ASYA KATILIM BANKASI A.Ş · ASYA KATILIM BANKASI A.Ş. INDEPENDENT AUDITORS’ LIMITED REVIEW...

ASYA KATILIM BANKASI A.Ş.

INDEPENDENT AUDITORS’ LIMITED REVIEW REPORT, UNCONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2011 (Convenience Translation of the Financial Statements and Related Disclosures and Footnotes originally issued in Turkish)


INDEPENDENT AUDITORS’ LIMITED REVIEW REPORT FOR THE PERIOD JANUARY 1, 2010 – MARCH 31, 2011

To the Board of Directors of Asya Katılım Bankası A.Ş. Istanbul We have reviewed the accompanying balance sheet of Asya Katılım Bankası A.Ş. (“the Bank”) as at March 31, 2011 and the related statements of income, changes in shareholders’ equity and cash flows for the period then ended. These financial statements are the responsibility of the Bank’s management. As independent accountants our responsibility is to issue a report based on the review performed on these financial statements. We conducted our review in accordance with the accounting rules and policies, and the accounting and auditing standards, set out as per the Banking Act No: 5411. Those standards require that we plan and perform the review to obtain limited assurance as to whether the financial statements are free of material misstatement. A review is principally limited to reviewing financial statements by applying analytical procedures, inquiring as to the integrity of the financial statements and making inquiries of management to obtain information; it is substantially less in scope than an audit and therefore provides a lesser assurance. We have not performed an audit and accordingly we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial statements do not give a true and fair view of the financial position, the results of its operations and its cash flows, of Asya Katılım Bankası A.Ş. for the period ended March 31, 2011 in accordance with the prevailing accounting principles and standards set out as per the Article No: 37 of the Banking Act No: 5411, and other regulations, communiqués and circulars in respect of accounting and financial reporting and pronouncements made by Banking Regulation and Supervision Agency. Additional paragraph for English translation: The effect of the differences between the accounting principles summarized in Section 3 and the accounting principles generally accepted in countries in which the accompanying financial statements are to be distributed and International Financial Reporting Standards (IFRS) have not been quantified and reflected in the accompanying financial statements. The accounting principles used in the preparation of the accompanying financial statements differ materially from IFRS. Accordingly, the accompanying financial statements are not intended to present the Bank’s financial position and results of its operations in accordance with accounting principles generally accepted in such countries of users of the financial statements and IFRS. DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED

Özlem Gören Güçdemir Partner Istanbul, May 11, 2011

THE UNCONSOLIDATED FINANCIAL REPORT OF ASYA KATILIM BANKASI A.Ş. FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2011

Address of the Headquarter of the Bank : Saray Mahallesi Dr. Adnan Büyükdeniz Caddesi No:10 34768 Ümraniye/İSTANBUL Phone and Fax Numbers of the Bank : 0 216 633 50 00 / 0 216 633 69 89 Website of the Bank : www.bankasya.com.tr Electronic Mail Address to Contact : [email protected] The unconsolidated financial report for the three months designed by the Banking Regulation and Supervision Agency in line with Communiqué on “Financial Statements to be Publicly Announced and the Related Policies and Disclosures” consists of the sections listed below:

• GENERAL INFORMATION ABOUT THE BANK • UNCONSOLIDATED INTERIM FINANCIAL STATEMENTS OF THE BANK • EXPLANATIONS ON THE CORRESPONDING ACCOUNTING POLICIES APPLIED IN THE

RELATED PERIOD • INFORMATION ON FINANCIAL STRUCTURE OF THE BANK • EXPLANATORY DISCLOSURES AND FOOTNOTES ON UNCONSOLIDATED FINANCIAL

STATEMENTS • LIMITED REVIEW REPORT

The unconsolidated financial statements for the three months and the explanatory footnotes and disclosures, unless otherwise indicated, are prepared in Thousands of Turkish Lira, in accordance with the Communiqué on Banks’ Accounting Practice and Maintaining Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards, related communiqués and the Banks’ records, have been reviewed and presented as attached. May 11, 2011

Behçet AKYAR

Abdullah ÇELİK

Ahmet BEYAZ

Kamil YILMAZ

Chairman of the Board of Directors

Member of the Board of Directors and General

Manager

Assistant General Manager Responsible of

Financial Reporting

Manager in Charge of Financial Reporting

Hülagü ÖZCAN

İsmail Erol İŞBİLEN

Member of the Board of Directors and Member of

the Audit Committee

Member of the Board of Directors and Member of

the Audit Committee Responsible personnel for the questions that can be raised on the financial statements: Name-Surname/Title: Merve Yasemin GÜNEŞ / Assistant Manager in Charge of Budgeting and Financial Controlling Telephone Number : 0 216 633 54 82 Fax Number : 0 216 633 69 89

SECTION ONE

GENERAL INFORMATION

I. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial Status 1II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and

Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank’s Risk Group 1

III. Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents 1

IV. Individuals and Institutions That Have Qualified Shares in the Bank 2V. Summary Information on the Bank’s Services and Activity Areas 2

SECTION TWO THE UNCONSOLIDATED FINANCIAL STATEMENTS

I. Balance Sheet 3 – 4II. Statement of Off-Balance Sheet Contingencies and Commitments 5III. Statement of Income 6IV. Statement of Income and Expense Accounted under Equity 7V. Statement of Changes in Shareholders’ Equity 8VI. Statement of Cash Flows 9

SECTION THREE ACCOUNTING PRINCIPLES

I. Explanations on Basis of Presentation 10II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions 10III. Explanations on Forward and Option Contracts and Derivative Instruments 11IV. Explanations on Profit Share Income and Expenses 11V. Explanations on Fees and Commission Income and Expenses 11VI. Explanations on Financial Assets 11VII. Explanations on Impairment of Financial Assets 13VIII. Explanations on Offsetting Financial Assets and Liabilities 14IX. Explanations on Sales and Repurchase Agreements and Lending of Securities 14X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets 14XI. Explanations on Goodwill and Other Intangible Assets 15XII. Explanations on Tangible Assets 15XIII. Explanations on Leasing Transactions 16XIV. Explanations on Provisions and Contingent Liabilities 16XV. Explanations on Liabilities for Employee Benefits 16XVI. Explanations on Taxation 17XVII. Additional Disclosures on Borrowing 17XVIII. Explanations on Issuance of Share Certificates 18XIX. Explanations on Avalized Drafts and Acceptances 18XX. Explanations on Government Incentives 19XXI. Explanations on Segment Reporting 18XXII. Explanations on Other Matters 18

SECTION FOUR

INFORMATION ON FINANCIAL STRUCTURE

I. Explanations on Capital Adequacy Standard Ratio 19II. Explanations on Market Risk 22III. Explanations on Currency Risk 22IV. Explanations on Interest Rate Risk 24V. Explanations on Liquidity Risk 24

SECTION FIVE EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS

I. Explanations and Disclosures Related to the Assets 26II. Explanations and Disclosures Related to the Liabilities 45III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments 53IV. Explanations and Disclosures Related to the Income Statement 58V. Explanations on the Risk Group of the Bank 64VI. Explanations on the Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign

Representative Offices 65

SECTION SIX OTHER EXPLANATIONS

I. Other Explanations on the Operations of the Bank 65

SECTION SEVEN LIMITED REVIEW REPORT

I. Explanations on the Limited Review Report 65II. Other Footnotes and Explanations Prepared by the Independent Auditors 65


NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2011

(Amounts expressed in thousands of Turkish Lira (“TRY”) unless otherwise stated.)

1

SECTION ONE

GENERAL INFORMATION

I. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial

Status Incorporation of Asya Katılım Bankası A.Ş. (“the Bank”) is permitted with the decision of the Council of Ministers No: 96/8041 on April 11, 1996 as published in the Official Gazette dated April 25, 1996. The Bank was registered on September 20, 1996 and “the Articles of Association” was published in the Trade Registry Gazette on September 25, 1996. The Decision regarding the change in the title of the Bank was settled in the Extraordinary General Board of Directors’ meeting dated December 22, 2005 and the title was changed from Asya Finans Kurumu A.Ş. into Asya Katılım Bankası A.Ş. and it was published in the Trade Registry Gazette on December 26, 2005.

II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank’s Risk Group

The Bank has no shareholders having more than 10% shareholding direct or indirect, joint or individual control over the management of the Bank. The Bank is not included in any group.

III. Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents

Title Name Area of Responsibility Ownership Percentage %

Chairman of the Board of Directors

Behçet AKYAR

Chairman of the Board of Directors 0,0003

Member of the Board of Directors Salih SARIGÜL Vice Chairman of the Board of Directors 0,3102 Tacettin NEGİŞ Member of the Board of Directors - Ahmet ÇELİK Member of the Board of Directors 0,4467

İsmail Erol İŞBİLEN (*) Member of the Board of Directors and the Audit Committees -

Hülagü ÖZCAN (*) Member of the Board of Directors and the Audit Committees -

General Manager Abdullah ÇELİK Member of the Board and General Manager 0,0034

Assistant General Managers Corporate/Commercial Loans, Business Banking, Financial Institutions -

Ali TUĞLU Information Technologies - Ali Fuat TAŞKESENLİOĞLU Corporate/Business/ Consumer Credit Allocation -

Ömer Faruk ŞENEL Human Resources, Education, Purchase and Organization and Quality Management, Public Relations, Administrative Affairs, Internal Control -

Erdal ERDEM Credit and Risk Monitoring, Law - Fahrettin SOYLU Banking Operations -

Ercüment GÜLER Retail Sales Management, Retail Product Management, Branchless Banking, Customer Contact and Tele Sales, Card Payment Systems Marketing Management -

Ahmet BEYAZ Budgeting & Reporting, Treasury, Financial Institutions, Accounting & Bank Affiliates, Investor Relations -

Auditors Ali AKBULUT Auditor 0,0002 Atıf BİLGİN Auditor 0,2667 İrfan HACIOSMANOĞLU Auditor 1,6623

(*) Pay rate is not presented due to below 0,001%. (**) Mr. Ahmet AKAR and Zafer ERTAN have been assigned as the Assistant General Manager with bord decision of Aprıl 29, 2011.




2

SECTION ONE (Cont’d) GENERAL INFORMATION (Cont’d)

IV. Individuals and Institutions That Have Qualified Shares in the Bank

The Bank’s capital, amounting to TRY 900.000.000, consists of qualified shares, amounting to TRY 360.000.000 and the holders of the A Group type shares are considered as qualified. The qualified shareholders are listed below.

