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(1)

2010

ANNUAL REPORT

www.bankasya.com.tr

ya 2010 ann U a L REPORT

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Part I: PresentatIon

4 Mission, Vision, Strategic Objectives 5 Bank Asya in Brief

6 Key Highlights

8 Bank Asya’s Market Position in the Sector 10 Bank Asya’s Growth Strategy

14 Milestones 16 History

18 Changes in Capital and Shareholder Structure During the Reporting Period 24 Chairman’s Message

28 CEO’s Message

30 Message from Mr. Cemil Özdemir

34 Macroeconomic Overview and the Banking Sector 42 Review of Bank Asya’s Activities in 2010

58 Corporate Communications and Social Responsibility 60 Subsidiaries and Affiliates

61 Independent Auditors’ Compliance Opinion on the Annual Report

Part II: InformatIon on management and CorPorate governanCe PraCtICes 64 Board of Directors

66 Statutory Auditors 68 Senior Management 70 Organization Chart 72 Committees

74 Summary Report of the Board of Directors 75 Human Resources

76 Training

77 Transaction Volume of the Risk Group of the Bank, Outstanding Loan and Deposit Balances, and Current Income and Expenses for the Reporting Period

78 Report on Compliance with Corporate Governance Principles 83 Support Services Procured by Bank Asya

84 The Bank’s Profit Distribution Policy

85 The Bank’s Profit Distribution Proposal for 2010 Profits 86 Matters Regarding The Ordinary General Assembly Meeting 87 Detailed Information On Agenda Items

Part III: assessment on fInanCIal InformatIon and rIsk management 88 Summary Report of the Statutory Auditors

89 Five-Year Summary Financial Statistics Including the Reporting Period 90 Assessment of Financial Position, Profitability and Debt Servicing Capacity 91 Assessment of the Audit Committee on the Operation of Internal Systems 93 Information on Risk Management Policies Implemented for each Risk Category 95 Credit Ratings and Reports

Part Iv: UnConsolIdated fInanCIal statements and aCComPanyIng notes 99 Independent Auditors’ Report

102 Explanations and Notes for the Financial Statements

Bölüm v: ConsolIdated fInanCIal statements and aCComPanyIng notes 173 Independent Auditors’ Report

178 Explanations and Notes for the Financial Statements 250 Branches

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With its mission to extend participation banking to the

widest population possible with the latest products and

services, Bank Asya continues to create sustainable

value through investments in advanced technology, a

customer-centric approach, and strong, broad capital

base.

Bank Asya is committed to remain at the top with its

high quality service and advanced technology, and to

continue on its steady and healthy growth path.

High caliber human capital,

excellent performance

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Mount AĞRI: Turkey’s tallest mountain with an elevation of 5,137 meters.

Bank Asya,

a pioneer with its innovations,

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IN

NOV

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BAnk AsyA 2010 ANNUAL REPORT

4

VIsIon

To be a respected, trusted and effective

bank that provides world-class service

with the products it develops.

MIssIon

To contribute to both shareholder value and the

Turkish economy by developing modern banking

services within the framework of interest-free

banking principles and satisfying customer

needs and expectations with a “different

solutions for different expectations” approach.

stRAtEGIC oBJECtIVEs

To be one of the world’s leading interest-free

banks.

To continue to be the participation bank with the

highest brand value in Turkey.

To rank in the forefront of companies where

highly qualified professionals would strive to

work.

To increase its market share.

To be a pioneer in the banking industry with its

innovations.

To be the primary bank of its customers.

To sustain and increase support of social

responsibility projects including social activities

and sports.

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Bank Asya ascertains its strategic targets

by the principle of “more sustainable

value” for all of its social and economic

stakeholders.

Bank Asya, Turkey’s most dynamic participation bank, commenced operations under the “Asya Finans” name in 1996 as the country’s sixth private finance house. As the sector’s newest participation bank, Bank Asya grew rapidly in a short period of time and achieved a strong and respected market position.

Turkey’s first participation bank to go public

Bank Asya is firmly committed to a strategy of sound and sustainable growth, which it has carefully integrated into its organizational structure. As the first participation bank in Turkey to go public in order to establish a strong and broad capital base, Bank Asya floated 23% of its shares in 2006. As of year-end 2010, 52.5% of the Bank’s capital was publicly held. The Bank’s paid-in capital was TL 900 million as of the end of 2010.

New high-quality products and services in participation banking Bank Asya works continuously and proactively to expand its product and service lineup in order to meet the changing needs and expectations of its customers across all its business lines. As the first participation bank in Turkey to be awarded ISO 9001 Quality Management System certification, Bank Asya seeks to strengthen its market position by developing new interest-free banking products, including derivative products, with its innovative approach. The Bank also undertakes efforts to adapt widely used banking products and services to the interest-free banking system at the highest level of quality.

Invest in people, invest in the future Bank Asya well understands that when it invests in people and technology, it invests in the future. The Bank deploys advanced technology in order to strengthen its growth momentum and supports its young, dynamic and development-focused workforce to embrace the Company’s values. Advanced technology in banking Having expanded the reach of its delivery network through investments in technological infrastructure and alternative distribution channels, in addition to its 175 branches, Bank Asya has been particularly successful in gaining more frequent recognition in recent years for the innovative payment system products that it has introduced. After the launch of Europe’s most advanced contactless credit card, AsyaCard DIT, and Turkey’s first prepaid contactless debit card, DIT Pratik, Bank Asya once again demonstrated that it is a pioneer with the introduction in late 2010 of DIT Mobil, which facilitates contactless transactions using mobile phones.

Creating more sustainable value Conducting its operations as a good corporate citizen, Bank Asya sets its strategic objectives in line with the principle of “creating more sustainable value” for all of its social and economic stakeholders.

Increasing brand value alongside unmatched growth dynamics Bank Asya is transforming a business model which is based on supporting the real sector and manufacturing and which is informed by the fundamental principles of interest-free banking into an effective example of participation banking through its management competencies, funding practices, risk and quality policies, innovativeness, and unmatched growth dynamics. To this end, the Bank will continue to enhance the brand value that it has established in its national market and in the international arena.

In 2010, Bank Asya sustained its profitability and growth in line with its performance targets thanks to its solid capital base and healthy balance sheet. The Bank continued to lead the participation bank market in 2010 in terms of total assets, lending, non-cash loans, deposits and net profit. Bank Asya also outperformed the industry overall in growth of total assets and deposits.

BAnk AsyA

In BRIEF

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BAnk AsyA 2010 ANNUAL REPORT

6

kEy HIGHLIGHts

key Financial Highlights (Try Million) 2009 2010 Change(%)

Total Assets 11,609 14,513 25.0 Cash Loans (*) 8,355 11,060 32.4 Deposits 9,137 11,167 22.2 Shareholders’ Equity 1,708 1,942 13.7 Paid-In Capital 900 900 -Non-Cash Loans 8,886 9,227 3.8

Net Profit for the Period 301 260 (13.6)

Number of Branches 158 175 10.8

Number of Personnel 4,074 4,266 4.7

key Financial Ratios (%) 2009 2010

Cash Loans/Total Assets (**) 72.73 76.69

Loan-to-Deposit Ratio 78.70 76.94

Cash Loans/Deposits (**) 94.98 101.77

Capital Adequacy Ratio 14.45 13.33

Shareholders’ Equity/Total Assets 14.71 13.38

14,5 13 11,609 8,109 6,260 4,17 9

totAL AssEts (TRY MILLION)

25

%

10 09 08 07 06 11,060 8,355 6,381 4,610 3,060

LoAns (TRY MILLION)

32

%

10 09 08 07 06 (*) Cash Loans include leasing receivables and non-performing loans. (**) Loan-To-Deposit Ratio is calculated by dividing Cash Loans by Deposits. (***) Non-performing loans were added to Cash Loans and Total Assets in gross terms.

