KentBank at A Glance

KateantgBlaanncke

OBAVNERKVIEW

You are in good hands.

August 2016, Zagreb

3 Agenda

• BANK HISTORY & OWNERSHIP STRUCTURE
• BRANCH NETWORK
• VISION & MISSION
• MACROECONOMIC DATA
• FINANCIAL HIGHLIGHTS
• RETAIL BANKING
• CORPORATE BANKING
• SME BANKING

4 Bank history & ownership structure

1998 - 2010 2011 2012 2013 2014 2015 2016

• Banka Brod d.d. • New branch in Zagreb • New banking software • Capital increase of • New branches: • New branch:
acquired Banka Brod d.d.  • Capital increase of EUR 5 million Zadar and Varaždin Šibenik
• New branches:
EUR 10 million Split and Dubrovnik • Capital increase of
EUR 5 million
• Headquarter • Capital increase of
moved to Zagreb EUR 10 million • Card & ATM
implementation
• KentBank rebranding

ABOUT SÜZER GROUP

KentBank is wholly owned by Süzer Group.

Süzer Group was established in 1952 in Turkey and today
represents Turkey internationally, having established
partnerships with world-wide leaders in their sectors.

It is one of the leading groups in Turkey with a sustainable
growth mission, an innovative vision and domestic, as well as
foreign, investments.

5 Branch network

ZAGREB

RIJEKA OSIJEK

NOVA SBLRAOVDONSKI

PULA From a regional to a national commercial bank
with 14 branches covering the whole of Croatia.
ZADAR
Continuous expansion of the branch network
SPLIT and modernization of existing branches.

DUBROVNIK New branches opened in Zadar and Varaždin in 2015.
New branch opened in Šibenik in 2016.

New branch will be opened in Zagreb in 4Q 2016.

As of July 2016, the bank has 178 educated, experienced
and professional employees and is constantly working on
improving its staffing structure.

6 mission Vision / Mission

vision Creating additional value orientation
for its customers, employees,
To be a growing local community and Wide range of tailor made
international commercial shareholders through a products & nationwide
bank with sustainable tailor-made approach and branch network
profit. innovative products in
order to ensure continuous Focus on service quality:
progress in business • quick response
operations. • flexible and tailor-made

You are in good hands. approach to each client

Good asset quality with a
diversified portfolio

Modern business system
and processes

Stable and sustainable
profit

7 Macroeconomic data

ACTIVITY 2013 2014 2015 2016F 2017F
Nominal GDP (EURbn)
GDP per capita (EUR) 43.5 43.0 43.9 44.4 45.8
Real GDP growth (%) 10,225 10,114 10,334 10,476 10,799
Industrial production (YoY, %)
Unemployment rate (ILO, average %) -1.1 -0.4 1.6 3.0 2.5
-1.8 1.2 2.7 2.7 3.0
PRICES 17.3 17.3 16.5 15.7 15.0
CPI inflation (average % YoY)
CPI inflation (end-year % YoY) 2.2 -0.2 -0.5 -0.5 1.4
PPI inflation (average % YoY) 0.3 1.4
Net wages (% YoY, nominal EUR) 0.5 -0.5 -0.6 0.6 1.5
-0.1 1.1
EXTERNAL BALANCE -2.7 -3.9 -3.6
Export of goods and services (EUR bn) 18.8
Import of goods and services (EUR bn) 18.6 -0.4 3.4 1.0
Trade balance (EUR milion) -6.6
Trade balance (% of GDP) -15.1 20.0 21.8 22.5 23.3
Net FDI (EURbn) 0.9 19.0 20.4 21.3 22.1
FDI (% of GDP) 2.0 -6.3 -6.5 -6.6 -6.8
-14.7 -14.9 -14.8 -14.9
DEBIT INDICATORS 46.0 1.3 1.2 1.3 1.5
Gross external debit (EUR bn) 105.6 3.0 2.7 3.0 3.4
Gross external debit (% of GDP)
7.64 46.7 46.4 47.7 50.2
EXCHANGE RATE 7.57 108.4 105.7 107.5 109.6
EUR/HRK (end-year) 5.55
EUR/HRK (average) 5.71 7.66 7.64 7.66 7.67
USD/HRK (end-year) 7.63 7.61 7.60 7.63
USD/HRK (average) 6.30 6.99 7.60 8.03
5.75 6.86 7.14 7.87
CREDIT RATING (July 2016)
S&P - BB (outlook negative)
Moody’s - Ba2 (outlook negative)
Fitch - BB (outlook negative)

8 Financial highlights

ASSETS, M EUR LOANS, M EUR

350 350

300 15108M7%EUinRcgreroawseth 632M7%EUinRcgreroawseth 300 9273M6E%UiRncgrreoawseth 634M6%EUinRcgreroawseth
250
80 250
116
153 Continuous increase in asset size:
177
230 • 2012 vs 1H2016 - 187% increase
223
263 • 27% increase is planned for the
293 period from 2016 to 2018