Name / Commercial Name Share

AmountShare Ratio

Paid Shares

Unpaid Shares

ORTADOĞU TEKSTİL TİC. SAN. A.Ş. 37.992 10,55 37.992 - FORUM İNŞAAT DEKORASYON TURİZM SAN. VE TİC. A.Ş. 34.668 9,63 34.668 - ABDULKADİR KONUKOĞLU 20.088 5,58 20.088 - BJ TEKSTİL TİCARET VE SANAYİ A.Ş. 18.000 5,00 18.000 - BİRİM BİRLEŞİK İNŞAATÇILIK MÜMESSİLLİK SAN. VE TİC. A.Ş. 17.783 4,94 17.783 - SERRA TURİZM LTD. ŞTİ. 15.000 4,17 15.000 - OSMAN CAN PEHLİVAN 14.400 4,00 14.400 - HASAN SAYIN 13.510 3,75 13.510 - NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş. 13.142 3,65 13.142 - İBRAHİM SAYIN 12.679 3,52 12.679 - MUAMMER İHSAN KALKAVAN 7.456 2,07 7.456 - İRFAN HACIOSMANOĞLU 6.861 1,91 6.861 - SÜRAT BASIM YAYIN REKLAMCILIK VE EĞİTİM ARAÇLARI 6.483 1,80 6.483 AYDAN AYDIN SAĞLIK 5.952 1,65 5.952 - FEHİM ARICI 5.580 1,55 5.580 - YAVUZ EROĞLU 5.220 1,45 5.220 - ABDURRAHMAN KOPUZ 3.960 1,10 3.960 - OTHER 121.226 33,68 121.226 - Total 360.000 100,00 360.000 -

V. Summary Information on the Bank’s Services and Activity Areas

The Bank operates in accordance with the principles of interest-free banking as a participation bank by collecting funds through current accounts and profit sharing accounts, and lending such funds through production support, finance lease and profit/loss sharing partnership and shared investments.

The Bank has two ways of collecting funds; current accounts and profit sharing accounts. The Bank classifies current accounts and profit sharing accounts in accordance with their maturities in its accounting system. Profit sharing accounts are classified into five different maturity groups; up to one month, up to three months (three months included), up to six months (six months included), up to one year (one year included) and one year and more than one year (one month, three months, six months and one year profit share payment).

The Bank could determine the participation rates on profit/loss sharing accounts with respect to the maturity group of TRY and foreign currency accounts, separately under the limitation that the participation rate on loss shall not be less than 50%, for different currency type, amount and maturity groups specifically.

The Bank constitutes specific fund pools allocated to the individually predetermined projects for financing purposes. Profit sharing accounts, which are part of the funds collected for project financing purpose, are distinguished from others with respect to the terms, accounted separately from the others and no transfers can be made from these accounts to any other maturity groups. Specific fund pools are liquidated at the end of the financing period. The Bank has no specific fund pools as of March 31, 2011.

In addition to ordinary banking activities, the Bank operates as an agency on behalf of Işık Sigorta A.Ş. and intervenes stock purchase-sell transactions on behalf of Bizim Menkul Değerler A.Ş. through its branches.

SECTION TWO

THE UNCONSOLIDATED FINANCIAL STATEMENTS

CURRENT PERIOD PRIOR PERIOD

ASSETS Note (31/03/2011) (31/12/2010)TRY FC Total TRY FC Total

I. CASH AND BALANCES WITH THE CENTRAL BANK (1) 770.761 764.738 1.535.499 1.357.173 727.792 2.084.965 II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR (2) - 18.898 18.898 - 2.581 2.581 2.1 Financial assets held for trading - 18.898 18.898 - 2.581 2.581 2.1.1 Public sector debt securities - - - - - - 2.1.2 Share certificates - - - - - - 2.1.3 Derivative financial assets held for trading - 18.898 18.898 - 2.581 2.581 2.1.4 Other marketable securities - - - - - - 2.2 Financial assets at fair value through profit or loss - - - - - - 2.2.1 Public sector debt securities - - - - - - 2.2.2 Share certificates - - - - - - 2.2.3 Loans - - - - - - 2.2.4 Other marketable securities - - - - - - III. BANKS (3) 18.721 217.154 235.875 36.237 150.375 186.612 IV. MONEY MARKET PLACEMENTS - - - - - - V. FINANCIAL ASSETS AVAILABLE FOR SALE (Net) (4) 479.020 - 479.020 394.577 - 394.577 5.1 Share certificates 93 - 93 93 - 93 5.2 Public sector debt securities 478.927 - 478.927 394.484 - 394.484 5.3 Other marketable securities - - - - - - VI. LOANS AND RECEIVABLES (5) 10.263.831 1.067.985 11.331.816 9.967.521 987.275 10.954.796 6.1 Loans and receivables 10.111.323 1.067.589 11.178.912 9.824.377 986.884 10.811.261 6.1.1. Loans to risk group of the Bank 252.111 833 252.944 248.182 1.707 249.889 6.1.2. Public sector debt securities - - - - - - 6.1.3. Other 9.859.212 1.066.756 10.925.968 9.576.195 985.177 10.561.372 6.2 Non-performing loans 439.686 1.433 441.119 445.673 1.478 447.151 6.3 Specific provisions (-) (287.178) (1.037) (288.215) (302.529) (1.087) (303.616) VII. HELD TO MATURITY INVESTMENTS (Net) (6) 75.994 - 75.994 77.032 - 77.032 VIII. INVESTMENTS IN ASSOCIATES (Net) (7) 86.606 - 86.606 86.606 - 86.606 8.1 Accounted for under equity method - - - - - - 8.2 Unconsolidated 86.606 - 86.606 86.606 - 86.606 8.2.1 Financial associates 32.625 - 32.625 32.625 - 32.625 8.2.2 Non-financial associates 53.981 - 53.981 53.981 - 53.981 IX. INVESTMENTS IN SUBSIDIARIES (Net) (8) 144.963 - 144.963 144.963 - 144.963 9.1 Unconsolidated financial subsidiaries 88.011 - 88.011 88.011 - 88.011 9.2 Unconsolidated non-financial subsidiaries 56.952 - 56.952 56.952 - 56.952 X. ENTITIES UNDER COMMON CONTROL (Net) (9) - - - - - - 10.1 Consolidated under equity method - - - - - - 10.2 Unconsolidated - - - - - - 10.2.1 Financial subsidiaries - - - - - - 10.2.2 Non-financial subsidiaries - - - - - - XI. FINANCE LEASE RECEIVABLES (10) 89.281 22.630 111.911 81.966 23.505 105.471 11.1 Finance lease receivables 102.557 24.881 127.438 95.514 26.200 121.714 11.2 Operating lease receivables - - - - - - 11.3 Other - - - - - - 11.4 Unearned income ( - ) (13.276) (2.251) (15.527) (13.548) (2.695) (16.243) XII. DERIVATIVE FINANCIAL ASSETS FOR HEDGING PURPOSES (11) - - - - - - 12.1 Fair value hedge - - - - - - 12.2 Cash flow hedge - - - - - - 12.3 Hedge of net investment risks in foreign operations - - - - - - XIII. TANGIBLE ASSETS (Net) (12) 364.412 - 364.412 353.452 - 353.452 XIV. INTANGIBLE ASSETS (Net) (13) 9.710 - 9.710 10.419 - 10.419 14.1 Goodwill - - - - - - 14.2 Other 9.710 - 9.710 10.419 - 10.419 XV. INVESTMENT PROPERTY (Net) (14) - - - - - - XVI. TAX ASSET (15) 9.491 - 9.491 9.811 - 9.811 16.1 Current tax asset - - - - - - 16.2 Deferred tax asset 9.491 - 9.491 9.811 - 9.811 XVII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) (16) 6.210 - 6.210 6.509 - 6.509 17.1 Held for sale 6.210 - 6.210 6.509 - 6.509 17.2 Discontinued Operations - - - - - - XVIII. OTHER ASSETS (17) 95.201 452 95.653 94.814 811 95.625

TOTAL ASSETS 12.414.201 2.091.857 14.506.058 12.621.080 1.892.339 14.513.419

ASYA KATILIM BANKASI A.Ş. UNCOSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION)

THOUSAND TURKISH LIRA

Audited Audited

The accompanying notes are integral part of these financial statements.3

CURRENT PERIOD PRIOR PERIOD

LIABILITIES AND EQUITY Note (31/03/2011) (31/12/2010)TRY FC Total TRY FC Total

I. FUND COLLECTED (1) 7.431.135 3.616.889 11.048.024 7.662.288 3.504.294 11.166.582 1.1 Fund from risk group of the Bank 159.070 68.886 227.956 131.304 82.142 213.446 1.2 Other 7.272.065 3.548.003 10.820.068 7.530.984 3.422.152 10.953.136 II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) - 2.487 2.487 - 5.397 5.397 III. FUNDS BORROWED (3) - 675.811 675.811 - 622.237 622.237 IV. MONEY MARKET BALANCES - - - - - - V. MARKETABLE SECURITIES ISSUED (NET) - - - - - - VI. SUNDRY CREDITORS 277.429 2.463 279.892 278.187 2.656 280.843 VII. OTHER LIABILITIES (4) 262.385 13.988 276.373 256.348 14.813 271.161 VIII. FINANCE LEASE PAYABLES (5) - - - - - - 8.1 Finance lease payables - - - - - - 8.2 Operating lease payables - - - - - - 8.3 Other - - - - - - 8.4 Deferred finance lease expenses (-) - - - - - - IX. DERIVATIVE FINANCIAL LIABILITIES FOR HEDGING PURPOSES (6) - - - - - - 9.1 Fair value hedge - - - - - - 9.2 Cash flow hedge - - - - - - 9.3 Hedge of net investment in foreign operations - - - - - - X. PROVISIONS (7) 185.606 22.354 207.960 159.391 17.979 177.370 10.1 General loan loss provisions 105.582 20.734 126.316 100.356 16.848 117.204 10.2 Restructuring provisions - - - - - - 10.3 Reserve for employee benefits 27.618 - 27.618 23.058 - 23.058 10.4 Insurance technical reserves (Net) - - - - - - 10.5 Other provisions 52.406 1.620 54.026 35.977 1.131 37.108 XI. TAX LIABILITY (8) 34.439 - 34.439 48.161 1 48.162 11.1 Current tax liability 34.439 - 34.439 48.161 1 48.162 11.2 Deferred tax liability - - - - - - XII. PAYABLES RELATED TO ASSETS HELD FOR SALE (Net) (9) - - - 12.1 Held for sale - - - 12.2 Discontinued operations - - - - - - XIII. SUBORDINATED LOANS (10) - - - - - - XIV. SHAREHOLDERS' EQUITY (11) 1.981.072 - 1.981.072 1.941.667 - 1.941.667 14.1 Paid-in capital 900.000 - 900.000 900.000 - 900.000 14.2 Capital reserves 5.678 - 5.678 14.314 - 14.314 14.2.1 Share premium 3.307 - 3.307 3.307 - 3.307 14.2.2 Share cancellation profits - - - - - - 14.2.3 Marketable securities revaluation reserve (1.904) - (1.904) 6.732 - 6.732 14.2.4 Tangible assets revaluation reserve 4.275 - 4.275 4.275 - 4.275 14.2.5 Intangible assets revaluation reserve - - - - - - 14.2.6 Investment property revaluation reserve - - - - - - 14.2.7 Bonus shares obtained from associates, subsidiaries and jointly controlled entities - - - - - - 14.2.8 Hedging funds (Effective portion) - - - - - - 14.2.9 Value increase on assets held for resale - - - - - - 14.2.10 Other capital reserves - - - - - - 14.3 Profit reserves 1.027.353 - 1.027.353 767.391 - 767.391 14.3.1 Legal reserves 65.948 - 65.948 52.950 - 52.950 14.3.2 Status reserves - - - - - - 14.3.3 Extraordinary reserves 961.405 - 961.405 714.441 - 714.441 14.3.4 Other profit reserves - - - - - - 14.4 Profit or loss 48.041 - 48.041 259.962 - 259.962 14.4.1 Prior year income / (losses) - - - - - - 14.4.2 Current year income / (losses) 48.041 - 48.041 259.962 - 259.962 14.5 Non-controlling interest - - - - - -

