Ladies and gentlemen, welcome to the VakıfBank audio webcast fourth quarter 2024 bank only earnings results webcast. We will have a question-and-answer session following the presentation, and if you'd like to submit your questions, you can send them anytime by clicking the Q&A button, which you will see there at the bottom of your zoom screen. If you want to ask an audio question, you can join the call as well by clicking the raise hand button, which again you'll see down there at the bottom of your zoom screen. Now with that, I will leave the floor to our hosts and they are Mr. Ali Tahan, the Head of International Banking and Investor Relations, and Ms. Ece Seda Yasan Yılmaz, the Head of Investor Relations, both from VakıfBank. Sir, Madam, the floor is yours. Thank you, Rob. Good afternoon, everybody, and welcome to our year-end earnings presentation, conference call. For those of you to whom we couldn't introduce, Ece recently appointed as Head of Investor Relations. Former Head of IR, Nihan, took a new role within the bank, and following that, Ece became the new Head of IR. Going forward, we will be covering all your questions and queries related to VakıfBank and Turkish banking sector, together with Ece and the team. After this update from our organizational change, let me go back to presentation, starting with the first page. Proudly, as expected and as guided, this quarter came very strong, the strongest quarter of the year in terms of bottom line. As you can see on the left-hand side below chart, reported our net income on the Q4 came at TRY 13.2 billion, which is up by 64% compared to a quarter ago, and which is also higher than the market consensus of TRY 12.1 billion. Equally important, apart from this strong PNL numbers, additionally, we also booked additional TRY 6.5 billion pre-provision during the quarter. Therefore, total free provisioning amount increased to TRY 15 billion from a quarter ago of TRY 8.5 billion. Adjusted with this quarterly free provisioning set aside, our adjusted PNL in the quarter will be TRY 19.7 billion, which is up by 145% compared to a quarter ago. This is clearly the strongest PNL performance of the bank within 2024. On top of that, maybe more importantly, even compared to most of the private peers, this is clearly a number advocating and supporting our convergence story. This very strong Q4 results create the reported ROE at 25% quarterly. Adjusted with the free provisioning, it would be even higher at almost 37%. Thanks to this very strong Q4, total reported net income materialized at above TRY 40 billion, which is up by 61% compared to the previous year of 2023. Please note that 61% net income growth for VakıfBank in a year where sector net income growth was only up by 6%. Clearly, this is also another very strong our performance KPI of VakıfBank compared to sector average, and this is also clearly supporting our convergence story again. This free provisioning adjustment for the full year, net-net, we set aside in total TRY 4 billion. As we discussed, we booked TRY 6.5 billion in the Q4, but in the previous quarters, we released TRY 2.5 billion. Therefore, net-net during the entire year of 2024, we set aside TRY 4 billion. Adjusted with that full year, cumulative net income would be TRY 44.4 billion, which is up by even 77% increase compared to previous year. Please also note that thanks to this, additional free provisioning, effective tax rate of the quarter also came stronger and higher than usual. So our free provisioning amount, which is TRY 15 billion outstanding number at the moment, can be considered as hidden capital and in order to support the PNL and in order to, decrease the earnings volatility between the seasons, it can be utilized and released back again at any time. The last point on this page is related to, another important PNL item, at the top line, which is, coming from the core banking revenues in some of net interest income and net fee and commission income. This is also, the best part of our PNL. Our strong profitability mainly supported and backed by core banking revenue generation capacity. Both QOQ and year-over-year, vice. The numbers are strong and are outperforming the sector averages. For the full year, we almost generated TRY 146 billion core banking revenues, which is up by 87% year-over-year comparison. As you can see, the sector average was 58%, and this is the main area actually where overall profitability we had outperformed compared to sector average number. For the sake of the time, I am skipping some pages and I would like to take your attention to net interest margin side, where the details can be seen on page five. I mean, there are a couple of points we would like to explain in detail on this net interest margin four-point. First of all, of course, this quarter reported net interest margin came very strong at above 5%. The lion's share of this very strong, maybe one of the strongest quarter net interest margin, of course, attributable to additional CPI revenue. Even adjusted with this CPI revenue, I mean excluding this additional one-off CPI impact, still we would end up with very strong PNL of 3.8%, which was 2.7% a quarter ago. Because during this quarter, we corrected entire CPI interest with the actual October to October CPI data of 48.6%. Just to