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IS INVESTMENT Financial Results & Performance 2007/Q3

IS INVESTMENT Financial Results & Performance 2007/Q3. About Us.

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IS INVESTMENT Financial Results & Performance 2007/Q3

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  1. IS INVESTMENT Financial Results & Performance 2007/Q3

  2. About Us • Is Investment was established by Is Bank in 1996, with a paid in capital of NTL 500.000. The company has started with 42 staff and reached 272 employees as of 2007/Q3 and shareholders’ equity increased to NTL235.9 mn. at the same time. • 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

  3. Overview of Turkish Capital Markets - 1 Equity Market (NTL Billion) Bills & Bonds Market (NTL Billion) 574.5 575.5 579.3 513.9 2006/Q3 2007/Q3 2006/Q3 2007/Q3 The comparative low uncertainities on politic area in 2007/Q3, led the Bonds & Bills market trading volume almost catch up with 2006/Q3. Equity market displayed a better performance with respect to the same period of 2006

  4. Overview of Turkish Capital Markets - 2 Derivative Market (NTL Billion) Mutual Funds (USD Million) Pension Funds 144.1 29.268 25.010 20.271 3.677 21.4 2.048 913 2006/Q3 2007/Q3 2005 2006 26/10/2007 Derivative market displayed a paramount performance and reached more than two-folds of our year-end trading volume target,growing 571% compared with 2006/Q3 Portfolio size of pension funds still keep on becoming the driving force of the fund management business, rising 78% with respect to the end of 2006

  5. Overview of Turkish Capital Markets - 3 Number of Public Companies Traded on the ISE Average Free Float Rate (%) 326 322 31,6 31,4 30,9 306 2005 2006 2007/Q3 2005 2006 2007/Q3 Market Capitalisation ($ Billion) 285.8 163.7 162.8 2005 2006 2007/Q3

  6. Overview of Turkish Capital Markets - 4 (Foreign Investors) Trading Volume / Total Equity Trading Volume (%) Share in Total Equity Portfolio (%) 72 30 67 67 19 59 18 51 12 9 2003 2004 2005 2006 2007/Q3 2003 2004 2005 2006 2007/Q3 Foreign investors trade 30% of the ISE trading volume, while they hold the 72% of the free float market capitalisation

  7. Market Share in Equity Market Equity Market - Is Investment (NTL Billion) 6,33% 6,38% 36.3 Our performance is in line with our targets. 32.8 2006/Q3 2007/Q3 We maintain our leadership position as of 2007/Q3 with NTL 36.3 bn trading volume and 6,33% market share

  8. Market Share in Bills & Bonds Market Bills & Bonds Market - Is Investment (NTL Billion) 13,65% 12,43% 16.9 11.3 2006/Q3 2007/Q3 We hold one of the first leading ranks with 12,43% market share and 11.3 bn trading volume and it is expected to see a recovery in the market with the issuance of private sector bonds in 2008

  9. Market Share in Derivative Market Derivative Market – Is Investment (NTL Billion) 17,53% 25.2 Quite close to the two-folds of our year-end target 27,4% 6.1 2006/Q3 2007/Q3 • Ourderivative market trading volume is already quite close to the two-folds of our year-end target figure (NTL 14 bn) we had set for the full year, reaching NTL 25.2 bn. • Wemaintain our uncontested leadership as of 2007/Q3 with 17,53% 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).

  10. Trading Volume in International Capital Markets International Capital Markets – Is Investment (USD Billion) 12.5 1.2 2006/Q3 2007/Q3 Our trading volume reached USD 12.5 bn from USD 1.2 bn surging by ten-folds of the same period of 2006 and our trading volume will likely increase with the anticipated new instruments in international capital markets

  11. Asset Under Management AuM & Pension Funds Portfolio Size – Is Asset Management (Million NTL) 173 777 The portfolio size of pension funds grows in parallel with the overall market 682 410 7.043 516 6.620 6.484 6.003 5.247 2007/H1 2005 2006/Q3 2006 2007/Q3 The growth trend of mutual funds kept rising in 2007/Q3 due to the new accounts and the rise in current portfolios and reached NTL 6.6 billion, after the major shake out in 2006

  12. Corporate Finance (Public Offerings - M&As) Public Offering Size (USD Million) - Is Investment M&As Size (USD Million) - Is Investment 1.911 341 708 34.9 2006/Q3 2007/Q3 2006/Q3 2007/Q3 The largest domestic demand for Tekfen Holding among the private sector IPOs We executed USD 341 mn. amounted 6 M&As while it was USD 34,9 mn. in the same period of 2006 and new corporate bond and IPO projects are in the pipeline The largest privatization offering in the Turkish capital markets - Halkbank - completed this year

  13. Income Statement Is Investment 2006/Q3 2007/Q3 YoY ▲% NTL (000) Operating Income Interest and Trading Income 17.150 56.676 230 25 Commission Revenues 29.513 37.093 Income from Corporate Finance -22 6.653 5.125 Other Income 7.340 -33 4.864 Total Operating Revenues 71 60.656 103.758 38 Operating Expense -30.204 -41.884 103 Net Operating Profit 61.874 30.452 45 Other Expenses -7.944 -4.324 Financial Expenses -4.100 47 -7.802 Minority Expense -26.760 n.m. -406 EBT 26.690 86 14.300 Tax -5.260 184 -1.847 21.430 72 12.453 Net Profit