TOTAL LIABILITIES AND EQUITY 10.172.066 4.333.992 14.506.058 10.346.042 4.167.377 14.513.419

ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATE BALANCE SHEET (STATEMENT OF FINANCIAL POSITION)


Audited Audited

- - -

The accompanying notes are an integral part of these financial statements.4

(31/03/2011) (31/12/2010)

Note TRY FC Total TRY FC Total

A. OFF BALANCE SHEET COMMITMENTS AND CONTINGENCIES (I+II+III) 50.708.488 6.523.450 57.231.938 49.989.225 5.737.843 55.727.068 I. GUARANTEES (1), (2) 4.165.708 5.410.407 9.576.115 4.226.595 5.000.288 9.226.883 1.1. Letters of guarantees 4.133.141 3.988.357 8.121.498 4.195.799 3.742.856 7.938.655 1.1.1. Guarantees subject to State Tender Law - - - - - - 1.1.2. Guarantees given for foreign trade operations - - - - - - 1.1.3. Other letters of guarantee 4.133.141 3.988.357 8.121.498 4.195.799 3.742.856 7.938.655 1.2. Bank loans 23.000 147.268 170.268 23.000 131.318 154.318 1.2.1. Import letter of acceptances 23.000 147.268 170.268 23.000 131.318 154.318 1.2.2. Other bank acceptances - - - - - - 1.3. Letter of credits 2.533 1.134.950 1.137.483 642 996.720 997.362 1.3.1. Documentary letter of credits - - - - - - 1.3.2. Other letter of credits 2.533 1.134.950 1.137.483 642 996.720 997.362 1.4. Prefinancing given as guarantee - - - - - - 1.5. Endorsements - - - - - - 1.5.1. Endorsements to the Central Bank of Turkey - - - - - - 1.5.2. Other endorsements - - - - - - 1.6. Other guarantees 7.034 139.832 146.866 7.154 129.394 136.548 1.7. Other collaterals - - - - - - II. COMMITMENTS (1) 45.774.492 261.934 46.036.426 45.494.387 79.243 45.573.630 2.1. Irrevocable commitments 2.719.417 261.934 2.981.351 2.686.588 79.243 2.765.831 2.1.1. Forward asset purchase commitments 70.747 261.934 332.681 36.324 79.243 115.567 2.1.2. Share capital commitment to associates and subsidiaries 2.000 - 2.000 2.000 - 2.000 2.1.3. Loan granting commitments 315.244 - 315.244 397.512 - 397.512 2.1.4. Securities underwriting commitments - - - - - - 2.1.5. Commitments for reserve deposit requirements - - - - - - 2.1.6. Payment commitment for checks 632.677 - 632.677 580.319 - 580.319 2.1.7. Tax and fund liabilities from export commitments 1.806 - 1.806 1.880 - 1.880 2.1.8. Commitments for credit card expenditure limits 1.690.013 - 1.690.013 1.661.296 - 1.661.296 2.1.9. Commitments for promotions related with credit cards and banking activities 6.930 - 6.930 7.257 - 7.257 2.1.10. Receivables from short sale commitments - - - - - - 2.1.11. Payables for short sale commitments - - - - - - 2.1.12. Other irrevocable commitments - - - - - - 2.2. Revocable commitments 43.055.075 - 43.055.075 42.807.799 - 42.807.799 2.2.1. Revocable loan granting commitments 43.055.075 - 43.055.075 42.807.799 - 42.807.799 2.2.2. Other revocable commitments - - - - - - III. DERIVATIVE FINANCIAL INSTRUMENTS (4) 768.288 851.109 1.619.397 268.243 658.312 926.555 3.1. Derivative financial instruments for hedging purposes - - - - - - 3.1.1. Fair value hedge - - - - - - 3.1.2. Cash flow hedge - - - - - - 3.1.3. Hedge of net investment in foreign operations - - - - - - 3.2. Held for trading transactions 768.288 851.109 1.619.397 268.243 658.312 926.555 3.2.1. Forward foreign currency buy/sell transactions - - - - - - 3.2.1.1. Forward foreign currency transactions-buy - - - - - - 3.2.1.2. Forward foreign currency transactions-sell - - - - - - 3.2.2. Other Forward buy/sell transactions 768.288 851.109 1.619.397 268.243 658.312 926.555 3.3. Other - - - - - - B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) 123.347.560 80.029.728 203.377.288 114.534.965 74.648.884 189.183.849 IV. ITEMS HELD IN CUSTODY 753.572 483.197 1.236.769 737.083 373.825 1.110.908 4.1. Assets under management - - - - - - 4.2. Investment securities held in custody 2.884 - 2.884 2.885 - 2.885 4.3. Checks received for collection 551.588 239.131 790.719 537.081 193.630 730.711 4.4. Commercial notes received for collection 199.093 16.204 215.297 197.111 15.177 212.288 4.5. Other assets received for collection - 48.719 48.719 - 40.842 40.842 4.6. Assets received for public offering - - - - - - 4.7. Other items under custody 4 - 4 4 - 4 4.8. Custodians 3 179.143 179.146 2 124.176 124.178 V. PLEDGED ITEMS 122.593.988 79.546.531 202.140.519 113.797.882 74.275.059 188.072.941 5.1. Marketable securities 706.786 301.489 1.008.275 558.289 300.630 858.919 5.2. Guarantee notes 42.434.558 30.222.279 72.656.837 38.978.316 27.921.735 66.900.051 5.3. Commodity 2.211.578 584.327 2.795.905 2.124.763 553.137 2.677.900 5.4. Warranty - - - - - - 5.5. Properties 16.198.523 1.282.532 17.481.055 15.363.750 1.260.824 16.624.574 5.6. Other pledged items 61.042.543 47.155.904 108.198.447 56.772.764 44.238.733 101.011.497 5.7. Pledged items-depository - - - - - - VI. ACCEPTED AVALIZED DRAFTS AND SURETYSHIPS - - - - - -

TOTAL OFF BALANCE SHEET ACCOUNTS (A+B) 174.056.048 86.553.178 260.609.226 164.524.190 80.386.727 244.910.917

ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET CONTINGENGIES AND COMMITMENTS

Audited AuditedCURRENT PERIOD PRIOR PERIOD



CURRENT PERIOD PRIOR PERIODSTATEMENT OF INCOME Note Audited Audited

(01/01/2011-31/03/2011) (01/01/2010-31/03/2010)I. PROFIT SHARE INCOME (1) 288.300 296.461 1.1 Profit share on loans 272.980 274.122 1.2 Profit share on reserve deposits - 4.027 1.3 Profit share on banks 642 7.340 1.4 Profit share on money market placements - - 1.5 Profit share on marketable securities portfolio 11.966 5.870 1.5.1 Held-for-trading financial assets - - 1.5.2 Financial assets at fair value through profit and loss - - 1.5.3 Available-for-sale financial assets 9.753 3.133 1.5.4 Investment-held for maturity 2.213 2.737 1.6 Finance lease income 2.712 5.102 1.7 Other profit share income - - II. PROFIT SHARE EXPENSE (2) (144.677) (162.054) 2.1 Expense on profit sharing accounts (138.179) (160.609) 2.2 Profit share expense on funds borrowed (6.299) (1.445) 2.3 Profit share expense on money market borrowings - - 2.4 Expense on securities issued - - 2.5 Other profit share expense (199) - III. NET PROFIT SHARE INCOME (I - II) 143.623 134.407 IV. NET FEES AND COMMISSIONS INCOME 67.247 64.938 4.1 Fees and commisions received 81.532 75.925 4.1.1 Non-cash loans 33.904 40.951 4.1.2 Other (12) 47.628 34.974 4.2 Fees and commisions paid (14.285) (10.987) 4.2.1 Non-cash loans (2) (2) 4.2.2 Other (12) (14.283) (10.985) V. DIVIDEND INCOME (3) - - VI. NET TRADING INCOME (4) 13.370 10.515 6.1 Securities trading gains / (losses) - - 6.2 Gains /(losses) on derivative financial instruments 23.335 16.533 6.3 Foreign exchange gains / (losses) (9.965) (6.018) VII. OTHER OPERATING INCOME (5) 28.202 38.971 VIII. NET OPERATING INCOME (III+IV+V+VI+VII) 252.442 248.831 IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (6) (60.793) (45.259) X. OTHER OPERATING EXPENSES (-) (7) (134.334) (126.830) XI. NET OPERATING PROFIT/(LOSS) (VIII-IX-X) 57.315 76.742 XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - -

XIII.PROFIT /(LOSS) FROM INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD - -

XIV. NET MONETARY POSITION GAIN/(LOSS) - - XV. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XI+…+XIV) (8) 57.315 76.742 XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (9) (9.274) (17.507) 16.1 Current income tax charge (8.245) (19.896) 16.2 Deferred tax charge/ (benefit) (1.029) 2.389 XVII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XV±XVI) (10) 48.041 59.235 XVIII. INCOME FROM DISCONTINUED OPERATIONS - - 18.1 Income from assets held for sale - - 18.2 Income from sale of associates, subsidiaries and jointly controlled entities (Joint Vent.) - - 18.3 Income from other discontinued operations - - XIX. LOSS FROM DISCONTINUED OPERATIONS (-) - - 19.1 Loss from assets held for sale - - 19.2 Loss on sale of associates, subsidiaries and jointly controlled entities (Joint vent.) - - 19.3 Loss from other discontinued operations - - XX. PROFIT / (LOSS) ON DISCONTINUED OPERATIONS BEFORE TAXES (XVIII-XIX) - - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) - - 21.1 Current income tax charge - - 21.2 Deferred tax charge/ (benefit) - - XXII. NET PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) - - XXIII. NET PROFIT/LOSS (XVII+XXII) (11) 48.041 59.235 23.1 Group’s profit/loss 48.041 59.235 23.2 Non-controlling interest - -

Earnings per share 0,05 0,07


ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF INCOME


ASYA KATILIM BANKASI A.Ş. STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY

CURRENT PERIOD PRIOR PERIODAudited Audited

STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY (01/01/2011-31/03/2011) (01/01/2010-31/03/2010)

I. Additions to marketable securities revaluation differences from financial assets available for sale (9.345) (208)II. Tangible assets revaluation differences - - III. Intangible assets revaluation differences - - IV. Foreign exchange differences for foreign currency transactions - - V. Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences) - - VI.

