TURKEY - İş Yatırım

TURKEY
Corporate Governance
Rating Report
Revised Report
Brokerage House
This Report has been prepared by JCR-ER in compliance to
the regulations of Capital Market Board of Turkey
8.91
İŞ YATIRIM MENKUL DEĞERLER A.Ş.
AAA(Trk)/a
(STABLE)
Financial Data
8.83
Corporate Governance
Score & Outlook
Shareholders
AAA(Trk)/a
(Stable)
9.04
Public Disclosure
& Transparency
AAA(Trk)/aa
(Stable)
Stakeholders
Board of Directors
Web
Total Assets (000 USD)
2,316,544
2,343,855
1,621,751
1,746,684
1,706,961
Total Assets (000 TRY)
4,935,166
4,166,436
3,063,325
2,685,702
2,538,764
Equity (000 TRY)
917,223
853,622
687,521
650,022
597,464
Net Profit (000 TRY)
125,312
137,364
84,893
98,191
114,131
Sales (000 TRY)
344,656
311,928
230,669
209,805
214,829
36.36
44.04
36.80
46.80
53.13
3.01
4.26
3.44
4.31
10.03
9.05
ROAE (%)
15.49
19.96
14.79
18.07
42.63
AAA(Trk)/aa
(Stable)
Equity / Total Assets (%)
18.59
20.49
22.44
24.20
23.53
Net Working Capital / T.
Assets (%)
17.77
18.65
19.80
20.19
20.39
Debt Ratio (%)
81.41
79.51
77.56
75.80
76.47
18.45
36.01
14.06
5.79
71.21
Asset Growth Rate (%)
*end of year
Overview
İş Yatırım Menkul Değerler A.Ş. (referred hereinafter as İş Yatırım or the Company), established
by T. İş Bankası A.Ş. in 1996, is an investment company which offers the services of local and
international brokerage, investment advisory, portfolio management and corporate finance.
Beginning trading on the BIST (Borsa Istanbul) in 2007, 29.32% of the Company’s shares are
publicly traded while the remaining shares are owned by T. İş Bankası A.Ş. and its subsidiaries.
The Company has 6 subsidiaries, two of which operate abroad and two are traded on the BIST.
Mr. A. Erdal ARAL
Deputy CEO, Ms. Çağlan Mursaloğlu
Head of IR, Mr. Ozan Altan
IR Specialist, Mr. Alper Alkan
Phone: +90.212.350.28.72
yatirimciiliskileri @isyatirim.com.tr
www.isyatirim.com.tr
www.isinvestment.com
Investor
Relations
2009*
ROAA (%)
İş Kuleleri-2 Kat: 12 4. Levent
34330 Beşiktaş/ISTANBUL
Mr. İlhami KOÇ
CEO
2010*
Net Profit Margin (%)
IŞ YATIRIM MENKUL DEGERLER A.Ş.
Chairman
2011*
8.51
Company Information
Address
2012*
AAA(Trk)/a
(Stable)
Analyst: Ceyhun KIR/ +90 212 352 56 73
[email protected]
Analyst: Gökhan İYİGÜN/ +90 212 352 56 73
[email protected]
Trade Name
2013*
The Company, having a widespread service network of 11 branches, 5 representative offices
and T. İş Bankası A.Ş. branches utilized as its agencies, employs a staff force of 406. As a
leading institution in terms of both market share and transaction volume for years, İş Yatırım is
the market’s leader with market share of 8.4% in terms of transaction volume of equity market
as of the end of 2013.
Board of Directors consists of 9 members, two of them are independent, and two of them women
and 7 of the members are determined by İşbank and elected from among the experienced
managers working in the relevant capital market departments of the Bank. The audit, Risk and
Corporate Governance committees exist within scope of the board.
