investor presentation - gsd holding holding presentation-30.06.20… · tekstilbank’s national...

Tekstilbank HQ, Istanbul

GSD Holding HQ, Istanbul

Investor

Presentation October 2013

1 October 2013, Istanbul

GSD Holding

Highlights • A 27 years old financial holding company with core investments

in:

– Banking: one deposit accepting commercial bank and one investment bank with combined assets of TL 3.7 billion.

– Financial services a factoring company ranked in the top ten for years and one of the fastest growing stock broking company in Turkey.

– Shipping new entry into the dry bulk ship management, with a vision to own a fleet of 4 handy size vessels in the medium term. (Cano M/V and Dodo M/V has started its operations in May 2013)

• A healthy balance sheet

– Well-capitalised: Businesses funded by high level of equity

– High asset quality

– Strong funding and retail deposit base.

• 1,022 employees as of 30 June 2013.

(TL, million) 30 June 2013

Total Asset* 4,038

Loans 2,898

Deposits 2,368

Equity 762,4

Net earnings 8.2


• The foundations of GSD Group were laid down by the establishment of GSD Foreign Trade in 1986 as

the first independent trading house in Turkey. The company soon evolved into Turkey’s one of the

leading exporters.

• Encouraged by its achievements in foreign trade, GSD Group decided to invest in other areas of

potential growth and the finance sector was identified as a key target. Eventually the Group became a

predominantly financial services group, through its banks, its leasing, factoring and brokerage

companies.

• A major change occurred in our portfolio in August 2011, when changing business circumstances led us

reassess our investment portfolio. Diminishing returns drove us stop our leasing business and enter into

dry bulk ship management business by converting our leasing subsidiary into a shipping company we

called GSD Marin.

• Increasing competition from banks and government’s abolishment of exceptional Value Added Tax (VAT)

rates for leasing companies had made leasing transactions unprofitable for some time. In search of new

value investments, the real estate sector seemed attractive at first, however a deeper analysis revealed

that the real estate prices in Turkey were still expensive to produce a profitable business. We believe that

the prevailing diminished economic activity resulting from the global economic crisis made shipping

business quite attractive at this stage, given the significantly reduced vessel prices and historicaly low

freight charges that are expected to pick up as the global growth resumes.

GSD Holding

History


• In addition to GSD Marin, GSD Foregin Trade resolved to terminate the by-pass export activities after

reevaluating the efficiency in this area of activity due to the loss of feasibility of by-pass export activities

arising from the decrease in rights and benefits provided for foreign trade intermediary companies within

the scope of current legislation and enter into dry bulk ship management business in December 2012.

• GSD Marin has currently two wholly-owned subsidiaries, Cano Maritime Ltd. and Dodo Maritime Ltd.,

established in Malta on 26 March 2013, each owning and operating a newly-built dry bulk carrier vessel

with a 39,000 dwt transportation capacity per ship under time charter agreements starting from 7 May

2013.

• GSD Foreign Trade has currently two wholly-owned subsidiaries, Hako Maritime Ltd. and Zeyno Maritime

Ltd., established in Malta on 1 April 2013 and 22 April 2013, respectively, each expected to own and

operate a newly-built dry bulk carrier vessel with a 63,500 dwt transportation capacity per ship under time

charter agreements starting from May 2014 and September 2014, respectively.

• GSD Group is currently active in most financial services: Banking with Tekstilbank and GSD Bank,

domestic and international factoring with Tekstil Factoring, investment banking and capital market

brokerage services with Tekstil Invest and dry bulk shipping management with GSD Marin and GSD

Foreign Trade.

GSD Holding

History


• GSD Holding is the controlling shareholder in all these companies and is responsible for establishing major operational guidelines and setting the standards for enterprise risk management and corporate governance.