- - VII. The effect of corrections of errors and changes in accounting policies - - VIII. Other profit loss items accounted under equity due to TAS - - IX. Deferred tax of valuation differences 709 41 X. Total Net Profit/Loss accounted under equity (I+II+…+IX) (8.636) (167)

XI. Profit/Loss - -

11.1 Change in fair value of marketable securities (Transfer to Profit/Loss) - - 11.2 Reclassification and transfer of derivatives accounted for cash flow hedge purposes to Income Statement - - 11.3 Transfer of hedge of net investments in foreign operations to Income Statement - - 11.4 Other - -

XII. Total Profit/Loss accounted for the period (X±XI) (8.636) (167)

Profit/Loss from derivative financial instruments for hedge of net investment in foreign operations (Effective portion of fair value differences)



Note Current Period Prior Period

Share Premium

Extraordinary Reserve

Other Reserve

Net Income / (Expense)

Net Income / (Expense)

PRIOR PERIODAudited

(01/01-31/03/2010)I. Prior Period Balance - 31.12.2008 900.000 - 3.307 - 37.886 - 458.224 - - 301.281 2.921 4.275 - - - 1.707.894 - 1.707.894 II. Corrections according to TAS 8 - - - - - - - - - - - - - - - - - - 2.1. The effect of corrections of errrors - - - - - - - - - - - - - - - - - - 2.2. The effects of changes in accounting policy - - - - - - - - - - - - - - - - - - III. New Balance (I+II) 900.000 - 3.307 - 37.886 - 458.224 - - 301.281 2.921 4.275 - - - 1.707.894 - 1.707.894

Changes in period - - - - - - - - - - - - - - - - - - IV. Increase/decrease related to merger - - - - - - - - - - - - - - - - - - V. Marketable securities revaluation differences - - - - - - - - - - (167) - - - - (167) - (167)VI. Hedging funds (Effective Portion) - - - - - - - - - - - - - - - - - - 6.1 Cash-flow hedge - - - - - - - - - - - - - - - - - - 6.2 Hedge of net investment in foreign operations - - - - - - - - - - - - - - - - - - VII. Tangible assets revaluation differences - - - - - - - - - - - - - - - - - - VIII. Intangible assets revaluation differences - - - - - - - - - - - - - - - - - - IX. Bonus shares obtained from associates, subsidiaries and jointly controlled

entities (Joint vent.) - - - - - - - - - - - - - - - - - -

X. Foreign exchange differences - - - - - - - - - - - - - - - - - - XI. The impact due to disposal of assets - - - - - - - - - - - - - - - - - - XII. The impact due to reclassification of assets - - - - - - - - - - - - - - - - - - XIII. The effect of change in associate’s equity - - - - - - - - - - - - - - - - - - XIV. Capital increase - - - - - - - - - - - - - - - - - - 14.1 Cash - - - - - - - - - - - - - - - - - - 14.2 Internal sources - - - - - - - - - - - - - - - - - - XV. Share premium - - - - - - - - - - - - - - - - - - XVI. Share cancellation profits - - - - - - - - - - - - - - - - - - XVII. Inflation adjustment to paid-in capital - - - - - - - - - - - - - - - - - - XVIII. Other - - - - - - - - - - - - - - - - - - XIX Period net income/(loss) - - - - - - - - 59.235 - - - - - - 59.235 - 59.235 XX. Profit distribution - - - - 15.064 - 256.217 - - (301.281) - - - - - (30.000) - (30.000)20.1 Dividends distributed - - - - - - - - - (30.000) - - - - - (30.000) - (30.000)20.2 Transfers to reserves - - - - 15.064 - 256.217 - - (271.281) - - - - - - - - 20.3 Other - - - - - - - - - - - - - - - - - -

Closing Balance (I+II+III+-…...+XVI+XVII+XVIII) 900.000 - 3.307 - 52.950 - 714.441 - 59.235 - 2.754 4.275 - - - 1.736.962 - 1.736.962

CURRENT PERIODAudited

(01/01-31/03/2011)I. Prior Period Balance - 31.12.2009 900.000 - 3.307 - 52.950 - 714.441 - - 259.962 6.732 4.275 - - - 1.941.667 - 1.941.667

Changes in period - - - - - - - - - - - - - - - - - - II. Increase/decrease related to merger - - - - - - - - - - - - - - - - - - III. Marketable securities revaluation differences - - - - - - - - - - (8.636) - - - - (8.636) - (8.636)IV. Hedging funds (Effective Portion) - - - - - - - - - - - - - - - - - - 4.1 Cash-flow hedge - - - - - - - - - - - - - - - - - - 4.2 Hedge of net investment in foreign operations - - - - - - - - - - - - - - - - - - V. Tangible assets revaluation differences - - - - - - - - - - - - - - - - - - VI. Intangible assets revaluation differences - - - - - - - - - - - - - - - - - - VII. Bonus shares obtained from associates, subsidiaries and jointly controlled

entities (Joint vent.) - - - - - - - - - - - - - - - - - -

VIII. Foreign exchange differences - - - - - - - - - - - - - - - - - - IX. The impact due to disposal of assets - - - - - - - - - - - - - - - - - - X. The impact due to reclassification of assets - - - - - - - - - - - - - - - - - - XI. The effect of change in associate’s equity - - - - - - - - - - - - - - - - - - XII. Capital increase - - - - - - - - - - - - - - - - - - 12.1 Cash - - - - - - - - - - - - - - - - - - 12.2 Internal sources - - - - - - - - - - - - - - - - - - XIII. Share premium - - - - - - - - - - - - - - - - - - XIV. Share cancellation profits - - - - - - - - - - - - - - - - - - XV. Inflation adjustment to paid-in capital - - - - - - - - - - - - - - - - - - XVI. Other - - - - - - - - - - - - - - - - - - XVII. Period net income/(loss) - - - - - - - - 48.041 - - - - - - 48.041 - 48.041 XVIII. Profit distribution - - - - 12.998 - 246.964 - - (259.962) - - - - - - - - 18.1 Dividends distributed - - - - - - - - - - - - - - - - - - 18.2 Transfers to reserves - - - - 12.998 - 246.964 - - (259.962) - - - - - - - - 18.3 Other - - - - - - - - - - - - - - - - - -

Closing Balance (I+II+III+-…...+XVI+XVII+XVIII) 900.000 - 3.307 - 65.948 - 961.405 - 48.041 - (1.904) 4.275 - - - 1.981.072 - 1.981.072

ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITYTHOUSAND TURKISH LIRA

STATEMENT OF CHANGES OF SHAREHOLDER'S EQUITY Inflation Adjustment

to Paid-in Capital

Share Certificate

Cancellation Profits

Legal Reserves

Statutory Reserves

Tangible and Intangible Assets

Revaulation Differences

Bonus Shares Obtained from

SubsidiariesHedgingFunds

Total Equity Excluding Non-

controlling InterestPaid-in CapitalNon-controlling

Interest Total Equity

Diff. fromAssets Heldfor Sale and

from

Marketable Securities

Revaluation Reserve


CURRENT PERIOD PRIOR PERIODAudited Audited

Note (01/01-31/03/2011) (01/01-31/03/2010)

A. CASH FLOWS FROM BANKING OPERATIONS

1.1 Operating profit before changes in operating assets and liabilities 53.186 67.205

1.1.1 Profit share income received 277.808 260.579 1.1.2 Profit share expense paid (148.181) (157.363) 1.1.3 Dividend received - - 1.1.4 Fees and commissions received 81.532 75.925 1.1.5 Other income 10.180 23.540 1.1.6 Collections from previously written off loans 3.133 4.759 1.1.7 Payments to personnel and service suppliers (64.321) (61.114) 1.1.8 Taxes paid (19.585) (22.516) 1.1.9 Others (87.380) (56.605)

1.2 Changes in operating assets and liabilities 106.040 101.557

1.2.1 Net (increase) decrease in financial assets - - 1.2.2 Net (increase) decrease in financial assets at fair value through profit or los - - 1.2.3 Net (increase) decrease in due from banks and other financial institution 572.558 420.677 1.2.4 Net (increase) decrease in loans (400.726) (491.389) 1.2.5 Net (increase) decrease in other assets 5.952 (36.862) 1.2.6 Net increase (decrease) in bank deposits 64.985 32.281 1.2.7 Net increase (decrease) in other deposits (165.257) 180.994 1.2.8 Net increase (decrease) in funds borrowed 37.018 (10.196) 1.2.9 Net increase (decrease) in due payables - - 1.2.10 Net increase (decrease) in other liabilities (8.490) 6.052

I. Net cash provided from banking operations 159.226 168.762

B. CASH FLOWS FROM INVESTING ACTIVITIES

II. Net cash provided from investing activities (84.230) (176.972)

2.1 Cash paid for purchase of entities under common control, associates and subsidiarie - (21.548) 2.2 Cash obtained from sale of entities under common control, associates and subsidiarie - - 2.3 Fixed assets purchases (3.261) (8.575) 2.4 Fixed assets sales 19.031 3.151 2.5 Cash paid for purchase of financial assets available for sal (100.000) (100.000) 2.6 Cash obtained from sale of financial assets available for sal - - 2.7 Cash paid for purchase of investment securities - (50.000) 2.8 Cash obtained from sale of investment securities - - 2.9 Other - -

C. CASH FLOWS FROM FINANCING ACTIVITIES

III. Net cash provided from financing activities - -

3.1 Cash obtained from funds borrowed and securities issued - - 3.2 Cash used for repayment of funds borrowed and securities issued - - 3.3 Capital increase - - 3.4 Dividends paid - - 3.5 Payments for finance leases - - 3.6 Other - -

IV. Effect of change in foreign exchange rate on cash and cash equivalents (7.712) (1.637)

V. Net increase in cash and cash equivalents 67.284 (9.847)

VI. Cash and cash equivalents at the beginning of the year 420.068 378.343

VII. Cash and cash equivalents at the end of the year 487.352 368.496


ASYA KATILIM BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF CASH FLOWS

The accompanying notes are an integral part of these financial statements9




10

SECTION THREE ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 1. Presentation of Financial Statements

The Bank prepares its financial statements and notes in accordance with the Communiqué on Banks’ Accounting Practice and Maintaining Documents, Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”), other communiqués, pronouncements and explanations about accounting and financial reporting issued by the Banking Regulation and Supervision Agency (BRSA), Turkish Commercial Code and the Tax Legislation. The prior period financial statements are presented in line with the principles of TAS No: 1 “Fundamentals of Preparing and Presenting Financial Statements” published in the Official Gazette on January 16, 2005 with No: 25702, and in accordance with Turkish Accounting Standards and Turkish Financial Reporting Standards; and other principles, methods and explanations about accounting and financial reporting issued by the BRSA. Certain reclassifications have been made to the prior year financial statements to comply with the current year presentation. The accompanying financial statements are prepared in accordance with historical cost basis except for financial assets at fair value through profit or loss and financial assets available for sale that are presented on fair value basis.