Strengths
Constraints
 Board members and top managers were provided
assurance with liability insurance
 Absence of internal regulations to broaden the exercise of minority rights beyond
 Well organized the Investors Relation Department and
sufficient activities
 Utilization
of
Company
 A group share privilege to determine majority of the Board members
the current legislation,
 Lack of disclosure of senior management’s remunerations per person
website
as
an
effective
 Absence of an objective performance evaluation method for the Board members
transparency platform in Turkish and English
 Exiting the sufficient risk management system
 High qualifications of the Board members and senior
management in terms of education and track record
Publication Date: September 05, 2014
“Global Knowledge supported by Local Experience”
Copyright © 2011 by JCR Eurasia Rating. 19 Mayıs Mah. 19 Mayıs Cad. Nova Baran Plaza No:4 Kat:12 34360 Şişli /İST Telephone: +90.212.352.56.73 Fax: +90 (212) 352.56.75
Reproduction is prohibited except by permission. All rights reserved. All of the information has been obtained from sources JCR ER believes are reliable. However, JCR-ER does not
guaranty the truth, accuracy, adequacy of this information. A JCR ER Rating is an objective and independent opinion as to the creditworthiness of a security and issuer, not a
recommendation to buy, hold, sell any security and to issue a loan. This rating report has been composed within the frameworks of SPK (Capital Markets Board of Turkey)
regulations and internationally accepted rating principles and guidelines. http://www.jcrer.com.tr
BROKERAGE HOUSE
In compliance with changes in the Corporate Governance
Ratings Methodology was made by CMB, JCR Eurasia
Rating has revised and announced the compliance notes
and outlooks of Is Yatirim in March 3, 2014. Details of the
adjusted notes can be seen in the table below.
1- Executive Summary and Rating Rationale
This revised report was prepared in light of JCR Eurasia
Rating’s original methodological procedures in accordance
with the Corporate Governance Principles (the code) set
by the Capital Market Board (CMB) and states the
Company’s level of compliance with corporate
governance principles as of September 2014.
March 03, 2014
Numerical Convergence
Notch Degree Outlook
Value
Level
AAA(Trk)
a
Shareholders
8.54
Stable
Distinctive
Excellent
Public Disclosures
AAA(Trk)
aa
9.04
Stable
and Transparency
Distinctive
Superior
AAA(Trk)
a
Stakeholders
8.51
Stable
Distinctive
Excellent
AAA(Trk)
a
Board of Directors 8.96
Stable
Distinctive
Excellent
AAA(Trk)
a
Overall
8.81
Stable
Distinctive
Excellent
Fields
The Capital Market Board’s Corporate Governance
Principles were first published in 2003. Important revisions
and changes were made at the beginning of 2012 and
again in January 3, 2014, as detailed in the Communiqué
II-17.1 (accessible on www.spk.gov.tr)
An additional important change regarding the method of
calculation of compliance notes was made in the beginning
of 2014. Based on the recent CMB legislation, the new
scoring methodology consists of two stages in which
companies given a base and full score. In the new system,
companies are first assigned a base score of a maximum
of 85 points determining their compliance with the rules
and practices outlined in the Code. In the second stage, an
additional 15 points may be awarded depending on the
efficient implementation and value creation achieved
through practices exceeding those in the articles. Practices
not stated in the Code but determined by JCR Eurasia
Rating as best governance practices are also considered
as criteria in assigning the additional points.
Through the analysis of JCR ER’s original methodology, the
general compliance level of the Company with corporate
governance principles as of September 2014 and the
corresponding levels within the JCR ER’s notation have been
determined as follows;
 Numerical value is 8.91,
 Convergence Level AAA(Trk) representing the category
of “Distinctive Compliance”,
 Notch degree (a) representing the category of
“Excellent”,
 Outlook (Stable)
The code consists of four main section; Shareholders,
Public Disclosure and Transparency, Stakeholders and
Board of Directors. These main sections’ coefficients, which
were determined by the CMB, have been recently
changed as below;




Distinct levels of 4 main categories regarding compliance
with the corporate governance principles are exhibited in
the following table. Overall score has been assigned
based on weightings assessed for these 4 categories by
CMB regulations.
Shareholders: 25%
Public Disclosure and Transparency: 25%
Stakeholders: 15%
Board of Directors: 35%
September 05, 2014
These coefficients were 25%, 35%, 15% and 25%,
respectively, in the previous reports.