• The GSD Group's growth strategy is based on providing financial and other support services to commercial activity, rather than competing in industrial production. It has adopted a prudent management approach, giving priority to growth by equity rather than through borrowing. On solo basis, GSD Holding’s leverage is minimal since all investments were funded by equity. Therefore, sustainable profitability is the main pillar of the Group's investment strategy.

• GSD Holding attaches priority to specialization over total diversification, thus allowing resources to be channeled into the businesses where strategic strength and expertise can be offered.

• Since inception, GSD Holding had been fully observing the principles of corporate governance, transparency and good conduct of business. These aims were even better served by the GSD Holding’s quoting its shares on the the Borsa Istanbul (BIST) (formerly Istanbul Stock Exchange (ISE)) in 1999. Tekstilbank’s and GSD Marin’s shares are also traded on the BIST.

• Aware of its social responsibilities, the GSD Group is also active in philanthropic activities through the GSD Educational Foundation. It has built 3 primary schools across the country and donated them to the ministery of education. The foundation keeps supporting these schools.

GSD Holding

Vision


Investment Portfolio As of 30 June 2013

(together with each subsidiary’s equity and GSD Holding’s total direct and indirect ownership)

Banking Financial Services Shipping Others

Tekstilbank (consolidated with

Tekstil Invest)

TL 576 million

76.52 %

Tekstil Factoring

TL 28 million

89.09 %

GSD Marin (consolidated with

Cano Maritime and

Dodo Maritime)

TL 64 million

54.46 %

GSD Real Estate

TL 0.028 million

99.99%

GSD Bank

TL 83 million

100 %

Tekstil Invest

TL 19 million

76.50 %

GSD Foreign Trade

TL 30 million

100 %

GSD Advert. & PR

TL 0.11 million

90.89 %

Cano Maritime

TL (2) million

54.46 %

GSD Plan & Project

TL 0.027 million

99.99 %

Dodo Maritime

TL (2) million

54.46 %

Hako Maritime

TL 0.01 million

100 %

Zeyno Maritime

TL 0.01 million

100 %


GSD Holding

Shareholder’s Structure

Shareholder Name Ownership (%)

Mr. Mehmet Turgut Yılmaz 19,00 %

Delta Land and Building Development 4.50 %

GSD Foreign Trade 4.49 %

GSD Marin 0.17 %

58 Registered Shareholders 0.00%

Publicly Owned 71.84 %

Share Capital 100.00 %


• Banking is our core business since banking assets from banking activities constitute 92 % of GSD Holding’s consolidated financial accounts as of 30 June 2013.

• The assets and loans size of our banking businesses is TL 3.7 billion and TL 2.7 billion, respectively for the same period.

• We conduct banking activities through Tekstilbank, a mid-sized commercial bank and GSD Bank, a small investment bank specialised in trade finance.

• Both banks have ample growth opportunities since they use little leverage and therefore have high capital adequacy ratios. (16.7% for Tekstilbank and 24.24% for GSD Bank as of 30 June 2013)

• The Board of Directors of GSD Holding A.Ş. resolved on starting to work with a view to determine and evaluate the strategic options such as possible partnership, cooperation and/or share selling in the banking sector relating to Tekstil Bankası A.Ş., whose majority shareholder is GSD Holding A.Ş., getting opinion and support from the consulting firms when necessary as well on 27 March 2013 and resolved to authorise BNP Paribas London as a financial advisor and Atım&Atım Law Office and Paksoy Law Partnership Office as legal advisers exclusively in connection with the sale of all or a part of shares of Tekstil Bankası A.Ş. owned by GSD Holding A.Ş. to prospective purchasers on 3 April 2013.

• GSD Holding A.Ş. has disclosed in its material public disclosures to the Public Disclosure Platform of Borsa Istanbul on 4 July 2013, 25 July 2013 and 20 August 2013 that the negotiations conducted by BNP Paribas London, authorised by GSD Holding A.Ş. to act as an intermediary for the sale of all or a part of shares of Tekstil Bankası A.Ş. owned by GSD Holding A.Ş. to prospective purchasers, are in progress.