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Bank Asya’s Composition of Assets (%) 2009 2010

Liquid Assets 22 18

Cash Loans 72 76

Fixed Assets 3 3

Other 3 3

Bank Asya’s Composition of Liabilites (%) 2009 2010

Deposits 79 77 Funds Borrowed 2 4 Shareholders’ Equity 15 13 Other 4 6 1,942 1,708 1,404 854 633

sHAREHoLDERs’ EQuIty (TRY MILLION)

14

%

10 09 08 07 06 11,16 7 9,137 5,843 4,698 3,201

DEPosIts (TRY MILLION)

22

%

10 09 08 07 06

Bank Asya sustained its upward

momentum in 2010 and achieved growth

of 25% in Total Assets, 32.4% in Cash

Loans and 22.2% in Deposits.

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BAnk AsyA 2010 ANNUAL REPORT

8

BAnk AsyA’s MARkEt PosItIon

In tHE sECtoR

bAN k As yA PArtici PAtion B Ank s DePosit B Ank s BAnking inDus try 32.4 33.1 36.3 35.5 LoAns (%) 25.0 28.9 20.6 20.7 totAL AssEts (%) 11.0 7.7 -13.6 9.6

nEt PRoFIt FoR tHE PERIoD (%)

13.7 23.5 22.5 21.3 sHAREHoLDERs’ EQuIty (%) 22.2 23.9 19.7 19.9

DEPosIts (FunDs CoLLECtED) (%)

-2.0 -5.6 -9.1 -8.8 non-PERFoRMInG LoAns (%) 17.7 33.3 32.1 totAL LoAns (%) 3.8 9.4 23.3 22.0 non-CAsH LoAns (%)

High performance, strong

and leading position

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4.9 6.5 10.8 5.0 nuMBER oF BRAnCHEs (%) 3.6 7.4 4.7 3.8 nuMBER oF PERsonnEL (%)

nEt PRoFIt/Loss FoR tHE PERIoD(%)

sHAREHoLDERs’ EQuIty(%)

totAL AssEts (%)

nuMBER oF BRAnCHEs (%) nuMBER oF PERsonnEL (%)

DEPosIts (FunDs CoLLECtED) (%)

Bank Asya maintained its strong market

position in 2010 and outperformed the

overall sector with its increase in total

assets and improvement in asset quality.

27.6 34.5 34.5 65.5 LoAns (%) 34.3 65.7 38.6 61.4 34.2 65.8 42.7 57.3 72.4 65.5 bANk AsyA otHer PArticiPAtion BAnks

Comparison of bank Asya with Other Participation banks

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BAnk AsyA 2010 ANNUAL REPORT

10

BAnk AsyA’s

GRoWtH stRAtEGy

Bank Asya’s strong 2010 results reflected the

successful implementation of its growth strategy and

its effective business processes and practices.

Profitability-oriented

sustainable growth

Effective Resource Management Solid capital base

˴

Rapid increase in deposits ˴

Longer average terms on deposits and high liquidity ˴

Sustainably high profitability ˴

Effective Credit and Risk Management Deeper customer relationships ˴

More diversified loan portfolio ˴

High rate of NPL recovery ˴

Lower NPL ratio ˴

Increased loan loss reserves ˴

Effective Product and brand Management Growth in innovative products

˴

Greater brand awareness ˴

(Sponsorships, effective promotion and advertising) ˴

13.33% (tier 1)

˴ capital adequacy ratio

22% increase

˴ in deposits vs. 19.9% for the

sector 18%

˴ liquidity ratio

14.4%

˴ return on equity (ROE)

AsyaCard DIT: Market leader in contactless ˴

cards 25%

˴ increase in credit card turnover

Ranked 10th

˴ in the sector with 1.8 million credit

cards

High profile with Bank Asya

˴ 1st League

(football league) 32.4%

˴ growth in cash loans

Ranked 12th

˴ in cash loans

3.9%

˴ NPL/cash loans ratio

2.2%

˴ NPL/total loans ratio

67.9%

˴ NPL coverage

Bank Asya forms its strategies around the overarching goal of being one of the most important brands in the participation banking business line not only in Turkey but also in the entire the world. Conducting its operations in line with the principles of sustainable growth while pursuing this primary objective, the Bank focuses on creating more and more value not just for the economy but also for the society as a whole.

Bank Asya is commited to being a model bank along all the three axes of quality, productivity and profitability. The Bank invests both in technology and in people in order to make its proactive, customer-oriented service philosophy a reality in all aspects. Bank Asya is a transparent institution that continuously improves its business processes and systems in line with the requirements of the day and that embodies the very best of corporate governance principles and practices.

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bank Asya’s strategic Orientation in 2011-2015

Trustworthiness, stable growth, effective risk management, business continuity and productivity are Bank Asya’s top strategic priorities. Having clearly and explicitly defined its objectives in line with its corporate vision, Bank Asya groups its strategies under four main headings in order to achieve its objectives: Financial ˴ Operational excellence ˴ Stakeholders ˴

Personnel & progression ˴

In the same way, Bank Asya has laid out a five-year roadmap whose course is shaped by these strategies.

bank Asya’s Competitive Advantages

Leader among participation banks in total assets, deposits, ˴

loans, and profitability

Dynamic, growing organization ˴

Well-qualified, young staff ˴

Customers trust Bank Asya ˴

Experienced in crisis management ˴

Employee engagement and loyalty to the Bank ˴

Strong team spirit throughout the Bank ˴

Focus on rapid technology deployment and innovation ˴ Sustainable growth ˴ and profitability Strengthening the ˴ financial structure Targets for ˴ subsidiaries and affiliates

Increasing the use of ˴ technology Improving the ˴ efficiency of business processes Increasing the ˴ effectiveness of risk management practices Maximizing customer ˴ satisfaction Offering diversified ˴ solutions capable of addressing different customer expectations Ensuring sustainable ˴ dividend payment to shareholders Increasing the ˴ knowledge levels of employees Establishing effective ˴ communications and enhancing skills Disseminating ˴ corporate strategy and performance-oriented management philosophy

FINANCIAL OPERATIONAL EXCELLENCE sTAkEHOLDERs PROGREssIONPERsONNEL &

bUsINEss

CONTINUITy

OUR sTRATEGIC

PRIORITIEs

PRODUCTIVITy

TRUsT

sTEADy

GROWTH

EFFECTIVE

RIsk

MANAGEMENT

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Mount EVEREst: The world’s tallest mountain with an elevation of 8,848 meters.

Bank Asya,

shining example with its high

performance…

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HI

GH

P

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FO

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AN

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, S

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AN

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MARKET POSITION

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BAnk AsyA 2010 ANNUAL REPORT

14

The Compan

y’s paid-in capital is incr

eased to TL 60 million.

Asya Finans becomes a member o f the VISA s ystem. The number o f branches r eaches 43.

MILEstonEs

Asya Finans launches the As ya Finans cr edit car d. The number o f branches r eaches 16. The Compan

y’s paid-in capital is incr

eased to TL 10 million.

Asya Finans is subjected to the Banking L aw.

The Compan

y’s paid-in capital is incr

eased to TL 40 million. The AS YA2

4 ATM netw ork goes liv

e for customer use. The number o f branches r eaches 28. The As ya Finans online br

anch goes into service. The number o f branches r eaches 25. The Compan y’s paid-in capital is incr eased to TL 20 million. The Association o f Priv

ate Finance Houses is established. Bank As ya commences oper ations on 2 4 October . The number o f branches r eaches 15. 1996 1997 1998 1999 2000 2001 2002 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 (TL million)

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DEPosIts (FunDs CoLLECtED) (TRY MILLION) totAL LoAns (TRY MILLION)

The Compan

y’s paid-in capital is incr

eased to TL 60 million.

The Compan

y’s paid-in capital is incr

eased to TL 120 million. In an initial public o ffering, 23% o f Bank As ya’s shar es ar

e floated; the Compan y’s stock

begins tr

ading on the Istanbul Stock Ex

change under the AS YAB tick

er s ymbol.

Bank As

ya stock is added to the ISE -30 Inde x as o f January 200 7. Contactless technology pr oducts As yaCar d DIT and DIT Pr

atik ar e made a vailable f or the use o f the Bank’ s customer s. AsyaCar d DIT r eceiv

es the “Best Cash Displacement Initiativ

e” and the “Best Ne w Cr edit Car d Pr oduct L aunch” aw ards. Bank As

ya joins the Mone

yGram service netw ork. As

yaAsist, Çoban

yıldızı and DIT Mobil w ere launched f

or customer use.

