Dear investors, customers, business partners and colleagues,
2010 was a year in which we, as the TEB family, went through exciting developments, setting out the roadmap for our sustainable growth performance in the future. At the end of this period, we merged with Fortis, a milestone in the Turkish banking history, with our innovation-focused culture being adopted as the driving force behind our united bank and group.
TEB, one of the building blocks of the Turkish banking industry, will continue to operate by the values that its brand stands for in the name of offering its customers the best services and to produce added value for all its stakeholders.
Highlights of our performance in 2010
TEB recorded a strong operational and financial performance in 2010 and continued to play an active role to offer its customers the best services in different banking services under the most appropriate conditions.
TEB’s total assets reached TRY 19 billion by the end of 2010.
TEB’s total assets grew by 26% in 2010, largely thanks to expanding credit and securities portfolios. In 2010, the Bank maintained the trend of growth which had first been seen in the second half of 2009, and succeeded in expanding its credit portfolio on a yearly basis. According to figures for December 31st, 2010, the total volume of loans supplied by the Bank had reached TRY 11.8 billion.
The loan policies that we diligently put in practice at TEB, which also guard the quality and health of our financial structure, allowed us to considerably curtail the volume of non-performing loans, helping reduce the share of non-performing loans in total credit volume to as low as 3%.
Retail banking was one of the business lines where we recorded the highest growth rates in 2010. The rapid increase in the volume of consumer loans maintained the growth momentum in personal loans throughout the year. As a consequence of these developments, the share of personal loans in the total credit portfolio rose by 2 percentage points to 26% in 2010.
Another business line in which TEB demonstrated strong growth was enterprise banking. TEB’s enterprise banking client portfolio expanded by 20% in 2010. This growth in our client portfolio emerged as a natural result of our efforts to use our delivery channels in the most effective manner possible.
Having adopted the goal of being an exemplary practitioner of banking in a bid to build confidence, TEB held TRY 12 billion of deposits at the end of 2010. Deposits continued to be the primary source of our funding operations, while our loans/deposits ratio came in at 98%; in other words, for every TRY 100 of deposits, we supplied TRY 98 to our customers as loans. With this result, TEB has once again proven that it has successfully fulfilled the fundamental function of banking.
Our Bank generated TRY 366.9 million in profit before taxes in 2010 and TRY 300.3 million in net profit. According to these results, TEB recorded an average return on capital of 17.35% (2009: 13.68%) and an average return on assets of 1.76% (2009: 1.41%). TEB’s capital adequacy ratio stood at 14.43% in 2010 preserving its high level.
Besides its strong financial performance, TEB broke new ground in its banking products and services, and strengthened its presence in the market in 2010.
Developments show the strength of our innovative business approach
TEB’s innovative service approach and innovative spirit continued to a play key role in TEB’s sustainable performance.
TEB was ranked the winner in the “Customer Satisfaction” category in the 2010 BNP Paribas Innovation Contest with its project entitled TEB Green Trumpet. Although TEB Green Trompet is a project directly linked to our retail and enterprise banking business lines, it is also an important means of expressing our Bank’s point of view towards innovation and its strength in the field. Launched on television in January 2010, TEB Green Trompet project comprises a number of campaigns, including Magnet Loan, Instant Money and TEB Personal Loan, which were widely acclaimed by our customers throughout the year, allowing us to expand our client base.
In 2010 our Bank offered the market a product entitled Index Linked Deposit Account, which offers investors high returns based on potential changes in financial instruments like stock exchanges, exchange rates, interest rates, etc, as well as precious metals, thus covering the demands of its clients seeking alternative investment instruments.
Another work that was awarded in 2010 was our Pensioner Service project. Having adopted the task of easing the lives of its customers and turning banking into an easy-to-reach and easy-to-use service as its mission, TEB launched the TEB Pensioner Service project, which aims to meet the needs of pensioners who are customers of TEB. In this project, which was put in practice in the second half of the year, we aimed to ensure that our pensioner customers enjoy easy access to TEB branches; initially, in our 6 branches where the project was first put in practice, more than 300 pensioners began to use the transportation network offered by our Bank in order to draw their retirement pensions and to carry out other transactions. As an example of our customer-oriented service philosophy, this service received the award under the Product and Service Category at the 2010 BNP Paribas Innovation Contest.
