April 2012 Leasing Sector, Turkey Bülent Tasar Chairman – Turkish Leasing Assosciation (FIDER) CEO - Siemens Finansal Kiralama A.S. - Turkey 1

April 2012 Changing dynamics of the emerging markets & the potential for their leasing industries Special Reference: Turkish Leasing Industry 2

April

Shifting Balances *Emerging Economies as % of total World, 2010; Source: IMF Emerging Economies Advanced Economies 4

April 2012 EM: Strong Human Capital Projected Growth of Working Age Population (Ages 10-65),

April 2012 They are growing faster than the advanced economies GDP Growth Advanced Economies Emerging Economies Source: IMF Contribution to Global Growth Emerging Economies Advanced Economies Source: HSBC 6

April 2012 Source: Goldman Sachs, PriceWaterHouseCoopers By 2050… E7 countries, which comprise of Turkey, China, India, Brazil, Russia, Indonesia and Mexico are expected to outperform the growth rates in the US, EU, G7 and OECD countries. E7 countries are expected to attract the highest levels of capital inflow in addition to the strong increase in their trade volumes. 7

April 2012 They invest heavily in sectors where leasing industry is the most active Energy Infrastructure Transportation Telecommunications Health 8

April 2012 …but their access to financial services remains severely constrained Share of SMEs in GDP & employment is very high… 9

April 2012 Key Take Away: Emerging Markes will provide significant growth prospect for their leasing industries… Larger and relatively stronger Offering significant growth potential Under-capitalized Under-leveraged Providing compelling sector/company-specific stories Under-owned & under-valued Under-penetrated 10

April 2012 …& significant value-added for global players Margins are higher Returns are stronger Strong M&A activity and search for partnerships Scope for know-how transfer and value add Penetration levels are low Presence of captive parents 11

April 2012 Special Reference: Turkish Leasing Sector 12

April 2012 What can Turkey offer different than other Emerging Markets …enjoys a very special location at the crossroads between East & West, overlapping Europe & Asia geographically …occupies an area approximately equivalent to the quarter of the size of the EU …strategically located on critical energy corridors …is the leading investor in Caucasian and Central Asian Turkic Republics Unique Geographical Location… 13

April 2012 Consecutive High Growth Rates US$bn% 1970 US$ 13 bn 2000 US$ 200 bn 2011 US$ 776 bn GDP Fast growing economy Source: TURKSTAT 14

April 2012 Net Public Debt / GDP % Declining Budget Deficit & Net Public Debt Budget Balance / GDP % Source: TURKSTAT 15

April 2012 Increasing Trade Volumes 1970 US$ 1.5 bn 2000 US$ 81 bn 2011 US$ 382 bn 16

April 2012 Stronger FDI flows over US$20bn per year in compared to only less than US$1bn historically 17

April 2012 Promising for Higher Growth Rates due to Low Penetration Levels Car ownership per ‘000 Automotive Loans + Deposits / GDP, % Finance Per capita consumption (toe) Energy 18

April 2012 Financial Leasing can be applied in the form of domestic lease, cross - border lease. Currently No operational leasing. Main medium-long term equipment financing instrument, especially for SME’s. 31 companies of which 26 are member of the association. First 15 players dominate the market (mainly bank subsidiaries). 4 Participation islamic 11 Investment Banks Contracts : Almost all full payout - mostly fixed interest rate Average term: 3 years Average growth rate: 35% in real terms growth 55% in US$ terms. Turkish Leasing Industry in a Nutshell 19

