TEB 2018 Annual Report

We are leaving behind 2018 which was a critical period for the banking industry. Despite the fluctuations which took place, especially in the second half of the year, we have rapidly moved on to a stabilization process, thanks to rapid economic decisions and high collaboration between the industry and regulatory authorities.

Towards the end of the year, banks started to renew their syndication loans, Turkish Lira has started to appreciate again and positive developments occurred in terms of current deficit.

Turkish economy stands on strong foundations and the infrastructure of banking industry is profoundly robust. Efficiency is one of the most significant problems of our country. I believe we will overcome this challenge by expediting the reform process. Every decision which reduces the current deficit while sustaining our growth will increase our efficiency. As banks, we should join hands with the real sector maintaining our strong asset quality and continue to grow.

As far as TEB is concerned, I can state that we reached our targets by managing the difference between reality and perception in a year when each quarter had different characteristics compared to others. In this process, in order to do our part in the best way possible and contribute to our country’s economy, we have not only focused on financial growth but also to efficiency and continued to add value to all our stakeholders.

In 2018, we continued our support for the economy.

Total assets of our bank increased by 13% YoY as of 31 December 2018 and reached TL 96.9 billion. Our net profit was realized as TL 1 billion. Credits which are the most important indicators of the support we provide to the economy and our customers constitute 66% of our total assets.

Giving priority to risk management and asset quality, as always, our bank’s total credits were TL 64 billion and deposits were up by 15.5% and reached TL 64.2 billion. Our shareholders’ equity increased to TL 9.7 billion, while capital adequacy ratio was registered as 16.93%, significantly above the target ratio of 12%.

We have renewed the syndicated loan at 101%.

As an indicator of international investors’ trust to Turkey and TEB, a syndicated loan agreement was signed in October 2018 for Euro 433.5 million and USD 33.5 million with a 367 day maturity with the participation of 17 banks. This syndication loan is a representation of TEB’s success and banking sector’s robust standing and contributed a great deal to Turkish economy, specifically through its use to finance exports. Total cost of the loan is Euribor+2.65% for Euro and Libor+2.5% for USD.

The banking model of the future, “TEB Practical Branch” is expanding throughout the country.

We have increased the number of TEB Practical Branches which we initiated last year as an indication of our leadership in digital banking and the digital transformation of our industry and they started to provide services in many different parts of the country. Number of TEB Practical Branches, our new banking approach which combines digital and physical branches, is 24, eight in İstanbul, eight in Bursa, five in Denizli and four in İzmir.

With TEB Practical Branch, where all documentation is being approved digitally over devices, we are enabling the performance of various transactions that need a wet signature, as well as transactions requiring a physical exchange such as money withdrawal, deposits, money transfers, payment transactions and credit card delivery. TEB Practical Branches which we plan to expand more as we see it as the banking model of the future, also serve to contribute to operational efficiency.

CEPTETEB reached 600 thousand customers.

As one of the first banks to invest on digital banking, we keep on developing products and services we provide through digital channels and renew ourselves with our knowledge in this area. Accordingly, 2018 has been a year when we focused on digitalization to make our customers’ lives easier. As of 2018 year-end, number of users of CEPTETEB, our digital banking platform, exceeded 600 thousand in its third year. Every other person among TEB customers use online banking while 86% of the banking transactions of our customers were realized through digital channels. Number of customers using mobile banking has exceeded 1 million. Standing out with its ease of use, high security standards and rich content, CEPTETEB allows customers to perform their banking transactions easily through digital channels.

Our support for SMEs continues increasingly.

We pay specific attention to the development of SMEs which are the driving force of the Turkish economy. With our “Consultant Bank” approach under TEB SME Banking, we not only provide financing to our SMEs but also support them with non-financial products and services. Accordingly, we conduct trainings and workshops for SMEs through TEB SME Academy by travelling from one city to another and providing guidance on their growth plans and standing out in a competitive environment.

Industry 4.0 was another major topic for SMEs in 2018. By means of meetings with SMEs, TEB aimed to share information for changing needs of our SMEs and help them draw their future visions and increase their capabilities of strategic thinking and structuring. We will continue to be on our SMEs’ sides to help them adapt to technological transformation for sustainability and stand strong in global competition.

TEB Women’s Academy continues on its way.

We believe being a sustainable bank starts with sustainability of the region where it operates and sustainability of the society. Accordingly, through the programs we conduct, we aim at strengthening women’s existence in business world and encourage them to increase their involvement in the economy. With TEB Women Banking we provide financing for women entrepreneurs and offer them information and consultancy on areas they need. Through TEB Women’s Academy, which we started to bring together women business owners with inspiring successful business women, we support women in business life on key areas such as accessing information they need to grow their businesses, reaching new markets, and establishing networks through trainings, consultancy and mentoring programs.

We are among the most significant components of entrepreneurial ecosystem.

2018 has also been a very important year with the support we provided for entrepreneurial ecosystem. A very comprehensive entrepreneurial ecosystem has developed in our country which includes start-ups, incubation centers, acceleration centers, universities, representatives of business world, angel investors, corporate infrastructure and incentive systems of the government. Our bank has focused on this area with TEB Startup Business Banking and has been an important component of this ecosystem for the last six years.