remind you, in the previous quarters, our CPI estimate was much more conservative and lower compared to private peers, especially. Therefore, in this quarter, we had a very strong room for correction purpose. A quarter ago, for example, the CPI estimate we used in September was less than 44% for the entire cumulative portfolio. All the corrections materialized in accordance with the actual number of almost 49%. Therefore, this created additional TRY 11.4 billion interest income from the CPI portfolio. Of course, this is the main driver of the very strong quarter net interest margin. My point is, even excluding the CPI impact, especially core spread expansion was very strong. This is also equally creating additional boost in our total net interest margin. At this stage, I would like to take your attention to Turkish lira core spreads, especially. As you can see on the right-hand side below chart. Overall Turkish lira core spreads further increased to 2.33% from a quarter ago of 1.3%. Just in one quarter period of time, even before the start of rate cut cycle, we enjoyed additional 1% Turkish lira core spread expansion, which is also another very important factor behind such quarterly strong net interest margin performance. I believe such strong recovery of 1% just in one quarter period of time is clearly better compared to most of the private peers even. Of course, the main driver of such our performance can be understood by the composition of Turkish lira loan portfolio in terms of interest rate structure. During the year of 2024, deliberately, we shifted the loan portfolio more in favor of fixed loan rather than floating. As a result of that, as of year end, the share of fixed rate Turkish lira loans increased to 60% versus 41% a year ago. Such timely shift within loan portfolio enabled us to deliver very strong Turkish lira core spread performance in Q4, despite a rate cut cycle just started. Going forward, the more we turn into fixed, of course the more duration gap increased between Turkish lira assets and liabilities. Given we are in rate cut cycle, this kind of additional increase in duration will create additional upside for net interest margin outlook of 2025, and we will also enjoy especially each and every quarter of 2025. Another point I would like to take your attention is related to OpEx. On page seven, you can see OpEx numbers and KPIs. Especially, the most eye-catching development of the year is we outperformed all cost-related KPIs during entire 2024, including both cost-to-income ratio as well as cost over average assets. As you can see on the right-hand side, cost-to-income ratio for the full year of 2024 came at 40% versus sector average of 42%. On top of that, cost over average asset ratio came at 2.2% for the full year versus 2.9% for the sector average. This clearly shows that VakıfBank, thanks to both cost discipline as well as thanks to strong income generation capacity, we outperformed the sector in terms of all OpEx related KPIs. With page eight, we would like to turn your attention to a lending side. As you can see from the headline, total loan portfolio for the first time exceeded TRY 2 trillion level, and our total asset size for the first time also exceeded TRY 4 trillion level. In this manner, the share of lending in total assets materialize at around 50%. In terms of the lending portfolio, especially in Q4, our lending growth was above than the sector, both in Turkish lira as well as in hard currency. As you can see, we have one percentage point higher Turkish lira lending growth in the final quarter of the year compared to sector. 7.3% QOQ growth for the sector versus 8.4% QOQ growth for us. Therefore, on the Turkish lira lending side, we have additional 1 percentage point increase, additional growth. This is mainly driven by retail side. As you can see on the left-hand side below chart, QOQ retail lending growth was up by 16%. This is especially the area where we had a relatively higher growth on the Turkish lira lending side. This retail growth mainly came from both credit card business as well as total retail overdraft loan portfolio. When we look at the hard currency lending, we had another strong growth on hard currency lending. In dollar terms, we had 4.6% QOQ hard currency lending growth in hard currency versus sector average of 2.7%. In this manner, in Q4, both Turkish lira lending growth as well as hard currency lending growth came stronger than the sector averages. For the full year of 2024, our total lending growth and hard currency lending growth was slightly lower than the sector average, despite additional momentum we had in Q4. On the hard currency lending side, we are slightly above than the sector in terms of hard currency lending growth for the full year of 2024. Therefore, thanks to these results, we are still keeping our first ranking among the top-listed banks of Turkey in terms of market share, both in Turkish lira lending as well as in hard currency lending. Another point I would like to take your attention is related to asset quality. On page four, you can see the numbers and ratios related to asset quality. Let me first start with the ratios. NPL ratio and Stage two ratio almost flattish compared to a previous quarter. NPL ratio came at 1.79%, which is up by only two basis