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Performance & Financial Results 2007 March 2008

Performance & Financial Results 2007 March 2008. ABOUT US. OVERVIEW OF CAPITAL MARKETS. OUR PERFORMANCE. FINANCIAL RESULTS. HINTS FOR 2008. ABOUT US.

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Performance & Financial Results 2007 March 2008

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  1. Performance & Financial Results 2007 March 2008

  2. ABOUT US OVERVIEW OF CAPITAL MARKETS OUR PERFORMANCE FINANCIAL RESULTS HINTS FOR 2008

  3. ABOUT US • Is Investment - the investment arm of Is Bank and the leading investment banking institution in Turkey - stands out as the only listed brokerage house in the country offering variety of services, such as; • Brokerage (Trading securities including domestic and international equities, fixed income and derivatives) • Investment Advisory • Asset Management • Corporate Finance (Public offerings, M&A’s and strategic consultancy) • Research • Is Investment was established by Is Bank in 1996, with a paid in capital of YTL 500.000. The company has started with 42 staff and reached 289 employees as of 2007 and shareholders’ equity increased to YTL 246.2 mn. at the same time (Please note that it was YTL 235.9 mn. as of 2007/Q3).

  4. CREDIT RATING - ‘AAA(tur)’ ‘AAA(tur)’ Fitch Ratings has assigned Is Investment’s national long-term rating of 'AAA(tur)' with stable outlook and the national rating of Is Investment reflects the support and close integration with our parent, Is Bank

  5. ABOUT US OVERVIEW OF CAPITAL MARKETS OUR PERFORMANCE FINANCIAL RESULTS HINTS FOR 2008

  6. TRADING VOLUME Equity Market (YTL Billion) Bills & Bonds Market (YTL Billion) 574.5 575.5 579.3 775.4 748.5 3,5% 19,3% 513.9 722.9 649.9 2006 2007 2006 2007 Source: ISE - www.imkb.gov.tr Source: ISE - www.imkb.gov.tr Decrease in the public borrowing requirement and CBRT’s interest rate policy, caused a weaker concern for the Bills & Bonds market Equity market displayed a better perfomance with respect to the year 2006, whereby the higher amount of public offerings

  7. TRADING VOLUME Derivative Market (YTL Billion) Eurobonds (YTL Billion) 144.1 29.268 551% 233.5 64.2 25.010 20.271 3.677 21.4 2.048 913 35.7 2006 2007 2007 Source: ISE - www.imkb.gov.tr Source: TurkDEX - www.vob.org.tr Derivative market’s remarkable performance went beyond even our year-end estimates and the total trading volume reached more than six-folds of 2006 ISE has announced the trading volume of Turkish Eurobonds in 2007 for the first time as YTL 64.2 bn

  8. ISE - EQUITY MARKET FIGURES Number of Public Companies* Traded on the ISE Average Free Float Rate (%) 327 31,6 322 31,6 30,9 306 2005 2006 2007 2005 2006 2007 *Listed companies and ETFs Market Capitalisation ($ Billion) Is Investment’s expectation was YTL 285 bn. 288.7 163.7 162.8 2006 2007 2005 Source: www.tspakb.org.tr

  9. FOREIGN INVESTORS Share in Total Equity Portfolio (%) Trading Volume / Total Equity Trading Volume (%) 72 29 68 67 19 18 59 51 12 9 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 Source: www.tspakb.org.tr – www.imkb.gov.tr Foreign investors trade 29% of the ISE trading volume, while they hold the 72% of the free float market capitalisation with a stable approach

  10. ASSET MANAGEMENT Funds* (USD Million) 144.1 3.813 29.268 86% 29.574 25.010 20.271 2.048 20.271 3.677 21.4 2.048 913 45% Pension Funds Total 2007 2006 Source: www.tspakb.org.tr Portfolio size of pension funds confirms our claims to be the locomotive of fund business in near future, increasing 86% while total mutual funds performing 46% with respect to 2006 • Including Exchange Traded Funds, Investment Trusts, Real Estate Investment Trusts and Venture Capital Companies • .