Asya Finans is r eorganiz

ed as a participation bank and its name is changed to “Bank As ya.”

Alo As

ya telephone banking services ar e launched. The number o f branches r eaches 62. The number o f branches r

eaches 92. The Compan

y’s paid-in capital is incr

eased to TL 300 million. The number o

f branches r eaches 118.

Bank As

ya becomes the name sponsor o f the T urkish F ootball F eder ation 1st League. The number o f branches r eaches 158. Bank As ya becomes a shar eholder in Senegal-based T amw eel A frica Holding SA.

The number o f branches r

eaches 17 5. DIT Pr

atik is named “Best Master card Pr epaid Pr oduct in T urkey .” The number o f branches r eaches 7 2. The Compan

y’s paid-in capital is incr eased to TL 2

40 million.

Asya Finans becomes a member o f the VISA s ystem. The number o f branches r eaches 43. 2010 2003 2004 2005 2006 2007 2008 2009 11,167 11,060

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BAnk AsyA 2010 ANNUAL REPORT 16

HIstoRy

A success story

in participation banking

1996

originally founded with tL 2 million in capital, Asya Finans kurumu A.Ş. (Asya Private Finance House inc.) commences operations on 24 october 1996 at its main branch located in the Altunizade district of istanbul.

1997

the number of branches reaches 15.

1998

Asya Finans launches the Asya Finans credit card for its customers. the number of branches reaches 16.

1999

Asya Finans is subjected to the Banking Law.

the company’s paid-in capital is increased to tL 10 million.

2000

the Asya Finans online branch goes into service.

the number of branches reaches 25.

2001

the Association of Private Finance Houses is established and a guarantee Fund is formed. the company’s paid-in capital is increased to tL 20 million.

2002

the company launches an installment-based credit card and the AsyA24 AtM network for its customers.

“regulations on the Private Finance House Private current and Participation Account guarantee Fund” go into effect on 18 september. the company’s paid-in capital is increased to tL 40 million.

the number of branches reaches 28.

2003

Asya Finans is licensed by the Ministry of Finance to accept tax payments.

Asya Finans customers begin to make credit card payments and money transfers through online Ptt offices located all over the country. Asya Finans becomes a member of the VisA system on 24 october. the company’s paid-in capital is increased to tL 60 million.

the number of branches reaches 43.

2004

Alo Asya (444 4 888) telephone banking services are launched for retail customers and corporate clients.

the company undergoes a

headquarters reorganization in which the number of units is increased to 24.

Asya Finans joins the “ortak nokta” AtM sharing platform, enabling its customers to access their accounts from any of more than 2,400 ortak nokta AtMs located all over the country.

the company’s paid-in capital is increased to tL 120 million.

the number of branches reaches 62.

2005

As a result of amendments to the Banking Law, private finance houses are given one year to become compliant with “participation bank” status.

control of the guarantee Fund is turned over to the savings Deposit insurance Fund.

Asya Finans kurumu A.Ş. is reincorporated as Asya katılım Bankası A.Ş. (Asya Participation Bank inc.) and it is decided to continue Asya Finans’s operations as “Bank Asya.”

the company’s paid-in capital is increased to tL 240 million.

the number of branches reaches 72.

2006

Bank Asya increases its paid-in capital to tL 300 million as a result of an initial public offering in which 23% of its shares are floated and acquired in record-breaking demand. Bank Asya begins trading on the istanbul stock exchange under the AsyAB ticker symbol on 12 May. Heavy trading in the company’s shares

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qualifies it for inclusion in the ise-50 index of the most actively traded shares by the end of the same year. Bank Asya celebrates its 10th anniversary in the financial services industry.

the number of branches reaches 92.

2007

Bank Asya stock is added to the ise-30 index as of January.

the company moves to its new headquarters building in the Ümraniye district of istanbul.

the number of branches reaches 118.

2008

Bank Asya becomes the name sponsor of the turkish Football Federation 1st League.

the company undergoes a

headquarters reorganization in which the number of units is increased to 40.

Asyacard Dit (europe’s most advanced contactless credit card) and Dit Pratik (turkey’s first prepaid contactless debit card) are made available for the use of the Bank’s customers.

With the launch of the first transportation system project using Asyacard Dit in the city of kahramanmaraş, residents begin to pay municipal bus fares with the card. the company’s paid-in capital is increased to tL 900 million.

the number of branches reaches 149.

2009

the number of cities in which municipal bus fares can be paid using Asyacard Dit reaches four with the introduction of the system in karabük, Balıkesir and Bolu.

Asyacard Dit receives both the “Best cash Displacement initiative” award in the Visa europe Best card & Payment sector Awards and the “Best new credit card Product Launch” award at the cards & Payments Awards.

the Asyacard website, www.

asyacard.com.tr, receives the “Best in class” designation at the interactive Media Awards competition.

Bank Asya signs a strategic partnership agreement with the islamic corporation for the Development of the Private sector (icD), an agency of the islamic Development Bank (iDB), and becomes a shareholder in tamweel Africa Holding sA, a senegal-based company that engages in interest-free banking in Africa.

the number of branches reaches 158.

Bank Asya is cited in the Banker magazine’s list of the world’s 1,000 largest banks for its highly impressive performance.

2010

Dit Pratik is named “the Best

Mastercard Paypass Prepaid Banking Product in turkey” by Mastercard. Bank Asya branches join the Moneygram service network to enable international money transfers. Asyacard receives the “consumer Quality Award” at the 23rd international consumer summit. Bank Asya signs an agreement with the turkish Football Federation to extend its name sponsorship of the 1st League until 2014.

AsyaAsist is launched to provide dedicated assistance services to sMes.

As part of its new generation small business banking concept, Bank Asya consolidates its services for microbusiness and sMe segment customers under the Çobanyıldızı brand.

Bank Asya introduces Dit Mobil, which facilitates contactless

transactions via MicrosD cards using mobile phones.

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BAnk AsyA 2010 ANNUAL REPORT

18

CHAnGEs In CAPItAL AnD sHAREHoLDER

stRuCtuRE DuRInG tHE REPoRtInG PERIoD

year-end 2009 % year-end 2010 %

Group A (preference shares) 360,000,000 40 360,000,000 40

Group B (not traded on ISE) 82,014,186 9.11 67,124,038 7.46

Group B (traded on ISE) 457,985,814 50.89 472,875,962 52.54

Total 900,000,000 100 900,000,000 100

ownership

title name/surname in the Bank (%)

Chairman Behçet Akyar 0.0003

Board Members Salih Sarıgül 0.3102

Tacettin Neğiş

Ahmet Çelik 0.4467

İsmail Erol İşbilen (*)

Hülagü Özcan (*)

-CEO Cemil Özdemir (***) 0.0026

Executive Vice Presidents Ayhan Keser (**) 0.0017

Yusuf İzzettin İmre (**)

Buket Gereçci

Ali Tuğlu

Ali Fuat Taşkesenlioğlu

-Ömer Faruk Şenel

Erdal Erdem

Hasan Ünal

Fahrettin Soylu

-Statutory Auditors Ali Akbulut 0.0002

Atif Bilgin 0.2667

İrfan Hacıosmanoğlu 1.8179

Bank Asya’s shareholder structure as of year-end 2009 and year-end 2010 appears in the table below.

(*) Not shown because the shareholding interest is less than 1/100,000.

(**) Executive Vice Presidents Ayhan Keser and Yusuf İzzettin İmre resigned from their posts as of 3 January 2011. (***) Board Member and CEO Cemil Özdemir resigned from his duties as of 10 March 2011; he was replaced by Abdullah Çelik.

Bank Asya has a broad-based, multi-shareholder, domestically-financed capital structure. As of year-end 2010, the Company had 253 partners who are direct owners of preference shares, excluding the publicly-held portion of the share capital.

shareholding interests held by the Chairman and members of the board of Directors, CEO and Executive Vice Presidents

Statements concerning the shareholding interests held by the Chairman and members of the Board of Directors, CEO and Executive Vice Presidents as shown in the Bank’s Shareholders’ Register as of 31 December 2010 are presented below.

