Our success in the use of sukuk and similar instruments has already made a significant contribution to the growth and development of participation banking in Turkey while also enhancing the reputation of our own Bank in national and international arenas.

Esteemed stakeholders,

2015 was a turbulent year for the global economy.
Weaknesses in emerging market economies and still-fragile recovery processes in developed countries once again remained the most serious stumbling-blocks confronting the global economy in 2015.

Notwithstanding low inflation, the ongoing recovery and improvements in labor market data in the US economy remained on course. In Europe on the other hand, growth remained weak despite the asset-buying program which the European Central Bank initiated early in the year and which it planned to continue until September 2016. The Eurozone economies’ unresponsiveness to the program strengthened expectations that ECB would extend the program beyond that date and might even expand it.

In an economic outlook indexed to the US Federal Reserve Bank’s interest rate hike decisions and sterilization process, it was inevitable that the US dollar should appreciate. This contrasted sharply with volatilities and uncertainties in emerging markets, from which there were consequently significant outflows of capital.

Speculations as to if and when the Fed would or would not boost interest rates, which had dominated capital flows for the previous two years, came to an end when the bank raised its main rate by 25 basis points at its 16 December 2015 meeting. This announcement signified the passing of a new turning-point. Fed President Yellen made it clear that while subsequent interest rate hikes would be gradual, the Bank’s monetary policy would remain expansionist nonetheless.

While depressed oil prices continued to have a favorable impact on the current accounts of oil-importing emerging economies, they also made life even more difficult for oil-exporting countries. The deflationary effects of low commodity prices were further exacerbated when they fell still more as demand contracted in the face of China’s efforts to retool its economy and make it more services-oriented.

Besides being harried by global market volatilities, the Turkish economy also had to contend with two rounds of parliamentary elections, political uncertainties, and disputes with neighboring countries, all of which worsened the risks to which the country’s economic growth was exposed. In the first nine months of 2015, economic growth was 3.4%. That said, unless the Turkish economy’s growth model can be made less consumption-dependent and more production-oriented, the sustainability of its growth will be at risk.

Despite a weak Turkish lira, Turkey’s current account deficit contracted owing mainly to a smaller bill for imports brought on by lower oil prices but also to weaker growth.

We remain on course, building on our existing strengths and adding to them.
Having emerged from a difficult year, Türkiye Finans nevertheless posted successful results and remains on the path of consistent growth and development. We maintained our strong position in 2015 thanks both to the strategies that we correctly fashioned in line with our strongly insightful expectations of the macroeconomic environment and to our experience of managing previous economic crises.

In keeping with our goal of being “Turkey’s Finance”, Türkiye Finans we will continue to introduce innovative new products to our customers, to make use of all the means afforded by technology to enhance the effectiveness of financial services, and to pursue growth along with our customers. First and foremost, however, we will remain deeply committed to the principles and values of participation banking.

Our success in the use of sukuk and similar instruments has already made a significant contribution to the growth and development of participation banking in Turkey while also enhancing the reputation of our own Bank in national and international arenas.

Having adopted a long-term perspective, our shareholders remain strongly confident in the Turkish market and continue to provide us with all of the support we need. Even though there may be short-term volatilities, our expectation is that the Turkish economy and our sector embody the essentials that will support our strong and sustainable growth in the medium and long term.

All of our successes are rooted in the tireless dedication of the Türkiye Finans team, in the support of our shareholders, and in the trust we have earned from our customers. Believing that together we will go on building a better future, I would like to extend my sincere gratitude and appreciation for each and every one of them.

Very truly yours,

Saeed Mohammed A. Alghamdi
Chairman of the Board of Directors