2. Basis of Accounting

The accompanying financial statements are based on the Bank’s legal records. The Bank has recorded the adjustments of inflation accounting to its legal records beginning from June 30, 2004 to December 31, 2004 in accordance with Act No: 5024 of the Tax Procedural Code. As of December 31, 2003, the financial statements are prepared in accordance with the legal books and historical cost principle except for the revaluation of fixed assets and includes adjustments and reclassifications, including restatement for the changes in the general purchasing power of the Turkish Lira in accordance with International Accounting Standard No: 29 “Financial Reporting in Hyperinflationary Economies” (“TAS 29”) prior to December 31, 2004 for the purpose of fair presentation.

II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions

The Bank manages its financial instrument strategies depending on the financing sources. The sources mainly constitute of the current and profit sharing accounts. As of the balance sheet date, the Bank’s assets and equity structure are sufficient to cover its liabilities. The Bank allocates 19% of its profit sharing accounts to liquid instruments (December 31, 2010: 23%). The Bank does not carry a significant foreign currency position risk due to the existing floating exchange rate regime. The investment decisions are made by taking into consideration the maturity structure of the balance sheet items. The allocations of asset items are designated, and yield analysis are made based on this designation.

In the statutory records of the Bank, the transactions recorded in foreign currencies (all other currencies except Turkish Lira) are translated into the Turkish Lira at the exchange rates prevailing at the transaction dates. Monetary asset and liabilities denominated in foreign currencies are translated into the Turkish Lira at the balance sheet date of the Bank. Foreign exchange gains or losses arising from the translation of monetary items and foreign currency denominated collections or disbursements are recognized in the income statement.




11

SECTION THREE (Cont’d) ACCOUNTING PRINCIPLES (Cont’d) III. Explanations on Forward and Option Contracts and Derivative Instruments

In determination of fair value of forward and swap transactions, forward rates discounted to the balance sheet date by prevailing are compared with the expected discounted rates at maturity calculated based on the prevailing profit shares as of the balance sheet date and arising foreign exchange differences are recognized in the income statement. Although some of the derivative transactions provide economic hedging, since all necessary conditions for hedge accounting have not been, yet, the bank classifies these transactions as “held for trading” therefore changes in the fair value of derivative financial instruments are recognized in profit or loss as they arise.

IV. Explanations on Profit Share Income and Expenses

Profit share income and expenses are recognized in the income statement on an accrual basis.

Realized and unrealized profit share accruals of the non-performing loans are reversed and profit share income in connection with these loans is recorded as profit share income only when they are collected.

V. Explanations on Fees and Commission Income and Expenses

Banking service revenues are recognized as income only when they are collected while only the current portion of the prepaid commission income obtained from loans is recorded as income based on the periodicity principle. Fees and commissions for funds borrowed paid to other financial institutions, as part of the transaction costs, are recorded as prepaid expenses and are recognized as expense on the relevant periods.

VI. Explanations on Financial Assets

Financial instruments comprise of financial assets, financial liabilities and derivative instruments. Financial assets and financial liabilities are recognized on the Bank’s balance sheet when the Bank becomes a party to the contractual provisions of the instrument. Basically, financial assets form majority of the commercial activities and operations of the Bank. Financial instruments expose, change or reduce the liquidity and credit risks of the Bank’s financial statements. Fair value is the amount for which an asset could be exchanged or a liability settled, between knowledgeable willing parties in an arm length transaction. Fair value is best evidenced by a market price, being the amount obtainable from the sale or payable on the acquisition, of a financial instrument in an active market, if one exists. Estimated fair values of financial assets are determined by the Bank by using the market data and relevant valuation methods. However, interpretation of market data is necessary to determine fair value. Therefore, estimated fair values presented in this report may not be necessarily equivalent of the disposal values of such assets derived from current market conditions. Some carrying values of the financial instruments which are same with their cost values are assumed to be equal to their fair values because of their short term nature.

The methods and assumptions used in determining the reasonable estimated values of all financial instruments are mentioned below: Cash, Banks, and Other Financial Institutions: Cash and cash equivalents comprise of cash on hand, demand deposits, and highly liquid short-term investments not bearing risk of significant value change, and that are readily convertible to a known amount of cash. The book value of these financial assets approximate to their fair value.




12

SECTION THREE (Cont’d) ACCOUNTING PRINCIPLES (Cont’d) VI. Explanations on Financial Assets (Cont’d)

Financial Assets at Fair Value through Profit or Loss:

Marketable securities at fair value through profit or loss are classified in two categories; i) marketable securities classified as trading securities: acquired or incurred principally for the purpose of selling or repurchasing it in the near term in order to benefit from short-term profit opportunities; ii) marketable securities classified as marketable securities at fair value through profit or loss at initial recognition. The Bank uses the above-mentioned classification when permitted, or for the purposes of providing a more appropriate presentation.

In this group, trading securities are initially recognized at cost and measured at fair value on the financial statements. Fair value of debt securities traded in an active market is determined based on the quoted prices or current market prices. The difference between initial cost and fair value of financial assets at fair value through profit or loss is reflected to profit share income or diminution in value of marketable securities accounts. Profit share income from financial assets at fair value through profit or loss is reflected in profit share income. As of March 31, 2011, the Bank has TRY 18.898 Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2010: TRY 2.581 Thousand). Held to Maturity Investments: Held to maturity investments include securities with fixed or determinable payments and fixed maturity when there is an intention of holding till maturity and the relevant conditions for fulfillment of such intention, including the funding ability. This portfolio excludes loans and receivables. Subsequent to initial recognition, held to maturity investments are measured at amortized cost by using the effective interest rate less impairment losses, if any. The Bank has no financial assets acquired and classified as held to maturity investments that cannot be subject to such classification for two years because of the non-performance of tainting rules. The profit share income received from held to maturity investments is recorded as profit share income in the income statement. As of March 31, 2011, the Bank has TRY 75.994 Thousand of held to maturity investments (December 31, 2010: TRY 77.032 Thousand). Financial Assets Available for Sale: Financial assets available for sale are initially recognized at cost including the transaction costs. After initial recognition, bonds classified available for sale are measured at fair value and unrealized gains/losses originating from the difference between the amortized cost and the fair value are recorded in “Marketable Securities Value Increase Fund” under equity. At the disposal of available for sale financial assets, value increase/decrease recorded in “Marketable Securities Value Increase Fund” under equity is transferred to the income statement. Equity instruments that are classified as available for sale assets are recorded with their value after deduction of any impairment from original cost. As of March 31, 2011, the Bank has TRY 479.020 Thousand of available for sale financial assets (December 31, 2010: TRY 394.577 Thousand).




13

SECTION THREE (Cont’d) ACCOUNTING PRINCIPLES (Cont’d) VI. Explanations on Financial Assets (Cont’d)

Loans and Receivables:

Loans and receivables are recognized at amortized cost. Fees, transaction costs and other similar costs in connection with the guarantees of loans and receivables are not considered as part of the transaction cost and recognized as expense in the income statement.

Loans are transferred to the relevant accounts in with their cash amounts and income accruals are calculated by using the internal rate of return method and the related income is recorded in the profit share income item. Foreign currency and foreign currency indexed loans are evaluated and evaluation differences are accounted under “Foreign Exchange Gains” and/or “Foreign Exchange Losses” in the income statement.

The classification and provisioning of doubtful loans/receivables are appropriately accounted for in accordance with the prevailing regulations, and specific provisions allocated are recognized in the income statement for the period. Collections made from such loans are recognized under the “Non-performing loans” (including receivables from the doubtful receivables) account and “Profit share income received from uncollectible loans and other receivables” account. Released loan loss provisions are accounted as a reversal from provision expense if realized in the current year, and the remaining amounts are recognized as income in the account of collections from the prior year expenses. In addition to specific loan loss provisions, within the framework of the regulation and principles referred to above; the Bank records a general loan loss provision for loans and other receivables. The Bank calculated the general loan provision at 0,5% for cash loans and other receivables, and 0,1% for non-cash loans until November 1, 2006. Subsequent to the change in the regulation on “Determining the Nature of Loan and Other Receivable Provisions Allocated By Banks and Procedures and Principles of Allocating Provisions” which was published in the Official Gazette No: 26333 on November 1, 2006; the Bank started to book general loan loss provision at 1% for cash loans and other receivables; and 0,2% for non-cash loans on the increase in the cash and non-cash loan portfolio as compared to their October 31, 2006 balances whereas allocating 0,5% general loan loss provision for cash loans and other receivables, and 0,1% for non-cash loans for the balances as of October 31, 2006. Together with the change in the same regulation made on February 6, 2008, the Bank started to book general loan loss provision at 2% for closely monitored cash loans and 0,4% for closely monitored non-cash loans.

VII. Explanations on Impairment of Financial Assets At each balance sheet date, the Bank evaluates the carrying amounts of its financial asset or a group of financial assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If such an indication exists, the Bank determines the related impairment.

A financial asset or a financial asset group incurs impairment loss only if there is an objective indicator related to the occurrence (loss/damage event) of one or more than one event (or occurrence) subsequent to initial recognition of that asset; and such loss event causes an impairment loss as a result of the effect on the reliable estimate of the expected future cash flows of the related financial asset and asset group. Any amounts attributable to expected losses arising from any future events is not recognized under no circumstances.

Companies that are required to prepare separate financial statements under the statutory requirements in accordance with TAS 27 “Consolidated and Separate Financial Statements” can represent their subsidiaries or associates either at cost or based on requirements set out in TAS 39, “Financial Instruments: Recognition and Measurement”. In this respect, the Bank chooses to use the first method and presents the subsidiaries, jointly controlled entities and associates at cost less impairment loss, if any.




14

SECTION THREE (Cont’d) ACCOUNTING PRINCIPLES (Cont’d) VIII. Explanations on Offsetting Financial Assets and Liabilities

Financial assets and liabilities are offset when the Bank has a legally enforceable right to set off, and when the Bank has the intention of collecting or paying the net amount of related assets and liabilities or when the Bank has the right to offset the assets and liabilities simultaneously.

IX. Explanations on Sales and Repurchase Agreements and Lending of Securities

The Bank does not have any repurchase agreements or lending of securities.

X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets

The principles on accounting, assessment and disposal of assets held for sale are determined based on the Communiqué of “Principles and Procedures on Bank’s Disposal of Precious Metals and Assets Held for Sale” published on November 1, 2006 in the official Gazette numbered 26333.

Although the Bank has assets held for sale in the balance sheet, due to the fact that the Bank does not have a formal plan to dispose of these assets in one year subsequent to their classification date, such assets are continued to be depreciated. For this reason, these assets are classified as tangible assets instead of assets held for sale in the accompanying financial statements.