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Names and shareholding Interests of shareholders Who Own Qualified shares

Shareholders who are registered in Bank Asya’s Shareholders’ Register as of 31 December 2010 and whose ownership of Group A preference shares entitles them to designate candidates to fill seats on the Board of Directors and Audit Committee as per Articles 32 and 49 of the Articles of Association are presented below.

Group A

no name/surname share in the Bank (%)

1 Işıl Abay 0.3717 2 Adem Acar 0.2417 3 Lutfi Acet 0.0012 4 Ali Açıl 0.0448 5 Elif Adıyaman 0.0365 6 Kazım Afşar 0.4872 7 Ali Ağaç 0.0000 8 Recep Ağaç 0.0000 9 Yalçın Akarsu 0.1517 10 Ali Akbulut 13.2858 11 Cemil Akbulut 0.0010 12 Fikri Akbulut 3.0534

13 Hakan Cem Akbulut 1.0002

14 Mustafa Akbulut 0.0333

15 Şükran Akbulut 0.0050

16 Mehmet Akçay 0.0292

17 Ahmet Akgül 0.0000

18 Zeki Murat Akhan 0.0461

19 Ali Akın 0.3015 20 Adnan Aksoylar 0.1731 21 Erol Aktürk 0.0750 22 Nuri Alım 0.0003 23 Fehim Arıcı 1.5500 24 Hüsamettin Arlı 0.0010 25 Mehmet Artukarslan 0.0834 26 Mustafa Atçı 0.0029 27 Zehra Aydın 0.2419

28 Aydan Aydın Sağlık 1.6533

29 Erdal Babadağ 0.0128

30 Recep Bahtiyar 0.0500

31 Nusret Barış 0.0167

Group A

no name/surname share in the Bank (%)

32 Zübeyir Barış 0.0500 33 Ziya Başcı 0.0333 34 Ahmet Başoğlu 0.2075 35 Arif Başoğlu 0.0278 36 Tuncay Baydak 0.0500 37 Bahri Bayram 0.0272

38 Mehmet Emin Bayram 0.0685

39 Mehmet Salih Bayram 0.0272

40 A. Selçuk Berksan 1.4960

41 Ahmet Levent Berksan 1.1362

42 Ayşe Tülin Berksan 0.0494

43 Bülent Berksan 1.4325

44 Fatma Emine Berksan 2.5000

45 Mehmet Berksan 1.4325

46 Mehmet Sinan Berksan 1.6667

47 Ömer Faruk Berksan 0.5129

48 Atif Bilgin 0.5900

49 Mustafa Bilgin 0.0500

50 Ayşe İfakat Bilginoğlu 0.3783

51 Elif Bilginoğlu 0.3717

52 Faruk Bilginoğlu 0.3783

53 Ömer Bilginoğlu 0.5575

54 Rıfat Bilginoğlu 0.5575

55 Nur Bilginoğlu Anaç 0.3717

56 Ali İhsan Bostan 0.5033

57 Turan Boztepe 0.0000 58 E. Altan Bursal 0.0001 59 S. Atilla Bursal 0.0000 60 Aykut Büyükekşi 0.2500 61 Yavuz Canikli 0.0000 62 Mustafa Cemaloğlu 0.5000

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BAnk AsyA 2010 ANNUAL REPORT

20

CHAnGEs In CAPItAL AnD sHAREHoLDER stRuCtuRE DuRInG tHE REPoRtInG PERIoD

Group A

no name/surname share in the Bank (%)

63 Halil İbrahim Ceylan 0.2500

64 Kadir Ceylan 0.0667 65 Hakkı Coşkun 0.1933 66 Mehmet Coşkun 0.1933 67 Abdurrahman Çakar 0.1250 68 Hadi Çakar 0.1000 69 Mustafa Çakar 0.1250 70 Sadi Çakar 0.1000 71 Şerafettin Çakar 0.1250 72 İbrahim Çakır 0.0500

73 Ahmet Hamdi Çakmaz 0.2013

74 Ahmet Çelik 0.0500

75 Ahmet (355) Çelik 0.5844

76 Hüseyin Çelik 0.2500

77 Mustafa Çelik 0.0025

78 Ömer Lütfi Çelik 0.0002

79 Saffet Çerçi 0.2000

80 Doğan Çetin 0.0500

81 Cengiz Çırak 0.0508

82 İsmail Cem Çitak 0.0308

83 Cahit Değerli 0.0019 84 Mustafa Demir 0.0500 85 Yüksel Demirci 0.0278 86 Duygu Demirel 0.0365 87 Zeki Demirtaş 0.2500 88 Kamil Dere 0.0300 89 Niyazi Dere 0.0656 90 Ethem Dizdar 0.0500

91 Mehmet Semih Doğan 0.1000

92 Hüseyin Duğral 0.0167

93 Mustafa Duğral 0.2567

94 Nuri Duman 0.4548

95 Yusuf Durmuş 0.0500

96 Soner Eken 0.0500

97 Velid Yusuf Elcarullah Elhasen Elcarullah 0.0097

Group A

no name/surname share in the Bank (%)

98 Mehmet Eldem 0.0331

99 Kemal Elibal 0.4442

100 Yalçın Ercan 0.1083

101 Nurettin Eroğlu 0.1936

102 Yavuz Eroğlu 1.4500

103 Mehmet Şevki Erol 0.1583

104 Avni Ertansel 0.0500

105 Mehmet Fayik Esen 0.0500

106 Sabri Esen 0.0500

107 Celal Evci 0.0000

108 M. Abdulcebbar Ezgin 0.1000

109 Memet Fırat 0.0611

110 Adnan Osman Güldaş 0.0000

111 Yılmaz Güldaş 0.0508 112 Ali Gülen 0.2012 113 İlhami Gülen 0.2012 114 Mehmet Gülen 0.2012 115 Sadık Gülen 0.2012 116 Yusuf Gülen 0.2012 117 Faik Gün 0.0500 118 Emine Gündüz 0.0547 119 Rıdvan Güngör 0.0500 120 Cemil Gürleroğlu 0.0500 121 Fevzi Gürses 0.0003 122 Hüseyin Güzel 0.0875 123 İrfan Hacıosmanoğlu 2.1561

124 Mehmet Emin Hasırcılar 0.2308

125 Derviş İnce 0.0500

126 Ünal Kabaca 0.0000

127 Eyyup Kadıoğlu 0.1250

128 Makbule Kadıoğlu 0.1250

129 Mehmet Murat Kadıoğlu 0.0132

130 Mehmet Kafarcı 0.5000

131 Mevlüt Kaklık 0.2000

(23)

Group A

no name/surname share in the Bank (%)

133 Ayhan Kalaycı 0.0250

134 Erhan Kalaycı 0.0250

135 Muammer İhsan Kalkavan 2.2578

136 Kamil Kandemir 0.0087

137 Mehmet Emin Kara 0.2000

138 Müyesser Karadayı 0.5611

139 Gülsüm Betül Karagöz 0.8988

140 Sami Karahan 0.0608

141 Maksut Karakaya 0.0157

142 Murat Karakaya 0.0157

143 Sadık Mutlu Karakaya 0.0067

144 Salih İhsan Karakaya 0.0067

145 Fahri Karatay 0.0862 146 Hasan Karatay 0.8758 148 Celal Karayol 0.3333 149 Emre Katırcı 0.0750 150 Mehmet Katırcı 0.1625 151 Abidin Kavurmacı 0.0485 152 Ahmet Kavurmacı 0.0242

153 Ahmet Sait Kavurmacı 0.0024

154 Mustafa Kavurmacı 0.0121

155 Mustafa Şevki Kavurmacı 0.8529

156 Nuri Kavurmacı 0.0121

157 Ömer Faruk Kavurmacı 0.0024

158 Salih Servet Kavurmacı 0.0024

159 A, İskender Kaya 0.0028

160 Adem Kaya 0.0015

161 Ali İhsan Kaya 0.0014

162 Alpaslan Kaya 0.0014 163 Aynihal Kaya 0.0015 164 Celal Kaya 0.0015 165 Cengiz Kaya 0.0041 166 Coşkun Kaya 0.0035 167 Etem Kaya 0.0015 168 Gülten Kaya 0.0033 Group A

no name/surname share in the Bank (%)