  11. ABOUT US OVERVIEW OF CAPITAL MARKETS OUR PERFORMANCE FINANCIAL RESULTS HINTS FOR 2008

  12. EQUITY MARKETS Equity Markets - Is Investment (YTL Billion) 6,32% 6,43% 49.1 17,4% Our performance is increasing in parallel with the equity market. 41.8 2006 2007 Source:www.imkb.gov.tr Despite the ascending total trading volume and the new comers to the market we maintain our leadership position

  13. BILLS & BONDS MARKETS Bills & Bonds Markets - Is Investment (YTL Billion) 13,1% 16.9 11,8% 19.8 11.3 14.2 2006 2007 Source: www.imkb.gov.tr We hold the third place among the brokerage houses with 11,8% market share and YTL 14.2 bn trading volume and it is expected to see a recovery in the market with the issuance of private sector bonds in 2008

  14. DERIVATIVE MARKETS Derivative Markets – Is Investment (YTL Billion) 17,18 ! 343% 39.9 25.2 Almost three-folds of our year-end trading volume target figure 25,29% 6.1 9.0 2006 2007 Source: www.vob.org.tr Our derivative market trading volume is almost three-folds of our year-end target figure (YTL 14 bn) we had set for the full year, reaching YTL 39.9 bn We maintain our uncontested leadership as of 2007 with 17,18% market share despite the rise in the market players Our client base in derivative products continue to get wider in each quarter as stated before (foreign & domestic)

  15. INTERNATIONAL CAPITAL MARKETS International Capital Markets – Is Investment (USD Billion) 38.1 3.4 2006 2007 Source: Is Investment Our trading volume reached USD 38.1 bn from USD 3.4 bn surging by more thanten-foldswith respect to 2006 and our trading volume will likely increase with the anticipated new instruments in international capital markets

  16. ISE EUROBOND MARKET Eurobond Market - Is Investment (YTL Million) We hold the first rank among the banks & brokerage houses 13.4 1.2 2006 2007 Source:www.imkb.gov.tr - Is Investment Our trading volume displayed a fundamental performance and reached YTL 13.4 bn. surging by eleven folds with respect to 2006 year end volume

  17. ASSET UNDER MANAGEMENT AuM & Pension Funds Portfolio Size – Is Asset Management (Million NTL) AuM & Pension Funds portfolio size represent 20% and 19% of the funds market respectively 173 777 682 173 860 777 410 682 173 7.043 516 6.620 7.043 7.043 516 6.484 6.003 6.820 5.247 6.620 6.484 5.247 2005 2006 2007/H1 2007/Q3 2007 Source: Is Investment The size of AuM, which is about to catch 2005’s mutual funds values after major redemptions in 2006, reached to YTL 6.8 bn due to the rise in portfolios and growing pension fund business

  18. CORPORATE FINANCE (Public Offering - M&A) Public Offering Size (USD Million) - Is Investment M&As Size (USD Million) - Is Investment 1.911 2.401 341 239% 500 708 707.9 34.9 38.9 38.9 2006 2007 2006 2007 Source: www.imkb.gov.tr Source: Is Investment 2007 was a golden year for Corporate Finance business After the largest privatization offering -Halkbank- and Is Investment which was 15,4 times over subscribed, Tekfen Holding IPO generated the highest domestic demand among the private sector IPOs in Turkish capital markets We experienced the highest performance for M&As business in 2007, implementing USD 500 mn. amounted M&As projects while it was USD 38,9 mn. in 2006

  19. ABOUT US OVERVIEW OF CAPITAL MARKETS OUR PERFORMANCE FINANCIAL RESULTS HINTS FOR 2008

  20. BALANCE SHEET Is Investment 2006 2007 YoY ▲% YTL (000) Total Assets 542.143 1.237.785 128 Shareholders’ Equity 152.622 246.179 61 Our shareholders’s equity reached to YTL 246.1 mn surging by 61% with respect to 2006 and while having more than 30% of the total assets of the brokerage houses in the sector

  21. INCOME STATEMENT Is Investment 2006 2007 YoY ▲% YTL (000) Interest and Trading Income 28.948 84.269 191 50 Commission Revenues 34.475 51.814 Income from Corporate Finance 127 7.492 17.079 Other Income 8.931 -42 5.151 Total Operating Revenues 79.846 158.313 98 49 Operating Expense -42.347 -63.357 153 Net Operating Profit 94.956 37.499 11 Other Expenses -7.094 -7.921 Financial Expenses -13.780 239 -4.059 Minority Expense -31.224 n.m. -8.384 EBT 42.031 233 17.962 Tax -8.305 272 -2.228 33.726 114 15.734 Net Profit

  22. OPERATING REVENUES 84.269 (YTL 000) 2006 2007 51.814 34.475 28.948 17.079 8.931 7.492 5.151 Interest and Trading Commissions Corporate Finance Other • Is Investment’s total revenues amounted to YTL158.3 mn as of 2007, up by 98% on YoY basis. • Interest and trading revenues performed a fundamental growth, increasing to YTL84.2 mn. from YTL28.9 mn. • Commission revenues reached YTL51.8 mn, surging by 50% while the commissions had totaled YTL34.4 mn.asof 2006. • Other revenues amounted to YTL5.1 mn down from YTL8.9 mn due to the mainly decline inmarked to market value of Is Private Equity.

