Türkiye Finans continued to fulfill the main functions of banking and transferred funds collected to its customers from various sectors within the rules of risk management in 2015.

Dear stakeholders, 

As a joint venture between the Saudi Arabian National Commercial Bank, the Boydak Group and the Ülker Group, Türkiye Finans is one of the leading Turkish participation banks with its strong capital structure and vision. The Bank maintains its growth with firm steps forward.

The Turkish economy successfully passed a stress test in 2015 despite negative developments in international and domestic markets.

In terms of economic developments, the year 2015 was shaped by the processes leading up to the Fed’s rate hike, the monetary expansion policies pursued by the European Central Bank (ECB) together with their impact on growth and the slow-down in Chinese economy. At home, the uncertainty stirred by two general elections, disputes with neighboring countries and the unease stemming from terrorist activity put pressure on economic growth. However, Turkey maintained its growth in 2015 despite all of these developments. A strong financial system and sound public finances were the main factors behind the success of the Turkish economy in its stress test.

Asset growth of 15%
Our Bank unwaveringly applied its strategies under volatile market conditions during 2015. Türkiye Finans achieved a growth performance that was in parallel with the growth in the broader sector in all of its business units.

The total asset size of Türkiye Finans reached TL 38.6 billion, having posted 15% YoY growth as of the end of 2015. Our Bank posted an earnings before tax of TL 333 million and net income of TL 261 million for the 2015 full year.

In 2015, the volume of funds collected, our Bank’s most important funding resource, grew by 16% to TL 22.2 billion, comprising a 57% share of the balance sheet.

An 18% increase in the support we extended to the real economy
The main function of the banking is to transfer funds collected from savers to the real economy and to support development. The banking also requires the effective provision of products, services and solutions that companies and individuals require at establishment for their financial future.

Türkiye Finans continued to fulfill the main functions of banking and transferred funds collected to its customers from various sectors within the rules of risk management in 2015.

The total volume of loans, including financial leasing, increased by 18% YoY to reach TL 28.6 billion, in line with average growth rates in the sector and participation banking sector.

The net profit share income, which is a performance indicator of our placements, grew by 28% YoY to TL 1.4 billion.

Growth supported by strong shareholders’ equity
Türkiye Finans’ shareholders’ equity reached TL 3.4 billion by the end of 2015. Türkiye Finans obtained two subordinated murabaha loans (Tier 2) amounting to USD 100 million and USD 150 million from its main shareholder, The National Commercial Bank in 2015. This support indicates our main shareholders’ strong belief in its investment in Turkey. This contribution further strengthens the shareholders’ equity of our Bank.

Our capital adequacy ratio increased to 13.51% as of the end of December 2015, from 12.47% at the end of 2014.

Opening of our Bahrain branch
Türkiye Finans’ first international branch was opened in October 2015.

Our branch was opened in Bahrain, which is the Gulf’s leading finance center. Our Bahrain Branch entered operation within the scope of Wholesale Islamic Banking license awarded by the Bahrain Central Bank. The Bahrain Branch will further enhance Türkiye Finans’ relations with investors from the Gulf Region and will also ease access to new investors/customers.

The Bahrain Branch represents an important step in Türkiye Finans’ process of improving its international service capacity. This branch will offer Türkiye Finans with new opportunities regarding territorial expansion.

Reinforcing our leading position in sukuk issuances
Türkiye Finans was the first bank in Turkey to issue the lease certificate for financing in the real sector.

Our Bank maintained its strong performance in this area in 2015. Following 10 different sukuk transactions, the Bank obtained TL 1.1 billion of domestic resources while MYR 360 million was obtained as a result of international issuance activities.

Our subsidiary, TF Varlık Kiralama A.Ş., which is Turkey’s largest active asset leasing company, undertook Turkey’s largest domestic issuance at any one time, with a transaction of TL 250 million in 2015.

Türkiye Finans meets its customers’ needs through a wide range of products. The Bank continued to extend services to its corporate clients with asset leasing companies in 2015. Türkiye Finans undertook a lease certificate issuance in which corporate customers were fund users amounting to TL 243 million in 2015.

