EVALUATION OF FINANCIAL STATUS, PROFITABILITY AND SOLVENCY

The results of the 2014 evaluation of TEB’s financials prepared according to the BRSA regulations is as follows:

TEB’s net profit increased by 16% and was realized as 623 million TRY in 2014, while total equity increase was realized by 11.7%.
which is an indicator of strong performance in core banking operations and improved operational efficiency.

By December 31, 2014, TEB’s total assets increased by 18% on a year to date basis and reached 62,992 billion TRY, while loans increased by 19% and reached 45,392 billion TRY, continuing to support its retail and institutional customers. Within the scope of providing services to an expanded customer base, retail loans increased by 14% and reached TRY 13,815 million. As an indicator of TEB’s consistent contribution to the economy, the total of SME, commercial and corporate loans reached 31,176 composing 69% of loans.

TEB granted all of its deposits to its customers in the form of loans and the loans to deposit ratio was 115.1% as of year-end 2014. Time deposits, which constitute our Bank’s primary funding source, increased by 17.6% and total deposit share in liabilities increased to 63%.

Meanwhile, the volume of demand deposits reached TRY 5,479billion, providing a significant reduction in our Bank’s funding costs.

TEB is diversifying its funding base by international borrowings. In order to provide long term funds, the Bank continued to obtain syndication loans and similar loans from international markets.

Despite the adverse developments in the global financial markets, TEB was able to renew its syndication loan, to support export companies, with one year maturity and 113% and Libor/Euribor + 0.90% per annum in total, which is the lowest rate for 2014 in Turkish banking sector. Agreement regarding the loan, consisting of two tranches € 335million and $ 180million, $ 625 million in total, was signed on 21 August 2014 and 32 banks contributed to the syndication loan.

Within the framework of the agreements signed between our Bank and various banks and financial institutions, as of year end 2014 bank has outstanding subordinated debts of $ 280 million and € 400 million.

To diversify its funding resources through international borrowings and offer its customers an alternative to deposit bank issued nominal value of  228.2 million TRY  bond with a tenor of 173 days on September 2014, nominal value of  254.5 million TRY  bond with a tenor of 176 days on October 2014, and , nominal value of  26.9 million TRY  bond,  nominal value of 21.8, 20.6, 31.0, 28.8, 24.4 million USD bond with a tenor of 302 days, nominal value of 241.3 million TL bond with a tenor of 166 days amounting to a total of TL 991.6 million.