169 Hakan Kaya 0.0041 170 Halit Kaya 0.0055 171 Hayati Kaya 0.0015 172 Hayri Kaya 0.0015 173 İlgül Kaya 0.0017 174 İslam Kaya 0.0200

175 İsmail Hakkı Kaya 0.0076

176 Şenay Kaya 0.0017 177 Şükrü Kaya 0.0074 178 T. Bayram Kaya 0.0035 179 Kadir Kayalı 0.5025 180 Hüseyin Kayıkçıoğlu 0.0500 181 Hasan Keklik 0.0500 182 Kenan Kelekçi 0.2992 183 Ayhan Keser 0.0000 184 Vildane Kılıç 0.1250 185 Hasan Kırgöz 0.0258 186 İsmail Kırgöz 0.2000 187 Nail Kıygın 0.8839 188 Mesut Kızılhisar 0.3250 189 Mustafa Koç 0.2569

190 Mehmet Nevzat Koçak 0.0500

191 Mehmet Salih Konakçı 0.5110

192 Abdulkadir Konukoğlu 5.5800

193 Abdurrahman Kopuz 1.1000

194 Musa Korkmaz 0.0500

195 Mustafa Aydın Koyuncu 0.8000

196 Metin Kulaberoğlu 0.1000

197 Burhan Kurt 0.1342

198 Hasan Kurt 0.0361

199 Turan Kurt 0.1258

200 Yalçın Atilla Kurtuluş 0.0219

201 Avni Kuşol 0.0600

202 Hasan Kuşol 0.0667

(24)

BAnk AsyA 2010 ANNUAL REPORT

22

CHAnGEs In CAPItAL AnD sHAREHoLDER stRuCtuRE DuRInG tHE REPoRtInG PERIoD

Group A

no name/surname share in the Bank (%)

204 Mesut Kuşol 0.0600

205 Selahaddin Kuşol 0.0600

206 Hasan Kutlutaş 0.0500

207 Kamil Yavuz Malkatan 0.0278

208 Cengiz Manav 0.0020

209 Ahmet Nuri Metin 0.0143

210 Ahmet Mutafoğlu 0.0000 211 İlhami Negiş 0.0138 212 Nermin Negiş 0.1095 213 Selman Negiş 0.3651 214 Tacettin Negiş 3.8876 215 Kemal Övün 0.0276 216 Fazlı Özalp 0.0000 217 Abdullah Özata 0.0000 218 Adnan Özata 0.0000 219 Ahmet Özata 0.0021 220 Erol Özata 0.0000 221 Hürriyet Özata 0.0058 222 Mustafa Özata 0.0000 223 Yakup Özata 0.0000 224 Ramis Özaydın 0.0500 225 Mustafa Özaydınlık 0.0000 226 Şükrü Murat Özcan 0.0500 227 Cemil Özdemir 0.0000 228 İdris Özdemir 0.3871

229 Mustafa Kemal Özdemir 0.0050

230 Recep Özdemir 0.0056 231 İsmail Özen 0.5000 232 Enver Özeren 0.0500 233 Rafet Özeren 0.0500 234 Osman Gürbüz Özkara 0.0583 235 Fatih Özkaragöz 0.2767 236 Kemal Özkaragöz 0.1000 237 Ali Özturan 0.0221 238 Ali Öztürk 0.0079 239 Zekai Öztürk 0.0437

240 Osman Can Pehlivan 4.0000

241 Rahmi Peker 0.5000

Group A

no name/surname share in the Bank (%)

242 Sinan Saraç 0.1000 243 İrfan Sarı 0.0000 244 Salih Sarıgül 0.1198 245 Ahmet Sarıkaya 0.0131 246 Kadri Sarıkurt 0.1000 247 Asım Sayın 0.4150 248 Hasan Sayın 4.4576 249 İbrahim Sayın 3.5218 250 Burak Serdaroğlu 0.1268 251 Semih Serhatlıoğlu 0.0003 252 Salih Seyhan 0.0023 253 Osman Sezer 0.0500 254 Arzu Silahtar 0.3783 255 Murat Sungurlu 0.3683

256 Hüseyin Fikret Şahinbaşoğlu 0.0003

257 Mesut Talha Şahsuvaroğlu 0.0603

258 Orhan Şeker 0.0417

259 Yaşar Şeker 0.0021

260 Harun Şimşek 0.4000

261 Namık Kemal Şimşek 0.1250

262 Sebahat Şimşek 0.0625

263 Abdülvahit Tabakçı 0.0107

264 Cemil Tan 0.0436

265 Halis Tan 0.3297

266 Seyyithan Tan 0.1766

267 Ali Rıza Tanrıseven 0.9257

268 Mehmet Tari 0.2500

269 Aşır Taşkıran 0.0500

270 Mehmet Sıddık Tekin 0.3312

271 Ali Cem Tekoğlu 0.0107

272 Ömer Tekoğlu 0.0781 273 Tahsin Tekoğlu 0.1901 274 Ergin Tonyalı 0.0500 275 Kamil Topçu 0.1361 276 Murat Toplaoğlu 0.0080 277 Ümit Topuz 0.1000 278 Mehmet Torun 0.0700 279 Sadık Tuğcu 0.2500

(25)

Group A Pending Approval from bRsA as of 31 December 2010

Information on Titles and shares of shareholders Holding Preferred shares

Changes Made in the Articles of Association in 2010 No changes were made in the Bank’s Articles of Association during 2010.

Group A

no name/surname share in the Bank (%)

280 İbrahim Tulum 0.0625

281 Ahmet Tuna 0.0500

282 Haluk Tunçak 0.0889

283 Ahmet Turalioğlu 0.0367

284 Mehmet Hanifi Turalioğlu 0.0367

285 Ömer Turalioğlu 0.0367

286 Vural Tutak 0.0468

287 Kazım Türkkaynağı 0.0083

288 Ahmet Tüysüz 0.1000

289 Mahmut Nedim Uğur 0.0000

290 Mustafa Nazım Ulusoy 0.0313

291 Erdoğan Ustaömer 0.0500

292 Ali Rıza Uysal 0.0500

293 Mehmed Uzun 0.2500 294 Numan Uzun 0.0000 295 Savaş Ünal 0.0761 296 Ahmet Ruhi Ünlü 0.0340 297 Mustafa Ünlü 0.0000 298 Nesrin Vural 0.0015 299 Mustafa Vuran 0.0458 300 Ali Yarkın 0.4872 301 Ahmet Yaşar 0.0150 302 Niyazi Yıldırım 0.0500 303 Ayten Yıldız 0.0125

304 Canan Deniz Yıldız 0.0125

305 Murat Atıf Yıldız 0.0125

306 Nagihan Yıldız 0.0125

307 Hasan Yılmaz 0.0500

308 İbrahim Yöndem 0.0333

309 Muammer Yurtsever 0.0000

310 Mehmet Fevzi Yüce 0.0288

311 Diğer 0.4451

Pending BRsA Approval 5.8240

total 100.00

Group A

no name/surname share in the Bank (%)

1 Forum İnşaat Dekorasyon

Turizm San. ve Tic. A.Ş. 3.5924

2 Ortadoğu Tekstil Tic. San. A.Ş. 0.4389 3 Sürat Basım Yayın Reklamcılık ve

Eğitim Araçları San. Tic. A,Ş. 1.5703

4 Ali Ulvi Orhan 0.0556

5 Asım Sayın 0.0500

6 Hasan Sayın 0.0231

7 Mehmet Necip Işık 0.0625

8 Zeki Erdemir 0.0313

Group A

no name/surname share in the Bank (%)

1 Asya Katılım Bankası A.Ş. 0.4167

2 Aydınlı Hazır Giyim Sanayi ve Tic. A.Ş. 0.2423 3 Birim Birleşik İnşaatçılık

Mümessillik San. ve Tic. A.Ş. 4.9398 4 Bj Tekstil Ticaret ve Sanayi A.Ş. 5.0000 5 Forum İnşaat Dekorasyon

Turizm San. ve Tic. A.Ş. 6.2681

6 Galaksi İnşaat Tek. San. A.Ş. 0.5000 7 Karakaya Yedek Parça ve

Otomotiv San. Tic. Ltd. Şti. 0.0449 8 Koçkaya Motorlu Araçlar San. ve Tic. A.Ş. 0.0656 9 Linateks Tekstil İthalat

İhracat San. ve Tic. Ltd. Şti. 0.2500 10 Meltem Turizm İnş. Tic. A.Ş. 0.0210 11 Negiş Giyim İmalat ve İhracat A.Ş. 3.6506 12 Ortadoğu Tekstil Tic. San. A.Ş. 10.5535

13 Serra Turizm Ltd. Şti. 4.1667

(26)

24 BAnk AsyA 2010 ANNUAL REPORT

CHAIRMAn’s

MEssAGE

Esteemed Shareholders, We have left behind a year when policy measures were implemented to prevent the economic crisis that devastated the entire world from deepening any further while constructive signs were also observed that gave reason to be hopeful for the period ahead.

