Türkiye Is Bankasi A.S. (ISCTR) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Isbank's Seventh Analyst and Investor Day. Unfortunately, circumstances that are well-known to everyone did not allow us to host yourselves in Istanbul at all this year. But no matter what, we are once again here as the executive team of Isbank and happy to host you virtually. First of all, we wish everyone a safe and healthy 2021, sincerely hope to be together again in person in the next year's event. We thank you for joining this event through our webcast. Before starting our presentation, I would briefly like to touch upon the recent developments regarding my position, which you may have already followed from the press. As we have disclosed 2 days ago, in accordance with our corporate governance perspective, I will be stepping down from my position as Isbank's CEO by this year's general assembly meetings, which will be held late in March and would like to continue sharing in the Board of Directors, of course, if approved the general assembly. In our press meeting, I also specified that I would like to propose Mr. Hakan Aran, who is currently acting as CIO, as my successor, being also subject to approval of regulatory institutions. He represents a profile that has not evolved to banking from a technological background but rather one that has built a digital mindset on top of a banking perspective. Moving on with our agenda today, our presentation will cover our performance in 2020, which was supposed to be a recovery year for Turkish economy, but turned out to be, unfortunately, another challenging one because of the pandemic and our strategy priorities and expectations for 2021 under gradual normalization. Then we will take your questions from the webcast platform. We will be again presenting together Ms. Senar Akkus, our CFO; and Ms. Gamze Yalcin, our Deputy CEO, responsible for Investor Relations, financial institutions and sustainability. We have once again divided the presentation into 2 parts. First, I'm going to talk about our 2020 performance and then macro expectations, as well as Isbank's strategic priorities and initiatives in 2021, then Ms. Gamze Yalcin will be going into the details of our performance and targets. And finally, we will conclude the presentation with a Q&A session. Last year, this time, we had said in 2020 along with the postponed demand, Turkish economy was expected to grow by 4%. We were anticipating the consumer inflation to fall to single-digit levels at the end of 2020 with the prerequisites that the recovery in the output gap would be slow and the financial markets would be calm. However, starting from the first months of the year, as you know, COVID-19 pandemic has disrupted global economy in an unprecedented way and created a turning point for Turkish economy as well, changing the outlook drastically. As a result of lockdowns, restrictions, economic activity was negatively impacted, tourism and transportation being the most vulnerable sectors. Of course, measures to mitigate economic and social consequences of COVID outbreak were taken in due course. In these challenging times, we came forward with timely responses. First of all, prioritizing the health and safety of both our customers and employees, we have taken all the necessary actions and ensured business continuity. Besides as Turkey's bank, we have supported the real sector and households in every possible ways, we deferred loan payments of our customers who were negatively affected from the pandemic for a portfolio amounting to TRY 42 billion. We actively utilized the CGF packages throughout the year and extended TRY 7.2 billion supporting the SMEs primarily. Not limited to this, we also provided additional loan limit where needed. Another support was to waive money transfer fees from digital channels, we increased daily cash withdrawal and contactless payment limits as well. Actually, this period allowed us to test the effectiveness our investments in digital information -- digital transformation and technological infrastructure, as well as our initiatives towards sustaining strategic and organizational agility. And I can definitely say that this experience proved to be very successful for Isbank. We will be touching these points in detail in the coming slides. But here, I would briefly like to indicate that although these unprecedented conditions have negative effects on the financials of the banks in the short-term, in fact, they will be displaying their actual impact through facilitating the transformations in economic and social life, as well as disrupting competitive operating environment, creating permanent changes in customer habits and preferences and presenting us the envision threats and opportunities earlier than expected. In this environment, we, as Isbank, strengthened our pioneer position in the banking sector, thanks to the actions we took in order to adapt our IT infrastructure, competencies of our human capital and operating model to the transformation in the banking environment with a visionary and systematic approach instead of a reactive one. Therefore, as a vast organization, we were able to continue all our operations and services seamlessly and efficiently while a very large portion of our staff were working from their homes. Circling back to the financial performance of the year, especially in the first half, owing to the postponed demand from the previous year, credit support allocated to the real economy and households, as well as the relatively low level of interest rates, we observed a strong momentum in TL loans. Of course, this trend decelerated after August, subsequent to the tightening policy. Consequently, TL loan growth surpassed our initial expectation of 16% to 17% and reached a level above 30% for the full year 2020. Thanks to our dynamic and cost-sensitive balance sheet management and support to interest rate environment for the most part of the year, net interest margin hovered at better-than-expected levels for the first 3 quarters. And therefore, we revised our swap-adjusted NIM guidance upwards during the year. Although a contraction in the last quarter is inevitable due to the rising funding rates, we will have no difficulty in achieving a full year adjusted NIM around 4.4%. Strong NIM performance and TL loan growth, which led to a net interest income growth, much higher than our expectations. Despite the challenging pandemic environment, we didn't experience a significant increase in our NPL ratio throughout the year, even excluding the BRSA forbearance measures. We believe our NPL ratio without forbearance will be in line with our guidance with a level of less than 7% at the end of the year, specifically less than 6%. On the other hand, our cost of risk exceeded our guidance. This was mainly due to our prudent and conservative provisioning approach in the face of uncertainties created by the pandemic. In this period, we increased coverage ratios across all stages. Last year, we also tapped our free provision base by TRY 1.850 billion, carrying the total amount to near TRY 3 billion, strengthening our safety cushion against all negativities. As a result, we revised our net cost of risk expectation to around 250 basis points level. High provisioning expenses also led our profitability ratios to be lower than we guided at the beginning of the year. As a result of the resilience