 22MSole Arranger

2010

GEO-THERMAL

Power Plants

ZORLURotor WPP

Osmaniye Wind Farm

€ 135 MMLA & Coordinator

2009

ZORLURotor WPP

Osmaniye Wind Farm

€ 135 MMLA & Coordinator

2009

AKSA

Term Loan for Kapıdağ WPP

€ 39 MMLA2011

AKSA

Term Loan for Kapıdağ WPP

€ 39 MMLA2011

WINDPower Plants

AKSA

Term Loan for Ayres WPP

€ 39 MMLA2011

AKSA

Term Loan for Ayres WPP

€ 39 MMLA2011

SANKO

Term Loan for Çatalca WPP

€ 42MMLA2007

SANKO

Term Loan for Çatalca WPP

€ 42MMLA2007

RENAISSANCE

Refinancing of Filyos HEPP

$ 32.5 MSole Arranger

2011

RENAISSANCE

Refinancing of Filyos HEPP

$ 32.5 MSole Arranger

2011

PETA

Term Loan for Mursal HEPP

$ 15 MMLA2010

PETA

Term Loan for Mursal HEPP

$ 15 MMLA2010

ERNA

Term Loan for Suçatı HEPP

$ 11MMLA2012

ERNA

Term Loan for Suçatı HEPP

$ 11MMLA2012

KADOOGLU

Term Loan for Kale HEPP

$ 22 MMLA2011

KADOOGLU

Term Loan for Kale HEPP

$ 22 MMLA2011

YPM

Term Loan for Suşehri HEPP

$ 19 MMLA

2006-2007

YPM

Term Loan for Suşehri HEPP

$ 19 MMLA

2006-2007

Y.ULUSOY

Term Loan for Vizara HEPP

$ 16 MMLA 2009

Y.ULUSOY

Term Loan for Vizara HEPP

$ 16 MMLA 2009

MNG

Term Loan for BGT HEPP

$ 16 MMLA 2009

MNG

Term Loan for BGT HEPP

$ 16 MMLA 2009

AKFEN

HEPP Portfolio Financing€ 222 M

MLA 2009

AKFEN

HEPP Portfolio Financing€ 222 M

MLA 2009

SANKO

Term Loan for Yedigöze HEPP

$ 425 MMLA 2008

SANKO

Term Loan for Yedigöze HEPP

$ 425 MMLA 2008

AS INSAAT

Financing of Muratlı HEPP

$ 59.4 MMLA2011

AS INSAAT

Financing of Muratlı HEPP

$ 59.4 MMLA2011

LİMAK

Financing of Kirazlık HEPP

$ 90 MMLA 2011

LİMAK

Financing of Kirazlık HEPP

$ 90 MMLA 2011

SERKA

Term Loan for İncirli HEPP

$ 59 MMLA 2009

SERKA

Term Loan for İncirli HEPP

$ 59 MMLA 2009

İŞBA

Refinancing of 2 HEPP’s$ 55 M

MLA 2012

İŞBA

Refinancing of 2 HEPP’s$ 55 M

MLA 2012

MNG TURKONFinancing of

Hamzalı&Reşadiye HEPPs

$ 149MSole Arranger

2011

MNG TURKONFinancing of

Hamzalı&Reşadiye HEPPs

$ 149MSole Arranger

2011

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PARTNERSHIP WITH EBRD

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I. Cofinancing: • ROTOR WPP,

• IDO acquisition,

• TAV Izmir Airport.

• Ongoing pipeline: natural gas distribution and production, healthcare PPP, ports

II. Funding: MidSEFF &TurSEFF:

The objective of MidSEFF & TURSEFF is to reduce Turkey’s dependence on fossil fuels by financing private sector investments in mid-size renewable energy projects.

• MidSEFF: EUR 150 million (EBRD & EIB)

• TurSEFF I: USD 40 million (EBRD & CTF)

• TURSEFF II: EUR 40 million I (EBRD & JBIC)

III. Other/Equity:

Ongoing deal to be closed (Graniser) where EBRD will be the equity investor.