For Bank Asya, 2010 has been a year when the Bank adapted to the evolving environment in the world and in Turkey, achieved its growth targets, and sustained and reinforced its solid market position along with growing business and customer volumes. Global capital flowed and shifted direction according to the measures and policies implemented by individual countries in 2010. While economic recovery in response to the policy measures was lackluster in general, a relative improvement in financial markets started to become more apparent. The worsening sovereign debt crisis, particularly in Europe, was attempted to be resolved with the support of and measures taken primarily by the European Union and the IMF. The debt crisis that started in Greece in the first quarter of the year and threatened to spread to Ireland, Portugal and even Spain led to a significant increase in the cost of borrowing for these countries. Many European Union countries, in an attempt to mitigate the impact of the financial crisis, pursued extremely loose monetary and fiscal policies in order to boost consumption and improve credit costs and availability.

As the repair process of economic imbalances across the entire world, and especially in more developed countries, continued, emerging markets like Turkey led global economic growth last year. Ranking in the top tier of developing countries with its impressive rate of growth in 2010, Turkey continued to gain ground in the economic arena. The rising share of investments in this growth performance makes us optimistic about the coming years as well. In line with these developments, Turkey’s CDSs (credit default swaps), which indicate the risk premium of Turkish sovereign bonds and are monitored closely by international investors, hovered below the premiums of many developed countries

throughout 2010. While numerous developed country stock markets finished 2010 without major gains, Turkish equities as measured by the ISE-100 index surged by 24%. Turkey’s credit ratings were raised while many countries were downgraded. Turkey’s prospects to attain an investment-grade rating also look very favorable. The fact that Turkey managed to rapidly reduce the interest cost of its debt burden indicates the sustainability of the pronounced improvement achieved in public finances over the last few years.

24%

The Istanbul Stock Exchange

finished 2010 with a gain of

24%, which made the Turkish

equity market among the best

performers in the world.

The reduced interest burden

on the public debt as a

result of the low interest

rate environment boosts

our conviction about

the sustainability of the

improvement in public

finances.

technology

(27)

In 2010, Bank Asya adapted to the evolving

global and domestic economic environment,

achieved its growth targets, and sustained and

strengthened its solid market position while

growing its business and customer volumes.

The Turkish banking industry in general maintained its solid capital structure, asset quality and profitability in 2010. The increase in profits registered in the banking sector for the first two quarters of the year reversed course and began to decline starting in the third quarter. During this period, Bank Asya became one of the very few banks to increase its profit in every quarter on a quarter-over-quarter basis.

The year 2010 has been a successful one for participation banking. While other banks responded quickly to the decision taken by the Central Bank of Turkey in the last quarter of the year to raise capital reserve requirements and saw rapid results due to their structure, it took time for the measures taken by participation banks to be reflected in their results. Nevertheless, targets were generally hit in both deposits and lending in 2010.

Banks continued to implement measures to improve balance sheet asset quality throughout 2010. The share of non-performing loans in total assets began to decline in the overall banking industry and lending rates dropped due to rising excess liquidity in the system, and as a result banks increased their lending. Growth in consumer and small business loans was particularly robust.

(28)

26 BAnk AsyA 2010 ANNUAL REPORT

CHAIRMAn’s MEssAGE

One major factor in this development is that the targets set in the

government’s Medium Term Program (MTP) are consistent with the targets stipulated by the Fiscal Rule, implementation of which has been delayed for now. The expected credit rating upgrades by rating agencies beginning in the third quarter of 2011 and the prospect of Turkey attaining an investment-grade sovereign rating inspire the hope in all markets that all lingering issues could be resolved easily.

Bank Asya, whose profitability depends significantly on its lending to the real sector due to its business model, will continue to use its deposits, which it sees as Turkey’s capital, as well as its own equity capital to extend support to Turkish businesses, entrepreneurs and consumers. The Bank’s specialized and expert staff will continue to share its knowledge, know-how and experience gained over many years with clients who do business with Bank Asya. The significant increase in the Bank’s cash loans in 2010 signals a similar growth momentum for the upcoming years as well.

One significant factor is that the

targets set in the government’s

Medium Term Program (MTP)

are consistent with the targets

stipulated by the Fiscal Rule,

implementation of which has

been delayed for now.

Bank Asya, whose profitability

depends significantly on

lending to the real sector due

to its business model, will

continue to use its deposits,

which the Bank sees as

Turkey’s capital, as well as its

own equity capital, to extend

support to Turkish businesses,

entrepreneurs and consumers.

Bank Asya, the relative newcomer to the banking industry, continues to be the leader in participation banking. The Bank strides forward with confidence towards its target position of overall banking industry leader. Managed by a professional team, the Bank remains committed to its core principles and corporate governance practices on its journey towards its target while continuing to be one of the most transparent banks with one of the highest free float ratios in the sector. Bank Asya aims to closely monitor domestic and international developments in 2011 and sustain its organic growth by making timely and appropriate strategic decisions. Appealing to an increasingly larger domestic customer base with its ever-growing branch network, Bank Asya plans to expand its footprint even further. In addition, with the joint banking investment undertaken with the Islamic Development Bank in Africa, Bank Asya strives to give Turkey the opportunity to take advantage of a vast and largely untapped market. We believe that the shifting global economic balance will prove to all of us how on-the-mark this investment is in the medium and long term.

(29)

Our accomplishments and strategic targets for the future are a direct consequence of our appropriate decisions and planning efforts. Our fundamental objective is to lend a hand as a reliable friend to provide our people with the quality and level of support that they justly deserve. In the process, as the newest bank in the sector, we will share all of our energy, as well as the knowledge and experience we have gained through hard work, and to help others grow as we grow the Bank.

I would like to take this opportunity to express my gratitude to everyone who contributed to our strong results in 2010 as well as to all of our stakeholders.

behçet Akyar

Chairman of the Board of Directors

Bank Asya will closely monitor

domestic and international

developments in 2011

and sustain its organic

growth by making timely

and appropriate strategic

decisions. The Bank aims to

further expand its customer

base in 2011 alongside its

ever-growing branch network.

Ever the pioneer and visionary, Bank

Asya gives Turkey the opportunity to take

advantage of a vast and largely untapped

market with its joint banking investment

undertaken with the Islamic Development

Bank in Africa.

(30)

28 BAnk AsyA 2010 ANNUAL REPORT

CEo’s

MEssAGE

Esteemed Friends of Bank Asya, The world’s economy, which contracted as a result of the global financial crisis that broke out in 2008, started to grow again in 2010 as the repercussions of the downturn began to fade. As the extraordinary measures and policy decisions taken to counter the economic crisis started to take effect, the world economy began to recover in 2010. Meanwhile, the Turkish economy recorded an impressive performance and displayed one of the liveliest levels of economic activity in the world. The Turkish economy left behind another year of robust growth built on solid foundations. In line with this favorable macroeconomic environment, the banking sector accelerated its growth and continued to increase its profitability. The sector, total assets of which topped TL 1 trillion as of year-end 2010, continued to expand its branch network and contribute to the Turkish economy at an increasing rate, with higher levels of employment and support for the real economy.

