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TURKEY

Publication Date: April,25 2014 “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

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principles and guidelines but is not covered by NRSRO regulations. http://www.jcrer.com.tr

Corporate Credit Rating Factoring

Long Term

Short Term

Inte

rna

tion

al Foreign Currency BBB- A-3

Local Currency BBB- A-3

Outlook FC Stable Stable

LC Stable Stable

Na

tion

al

Local Rating BBB (Trk) A–3 (Trk)

Outlook Stable Stable

Sponsor Support 2 -

Stand Alone B -

So

vere

ign

*

Foreign Currency BBB- -

Local Currency BBB- -

Outlook FC Stable -

LC Stable -

*Assigned by Japan Credit Rating Agency, JCR on May 23, 2013

Analyst: Gökhan IYIGUN/ +90 212 352 56 73 [email protected] Analyst: Merve BÖLÜKÇÜ/+90 212 352 56 74 [email protected]

ANALİZ FAKTORİNG A.Ş.

F i n a n c i a l D a t a 2013* 2012* 2011* 2010* 2009*

Total Assets (000 USD) 45,412 30,695 26,619 30,859 10,665

Total Assets (000 TRY) 96,745 54,564 50,281 47,448 15,862

Equity (000 TRY) 13,715 10,277 10,228 8,161 6,386

Net Profit (000 TRY) 3,440 52 1,664 1,941 1,327

Market Share (%) 0.44 0.30 0.32 0.33 0.15

ROAA (%) 5.83 0.38 4.27 7.68 21.75

ROAE (%) 36.77 1.93 22.71 33.41 54.03

Equity/Assets (%) 14.18 18.84 20.34 17.20 40.26

NPL (%) 4.87 12.31 4.26 1.06 2.73

Growth Rate (%) 77.31 8.52 5.97 199.13 n.a

*End of year

Company Overview

Analiz Faktoring Anonim Şirketi (henceforward referred to as „the

Company‟ or „Analiz Faktoring‟) has been operating in the Turkish factoring

market since 2008, assuring domestic factoring services to its customers by

undertaking their collection. The Factoring Sector is regulated and

supervised by the Banking Regulation and Supervision Agency (BRSA).

The shareholder structure of the Company comprises 5 individuals. The major

shareholders are Mr. Selim Tariç (%40), Mr. Nesim Geron (%25) and Mr.

Yaşar Gülcen (%20). As of 2014, Analiz Faktoring sustained its country-wide

operations through its head office in Istanbul and 2 branch offices in Ankara

and Antalya. Moreover, the Company obtained permission from the BRSA to

open a branch office in Adana in 2014. The total number of employees

increased to 37, with a significant portion of the workforce in the Istanbul

headquarters.

The Company focuses operations on the financing wholesale trade and

brokerage, construction and manufacturing sectors across a broad range of

sector, with a 0.44% market share in the total Factoring Sector and a total

asset size of TRY 96.74mn. The Company‟s long term national grade was

upgraded one notch to ‘BBB (Trk)‟ with a ‘Stable’ outlook.

Strengths

Notable improvements in main profitability ratios

climbing above the sector averages and contributing to

internal equity generation capacity,

Almost doubled asset size with an increased market

participation thanks to expanding branch network,

comparing to previous year‟s figure due to appealing

growth

Outstanding increase in interest income,

Diversified borrowing structure with a bond issue,

An improvement in NPL levels contributing to asset

quality and profit margin,

Experienced and reliable management structure along

with well-defined work flow processes,

Constraints

Despite meeting legal requirements, descending and below

sector equity level for the last two years,

Financial and fee & commission expenses pressuring

profitability,

Highly intensive and growing market competition dominated

by bank managed companies,

Scarce operating channels compared to bank related

companies,

Growing perception of pressure in the markets through risks

arising from the current social unrest and political instability on

economic influences,

Improvements needed in corporate governance principles,

mailto:[email protected]

FACTORING

Analiz Faktoring A.Ş.

2

1. Rating Rationale

The Turkish Factoring Sector has been regulated and

supervised by the Banking Regulation and Supervision

Agency (BRSA) since 2006. The Financial Leasing, Factoring

Sector and Financing Companies Law No. 6361, the

factoring sector‟s first, came into effect on December 13,

2012. Moreover, the Regulation regarding organization

and operating principals of financial leasing, factoring and

financing companies entered into force on April 24, 2013.

According to the most recent BRSA statistics, the total asset

size of the Turkish Factoring Sector was TRY21.80bn and

involved 75 factoring companies, two of which were listed

on the Borsa Istanbul (BIST) as of FYE2013.

Independent auditor‟s reports prepared in conformity with

BRSA regulations, information, projections, clarifications

and audit reports edited by the auditing company, sector

statistical data provided by the BRSA and Factoring

Association, JCR Eurasia Rating‟s own research and

records and other non-financial figures were drawn upon in

the determination of the assigned ratings.

JCR Eurasia Rating has assigned National Local Rating

Notes of ‘BBB (Trk)’, denoting an adequate level, in the

long term and ‘A-3 (Trk)’ in the short term in JCR Eurasia

Rating‟s notation system.

Fundamental rating considerations are as below;

Positive Outlook of Turkish Factoring Sector

Recent regulations defined companies in the Factoring

Sector as „non-bank financial institutions‟ and increased the

efficiency of supervision and effectiveness of audit systems

in the sector. Moreover, legislation prohibits the reuse of

invoices by different companies and provides companies

easy access to data. Thanks to the aggravation of

establishment requirements for new companies and

enhanced professional experience and education levels,

the quality of the sector has improved. The Factoring

Sector is highly affected by fluctuations and uncertainties in

Turkey‟s macroeconomic conditions due to social unrest,

upcoming elections and complicated status of neighboring

regions and increased interest rates and foreign currencies

in FYE2013. The Factoring Sector has experienced a

continuous growth for the last decade.

Augmented Profitability Indicators

Return of Average Assets (ROAA) and Return on Average

Equity (ROAE), the main profitability indicators,

outperformed the previous years. Additionally, the

escalation in net profit margin and interest margin played

major roles in the notable growth in assets and market

share and positively affect the structure of the Company.

Deficiencies in the Compliance Level with Corporate

Governance Principles

To establish transparency and ensure that its customers

have the access to current information, Analiz Faktoring

should disclose materials concerning the organization,

although is not subject to strong governance regulations

as a non-publicly traded company.

The Flexibility to Grow at a Fast Pace

The outstanding asset growth is expected to continue with

the establishment of new branches in a variety of regions

such as in Adana, Bursa and Samsun. On the other hand,

due to the large customer base, the low level of

concentration of factoring receivables improves the asset

quality.

Significant Enhancement in NPL Level

As of FYE2013, the NPL ratio sharply decreased due to

the collection of impaired receivables thanks to a real

estate sale and assignment contract signed with a

customer in March 2013.

The majority amount of non-performing loans was

transferred to an asset management company as of

March, 2014. On the other hand, the Company‟s

customer base was dominated by the construction sector

and wholesale trade and brokerage. Besides, high level

of collaterals to total Receivables supports the asset

quality.

Legally Adequate but Below Sector Average Equity

Level

Under the recent legislation, a Company‟s standard ratio

(equity to total assets) must be sustained at 3%. Although

the Company‟s equity level met legal requirements, its

share in total liabilities and assets remained below the

sector figures over the last three years. Moreover, equity

growth stood behind the increase in total liabilities due to

funding needs from external sources.

