Assessment of Financial Position, Profitability and Solvency

(*) Loans Amount includes Net Non-Performing Funds and Financial Leasing.

Asset Quality and Profitability

At the end of December 2017, our Bank commanded TL 39.1 billion of assets, an increase of 0.7% when compared to the end of the previous year. Our Bank grew in a balanced manner in 2017. Loans accounted for 68% of the total assets at the end of 2017.

Our Bank’s pre-tax profit amounted to TL 458 million, while its net profit for the period stood at TL 375 million, an increase of 27% YoY. Accordingly, our profitability in assets and equity improved. In this period, our Bank recorded a Return on Assets of 0.96%, while we achieved a Return on Equity of 9.72%. The Bank focused on efficiency and managed its expenses effectively, supporting the improvement in profitability, a trend which was complimented by implementing effective practices to increase asset quality

Funds Collected and Shareholders’ Equity

Collected funds remained the most important source of funding for the Bank in 2017. Collected funds stood at TL 22 billion, a 4.6% YoY increase as of December 2017, representing a 56% share of the total balance sheet, with 51% of this amount consisting of TL accounts and 49% of foreign currency accounts. In addition, current deposits totalled TL 6.9 billion, marking an increase of 20%. Our Bank successfully managed its existing international borrowing during the year and diversified its funding structure by increasing its domestic lease certificate issuances. Moreover, the previous year’s profits were kept within the Bank and our equity amounted to TL 4.1 billion, with increased profitability.

The Bank’s Capital Adequacy Standard Ratio stood at 15.58% at the end of 2016 and 18.22% at the end of December 2017. The Bank’s current subordinated loans serve to balance any negative impact of exchange rate movements on the Bank’s legal equity and, as a result, our Bank is able to maintain its capital adequacy ratio at a relatively strong level.