CEO ASSESSMENT

In 2017, we continued our efforts to raise a financially literate generation, to leverage and propagate the habit of saving up in our country based on our “Responsible Banking” approach.

Distinguished shareholders, customers, business partners and colleagues,

2017 has been a successful year for the banking sector and for TEB. The cooperation established by the public sector, private sector and regulatory agencies that succeeded in taking action in unison and harmony following the tough year of 2016 contributed to the beyond-projected growth rate attained by Turkey in 2017. As TEB, we vigorously continued to contribute to the growth of the national economy, backed in the toil by the self-confidence of having reached our targeted growth figures and the experience and sense of responsibility stemming from having completed our 90th year in business.

At TEB, we consider an economy erected on innovation and added value as the future of our country. Drawing on our banking concept that delivers solutions to future needs and on our know-how and experience of 90 years, we carry on extending increasing versatile support that will carry our employees, business partners, customers and society into the future.

In 2017, we kept focusing on productivity and continued to work to produce even more value for all our stakeholders. Along our journey that we set out based on our “Consultant Bank” concept, we have launched a number of projects emanating from our commitment to responsibility in a broad spectrum of areas ranging from innovation to sports, financial literacy to entrepreneurship, SMEs to women entrepreneurs and angel investors. Firmly believing that innovation is the only way to get ahead in the competition, we maintained our focus on innovation and entrepreneurship, placing special emphasis on SME, Retail, Corporate, Startup Business and Women Banking segments.

We extended continued and increased support to the economy also in 2017

Our Bank’s total assets reached TL 85.8 billion, up by 8%, as at 31 December 2017. The Bank booked TL 1,068.8 million in net profit. Loans, the most important indicator of our support to the economy and our customers, accounted for 74% of our total assets in 2017. We have allocated nearly half of our lending that amounted to TL 63.3 billion to SMEs, the engine of the Turkish economy.

Giving priority to risk management and asset quality as always, TEB’s NPL ratio was 3.02% in the reporting period. In the same period, our total deposits grew by 12% and reached TL 55.6 billion. Our shareholders’ equity increased by 16% to TL 9 billion, while our Bank’s capital adequacy ratio was registered as 16.12%, significantly above the target ratio of 12%.

We have renewed the syndicated loan at 103%

In September 2017, we have signed a syndicated loan agreement for EUR 385 million and USD 85 million with a 367-day maturity and for USD 75 million with a 2 year and 30-day maturity. Compared with the amount of the facility secured in the previous year, we attained a renewal rate of 103%; in a similar vein, a tranche with a term of 2 years and 1 month was added so as to confirm the trust held in our Bank by the investors. The syndicated loan we obtained once again attested to Turkey’s key economic indicators, the banking sector’s robust structure, and TEB’s successful performance.

We are shaping the banking model of the future with “TEB Practical Branch”

As we employed the advancing technology in our operational processes, we kept upgrading our banking business models and service channels based on our customer-focused approach. In 2017, we have initiated a brand new era in the Bank’s ATMs all over Turkey with TEB Practical Branch that is in pilot phase, which is our new branch concept that combines digital and physical branches. With TEB Practical Branch, where we integrate the human factor in the digital, we are enabling the performance of various transactions that oblige a wet signature such as obtaining a housing loan, as well as transactions requiring a physical exchange such as money withdrawal, depositing and credit card delivery. Eliminating hard copy documents and incorporating digital authorization of all documentation by the device, TEB Practical Branch will also serve to contribute to operational efficiency.

Relying fully on domestic production without incorporation of any software or hardware from abroad, and developed by our in-house IT and operations departments and engineering staff working in the R&D department, TEB Practical Branch offers the full range of banking services. With the pilot runs ongoing in Denizli and İstanbul, we are intending to expand TEB Practical Branch all over Turkey, which we believe is going to be the banking model of the future.

We have guided the transformation of our SMEs in the Industry 4.0 process

As TEB, we recognize that SMEs are the drivers of our economy; we have been supporting the SMEs for more than a decade with TEB SME Banking. Along the line, we kept standing by our SMEs with our further diversified support extended to them in 2017. Based on the fact that it is not sufficient to focus merely on their financial needs, we have developed new services in line with their needs in an effort to help them keep pace with the evolving world and to build on their managerial skills. We concentrated on helping our SMEs grow and get ahead in the competition.

Aiming to help SMEs to be able to compete globally and to adapt to “Industry 4.0” process, we began visiting the SMEs in all the cities and organizing “TEB SME Academy Industry 4.0 Gatherings” under the TEB SME Academy roof. In these training programs that we launched in order to navigate our SMEs through their technological transformation in the Industry 4.0 process, we will carry on with our efforts targeted at letting them endure in the global competitive environment.

We have reached three thousand business owners via TEB Women Academy

We carried on with our efforts aimed at increasing women labor participation in the economy through Women Banking organized as an individual business line at a bank, a first in Turkey. Through the TEB Women Academy, we continued to organize special training programs to eliminate the hardships women face in business life. With TEB Women Academy, we succeeded in reaching three thousand women bosses in 25 training activities we held in 17 cities specifically for women business owners.