Sharp Increase in Factoring Receivables and

Diversified Funding Structure

The Company‟s almost doubled factoring receivables

supported asset quality. The funding of Analiz Faktoring

is based on borrowings from factoring companies and

banks and realized and planned debt issues.

Above Sector Internal Equity Generation Supporting

Asset Quality

Augmented profitability ratios were derived from a

striking improvement in the Company‟s internal resource

generation capacity.

FACTORING


3

Fierce Competition Throughout The Sector

While establishment of requirements for new companies

have been aggravated with the recent legislation,

competition in the sector has increased and is dominated

by bank and bank managed factoring companies.

Market Outlook

Persistent risks caused by social unrest, political instability,

financial turmoil and likelihood of depreciation in market

outlook exert pressure on the markets. Turkey‟s Central

Bank‟s support of TRY assets from the interest rate side led

to an increase in funding costs. Diminishing credit sources

for the companies in this economic structure will be the key

driver enhancing factoring companies‟ activities.

Quantitative and qualitative factors contributing to a

possible increase in ratings include:

Improvements in profitability figures, asset quality and

market share,

Increasing internal equity generation,

The paid and projected capital increase

An improvement in the Company‟s risk management

practices,

Decrease in provisions and NPL levels,

Factors that might exert downward pressure on the ratings

include:

A decline trend in its profitability ratios and resource

sources,

High level of debt ratio,

Growing market share derived from branch

expanding not being parallel with the increase in the

profitability ratios and deterioration in factoring

receivables.

Macroeconomic and the sector conditions

The above stated factors are taken into consideration in

the determination of the risk assessment of the long-term

international local currency and foreign currency grades as

well as national grades.

2. Outlook

A ‘Stable’ outlook has been assigned for the Company‟s

short and long term national grades, considering the

realized and planned debt issue, relatively balanced risk

position, assets composition, growth projections, asset

quality, shareholder structure, positive year-end values in

profitability ratios, below sector average equity level,

significant recovery in the NPL against the sector‟s flat

figure, uncertainties in Turkey‟s macroeconomic conditions

and competitive market conditions.

Additionally, JCR Eurasia Rating has affirmed a „Stable’

outlook on the international short term and long term

rating perspectives of Analiz Faktoring A.Ş, which are the

sovereign ratings‟ outlook of the Republic of Turkey.

The main driving forces that can call a forth a revision in

the current outlook status include the Company related

issues affecting asset quality and liability profile, along

with Turkey‟s sovereign rating and liability profile which

is highly responsive to domestic and foreign political and

economic uncertainties, tensions and developments

3. Sponsor Support and Stand-Alone

Sponsor support grades and risk outlooks reflect the

financial and non-financial states and expected support

of the ultimate shareholders of Analiz Faktoring, Mr.

Selim Tariç, Mr. Yaşar Gülcan and Mrs. Milka Janti Tariç

and Mr. Nesim Geron. It is considered that Analiz

Faktoring‟s real person shareholders have the willingness

to support the company if liquidity needs arise in the

short or long term perspective within their financial

capability. However, JCR-ER is unable to form a

conclusion on the level of financial power of the

Company‟s real person shareholders, although it is

believed that they possess the willingness to offer

adequate support.

The Stand Alone Grade has been constituted with respect

to the Company‟s organizational structure, equity

structure, asset size and quality, risk management

practices, market contribution, growth rates and

profitability ratios and the development of existing risks

in the markets and business environment

We, as JCR Eurasia Rating, under these assessments,

have affirmed the Sponsor Support Grade as ‘ 2 ’

reflecting the financial and non-financial states and

expected support by the shareholders, and a Stand

Alone Grade of ‘ B ’ with the opinion that Analiz

Faktoring has reached the level of adequate experience

and facilities to manage the incurred risks on its balance

sheet without any assistance from its shareholders, on

condition that it improves the current customer level,

profit generation capacity and competency in the market.

FACTORING


4

4. Company Profile

a. History & Activities

Analiz Faktoring A.Ş.. founded in 2008 under the name

„Asya Faktoring Anonim Şirketi‟, changed its trade name

to „Analiz Faktoring A.Ş.‟ in 2009. The Company operates

in the Turkish Factoring Sector, offering cash-financing to

sellers in return for their receivables, based on invoices or

other certifying documents representing the domestic sales

of goods and services, by undertaking their collection.

b. Organization & Employees

The Board of Analiz Faktoring has 4 members, including

an executive member. The actual labor force of the

headquarters, and regional branches was 37 as of

FYE2013.

The organization chart is divided into four main groups,

including marketing, administrative affairs, loans and IT

departments. In addition, the internal audit department

reports directly to the Board of Directors.

The Company has established internal control and audit

systems and risk management systems which regularly

report to the Board. The unit for the diagnosis of risk was

establıshed to systematically manage risks to which the

Company will be exposed.

c. Shareholders, Subsidiaries & Affiliates

The Company operates its activities through its

headquarters in Istanbul and branches in Ankara and

Antalya. Additionally, Analiz Faktoring projected to open

new branches in different regions of Turkey, in Bursa,

Adana and Samsun in FYE2014. As of FYE2013, the labor

force of the Company increased to 37 from 34 and the

majority of employees have an undergraduate degree.

The Company‟s shareholder structure covers 5 individuals;

the main controlling qualified shareholders, Mr. Selim Tariç

(40 %), Mr. Nesim Geron (25%), Mr. Yaşar Gülcan (20%)

and Mrs. Milka Janti Tariç (10%). The Company‟s

shareholder structure is shown in the chart below and no

changes in the amount of paid capital have occurred over

the previous 3 years.

d. Corporate Governance

Analiz Faktoring is not a publicly traded company;

therefore the corporate governance discipline is not a

field that is required to be taken into consideration.

However, the Company‟s periodical financial statements

are consistently disclosed to the public via its website. The

BRSA enforces strict regulations and supervision in the

Factoring Sector. Additionally, the Company has

established an „Internal Auditing‟ department which

prepares and presents internal auditing reports to the

Board every six months. The Board also contains a „Credit

Committee‟ which provides limit allocation. The Company

aligns all of its records and reports with international

standards and procures an independent audit service.

However, Corporate Governance, Audit or Early

Detection of Risk committees have not been established.

The Company provides information about its vision,

principal agreement, annual reports and organization

chart. On the other hand, the non-disclosure of the

shareholding structure, general assembly meeting

documents, information policy, ethical rules, mission and

strategies, Board of Directors, establishment of functional

committees within the Board, investor relations

department and the lack of a functional website reduces

the level of transparency and effectiveness of its business

activities as well as its compliance level with corporate

governance principles.

Moreover, the Company does not have an effective

policy of social responsibility. These constraints are

factors reducing the quality of the Company‟s total

corporate governance practices.

e. The Company & Its Group Strategies

Analiz Faktoring projected the opening of 3 new

branches in accordance with the Company mission and

vision to sustain its balanced growth during the 2014

fiscal year.

Moreover, the Company will not make dividend

distribution within this year and plans to increase the

Analiz Faktoring A.Ş. Share%

Shareholding Structure 2013 2012 2011 2010

Selim Tariç 40 40 40 40

Yaşar Gülcan 20 20 20 20

Nesim Geron 25 25 25 25

Milka Janti Tariç 10 10 10 10

Ester Geron 5 5 5 5

TOTAL 100 100 100 100

Paid Capital (TRY/000) 8,000 8,000 8,000 5,424

FACTORING


5

paid capital to TRY 13mn by adding the profit into the

equity. The main target of the Company is to reach the

maximum profit in the competitive environment by

increasing transaction volume of transactions due to the

diversification of the customer portfolio.