TEB conducts projects with many institutions and organizations to bring in innovative business ideas to the economy and contribute to the entrepreneurial ecosystem. Our Bank has been the only bank in TÜBİTAK’s BIGG Program for the last four years to support startups which are in this program. TEB has been the second organization to provide support to highest number of startups in the BIGG Program last year and with this success it was entitled to be an implementing institution for another two year period.

Through our cooperation with Turkish Exporters Assembly (TİM), we have launched TİM-TEB Start-up Houses in many parts of our country which virtually operate as innovation centers and support start-ups which will build our future economy with their innovative ideas. Our Bank supports entrepreneurs from other countries as well. Through TİM-TEB Start-up House in Silicon Valley, USA, TEB contributes to projects with a high export potential to expand abroad. We will continue to develop TİM-TEB Start-up Houses and open up new ones.

We support Turkish fintechs to expand abroad.

We believe that fintechs which are the new actors of digital transformation will play a significant role in the future of finance industry along with banks. Finance industry needs to live together with innovative finance technologies. TEB stands out as the most active organization to steer this transformation.

TEB started the TEB Fintech Future Four Program last year with an aim to support start-ups which create innovative solutions for the banking and finance industry and to develop and offer innovative products together. This year we cooperated with a strong partner from abroad to enable fintechs to expand abroad. TEB Fintech Future Four Program has gone beyond being just a competition and has been transformed into a platform where applications are received and bright ideas are being evaluated throughout the year.

We will continue our support for fintechs to help them access and introduce themselves in global markets with TEB Fintech Future Four Program. We are proud of our structure which allows us to offer financial and advisory service to a start-up at an idea phase through public offering.

In 2018, TEB started activities on social entrepreneurship area which became popular in Turkey as well as the rest of the world. With “Distinctive Investments” events organized in cooperation with Ashoka, the first and widest social entrepreneur network in the world, we brought together social entrepreneurs with investors with an aim to support sustainable business models.

We started TEB Digital Financial Literacy Program.

TEB is one of the first implementers of Financial Inclusion Program which assumes a significant role in reaching Sustainable Development Goals. With TEB Family Academy we continue to work towards expanding savings habits to all segments of the society and raising a financially literate generation. Financial literacy trainings brought together expert trainers with a large number of participants in 2018.

Our Bank enabled approximately 19 million people to participate financial literacy trainings so far. In 2018 a major development in this area has been in digital financial literacy. As a bank which creates solutions with fintechs and develops and implements its own fintech development program during its digital transformation process, we started “TEB Digital Financial Literacy Program” for university students who will be financial consumers of the future. In this context, we travelled from one city to another to meet with university students and shared information on new generation technologies and digital transformation.

2018 has been a year with many awards.

In 2018, TEB has been granted numerous awards for its innovative and distinctive products and services. In Retail Banking, TEB Family Academy received Global Business Excellence Awards while CEPTETEB won two prizes at Altın Örümcek (Golden Spider) awards. TEB Private Banking has been awarded by Global Finance and World Finance as the ”Best Private Bank” and also received the ”Most Innovative Private Bank” award in International Finance.

In Corporate Banking, TEB’s products and services in Cash Management have been rewarded by Asian Banking and Finance 2018 and Best Business Awards. In a survey conducted by Euromoney, which is the most effective publication in finance, TEB has been selected as “Best Cash Management Service Quality Bank in Turkey” and took the second place in ”Market Leader” category.

Two international awards have been received in SME Banking this year. TEB SME Consultancy Marathon Program has been awarded by CSR Excellence Awards and TEB Academy Industry 4.0 Meetings conducted all around Turkey has been awarded by Global Business Excellence Awards.

TEB focuses on employee happiness under “Employee Value” principle which is at the foundation of its corporate culture. We are proud to receive the “Best Employer of Europe and Turkey” given by Top Employers Institute one more time.

Aside from the awards in banking and finance, TEB has a year full of many prizes as a result of 27 awards received for our successful communication activities. Our digital advertising campaign realized through our tennis platform “We Are Tennis” achieved to receive Felis, Inflow, Stevie and MIXX awards.

TEB strives to contribute to its society as well as the Bank and its customers. Among our communication campaigns, “Elalem Ne Der” (No Matter What Others Say) which we launched on March 8 International Women’s Day encourages women to contribute to the economy without being discouraged by offending expressions from others.

We will continue our journey towards our goals in 2019.

We have a new year and new goals ahead of us.

TEB will continue its efforts in 2019 with its knowledge and experience from its long-standing background and without compromising competition. With our customer oriented approach we will be on our customers’ sides with most appropriate products and services for their needs and expectations. As one of the most significant players of the banking industry we trust our country and our people.

As always, we are determined to be “a good bank” for our employees, customers, shareholders and society; in summary all our stakeholders and we will continue our efforts to add value to increase the welfare level of our country.

On behalf of myself and TEB Management Team, I would like to thank all our stakeholders who trust and believe in TEB brand, particularly our dearest employees who created our 2018 performance.

Yours sincerely,

Ümit Leblebici
CEO