Banking


• Founded in 1986, Tekstilbank is engaged in corporate, commercial, SME and retail banking activities, providing a wide range of financial products and services to its customers.

• GSD Holding is the majority shareholder with 76.52 % stake directly and indirectly in total, while the

remaining shares are publicly traded on the Istanbul Stock Exchange (ISE). • As of 30 June 2013, Tekstilbank's total assets, loans, deposits and equity stood at TL 3.6 billion, TL 2.6

billion, TL 2.4 billion and TL 567 million, respectively according to BRSA (Banking Regulation and Supervision Agency) unconsolidated financials.

Banking

Tekstilbank

International Credit Rating Agency Fitch Ratings

Long-term foreign currency and TL credit rating B +

National long-term credit rating A (tur)

Short-term foreign currency and TL credit rating B

Viability rating b +

Support rating 5

• As of 19 July 2012, Fitch Ratings upgraded Tekstilbank’s national long-term credit rating to “A(tur) from A-(tur) and affirmed the other credit ratings as mentioned in the table;

• Today, Tekstilbank operates through 44 branches as well as alternative delivery channels; internet banking, ATMs and call centre, providing continuous service to its customers.


Banking

Tekstilbank Key Indicators (TL million)

* Calculated quarterly and adjusted by fx gains/losses

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

2007 2008 2009 2010 2011 2012 30.06.2013

Total Assets Deposits Cash Loans Equity

2007 2008 2009 2010 2011 2012 30.06.2013

Adjusted Net Interest Margin* 5.0 % 5.3 % 6.2 % 4.8% 5.1 % 5.6 % 4.8 %

Return on Average Assets 1.5 % 0.4 % 0.5 % 0.6 % 0.7 % 0.8 % 0.2 %

Return on Average Equity 11.9 % 3.0 % 2.8 % 2.9 % 4,5 % 4.9 % 1.3 %

Capital Adequacy Ratio 13.2 % 17.9 % 20.8 % 19.4 % 15,9 % 16.5 % 16.7 %

Loans/Assets 72 % 54 % 72 % 71 % 71 % 71 % 70 %

Deposits/Liabilities 51 % 48 % 68 % 86 % 83 % 86 % 77 %

NPL/ Cash Loans 1.4 % 3.3 % 6.0 % 4.9 % 4,2 % 4.9 % 6.7 %

Noncash/Cash Loans 66 % 64 % 49 % 48 % 50 % 48 % 48 %


• Established in 1998, GSD Bank is one of the most highly rated private sector investment banks in Turkey.

• As a non-deposit accepting bank, it maintains a high level of equity. With a capital adequacy ratio of

24.24 % as of 30 June 2013 on solo basis, GSD Bank ranks among top Turkish banks with lowest leverage.

• As a result of its continued focus on placing commercial loans to institutions, the loan portfolio has

always taken a major share in GSD Bank's assets, while revenues generated from those constituted the major income item for years. GSD Bank will continue to pursue growth by focusing on trade finance.

Banking

GSD Bank

(TL, million) 2007 2008 2009 2010 2011 2012 30.06.2013

Total Assets 161 76 103 105 149 111 111

Equity 59 59 67 71 75 81 82

Net Earnings 8.2 9.3 2.7 4.7 4.1 6.1 1.5

Cash Loans 126.9 38.6 78.7 90.5 143 103 107

Capital Adequacy Ratio 30.55 % 49.16 % 42.80 % 41.50 % 34.12 % 42.73 % 24.24 %


Factoring

Tekstil Factoring

• Established in 1994 as the Group’s factoring arm, Tekstil Factoring provided credit risk protection and short-term financing to a wide range of clients against their short-term domestic or foreign trade receivables.

• Tekstil Factoring has a stable place among the top ten factoring companies in Turkey in terms of

business volume, service quality, number of customers, and product diversity.

