EVALUATION OF FINANCIAL STATUS, PROFITABILITY AND SOLVENCY

The results of the 2012 evaluation of TEB’s financials prepared according to the BRSA regulations is as follows:

Compared to year end 2011, TEB’s net profit increased by 135% and was realized as 486 million TRY in 2012, which is an indicator of strong performance in core banking operations and improved operational efficiency.

By December 31, 2012, TEB’s total assets increased by 14.3% on a year to date basis and reached 43.5 billion TRY, while loans increased by 16% and reached 29,686billion TRY, continuing to support its retail and institutional customers. Within the scope of providing services to an expanded customer base, retail loans increased by 22.5% and reached TL 9,356 million. As an indicator of TEB’s consistent contribution to the economy, the total of SME, commercial and corporate loans reached 20,072 composing 68% of loans.

With the help of our cautious risk management and sale of non-performing loans, TEB lowered the ratio of its non-performing loans from 2.8% at the end of 2011 to 2.1% by the end of 2012.

TEB granted all of its deposits to its customers in the form of loans and the loans to deposit ratio was 103.3% as of year-end 2012.

Our Bank covers a large portion of its funding need through time deposits which grew above the sector and reach 29.3%. Share ratio of deposits, of its funding need through deposits. The share ratio of deposits, which constitute our Bank’s primary funding source, is 66% in the liabilities and shareholder’s equity.

Meanwhile, the volume of demand deposits reached TRY 4,339billion, providing a significant reduction in our Bank’s funding costs.

TEB diversifies its funding resources through international borrowings. In order to provide long term funds, the Bank continued to obtain syndication loans and similar loans from international markets. As of December 2012, we have syndication loans amounting to $122 million and € 250 million with maturities ending by August 2013.

Within the framework of the agreements signed between our Bank and various banks and financial institutions, bank has two subordinated debts with a total amount of $ 215 million and € 275 million.