5. Sector Overview & Operational Environment

The Turkish Factoring Sector has been regulated and

supervised by the Banking Regulation and Supervision

Agency (BRSA) since 2006. The Financial Leasing, Factoring

and Financing Companies Law came into effect in

December 2012 has presented positive developments in

the sector‟s corporate structure, quality of financial reports,

standardization and transparency, and the assurance of

competitive equality. With the recent regulations,

companies in the Factoring Sector are defined as „non-

bank financial institutions‟. This legal infrastructure is

expected to increase the efficiency of supervision and

effectiveness of audit systems in the sector.

Under the stated regulations;

The minimum paid-in capital per company has been

increased to TRY 20mn with a compliance deadline of

December 31, 2015,

The establishment and operations of Leasing, Factoring

and Financing Companies has been consolidated under

a single law and these companies are defined as „non-

bank financial institutions‟,

Factoring companies, described as non-bank financial

institutions, have been consolidated under the umbrella

of ‟Leasing, Factoring and Financing Companies

Association‟ characterized as a professional

organization with public institution status,

Establishment requirements for new companies have

been aggravated,

Companies have been required to establish the

necessary legal infrastructure, information systems, risk

assessment and internal control systems in order to

carry out effective supervision and audit,

The minimum professional experience and education

levels required for the company board members,

general managers and assistant general managers

have been updated,

The establishment of a Central Record Billing Systems

under the Union has been proposed in order to prevent

the repeated use of invoices by different companies,

The conditions for the acquisition of information from

the database of the Risk Management Department

operating under the Banks Association of Turkey have

been improved, enabling the sector to enjoy greater

access to reliable data,

It has been clarified that sector companies cannot be

organized outside of branches,

It was determined that cash credit lending authority

shall not exceed 1% of paid capital, and

The stipulation that the utilization of loans may not

exceed equities by more than 30 times has been

removed and replaced by the obligation that the

ratio of equity to total assets must be sustained at

3%.

The rates of entry and exit and change in ownership

structure and executive staff remain relatively high in the

sector. The Factoring Sector is based on intensive

competitive working conditions, small businesses are

prominent and the use of term checks and bonds in

payment and collateral is common.

The Factoring Sector is one of the most highly affected

sectors from the fluctuations and uncertainties in Turkey‟s

macroeconomic conditions. Administration policies in the

sector are becoming increasingly difficult due to BRSA

regulations and changes in the economic cycle.

The Turkish Factoring Sector, a growing source of

external funding for small and medium sized enterprises,

reached an asset size of TRY 21.8bn in 2013. Factoring

services date back to 1983, initially regulated under the

Undersecretariat of the Treasury of Turkey. The first

factoring company was established in 1990. After the

Turkish Banking Law came into force in 2005, factoring

services came under the rule of the Banking Regulation

and Supervision Agency (BRSA). According to the data

published by BRSA, 75 factoring companies are

operating in Turkey as of March 2014.

THE KEY INDICATORS OF TURKISH FACTORING SECTOR

(TRY/000.000) 2013 2012 2011 2010 2009 2008

Asset Size-TRY 21.801 18.146 15.622 14.463 10.491 7.797

Asset Size-USD 10.233 10.208 8.271 9.406 7.054 5.123

Equity-TRY 4.013 3.856 3.377 2.940 2.537 n.a

P/L-TRY 492 610 493 412 329 n.a

ROAA % 3 .07 4.50 4.03 3.98 4.62 6.49

ROAE % 15.58 21.00 19.18 18.11 17.22 21.32

NPL Ratio% 4.64 4.69 3.82 4.07 5 .88 8 .25

Equity / T. Sources 18.41 21.25 21.62 20.33 24.19 30.45

In the Turkish Factoring Sector, few companies are

publicly traded and the Sector‟s share in the total Turkish

Financial Sector remains comparatively low. 72

companies are based in Istanbul and 3 in Izmir and

Ankara. Every factoring company is obliged to be a

FACTORING


6

member of “Financial Leasing, Factoring and Financing

Companies Association” under the recent legislation.

The fact that a substantial amount of total funds are

generated by bank related factoring companies exerts

increasing strain on the ability of no-bank affiliated

companies and the sector to provide services as financial

intermediaries. However, recent years has seen an increase

in the interest of investors in the Factoring Sector and the

amount of licenses obtained from the BRSA.

The composition of factoring companies‟ short-term balance

sheet has created a significant disadvantage in liquidity

management. Therefore, successful swift maneuvers to

increase or decrease asset size and adaptation to

economic situations through tight monitoring of customers‟

cash flow are important necessities for the management of

factoring companies. Another decisive feature of the

factoring sector is the differences in organizations and

customer bases in terms of service and operation

strategies, leading to the differentiation in fields of

competition.

As of the end of 2013, the sector‟s asset size was TRY

21,801mn and equity size was TRY 4,013mn.

With the exception of decreases of 10.31% in 1994 and

40.23% in 2001, the Factoring Sector has experienced a

continuous growth for the last 24 years. Cumulatively, the

Factoring Sector recorded a 311.34% growth between

2006 and 2013. The latest growth rate was 20.14%.

Factoring receivables constituted the largest portion of

sector assets with a share of 93.07% and credits obtained

formed the highest amount of resources with a share of

70.92%. The sector, whose most important feature is the

inability to create resource diversification, met the largest

part of its resource needs from short-term bank loans.

However, bond issuances starting in 2008 have gained

acceleration in 2012 and 7.09% of total funds are

comprised of issued bonds as of 2013.

Moreover, the ratio of equity to total resources stood at

18.41% and is continuously decreasing. The legislation

provision of a factoring company‟s total receivables

cannot exceed a rate of 30 times their equity was

revised. New regulations state that the standard ratio,

the ratio of the company‟s equity to total assets, must be

at least 3%.

As of 2013, the sector risk concentration of factoring

companies focused on the production industry, including

the fields of nuclear fuel, petroleum production, coal

production industry, textile production, main metal

industry, refined material industry and transportation, at

a share of 55.58%. In the service sector, the most

important fields were the wholesale and retail trade

motor vehicle servicing facilities, construction sector,

transportation, warehousing and intercommunication

services, respectively.

The ratio of non-performing loans (NPL) to total

receivables of the sector was 4.64% as of 2013, above

that of the Banking Sector. Moreover, the share of NPLs

in equity was 24.44%, signaling the factoring sector‟s

increasing risk perception and weakening asset quality.

The most important macro reason behind the increase in

NPLs was the loss of momentum in the general economy in

terms of the growth.

The superior emphasis given to auditing facilities has

contributed to the improvement of the Factoring Sector.

On the other hand, despite higher 2013 profitability

indicators than those of the Banking Sector, the

performance of the Factoring Sector began to follow a

downward trend in 2013. While the ratio of ROAA and

ROAE of the Banking Sector were 2.01% and 16.62%,

respectively, these ratios remained 3.07% and 15.61%,

respectively, in the Factoring Sector. Similarly, a

downward trend was observed in the “Interest Coverage

Ratio” and “Net/Gross Profit Margin”. However, if we

consider the ratio of equity to total assets, we can

observe that the Factoring Sector had a higher equity.

Likewise, the ratio of the “Equity/Total Asset” for the

Factoring Sector was 18.41% in 2012 and 11.19% in

the Banking Sector. The ratio of private reserve ratios to

the non-performing loans stood over those of the Banking

Sector since 2012.