built-in fee income generation capacity over the last decade, we managed to keep our net fees and commissions base flattish despite regulatory pressures and fee waivers. Despite extraordinary conditions, OpEx evolution remained almost in line with our expectation while income from subsidiaries overperformed the guidance and provided a significant contribution to our revenue base, once again proving the power of synergy that we have created among our group companies. Last but not least, our cash adequacy figures, excluding forbearance, stood at solid levels proving at comfortable level for future growth. To sum up, once more, we displayed a strong performance in a highly challenging environment and proved the strength of revenue generation capacity. Moving on with this year's expectations on the macro front, in line with the supportive measures, we estimate that Turkish economy ended 2020 with a limited positive growth rate. For 2021, we expect a mild economic expansion at around 3.5%, again mainly driven by consumption expenditures provided that and normalization will be in place depending on the vaccine developments, inoculation process and the ultimate duration of the pandemic. We believe that, at this point, a sustainable growth, which will support the potential of the economy is more valuable. However, if pandemic conditions improve faster than our expectations, hopefully, our GDP growth estimation might be revised upwards, leading also to a higher loan growth. Last year, inflation was a major concern for Turkish economy, However, along with the tight monetary policy stance, we expect a downward trend in inflation in the second half and CPI to end at low double-digit levels is by the -- levels by the end of 2021. As the recent policy normalization steps by the authorities have led to a rapid improvement in risk perception towards Turkey and a recovery in nonresidential capital flows, we anticipate a better external financing outlook in 2021 in this context. Turkey is expected to benefit from capital inflows filled by ample global liquidity, emanating from the expansionary fiscal and monetary policies, followed by advanced economies. One of the most important advantages that we have entering 2021, is the signals given in favor of a market-friendly policy framework by the new economy administration. Indeed, the policy stands and the perspective that the new leadership directly conveyed to us during the inclusive meetings they conducted were identical to the ones they have shared with the public. The initial actions and messages of the officials immediately received positive responses from the market participants, of course, the duration of the positive feedback will be directly related to the consistent and sustainable execution of the new framework. I believe if the actions are carried out decisively, a strong confidence will be built for Turkish economy. Now I would like to touch on our strategic priorities as Isbank. As you remember from our previous meetings, we have been implementing a strategy which prioritizes selective growth with a risk and return balance, supporting the capital base through sustainable profitability, continuous focus on asset quality, improving cost efficiency and last but not least, enhancing the customer experience. The main pillars of our strategy are maintained in 2020 as well. But of course, our strategic approach is constantly evolving in order to reflect the vast changes in our environment, the evolution of concepts and the ways of thinking led by these changes. Here, I specifically would like to emphasize the COVID pandemic as a major disruptor, which has deep impact on people's lives on a global scale, as well as the business models of every corporate as it transformed to the competitive environment and customer preferences, I believe we begin the new era with an important amount of experience gained during this period. In this context, for 2021, we have defined our strategy, risk oriented and dynamic balance sheet management during the period of pandemic and global uncertainties. As you will remember, we have always been paying the utmost attention to sustainability, not only in financial cess, but also in terms of our environmental and social impact. Since the day of our establishment, sustainability has been a concept in our DNA, constantly manifesting itself in a vast number of areas from our perception of women in business and social life to our projects regarding environment, education and culture. This year, extending the scope of sustainability in the most inclusive and widespread manner will be one of our strategic priorities as well, which means without limiting sustainability to balance sheet management practices that will sustain our financial strength, environmental and social management principles will be integrated to the ways of doing business with a broader perspective and in parallel with our strategy. Looking at our other strategic priorities, we will be focusing on asset quality, effective management of capital, selective growth policies, as always. Of course, as you know, our funding strategy relies on diversification of funding sources lengthening the maturity profiles and cost optimization. In 2021, we will again be sticking to these principles. In a year in which net interest margins will be under pressure for some time due to the rising funding rates, we will be concentrating on maintaining our net interest income. We will focus on the continuity of the fee income growth. And of course, in the light of concrete results we achieved in digitalization and the insights we acquired in the pandemic period, we will continue enhancing the customer experience and increasing the digital effectiveness and efficiency. This includes the transformation of our business model and competencies of our human resources with the converging of our mobile banking applications into a platform that is integrated with payment companies, gradual transition to remote working model in a way to support profitability, dissemination of artificial intelligence, robotic automation, blockchain and agile organization in a manner that will support efficiency, expanding our customer base through both conventionally and digitally and utilizing open banking applications with an approach that will provide competitive advantage to our bank. On this page, I would like to provide you some color on our journey towards digitalization. Number of mobile customers increased to 9.1 million by the end of November 2020 from 7.8 million customers at the end of 2019. On account of this, transactions held from non-branch channels as a percentage of overall transactions have increased to 96%. Share of digital channels in retail sales for time deposits and general-purpose loans came to 82%, 83.3%, respectively, from 74%, 75% levels at the beginning of 2019. Accordingly, we are experiencing continuous efficiency gains in our operations. We have been observing a downsizing trend, both in number of branches and headcount in line with the increase in automated processes as well as enhancing the utilization of digital channels. Sales force constitute 59% of our branch employees. OpEx and HR expenses, coverage of fee income, which is supported by digital transformation reached remarkably to a level of 47.5% and 107%, respectively. At this point, I would like to hand over to Ms. Gamze Yalcin. Please?