Numerical Convergence
Notch Degree Outlook
Value
Level
AAA(Trk)
a
Shareholders
8.83
Stable
Distinctive
Excellent
Public Disclosures
AAA(Trk)
aa
9.04
Stable
and Transparency
Distinctive
Superior
AAA(Trk)
a
Stakeholders
8.51
Stable
Distinctive
Excellent
AAA(Trk)
aa
Board of Directors 9.05
Stable
Distinctive
Superior
AAA(Trk)
a
Overall
8.91
Stable
Distinctive
Excellent
Fields
Subject to the preservation of integrity of regulations by
the CMB and compliance with the limitations thereof, this
report also covers such topics as implementations
regarding “Outlook” determinations and “Financial
Efficiency” analyses all of which exist in JCR Eurasia
Rating’s original methodological structure.
Findings and assessments within the content of the report
are based on information and documents disclosed by the
Company to the public through various channels and also
submitted to JCR Eurasia in writing and verbally, as well
as reports and statistics by the CMB and Central Registry
Agency (CRA).
İş Yatırım Menkul Değerler A. Ş.
JCR
ER’s
notation
system
may
be
viewed
at:
http://www.jcrer.com.tr/Administrator/files/436_kyder_notation.pdf
2
NON-FINANCIAL
According to the current shareholder structure disclosed on
the Company’s website, T. İş Bankası A.Ş. is the major
shareholder, holding a 65.7% share. Additionally, T. İş
Bankası A.Ş. holds 150,000 shares with the privilege of
determining the majority of the Board members. Of the other
remaining shares, İş Factoring owns 2.4%, İş Leasing 2.4%
and 0.2% Cam İş Yatırım Holding, while 29.3% are publicly
traded.
The Company’s consolidated subsidiaries are given in Table:
2 in the Appendices. Shares of İş Girişim and İş Yatırım
Ortaklığı, which offer financial services locally and
internationally, are publicly traded while two other
companies are located outside Turkey.
The Company has 11 branches in the cities of Istanbul,
Ankara, Izmir, Bursa, Adana and Antalya and 5
representative offices in Kazakhstan, Istanbul, Mersin,
Kırıkkale, and Diyarbakır. In addition, more than 1,300
İşbank branches in Turkey also act as agencies of İş Yatırım.
The Company has maintained an uninterrupted leading
position in the stock market since 2003 and in the derivatives
market since its establishment in 2005 through its
widespread service network. A workforce of 406 was
employed as of July, 2014.
Corporate Governance
Overall Results
İş Yatırım’s Board consists of 9 members. There are two
independent and two women members in the Board.
Currently, 7 of the members are determined by İşbank and
elected from among the experienced managers working in
the relevant capital market departments of the Bank.
Detailed information on the Board is presented in Table: 3.
The General Manager and 7 Assistant General Managers
compose the top level management of the Company.
8,91
AAA (Trk)/a
Stable
Outlook (Corporate Governance):
3. Shareholders
JCR-ER believes that İş Yatırım will maintain its high level of
compliance during the 12 month monitoring period following
the publication of the revised report. For this reason, the
Company’ Outlook has been determined as “Stable” for this
rating period.
The Company’s Shareholder score has been raised to 8.83
from 8.54. Appointment of Ozan Altan, who is manager in
Investors Relation Department, a member of the corporate
governance Committee and effective activities performed by
this department have been effective in this increase. The
company’s level in this section and their corresponding notes
are outlined below;
2. Company Overview
 Numerical value is 8.83,
 Convergence Level AAA(Trk) representing the category
of “Distinctive Compliance”,
 Notch degree (a) representing the category of
“Excellent”,
 Outlook (Stable)
İş Yatırım was established in 1996 by the major shareholder
T. İş Bankası A.Ş. to offer services of intermediation in local
and international financial markets. The company offers the
services of brokerage of securities traded in secondary
markets, investment advisory, portfolio management and
corporate finance. The Company, breaking new ground in
the capital markets following its establishment, offered
nearly 30% of its shares in 2007 to the public and its shares
began trading on the Borsa Istanbul (BIST-). Currently,
29.3% of the Company’s shares are publicly traded.
With regard to 1H2014 financial statements, the Company,
with an asset size of TL4,972 bn, had equity in the amount
of TL908 mn and a net profit of TL57 mn. Key balance sheet
items and ratios can be found in first page. İş Yatırım also
has the largest amount of paid-in capital at TL332 mn.
İş Yatırım Menkul Değerler A. Ş.
3
NON-FINANCIAL
Shareholders
Results
Outlook
8,83
JCR-ER is of the opinion that the Company will maintain its
level of compliance with Code in the Shareholders field
during the following monitoring period. For this reason, the
Outlook for this section has been determined as “Stable”.