Bank related factoring companies carry privileges over

non-bank companies that create competition inequality in

subjects such as access to funds, network scale and

alternative distribution channels. The ratio of the credit

and return on assets of the Factoring Sector did not

change substantially in 2013 although the break-even

interest rates declined from 12.15% to 9.55% in 2013

19.27% 3.24%

34.55%37.86%

8.02%16.16% 20.14%19.47%

42.49% 47.11%

97.94%

172.88%

194.76%

242.39%

311.34%

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00%

350.00%

2006 2007 2008 2009 2010 2011 2012 2013

Turkish Factoring Sector Asset Growth Rate %

Annual Cumulative

FACTORING


7

due to improvements in the costs of interest bearing

resources. However, this improvement in the composition of

financial statements has not been equally reflected into the

profits of the balance sheets as a result of the increase in

operating expenses.

RETURNS - COST RATIOS ANALYSIS

FOR TURKISH FACTORING INDUSTRY

ASSET RETURN 2013 2012 2011

Loans Interest Yield 11.31% 12.33% 9.42%

Return the Commission 1.33% 1.33% 1.31%

FX Return or Cost 0.39% -0.01% -0.18%

Return or the Cost of Other Operations 1.76% 1.09% 1.23%

Loans Total Return 14.78% 14.74% 11.77%

Cost of Non-Earning Assets -0.51% -0.51% -0.41%

Asset Return 14.27% 14.23% 11.37%

COST OF LIABILITIES 2013 2012 2011

Interest Cost for Cost Bearing Resources 6.50% 7.29% 6.28%

Cost of the Commission for Cost Bearing Resources 0.00% 0.00% 0.00%

Return on Non-Cost Bearing Resources 0.00% 0.26% 0.76%

Cost of Liabilities 6.50% 7.56% 7.04%

NET PROFIT MARGIN 2013 2012 2011

Interest and Commission Margin 7.77% 6.68% 4.33%

The Cost of Provisioning Expenses -1.56% -1.54% -0.60%

The Cost of Activities Expenses -4.51% -3.14% -2.79%

Net Profit Margin 1.70% 1.99% 0.94%

Break-Even Point in Terms of Interest 2013 2012 2011

Break-Even Point in Terms of Interest 9.55% 12.15% 11.26%

Break-Even Point in Terms of Loan Size-TRY 16,289.13 13075.4 12,477.07

6. Financial Foundation

a. Financial Indicators & Performance

Analiz Faktoring A.Ş. has completed its fifth financial year

with a year base auditing reports, providing an enhanced

comparison with the previous financial statements of the

Company.

i. Indices relating to size

Despite fluctuations and a slight decline between FYE2010

and FYE2012, the Company covered a significantly larger

share of the market at 0.44% as of FYE2013.

The total assets of the Company considerably increased

since its establishment from TRY 15.86mn in FYE2009 to

TRY 96.74mn in FYE2013. Thanks to a growth rate of

74.23% in factoring receivables from TRY 49.27mn to

TRY 85.85mn, the annual asset growth increased from

8.52% to 77.31% as of FYE2013.

Cumulatively, since establishment the Company has

enjoyed a considerable and above sector asset growth

of 310.79% as of FYE2013. The same indicator for the

sector was by 70.51%.

The dispersion of liabilities and equity on the Company‟s

balance sheet is shown in the graph below. While the

amount of payables to factoring companies almost

tripled to TRY 43.82mn, credits obtained slightly fell by

TRY 5.07mn to 24.32mn as of FYE2013. The Company‟s

equity amount increased by TRY 3.44mn to TRY 13.71mn,

0.44

0.30

0.320.33

0.15

0.00

0.10

0.20

0.30

0.40

0.50

20132012201120102009

Market Share % trend line

20.14 16.20 7.98

38.96 37.39

77.31

8.525.97

199.13

0.00

-50

0

50

100

150

200

250

20132012201120102009

Annual Asset Growth Rates %

TURKISH FACTORING SECTOR ANALİZ FAKTORİNG A.Ş.

109.47 74.36

50.05 38.96

509.92

243.99216.99199.13

0

100

200

300

400

500

600

20132012201120102009

Cumulative Asset Growth Rates %


FACTORING


8

derived from a striking improvement in internal resource

generation capacity as of FYE2013.

ii. Indices relating to profitability

The Company‟s cash flow provided by financing activities

contributed to a stronger net profit that rose to TRY

3.44mn in FYE2013, up from TRY51k compared to the

previous year. Moreover, according to 2013 year-end

data, growth has picked up markedly in profitability

thanks to interest income acceleration, decreased overdue

loans and a skyrocketing pretax profit figure.

The main profitability ratios ROAA and ROAE stood well

above the sector average at 5.83% and 36.77%,

respectively, as of FYE2013.

Although the interest margin dropped by 0.81% to

12.64% in FYE2012, followed by a slight increase of

1.21% to 13.85% thanks to an almost double increase in

interest income to TRY 18.84mn and a growth at 37.84%

in average earning assets as of FYE2013.

On the other hand, the average cost bearing liabilities

increased by TRY 19.81mn with a marked increase in

interest expense by TRY 4.92mn to TRY 7.97mn.

Despite the fluctuating figures affected by the fierce

competition in the sector, the Company‟s interest margin

stood above the sector since 2009. Specifically, the stated

ratio dropped from 6.02% to 5.01% for the sector in

FYE2013.

The distribution of total income constituted of net interest

and fee & commission at an amount of TRY 13.58mn as

of FYE2013, a figure that sharply increased from TRY

7.52mn in FYE2012. The growth rate of factoring interest

income was 85.05% whilst factoring receivables growth

rate stood at 74.23%. The trend of net interest and

commission income of the Company was upward while the

total operating income presented an opposite trend as of

FYE2013. Also, the growth rate of net interest income

stated at 52.55% recording a higher growth than

operating expenses‟ growth rate at 41.94%.

Financial expenses sharply increased to TRY 7.96mn from

TRY 3.05mn, mainly derived from interest on borrowing

financial transactions. On the other hand, the amoun of

interest income and net fee and commission income

increased by TRY 10.57mn to TRY 21.54mn as of

FYE2013. Thus, despite the fluctuations over the last four

year period, a notable augmentation was observed in

the ratio of financial expenses to interest and net

commission as of FYE2013, slightly below the sector

averages.

45.30

26.60

9.59

27.46

0.00

36.65

53.86

69.28

54.36

58.47

3.870.700.790.98

1.28

14.1818.8420.3417.20

40.26

0%

20%

40%

60%

80%

100%

20132012201120102009

Resource Distribution %

Equity Non-Costly Liabilities Other Borrowing Payables

5.83

0.38

4.277.68

21.75

3.08

4.50

4.03

4.074.84

36.77

1.93

22.71

33.41

54.03

15.61

21.00

19.1918.63

18.08

0.00

10.00

20.00

30.00

40.00

50.00

60.00

20132012201120102009

ROAA & ROAE Comparison %

ROAA ANALİZ FAKTORİNG A.Ş.

ROAA TURKISH FACTORING SECTOR

ROAE ANALİZ FAKTORİNG A.Ş.

ROAE TURKISH FACTORING SECTOR

12.93

7.29 10.30 9.98 9.97

26.78

19.94

23.7622.50

41.44

13.85 12.64 13.45 12.52

31.47

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

20132012201120102009

Interest Margin %

Interest Rate for Costly Liabilities (avg.) %

Interest Rate for Earning Assets (avg.) %

Margin %

91.12

82.15

95.2195.8096.54

8.8817.84

4.794.203.46

0.00

20.00

40.00

60.00

80.00

100.00

20132012201120102009

Total Income Distribution %

Net Interest and Commission

Net Other Operating Income

FACTORING


9

The operating expenses of the Company recorded a

41.94% growth throughout FY2013, while the ratio of total

operating expenses to total income slightly fell by 8.92%.