Thank you, Mr. Bali. For 2020, we were expecting a declining net interest margin on a quarterly basis. Our expectation for the full year was 3.8% to 4% based on the assumption of a limited room for rate cuts. However, during the COVID-19 pandemic, CBRT stance was on the accommodative side for a large part of the year and interest rates stood at relatively low levels. In this environment, coupled with our proactive funding management approach, swap-adjusted NIM stood relatively at better levels than expected in the first 3 quarters of the year. Our proactive approach to funding management proved its value, especially in the third quarter when Turkish lira market rates began to present an upward trend. By switching to cheaper alternative funding sources rather than comparatively expensive TL deposits, we were able to contain funding costs and this is how we defended our TL core spreads. Of course, high level of demand deposits was a major support, as always. Despite the inevitable contraction in the fourth quarter, we will most probably close the year with an adjusted NIM around 4.4%. For the first half of 2021, we expect current tight monetary stance to continue. In this regard, we anticipate to see the bottom level in NIM in the first quarter. In the second half, we may see a more benign picture in terms of funding rates, in line with the expected improvement in inflation outlook. In this period, continuing upward asset repricing will further support net interest margin. All in all, we expect a swap-adjusted NIM in the range of 3.6% to 3.8% in 2021. Needless to say, we'll continue to manage the funding costs in a dynamic manner. In this context, we will again be focusing on our unique widespread deposit base and demand deposits. Certainly, we will also utilize alternative sources of funding with a cost-oriented approach, as well as deploying AI facilities for customized pricing. On the fee income growth side, last year definitely was challenging. First, the regulatory changes, which were introduced at the beginning of the year created a pressure. And then the supportive actions against the pandemic, mainly fee waivers, limited fee income generation along with the slowdown in the economic activity. In such an environment, we think maintaining the level of fee income was a success by itself. Lending-related fees, of course, supported the fee income base, search for higher-yielding investment products enabled us also to achieve a significant increase in asset management fees. For 2021, we projected fees and commissions income to increase by around 15%, which indicates a level above inflation. Payment systems are expected to be the main driver of this growth. Our ongoing efforts to enrich the type and scope of fee-based services on digital channels will also be supporting the fee growth. We mentioned that last year, we witnessed a strong momentum in Turkish lira loan growth, driven by both retail and commercial loans. On the other hand, throughout the year, FX loan growth remained weak as guided. Dollarization, including gold accounts, was the main trend on the deposit side. TL deposit growth was limited in line with our flexible funding management, enabling us to contain the cost base. In 2021, again, we expect the loan growth to originate from the Turkish lira side. We will grow this portion with a selective approach as always. Our expectations for Turkish lira loan growth is 15% to 16%, whereas slight contraction trend in FX loans will most probably continue. On the funding side, we expect a slight dedollarization this year. In this sense, Turkish lira deposits is anticipated to post a growth around 25%, while FX deposits is predicted to contract by 4% to 5% in USD terms. We will continue to sustain our widespread deposit base as well as the demand deposits, which have a remarkable share of 40% in total. In terms of asset quality, despite the negative impact of the pandemic on economic activity, our asset quality indicators did not display a significant deterioration even excluding the forbearance measures. Collections, which gains momentum after June supported by the restart of legal proceedings, also contributed to our asset quality performance in the second half of 2020. In line with our conservative stance in this period, we increased coverage ratios. On top of our more than enough loan loss provisions, we have a free provision stock of almost TRY 3 billion, providing an extra buffer for any future risks. Our net cost of risk during the new conditions imposed by the pandemic will most probably be in line with our revised guidance of around 250 bps by the end of 2020. For the new Year, this year, moderate