points. Share of Stage two was in total loan portfolio came at 7.9% versus 8% a quarter ago. In this manner, ratio-wise, NPL ratios and Stage two ratios were flattish QOQ. However, of course, especially NPL ratio, if we look at from one-year period of time, increased almost 50 basis points from 1.3% to 1.8%, which is understandable and reasonable, because of the current macro developments as well as because of the fade away impact of denominator, actually, lending growth normalization, let's say. Still, this 1.8% both in line with the sector average as well as those NPL ratios are well below the cycle average of 3% area. The headline of the quarter for the asset quality is normalizing quarterly net cost of risk levels. As expected and as guided, we have much higher net cost of risk ratios in Q4 compared to first three quarters of the year. Net cost of risk of the quarter came at 172 basis points, which was 85 basis points a quarter ago. Thanks to this relatively high net cost of risk of the quarter, full year 2024 average net cost of risk came at 33 basis points. On top of that, as we discussed, we also had additional TRY 6.5 billion pre-provisioning this quarter, which brought full year outstanding total pre-provisioning amount to TRY 15 billion. With page 11, we can move to liability side. Starting with the deposit side. This quarter, we have relatively stronger growth on Turkish deposits and total deposits, which is very similar to lending compared to sector averages. In terms of Turkish deposits. Turkish deposits are up by almost 17% versus 10% for the sector, and total deposit growth was up by 10% for us Q on Q versus 6% for the sector. One very important point is during 2024, in line with our strategy and in line with our focus, we created more granular deposit base, thanks to additional shift in favor of both retail as well as demand deposit. As you can see, as of 2024 year end, the share of demand deposit further increased to 26% versus 22% a year ago. Of course, compared to a peer group, this ratio is relatively still low. There is still room to improve and to go, but it clearly shows we are in the right direction. Each and every quarter, hopefully, we will see higher ratios of demand deposit within total deposit portfolio. Equally important, related to granular feature of deposit portfolio. The share of retail deposits further increased to 48% as of year-end versus 39% a year ago. It shows 9 percentage point increase in favor of retail deposit share. Especially in terms of market share, we gained almost 2 percentage point market share, both in retail deposits as well as demand deposits. Both of them now are above the 10% threshold and approaching to our natural market shares of 12%-13%. Each and every quarter going forward with still additional focus on those areas, we expect our market shares both on retail as well as demand deposits will be even further approaching to our natural market shares. One relatively quiet slide in our presentation, Ece and her colleagues are inserting is related to the products we were heavily using during 2024, which helped us to penetrate across all segments. These products, including the products we put on the right-hand side, like V-PART, like SKY SME or Sky Limit or like Vinov, these are all sector-leading products, and these are very welcomed by the entire VakıfBank customer base. We didn't only become the second biggest bank of Turkey in terms of asset size and lending market share or deposit market share, but also in terms of transactional banking and in terms of all subsectors, we became even much bigger player. This is very visible in terms of the KPIs and the numbers shown on the left-hand side of the page. As of 2024, with 18% market share, VakıfBank still the biggest trade finance hub of the country. On top of that, especially on the Turkish retail deposit side, we became the market leader, which was positioning as number fifth a year ago. My point is, thanks to this kind of sector-leading and well-received products, which is completely targeting the financial needs of our customer base, we further increased our penetration and we further gained momentum, especially on transactional banking side. The other page is related to wholesale borrowing, which is also part of our department's responsibility. Entire year of 2024 was a very strong year, very successful year in terms of wholesale borrowing transactions for entire Turkish banking sector. Proudly, and as one of the biggest wholesale banking bank of the country, we are also one of those. In total, we had $11.5 billion fresh funding, which is well-diversified and which is coming from different sources. Some of them are also quite new, not only for VakıfBank, but also for the entire commercial state banking industry, like public issues AT1. That was a period for us as well as for the sector to further diversify the wholesale funding activity. In terms of the maturity profile, out of total international funding, most of them like three quarters is coming from long-term funding with $15 billion balance. Only less than $5 billion, $4.7 billion is short dated, including one year syndication loans as well as post-financing loans. That was a very successful area for us, especially during the entire year of 2024. With the current, supportive