We are directing the participation banking sector in Turkey with our actions and innovative products and services. We provide strong support to the real sector and our country’s economy.
Türkiye Finans, the leader in participation banking, continued to chalk up sustainable growth in 2014. In addition to increasing the number of its branches and employees, and the new products and services that we have rolled out, we have also brought our capital adequacy and credit rating grade to the highest points.
In 2014, the volume of our Bank’s assets increased to TL 33.5 billion growing by 33% YoY. The volume of funds collected - our Bank’s most important funding resource - grew by 26% YoY to TL 19 billion, comprising a share of around 57% in the balance sheet. The total volume of loans, including financial leasing, extended to customers increased by 32.3% YoY to reach TL 24.3 billion.
Our Bank recorded a profit of TL 425 million before tax and TL 334 million of net income, marking 1.5% growth compared to the same period in the previous year. In the Extraordinary General Assembly dated 29 August 2014, the decision was taken to increase the capital from TL 1,775 million to TL 2,600 million, with the capital increase taking place in the last quarter of the year. This places the Bank as the strongest player among participation banks in terms of capital. In banking sector, Türkiye Finans’ ranking increased to 7th place in terms of paid-in capital. Our Bank sustained its policy of keeping previous years’ profit within the Bank to realize its growth plans in 2014. Our Bank’s equity reached TL 3.2 billion by the end of 2014.
Sustaining a strong capital adequacy ratio, at 12.47%
Türkiye Finans increased its number of branches to 280 with 30 new branch openings while exceeding its organic growth targets in 2014. Our Bank effectively utilizes technology to ensure an excellent customer experience and broadens customer access from different channels with its internet branch, mobile branch and more than 500 ATMs.
Our Bank’s outstanding performance in Turkey and international markets continues to draw appreciation on respectful platforms. Türkiye Finans was awarded by the 2014 Global Banking&Finance Review in 2013 in the following categories: “Turkey’s Fastest Growing Commercial Bank”, “Turkey’s Fastest Growing SME Bank”, “Turkey’s Fastest Growing Retail Bank” and “Turkey’s Best Co-Branded Credit Card”.
Türkiye Finans is one of top 8 banks to have a credit rating grade in Turkey. Fitch Ratings affirmed Türkiye Finans’ long term foreign currency credit rating as “BBB” with a ‘stable’ outlook following the evaluation conducted in 2014. The national credit rating was determined as AAA (tur) with a ‘stable’ outlook.
Diversifying the support provided to the real sector with a strong capital structure and leading position
Türkiye Finans, which was the first participation bank in Turkey to issue lease certificates to finance the real sector, is determined to enhance this position with new issues. Türkiye Finans has taken the lead to deepen our country’s sukuk market with lease certificate issuances conducted through TF Asset Leasing, a subsidiary of Türkiye Finans, to provide resource to corporate customers.
We broadened our resource range by issuing three sukuks, in which our Bank is a user of funds, amounting to TL 299 million, two of which are public offerings and the other is an issuance to qualified investors in 2014.
Pride in our achievements based on Türkiye Finans’ reputation in the international arena.
Türkiye Finans has realized the largest murabaha syndicated loans and sukuk issuances in participation banking for the last two years.
Our Bank obtained a Murabaha Syndicated Loan amounting to USD 350 million (USD 253.5 million and EUR 72 million). The maturity of this syndicated loan was 1 year, with 21 banks from 12 countries involved in the loan at June 2014.
Our Bank conducted two sukuk issuances amounting to USD 500 million and 800 million Malaysian Ringgit in 2014. These sukuk issuances attracted great interest from international investors. With the sukuk issuance made in Malaysian Ringgit domination, we realized the biggest issuance in one tranche as a non-Malaysian bank to local investors in Malaysia. In addition, we conducted the first and only issuance based in Turkey with this sukuk issuance in Malaysia, which is the world’s most active and largest sukuk market.
Our Bahrain Branch - an important and strategic step, as it will be our first branch abroad.
At Türkiye Finans, we chose Bahrain for our first branch opening abroad as the country has the deepest experience in Islamic banking in Gulf Region. The fact that our main shareholder also operates in the country will be a great support for our activities in the region. With the opening of our branch, we will obtain important advantages in access to Islamic finance products and networking to strong players in the market. The branch will have the ability to create new sources of funding, helping Türkiye Finans to establish new business networks in a region where global Islamic banks have a presence.
Sustainability - an important axis of our activities.
Our Bank determines sustainability in its different dimensions as an important axis of its activities. Türkiye Finans also protects its different position with its cultural and social contributions. We felt the justified pride, in this year too, of being the first and only financial institution to support the Kırkpınar Oil Wrestling Tournament, which has a history dating back centuries. We shared in the joy of the event, which was organized for the 653rd time.
We, as an institution that derives profit from society, attaches importance to corporate social responsibility activities to fulfill our task of supporting the development of society. Our sustainability strategy is shaped by realizing good corporate citizen examples while realizing good banking applications. In line with our sustainability strategy, we published our first Sustainability Report. With this report, we presented our targets and strategy in this area to our stakeholders.
This positive point was crowned with GRI’s approval at A+ level as the first and only report among banks that have permission to collect deposits.
In the upcoming period…
The macroeconomic outlook and macro prudential measures that have been taken signal that the sector can maintain its balanced growth going forward. In addition, we believe new entrants will inject new energy to the participation banking sector.
There is an important correlation between banks’ private deposit market shares and branch market shares. The importance of branches becomes clearer from this approach. Our bank is determined to sustain its organic growth.
Always being on the side of the real sector’s and SMEs and offering user friendly and innovative products and service which we support with our technological aspect are our unwavering priorities. On the other hand, we are aiming to introduce the lease certificate, a new and reliable funding method, to our corporate customers by supporting them in issuances. We also aim to keep contributing to our country’s economy by creating an important market in this area. We are planning to continue issuing lease certificates in TL and foreign currency denomination depending on the cyclical conditions in 2015.
Our strategy is plain: Grow with Turkey and share the value that we generate with the country
Our stakeholders are at the heart of our main power groups in our growth strategy, in the future as they have been in the past. Accordingly, the four petals of the flower which composes our emblem represents our four main stakeholders: Customers, Employees, Shareholders and Society.
The main purpose of our banks’ activities is to acquire new and loyal customers. We are aware of customer satisfaction in the establishment of success and reputation. We are taking actions with this focus.
Our Bank will remain the leading participation bank in 2015, as it has every year, with the following steps taken in view of the strategic priorities set out in line with the growth targets; customer oriented activities, capabilities in product and service development, international credibility, success in fund diversification and technological investments.
We are determined to manage and develop our assets and to share the value that we generate with our stakeholders by utilizing our power groups. For this purpose, we, as the Türkiye Finans family, will sustain our activities with excitement and devotion.
Yours sincerely,
Derya GÜRERK
CEO
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