Assets held for sale are measured at the lower of the carrying amount of assets and fair value less any cost incurred for disposal. Assets held for sale are not amortized and presented in the financial statements separately. In order to classify an asset as held for sale, only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale. Highly saleable condition requires a plan by the management regarding the sale of the asset to be disposed of (or else the group of assets), together with an active program for the determination of buyers as well as for the completion of the plan. Also the asset (or else the group of assets) shall be actively marketed in conformity with its fair value. On the other hand, the sale is expected to be recognized as a completed sale within one year after the classification date; and the necessary transactions and procedures to complete the plan should demonstrate the fact that there is remote possibility of making any significant changes or cancellation of the plan. Various events and conditions may extend the completion period of the disposal more than a year. If such delay arises from any events and conditions beyond the control of the entity and there is sufficient evidence that the entity has an ongoing disposal plan for these assets, such assets (or else group of assets) are continued to be classified as assets held for sale (or else group of assets).

As of March 31, 2011, assets held for sale amounts to TRY 6.210 Thousand (December 31, 2010: TRY 6.509 Thousand).

A discontinued operation is a division of a bank that is either disposed of or held for sale. Results of

discontinued operations are included in the income statement separately. The Bank’s has not a discontinued operation.




15

SECTION THREE (Cont’d) ACCOUNTING PRINCIPLES (Cont’d) XI. Explanations on Goodwill and Other Intangible Assets

Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired.

If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. No goodwill amount is recognized in the unconsolidated financial statements of the Bank as of the balance sheet date.

Intangible assets acquired prior to January 1, 2005 are accounted for at restated cost less accumulated depreciation and any impairment loss, and the intangible assets acquired in subsequent periods are accounted for at acquisition cost less accumulated depreciation and any impairment loss if any, for those acquired prior to January 1, 2005. Intangible assets are amortized by using the straight line method considering their useful lives. Amortization method is reviewed at the end of each year periodically. Intangible assets mainly constitute of rights and amortized using the straight line method in 5 years.

XII. Explanations on Tangible Assets

Prior to January 1, 2005, tangible assets are accounted for at acquisition cost plus any other direct costs incurred to bring the asset for ready to use. Tangible assets are measured at their acquisition cost less accumulated depreciation and impairment loss, if any.

Depreciation of assets held less than one year as of the balance sheet date is accounted for proportionately.

If the fair value of tangible assets is under their carrying value, impairment loss is allocated for exceeding amounts and these amounts are recognized as impairment in the financial statements.

Gains or losses resulting from disposals of tangible assets are recognized in the income statement.

Maintenance costs of the tangible assets are recognized in the income statement as an expense.

There are no pledges, mortgages or other restrictions on tangible assets.

Tangible Asset Useful Life Safety Boxes 5 years Office Equipment 5 years Furniture and Fixtures 5 years Vehicles 5 years Leasehold Improvements 5 years Buildings 50 years




16

SECTION THREE (Cont’d)

ACCOUNTING PRINCIPLES (Cont’d)

XIII. Explanations on Leasing Transactions

Bank as a Lessor: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the amount of the Bank’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Bank’s net investment outstanding in respect of the leases.

Bank as a Lessee:

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognized as assets of the Bank at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Bank’s general policy on borrowing costs.

As of March 31, 2011, the Bank as a lessee has operating leases for vehicles, general management and branches in addition to its assets through financial lease.

XIV. Explanations on Provisions and Contingent Liabilities

Provisions are recognized when there is a present obligation, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are continuously reviewed in order to determine whether there is any possibility of cash flow with regards to the sources having economic benefit for the Bank.

XV. Explanations on Liabilities for Employee Benefits

Under the existing Turkish law and union agreements, severance indemnity payment is required for employees retired or fired except resignations. The severance indemnity pay provision recognized represents the present value of the defined benefit obligation as adjusted for unrecognized gains and losses in accordance with TAS 19 “Employee Benefits”. The defined obligation is determined by independent actuaries.




17

SECTION THREE (Cont’d) ACCOUNTING PRINCIPLES (Cont’d) XVI. Explanations on Taxation Tax expense comprises of current tax and deferred tax expenses.

Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. According to the Article 32 of the Corporate Tax Law No: 5520 announced in the Official Gazette dated June 21, 2006, the corporate tax rate is 20%.

Deferred tax asset or liability is recognized on differences between the carrying amounts of assets and

liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in

which the liability is settled or the asset is realized and recognized in the income statement. If deferred tax is in connection with the assets directly associated with the equity, it shall be directly associated with shareholder’s equity items.

Taxes payables and prepaid taxes are offset since they are levied by the same taxation authority. Deferred

tax assets and liabilities are also offset.

The Bank has adjusted its statutory financial statements based on inflation accounting as of January 1, 2004 in accordance with Law No: 5024.

XVII. Additional Disclosures on Borrowings

Borrowings are recognized in accordance with TAS 39 “Financial Instruments: Recognition and Measurement”. No specific hedging technique is applied for borrowings, their accounting and valuation methods excluding some general methods applied for avoiding any liquidity and currency risks. There are no debt securities or convertible bonds issued by the Bank.




18

SECTION THREE (Cont’d) ACCOUNTING PRINCIPLES (Cont’d) XVIII. Explanations on Issuance of Share Certificates

As of March 31, 2011, there are no exported share certificates of the Bank.

XIX. Explanations on Avalized Drafts and Acceptances

Avalized drafts and acceptances are realized simultaneously with the payment dates of the customers and they are presented in the off-balance sheet commitment accounts.

XX. Explanations on Government Incentives

As of balance sheet date, there are no government incentives used by the Bank. XXI. Explanations on Segment Reporting

The Bank operates in corporate, commercial and retail banking areas in line with its mission by means of profit/loss sharing methodology.

Current Period Retail

Corporate and

Commercial Treasury Undistributed Total Total Assets 1.806.603 9.609.102 1.772.405 1.317.948 14.506.058 Total Liabilities 7.645.257 3.402.767 678.298 2.779.736 14.506.058 Net Profit Share Income / (Expense) (*) (70.132) 207.203 6.743 (191) 143.623 Net Fees and Commissions Income / (Expense) 2.903 61.385 (1.274) 4.233 67.247 Other Operating Income / (Expense) (1.444) (3.862) - (148.249) (153.555) Profit Before Tax (68.673) 264.726 5.469 (144.207) 57.315 Tax Provision - - - (9.274) (9.274) Net Profit for the Period (68.673) 264.726 5.469 (153.481) 48.041

(*) The allocation of retail, corporate and commercial banking segments above, is the result of differentiation in fund collection and allocation procedures of the participation banks.

Prior Period Retail

Corporate and

Commercial Treasury Undistributed Total Total Assets 1.660.799 9.357.642 2.212.187 1.282.791 14.513.419 Total Liabilities 7.611.765 3.554.817 627.634 2.719.203 14.513.419 Net Profit Share Income / (Expense) (*) (113.574) 231.556 12.391 4.034 134.407 Net Fees and Commissions Income / (Expense) 1.066 61.658 (291) 2.505 64.938 Other Operating Income / (Expense) (2.662) (4.200) - (115.741) (122.603) Profit Before Tax (115.170) 289.014 12.100 (109.202) 76.742 Tax Provision - - - (17.507) (17.507) Net Profit for the Period (115.170) 289.014 12.100 (126.709) 59.235

(*) The allocation of retail, corporate and commercial banking segments above, is the result of differentiation in fund collection and allocation procedures of the participation banks.

XXII. Explanations on Other Matters

There are no explanations on other matters.




19

SECTION FOUR INFORMATION ON FINANCIAL STRUCTURE I. Explanations on Capital Adequacy Standard Ratio

The unconsolidated capital adequacy ratio of the Bank is 13,36% (December 31, 2010: 13,33%). Capital Adequacy Standard Ratio is calculated in accordance with the Communiqué on “Measurement and Assessment of Capital Adequacy of Banks”, which was published on November 1, 2006 in the Official Gazette No: 26333. The calculation of Capital Adequacy Ratio includes the methods used in determining the Capital Adequacy Ratio, determination of risk weighted assets and non-cash credits in line with the relevant banking regulation and measuring the market risk and operational risk ratio in line with the same regulation.

Risk Weights Bank Amount Subject to Credit Risk 0% 10% 20% 50% 100% 150% 200% Balance Sheet Items (Net) 2.278.011 - 217.313 3.040.263 6.685.234 31.252 2.059

Cash and Cash Equivalents 290.945 - - - - - - Matured Marketable Securities - - - - - - - Due from Central Bank of Turkish Republic 934.595 - - - - - - Due from Domestic Banks, Foreign Banks, Branches and Head Office Abroad - - 217.213 - 18.662 - - Interbank Money Market Placements - - - - - - - Receivables from Reverse Repo Transactions - - - - - - - Reserve Deposits 243.333 - - - - - - Loans 163.283 - 100 2.934.541 5.517.287 31.252 2.059 Non-Performing Loans (Net) - - - - 124.591 - - Financial Lease Receivables 29 - - 3.443 77.163 - - Available-for-Sale Financial Assets 474.400 - - - 93 - - Held to Maturity Investments 75.000 - - - - - - Receivables from Installment Sales of Assets - - - - - - - Sundry Debtors - - - - 7.305 - - Accrued Profit Share and Income Accruals 15.077 - - 102.279 303.915 - - Subsidiaries, Associates and Entities Under Common Control (Net) - - - - 231.569 - - Tangible Assets - - - - 317.813 - - Other Assets 81.349 - - - 86.836 - -

Off-Balance Sheet Items 84.463 - 128.188 811.007 4.400.624 - - Guarantees and Commitments 84.463 - 114.566 811.007 4.400.624 - - Derivative Financial Instruments - - 13.622 - - - - Non Risk Weighted Accounts - - - - - - - Total Risk Weighted Assets 2.362.474 - 345.501 3.851.270 11.085.858 31.252 2.059

Summary of the Capital Adequacy Standard Ratio of the Bank:

Bank Current Period Prior Period Total Risk Weighted Assets (TRWA) 13.131.589 12.900.990 Amount Subject to Market Risk (ASMR) 68.975 38.438 Amount Subject to Operational Risk (ASOR) ( * ) 1.683.782 1.480.592 Shareholders’ Equity 1.988.016 1.922.505 Shareholders’ Equity / (TRWA + ASMR + ASOR) *100 13,36 13,33

(*) The amount subject to operational risk is in accordance with the “Regulation Regarding Measurement and Evaluation of the Bank’s Capital Adequacy Ratio” published in the Official Gazette No: 26333 dated 1 November 2006 which is effective from 1 June 2007. Operational risk is calculated by using the Basic Indicator Approach.