recovery in economic activity and elimination of forbearance measures in the second half will be the main determinants of asset quality metrics. Thanks to our prudent stance, continuous efforts and conservative risk management principles coupled with utilization of AI and robotic solutions in this area, we do not expect a significant downside risk in our asset quality indicators. This year, we expect the NPL ratio to be less than 6.5%. Collection rate is expected to be around 14%. As for the Stage 2 loans, their share in total loans is expected to stand around 15% level. On the net cost of risk side, following the front-loaded provisioning in 2020, we will continue our conservative stance this year as well. Within this context, in our baseline scenario, the net provisions are expected to be flattish while coverage ratios for all 3 stages continue to go up. Under the assumption of flattish provisioning, net cost of risk is calculated to improve and hover slightly below 250 bps. On the liquidity front, our FX liquidity profile was maintained at a robust level. Thanks to our stock of high-quality liquid assets in line with our proactive balance sheet management. We can say that our liquid assets are more than enough to cover our total outstanding FX debt. Furthermore, not only our LCR, liquidity coverage ratio but also net stable funding ratio, which has a longer perspective stood at robust levels. Our timely Tier 2 issuance amounting to USD 750 million in the beginning of the year before the global uncertainties, further supported our already-solid liquidity profile and capital base. With the outbreak of the virus, as risk perception remained at high levels for the most part of the year, we didn't opt to have new FX issuances and we followed a cost-sensitive approach in terms of our wholesale funding. On the other hand, special thanks to our strong and long-lasting relations with our correspondent banks that we achieved successful rollover ratios in non-deposit funding items as we budgeted. This year, we will again have an opportunistic approach to wholesale borrowing facilities. In line with our funding strategy, we will continue to monitor the market conditions. And if pricing levels deem favorable, then we will tap that capital markets as a frequent issue. As for the capital, last year, we continued to sustain our capital base primarily through net income growth. Of course, as I just mentioned, our Tier 2 issuance in the beginning of 2020 provided an extra support and also contributed us to mitigate the currency risk. As you can see in the slide, excluding the impact of BRSA forbearance, our capitalization ratios stood at solid levels despite the high level of volatility in the financial markets. We believe that our excess capital levels are strong enough to absorb the potential adversities in the economy as well as to sustain growth whenever it's deemed favorable. In 2021, again, our target will be maintaining capital adequacy ratio above 15% and Tier 1 ratio above 12% levels. When we look at our expectations for the P&L items for 2021, in line with decreasing volume growth and suppress net interest margin along with the strong base effect, we expect the swap-adjusted net interest income to be flattish. Fee income, as we have already discussed in detail, is expected to grow above inflation at 15%. We forecast an increase of around 19% in our income from subsidiaries, once again indicating a strong contribution to our revenue base parallel to 2020. OpEx growth will be slightly lower than 2020 at a level of 17% to 18%, and our cost-income ratio will remain in the range of 41% to 43%. In 2021, our profitability is expected to remain stable. We expect return on tangible equity to be around 12%, whereas return on assets to stand around 1.2% level. Mr. Bali already mentioned the integration of sustainability in our business model as a strategic priority. And in 2020, last year, we received international recognition for our efforts. We were positioned in the leadership category of CDP climate change program. We received 5 awards and was recognized as a platinum winner with a rank of 11th in Global 100 for our integrated report by the League of American Communications Professionals, one of the world's most prestigious platforms which sets the standards for excellence in communications. And last but not least, we were assigned an above-peer average ESG rating by Sustainalytics, a leading global provider of ESG ratings and data. These accomplishments, of course, motivate us further to advance our efforts regarding sustainability. And this concludes my presentation. Now I leave the floor to Mr. Bali. Thank you.