Awarded Strategic Partnership with EBRD

Excellence in Sustainable Energy

Financing2013

SustainabilityAward

2012

Zorlu EnerjiRotor WPP

2009EUR 130 mn

IDOPrivatization

2011USD 750 mn

IDOPrivatization

2011USD 750 mn

testimony to the best-in-class service provided by DenizBank and the harmonious

collaboration with EBRD; contributing to DenizBank’s brand recognition!!

Internationally recognised transactions in cooperation with EBRD!!

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•Project Location : Osmaniye / Gökçedağ, Southeastern Turkey.

•Project cost: EUR 210 mn

•Loan Amount: EUR 130 mn

•Tenor: IFI tranche 14 years, commercial loan tranche 12 years

•Turbines: GE 2.5 XL

•MLAs: EBRD, IFC, EIB, HSBC, DenizBank

•DenizBank Role: Coordinator, MLA, Bank Guarantee Facility Agent, Hedging Bank, Onshore Account Bank

I. Cofinancing

135 MW Zorlu ROTOR Wind Farm

EBRD’S FIRST FINANCING IN TURKEY!

Rotor WPP

2009EUR 130 mn

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•Project Description: Financing the privatization of Istanbul Ferries

•Acquisition Value: USD 861 mn

•Acquisition finance facility amount: USD 858 mn

•Tenor: 12 years

•DenizBank Role: MLA, Account Bank

I. Cofinancing

IDOPrivatization

2011USD 750 mn

IDOPrivatization

2011USD 750 mn

IDO Istanbul Ferries Privatization

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• Project Description : Financing of TAV’s new concession of Izmir International Airport

• Loan Amount: USD 325 mn

• Tenor: 15 years

• DenizBank Role: MLA, On-Shore& Off-Shore Account Bank, Hedging Bank

I. Cofinancing

TAV Izmir Adnan Menderes Airport

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MidSEFF & TurSEFF lines: Objective: to reduce Turkey’s dependence on fossil fuels by financing private

sector investments in mid-size renewable energy projects.

• MidSEFF: EUR 150 million (EBRD & EIB)

• TurSEFF I: USD 40 million (EBRD & CTF)

• TURSEFF II: EUR 40 million I (EBRD & JBIC)

~ 90 diversified renewable energy & energy efficiency transactions

Mainly SME & commercial banking segment clients benefiting from a systematic approach:

Due diligence & double checking of the technical assumptions

ESAP (Environmental&Social Action Plan): Road map with concrete actions & supervision of environmental and social issues

Enhanced awareness of environmental standards

More Clean, Conscious and Sustainable!!!

II. Funding: MidSEFF &TurSEFF

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THANK YOU.

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APPENDIX

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Electricity Overview - 1

TL CASH LOANS

Mio TL Corporate Commercial Public F. WHOLESALE SME Agric. RetailMargin loans

Credit cards Total

31.12.2012 1,330 3,559 647 5,536 3,983 1,989 7,250 66 2,047 20,88103.05.2013 1,604 3,920 753 6,277 4,658 2,597 8,171 69 2,194 23,966

FX CASH LOANS

Mio USD Corporate Commercial WHOLESALE SME Retail Total31.12.2012 3,667 4,132 7,799 351 124 8,30603.05.2013 3,813 4,492 8,305 439 113 8,884

TL NON CASH LOANS

Mio TL Corporate Commercial Public F. WHOLESALE SME Total31.12.2012 1,234 2,773 282 4,289 838 5,22303.05.2013 1,229 3,100 229 4,559 947 5,604

FX NON CASH LOANS

Mio USD Corporate Commercial WHOLESALE SME Other Total31.12.2012 1,911 1,813 3,724 132 174 4,03703.05.2013 2,314 2,019 4,333 144 228 4,766

