Turkey - Tenth Industrial Development Bank (TSKB) Project

FILE COPY DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. 15a-TU APPRAISAL OF TURKIYE SINAI KALKINMA BANKASI A.S. TURKEY December 7, 1972 D,velopment Finance Companies Division Europe, Middle East and North Africa Region This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  oURREN.Y EQUIVALENTS Prior to August 9, 1970 US $1 .00 = LT 9.00 LT 1 .00 = US 0.1 1 August 9, 1970 to December 22, 1971 US $1.')O LT 1'.00 LT 1.00 = 30.067 After December 22, 1971 US $1. 0= LT 1T.00 LT 1.00 = $0.0?  TURKEY APPRAISAL OF .TURKIYE SINAI KALKINMA BANKASI A.S. Table of Contents Paragraph Page BASIC DATA i - ii SUARY iii - v I. INTRODUCTION 1.01 - 1.03 1 II. THE ENVIRONMENT 2.01 - 2.13 1 - 5 Industry 2.04 - 2.06 2 - 3 Industrial rinance 2.07 - 2.13 3 - 5 Financial Terms of the Market 2.08 4 The Capital Market 2.09 - 2.11 4 The Banking System 2.12 - 2.13 4 - 5 JIII. THE COMPANY - ORCGANIZATION, POLICIES, PROCEDURES 3.01 - 3.21 5 - 11 AND RESOURCES Shareholders 3.01 - 3.02 5 Board 3.03 5 - 6 Management and Staff 3.04 - 3.06 6 Policies and Procedure 3.07 - 3.11 6 - 8 Project Appraisal 3.08 - 3.11 7 - 8 Project Supervision 3.12 - 3.14 8 - 9 Disbursements 3.13 - 8 - 9 Procurement 3.14 9 Resources 3.15 - 3.21 9 - 11 Foreign Currency Resources 3.16 - 3.18 9 - 10 Local Currency Resources 3.19 - 3.21 10 - 11 IV. OPERATIONS, PORTFOLIO AND FINANCIAL POSITION 4.01 - 4.21 11 - 1C, Operations 4.01 - 4.14 11 - 15 Equity Investments 4.02 - 4.04 11 - 12 Lending 4.05 12 Characteristics of Lending Operations 4.o6 - 4.11 12 - 13 Interest Rates 4.12 - 4.14 14 - 15 Quality of Portfolio 4.15 - 4.17 15 Loan in Arrears 4.16 15 rquity Portfolio 4.17 15 Financial Performance and Position 4.18 - 4.21 15 - 16 Profitability 4.18 - 4.20 15 - 16 Financial Position 4.21 16  -2- Paragraph Page V. TSKB's PROSPECTS 5.01 - 5.24 16 - 23 Growth Perspectives of Private Industrial Investment 5.01 - 5.02 16 - 17 Projected Operations 5.03 - 5.09 17 _ 19 Resource Requirements 5.10 - 5.15 19 - 21 Foreign Excchange 5.11 - 5.13 19 - 20 Local Currency 5.14 - 5.15 20 - 21 Interest Rate 5.16 21 Prospects for Promotion 5.17 - 5.19 21 - 22 Projected Profitability and Financial Position 5.20 - 5.24 22 - 23 VI. CONCLUSIONS AND RECOMMEDATIONS 6.01 - 6.10 214 - 26 This report is based on a visit to TSKB in October 1972, and was prepared by Messrs. Jacques Coudol and Edgar C.H. Su.  LIST OF ANNEXES 1. Cost of Capital to Industry in Turkey 2a. List of Shareholders as of March 10, 1972. 2b. List of Board Members as of June 30, 1972. 3. Organization Chart. 4. Statement of Policy. 5. Resources as of September 30, 1972. 6. Sunmnary of Ooerations, 1968-1971, and January-September, 1972 7a. Gross Loan Approvals by Industry, 1968-1971, and January-June, 1972. 7b. Outstanding Portfolio by Industryr, June 30, 1972. 8. Gross Approvals of Loans by Size, 1968-1971, and January-June, 1972. 9. Geographical Distribution of Loan Commitments, 1968-1971, and Januery-June, 1 972. 10. Equity Portfolio, as of June 30, 1972. 11. Arrears, December 31, 1968-1971, and June 30, 1972. 12. Income Statements, 1968-1971, and January-June, 1972. 1 3. Balance Sheets, Year-End 1 968-1971, and June 30, 1972. 14. Forecast of Operations, 1972-1977. 15. Projected Income Statements, 1972-1977. 16. Projected Balance Sheets, Year-End 1972-1977. 17. Projected Cash Flow, 1972-1977. 18. Projection Assumptions. 19. Schedule of Estimated Disbursements of the Proposed Loan.   TURKIYE SINAI KALKINMA BANKASI A.S. Basic Data 1. Year of Establishment: 1950 2. Ownership Amount of % of shares Total (LT million) Domestic 167.9 86.8 IFC 20.8 10.8 Other Foreign 4.7 2.4 Total 193.4 100.0 3. Bank Group Financing a. IFC Investment in TSKB's Share Capital Investment Number Number Date approved of shares Cost per share Total investment of cost 64_TU Sept. 18 1963 15,000 $ 61.11 $ 916,667 122-TU March 28 1967 4,500 75.00 337,500 149-TU March 4 1969 10,514 39.68 417,222 220-TU April 18 1972 11.917 35.71 425,6o7 41.,931 2,096.,996 Less Sales 6 180 366.827 35,751 1,730,169 b. IBRD Loans (October 31, 1972) Date of Rate of Disbursed Loan No. Effectiveness Interest Net Amount Authorized less repai Credits $'