41 Well-diversified balance sheet
70 and funding base:
86
107 • retail deposits are the main
138 source of funding
160
181 • loans make up 60% of assets
201 in 1H2016
200 200
• securities make up 25% of assets
150 150 in 1H2016

100 100

50 50

0 2012 2013 2014 2015 HY2016 2016 2017 2018 0 2012 2013 2014 2015 HY2016 2016 2017 2018

350 3

300 audit1ed218f9iMn4a%EnUciniRaclgsrerfroaowsmeth2012 371M9%EUinRcgreroawseth 2 2,2
2B5a0sed I HY2016 based on unaudit1ed 3,0

on to 2015 financials I from 2016 to 2018 budgeted figures

194 0,5
80 0,3

210 0,8
231
200 0

4

80
116
153
177
23
223

41
70
86
107
138
160
181
201
200 200 Financial highlights

150 150

9

100 100

50 50

0 2012 2013 2014 2015 HY2016 2016 2017 2018 0 2012 2013 2014 2015 HY2016 2016 2017 2018

DEPOSITS, M EUR NET PROFIT, M EUR

350 3

300 12189M4%EUinRcgreroawseth 371M9%EUinRcgreroawseth 2 2,2
250 3,0
1

66 0,5
96 0,3
129
147 0,8
194
180
210
231
200 0

150 -1 -1,4

100 -2

50 -3 -4,0 Profitability
-3,0
• the main reason for losses during
0 2012 2013 2014 2015 HY2016 2016 2017 2018 -4 2012 2013 2014 2015 HY2016 2016 2017 2018 previous years were provisions
provided for loans
Based on audited financials from 2012 to 2015 I HY2016 based on unaudited financials I from 2016 to 2018 budgeted figures
• in 2015, the bank recorded
a net profit

• in 1H2016, profit amounted
to EUR 0,3 million

10 LIABILITIES STRUCTURE Financial highlights

ASSETS STRUCTURE 0,8% 2,03% INCOME STRUCTURE

5,9% 4,1%
10,6%

72,8% 74,7%
67,4% 69,0%
14,8% 11,6% 21,6%
19,1% 25,4% 8,3% 21,8%
12,5% 14,8%

1,7% 10,8% 9,4%
0,6%

59,9% 60,2%

Loans Term deposits Net interest Income
Securities Demand deposits Net Fee Income
Cash and deposits Capital Other operating Income
(including CNB) Other liabilities
Other asset Bank borrowings

Source: 2015 audited and 2016 unaudited report Inner circle – 2015 I Outer circle – HY2016

Corporate loans 52,4% 39,6% 8,0% 56,7% 34,2% 9,1%
Retail loans
SME loans TOTAL LOANS 2015 TOTAL LOANS HY2016

0,00% 50,00% 100% 0,00% 50,00% 100%

11 Financial highlights

30% NPL RATIO 100% NPL COVERAGE Decreasing trend in NPL ratio due to:
30% 100% • new high-quality loan portfolio
• systematic improvements for
90%
90% achieving efficient monitoring and
25% 80% a strong collection department
25% 80% High NPL coverage
New Scoring System for further
70% improvement of NPL ratio
20% 70% The Bank always maintains a
20% 60% higher CAR ratio than it is legally
required.
60%
20.290.9%%
13.163.6%%
12.172.7%%
9.79.7%%
7.87.8%%
7.57.5%%

5353%%
6161%%
6161%%
6868%%
7070%%

5757%%
15% 50%
15% 50%

40%
10% 40%
10% 30%

30%
20%
5% 20%
5% 10%
10%

0 2012 2013 2014 2015 HY2016 2016 0 2012 2013 2014 2015 HY2016 2016
0 2012 2013 2014 2015 HY2016 2016 0 2012 2013 2014 2015 HY2016 2016

24% CAPITAL ADEQUACY RATIO
24% 2222..99 2211..55
22%
22%

20% 1188..66 1199..55
20%

18% 1166..77 1155..66 1166..22 1155..66
18%
16% 1166..00
16%

14%
14% 1144..00
12% 2013 2012 2013 2014 2015 HY2016 2016 2017 2018
12% 2013 2011 2012 2013 2014 2015 HY2016 2016 2017 2018
2011

Based on audited financials from 2012 to 2015 I HY2016 based on unaudited financials I from 2016 to 2018 budgeted figures

12 Financial highlights

ASSETS (000 EUR) 31. 12. 2015 30. 06. 2016 CHANGE %
Cash and Banks (including CNB)
Marketable securities 26,277 24,353 -7%
Loans 33,808 58,464 73%
Other assets 106,877 137,818 29%
TOTAL ASSETS 10,486 9,453 -10%
177,448 230,088 30%

LIABILITIES (000 EUR) 1,000 5,240 424%
Bank borrowings 147,199 194,200 32%
Deposits -35%
Other liabilities 2,948 1,924 9%
Capital 26,301 28,724 30%
TOTAL LIABILITIES AND EQUITY 177,448 230,088