Thank you, Ms. Gamze Yalcin. On this page, for your convenience for the 2021 expectation and targets, we provided summary table for our 2021 guidance, which we have already mentioned during our presentation. To sum up, in 2021, as key takeaways, digitalization and sustainability will be at the core of our strategy. Our focus on asset quality will continue, either conservative and prudent stance. We will retain our cost-sensitive approach in funding. We expect fee income growth to bounce back. Solid capital base and strong liquidity profile will be sustained. Thank you for your attention, and you can -- we can reply to your questions. And I see too many questions in the screen -- on the screen. We can start with some questions together with my colleagues.

First of all, there was a question about the -- there's a question about the banks return on equity targets are significantly below its shareholders' opportunity cost. How do the management see the economics of the business evolve in the long term? I think, first of all, I would like to give some dynamics behind the return on equity trends in Turkish banking sector. As you know, long-term sustainable return on equity is based on the expected risk-free rate and risk premium. But as we all know, however, such components of long-term return on equity vary a lot in Turkey due to the uncertainties, high volatility and vulnerabilities. And this is the result of this operational environment. But also, please note that we have TRY 3 billion free provision stock as I mentioned in the presentation. If we haven't decided 1.8 -- more than TRY 1.8 billion free provisioning, as you know, our return on tangible equity will be around, in that case, 15% instead of 12%. Over the medium term, we expect it to increase with the normalization in net interest margin and operating income, as well as improvement in the cost side due to the efficiency, especially coming from the digitalization process. Fee income also will support this figure. Under these circumstances, we can say that, in the medium term, we can reach to 14% to 15% levels in terms of return on equity. Of course, it depends on the stability of the operational environment in banking sector. We can go on.