A relatively lower increase in total operating expenses and

a 62.83% growth in total income have resulted in the drop

of the ratio to 60.58%, which was above the sector-

average of 41.67%. On the other hand, the sector

performed an opposite trend compared to the Company,

and there was a slight increase in the sector‟s total

operating expenses to total income ratio mainly resulting

from a 20.26% increase in personnel expenses. The total

income of the Factoring Sector recorded a 1.99%

decrease in FY2013.

As of FYE2013, the Company‟s pre-tax profit remarkably

skyrocketed to TRY 4.41mn from TRY 198k. The ratio of

pre-tax profit to total income recorded a substantial boost

during FYE2013 and attained a ratio of 29.60% which

was below the sector-average of 38.70%. Specifically, the

considerable increase of the ratio of pre-tax profit to total

income was derived from the 2,123.83% growth in

operational profit before tax and 85.14% increase in

interest income. The sector wide decline in profitability

mainly stemmed from the 19.10% fall in operating profit

throughout the sector together with the 1.99% fall in total

income.

b. Asset Quality

The share of earning assets in the Company‟s total assets

diminished to 90.32% from 97.70% as of FYE2013. The

„Company‟s factoring receivables‟ share of total assets

performed a downward trend for the last three years

and the related ratio recorded a value of 88.74% as of

FYE2013, below the sector average of 92.24%. The

Company had a total asset size of TRY 96.74mn

(FYE2012; TRY54.56mn), of which an 89.39% (FYE2012;

97.54%) share was composed of loans and receivables.

The earning assets weighted dispersion contributed to the

Company‟s asset quality. Additionally, the share of

„profit‟ in the related balance sheet section rose to 3.56%

(FYE2012; 0.10%) with a growth rate of 6,530.98% as

of FYE2013, which was above the sector average of

2.28%.

The NPL ratio of the Company displayed a continuous

above sector average pattern over three years

reviewed.

Specifically, the related ratio of the Company realized a

2012 year-end value of 12.31%, indicating an NPL ratio

almost three times that of the sector average of 4.69%.

In terms of the NPL level, although the gap between the

Company and the sector was quite large in 2012, it

narrowed in 2013. The amount of overdue loans

decreased by 36.50% to TRY 4.39mn while provisions

41.2742.94

47.08

41.82

35.8136.97

28.84

32.8229.37

12.41

0.00

10.00

20.00

30.00

40.00

50.00

20132012201120102009

Financial Expenses/Interest and Net Commission %


41.67

33.9237.4135.47

33.97

60.58

69.50

61.7658.23

47.89

0.00

20.00

40.00

60.00

80.00

20132012201120102009

Total Operating Expenses/Total Income %


38.70

46.8849.8147.42

49.55

29.60

2.17

24.03

40.33

51.07

-10.00

10.00

30.00

50.00

70.00

20132012201120102009

Pre-Tax Profit/Total Income %


89.39%

97.54%96.69%97.40%97.46%0.93%

0.16%0.28%

0.37%0.54%

9.68%

2.30%3.03%2.23%2.00%

84%

86%

88%

90%

92%

94%

96%

98%

100%

20132012201120102009

Asset Distribution

Other Assets Banks and Other Earnings Assets

Loans and Receivables

FACTORING


10

were augmented 26.73% to TRY 3.76mn. The Company

largely allowed provisions for its uncollectible receivables

as of FYE2013. On the other hand, Company management

has stated that approximately 44% of year-end impaired

receivables valued at TRY 1.91mn out of TRY 4.39mn,

overdued less than a year. Approximately TRY 2.92mn of

the factoring receivables were collected due to a real

estate sale and assignment contract signed with a customer

in March, 2013, constituting the main driver of the

decrease in NPL levels.

The Company ratio of „impaired receivables to equity‟

continuously stayed above the sector averages over the

last three years due to the relatively high NPL ratios and

stood at 32.02% FYE2013.

On the other hand, TRY 2.52mn of non-performing loans

out of TRY 4.39mn were transferred to an asset

management company in March 3, 2014, to an

insignificant amount.

While the operating expenses of the Company recorded a

17.18% growth to TRY 10.50mn in 2013, the provisions

almost halved to TRY 1.46mn in FYE2013. The provisions to

total expenses ratio provided an upward trend since

establishment with the exception of the decrease of

15.01% in the last reporting period of FYE2013 to

13.95%.

c. Funding & Adequacy of Capital

The regulation announced by the BRSA obligates that the

ratio of the Company‟s equity to total assets (Standard

Ratio) must be at least 3%. The Company‟s stated ratio

recorded a downward trend for the last three year

period to 14.18%, below the sector average of 18.41%

as of FYE2013.

The Company‟s realized and free equity to total assets

ratios reached their lowest levels in FYE2013, to 14.18%

and 11.18%, respectively. The stated drop stemmed

from a rapid asset growth rate of 77.31% due to a

striking increase in factoring receivables, compared to

the relatively lower growth in equity of 33.45%.

Moreover, the ratio of Company‟s equity to total

resources decreased for both the Company and the

sector, to 16.52% (23.21% FYE2012) and 22.56%

(FYE2012: TRY 26.98mn), respectively, as of FYE2013.

Paid-up capital is projected to increase by adding the

profit into the equity to TRY 13mn in 1H2014 from TRY

9.60mn in FY2013. It must be noted that according to the

current set of legal regulations, Analiz Faktoring is under

an obligation to increase its paid-in capital from its

present level of TRY 9.6mn to TRY20m by the end of

FY2015. It plans to meet this requirement through the

transfer of profit to the Company‟s paid-in-capital.

4.65 4.69 3.83 4.07

5.89 4.87

12.31

4.26

1.06

2.73

0.00

4.00

8.00

12.00

16.00

20.00

20132012201120102009

NPL %


24.44 20.82

16.75 17.86 20.95

32.02

67.28

20.97

6.05 6.64

0.00

20.00

40.00

60.00

80.00

20132012201120102009

Impaired Receivables / Equity %


13.95%

28.96%

18.70%

2.42%2.13%

0.00%

10.00%

20.00%

30.00%

20132012201120102009

Provisions / Total Operating Expenses

3.00 11.18

15.8417.3414.20

37.26

14.18

18.84 20.34

17.20

40.26

-

0.00

10.00

20.00

30.00

40.00

50.00

201320122011201020092008

Standard Ratio (Equity / Total Assets) %

Free Equity / Total Assets Ratio %

Realized Equity / Total Assets Ratio %

FACTORING


11

The short term financial loans decreased to TRY 24.32mn

from TRY29.39mn. Factoring payables to factoring

companies increased almost threefold to TRY 43.82mn

from TRY 14.52mn as of FYE2013, derived from favorable

interest rates. Moreover, a 77.31% growth in total assets

and a 55.22% growth in the amount of factoring payables

and short term borrowings resulted in a decrease in the

ratio of short term borrowings to total assets to 70.44%,

slightly below the sector average of 72.71%. Despite the

fluctuating figures of the Company, the related ratio for

the sector almost maintained its position over the last three

years.

The Company ratio of „Collaterals to Total Receivables‟

exhibited an above sector average pattern despite the

slight drop of 73.37% in FYE2013, contributing to asset

quality. Taking into account that the Company managed to

decrease its high NPL level in 2013 thanks to its high

collaterals that received from its customers.