Stable
AAA (Trk)/a
4. Public Disclosure and Transparency
Activities carried out during the monitoring period in
the Shareholder field:
In this important section focusing on the disclosure of
information and documents needed by shareholders and
stakeholders while protecting trade secrets. The Company’s
level in this field and their corresponding notes are outlined
below;
 Mr. Ozan Altan who has three licenses from CMB
and is manager of the investor relations department
was appointed as the member of corporate
governance committee in 05.03.2014.
 A “road show” was organized by the Investor
Relations Department on April 10-11, 2014 in
London and attended by foreign institutional
investors. Additionally, the department held a
conference in Istanbul for portfolio management
companies.
 The 2013 general meeting was held on March 25,
2014 at İş Kuleleri Kule-1 4.Levent Beşiktaş,
İSTANBUL. The meeting was observed by a JCR-ER
analyst and the works undertaken by the Company
were closely observed prior, during and following
the
meeting.
Pre-meeting
preparations,
announcements and invitations were carried out by
the Investor Relations Department according to the
Code. Within the framework of democratic
principles, all shareholders were treated equally,
the Company’s 2013 activities were outlined, all
shareholders were given the right to address each
agenda item and voting was done by an open show
of hands during the meeting. Following the meeting,
the relevant documents were disclosed to investors
on the Company’s internet site.
 Shareholders, stakeholders and prospective
investors were regularly informed by the investor
relations department via the web site, e-mail,
teleconference, PDP (public disclosure platform) and
e-governance platform of Central Registry Agency.
Additionally, the managers of the department
responded questions and inquiries received by
telephone from the shareholders and stakeholders.
No complaints were made by the shareholders in
the observation period.
 No shareholders have canceled any agreement or
opened any lawsuit against the Company. No
findings of discrimination against any shareholder
were found.
 The company realized a net profit of TL70.813.280
in 2013 and the decision to distribute TL
20.825.000 as the cash and TL 21.500.000 as the
stock dividend of this to shareholders was made in
the general meeting on March 25, 2014. The
dividend distribution table was disclosed to the
public via the company’s website and the PDP
following the general meeting.
İş Yatırım Menkul Değerler A. Ş.
 Numerical value of 9.04,
 Convergence Level AAA(Trk) representing the category
of “Distinctive Compliance”,
 Notch degree (aa) representing the category of
“Superior”,
 Outlook (Stable)
Public Disclosures &
Transparency Results
9,04
AAA (Trk)/aa
Stable
Activities carried out during the monitoring period in
this field:
 İş Yatırım disclosed 75 notifications to the Public
Disclosure Platform (PDP) in the monitoring period.
Following these disclosures, the Company was not
delisted on the BIST and no additional information
was requested.
 The Company’s quarterly financial statements were
released to the public within the period specified by
CMB legislation and posted on its internet site.
 The company’s website is kept up to date in Turkish
and English. A link to the PDP is included. Significant
improvements in the Company’s organizational
structure and operations are published in a timely
manner.
 The company publishes quarterly activity reports
that include compliance report with the code. The
2013 annual report was also published with high
compliance level with the code.
4
NON-FINANCIAL

in employee rights was observed during these
developments.
 Four lawsuits were filed by the customers against
the Company. These are currently ongoing.
 No lawsuits were filed against the Company by
suppliers.
 Within the scope of social responsibility, the
Company granted the amount of TL1.500 out of the
2013 profit to Türk Eğitim Vakfı.
The Company’s 2013 financial tables were audited
by the independent audit firm Akis Bağımsız Denetim
ve Serbest Muhasebeci Mali Müşavirlik A.Ş – KPMG.
There is no conflict interest with the audit firm.
Outlook
JCR-ER is of the opinion that the Company will maintain its
level of compliance with Code in the Public Disclosure and
Transparency field during the upcoming monitoring period.
For this reason, the Outlook for this section has been
determined as “Stable”.
Outlook
JCR-ER is of the opinion that during the following monitoring
period the Company will maintain its level of compliance with
the code in the Stakeholders field. For this reason, the
Outlook for this section has been determined as “Stable”.