Thank you very much. Let me start with the question about cost of risk from [ Thomas Nordcell ]. The question is that, how would your cost of risk guidance change should GDP accelerate better than planned? Although we have given a guidance of less than 250 basis points, actually our base case scenario indicates a lower cost of risk, which is closer to 200 basis points. If GDP growth becomes better than what we expected, of course, this can -- at first sight, this can come down below 200 basis points for the whole year, we can easily say it. As you might remember, for this year, our initial guidance was less than 150 basis points before the pandemic conditions, of course. And in 1- or 2-year time, we can easily say that this cost of risk -- net cost of risk can come down to 150, 100 basis point levels. There are 2 questions about OpEx, about the high level of OpEx growth in 2021. I should say that in 2020, actually the OpEx items which should be considered as manageable, have closed the year at levels lower than our budget. But while doing so, since we have some additional expenses due to pandemic, we sacrificed expenses in some areas like advertising, marketing and maintenance. Therefore, these items have low basis coming from 2020. Therefore, we will see a higher rate of growth for these items over the average OpEx growth. Also, as always, as you know, IT expenses constitute an important part of OpEx. This year, we will see dollar TL rate increase effect on IT side. Also, there will be some additional expenses resulting from our existing investment, not new investments, from existing investments like data centers. This is the main factor behind the OpEx growth, which are considered to be high. But historically actually, Isbank has been registering an OpEx growth of average CPI plus 3% to 4%. This is the historical trend in our OpEx. Therefore, we are very close to it. Therefore, 17%, I think, should not be taken as a high level of OpEx growth. One question is again from [ Thomas Nordcell ]. What is the dedollarization impact on your NIM in 2021? Actually, we have already assumed a dedollarization -- a gradual dedollarization in our budget and it is included in our NIM projections. But of course, if the dedollarization accelerates more than what we expected, it will depend on the composition of our funding. As you know, we are managing our fundings in a very dynamic way. This year, we projected a 25% increase in TL deposits. Actually, this is not an aggressive one if we take into account that the most competitive rates have come to 18% to 19% level, there is an interest rate effect. Therefore, 25% TL deposit increase should not be taken as an aggressive target. But within the year, depending on the dollarization or dedollarization trends and depending on the alternative cost of funding, our treasury easily switch from deposits to money market or swaps from TL deposits. Therefore, if dedollarization accelerates more than what we expected, under different scenarios, we can say that it can have a positive impact by 5 basis points compared to what we have shared with you today.