TOTAL CASH LOANS WHOLESALE TOTAL CASH LOANSMio USD Mio USD

31.12.2012 19,907 31.12.2012 10,87503.05.2013 22,198 03.05.2013 11,792

TOTAL NON CASH LOANS WHOLESALE TOTAL NON CASH LOANSMio USD Mio USD

31.12.2012 6,939 31.12.2012 6,10703.05.2013 7,879 03.05.2013 6,866

Total Loan Book WHOLESALE TOTAL LOAN BOOKMio USD Mio USD

31.12.2012 26,846 31.12.2012 16,98203.05.2013 30,077 03.05.2013 18,658

OUTSTANDING PF LOANS 5,000

PF LOAN SHARE IN LOAN BOOK AS OF 03.05.2013

17% OVER TOTAL DENIZBANK LOAN BOOK27% OVER WHOLESALE LOAN BOOK

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• Turkey’s electricity consumption per capita is 3,226 kwh while EU, OECD and Russia’s are 6,700 kwh, 9,600 kwh and 6,600 kwh as of 2012 year end.

• Installed capacity of Turkey has reached app. 57 GW as of 2012 year end with a CAGR of % 6.4 (last 5 years) where the share of renewable energy plants stands at 39%.

• Annual electricity consumption in Turkey has reached 242 TWh as of 2012 year end, showing a CAGR of ~8.5% during the last 5 years.

• The envisaged electricity installed capacity in Turkey will be 105 GW for the year 2023.

• In order to meet the electricity demand in the following period, an additional installed capacity of 48 GW is planned to be added to the system during the next 10 years and reach to a level of 105 GW by 2023 with a CAGR of ~6.1%. The total investment amount required for an additional installed capacity of 48 GW can be envisaged as USD 70-95 bn with the assumption of investment cost per MW is around USD 1.5 – 2.0 mio.

• The share of renewable energy plants within the total installed capacity is envisaged as at least 30% in 2023.

• In terms of share in total energy generation; renewables, natural gas, nuclear and other thermal power plants are expected to have an equal share of 25% in 2023.

Electricity Overview - 2

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Electricity Overview - 3

USD Mio 2006 2007 2008 2009 2010 2011 2012 CAGR

Energy Import 28,859 33,883 48,281 29,905 38,497 54,118 60,100 13%17% 42% (38%) 29% 41% 11%

Total Import 139,576 170,063 201,964 140,928 185,544 240,842 238,000 9%22% 19% (30%) 32% 30% (1%)

Account Deficit (32,249) (38,434) (41,959) (13,991) (46,643) (77,141) (49,000) 7%19% 9% (67%) 233% 65% (36%)

GDP 520,429 648,754 742,094 616,703 731,608 774,188 787,120 7%25% 14% (17%) 19% 6% 2%

• Liberalization in Energy started with the new power plant licenses given to the private sector. The government stopped building power plants and handed the business to private sector in BO or BOT type. Also the existing power plant portfolio began to be privatized, starting with the renewable (mostly HEPP) portfolio.

• After the spin-off of Turkish Electricity Authority (TEK) into production, distribution, wholesale and transmission activities (EÜAŞ, TEİAŞ, TEDAŞ, TETAŞ) the distribution & transmission activities began to be privatized, by transferring the rights of operations in 21 regions nationwide.

• By the new Energy Market Law, incentives are given to the renewable energy in terms of feed-in tariffs. Power plants of hydro, wind, geothermal, solar biomass and biogas enjoy 10-year purchase guarantee with high level feed-in tariffs.

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• Under the Law on Utilization of Renewable Energy Resources enacted in 2005 and amended in 2007, companies holding retail distribution licenses were to purchase electricity from renewable producers at the average wholesale electricity price of the previous year. This price was varying between a minimum of EUR 5 cents/kWh and EUR 5.5 cents/kWh converted into TL.

• The Parliament has amended the Law at the end of 2010 again. According to the new amendment, the final feed in tariffs per renewable source is presented in the table below.

• Moreover, in the event that operators use locally made equipment and technology in renewable energy facilities, an additional support of 0.4 cents to $ 2.4 per kilowatt can be provided for a five-year term to companies that started producing energy before the end of 2015.

Electricity Overview - 4