7. Risk Profile & Management

a. Risk Management Organization & Its

Function-General Information

The most important financial instruments giving rise to the

Company‟s payable and receivable obligations are

factoring receivables and bank loans, which are exposed

to market, credit, interest and other operational risks,

derived from the use of financial instruments. The Board

of Directors is responsible for taking the required

cautions in management and supervising the activities of

the Company.

The Company‟s risk management policies are formed to

identify and analyze the potential risk exposures and

aim to create appropriate risk limit controls, monitor risks

and comply with the limits for the Company risks.

Additionally, Company operations are audited by

Independent Auditing firms on a yearly basis.

b. Credit Risk

Credit risk concentration depends on the number of

companies operating in similar business areas, taking

part in the same geographical region or similarly

affected by changes in economics, politics or other

conditions. If unpreventable, companies try to diminish

credit risk by transacting with parties in a variety of

sectors and regions and obtaining sufficient collateral

where possible.

The Company does not provide loans to firms that do not

match with its credit allocation criteria. Moreover, the

Company performs a credit review stage for credit

customers and obtains sufficient collateral where

appropriate. Credit risks are controlled by the limits set

by the Board of Directors

The Company‟s factoring receivables is diversified into a

variety of groups. As of FYE2013, the largest portion

with a percentage of 23.82% belonged to the wholesale

22.56 26.98 27.58 25.52

31.50

44.13

16.52 23.21

25.54 20.77

67.38

-0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

201320122011201020092008

Equity / Total Resources %


72.7172.2174.7577.29

73.25

70.4480.4678.8781.8258.47

0.00

20.00

40.00

60.00

80.00

100.00

20132012201120102009

Short Term Borrowings / Total Assets (%)


325.39

398.76

168.54

106.42

206.42

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

20132012201120102009

Collaterals / Total Receivables %Collaterals / Total Receivables %

FACTORING


12

trade and brokerage followed by construction at 17.33%,

the manufacturing industry at 14.07% and road

transportation at 11.44%. The other sectors have a share

of below 10%.

The Company‟s top 10 customers constituted 27% of the

total receivables portfolio while the top 20 and 50

customers composed 44% and 65%, respectively. The

active customer number was 861 as of April, 2014.

c. Market Risk

All financial instruments held for trading are exposed to

market risk and the changes in market prices affecting

operating income will manipulate the value of a financial

asset.

Analiz Faktoring is not exposed to foreign currency risk

due to its factoring receivables. An amount of TRY 3k in

foreign currency denominated assets indicates the

Company‟s total net FX position in FY2013.

The Company‟s major interest bearing assets and liabilities

are factoring receivables, bank loans and issued bonds.

The Company issued a bond valued TRY 11mn in

November 29, 2013 with a year maturity and coupon

payments every 90 - day in floated interest rates.

The Company projects to minimize the interest rate risk

through due date matching efforts of its receivables and

payables. As of FYE2013, the Company had no financial

instrument with floating interest rates. On the other hand,

82.49% of the Company‟s factoring liabilities belonged to

fixed interest rates (FYE2012; 86.87%) and 17.51% to

floating interest rates (FYE2012; 13.13%).

Moreover, weighted average affective interest rates of

Company assets was 19.57%, liabilities to banks and

factoring companies were 11.15% and 11.25%,

respectively as of FYE2013, eliminating the interest rate

risk.

d. Liquidity Risk

The Company manages its liquidity risk by matching

maturities of the financial assets and liabilities through

monitoring cash flows to avoid any liquidity crises. The

Company has access to funding sources from banks, capital

market instruments and shareholders.

The Company‟s funding is based on up to one year

maturity of bank loans in the amount of TRY 24.32mn and

issued bonds at an amount of TRY 11.14mn. Moreover, the

factoring loans valued at TRY 43.82 constituted the largest

share in borrowing on a maturity of three months or less.

As of FYE2013, credit lines worth TRY 68.69mn were

extended to Analiz Faktoring by a variety of financial

institutions and 46.44% of the total line was utilized, with

a cash free line amounting to TRY 36.79mn.

e. Operational, Legal Regulatory & Other

Risks

With the recent legislation, companies are required to

establish the necessary legal infrastructure, information

systems, risk assessment and internal control systems in

order to carry out effective supervision and audit. In

order to remove operational risk, the Company has

implemented detailed procedures in monitoring its

factoring receivables.

Although the Company does not have a settled risk

department, the Financial and Administrative Department

reports on banks limit and risks, budget realization and

cash flows. Additionally, the Internal Auditing Department

provides risk management assessments. Financial reports

are prepared on a regular basis and reported to the

Board of Directors, easing the decision making processes.

Independent audit reports have been published on a

yearly basis since 2009, providing comparisons with the

previous years.

8. Budget & Debt Issue

Analiz Faktoring has projected 2014 year-end financial

statements figures of TRY 8.15mn net profit and TRY

127.54mn asset size through an 31.83% annual growth

rate. The major assumptions of the bond issuance

projections are as follows:

41.04% and 50.00% growth in factoring

receivables and factoring loans to TRY 121.08mn

and TRY 65.74mn, respectively

TRY 21.51mn equity amount mainly derived from

internal equity generation

A debt issue valued at TRY 20mn with a maturity of

one year

4.18

7.536.01

12.61

15.93

1.080.200.350.440.90

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20132012201120102009

Liquid Assets + Marketable Securities / Total Liabilities %


FACTORING


13

Augmentation of factoring interest income to TRY

29.84mn

13% increase in operating expenses

The expected FYE2014 ratios are listed as below;

Financial Ratios 2013 2014

Actual Projected

Asset Growth Rate 77.31% 31.83%

Equity / Total Assets 14.18% 16.87%

ROAA 5.83% 9.26%

ROAE 36.77% 58.96%

Integrating the above stated projected growth with the last

five years‟ growth series results in a cumulative asset

growth rate between 2009 and 2014 of 704.03%.

The profitability ratios ROAA and ROAE based on the

assumptions and parameters are expected to be 9.26%

and 58.97%, respectively.

The source of the growth is projected to be financed

through mainly short-term borrowings and a bond issuance

at a value of TRY 20mn depending on the terms of market

conditions. In November, 2013, the Company issued a

bond valued TRY 11mn with a year maturity with coupon

payments every 90 days and The Company met its

financial obligations arising from the realized payments of

bond issue in a timely manner. On the other hand, TRY

2.52mn of non-performing loans out of TRY 4.39mn was

transferred to an asset management company as of March

3, 2014, affecting the NPL level.

Considering the previous year‟s asset size growth and

profitability performance, the Company is believed to be

able to fulfill its liabilities on time and reach the realization

of its projects.