• Tekstil Factoring stresses the service content of factoring by providing collection-only services to its

clients in Turkey and abroad. In addition, Tekstil Factoring provides its export clients credit investigation services on their foreign customers to reduce their risks in foreign markets as well as to expand sales.

• The Company has been a member of the Brussels-based International Factors Group (IFG) since

1996. In addition, Tekstil Factoring works closely with members of Factors Chain International (FCI) via bilateral agreements.

(TL, million)

2007 2008 2009 2010 2011 2012 30.06.2013

Total Assets 106 34 159 125 182 164 183

Equity 21 27 32 30 34 31 28

Net Earnings 5.9 5.2 5.2 4.8 4.0 8.1 2.9

Domestic Factoring Turnover 490 416 466 593 403 833 392


• Established in 1996 as one of the first brokerage houses in Istanbul, Tekstil Invest offers brokerage for securities, warrants and derivative markets. It also provides research, asset management and corporate finance services

• Tekstil Invest commands market shares of 1.40% in the stock market on the ISE, as of June 2013.

This places Tekstil Invest as the 24th largest brokerage house in terms of transaction volume in Turkey.

• Tekstil Invest manages 5 mutual funds with varying proportions of stocks and fixed instruments

devised in accordance with risk preferences of clients. The NAV of funds under management amounted to TL 52 million as of 30 June 2013.

• Fully owned by Tekstilbank, Tekstil Invest efficiently makes use of Tekstilbank branches as brokers,

with substantial marketing and sales capabilities. Tekstil Invest has 23 branches across Turkey.

• Trusted by over 20,000 clients globally, Tekstil Invest provides high quality investment advice and

unmatched customer service to institutional and high net worth clients.

Stock Broking

Tekstil Invest


• Our most recent investment has been dry bulk ship management. • We think the current lowered economic activity resulting from the global economic crisis took a

heavy toll on shipping businesses as evident in significantly reduced vessel prices and historicaly

low freight charges. • We believe the circumstances present a unique investment opportunity in entering ship

management business with a long term perspective. After all, the current downward trend should

reverse as the global economic activity later picks up. • We positioned ourselves in the dry bulk handy size ship management since it is more resilient to

fluctuations stemming from business cycles.

Shipping

GSD Marin


• Tekstil Finansal Kiralama A.Ş. (Tekstil Finance Lease Inc.) exited from the status of finance lease company and

ceased to be subject to finance lease regulations as at 16 June 2011, its authorisation certificate for finance lease

activity having been cancelled by the Banking Regulation and Supervision Agency on that date upon its application on

27 May 2011. The Extraordinary General Assembly of Tekstil Finansal Kiralama A.Ş. (Tekstil Finance Lease Inc.)

decided to change the company name to GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret A.Ş. (GSD Marine

Property Construction Industry and Trade Inc.) and the main business activity of the company from finance lease to

marine freight transportation and determine the business name as GSD Marin (GSD Marine) on 24 August 2011, the

related amendments to the articles of association of the company having been registered in trade registry on 26

August 2011.

• GSD Marin has made a ship building agreement with Hyundai Mipo Dockyard Co. Ltd. on 10 April 2012 for the

construction of 2 dry bulk carrier ships with 39,000 dwt transportation capacity per ship which will be delivered in June

2013 pursuant to the authority granted by the extraordinary general assembly held on 10 April 2012 having approved

the decision of the board of directors within the scope of significant transaction on the same date.

Shipping

GSD Marin


• GSD Marin has established two wholly-owned companies

in Malta under the names of Cano Maritime Ltd. and Dodo

Maritime Ltd. with a share capital of EUR 5,000 each on 26

March 2013.

• The General Assembly held on 30 May 2013 for the year

2012 of GSD Marin has resolved to sign a Novation

Agreement and a Tripartite Agreement for its

implementation between the Company, Hyundai Mipo

Dockyard Co. Ltd., Dodo Maritime Ltd. and Cano Maritime

Ltd. in order to transfer all rights and obligations for the

ships numbered 6150 and 6151 arising from the ship

building agreement signed with Hyundai Mipo Dockyard

Co. Ltd. for the construction of 2 dry bulk carrier ships with

39,500 dwt transportation capacity per ship, to Dodo

Maritime Ltd. and Cano Maritime Ltd., established and

wholly-owned by the Company.