5. Stakeholders
With the exception of upper-level managers, a company’s
employees, customers, suppliers, creditors, public authorities
and the public in general are considered stakeholders of an
institution. The rules and practices in this main section
primarily aim to secure the rights of stakeholders, facilitate
the exercise of their rights and thus to maximize their
contributions to the institution. The Company’s level in this
field and their corresponding notes are outlined below;
6. Board of Directors
This section consists of the board functions, qualifications,
duties, powers and responsibilities of its members and upperlevel managers, and the rules and practices related with
established systems for effective supervision and control.
The company’s compliance in the field of Board of Directors
was increased to 9.05 from 8.96. Provided assurance with
liability insurance to board members and top managers have
been effective in this increase. The company’s level in this
field and their corresponding notes are outlined below:
 Numerical value of 8.51,
 Convergence Level AAA(Trk) representing the category
of “Distinctive Compliance”,
 Notch degree (a) representing the category of
“Excellent”,
 Outlook (Stable)
 Numerical value is 9.05,
 Convergence Level AAA(Trk) representing the category
of “Distinctive Compliance”,
 Notch degree (aa) representing the category of
“Superior”,
 Outlook (Stable)
Stakeholders
Results
8,51
AAA(Trk)/a
Stable
Board of Directors
Results
Activities carried out during the monitoring period in
the Stakeholders field:
9,05
AAA(Trk)/aa
 One lawsuit that was opened by an employee was
concluded against the Company by an employee in
the monitoring period.
 İş Yatırım hired 54 new employees, 60 employees
left the company and 7 employees retired. No loss
İş Yatırım Menkul Değerler A. Ş.
Stable
5
NON-FINANCIAL
Activities carried out during the monitoring period in
this field:







Under these licenses, Iş Yatırım carries on the following
activities;


Board members and top managers were provided
assurance with liability insurance by the Company.
At the general meeting held on March 25, 2014 the
shareholders approved the 2013 activities of the
Board of Directors.
Mr. Sezai Sevgin was elected as the new member to
the Board replacing Mr. Ahmet Baş in the general
meeting. Mr. Mete Uğurlu was appointed as a
board member replacing Mr. Tolga Achim MÜLLER
by the Board of Directors until next general meeting
in 17.07.2014. These changes were disclosed in a
timely manner to the PDP.
Mr. Rıfat Cenk Aksoy was appointed as new the
Assistant General Manager in July 02, 2013.
Seven Board of Director meetings were held in year
to date.
All Board of Director Meeting preparations,
applications and follow-ups were handled in
accordance to Corporate Governance principles.
The Corporate Governance Committee held 5, the
Audit committee 7 and the Risk committee 7
meetings in the monitoring period. Recommendations
made in these meetings were presented to the
Board.




Public offering intermediation in primary markets,
Repurchase and reverse repurchase of capital
market instruments,
Portfolio management (individual and institutional
investors, mutual funds, etc.),
Investment advisory and M&A consultancy
Credit and derivative trading intermediation.
Leveraged FX Trading - Market Maker
Iş Yatırım’s market share amongst brokerage houses in terms
of asset size rose to 29.40% at the end of 2013 from
11.75% in 2004.
Outlook
JCR-ER is of the opinion that the Company will maintain its
level of compliance with Code in the Board of Directors field
during the following monitoring period. For this reason, the
Outlook for this section has been determined as “Stable”.
Iş Yatırım’s market shares in terms of trading volume are
shown in the table below, which indicate its extent and
effectiveness across most of the transaction types.
7. Financial Efficiency
Market Shares
İş Yatırım which is the biggest brokerage company in Turkey
currently has the following authorizations, obtained from the
CMB.
(In terms of transaction volume)
Markets and Activities
Authorization Licenses
Obtained from CMB
2009
2010
2011
2012
2013
Equity Market Volume
7.9%
6.9%
7.3%
7.6%
8.4%
Fixed Income Securities Trading Volume*
12.9%
20.0%
10.2%
12.4%
6.8%
 Brokerage
Turkish Derivatives Exchange Trading Volume
13.2%
11.5%
12.6%
14.8%
13.5%
 Public Offering Intermediation
Eurobond Trading Volume
0.9%
0.3%
0.2%
0.2%
0.3%
 Repo - Reverse Repo
*Among Brokerage Houses
 Portfolio Management
With an asset size of TRY4,94 bn according to the end of
2013 data, Iş Yatırım is Turkey’s largest brokerage house.
