Esteemed Shareholders,

We would like to warmly welcome you to our Bank’s 27th Annual General Meeting. On behalf of the Board of Directors, we respectfully extend our sincerest greetings to you, our esteemed shareholders, who have honoured us with your presence at our Bank’s 2017 Annual General Meeting.

We would like to touch on the macroeconomic developments that have taken place during the year and also the activities of our Bank in 2017, before submitting the list of the Board of Directors and the Independent Audit Reports and Financial Statements for your review and approval for the 2017 fiscal year.

The Macro economy in 2017

The USD appreciated against global currencies during the year on the expectation that new economy policies would be introduced in the USA after the 2016 presidential elections, and of more significant monetary tightening from the US Federal Reserve Bank.

In Europe, the political uncertainty surrounding elections in the first half of the year proved short-lived, and the growth momentum was maintained with the region achieving its strongest growth in the recent period.

While inflation did not reach the targeted levels in developed countries, it rapidly declined in developing countries.

The Turkish economy reached the growth performance seen in prior years with the help of a recovery in the global economy and the macroeconomic measures taken by the government.

The Turkish Banking Sector in 2017

The banking sector demonstrated profitable and rapid growth in 2017. The credit guarantee amount, provided to enterprises with the Credit Guarantee Fund acting as an intermediary, increased ten-fold to TL 250 billion. Following this increase, loan growth posted its highest rate of growth for some years in the second quarter. As far as participation banking is concerned, development and growth continued by meeting the needs of the real economy. Our sector advanced its development and growth line forward, maintain the process seen in previous periods. The volume of funds collected and allocated by participation banks grew at a rate in excess of that seen in the banking sector as a whole.

As of the end of 2017, the sector’s loans had grown by 21% YoY to TL 2.2 trillion. The volume of deposits had increased by 17% YoY to TL 1.8 trillion. Meanwhile, the volume of funds allocated by Participation Banks had risen by 25% YoY to TL 108 billion as of the end of 2017. Funds collected, on the other hand, grew by 27% YoY to TL 107 billion.

While the net profit of the banking sector increased by 31% YoY to TL 49.1 billion in 2017, the net profit of participation banks increased by 43% YoY in the same period, to TL 1,583 billion.

The increased profitability of the sector brought its capital adequacy ratio to above 16.9% at the end of 2017, compared to 15.6% at the end of 2016. For participation banks, this ratio increased from 16.2% to 17%, maintaining growth potential which is higher than the overall banking sector.

Türkiye Finans in 2017

Türkiye Finans continued to offer services without any sacrificing of quality, with 287 branches, 3,767 personnel, 587 ATMs, the Call Center and an advanced technology infrastructure. Since May 2017, we have been operating from our new head office building in Umraniye.

Türkiye Finans established its growth strategy on a long term and sustainable plan. We undertake our activities with a strong capital structure, increased funding quality and a dynamic banking infrastructure which we have built on strong foundations.

We launched our innovative “Big Ladle” Account, a first for the Participation Banking product range which combines the participation account and lease certificates. We observed its positive impact on our funds in a short space of time. We also successfully launched the TFX Target mobile application, the first of its kind in Turkey, providing our customers with the opportunity to access global foreign exchange markets at a single click and to conduct transactions 24 hours a day, 5 days a week. Another milestone was Türkiye Finans becoming the third bank to have an R&D Center, with the establishment of the R&D Center in 2017.

We launched our new business model between June and August, and continued our activities with our branches which are specialized in Commercial and Retail banking and whose end-to-end processes are differentiated.

Türkiye Finans’s total assets reached TL 39.1 billion in 2017. Funds allocated, including receivables from financial leasing - which constituted 68% of total assets, amounted to TL 26.5 billion, indicating a market share of 1.2% in the sector and 25% in the participation banking sector. We also became the number one bank among Participation Banks with the allocation of TL 3.5 billion in Credit Guarantee Fund backed funds.

Funds collected increased by 5% YoY to TL 22 billion as of December 2017. Especially drawing funds grew by 21% to TL 6.9 billion. Türkiye Finans’ market share in funds collected was realized at 1.2% in the sector and 21% in participation banking sector.

Türkiye Finans wrote a profit before tax of TL 458 billion and a net profit for the period of TL 375 million, marking an increase of 27% YoY.

Türkiye Finans increased its capital adequacy ratio from 15.6% at the end of 2016 to 18.2% at the end of 2017 by maintaining its capital generation capacity with internal activity.

Esteemed Shareholders,

We have submitted our Annual Report, which covers our activities for the year 2017, our Balance Sheet and Profit and Loss Calculations for your review and approval.

On behalf of the Board of Directors, we would like to thank all of our shareholders, employees and customers, for their contribution to our successes and their confidence in our Bank. We respectfully pay tribute to you, our valuable partners,

Respectfully,

TÜRKİYE FİNANS KATILIM BANKASI A.Ş.

THE BOARD OF DIRECTORS