2016 ANNUAL REPORT
TEB FINANCIAL SERVICES GROUP
TEB FAKTORİNG A.Ş.
One of the top five players in its sector, TEB Faktoring provides export, import and domestic factoring products and services to corporate and commercial customers, with a particular focus on the SME segment of the market.
In 2016 TEB Faktoring wrote TL 7.7 billion worth of business, up from the previous year’s TL 7.6 billion despite the economic contraction. Total assets increased by 37% and amounted to TL 1,704,802. Additionally, the net income and total factoring receivables of the company increased by 39% in comparison with the previous year. As of year-end 2016 figures, the company registered a 15.41% return on equity and a 0.78% return on assets. According to the data released by the Financial Institutions Association, the sector average for the return on equity was 13.59%.
While the non-performing loans ratio in the factoring sector is approaching 5%, thanks to TEB Faktoring’s over emphasis on risk management, the NPL ratio realized at 2.39% below sector average and even below the budgeted figure.
In 2016 the total number of customers in TEB Faktoring’s portfolio reached 24,701. As of year-end, the company had 2,182 active customers, 18 branches and 128 employees.
TEB Faktoring ranked as the second largest factoring company in Turkey in terms of the factoring transaction volume and among the biggest factoring companies in the world according to Factors Chain International (FCI), the world’s biggest umbrella organization for independent factoring companies. In 2016, TEB Faktoring has been chosen as the second best factoring company with a score of 99.9% and holds a record as the first and only factoring company to win the “Best Factoring Company” award 5 times in the history of the award.
According to a regulation of the Central Bank of Turkey, the bonds and bills that are drawn against the export receivables that are handed over to factoring companies and endorsed to the Eximbank became eligible for rediscount, thus the opportunity for factoring companies to offer post-shipment rediscount credit to exporters. Therefore, export companies can make use of the favorable funding made available from the Central bank of Turkey. TEB Faktoring added to its successes by becoming the first factoring company in Turkey to offer post-shipment rediscount credit to exporters. In addition to that, The Central Bank of Turkey granted rediscount credit to factoring companies through banks against foreign exchange earning services and post-shipment export receivables.
TEB Faktoring is progressing on projects to better serve the factoring sector customers and enlarge the cake through projects that involve process digitization and targeting to bring them alive in 2017. TEB Faktoring has been keen on the digitalization projects since 2015 from the standpoint of risk management, increasing efficiency and automation which are the most important factors of profitability. Some of these projects have been realized in 2016 and the remaining ones will be a priority in 2017.
Supply Chain Financing, which is a frequently used product around the world, has been in the focus of the factoring sector in 2016. A portal which will be constructed under the umbrella of Association of Financial Institutions will allow financial institutions, buyers and suppliers be able to interact. This joint electronic infrastructure will enable companies, especially SMEs, obtain financing at more favorable rates and conditions. TEB Faktoring has initiated work towards this product and aims to make it available for its customers in the near future.
TEB ASSET MANAGEMENT A.Ş.
An asset-management joint venture of BNP Paribas, one of Europe’s leading financial institutions and of TEB, one of Turkey’s leading banks, TEB Asset Management has been established in 1999. As of year-end 2016, it is the 8th biggest asset management company in Turkey, whose portfolio of TL 4.2 billion worth of assets under management gave it a 3.48% share of the sector.
TEB Asset Management seeks to manage retail and corporate clients’ portfolios in the best way possible by identifying and maintaining financial instrument compositions that best suit their owners’ risk profiles.
As of December 2016, TEB Asset Management was an asset management company with an extensive international distribution network and it:
TEB Asset Management introduced asset management services in 2004. In late 2005, the company added corporate asset management services to its business lineup in order to manage the assets of institutional clients such as foundations, associations and the like. For the conduct of its corporate asset management services, the company has formulated both TL and foreign-currency based models in three different asset classes: bonds & bills, guaranteed-yield instruments and equities.
The synergies which TEB Asset Management generates by collaborating with BNP Paribas Investment Partners, one of the Euro Zone’s leading asset managers, are powering the company’s progress towards becoming a global force. Thanks to this collaboration, TEB Asset Management continues to enter into strategic partnerships with many other international firms.
TEB Asset Management manages the Parvest Turkey fund, a leading open-ended collective investment scheme (SICAV) whose assets of TL 156 million are invested mainly in the equities of companies established in Turkey. TEB Asset Management also manages the Japan-based Turkish Equity Mother Fund, whose assets amount to about TL 120 million. These two plus the TL 65 million in other international funds which invest in Turkish equities and for which the company acts as a consultant make TEB Asset Management Turkey’s biggest asset manager working for international clients.
2016: A year of many changes
After having a high proportion of liquid funds, the asset management companies are leaning towards various instruments in order to convert into managers of more diversified funds in 2016. In this respect, instruments such as private sector debt instruments and rent certificates are gaining weight in the investment funds. Additionally, real estate investment funds and venture capital investment funds have been included in the collective mutual funds this year for the first time.
TEB Asset Management maintained its leading position in the sector, establishing funds for different investment profiles such as:
In 2017
In 2017 TEB Asset Management will continue to introduce new products in keeping with its well-established reputation as a market innovator, to guide investors in their making the best possible investment choices at the best possible time, to work with domestic and international stakeholders in the exploration and exploitation of ways to boost market share and to protect its clients as well as itself against adverse market risks.
TEB INVESTMENT A.Ş.
TEB Investment Securities commenced operations in 1996. The company provides capital market services pursuant to the Capital Markets Act (Statute 6362) and relevant laws and regulations.
The company’s licenses were reviewed and renewed by the Capital Markets Board pursuant to two Capital Markets Act communiques: Communique III-37.1 on principles regarding investment services and activities and their ancillary services (“Investment Services Communique”) and Communique III-39.1 on the establishment and operation of investment institutions (“Investment Institutions Communique”). The company has been providing investment and ancillary services as a “broadly-licensed brokerage” since 13 November 2015.
TEB Investment A.Ş. is also licensed to provide order brokerage services to Türk Ekonomi Bankası A.Ş. by the resolution of Capital Markets Board dated 27 June 2016.
The company is currently licensed to provide the following investment and ancillary services:
TEB Investment Securities reaches its domestic and international clients and it supplies them with an extensive lineup of products and services through a variety of service channels that address the particular needs of different investor profiles. In this way, the company provides different client groups with the investment and trading services (equities, mutual funds, bonds & bills, repo, etc.) as well as corporate finance and research services according to their requirements.
TEB Investment Securities distinguishes itself in the sector by virtue of:
TEB Investment Securities’ 4.99% share, worth TL 101,064 million, of the Borsa Istanbul Equities Market’s trading volume ranked it in 7th place as of year-end 2016. On the BIST Derivatives Market, its 13.06% market share worth TL 151,645, ranked it first as of the same date.