April 2012 Legislative Framework Leasing Law (No: 3226) governs only Financial Lease. (since June 1985). Uncancellable period is four years (two years in some exceptions such as cars, computers, photocopiers, construction machineries, buses, trucks, medical equipments, aircraft and vessels). Lessor change is permitted. Sub Leasing is not allowed. Both movables and immovables can be leased (except industrial rights such as patent rights, software etc). Lease rentals can be fixed or floating and in TL and/or in FX. Lessor is the legal owner of the asset. Leasing sector is governed by the Banking Regulation and Supervision Agency (BRSA). Contracts should be registered with notary public to secure the ownership rights of Lessor. Lessor is obliged to take out insurance, Lessee should pay the insurance premium. Total book value of the leased assets can not exceed 30 times of the shareholders’ equity. Minimum capital requirement is TL 5 million (appx. USD 2.7 million). Cross -border leasing contracts should be registered with the BRSA. 20

April 2012 Accounting & Taxation in Turkish Leasing Industry The leased equipent is shown as symbolic price 1 YTL on Lessor’s balance sheet Therefore no depreciation is allocated Only interest portion of the rental is booked as revenue Leased equipment is booked with its invoice amount at fixed assests on B/S Depreciation is allocated over leased equipment invoice amount Only interest portion of the rental invoices are booked as expense LESSOR LESSEE IFRS since 2007 for all enterprises. Corporate tax: 20% 0.5% withholding tax on Cross-border rental payments. No stamp duty or any tax on the lease contracts. Investment incentives for special sectors and/or regions with 0% VAT allowances. 21

April 2012 Tax base leasing. All rentals are corporate tax deductable. Investment Incentive (up to 100% tax allowance may be reflected to lessee in pricing). 1% VAT against general VAT (over years 11% - 15% - 18%). IFRS tax accounting. No more tax base leasing. Investment Incentive Certificate and VAT advantageous continued. Investment Incentive Certificate, corporate tax allowances application ended gradually (finished by end 2008) VAT advantage of 1% against 8% or 18% continued. No any special tax incentive or advantageous in leasing sector. 1% VAT against general VAT (18%) 6,71219,37328,58124,25037,239 42,963 19,87851,519 6,197 10,18611,195 1st Phase2nd Phase3rd Phase4th Phase 5th Phase Sharp decline due to tax changes coupled with global financial turmoil Strong growth rates: CAGR: 50.23% Another growth phase Strong Growth Rates of the Past are expected to Return with New Legislation and Tax Reform Dec 2007-Jan 2012 June 1985 – June 2003July 2003 – Dec 2005 Jan 2006 – Dec 2007 current 22

April 2012 Draft Leasing Law What will Change? Operating Leasing Sale and Lease Back Sub Leasing Software Leasing Improvement in legal cases (i.e. Get equipment quicker, more severe trade/civil law articles against fraud). No time restriction The voluntary-based Leasing Association will become obligatory, covering all lessors and strengthening its status. Registration of lease contract with the Association will be less bureaucratic compared to the ex Notary Public application Higher volumes New Products Less Bureaucracy More Efficiency 23

April 2012 Future Prospects Penetration levels will increase in line with strong growth rates in Turkish GDP, increasing per capita income and higher level of private investments. New financial openings like operating leasing, sale and leaseback, sub leasing, software leasing will also increase the growth rate and fuel higher levels of penetration. Margins will improve via taking asset/RV risks (operation leasing, techfresh etc.) Asset management and risk management will be crucial (Basel II to be applied within 2 years). Technology investments will be used to create competitive advantages (IT, software, web base applications etc.) Brokership will increase. Specialization/Value Creation/ Innovation will differentiate the lessors. Benchmarking will be key. Learning organizations will be formed. (Dynamic and ongoing trainings). 24

April Siemens Finansal Kiralama A.S. BÜLENT TASAR Managing Director/CEO Meclisi Mebusan Cad. No: Findikli / Istanbul Tel: +90 (0 212) /08 Tel (Direct)+90 (0 212) Fax: +90 (0 212) website: Thank you for your kind attention. Finansal Kiralama Dernegi (FIDER) BÜLENT TASAR Chairman Nisbetiye Cad. Ayyildiz Is Merkezi No. 2/ Levent / Istanbul Tel: +90 (0 212) Fax: +90 (0 212) website: Future Prospects