TEB 2012 Annual Report

TEB FINANCIAL SERVICES GROUP

TEB FACTORING

As one of the 3 biggest companies in the sector, TEB Factoring continued to serve corporate and commercial firms and SMEs and increased its business volume in 2012 through a range of various export, import and domestic factoring products. The Company increased its profit by 55% YoY.

TEB Factoring recorded a 16% YoY increase in turnover in TL terms during 2012, closing the year with total turnover of TL 7 billion.
The company chalked up a return on equity of 37.34% and a return on assets of 1.92%. TEB
Factoring boasts one of the highest productivity yields in the factoring sector.

TEB Factoring expanded its total client base to 13,880 in 2012. The Company ended the year 2012 with 2,970 active customers, 10 branches and 109 employees.

As in 2009, 2010 and 2011, TEB Factoring was awarded the "Best Export Factoring Company" in 2012 by members of Factors Chain International (FCI), the world's largest and the most important factoring organization, which includes a total of 264 members from 72 countries. TEB Factoring is proud to have brought this prestigious award to Turkey for 4 years in a row.

In view of developments in the business arena during 2012, the availability of loan insurance products is expected to expand in 2013 and beyond, particularly for the domestic market. This product is not currently widely available. Factoring companies which progress rapidly are therefore in a position to create a product which can change the leadership in the sector in future. Having established the necessary infrastructure for this product, TEB Factoring has set the target of raising its market share in the sector by undertaking guaranteed factoring transactions in the coming years. Another goal for TEB Factoring is to represent Turkey among the world's leading countries in the factoring sector.

TEB ASSET MANAGEMENT

Managing a volume of nearly TL 3 billion in the fields of asset management and investment consultancy, TEB Asset Management is the 6th largest asset management company in the sector. TEB Asset Management's fundamental objective is to determine the compositions of investment portfolios based on the risk profiles of individual and corporate clients and to manage those portfolios accordingly, to optimum benefit.

As of December 2012, TEB Asset Management, as an asset management company with a wide delivery channel abroad, commanded

A 5.6% market share and a volume of TL 1.7 thousand in the overall mutual fund industry, with

a 12.4% market share in actively managed mutual funds and
a 10.2% market share in capital protected mutual funds,

A volume of TL 179 million in Private Asset Management,
A volume TL 133 million in Corporate Asset Management Services,
A 3% market share and volume of TL 611 million in Pension Funds, and
A volume of € 300 million in international mutual funds.

TEB Asset Management has been providing asset management services since June 2004. The
Company also began to offer 'Corporate Asset
Management Services' from the end of 2005.

Having entered a mutually advantageous collaboration with its partner, BNP Paribas Asset Management – a leading name in the asset management business in the Eurozone, TEB Asset Management has steadfastly moved towards its goal of becoming a global player. Having already begun to reap the benefits of this collaboration, TEB Asset Management has already succeeded in establishing strategic cooperation with a number of international corporations. In this context, the road-shows conducted in Europe (Paris, Frankfurt, Amsterdam, and Helsinki), Asia (Hong Kong, Singapore, Tokyo) and Latin America (Chile, Peru, Colombia, Brazil) during 2012 for international corporate investors began to yield positive results.

Managed by TEB Asset Management, the BNPP IP L1 Turkey Equity Fund has expanded to a size of about € (205 million, to become the largest equity fund in Turkey investing in Turkish equities.

Continuing to develop new products with an innovative approach
The Tactical Distribution Fund is a new product, which

is designed especially to meet the needs of TEB's Star and Private Banking customers;
invests in equities, borrowing instruments of public and private sectors, repurchase-reverse repurchase or gold or other precious metals; and
aims to benefit from the income differences between various asset classes by actively changing the distribution of assets in customers' portfolios.

In 2012, in addition to the Tactical Distribution Fund, the "MevduFon", a systematic product which includes both deposit and mutual funds was offered to customers of TEB Asset Management.

With its innovative 'Capital Protected Funds together with TEB' in 2012, TEB Asset Management has offered different alternatives to investors. In 2012, a total of 8 new capital protected funds were offered to the public under TEB Asset Management's supervision.