The TEB Screen Card, which we offered to the market in September 2010, is a world first. It is the first digital bank card to produce internet banking passwords. The TEB Screen Card was given the Public-news Oscars award and was chosen as the product of the year by BNP Paribas.
Dear investors, customers, business partners and colleagues,
TEB – Fortis Merger
I am delighted to inform you that TEB and Fortis merged under the roof of TEB on February 14th, 2011, a date when we were preparing our 2010 annual report for publication. This merger represents a milestone in our Bank’s history, and is also a momentous development for the Turkish banking sector.
Recognizing the challenges and the demands of the work necessary to merge two banks, we are proud of the end result generated by our joint teams. With the new TEB, a new life began for us employees. Our teams have worked tirelessly since the beginning of the merger process. The strong synergy, shared targets and the rising corporate common knowledge, all generated during this period, played a major role in the timely completion of the merger process.
I believe that the efforts and joint strength of our employees, who are so devoted to their jobs, will make us even stronger in the future.
A rapid transformation process, which is aimed to be completed in March, was initiated to merge the two banks physically and operationally under the TEB brand. During this period, our priority has been our customers, as always. Our performance-oriented culture has been adopted as the driving force of the Bank and the Group. As part of this culture, TEB will continue its journey towards its targets without compromising service quality, while putting customer satisfaction at the heart of every matter.
TEB now faces a new era full of opportunities. TEB is determined to turn these opportunities into high performance and reach its targets with the help of its shareholders’ support and the superior efforts of its employees. TEB became a bigger and stronger service provider following the merger, which has seen TEB’s assets nearly double, placing TEB as the sixth biggest private bank in Turkey with nearly 600 branches, more than 10,000 employees, more than 3 million individual customers and more than 500,000 corporate customers.
TEB will continue to lay the foundations of its sustainable growth with a proactive business approach going forward, as it has in the past. Higher market shares, which we plan to reach in every business line steadily and through firm steps, will become the driving force of our growth. Our infrastructure, which is built from effective processes and instruments, will be the basic element in realizing this growth projection.
Backed by BNP Paribas Group’s international financial strength and access facilities, TEB is a member of a global and strong family.TEB is also a respected, deeply rooted and strong bank with an extended knowledge of the Turkish banking industry, the real sector and the services sector. Having witnessed various phases of the Turkish economy, our Bank balanced these two valuable elements and successfully defined its competition threshold.
With the ability to maintain this balance and its competition threshold, our Bank will be operational in a wider region in 2011 and reinforce its position in the market with the energy that its growing sale force would introduce.
Aiming to be the leader among Turkey’s 2nd tier of banks
TEB is one of the leading banks in Turkey. TEB is also a respected and a preferred solution and business partner in the international banking arena. Thanks to its human resources, technical infrastructure and customer-oriented business philosophy, TEB will continue to develop its creative business areas in 2011 and beyond, and to improve its service quality further with each passing day.
While the merger with Fortis has placed TEB in a stronger position in the market, it has also allowed us to look at the future from a new perspective and to further raise the bar. The scale we have reached will positively affect TEB’s presence and prospects and its market share in various banking lines while also allowing us to stimulate our ability to generate added value. We completed the merger transaction, both operationally and physically, in early 2011 without compromising our sustainable growth strategies.
TEB will continue to meet its responsibilities to its clients, employees, shareholders and other social stakeholders in 2011, while also further cementing its new organizational structure.
As long as we shape TEB’s service quality with the point of I outlined above, our profitability, operating performance and presence in the market will grow stronger and our Bank will soon be the leader of Turkey’s 2nd tier of banks.
Esteemed investors, customers, business partners and colleagues,
With our doubled branch network and growing number of personnel, we are preparing to implement our strategy, which is focused on growth in the Turkish market.
The period covering 2011 and beyond will witness exciting developments for each of us; our journey to new horizons in the sector will move us to new levels.
We are proud of the performance demonstrated by TEB and Fortis teams under the exceptional conditions of 2010. As superior as their performance and teamwork was, each of our employees personally acknowledged and completely fulfilled the requirements of being a part of TEB.
As long as our shareholders and Board of Directors provide us with the necessary support and guidance, TEB will continue to prepare annual reports for operating periods which promise to be brimming with achievements. I would like to take this opportunity to extend my thanks to our millions of customers, as well as our business partners and correspondent banks for their trust and for choosing us.