20

SECTION FOUR (Cont’d)

INFORMATION ON FINANCIAL STRUCTURE (Cont’d) I. Explanations on Capital Adequacy Standard Ratio (Cont’d)

Components of Shareholders’ Equity: CORE CAPITAL Current Period Prior Period

Paid-in Capital (*) 894.525 894.525 Nominal Capital 894.525 894.525 Capital Commitments (-) - -Paid-in Capital Indexation Difference - -Share Premium 3.307 3.307Share Cancellations Profits - -Legal Reserves 65.948 52.950 First Legal Reserve (Turkish Commercial Code 466/1) 64.021 51.023 Second Legal Reserve (Turkish Commercial Code 466/2) 1.927 1.927 Other Legal Reserve per Special Legislation - -Status Reserves - -Extraordinary Reserves 961.405 714.441 Reserves Allocated by the General Assembly 961.405 714.441 Retained Earnings - - Accumulated Losses - - Foreign Currency Share Capital Exchange Difference - -Inflationary Adjustment to Legal Reserve, Status Reserves and Extraordinary Reserves - -Profit 48.041 259.962

Current Year Profit 48.041 259.962 Prior Years’ Profits - -

Provision for Possible Losses up to 25% of the Core Capital - -Gains on Sale of Associates and Subsidiaries and Properties to be added to Capital 4.275 4.275Primary Subordinated Loans up to 15% of the Core Capital - -Losses that cannot be Covered by Reserves (-) - -

Net Current Period Loss - - Prior Years’ Losses - -Leasehold Improvements (-) 51.810 55.453Prepaid Expenses (-) (**) - 13.153Intangible Assets (-) 9.710 10.419

Deferred Tax Asset Exceeding 10% of the Core Capital (-) - -Excess Amount in the Article 56, Clause 3 of the Banking Law (-) - -Total Core Capital 1.915.981 1.850.435

(*) The Bank has purchased 1.500.000 units of its own pledged shares at TRY 5.475 thousands as a result of sale in accordance with Turkish Commercial Code article 329/2.The effect of purchase has been considered as deduction from the paid-in capital item in the capital adequacy table. (**) Prepaid expenses are not deducted from the core capital according to the Article 1 of the Regulation for amending the Regulation on Equities of Banks” published in the Official Gazette no. 27870 dated 10 March 2011.




21


INFORMATION ON FINANCIAL STRUCTURE (Cont’d) I. Explanations on Capital Adequacy Standard Ratio (Cont’d)

Components of Shareholders’ Equity (Cont’d):

SUPPLEMENTARY CAPITAL Current Period Prior Period

General Loan Loss Provision 75.348 70.28745% of the Movables’ Revaluation Reserve - -45% of the Immovables’ Revaluation Reserve - -Bonus Shares Obtained from Associates, Subsidiaries and Entities Under Common Control - -Primary Subordinated Loans Excluded in The Calculation of the Core Capital - -Secondary Subordinated Loans - -Marketable Securities Value Increase Fund 45% (1.904) 3.029Associates and Subsidiaries - -Available for Sale Securities (1.904) 3.029Indexation Differences for Capital Reserves, Profit Reserves and Retained Earnings (Except Indexation Differences for Legal Reserves, Statutory Reserves and Extraordinary Reserves) - -Total Supplementary Capital 73.444 73.316TIER III CAPITAL - -CAPITAL 1.989.425 1.923.751DEDUCTIONS FROM THE CAPITAL 1.409 1.246

Shareholdings of Banks and Financial Institutions (Domestic, Foreign) from which the Bank Keeps Ten Percent or More of Capitals - 34

Shareholdings of Banks and Financial Institutions (Domestic, Foreign) from which the Bank Keeps Less than Ten Percent of Capitals which Exceed Ten Percent of Bank’s Core And Supplementary Capital - -Secondary Subordinated Loans Granted to Banks and Financial Institutions (Domestic, Foreign) or Qualified Shareholders and Placements That Possess the Nature of Their Primary or Secondary Subordinated Debt - -Loans Granted Being Non-Compliant with the Articles 50 and 51 of the Banking Law - -The Net Book Value of Properties Exceeding Fifty Percent of Equity and Properties Held for Sale and Properties and Commodity to be Disposed, Acquired in Exchange of Loans and Receivables according to the Article 57 of the Banking Law and have not been Disposed yet After 5 Years after Foreclosure 999 1.212

Other 410 -TOTAL SHAREHOLDERS’ EQUITY 1.988.016 1.922.505




22

SECTION FOUR (Cont’d) INFORMATION ON FINANCIAL STRUCTURE (Cont’d) II. Explanations on Market Risk

The amount subject to market risk is calculated and reported with the Standard Method described in Section 4 of the Communiqué on “Measurement and Assessment of Banks’ Capital Adequacy” published in the Official Gazette No: 26333 dated November 1, 2006. Market risk is measured on a monthly basis.

Amount (I) Capital Requirement to be Employed For General Market Risk - Standard Method 3.347(II) Capital Requirement to be Employed For Specific Risk - Standard Method -(III) Capital Requirement to be Employed For Currency Risk - Standard Method 2.171(IV) Capital Requirement to be Employed For Commodity Risk - Standard Method -(V) Capital Requirement to be Employed For Settlement Risk - Standard Method -(VI) Total Capital Requirement to be Employed For Market Risk Resulting From Options - Standard

h d-

(VII) Total Capital Requirement to be Employed For Market Risk in Banks Using Risk Measurement -(VIII) Total Capital Requirement to be Employed For Market Risk (I+II+III+IV+V+VI) 5.518(IX) Amount Subject to Market Risk (12,5 x VIII) or (12,5 x VII) 68.975

III. Explanations on Currency Risk

Foreign currency risk indicates the probability of loss that banks are subject to due to the exchange rate changes in the market. While calculating the share capital requirement, all foreign currency assets, liabilities and forward transactions of the Bank are taken into consideration and value at risk is calculated by using the standard method. The currency risk of the Bank is monitored on a daily basis. Net foreign currency position/capital ratio is also controlled using the same basis.

The Bank does not use any derivative instruments for hedging. The Standard Method stated in the statutory reporting is used to measure the currency risk of the Bank.

The risk measurements with the context of the Standard Method are performed on a monthly basis. The announced current foreign exchange buying rates of the Bank as of March 31, 2011 and the previous

five working days are as follows:

March 31, 2011 US Dollar Eur Sterling Japanese Yen

“FC Evaluation Rate” of the Bank 1,5483 2,1805 2,4827 1,8626Previously; 30.03.2011 (Day 1) 1,5549 2,1899 2,4841 1,883929.03.2011 (Day 2) 1,5485 2,1764 2,4795 1,892328.03.2011 (Day 3) 1,5433 2,1842 2,4732 1,892627.03.2011 (Day 4) 1,5470 2,1941 2,5007 1,909826.03.2011 (Day 5) 1,5543 2,1948 2,5253 1,9160

The simple arithmetic averages of the major current foreign exchange buying rates of the Bank for the thirty days before the balance sheet date are as follows; TRY 1,5741 per US Dollar, TRY 2,2044 per EUR, TRY 2,5428 per GBP and TRY 1,9255 per 100 JPY.




23

SECTION FOUR (Cont’d) INFORMATION ON FINANCIAL STRUCTURE (Cont’d) III. Explanations on Currency Risk (Cont’d)

Information on the Foreign Currency Risk of the Bank: Foreign Currencies (Thousand TRY)

EUR USD YEN Other Total Current Period - March 31, 2011 Assets

Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey 256.057 330.969 - 177.712 764.738 Due from Banks 81.157 118.781 6.463 10.753 217.154 Financial Assets at Fair Value Through Profit or Loss (**) - - - - - Money Market Placements - - - - - Financial Assets Available-for-Sale - - - - - Loans (*) 1.002.088 2.657.112 - - 3.659.200 Subsidiaries, Associates and Entities Under Common Control - - - - - Held-to-Maturity Investments - - - - - Derivative Financial Assets for Hedging Purposes - - - - - Tangible Assets - - - - - Intangible Assets - - - - - Other Assets 273 179 - - 452

Total Assets 1.339.575 3.107.041 6.463 188.465 4.641.544 Liabilities

Current and Profit Sharing Accounts of Banks 30.485 46.962 - 244 77.691 Current and Profit Sharing Accounts 1.076.814 2.252.801 6.134 203.449 3.539.198 Money Market Borrowings - - - - - Funds Provided from Other Financial Institutions 289.004 386.807 - - 675.811 Marketable Securities Issued - - - - - Sundry Creditors 155 2.285 - 23 2.463 Derivative Financial Liabilities for Hedging Purposes - - - - - Other Liabilities (**) 5.296 14.333 392 1.097 21.118

Total Liabilities 1.401.754 2.703.188 6.526 204.813 4.316.281 Net Balance Sheet Position (62.179) 403.853 (63) (16.348) 325.263 Net Off-Balance Sheet Position 62.972 (398.237) 63 16.581 (318.621)

Financial Derivative Assets (***) 113.243 266.606 77 17.285 397.211 Financial Derivative Liabilities (***) 50.271 664.843 14 704 715.832 Non-Cash Loans (****) 1.580.688 3.692.554 51.909 85.256 5.410.407

Prior Period - December 31, 2010 Total Assets 1.137.440 3.181.535 5.561 129.542 4.454.078 Total Liabilities 1.324.989 2.672.825 6.457 145.664 4.149.935

Net Balance Sheet Position (187.549) 508.710 (896) (16.122) 304.143 Net Off-Balance Sheet Position 188.586 (508.585) 907 16.933 (302.159)

Financial Derivative Assets 195.760 3.332 907 17.699 217.698 Financial Derivative Liabilities 7.174 511.917 - 766 519.857 Non-Cash Loans (****) 1.376.636 3.485.728 44.138 93.786 5.000.288

(*) TRY 2.568.585 Thousand foreign currency indexed loans are included in loans line (December 31, 2010: TRY 2.564.320 Thousand). (**) In accordance with the principles of the Regulations on the “Measurement and Practices of Bank’s Net Overall FX position Shareholders’ Equity Ratio on a Consolidated and Unconsolidated Basis”, general reserves recorded to expense accounts amounting to TRY 15.224 Thousand (December 31, 2010: TRY 12.045 Thousand) in assets and income accrual from derivative financial instruments amounting to TRY 18.898 Thousand (December 31, 2010 : TRY 2.581 Thousand) in liabilities and expense accrual from derivate financial instruments amounting to TRY 2.487 Thousand (December 31, 2010: TRY 5.397 Thousand), are not taken into consideration in the currency risk calculation. (***) TRY 141.421 Thousand forward asset purchase commitments are added to derivative financial assets and TRY 120.513 Thousand forward asset sale commitments are added to derivative financial liabilities (December 31, 2010: TRY 22.963 Thousand forward asset purchase commitments, and TRY 56.280 Thousand forward asset sale commitments ). (****) The related balances do not have any effect on off balance sheet position.




24


INFORMATION ON FINANCIAL STRUCTURE (Cont’d)

IV. Explanations on Interest Rate Risk Since the Bank has interest-free banking operations, it does not have any interest sensitive asset or

liability and consequently, it does not have any interest rate risk. V. Explanations on Liquidity Risk In order to avoid the liquidity risk, the Bank diversifies its funding resources as customer deposits and

foreign borrowings, considers the maturity match between assets and liabilities, focuses on strategies especially for the provision of long-term resources and retains its liquid assets in order to provide sufficient liquidity in any market fluctuations.