Addition is loan growth. We have Mr. [ Weapon's ] question and Ms. Senar Akkus has already replied the second part of the question. The first one in the screen, has already replied the cost of risk will be -- how it will be split across the year. But in the first part, how do you see the trends in loan volumes growth in the first half and second half? In 2002, as we all know, bank lending has boosted the pandemic heat Turkish economy. Turkish lira, in this context, loans have driven loan growth as demand for FX loans has remained weak due to the sharp devaluation of the local currency. As of December 25, annual TL loan growth, in this context, stood at 43%. Total loan growth was 35%. FX loans, in dollar terms, contracted by 3.2%. But in 2001, we expect a lower loan demand as tight monetary policy stance will be preserved. Our TL loan growth in this context forecast for 2021 stands at 12%, while we expect FX loans in dollar terms to increase by 2%, very moderate level. But in the second half, we expect a declining trend in inflation. Due to this factor, we are going to see or we may see some increase in loan demand, depending on this issue and especially depending on the stable trend in Turkish lira, I think we can see some acceleration in loan demand and loan growth.

Let me continue with another question. It is from [ Thomas Nordcell ]. Can you share your capital levels on a consolidated basis? I think the question is about to absolute capital levels. I can give them as of September 2020. Our CET1 capital is TRY 65.3 billion, our Tier 1 capital is TRY 66.6 billion and our total capital is around TRY 90 billion. These figures exclude the forbearance measures, which will end as of June 2021. And another question is that, what is your expectation for rates trajectory? When do you expect rates to start declining? And what is your projection at end of 2021? I can answer it shortly. In our rate scenario, we expect the Turkish lira rates to go down in the second half of the year. I do not want to give a specific level, but if our base case scenario is realized, we see that there is a room for at least 400 basis points in the second half of the year in terms of CBRT rate.

Maybe in the context of the loan growth, there is a similar question. Isbank's loan growth expectation is low compared to the peers. What are the driving reasons for 11% to 12% loan growth? It mainly depends on the severity of the pandemic process. If I mentioned in our presentation, if we see some improvement in this process through vaccination, inoculation of process, speed and the success of these processes will be the determining factor. And under these circumstances, if we see some improvements in this issue, we can see very higher-than-expected performances in all sectors, especially, which has been influenced very negatively during this process. As a prudent and conservative approach, we determined all of these targets in the context of the normal conditions. But of course, it includes an upside potential due to the positive developments, especially on the pandemic.

There is another question about the collection rate, about 14%. How does it compare to circle ratios? And how sensitive it is to GDP performance? Historically, the average collection rate of the bank is close to 20%. But in 2020, as you all know, this was realized at a lower level because of the pandemic. We prefer to be on the conservative side for 2021. Of course, if GDP performance goes well, there is a room for our collection rate to go up from 14% levels. Of course, it will have a positive impact on our net cost of risk as well.

We have covered all.

Do you include any further free provisions in your 2021 budget? We haven't assumed any additional free provisions or reversals from free provisions in our base scenario. The raw estimations are not based on a change in the free provisions stack.

At this point, it should be taken into consideration the existing level of free provisions, more than TRY 3 billion totally.

I cannot see any other question.

I think we have covered all the questions, and there is no additional question. Yes. Then I think we can close this session. Thank you very much for your interest. I think we have given some concrete messages, policies, strategies and some targets in figures. And also we tried to answer your questions through webcast. But still, if there is any -- there are some new questions, but we cannot see on the screen.

Yes. Maybe I can elaborate on this question, but it's -- I cannot see. It was about the debt portfolio. Could you please stick it there? Do you have any debt portfolio strategy from Ms. [indiscernible]? Do you have a plan to reduce syndicated loan portfolio in the long term? We believe that, first of all, in 2021, as we mentioned, there will be, again, some opportunity windows. In line with our funding strategy, as we mentioned during our presentation, which is based on the principles of diversification, lengthening of maturities, hedging currency risks, we will be again opportunistic -- act opportunistically to reach out to different sources of funding. So we believe that with the compression of credit risk spreads, there will be again other opportunities for us to continue. The second part of the question was related with, if we consider a decline in our syndicated loan portfolio? Indeed, in the last several years, we have been observing a deleveraging process in that sense in the system after the 2018 currency shock. And it is also reflected on the funding side as well. But syndications as an important item, as an important instrument in our funding base, of course, will continue because it is also a reflection of our representation of our strong and long-lasting relations with our correspondent banks. And as I mentioned again during the presentation, we could achieve to have successful strong rollover ratios because of their long-lasting supports. And again, we will be acting on cost-oriented approach. So funding strategy, as I said, as long as it's related with diversification of instruments, lengthening of maturities, of course, we'll continue to go for any other alternative, ESG-based funding is also included within this concept. If you remember all, back in 2019, we issued the first 100% green bond in the Turkish banking system. Of course, with our increased efforts in this ESG, we -- as we prove ourselves through our highing ESG ratings, of course, we'll have the chance to diversify our funding base with new instruments in the system.

That was the last question, and there is no additional questions. So we have come to close the session. Thank you very much for your participation. And again, we wish everyone a safe and healthy year. We need to have such year. Thank you very much.