We have left a year behind with favorable economic indicators for our country and our Bank. While giant financial institutions still struggle with major problems in Europe and in the USA, we have experienced a good year with respect to profitability. Being located in İstanbul, a city advancing on the way to becoming one of the leading financial centers in the world, brings us the advantage of keeping our finger on the pulse of the economy. We have continued to develop and to grow in the year 2010 by benefiting from this privilege in the most effective manner.

We increased the number of our credit cards by 70% in the year 2010. Our credit card, Happy Gard with bonus features, found its place in the wallets of many new customers. We have launched another new innovation in the year 2010 with the “Campus Card”, combining the functions of ID card, turnstile pass card, payment card and contactless debit card with pre-payment feature in the same card, which is currently used in Erzurum Atatürk University.

The Private Pension System (BES) plans comprising interest free funds only, offered in cooperation with Garanti Emeklilik and named as “Organic”, attracted a high demand. We have provided an opportunity to our interest-sensitive customers also in this area.

We continued to make investments in state of the art technology and multi-channel banking with a view to providing high quality services to our customers independent of time and location, maintaining customer satisfaction at the highest level and reducing the operational costs of our Bank in today’s banking system. 65% of basic banking transactions and 32% of credit card sales were made through alternative distribution channels (ADC) in the year 2010. We will continue with our efforts to increase transaction diversity, our sales capabilities and sales and commission income by giving priority to speed, ease of use and security in our channels, in the future as we did in the year 2010.

Türkiye Finans had become a partner of the Credit Guarantee Fund in the year 2010, which provides guarantee support for SMEs. Thus we have added the Treasury supported guarantee system to the product range of our Bank alongside the Credit Guarantee Fund guarantees through the Equity Capital Method which are provided since 2007. Our Bank is in the top 10 Banks which refer companies to the Credit Guarantee Fund with the purpose of utilizing Treasury supported Credit Guarantee Fund guarantees. Our Bank is in the top 3 in the KOSGEB-GAP projects under the KOSGEB schemes with respect to the monetary amount of investments and number of projects, with a market share of 10.4%.

Our Bank started to provide information and field support to its customers on grants and incentives, primarily the grants provided by the Development Agencies, from the last quarter of 2010 onwards. Moreover a “Profit Share Protocol” was signed with the Undersecretariat of Treasury in order to provide our customers with the profit share support granted by the Undersecretariat of Treasury for investments made in the priority regions for development.

The rate of our loans subject to legal proceedings is below sectoral average as a result of our new structure on Risk Management and the policies we are implementing. High asset quality is an important factor proving our success. We have received services and support from international consultancy firms in the year 2010 for development of our Bank in all aspects. We have worked in cooperation with organizations which are specialists in their fields, on applications and development projects regarding Human Resources, in projects for redefining the marketing segments and value recommendations through a customer oriented approach and in cost management projects regarding the income and expense targets of our bank.

Under the light of these developments, the assets of Türkiye Finans increased by 22.9 % in 2010 compared to the previous year, to reach TL 10 billion 692 million. Our Bank collected funds at an amount of TL 8 billion 398 million in the year 2010, representing an increase of 22.02% and granted cash funds as loans at an amount of TL 8 billion, representing an increase of 30.41%. Our equity capital has increased by 17.79% over the previous year to reach TL 1 billion 406 million by the end of 2010.

I would like to take this opportunity to thank my colleagues and our partners for this year in which we have achieved our targets, wishing favorable developments for our bank and our country in the future.

Sincerely,
Yunus NACAR
CEO