Under TEB Women Banking, which we launched with the goal of involving women in the economy rather as producers than consumers, we have introduced the Growth Academy in 2017, which is a group coaching service. Comprised of three different modules, the training program let the women business owners not only dwell on the most problematic topics they had to deal with while they run their businesses, but they also had the chance to meet many women business owners engaged in different sectors and to exchange ideas.

We take part in every department of the entrepreneurial ecosystem

Under the Startup Business Banking that we have been operating for five years based on our “Consultant Bank” concept whereby we are aiming to contribute to the entrepreneurial ecosystem in our country, we kept winning added-value projects for the national economy. We continue to expand the TEB Start-Up House concept, which we set up in Ataşehir, İstanbul to offer free-of-charge training, consultancy and mentoring services across Anatolia in cooperation with TİM (Turkish Exporters Assembly) with the aim of connecting with entrepreneurs all around the country and putting their innovative business ideas into use that will be beneficial for the economy. During 2017, we increased the number of TİM-TEB Start-Up Houses to 10 with the new ones established in İstanbul, İzmir, Denizli, Gaziantep, Trabzon, Mersin, Bursa, Konya, Edirne and Erzurum.

Including 236 companies to which we have offered consultancy to date, the total number of entrepreneurs we have supported reached 572. With 315 training programs we organized under 23 different headings in 17 cities in total, we reached 10 thousand entrepreneurs-to-be and active entrepreneurs. With the Wake Up programs we launched in universities, we taught the “design thinking” notion to more than one thousand university students, and let them put their own business ideas into life.

We connected with our children who are the future entrepreneurs with the “TEB Little Makers at Work” project

During 2017, we opened the doors of our TİM-TEB Start-Up Houses to our children, turning them into maker workshops. We introduced our children, who we believe will be the big entrepreneurs of tomorrow, with the maker movement that combines technology with the ‘do-it-yourself’ culture. With the aim of making sure that the children in Anatolia have access to equal opportunities with those in big cities through the “TEB Little Makers at Work” project, we gave maker training to students at our TİM-TEB Start-Up Houses located in nine different cities, namely, İstanbul, İzmir, Denizli, Gaziantep, Trabzon, Mersin, Bursa, Konya and Edirne. At the end of the project, we had managed to reach and open new horizons for more than 500 3rd and 4th graders in 72 schools.

We kept supporting Turkish fintechs with TEB Fintech Future Four

Under the TEB Fintech Future Four Program, which we launched in 2016 based on our prediction that banks would take on an active role together with fintechs in the future financial services sector, 8 projects qualified in the final presentation upon evaluation of all entries, and product development was initiated in relevant departments at the Bank. In the new term of the program, we will be partner with a global name and keep collecting applications from startups with innovative fintech ideas.

We continued to work to be a financially literate society

In 2017, we continued our efforts to raise a financially literate generation, to leverage and propagate the habit of saving up in our country based on our “Responsible Banking” approach. Under the TEB Family Academy we initiated in 2012 in order to help increase the “savings ratios”, a critical topic in Turkey as elsewhere in the world, the number of individuals who were given training by our voluntary trainers reached 250 thousand in five years. Within the scope of cooperation with UNICEF, we reached 11 million children in the 6-14 age interval through art classes and contributed to raising a financially literate generation. We are planning to give training to over 6 million participants and students via the projects we are co-conducting with Directorate General of Lifelong Learning, and Directorate General of Vocational and Technical Education under the Ministry of Environment. By 2019, we are aiming to make 20 million individuals, in other words 25% of Turkey, financially literate.

We kept investing in tennis, which we see as an investment in our country

We have been investing in the tennis sport for seven years, making use of the know-how and experience of our strategic partner BNP Paribas. In 2017, we carried on with our activities aimed at consolidating the perception “TEB is tennis” and to further upgrade our country’s brand equity. Through our TEB tennis investments, we are aiming to contribute to raise world-class tennis stars from among our youngsters, to sponsor global tennis organizations by giving our name, and to help our country get a larger share from the sports economy. In this context, we have authored events that put tennis on our national agenda also in 2017. Within the scope of the TEB BNP Paribas Tennis Stars Series event attended by thousands of tennis fans, the Russian tennis player Maria Sharapova and national title-holder tennis player Çağla Büyükakçay competed in a match.

We will continue with our efforts based on our responsibility we feel towards our country also in 2018

Being one of the oldest and key players of the national banking history owing to our know-how and experience, we do not regard the banking business merely as collecting deposits and disbursing loans; always keeping our responsibility towards our customers, employees, shareholders and society in mind, we will continue with all our might to bring our country and companies to a position capable of competing with others on a global scale, and to contribute to increasing the welfare of our society and our people in the years ahead, as we have always done in the past 90 years.

Yours sincerely,

Ümit Leblebici
CEO