In 2012 TEB Asset Management succeeded in raising its market share in the mutual fund industry.
In 2012 TEB Asset Management raised its market share in the sector with the timely issue of new products like the Tactical Distribution Fund and MevduFon, and by changing the type of products that it offers. Moreover, TEB Asset Management achieved a strong performance in all categories; eight of the fixed income funds managed by TEB Asset Management ranked in the top 20 among nearly 300 funds of the same type. Likewise, the funds managed by TEB Asset Management ranked among the top in the Equity Weighted Fund and Balanced Fund categories.
The performance demonstrated by TEB Asset Management in mutual funds was also reflected to pension funds; the fixed income and equity weighted pension funds managed by TEB Asset Management, in particular, are amongst the best performing in their categories.

TEB INVESTMENT

Established in 1996, TEB Investment's primary field of activity is to engage in capital market operations in accordance with the provisions set forth in the Capital Markets Law no. 2499 and respective legislation.

TEB Investment Securities Inc. offers the following services:

mediating in the trade of capital market instruments,
mediating in the issue of capital market instruments and their sale via public offering,
credit purchase, short-selling, borrowing and lending of capital market instruments,
the trade of capital market instruments with repurchase-resale guarantee, and
mediating in the trade of derivative instruments in Turkey and abroad, and in custody services.

TEB Investment's vision is shaped around the following principles:

to become the best and the most trusted brokerage house in capital market activities,
to expand its client portfolio by competing at the highest level based on customer needs and market tendencies, and through the use of state-of-the-art technology, which fully upholding the law and ethical standards, and
to ensure the highest level of customer satisfaction.

The Company aims to offer the best services to its customers with its dynamic and active personnel by keeping abreast of technological developments, listening to the opinions of its customers and allocating time to understand their needs.

TEB Investment delivers its wide product/service portfolio to its customers in both Turkey and abroad through a number of service channels. Accordingly, the differentiated channels used for various investment services such as equity, forward transactions, mutual funds, bonds-bills and repurchasing, as well as the channels used for special solutions, such as corporate finance, research, international capital markets, investment centers and the internet branch, which are offered to different customer groups, are all collected under TEB Investment.
TEB Investment differentiates itself in the sector with its

experienced human resources team, which provides effective services to both individual and institutional customers,
skilled research teams composed of specialists in their own fields, and the high quality services they offer, and
local know -how in conjunction with the support and experience of its global partner.

TEB Investment ranked 7th with a 3.72% market share on the basis of its ISE equity trading volume during 2012, accounting for a total trading volume of TL 46,390 million. For the same period, the Company was ranked 8th on the Turkish Derivatives Exchange in terms of trading volume, where it commanded a market share of 4.30% with total trading volume of TL 34,748 million.

THE ECONOMY BANK N.V.

The Economy Bank N.V. (TEB NV) was founded in 1998 in the Netherlands. TEB NV's mission is to be one of the most active and service-focused players in the Turkish and European financial markets as the TEB Group's specialized service provider in the international trade & commodity finance business line.

In 2005, TEB NV became a member of the BNP Paribas Group, one of the world's biggest financial institutions. This development brought a significant contribution to TEB NV's operations and TEB NV began to offer services in 80 countries worldwide. Benefiting from BNP Paribas' credit-risk analysis systems, the Bank continues its operations with an effective business model, in which trade and commodity finance products are held separately.

TEB NV has gained prominence in the sector with its

liquid balance sheet which mostly comprises of short-term assets,
experienced human resources,
the importance it attaches to effectiveness and transparency,
strong economic structure which has emerged with risk-monitoring approaches and practices, and
tailored and solution-oriented business making approach

TEB NV's performance in 2012
TEB NV wrote a pretax profit to € 22.14 million in 2012. Among the most important factors behind this success was the structuring of assets in accordance with market conditions.

The Bank's net interest revenues amounted to € 33 million in 2012, while its revenues from fees and net commissions reached € 6.2 million. The Bank's specific loan provisions had reached € 19.3 million by the end of 2012. In 2012, TEB NV's net loss after tax and provisions was realized at € 5.0 million, while its shareholders' equity amounted to € 96.0 million.

In 2012, TEB NV mediated in total of € 1.7 billion in trade transactions, with a cost/return ratio of 35.16%.

Setting itself apart in the sector with its specialized personnel, experienced managers and robust performance, TEB NV will continue to offer its customers various trade finance solutions in 2013 by diligently following its prudent approach and effective risk management policies.