 Investment consultancy 
 Credit Operations Permit
 Derivatives Trading Intermediation TAASA (Overseas) –
(VOBAŞ)
 Leveraged FX Trading-Market Maker
İş Yatırım Menkul Değerler A. Ş.
6
NON-FINANCIAL
8. Appendix
(3 Tables)
The Company’s profitability trend has followed a generally
fluctuating yet downward course, despite being above
general reference values, in connection with Turkey’s
conditions.
The Company’s equity level continues to increase at a level
necessary to meet the required funding needs for the
continuance and development of İş Yatırım’s compliance with
corporate governance principles.
As a result, high levels of İş Yatırım’s equity capital structure,
asset quality and internal profit generation capacity are
maintained and these contribute to the sustainability and
improvement of compliance level with the corporate
governance principles.
İş Yatırım Menkul Değerler A. Ş.
7
BROKERAGE HOUSE
Table:1
İŞ YATIRIM MENKUL DEĞERLER A.Ş.
SHAREHOLDING STRUCTURE
Years
2010
2011
2012
TL (000)
200.000
260.000
USD (000)
129.366
137.646
Shareholders
Share
Share
2013
August,2014
286.000
310.500
332.000
161.318
160.051
153,000
Share
Share
Share
İş Bankası A.Ş. (A Group)
0,08%
0,08%
0,05%
0,05%
0,05%
İş Bankası A.Ş. (B Group)
65,58%
65,57%
65,60%
65,60%
65,60%
Publicly Traded (B Group)
29,31%
29,31%
29,32%
29,32%
29,32%
5,04%
5,04%
5,03%
5,03%
5,03%
100,00%
100,00%
100,00%
100,00%
100,00%
Other (B Group)
Total
İş Yatırım Menkul Değerler A. Ş.
8
BROKERAGE HOUSE
Table: 2
AFFILIATES AND SUBSIDIARIES as of September 2014
Head Quarters
Fields Of Activities
Interest Share %
Acquisition Date
Efes Varlık Yönetim A.Ş.
Turkey
Asset Management
74
14.02.2011
İŞ Girişim Sermayesi Yat. Ortaklığı A.Ş.
Turkey
Private equity
29
23.10.2000
İş Portföy Yönetimi A.Ş.
Turkey
Portfolio management
70
04.10.2000
İş Yatırım Ortaklığı A.Ş.
Turkey
Investment trust
28.9
03.06.2003
United Kingdom
Securities brokerage
100
29.09.2005
Dubai
Securities brokerage
100
01.07.2011
Consolidated Subsidiaries
Maxis Securities Ltd.
Is Investments Gulf Ltd.
İş Yatırım Menkul Değerler A. Ş.
9
BROKERAGE HOUSE
Table: 3
BOARD OF DIRECTORS
Name
Task
Profession
Election
Date
Experience
(Years)
Education
Executive/Non Independent/Not
Executive
Independent
Committee Membership
İlhami KOÇ
Chairman
Banker
30.01.2013
28
Graduate
Non Executive
Not Independent
Feray DEMİR
ViceBanker
Chairwoman
26.04.2010
26
Graduate
Non Executive
Not Independent
Volkan KUBLAY
Member
Banker
16.08.2012
14
Graduate
Non Executive
Not Independent
Sezai SEVGİN
Member
Banker
25.03.2014
24
Graduate
Non Executive
Not Independent
Işıl DADAYLI
Member
Banker
01.04.2013
23
Graduate
Non Executive
Not Independent
Mete UĞURLU
Member
Insurance
17.07.2014
36
Graduate
Non Executive
Not Independent
Özgür TEMEL
Member
Banker
30.04.2013
20
Master Degree
Non Executive
Not Independent
Abdullah AKYÜZ
Member
Manager
26.10.2011
28
Master Degree
Non Executive
Independent
Audit Committees’ member
Behzat YILDIRIMER
Member
Banker
09.05.2012
31
Graduate
Non Executive
Independent
Audit, Corporate Governance and Risk Committees’ chairman
İş Yatırım Menkul Değerler A. Ş.
10
Corporate Governance and Risk committees’ member

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