macro conditions, we believe new diverse and pioneer products and new kind of cooperations will be created during 2025 as well. The last slide I would like to draw your attention to is related to solvency ratios. Thanks to strong profitability, our solvency ratios increased further during Q4. Total CAR materialized at 16.1%. Total Tier one materialized at 13.5%, and total CET1 ratios materialized at above 11%. Please note that all those numbers are the strongest ratios we announced during 2024, which is also in line with our guidance we provided previously. Just to remind you, thanks to internal generation capacity and thanks to good level of RE numbers, we will keep saying that we are targeting higher and better solvency ratios at every quarter compared to previous quarter. Indeed, during 2024, the year-end numbers came as strongest. Of course, it will be further increasing during 2025, thanks to very optimistic budget assumptions, which we will share shortly. The last point I would like to take your attention is related to bank-only versus consolidated ratios. This is the numbers, solvency ratios on a bank-only basis. Consolidated numbers will be announced next week. But as of today, we understand that consolidated capital ratios will be like 40 basis points higher compared to bank-only numbers. My point is, we take utmost care with the efficiency and profitability of our subsidiaries. As a reflection of this strategy, we will be having even higher and stronger capital ratios on a consolidated basis compared to bank-only numbers. These are the points and the slides we would like to draw your attention. We will be switching to Q&A, but before that, if you don't mind, we would like to also share our guidance and expectations for 2025, and thereafter, we can switch to Q&A session. In terms of guidance, let me first start with lending side. In terms of the lending, both in Turkish lira and in hard currency, our initial starting point conservative numbers are relatively humble compared to what you heard from the private peers. Starting with Turkish lira lending growth, the official budget shows it will be mid-teens% growth actually for the full year of 2025 compared to 2024. Mid-teens% Turkish lira lending growth. For the hard currency lending, we are guiding high single-digit% hard currency lending in dollar terms due to high base effect of 2024 actually, as well as some restrictions from the regulator, as well as the redemption profile of current hard currency loan portfolio. On the lending side, to summarize on the Turkish lira side, mid-teens% Turkish lira lending growth, and on the hard currency side, high single-digit% hard currency lending growth in dollar terms. In terms of swap-adjusted net interest margin guidance, we are guiding 2 percentage point improvement in 2025 compared to 2024. Just to remind you, in terms of the nominal numbers, last year in the year of 2024, full year swap-adjusted net interest margin came at 2.3%. We are guiding additional two percentage point increase, which coincides to 4.3%. Again, this is also relatively much more conservative because the assumptions are much more conservative in terms of both CPI as well as in terms of rate cut expectations. On the net fee and commission income side, we are expecting fee income growth to be mid-20s%. For the OpEx, the budget is above the average inflation. All those and one final point before RE. On the net cost of risk side, we are guiding 100 basis points net cost of risk during 2025, which is totally related to aging of the current NPL portfolio. As you know, the more the NPL portfolio ages, the more we increase the provisioning and we increase the net cost of risk. Given during 2024 and 2025, we have a relatively young NPL portfolio. For the very short term of 2025, net cost of risk should be expected to hold around 100 basis points. For the upcoming years, of course, it should be approaching to a cycle average, let's say, of 150-200 basis points. For 2025 only, we are guiding 100 basis points net cost of risk. All those numbers will take us to mid-20s average ROE. At this stage, we would like to take your attention that our assumptions and, starting point is relatively conservative, both in terms of lending growth as well as in terms of net interest margin improvement, expansion capacity. Realistically speaking, there is additional upside, and risk are on the upside to beat those numbers, realistically speaking. Therefore, even though the official budget, refers to mid-twenties average ROE, realistically speaking, we believe there is additional upside and there is additional room to deliver higher ROEs than mid-twenties. These are the notes, we would like to share with you. Thank you very much for listening to us. With pleasure now, we can switch to Q&A session. Thank you. Thank you, Mr. Tahan. Yes, as Mr. Tahan said, ladies and gentlemen, it is now time for the question and answer session. This is your chance to ask questions. If you want to ask a written question, please click the Q&A button at the bottom of your zoom screen and submit your question. If you would like to ask an audio question, you can join the call by clicking the raise hand button, and then we'll get to you. All right. Let's open the floor to everybody. Mr. Tahan, would you perhaps