Our mission is to serve our clients in lease certificate issuances, to introduce such new and secure funding techniques to our customers and to support the Turkish economy by leading the market in this area. Türkiye Finans is determined to diversify its resources and enhance support to its customers in this area through new lease certificate issuances, directly or via its subsidiary, in domestic and international markets in 2016 and beyond.

Taking the steps in 2015 to prepare us for 2016
Türkiye Finans considered 2015 as a preparation period for 2016 and later years. In 2015, the Bank undertook various infrastructure and corporate development activities.

The activities carried out within this scope, were focused mainly on enhancing our competitive power and optimizing our cost base. The Income/expense map of our whole organization, primarily our branches, was reviewed and applications that enable saving in our processes and enhance our competitive power were activated.

Another important activity which we carried out in 2015 was to activate a new collection program which enables us to proactively manage non-performing loan movements which will be a potential problem in our sector under the lights of cyclical developments. This new structure provides us more effectiveness in our collection processes for funds extended. This new structure rapidly leads to positive impacts on our profitability.

An important activity for the success and future of our human resources was initiated in 2015. This activity will simplify Türkiye Finans’s performance system and the Bank will focus on growth. Preparations for this project have now been completed, with the project on course to be completed in 2016.

Projects regarding both our technological infrastructure and human resources that we carried out in 2015 have enhanced our competitive edge and prepared us to approach 2016 with a stronger and healthier structure.

Organic growth and rationalization activities
Türkiye Finans opened five new domestic branches, with the total number of branches reaching 286 of which 285 were domestic branches with one international branch. In the last couple of years, our Bank has shifted its focus to improving the efficiency of existing branches instead of opening new branches, further enhancing human resources at the branches, increasing penetration in alternative distribution channels and, finally, improving performance.

Number of our branches covers the majority of the region where Turkey’s GDP is generated. Given this fact, our primary goal is to improve our current service network with a rational approach in view of current market realities instead of rapid branching. In addition, we aim to further improve the qualifications and efficiency of our human resources at the branches.

Skill is always complimented on.
Our Bank’s devoted and successful activities in 2015 gained acclaim by both domestic and international institutions, confirming the Turkish saying “skill is always complimented on”.

Within this framework, Türkiye Finans received an array of awards including “Turkey’s Best Islamic Bank”, within the scope of World Islamic Banking Conference Performance Rewards, the “Best Call Center Performance Improvement” award in the Turkey Call Center Rewards in which 32 call centers took part, and the “Turkey’s Best Participation Bank” award from the Islamic Finance News magazine.

Within the framework of transparency which is our main principle, we share our financial information publicly with our stakeholders, customers, and regulatory authorities with the same transparency as a listed company. Our approach to transparency is something that is appreciated both domestically and internationally. This approach has ensured that we are the number one bank in the Financial Transparency Index among banks in Eastern Mediterranean Region in WIBC Leaderboard 2015 (World Islamic Banking Conference).

Türkiye Finans aims to increase its profitability in 2016.
Türkiye Finans’ 2016 goal is to achieve a real rate of growth of 15%.

Türkiye Finans is a leading and innovative bank in the Participation Banking sector. The Bank will continue to be a role model for the sector in compliance with the principles of participation banking with its strong financial position and shareholder structure, by focusing on sustainable growth.

We expect 2016 to be a growth year. In line with Turkey’s 2023 vision of being one of the world’s top 10 economies, our targets for 2016 are to increase our profitability with a focus on efficiency, to enhance our asset quality and to be the leading bank in the participation banking sector in the medium-long term.

Another key topic for our bank in line with the Bank’s principles of “good banking” and “good corporate citizenship” is sustainability. In line with the sustainability strategy which we shared publicly in 2013, our core values are to protect the rights of all of our stakeholders, to be transparent in our activities, to carry out our decisions in a way that contributes to a sustainable future, to protect the interests of our country and the environment with the projects that we finance and to prioritize socially sensitive projects.

I would like to extend my gratitude to the Türkiye Finans family of over 4,000 devoted staff, to our shareholders whose support we always feel, to our customers who give us the best possible reward with their loyalty and satisfaction, to our esteemed Board of Directors and to all of my colleagues.

Yours sincerely,

Osman Çelik
CEO