Dear Stakeholders,
Despite the challenging global landscape marked by inflation, sluggish growth, restrictive financial conditions, and weak commercial expansion, Türkiye sustained its uninterrupted growth trend for the thirteenth consecutive quarter, recording a 4.5% growth rate in 2023. This achievement, along with record exports at around $256 billion for the full year, the highest in the history of the Republic, reaffirms our country’s commitment to building a sustainable economy.
The significance of our country’s accomplishments becomes even more apparent when we take into account regional geopolitical instabilities, and the humanitarian and economic crisis caused by the February 6 earthquakes centered in Kahramanmaraş, which directly affected 11 provinces and indirectly impacted the entire country. At Türkiye Finans, we have been collaborating with relevant institutions and civil society organizations from the immediate aftermath of the disaster, providing support to the affected region. We provided significant financing and payment assistance for businesses and individual customers in the disaster area and provided cash aid under the motto “Now is the Time for Solidarity.” Additionally, we delivered urgent humanitarian aid items to the region, such as food, clothing, and heating supplies. These aid materials were distributed to those in need with the help of our volunteer colleagues and the support of our Goodness Club. We supported disaster relief to the population of the disasterstricken region, and helped resume the production and employment. We showcased the finest example of solidarity as an institution focused on people.
Dividing the year 2023 into two halves, the first half was characterized by a low-interest environment, while the second half closed with cautious optimism brought by a return to traditional policies. The Turkish banking sector successfully navigated this challenging year, thanks to its qualified technological infrastructure, skilled human resources, financial discipline, and robust capital structure. Our sector, with its durability and reputation, has maintained its role as an important stabilizing factor for the Turkish economy. As Türkiye Finans, we continued to lead the way in social and economic development in 2023 with our priorities embedded in supporting production, trade, and exports, the three pillars of participation finance, as well as our investments in digitization, and our people-oriented banking approach. We have continued to meet all consumer needs rapidly and efficiently, regardless of location and time, thanks to our robust digital infrastructure and business models.
Successfully maintaining our sustainable and profitable growth strategy this year, Türkiye Finans has continued to provide strong financial support to both individuals and the commercial sector, contributing to the country’s economy. Despite all the variables in the economy in 2023, it was a successful period during which we increased our assets to TL 240 billion.
Through various fund products offered to add value to our customers’ assets, our bank increased its funds collected by 72% year-over-year to TL 177 billion, while the total size of participation accounts, the flagship fund product with a 68% share in fund collection, grew by 101% year-over-year to TL 120 billion. Moreover, we increased the size of TL funds collected by 88% to TL 99 billion, and grew TL participation accounts by a remarkable 103% to TL 85 billion. Utilizing the increased fund source to expand our financing volume, our bank played an important role in the continuity of the real sector and trade by financing companies that form the backbone of economy. This strategy played a key role in the 49% increase in funds allocated, which rose to TL 122 billion, and the 80% percent growth in non-cash loans, which climbed to an impressive TL 34 billion. As can be seen from this data, Türkiye Finans has maintained a robust capital structure necessary for sustainable growth, having also achieved a major increase in its regulatory equity, which has climbed 70% to TL 28 billion.
In order to hone our competitive edge and further strengthen our pioneering role in digitization, which is at the core of all our fundamental strategies such as supporting production and trade, delivering solutions for the financial needs of consumers, increasing financial inclusivity, and sustainable growth, we made organizational changes by forming the Digital Banking Business Group in 2023. With a people-centric approach to technology and banking, we embarked on new initiatives in 2023 to provide an excellent customer experience, which has become a crucial aspect of competition, and to further refine our operational excellence.
We have begun offering banking services through various e-commerce platforms as an integrated part of the embedded finance system. We have started increasing our steel-collar workers to maximize operational efficiency. By integrating Robotic Process Automation (RPA) technologies, we have flawlessly automated various business processes. We have established the Digital Transformation Technologies Office under the Digital Banking Business Group. We have become a member of the Türkiye Artificial Intelligence Initiative (TRAI) and began developing joint projects with players in the artificial intelligence ecosystem. While enhancing employee and customer experiences with AIpowered digital technologies, we have continued to improve our operational efficiency. In 2023, only 6% of our monthly average transaction volume occurred in our branches, with one-third of our customer acquisitions taking place through digital channels.
In line with our pioneering digital banking vision, we have expanded our customer base with innovative and competitive products and services such as eXtra Limit, personal loans, and investment products, aiming to meet all our customers’ needs and expectations. As we introduced Türkiye Finans to new audiences, we have taken steps to enhance the customer experience we offer. Under the motto “Ready for Tomorrow,” we undertook several groundbreaking initiatives to reduce paper consumption and carbon footprint while becoming the first participation finance institution to introduce the “Digital Slip” feature for card transactions. In combination with other digitization projects that we deployed prior to this initiative, we have reduced our annual paper consumption by 80%.
As Türkiye Finans, we will continue our commitment to supporting production, trade, and exports, as well as providing tailored solutions to individuals’ needs, which are at the core of participation finance system. We will continue to enhance our financing options and resources to swiftly meet all financial needs of our customers, especially those engaged in exports, production, and trade. Through our innovation investments, we are contributing to strengthening the foundations of our country’s banking sector. Guided by the digital banking strategy we set in 2023 focused on “people-oriented technology,” we will intensify our efforts to integrate artificial intelligence and automation technologies horizontally into all our units in 2024.
In 2024, we will continue to adapt to the rapidly evolving global dynamics and changing consumer needs with our people and production-focused growth strategy, continuing to offer excellent customer experiences with innovative, value-creating digital banking products and services.
As we enter the second century of our Republic, we will continue to be an institution that mobilizes all its resources for a more inclusive, productive, and sustainable economy, supporting national production and export goals. I extend my thanks to the entire Türkiye Finans family and all our valuable stakeholders for their contributions to further solidifying our bank’s competitive position and enhancing our reputation with the local and international awards we received in 2023.
Sincerely,
Murat AKŞAM
Board Member and CEO