SUMMARY OF BOARD DIRECTORS’ REPORT PRESENTED TO THE GENERAL ASSEMBLY

Distinguished shareholders, customers and employees,

In 2017, TEB’s total assets went up by 8% to reach TL 85.8 billion in the January-December period, while the Bank booked TL 1,068.8 million in net profit. Loans, which make up the most important indicator of TEB’s support to the economy and its customers, accounted for 74% of its total assets in 2017. Nearly half of the loans worth TL 63.3 billion in total were disbursed to the SMEs, the engine of the Turkish economy.

Having put emphasis on risk management and asset quality in 2017 as it does every year, TEB’s non-performing loans ratio in the reporting period was registered as 3.02%. In the same period, the Bank’s total deposits augmented by 12% to TL 55.6 billion. Maintaining its stable growth along with its robust capitalization, TEB’s shareholders’ equity increased by 16% to reach TL 9 billion, while capital adequacy ratio was a strong 16.12%, well above the targeted ratio of 12%.

TEB’s support to the national economy has been ongoing, and the bank achieved a differentiated and specialized position in foreign trade, backed also by the global service network of BNP Paribas. Through significant advantages and facilities offered to multinationals in cash management, the Bank kept developing cash management implementation for its global customers requiring a single global solution for their operations that may be scattered all around the world.

Besides supporting the real economy, TEB undertakes initiatives in major social and environmental issues as a requisite of its corporate social responsibility. This approach compels paying due regard to environmental, social and governance risks in certain sensitive sectors and products, while respecting sustainable development principles. In other words, this approach means that today’s needs are to be satisfied without injuring the ability to satisfy the needs of the future generations.

In a period of greater significance acquired by the market conditions and regulatory requirements, TEB continued to render service to its customers by setting itself high standards with respect to compliance also in 2017.

The Bank continued to give priority to Alternative Distribution Channels as evidenced by the migration of transactions performed from branches to digital channels, and the customer-centricity goal of being a digital and agile bank by 2020s has been maintained with the contribution of all employees.

The transformation program of TEB continues rapidly employing an innovative approach targeted at key points with the objective of achieving effective results. Efficient, digital and elegant customer interfaces are being utilized. These are combined with processes that put customer-centricity, efficiency, agile methods and initiatives aimed at empowering the employees that will own this transformation in their focal points, as well as advanced and digitalized business and distribution models.

In our day when everything has become digitalized, cyber security has become ever more important; hence, while IT security infrastructures have been upgraded, the Bank’s employees were given training which ensured higher awareness of the topic.

We hereby present the operating results and financial statements of TEB for 2017 fiscal year for your comments and review. On behalf of the Board of Directors and myself, I would like to thank you, our valued shareholders, our team, our customers and our business partners for accompanying and having confidence in us throughout our journey.

Sincerely,

Board of Directors