Having completed 2016 with strong results, we are welcoming 2017 as a confident and more powerful financial institution.

As we retained our profit in 2016, our shareholders’ equity reached TL 3.7 billion. That being said, we managed to improve our resilient capitalization and increased the capital adequacy ratio (CAR) by a significant 207bp to 15.6%.

Dear Stakeholders,

After taking office as the CEO of Türkiye Finans as of 1 November 2016, I’m delighted to present 2016 annual report.

Turkey and Turkish Banks stood against headwinds of 2016…

2016 was marked by local and global uncertainties. Rising expectations for a FED rate hike in the last quarter of the year led to capital outflows from developing countries and resulted in higher volatility in emerging market currencies. There were also political uncertainties such as the US presidential elections and UK’s decision to leave European Union, known as the “Brexit”. Against this backdrop, Europe could not deliver the long awaited economic revival which was another factor adversely impacting the world trade. On top of these global hurdles, Turkey experienced internal shocks as well. The failed coup attempt on July 15th - defeated by democratic will of Turkish people – was followed by S&P’s and Moody’s rating downgrades. However, Turkey and the Turkish Banks strived against these difficulties thanks to their strong fundamentals and the support provided by regulatory bodies, namely The Central Bank of Turkey and The Banking Regulation and Supervision Agency.

Main priorities of Türkiye Finans; sustainable profitability and healthy growth…

Türkiye Finans is a large financial institution operating with 3,989 professionals and 286 branches as of the end of 2016 while also serving our clients through a growing network of alternative distribution channels.

In 2016, the total assets of Türkiye Finans have reached TL 38.8 billion. We supported the real economy through TL 27 billion loans we extended which had 70% share in our assets. Türkiye Finans is mindful of the asset quality and taking necessary measures which already showed the results. We worked with our clients to advise them on their risks, help them reduce their unnecessary FX exposure or restructure their loans if necessary. We will continue to provide best in class advisory to our clients in the future.

On the other hand, funds collected have reached TL 21 billion with 54% share in total liabilities while we diversified our funding base through TL 1 billion worth of sukuk issuances in 10 separate transactions.

As we retained our profit in 2016, our shareholders’ equity reached TL 3.7 billion. That being said, we managed to improve our resilient capitalization and increased the capital adequacy ratio (CAR) by a significant 207bp to 15.6%. Our proactive approach in utilizing subordinated loans also served as a natural hedge against the negative impact of currency volatility on our risk weighted assets.

In the upcoming period, Türkiye Finans will prioritize healthy growth and sustainable profitability. Balanced loan growth, improved asset quality, diversification of the funding sources, strong capital and liquidity position will continue to be the key parameters for us to sustain our successful results.

A stronger Türkiye Finans into 2017…

Amidst the local and global hurdles, Türkiye Finans proved to be resilient by not only dealing with the difficulties successfully, but also managing its organizational change and delivering a remarkable progress. Having completed 2016 with strong results, we are welcoming 2017 as a confident and more powerful financial institution.

Our main strategy is developing innovative products compatible with the principles of participation banking while being mindful of our clients’ needs, expanding our customer base in all segments and creating value for our shareholders and the Turkish economy.

We will keep working hard for a better future together with our shareholders…

As the pioneer of participation banking in Turkey, Türkiye Finans is committed to progress with its innovative and customer-oriented approach.

Into 2017, we will continue to expand our customer base in all segments with a more customer-focused approach thanks to upcoming improvements planned. We will keep our focus on enhancing our contribution to shareholders, clients and the society as we continue to support the economy through our technology and people. Our clients will always receive our support through our best-in-class products, services, and advice. We will keep serving the society as a sound, trustworthy and transparent financial institution with our dedication to fundamentals of participation banking principles.

I would like to extend my gratitude to my colleagues at Türkiye Finans for their devoted efforts and our shareholders for their continuous support.

Wael Abdulaziz A. RAIES
CEO & Board Member