have you got some written questions so far? Actually, we have one or two questions from Mikhail Shchegolev. Mikhail is asking: May we ask what underlying macro assumption on rates and inflation you assume in your guidance? Thank you. Thank you, Mikhail. Actually, in terms of the macro assumptions, we are taking into consideration the macro numbers and ratios provided within Medium-Term Program of the government. These are taken as given, and we are making the budget assumptions on top of these macro ratios and numbers. This is the starting point. We have another question from Vinod Surendran. Vinod is asking: Could you please provide some color on your hard currency debt refinancing requirements for 2025 and any plans to issue Eurobond AT1 and AT2s? In terms of Eurobond redemption, we only had one redemption this week, and it already materialized with the amount of $750 million. For the rest of the year, we don't have any Eurobond redemption. Very recently, we also issued a very fresh DPR with the amount of $700 million with the real money investors, actually. It was 10 years DPR. For the first time after so many years of break, we issued fresh DPR with real money investors, and the maturities were higher than compared to our previous transactions on the DPR side. As the biggest DPR bank of the country, we also had a very strong start to the year in terms of DPR issues. For the DCM activities, I mean, we don't have any plan for AT1 and AT2 because, thanks to public issuances of last year, we already fully utilized AT1 bucket as well as AT2 bucket. However, as a regular issuer on the Eurobond market, opportunistically, we may look for the senior unsecured issuances. In our budget, we have one public issuance for senior unsecured. Timing-wise, given we don't have any redemption for the rest of the year, we will not be in hurry, especially given last year, we had three different DCM activity, one senior, one AT1, and one AT2. We believe we should put some break and, in the meantime, we should diversify with other funding sources like DPRs, like fresh IFI funding from multinational financial institutions, et cetera. Normally speaking, in our budget, we have only one Eurobond issuance plan in our budget. The second question of Vinod was NPL and Stage two loan evolution. Which sectors are expected to see deterioration, if any? Thank you very much for this question. Especially in terms of NPL ratio, as we showed in the presentation, we closed the year of 2024 with 1.8% NPL ratio. For the NPL ratio expectation for 2025, we are expecting it may go up to 2.5%. Year-over-year basis, our NPL ratio may increase by 70 basis points from 1.8% to 2.5%. In terms of the NPL inflow, we expect this time more NPL to come from micro SMEs and SME segments in general. Just to remind you, in the year of 2024, most of the NPL inflow was coming from the retail exposures. This time, for year of 2025, we are expecting more NPL inflow from SME. When we look at the SME sector-wise speaking, it is well-diversified. It is coming from every sub-segment, starting from manufacturing to textile, you name it, a lot of sectors. As long as it is SME, especially micro SMEs, it may be a potential source of NPL during 2025. My point is, those ratios, those asset quality-related issues, will always be manageable for Turkish banking sector as well as for Vakıf. Given the potential in our net interest margin recovery, we believe very strong net interest margin, hopefully in the year of 2025, will create additional room to compensate the negative impact of asset quality deterioration. In this manner, we are quite optimistic for 2025. Maybe in year of 2025, we will enjoy and deliver one of the highest annual net interest margins in the last 10 to 15-year period of time. Therefore, this strong net interest margin performance will create additional flexibility to manage all asset quality-related issues without giving up from efficiency and without giving up from profitability. Valentina was also asking another question related to issues, plus we already answered. She is also asking about the hard currency liquidity as of 2024 in dollar terms. It was mainly as far as I remember, we can double-check, Valentina, but our IR colleagues are saying that as of 2024 year-end, hard currency liquidity levels are hovering around, I mean, $5 billion. These are the questions on the written side. We don't have any written questions actually. All right, Mr. Tahan. I don't see any audio questions coming through. Just a quick reminder, folks, if you want to ask a question, audio question, you can join the call by clicking the raise hand button. I don't seem to see any coming through. Mr. Tahan, if you have any more written questions. Otherwise, we can conclude. Thank you, Rob. We don't have any further question. With this occasion, we are wishing a very good evening to all participants, and thank you very much for your patience and understanding. We are at your disposal as always, together with IR colleagues for any follow-up questions. Looking forward to meeting in the first possible occasion again. Thank you. Thank you, Mr. Ali Tahan, the Head of International Banking and Investor Relations and all our other hosts from VakıfBank. Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may now disconnect.