PROFIT/LOSS (000 EUR) CURRENT PERIOD 30. 06. 2015 CURRENT PERIOD 30. 06. 2016 CHANGE%
NET interest income 2,444 3,136 28%
Net Fee and commission income 332 500 51%
Other operating income 765 1,014 33%
Total income 3,541 4,650 31%
Total G&A expenses -3,148 -3,612 15%
Impairment losses and provisions -283 -728 157%
PROFIT/(LOSS) 109 310
184%

Source: 2015 based on audited financials I HY2015&HY2016 based on unaudited financials

13 Financial highlights

volumes income & expenses capital asset quality

Significant loan growth Continuous increase in Strong capital base with Conservative risk
income as a result of the continuous support of the management approach
Strong deposit growth increase in customer base shareholder
High-quality loan portfolio
International deposits Expenses are well- Full compliance in
from other European controlled in order to be maintaining high Low NPL, high coverage
countries maintained at a certain Capital Adequacy Ratio
Focus on liquidity level during growth
management
Collection efforts with
positive results

14 Retail banking

E-citizen New ATM The “e-Citizen” system
service products network, enables modern, fast and
available to (insurance Internet easy communication with
clients policies) banking public administration.
The system provides
Sales- NEW Centralized numerous electronic
orientated RETAIL approval services of various public
organization BANKING system authorities, over 30 online
services to clients at any
Cross-selling Centralized time and without a need to
opportunities collection wait in line.

system

Marketing Cooperation
activities with SME and

Corporate

15 Retail banking

RETAIL LOANS, M EUR ACCOUNTS
55% increase
100 224M6%EUinRcgreroawseth 20.000
80 228M4%EUinRcgreroawseth 18.000 2014 2015 HY2016

40 16.000 10,995
41 14,729
60 43 16,988

48 14.000
59
64
70
40
12.000

26
20
10.000

0 2012 2013 2014 2015 HY2016 2016 2017 2018 8.000
*SME segmentation started in 2015

Based on audited financials from 2012 to 2015 I HY2016 based on unaudited financials I from 2016 to 2018 budgeted figures

16 Corporate banking

Fast and CORPORATE LOANS, M EUR
flexible
Trade service Focus on 200 526M5%EUinRcgreroawseth
finance asset 150 6339M6E%UiRncgrreoawseth
quality

Turkish CORPORATE Flexible 16
desk BANKING loans 31
47
100 57
79
Cross-selling Wide 50 101
opportunities range of 117
products 131
/ Side Business 0 2012 2013 2014 2015 HY2016 2016 2017 2018
business cards, Internet *SME segmentation started in 2015
banking,
Cooperation insurance Tailor-made approach
with develop- policies Fast and flexible service
ment banks Cooperation with highest-quality clients on the market
and EU funds Strengthening of market presence – cooperation with
HBOR
Based on audited financials from 2012 to 2015 I HY2016 based on unaudited financials I
from 2016 to 2018 budgeted figures

17 SME banking

New SME LOANS, M EUR
products
40
Sales- Cross-selling
orientated opportunities 30 1292M2E%UiRncgrreoawseth
organization
with Retail

NEW Introduction 20 9
SME BANKING of a simple 13
Marketing loan approval 19
activities 24
process 28
through 10
Scorecard

Business cards, Full utilization 0 2015 HY2016 2016 2017 2018
Internet banking, of Retail *SME segmentation started in 2015
network
insurance
policies

Based on audited financials from 2012 to 2015 I HY2016 based on unaudited financials I SME as a new focus in 2016 (101% budget execution
from 2016 to 2018 budgeted figures for newly granted loans in the first 6 months)

New sales concept

New products (building renovation loans,
business cards, Internet banking, insurance policies)

Scoring system for high asset quality

You are in good hands.

KENTBANK

Gundulićeva 1, 10 000 ZAGREB, CROATIA
Tel: +385(0)1 4981 900 | Fax: +385(0)1 4981 910
E-mail: [email protected] | Corporate Department: [email protected] | FI Department: [email protected]

19 Disclaimer statement

The information in this document has been obtained by
Kentbank d.d. from sources believed to be reliable, however,
Kentbank d.d. cannot guarantee the accuracy, completeness,
or correctness of such information. This document has been
issued for information purposes only. Kentbank d.d. does not
accept any liability whatsoever for any direct or consequential
loss arising from any use of this document or its contents due
to misleading information in this document. All estimations
contained in this document are the opinions of Kentbank d.d.
and can be subject to change without notice. This document
cannot be interpreted as an advice to the investors and
Kentbank d.d. can not be held responsible for the results of
investment decisions made on account of this document. This
document has been issued specially to the person, whom the
document is concerned and may not be reproduced, distributed
or shared with third parties for any purpose.

U dobrim ste rukama.
www.kentbank.hr