  14. Operating Revenues (NTL 000) 56.676 2006/Q3 2007/Q3 37.093 29.513 17.150 7.340 6.653 5.125 4.864 Interest and Trading Commissions Corporate Finance Other • Is Investment’s total revenues amounted to NTL103.7 mn in 2007/Q3, up by 71% on YoY basis. • Interest and trading revenues displayed a sharp growth, increasing to NTL56.6 mn. from NTL17.1 mn. The dismal 2006/Q3 results could be attributed to the low credit volumes and thenegative impact of the turmoil. • Commission revenues reached NTL37.1 mn, surging by 63% over 2007/H1 figure, thecommissions had totaled NTL29.5 in the period of 2006/Q3. • Other revenues amounted to NTL4.8 mn down from NTL7.3 mn due to the mainly decline inmarked to market value of Is Private Equity.

  15. Brokerage & Trading Commissions (YoY) (NTL 000) 28.647 2006/Q3 2007/Q3 20.544 7.468 4.462 4.507 978 Brokerage Asset Management Other • Brokerage commissions reachedNTL28.6 mn. recording 39% rise over its2006/Q3 performance. • Commissions on derivatives rocketed by five-folds on YoY basis in 2007/1H, reaching NTL 5.7 mn. vs NTL1.1 mn in 2006/Q3. • Fees on asset management rose to NTL 7.4 mn. due to theeffect of 70% consolidation of Is Asset Management started in 2007/Q3.

  16. Margin Trading Outstanding Loans (NTL Million) Interest on Loans Extended to Clients (NTL Million) 67.1 10.4 35.2 4.1 31.5 21 2006/Q3 2007/Q3 06/Q1 06/Q2 06/Q3 07/Q3 Interest income on margin accounts recorded 153% YoY growth, reaching NTL 10.4 mn and loans to clients reached NTL 67.1 mn as of 2007/Q3 surging by 91% with respect to the same period of 2006

  17. Operating Expenses NTL (000) 2006/Q3 2007/Q3 YoY▲ Employee Costs 15.233 19.648 28% Severance 188 170 -9% Depreciation 898 905 0.7% Goodwill -253 -598 136% Consultancy 1.853 1.650 -11% Operating Costs 5.922 9.694 63% Sundry Taxes 3.841 5.232 36% Advertisement 1.198 903 35% Marketing and Dist. 1.324 4.280 223% Total 30.204 41.884 38% Operating costs recorded 38% rise on YoY basis and foreign marketable security transaction shares and other marketing, selling and distribution expenses also emerged as important cost components of operating expenses in 2007/Q3

  18. TradeMaster International (TMI) – A New Product With the incentive marketing, many requests recieved for the initial and unique application for the e-trade platform in the country -TMI- To perform stock and forward contracttransactions in various global stock exchanges

  19. TradeMaster International Features • Allows investors to reach information on the global markets in detail and in real time and to perform stock and forward contract transactions in various global stock exchanges quickly and easily with access to pertinent information. • Allows investors to undertake transactions in various global stock markets with detailed and real-time information. • Allows investors to carry out visual and statistical analysis using various techniques on detailed and real time data. • This application enables investors to carry out transactions and keep a watch on their investments in global markets from their own PC or any location with internet access. • TradeMaster International allows investors to reach global markets directly and quickly through simple menus. • Each time it is opened, TradeMaster International automatically downloads and installs any new versions. As a result, new versions are always updated, and the program allows investors to work with an updated version • Provides additional security for its investors through various channels of security within its software. Advantages • Limits on investor accounts, specified by Is Investment, may be uploaded to the program and investors can perform the required transactions in international markets within specified limits. • Ensures speed and ease for investors in their transactions in global markets. • The program allows investors to perform transactions directly and without the need for any other intermediary. • The program allows investors to access global market data in detail and in real time Investor Profile • Traders interested in global markets and various products in these markets. • Investors seeking to follow their investments closely while on business or personal travel. • Those who use visual and statistical analysis in reaching investment decisions, and those who would like to carry out such analysis independently. • Those who place importance on speed in their transactions.

  20. Conclusion • 2007/Q3 profit enforces our estimates to exceed the year-end profit target. • We maintain our dividend policy disclosed to the public (minimum 20% of the distributable profit). • Maxis Securities - the full subsidiary of Is Investment - started to welcome the client accounts and started to deal and it is planned to increase our international capital markets efficiency with Maxis. • There are 2 corporate bond issue projects that will be finalized in the last quarter and 2 IPO’s are also in the pipeline for the year 2008. • 70% consolidation of Is Asset Management that started in 2007/Q3 positevely effected our profit as stated before. • Akaretler Branch has gone into operation in Istanbul as the 5th branch of Is Investment and the 6th one will probably be seen in 2008. • TradeMaster International (TMI) has already been requested by many investors, and also theTradeMaster (the domestic form of TMI) • Some institutional investors apply Is Investment to establish new funds which are to be managed by us. • CMB approval for our capital-guaranteed fund is waited to be finalized in the last quarter. • We have set out a new and active marketing policy in cooperation with the private banking department of Isbank. • Foreign investors will be able to trade directly at ISE-Equity market via GL Trade served by Is Investmentin the last quarter.

  21. 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. 21

  22. IS INVESTMENT SECURITIES isyatirim.com.tr isinvestment.com 22

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