• The delivery of the ships constructed within the scope of

the ship building agreement signed for the construction of 2

dry bulk carrier ships with 39,000 dwt transportation

capacity per ship has been taken on 7 May 2013 in South

Korea so as to get them registered under the Malta flag on

behalf of Dodo Maritime Ltd. and Cano Maritime Ltd..

Shipping

GSD Marin


• Established in 1986 as the first specialized Turkish foreign trade company, GSD Foreign Trade set a unique model of business cooperation by combining the strengths and business volumes of individual ready-to-wear manufacturers and exporters to create economies of scale which would benefit all participants.

• The Board of Directors of GSD Foreign Trade resolved to terminate the by-pass export activities of the

company and to study on the evaluation of new activity areas on 27 June 2012. GSD Foreign Trade ceased to carry out the by-pass export activities within the scope of contracts with the manufacturer-supplier exporters as of 31 December 2012 and the Board of Directors of GSD Foreign Trade resolved to start working primarily on shipping as the new main line of business on 31 December 2012.

Shipping

GSD Foreign Trade

0,00%

0,50%

1,00%

1,50%

2,00%

2,50%

3,00%

3,50%

4,00%

4,50%

5,00%

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

2,0

9%

3,2

6%

3,8

1%

3,9

6%

4,5

4%

4,6

8%

3,9

8%

3,1

2%

3,0

1%

2,6

7%

2,6

3%

2,5

8%

2,2

1%

2,0

1%

2,0

8%

2,0

4%

1,7

6%

1,2

5%

1,1

3%

0,8

6%

0,7

1%

0,4

7%

0,7

3%

0,8

4%

0,8

0%

0,4

2%

GSD Group’s Share in Turkey’s Yearly Exports

0

200

400

600

800

1.000

1.200

2007 2008 2009 2010 2011 2012

Annual Development of By-Pass Export Activities

(million US dollar)


• GSD Foreign Trade has established two wholly-owned companies in Malta under the names of Hako Maritime Ltd. and Zeyno Maritime Ltd. on 1 April 2013 and 22 April 2013, respectively, with a share capital of EUR 5,000 each.

• The ship building agreement signed between GSD Foreign Trade and Yangzhou Dayang Shipbuilding Co. Ltd. established in China for the construction of 2 dry bulk carrier ships with 63,500 dwt transportation capacity per ship, have come into force on 11 April 2013 and 4 June 2013.

• The General Assembly held on 29 May 2013 for the year 2012 of GSD Foreign Trade has resolved to sign a Novation Agreement and a Tripartite Agreement for its implementation between the Company, Hyundai Mipo Dockyard Co. Ltd., Hako Maritime Ltd. and Zeyno Maritime Ltd. in order to transfer all rights and obligations for the ships numbered 4032 and 4039 arising from the ship building agreement signed with Hyundai Mipo Dockyard Co. Ltd. for the construction of 2 dry bulk carrier ships with 63,500 dwt transportation capacity per ship, to Hako Maritime Ltd. and Zeyno Maritime Ltd., established in Malta and wholly-owned by the Company.

• The main business activity of GSD Foreign Trade is maritime sector in 2013, since the company has terminated its by-pass export activities as of 31 December 2012 and the ship building agreements contracted by the company to operate its new business activity have come into force in 2013.

Shipping GSD Foreign Trade


For further information please contact:

Investor Relations

Mr. Güray Özer

E-mail : [email protected]

Phone : +90 216 417 10 08

Web Adress : www.gsdholding.com.tr

investor presentation - gsd holding holding presentation-30.06.20… · tekstilbank’s national...

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