31.8377.31

8.525.97

199.13

704.03

509.92

243.99216.99

-200.00

0.00

200.00

400.00

600.00

800.00

20142013201220112010

Annual Asset Growth Rate (%) Cumulative Asset Growth Rate (%)

FACTORING


14

FYE FYE FYE FYE FYE FYE FYE FYE As % of As % of As % of

ANALİZ FAKTORİNG A.Ş. 2013 2013 2013 2012 2012 2011 2011 2010 2013 2012 2011 2013 2012 2011

BALANCE SHEET - ASSET USD TRY TRY TRY TRY TRY TRY TRY Assets Assets Assets Growth Growth Growth

TRY (000) (Converted) (Original) (Average) (Original) (Average) (Original) (Average) (Original) (Original) (Original) (Original) Rate Rate Rate

A-TOTAL EARNING ASSETS (I+II+III) 41,015.94 87,380.35 70,345.63 53,310.91 51,034.31 48,757.72 47,572.84 46,387.97 90.32 97.70 96.97 63.91 9.34 5.11

I- LOANS AND RECEIVABLES (net) 40,593.46 86,480.32 69,850.88 53,221.44 50,920.27 48,619.09 47,416.24 46,213.39 89.39 97.54 96.69 62.49 9.47 5.21

a) Factoring Receivables 40,296.42 85,847.48 67,559.94 49,272.39 48,717.27 48,162.15 47,186.77 46,211.39 88.74 90.30 95.79 74.23 2.31 4.22

b) Financing Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Lease Receivables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

d) Over Due Loans 2,061.05 4,390.87 5,652.61 6,914.35 4,529.83 2,145.31 1,319.55 493.78 4.54 12.67 4.27 -36.50 222.30 334.47

e) Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

f) Receivable from Customer due to Brokerage Activities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

g) Allowance for Loan and Receivables Losses (-) -1,764.01 -3,758.04 -3,361.67 -2,965.30 -2,326.84 -1,688.37 -1,090.08 -491.78 -3.88 -5.43 -3.36 26.73 75.63 243.32

II-BANKS AND OTHER EARNING ASSETS 422.47 900.04 494.75 89.46 114.05 138.64 156.61 174.58 0.93 0.16 0.28 906.06 -35.47 -20.59

a) Banks 421.31 897.57 489.42 81.26 102.17 123.08 141.03 158.99 0.93 0.15 0.24 1,004.52 -33.97 -22.59

b) Other 1.16 2.47 5.33 8.20 11.88 15.56 15.57 15.59 0.00 0.02 0.03 -69.89 -47.30 -0.20

c) Balance With Banks-Current Accounts 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

III-SECURITIES AT FAIR VALUE THROUGH P/L 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

a) Treasury Bills and Government Bonds 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Other Investment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Repurchase Agreement 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

B- INVESTMENTS IN ASSOCIATES (net)+EQUITY

SHARE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

a) Investments in Associates (net) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Equity Share 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

C-NON-EARNING ASSETS 4,395.60 9,364.39 5,308.53 1,252.67 1,387.92 1,523.17 1,291.74 1,060.32 9.68 2.30 3.03 647.55 -17.76 43.65

a) Cash and Cash Equivalents 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

b) Financial Assets at Fair Value through P/L 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a c) Asset Held For Sale And Discontinued

Operations (net) 2,637.42 5,618.76 2,809.38 0.00 0.00 0.00 0.00 0.00 5.81 n.a n.a n.a n.a n.a

d) Other 1,758.18 3,745.64 2,499.15 1,252.67 1,387.92 1,523.17 1,291.74 1,060.32 3.87 2.30 3.03 199.01 -17.76 43.65

- Intangible Assets 5.50 11.71 14.18 16.65 23.38 30.11 18.46 6.80 0.01 0.03 0.06 -29.68 -44.71 342.73

- Property and Equipment 209.70 446.75 438.16 429.58 496.77 563.95 442.33 320.70 0.46 0.79 1.12 4.00 -23.83 75.85

- Deferred Tax 269.76 574.70 491.94 409.18 460.42 511.66 460.15 408.63 0.59 0.75 1.02 40.45 -20.03 25.21

- Other 1,273.23 2,712.49 1,554.88 397.27 407.36 417.45 370.82 324.18 2.80 0.73 0.83 582.79 -4.83 28.77

TOTAL ASSETS 45,411.54 96,744.74 75,654.16 54,563.58 52,422.24 50,280.89 48,864.59 47,448.28 100.00 100.00 100.00 77.31 8.52 5.97

FACTORING


15

FYE FYE FYE FYE FYE FYE FYE FYE As % of As % of As % of

ANALİZ FAKTORİNG A.Ş. 2013 2013 2013 2012 2012 2011 2011 2010 2013 2012 2011 2013 2012 2011

BALANCE SHEET-LIABILITIES+EQUITY USD TRY TRY TRY TRY TRY TRY TRY Assets Assets Assets Growth Growth Growth

TRY (000) (Converted) (Original) (Average) (Original) (Average) (Original) (Average) (Original) (Original) (Original) (Original) Rate Rate Rate

C- COST BEARING RESOURCES (I+II) 37,214.46 79,281.69 61,592.91 43,904.13 41,779.51 39,654.89 39,238.12 38,821.35 81.95 80.46 78.87 80.58 10.72 2.15

I-PAYABLES 20,571.15 43,824.79 29,170.27 14,515.75 9,667.87 4,820.00 8,923.47 13,026.95 45.30 26.60 9.59 201.91 201.16 -63.00

a) Factoring Payables 20,571.15 43,824.79 29,170.27 14,515.75 9,667.87 4,820.00 8,923.47 13,026.95 45.30 26.60 9.59 201.91 201.16 -63.00

b) Lease Payables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c) Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

II-BORROWING FUNDING LOANS & OTHER 16,643.31 35,456.90 32,422.64 29,388.38 32,111.64 34,834.90 30,314.64 25,794.39 36.65 53.86 69.28 20.65 -15.64 35.05

a) Fund Borrowed-Short Term 11,416.38 24,321.45 26,854.91 29,388.38 32,111.64 34,834.90 30,314.64 25,794.39 25.14 53.86 69.28 -17.24 -15.64 35.05

b) Fund Borrowed-Long Term 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

c ) Marketable Securities For Issued (net) 5,226.93 11,135.45 5,567.73 0.00 0.00 0.00 0.00 0.00 11.51 n.a n.a n.a n.a n.a

d) Securities Sold Under Repurchase Agreements 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

e) Subordinated Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

D- NON COST BEARING RESOURCES 1,759.35 3,748.13 2,065.09 382.04 389.85 397.65 431.72 465.78 3.87 0.70 0.79 881.08 -3.93 -14.63

a) Provisions 39.14 83.39 67.98 52.57 44.48 36.38 33.07 29.75 0.09 0.10 0.07 58.62 44.51 22.28

b) Current & Deferred Tax Liabilities 116.49 248.16 248.46 248.77 293.38 337.99 379.34 420.69 0.26 0.46 0.67 -0.24 -26.40 -19.66

c) Trading Liabilities (Derivatives) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

d) Other Liabilities 1,603.73 3,416.58 1,748.64 80.70 51.99 23.28 19.31 15.34 3.53 0.15 0.05 4,133.57 246.67 51.76

E- TOTAL LIABILITIES 38,973.81 83,029.82 63,657.99 44,286.17 42,169.36 40,052.55 39,669.83 39,287.12 85.82 81.16 79.66 87.48 10.57 1.95

F- MINORITY INTEREST 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

F- EQUITY 6,437.72 13,714.93 11,996.17 10,277.41 10,252.88 10,228.35 9,194.75 8,161.16 14.18 18.84 20.34 33.45 0.48 25.33

a) Prior Year's Equity 4,824.17 10,277.41 10,252.88 10,228.35 9,194.75 8,161.16 7,273.37 6,385.58 10.62 18.75 16.23 0.48 25.33 27.81 b) Equity (Internal & external resources added

during the year) -1.30 -2.77 -2.79 -2.82 199.96 402.74 118.83 -165.08 -0.00 -0.01 0.80 -1.77 -100.70 -343.97

c) Minority Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 n.a n.a n.a n.a n.a n.a

d) Profit & Loss 1,614.85 3,440.29 1,746.08 51.88 858.17 1,664.45 1,802.56 1,940.66 3.56 0.10 3.31 6,530.98 -96.88 -14.23

TOTAL LIABILITY+EQUITY 45,411.54 96,744.74 75,654.16 54,563.58 52,422.24 50,280.89 48,864.59 47,448.28 100.00 100.00 100.00 77.31 8.52 5.97