Shrinking profit margins in 2010 played a decisive role on banking activities. The low inflation and interest rate environment, fierce competition in the Turkish banking industry, and the expanding lending volumes as a result of rising liquidity in the system led to lower lending rates and contracting profit margins. Consequently, banks began to focus on real banking

activities and the quality, diversification and speed of services increased. Bank Asya, Turkey’s largest participation bank, has become a leader in all of its business lines by focusing on sustainable sources of income and profitability.

As you know, I joined the Bank a very short while ago. With the strong initiative and support of our Board of Directors, Bank Asya is pursuing more ambitious goals. I firmly believe that we will successfully accomplish these goals together.

Continued steady and profitable growth

As Bank Asya’s management, our primary function is to guide the Bank along a steady and profitable growth path. We will continue to provide support to the real sector in order to fulfill this responsibility. We plan to further increase the high rate of growth that the Bank achieved in retail and SME loans.

“Çobanyıldızı” (shining star) of sMEs

Bank Asya demonstrated the importance of the SME segment by launching Çobanyıldızı, its Small Business Banking solution, in 2010. Under Çobanyıldızı, the Bank will extend its consulting services offering to small-medium sized enterprises businesses so that the microbusiness and SME segment clients will see Bank Asya as their primary address for all of their financial as well as non-financial needs. Bank Asya plans to be known as the go-to advisor for microbusiness and SME customers in short order. Getting closer to customers Bank Asya will continue to conduct its operations with the objective objective of becoming a bank that reaches large masses.In the coming period, the Bank will further expand its branch network in order to achieve the optimum level of growth in its loan portfolio and deposit base.

Bank Asya, Turkey’s largest

participation bank, has

become a leader in all its

business lines by focusing on

sustainable sources of income

and profitability.

Bank Asya will continue to

conduct its operations with

the objective objective of

becoming a bank that reaches

large masses.In the coming

period, the Bank will further

expand its branch network in

order to achieve the optimum

level of growth in its loan

portfolio and deposit base.

A constantly appreciating,

strong brand

(31)

Thanks to its professional management

team, highly qualified personnel, innovative

approach, and sound policies, Bank Asya

will continue to play a pioneering role in the

Turkish banking industry in 2011.

The focus will be on increasing non-dividend income and generating revenues directly from customers. Bank Asya aims to expand cross selling and upselling opportunities by prioritizing products and packages that will increase customer loyalty. As it continues to create a more extensive and efficient branch network, the Bank will concentrate on improving the effectiveness and usage rate of its alternative distribution channels. Focusing on long-term funding sources

Bank Asya will also work to secure longer-term sources of funding in order to further improve the management of the liability side of its balance sheet. In an effort to increase the average maturity of its funding facilities, which is already longer than the sector average as of 2010, the Bank will diversify the financial instruments it makes use of and strengthen its balance sheet. This will enable Bank Asya to contribute more resources to the financing of long-term, large-scale projects.

solidifying leadership in contactless credit card market

The Bank’s pioneering role in modern banking technology is one of its cornerstones. To this end, Bank Asya will concentrate more keenly on its initiatives to introduce new products for the clients that make use of the state-of-the-art technology. The Bank aims to add to its innovative investments particularly in payment systems, gain market share in the contactless card market, and make the lives of its customers easier with the new products and services it will launch during the year.

As of 2011, it is safe to say that the rules of the game have changed in the Turkish banking industry. As profit margins get squeezed, there will be even greater focus on increasing non-dividend income and effectively managing non-dividend expenditures. Bank Asya will continue to grow in the period ahead in accordance with its objectives with a laser-sharp focus on profitability.

Increasing brand value with each passing day

Thanks to its professional management team, highly qualified personnel and sound policies, Bank Asya will continue to be a strong, upward trending brand in the Turkish banking industry in 2011.

Our goals are ambitious and the road ahead is long… Nevertheless, Bank Asya, which we consider to be a large family, is prepared to achieve its goals. I have no doubt that we will accomplish countless new achievements in the period ahead with the momentum of our employees who have made the Bank what it is today with their dedicated efforts, the unparalleled support of our Board of Directors, and the unwavering trust of our customers. Respectfully yours,

Abdullah Çelik

(32)

30 BAnk AsyA 2010 ANNUAL REPORT

MEssAGE FRoM

MR. CEMİL ÖZDEMİR

Esteemed Shareholders,

Bank Asya continued to create value in 2010 with its strong and broad capital base, healthy balance sheet composition, transparent corporate governance approach, and innovative and unrivaled growth dynamic. The priority given to technology and human resources, industry experience and know-how, product development initiatives, and customer-oriented activities stand out as the primary factors that allowed the Bank to sustain its growth and profitability in 2010.

sustained level of profitability in loans

While cash loan placements declined by nearly 50% compared to 2009, net dividend income in 2010 reached the prior year’s level. In addition, despite the extreme competition in the non-cash loan market, the Bank maintained its profitability level in this business line while increasing other commission revenues.

As of year-end 2010, the Bank’s return on equity (ROE) stood at 14.4% and its return on assets (ROA) was 2%. 22% growth in deposits

The Bank’s deposits were up by 22% as of year-end 2010 compared to the previous year while the deposit base broadened significantly thanks to effective marketing and an expanding branch network; we also managed to secure funding sources with an average maturity longer than the sector average. This practice helps the Bank’s liquidity management and facilitates the financing of longer-term projects and ventures.

25% increase in assets by supporting the real economy Bank Asya gained market share by increasing its total assets by 25% on the previous year to TL 14.5 billion by year-end 2010. The financial support provided by the Bank to the real economy via cash and non-cash loans reached TL 20.3 billion while cash loans grew to TL 11 billion in 2010, up 32% compared to the prior year. Always a supporter of the real sector, including during the economic crisis, Bank Asya continued to provide funding for its clients at a higher pace in 2010. The Bank’s loan-to-deposit (LTD) ratio topped 100% in 2010, up from 95% in the previous year.

“Çobanyıldızı” shines a light on sMEs Bank Asya launched the “Çobanyıldızı Project” in 2010 in order to offer product and solution packages that will empower the Turkish SMEs as they enter global markets. The Bank aims to create value and make a real difference for its customers by meeting their current financial demands while also anticipating their future financial needs with Çobanyıldızı, which embodies Bank Asya’s proactive approach to banking. The largest murabaha syndication facility

As an indication of the confidence that international markets have in Bank Asya, the Bank entered into an agreement for the largest murabaha syndication loan ever for a participation bank and generated USD 255 million; this facility was used to provide financing to the real sector, with an emphasis on export finance.

Full support for the

real economy

Always a supporter of the real

sector, including in times of

crisis, Bank Asya provided

funding support to its clients

at a higher pace in 2010. The

Bank’s loan-to-deposit (LTD)

ratio topped 100% in 2010, up

from 95% in the prior year.

(33)

Bank Asya continued to create value in 2010

with its strong, broad capital base, healthy

balance sheet composition, transparent

corporate governance approach, and

innovative and unrivaled growth dynamic.

bank Asya’s high-quality asset composition

The Bank continued to improve its asset quality thanks to its cautious growth policy, effective risk management and strong NPL recovery performance; as of year-end 2010, non-performing loans declined to a 3.9% share of cash loans and 2.2% of total loans.

The Bank’s capital adequacy ratio at year-end 2010 stood at 13.3%, an optimum level above the regulatory requirement.

Extensive branch network, effective distribution channels

In an effort to build a broader customer base, Bank Asya increased its branch network by 17 new branches in 2010, to a total of 175, and raised its employee count to 4,266. As of year-end 2010, the Bank continues to provide fast, high quality service to its customers in accordance with their needs through 444 ATMs and 86,434 POS devices as well as via its online, telephone and mobile banking channels.

Leader in contactless card transactions

Moving up in the overall sector rankings and gaining market share in the credit card segment in 2010 as a result of its customer-oriented activities and effective retail banking operations, Bank Asya became the market leader in contactless credit card transactions, in terms of both market share and turnover. The Bank also increased the number of its retail customers by 18% during the year. In addition, Bank Asya’s total number of credit cards reached 1.8 million in 2010 while credit card turnover rose 25% year-on-year.