  23. BROKERAGE & TRADING FEES 40.060 (YTL 000) 2006 27.405 2007 10.419 5.053 2.017 1.335 Brokerage Asset Management Other • Brokerage commissions reachedYTL40.1 mn. recording 46,1% rise over its2006 year-end performance. • Commissions on derivatives rocketed by almost five-folds on YoY basis as of 2007, reaching YTL 8.5 mn. vs YTL 1.9 mnin 2006 year end. • Fees on asset management rose to YTL 10.4 mn. due to theeffect of 70% consolidation of Is Asset Management started in 2007/Q3.

  24. MARGIN TRADING Outstanding Loans (YTL Million) Interest Income on Loans Extended to Clients (YTL Million) 69.8 67.1 54.7 108% 49.3 12.9 44.8 6.2 2006 2006 07/Q1 07/Q2 07/Q3 2007 2006 2007 Interest income on margin accounts recorded 108% YoY growth with respect to end of 2006, reaching YTL 12.9 mn while loans to clients declined to YTL.44.8 mn

  25. OPERATING EXPENSES YTL (000) 2006 2007 YoY▲ Employee Costs* 20.566 31.013 50% Depreciation 1.148 1.230 7% Goodwill -344 -470 36% Consultancy 1.852 2.806 51% Operating Costs 8.322 12.860 54% Sundry Taxes 5.999 6.754 13% Advertisement 1.638 1.643 n.m. Marketing and Dist. 3.166 7.521 137% Total 42.347 63.357 49% Operating costs recorded 49% rise on YoY basis while the total revenues displayed a 98% rise with respect to 2006 *The number of our employees has reached to 289, surging by 17,4% with respect to the end of 2006.

  26. RETURN on AVERAGE EQUITY R We are targeting Is Investment’s ROAE as 20% in five years’ time

  27. DIVIDEND DISTRIBUTION POLICY • Is Investment’s principles of dividend distribution policy are set by article 16 of the Articles of Association. The net profit of the company is the amount found after the deduction of every kind of expenses to be paid by the company and miscellenaous depreciations and reserves from the total revenues obtained by the Company within a balance sheet period and the profit after deduction of any previous year loss, if any... • Dividend distribution decision will be taken by the General Shareholders Meeting which is expected to be performed towards the end of April We have shared our success by going to public in May 2007 and now we want to share our profit considering the expectations of our shareholders

  28. ABOUT US OVERVIEW OF CAPITAL MARKETS OUR PERFORMANCE FINANCIAL RESULTS HINTS FOR 2008

  29. HIGHLIGHTS - From 2007 to 2008 • Geographic Expansion : Akaretler and Yesilkoy branches were opened. • ETFs: iBoxx Fixed Income ETF will come to market as the second ETF after ISDJE. • Hedge Fund: We are about to bring the first hedge fund to the market. • Prime Brokerage: We have developed a special software and started to test with clients. • Corporate Bonds: Closed two corporate bond deal. Creditwest Factoring is the first publicly traded corporate FRN. • Derivatives: Single stock futures and options will be initiated in the coming months • Euromoney Award: Is Investment rewarded as the “Best Equity House in Turkey” by Euromoney. • We Are in ISE-100: Is Investment was selected for the ISE National-100 Index in a four-month period after going public. • New Trading Platforms: TradeMaster and TradeMaster International.

  30. TRADEMASTER: Electronic Trading Platform 5% of our total client equity transactions are performed by TM user investors and this percent is expected to getting higher day by day for not only the equity market but also the derivative market

  31. TRADEMASTER INTERNATIONAL: Direct Access to Int. Markets The continous demand for this platform and the constant increase in the daily transaction volume will give additional boost to the income statement in 2008

  32. The information in this report is prepared by “IS YATIRIM MENKUL DEGERLER A.S.” (İş Investment) and it is not to be construed as an offer or solicitation for the purchase or sale of any financial instrument or the provision of an offer to provide investment services. Information, opinions and comments contained in this material are not under the scope of investment advisory services. Investment advisory services are given according to the investment advisory contract, signed between the intermediary institutions, portfolio management companies, investment banks and the clients. Opinions and comments contained in this report reflect the personal views of the analysts who supplied them. The investments discussed or recommended in this report may involve significant risk, may be illiquid and may not be suitable for all investors. Therefore, making decisions with respect to the information in this reportcause inappropriate results. All prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and/or publication of this report is strictly prohibited. The information presented in this report has been obtained from sources believed to be reliable. Is Investment cannot be held responsible for any errors or omissions or for results obtained from the use of such information. 32

  33. isyatirim.com.tr isinvestment.com IS INVESTMENT

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