FACTORING


16


INCOME STATEMENT TRY (000)

2013 2012 2011 2010 2009

Net Interest Income 10,874.25 7,128.18 7,259.29 4,566.53 2,758.37

A) Interest income 18,839.00 10,175.48 11,301.11 6,966.14 3,220.54

a) Factoring Interest Income 18,828.31 10,174.53 11,279.65 6,965.67 3,122.93

b) Financing Loans Interest Income 0.00 0.00 0.00 0.00 0.00

c) Lease Income 0.00 0.00 0.00 0.00 0.00

d) Banks 10.69 0.95 21.45 0.47 97.61

B) Fınancial Expense 7,964.74 3,047.30 4,041.82 2,399.61 462.17

Net Fee and Commission Income 2,705.67 390.96 1,013.09 1,205.48 503.14

a) Fee and Commission Income 3,478.41 1,372.75 1,438.86 1,354.67 503.14

b) Fee and Commission Expense 772.74 981.79 425.77 149.19 0.00

Total Operating Income 1,323.38 1,632.93 416.39 253.34 116.90

Interest Income from Other Operating Field 0.00 0.00 0.00 0.00 0.00

Foreign Exchange Gain or Loss (net) (+/-) 0.42 -0.41 1.00 1.17 2.67

Gross Profit from Retail Business 0.00 0.00 0.00 0.00 0.00

Gains or Loss on Derivative Instruments (+/-) 0.00 0.00 0.00 0.00 0.00

Income on Sale of Equity Participations and Consolidated Affiliates 0.00 0.00 0.00 0.00 0.00

Gains from Investment Securities (net) 0.00 0.00 0.00 0.00 0.00

Other Operating Income 1,322.97 1,633.35 415.39 252.17 114.23

Taxes other than Income Tax 0.00 0.00 0.00 0.00 0.00

Dividend 0.00 0.00 0.00 0.00 0.00

Provisions 1,463.71 2,592.92 1,234.39 86.87 35.14

Provision for Impairment of Loan and Trade Receivables 0.00 0.00 0.00 0.00 0.00

Other Provision 1,463.71 2,592.92 1,234.39 86.87 35.14

Total Operating Expense 9,028.63 6,360.80 5,366.11 3,508.56 1,618.05

Salaries and Employee Benefits 6,327.79 4,768.39 3,938.46 2,587.33 1,098.59

Depreciation and Amortization 27.36 12.67 6.63 0.00 0.00

Other Expenses 2,673.49 1,579.74 1,421.02 921.22 519.47

Profit from Operating Activities before Income Tax 4,410.96 198.35 2,088.27 2,429.93 1,725.21

Income Tax – Current 970.68 146.47 423.81 489.27 397.80

Income Tax – Deferred 0.00 0.00 0.00 0.00 0.00

Net Profit for the Period 3,440.29 51.88 1,664.45 1,940.66 1,327.41

Total Income 14,903.30 9,152.48 8,688.77 6,025.35 3,378.41

Total Expense 9,028.63 6,361.22 5,366.11 3,508.56 1,618.05

Provision 1,463.71 2,592.92 1,234.39 86.87 35.14

Pretax Profit 4,410.96 198.35 2,088.27 2,429.93 1,725.21

FACTORING


17


FINANCIAL RATIO %

2013 2012 2011 2010 2009

I. PROFITABILITY & PERFORMANCE

1. ROA - Pretax Profit / Total Assets (avg.) 5.83 0.38 4.27 7.68 21.75

2. ROE - Pretax Profit / Equity (avg.) 36.77 1.93 22.71 33.41 54.03

3. Total Income / Equity (avg.) 124.23 89.27 94.50 82.84 105.81

4. Total income / Total Assets (avg.) 19.70 17.46 17.78 19.03 42.60

5. Provisions / Total Income 9.82 28.33 14.21 1.44 1.04

6. Total Expense / Total Resources (avg.) 14.18 15.08 13.53 0.36 0.74

7. Net Profit for the Period / Total Assets (avg.) 4.55 0.10 3.41 6.13 16.74

8. Total Income / Total Expenses 165.07 143.88 161.92 171.73 208.79

9. Non Cost Bearing Liabilities + Equity- Non Earning Assets / Assets 8.37 17.24 18.10 15.95 39.53

10. Non Cost Bearing Liabilities - Non Earning Assets / Assets -5.81 -1.60 -2.24 -1.25 -0.73

11. Total Operating Expenses / Total Income 60.58 69.50 61.76 58.23 47.89

12. Interest Margin 15.46 13.97 15.26 14.75 35.49

13. Operating ROAA = Operating Net Incomes / Assets (avg.) 16.36 6.19 12.55 15.26 27.58

14. Operating ROAE = Operating Net Incomes / Equity Capital (avg.) 103.16 31.66 66.67 66.40 68.51

15. Interest Coverage – EBIT / Interest Expenses 155.38 106.51 151.67 201.26 473.28

16. Net Profit Margin 23.08 0.57 19.16 32.21 39.29

17. Gross Profit Margin 29.60 2.17 24.03 40.33 51.07

18. Market Share 0.44 0.30 0.32 0.33 0.15

19. Growth Rate 77.31 8.52 5.97 199.13 n.a.

II. CAPITAL ADEQUACY (Year End)

1. Equity Generation / Prior Year‟s Equity -0.03 -0.03 4.93 -2.59 -1,482.64

2. Internal Equity Generation / Previous Year‟s Equity 33.47 0.51 20.39 30.39 -362.85

3. Equity / Total Assets (Standard Ratio) 14.18 18.84 20.34 17.20 40.26

4. Equity / Total Liabilities 16.52 23.21 25.54 20.77 67.38

5. Free Equity / Total Receivables Ratio 15.33 18.47 19.82 16.95 39.34

6. Tangible Assets / Total Assets 0.46 0.79 1.12 0.68 1.78

7. Intangible Assets / Total Assets 0.01 0.03 0.06 0.01 0.14

8. Equity / Total Guarantees and Commitments + Equity 100.00 100.00 100.00 100.00 100.00

III. LIQUIDITY (Year End)

1. Liquid Assets + Marketable Securities / Total Assets 0.93 0.16 0.28 0.37 0.54

2. Liquid Assets + Marketable Securities / Total Liabilities 1.08 0.20 0.35 0.44 0.90

3. Short Term Borrowings / Total Assets 70.44 80.46 78.87 81.82 58.47

4. Net Interest and Commission / Total Assets 14.04 13.78 16.45 12.16 20.56 5. Liquid Assets + Marketable Securities / Equity 6.56 0.87 1.36 2.14 1.34

IV. ASSET QUALITY

1. Loan and Receivable‟s Loss Provisions / Total Loans and Receivables 4.16 5.28 3.36 1.05 0.23

2. Total Provisions / Profit Before Provision and Tax 24.92 92.89 37.15 3.45 2.00

3. Impaired Receivables / Gross Receivables 4.87 12.31 4.26 1.06 2.73

4. Impaired Receivables / Equity 32.02 67.28 20.97 6.05 6.64

5. Loss Reserves for Receivables / Impaired Receivables 85.59 42.89 78.70 99.59 8.29

6. Collaterals / Total Receivables 325.39 398.76 168.54 106.42 206.42

7. Total FX Position / Total Assets 0.00 0.01 0.01 0.01 0.00

8. Total FX Position / Equity 0.02 0.03 0.07 0.04 0.00

9. Assets / Total Guarantees and Commitments + Assets 100.00 100.00 100.00 100.00 100.00

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