A first in the world

DIT Mobil, a product that was launched by Bank Asya in 2010, is a first in the world in terms of equipping SIM memory cards in mobile phones with credit card functionality. DIT Mobil, which offers a much simpler and more flexible lifestyle to consumers, will be one of the major payment methods in the future.

supporting Turkish sports Actively involved in a variety of social responsibility projects since its inception, Bank Asya has been the name sponsor of the Turkish Football Federation 1st League since 2008. In July 2010, the Bank signed an agreement to extend its name sponsorship of the “Bank Asya League,” which has come to be closely identified with the Bank’s name, until 2014. As a

result, the Bank continued to add to the value of both the Bank Asya 1st League and the clubs in that league.

I would like to express my gratitude and pay my due respect to our employees who move the Bank forward with each passing year, our partners who always lend us their support, and our customers who have been with us on this journey for many years.

Respectfully yours,

Cemil Özdemir

Board Member and CEO

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Mount FuJİ: Japan’s tallest mountain with an elevation of 3,766 meters.

Bank Asya,

respected for its stakeholders

thanks to its value…

(35)

PROFIT

-DRIVEN SUS

(36)

34 BAnk AsyA 2010 ANNUAL REPORT

After contracting as a result of the global crisis in 2009, the global economy started to shake off the effects of the downturn and began to grow again in 2010. Expansionary monetary and fiscal policies

implemented, especially by developed countries, as well as tax incentives, were influential in the resumption of economic growth in 2010. Growth began to slow slightly in the second quarter of 2010; no major improvement in the labor market was registered despite all the measures taken, particularly in the US. As a result, the central bank of the United States, the FED, launched a second quantitative easing program, of USD 600 billion, towards the end of the year. The European Central Bank and the Bank of England also continued to provide liquidity support to the markets.

One of the most significant

developments of 2010 that impacted the world’s economies was the debt crisis experienced in the Eurozone. Starting in Greece in the first quarter of 2010 and also threatening Ireland, Portugal and Spain later on, the European debt crisis led the financial markets to lose confidence in these countries.

The CDS (Credit Default Swap) spreads, which are an indicator of the riskiness of sovereign bonds, of countries that were impacted by the debt crisis rose sharply and led to a significant increase in their borrowing costs. The loss of confidence

created by the crisis caused a sharp depreciation in the Euro. The EUR/USD exchange rate, which stood at 1.44 at the beginning of 2010, slid below 1.20 in June due in part to the Eurozone debt crisis.

INTERNATIONAL

DEVELOPMENTs

Developing country

economies are growing

1.20%

The EUR/USD exchange rate,

which stood at 1.44 at the

beginning of 2010, slid below

1.20 in June due in part to the

Eurozone debt crisis.

MACRoEConoMIC oVERVIEW AnD

tHE BAnkInG sECtoR

GDP GRoWtH 6 2.8 -0.6 4.8 4.2 4.5 2.6 2.2 2.7 -3.2 0.2 -4 2008 2009 2010 (t) 2011 (t) 2012 (t) -2 0 2 4 6 8 2.5 7.1 6.5 6.4 Developed Economies Developing Economies World

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Emerging markets continued to diverge positively from the developed economies in 2010. Developing countries outperformed developed countries in terms of both economic growth rates and stock market gains. Increased excess global liquidity caused by the expansionary monetary policies of the developed countries in particular led to higher capital inflows into emerging markets. As these short-term capital inflows resulted in the appreciation of emerging market currencies, these countries began to tighten monetary policy and implement

Expansionary monetary policies forced

all developing countries to take measures

against “hot money” flows in 2010;

accordingly, the Central Bank of Turkey

revised its primary objective to “financial

stability” and announced that it has had

shifted its focus from inflation targeting to

exchange rate stabilization.

GoLD AnD oIL

1,500 1,00 1,400 1,300 90 1,200 80 1,100 70 1,000 60 900 50 800 40 01.09 03.09 05.09 07.09 09.09 11.09 01.10 03.10 05.10 09.10 07.10 09.10 01.11 GOLD OIL (RIGHT AxIS)

CountRy CDs sPREADs 1.200 1.000 800 600 400 200 0 01.09 03.09 05.09 07.09 09.09 11.09 01.10 03.10 05.10 09.10 07.10 09.10 01.11

IRELAND TURKEY GREECE SPAIN PORTUGAL

and the low interest rate environment. Within the agricultural complex, cotton and wheat prices recorded significant gains while precious metals prices also rose sharply. Perceived as a safe haven in the aftermath of the European debt crisis, gold prices surged to an all-time high of USD 1,435 per troy ounce. After establishing a rising trend in 2009, oil prices continued to rise in 2010 and finished the year at USD 90 per barrel. tax measures. During this period,

Brazil increased taxes and hiked reserve requirements in the banking industry sharply while the Central Bank of Turkey took a similar step and increased the reserve requirements on the country’s banks.

Commodity prices also took a volatile course in 2010. Agricultural and industrial raw materials prices hit record highs with purchases by funds that started to chase returns in response to expectations for higher inflation, abundance of global liquidity

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36 BAnk AsyA 2010 ANNUAL REPORT

As the extraordinary measures and policy decisions implemented in the aftermath of the global financial crisis started to take effect, the world’s economy began to recover in 2010. Meanwhile, the Turkish economy registered an impressive performance and displayed one of the liveliest levels of economic activity in the world. While the concerns over the European debt crisis weighed heavily on the markets throughout 2010, Turkey managed to remain in the top tier of emerging markets in terms of its economic growth thanks to the sustained strength in domestic demand that

was supported fundamentally by fiscal discipline and the low interest rate environment.

After contracting by 4.7% in 2009, the Turkish economy registered growth rates of 11.8%, 10.2% and 5.5% in the first three quarters of the year, respectively. Gross Domestic Product at constant prices registered a growth rate of 8.9% in the first nine months of 2010 compared to the same period of the previous year. The strength in domestic demand and the sharp increase in construction investments were the major drivers of the

impressive GDP performance. Industrial production rose sharply in 2010 after declining by 9.9% in the prior year. Growing especially rapidly in the first quarter of 2010 but losing some of that momentum in the second half of the year, industrial production remained on a steady growth path throughout 2010 and finished the year with a 13.1% increase. After declining all the way down to 58.7% as a result of the crisis in 2009, the manufacturing industry capacity utilization rate stood at 75.6% at year-end 2010.

In response to slumping domestic demand in 2009, imports declined at a faster rate than exports; as a consequence, the trade deficit contracted. However, imports were up significantly in 2010 due to higher domestic demand as a result of the expansion of credit, the appreciation of the Turkish Lira from surging capital inflows, and the rise in energy prices in global markets. In addition, growth in exports was slower than imports growth due to the persistent weakness in foreign demand in 2010. Imports grew by 31.6% from the previous year to reach USD 185.5 billion while exports were up in 2010 by 11.5%, to USD 113.9 billion. Consequently, the current account deficit rose sharply to USD 48.5 billion, up from USD 13.9 billion in 2009.

DOMEsTIC

DEVELOPMENTs

The share of participation bank assets in

total assets of the banking industry rose to

4.3% in 2010, up from 4.0% in the previous

year.

8.9%

Turkey’s Gross Domestic

Product at constant prices

registered a growth rate of

8.9% in the first nine months

of 2010 compared to the

same period of the previous

year.

MACRoEConoMIC oVERVIEW AnD tHE BAnkInG sECtoR

FoREIGn tRADE AnD CuRREnt DEFICIt (usD MILLIon)

01.10 02.10 03.10 04.10 05.10 06.10 07.10 08.10 09.10 10.10 11.10

ExPORTS IMPORTS CURRENT DEFICIT (RIGHT AxIS)

6.000 7.000 8.000 5.000 4.000 3.000 2.000 1.000 0 0 5,000 10,000 15,000 20,000 25,000 0 5 10 15 20 25 78 76 74 72 70 68 66 64 62

SEASONALLY AND CALENDAR ADJUSTED INDUSTRIAL PRODUCTION

INDUSTRIAL PRODUCTION

01.10 02.10 03.10 04.10 05.10 06.10 07.10 08.10 09.10 10.10 11.10 12.10

InDustRIAL PRoDuCtIon AnD CAPACIty utILIZAtIon (%)

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