Maturity structure of the TRY and FC deposits, cost and change in the total amount are monitored on

daily basis by considering the past developments and future expectations. The Bank’s policy is to establish an asset structure that primarily meets all kinds of liabilities by using

liquid resources. The Board of Directors of the Bank determines a standard for the liquidity ratios, and applies the standard on a regular basis in order to ensure.




25


INFORMATION ON FINANCIAL STRUCTURE (Cont’d)

V. Explanations on Liquidity Risk (Cont’d)

Presentation of Assets and Liabilities according to Their Maturities:

Current Period- March 31, 2011 Demand Up to 1 Month 1-3 Months

3-12 Months 1-5 Years

Over 5 Years

Undistributed (*) Total

Assets Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey 980.082 555.417 - - - - - 1.535.499Due from Banks 202.078 17.443 - 16.354 - - - 235.875Financial Assets at Fair Value Through Profit or Loss - 8.117 10.781 - - - - 18.898Money Market Placements - - - - - - - -Financial Assets Available-for-Sale 93 - 2.322 126.605 350.000 - - 479.020Loans (**) - 999.694 2.028.078 3.612.187 4.224.810 426.054 - 11.290.823Held-to-Maturity Investments - - 994 75.000 - - - 75.994Other Assets - 74.488 - - - - 795.461 869.949

Total Assets 1.182.253 1.655.159 2.042.175 3.830.146 4.574.810 426.054 795.461 14.506.058

Liabilities Current and Profit Sharing Accounts of Banks 19.762 21.412 2.181 34.633 - - - 77.988 Current and Profit Sharing Accounts 1.788.206 4.112.707 1.022.711 3.958.687 87.725 - - 10.970.036 Funds Provided from Other Financial Instruments - 422.678 82.942 153.573 9.703 6.915 - 675.811 Money Market Borrowings - - - - - - - - Marketable Securities Issued - - - - - - - - Sundry Creditors 33.000 246.892 - - - - - 279.892 Other Liabilities (***) - 252.894 - - - - 2.249.437 2.502.331

Total Liabilities 1.840.968 5.056.583 1.107.834 4.146.893 97.428 6.915 2.249.437 14.506.058 Net Liquidity Gap (658.715) (3.401.424) 934.341 (316.747) 4.477.382 419.139 (1.453.976) - Prior Period - December 31, 2010

Total Assets 1.701.362 1.820.638 2.110.960 3.491.703 4.357.005 261.732 770.019 14.513.419Total Liabilities 2.112.022 5.200.415 2.135.824 2.770.754 107.528 1.018 2.185.858 14.513.419

Net Liquidity Gap (410.660) (3.379.777) (24.864) 720.949 4.249.477 260.714 (1.415.839) -

(*)Asset items, such as tangible assets, investment in associates and subsidiaries, stationary supplies, prepaid expenses and non-performing loans which are required for banking operations and which cannot be converted to cash in short-term are included in this column. (**) Loans balance also includes Finance Lease Receivables balance. (***) Equity is presented in the “Undistributed” column under “Other Liabilities”.




26

SECTION FIVE EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Assets 1. Information on Cash and Balances with Central Bank of the Republic of Turkey 1.1. Information on Cash:

Current Period Prior Period TRY FC TRY FC

Cash in TRY/ Foreign Currency 74.922 209.261 87.612 158.106 Central Bank of the Republic of Turkey 689.137 555.417 1.261.233 569.669

Other 6.702 60 8.328 17 Total 770.761 764.738 1.357.173 727.792

1.2. Information on Central Bank of the Republic of Turkey Accounts:


Unrestricted Demand Deposit 689.137 245.458 1.261.233 248.965 Unrestricted Time Deposit - - - - Restricted Time Deposit - - - - Other (*) - 309.959 - 320.704

Total 689.137 555.417 1.261.233 569.669

(*)Stands for the reserve deposit kept in Central Bank of the Republic of Turkey in relation to foreign currency liabilities.

Banks operating in Turkey, the Central Bank 2005 / 1 No. "Communiqué on the Mandatory Provisions" in accordance with the Turkish currency liabilities, liability, depending on maturity of 5% - 12% in the range of, primarily the U.S. dollar and euro currency for foreign currency liabilities currencies, including reserve requirements by 11% in the TCMB has been established. After the specified changes to the communiqué, the required reserve ratios for the Turkish currency liabilities, according to their maturities of 5% - 16% range, the maturities for foreign currency liabilities by 11% - 12% range was determined, Scale obligation will be effective as of April 29, 2011.

2. Information on Financial Assets at Fair Value through Profit or Loss 2.1. Information on Financial Assets at Fair Value through Profit or Loss Blocked/Given as Collateral or

Subject to Repurchase Agreements:

None.

2.2. Positive Differences Related to Derivative Financial Assets Held-for-Trading:


Forward Transactions (*) - 266 - 67 Swap Transactions - 18.632 - 2.514 Futures Transactions - - - - Options - - - - Other - - - -

Total - 18.898 - 2.581 (*) Includes forward asset purchase/sale commitments.




27

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 3. Information on Banks 3.1. Information on Banks and Other Financial Institutions:


Banks 18.721 217.154 36.237 150.375Domestic 18.721 62.363 36.237 32.447Foreign - 154.791 - 117.928Branches and Head Office Abroad - - - -

Total 18.721 217.154 36.237 150.375 3.2. Information on Foreign Bank Accounts:

Unrestricted Amount Restricted Amount Current Period Prior Period Current Period Prior Period

European Union Countries 53.970 34.515 - -USA, Canada 70.057 74.871 - -OECD Countries (*) 12.102 7.406 - -Off-Shore Banking Regions - - - -Other 2.308 1.136 16.354 -

Total 138.437 117.928 16.354 -

(*) OECD countries other than European Union countries, USA and Canada. 4. Information on Financial Assets Available for Sale 4.1. Information on Financial Assets Available for Sale Blocked/Given as a Collateral or Subject to

Repurchase Agreements:

None. 4.2. Information on Financial Assets Available for Sale:

As of March 31, 2011, the Bank has revenue sharing certificate which has TRY 475.000 Thousand nominal value (December 31, 2010: TRY 375.000 Thousand) and TRY 478.927 Thousand fair value at “Available for Sale Financial Assets” portfolio (December 31, 2010: TRY 394.484 Thousand).

Current Period Prior Period

Debt Securities 479.527 394.484 Quoted on a Stock Exchange 100.000 103.400 Not Quoted (*) 379.527 291.084 Share Certificates 93 93 Quoted on a Stock Exchange - - Not Quoted 93 93 Impairment (-) (600) - Total 479.020 394.577

(*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed.




28

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 5. Information on Loans 5.1. Information on All Types of Loans and Advances Given to Shareholders and Employees of the

Bank:


Cash

Non-Cash

Cash

Non-Cash Direct Loans Granted to Shareholders 76.699 3.383 78.453 3.138

Corporate Shareholders 37.400 2.865 33.583 2.655 Real Person Shareholders 39.299 518 44.870 483

Indirect Loans Granted to Shareholders 100.946 44.497 94.095 39.644 Loans Granted to Employees 10.257 - 9.870 - Total 187.902 47.880 182.418 42.782

5.2. Information on First and Second Group Loans and Other Receivables Including Restructured or

Rescheduled Loans:

Standard Loans and Other Receivables

Closely Monitored Loans and Other Receivables

(*)

Cash Loans

Loans and Other

Receivables Restructured or

Rescheduled

Loans and Other


Rescheduled Loans

Discount Notes - - - - Export Loans 200.984 - 287 241.194 Import Loans 29.600 - 88.769 - Business Loans 7.128.190 - 525.857 634.800 Consumer Loans 1.024.513 178 17.865 788 Credit Cards 756.874 2.424 19.870 8.944 Investments on Profit/Loss Partnership - - - - Precious Metals Loans - - - - Loans Given to Financial Sector 496 - - - International Loans 318.595 - 18.300 77.292 Other 69.650 146 13.260 36

Other Receivables (*) - - - - Total 9.528.902 2.748 684.208 963.054

(*) In addition to the balances mentioned in the table above, the Bank has TRY 1.745 Thousand of closely monitored finance lease receivables. (December 31, 2010 TRY 320 Thousand).




29

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 5. Information on Loans (Cont’d) 5.3. Loan Distribution based on the Maturity Structure:

Standard Loans and Other Receivables

Closely Monitored Loans and Other Receivables

Loans and Other


Rescheduled Loans and Other


Rescheduled Short-Term Loans and Other Receivables 3.522.799 1.833 216.643 47.659

Loans 3.522.799 1.833 216.643 47.659Other Receivables - - - -

Medium-Term and Long-Term Loans 6.006.103 915 467.565 915.395Loans 6.006.103 915 467.565 915.395Other Receivables ‐ ‐ ‐ ‐




30

SECTION FIVE (Cont’d)

EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 5. Information on Loans (Cont’d) 5.4. Information on Consumer Loans, Retail Credit Cards, Loans Given to Personnel and Personnel

Credit Cards:

Short Term Medium-term and Long-Term Total Consumer Loans-TRY 5.063 1.023.259 1.028.322

Housing Loans 1.037 934.635 935.672Vehicle Loans 597 80.775 81.372Consumer Loans 514 7.849 8.363Other 2.915 - 2.915

Consumer Loans-FC Indexed - 7.515 7.515Housing Loans - 7.195 7.195Vehicle Loans - 264 264Consumer Loans - 56 56Other - - -

Consumer Loans-FC - - -Housing Loans - - -Vehicle Loans - - -Consumer Loans - - -Other - - -

Retail Credit Cards-TRY 731.121 9.339 740.460With Installments 170.068 9.339 179.407Without Installment 561.053 - 561.053

Retail Credit Cards-FC - - -With Installments - - -Without Installment - - -

Personnel Loans-TRY 154 7.320 7.474Housing Loans 74 3.461 3.535Vehicle Loans 55 3.559 3.614Consumer Loans 25 300 325Other - - -

Personnel Loans-FC Indexed - 33 33Housing Loans - 33 33Vehicle Loans - - -Consumer Loans - - -Other - - -

Personnel Loans-FC - - -Housing Loans - - -Vehicle Loans - - -Consumer Loans - - -Other - - -

Personnel Credit Cards-TRY 2.700 50 2.750With Installments 1.761 50 1.811Without Installment 939 - 939

Personnel Credit Cards-FC - - -With Installments - - -Without Installment - - -

Overdraft Account-TRY(Individuals) - - -Overdraft Account-FC (Individuals) - - -Total 739.038 1.047.516 1.786.554




31

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 5. Information on Loans (Cont’d) 5.5. Information on Installment Basis Commercial Loans and Corporate Credit Cards:

Short Term Medium-term and Long Term Total Installment Basis Commercial Loans-TRY 59.119 17.847 76.966

Business Loans - 8.269 8.269Vehicle Loans 4 9.578 9.582General Purpose Loans - - -Other 59.115 - 59.115

Installment Basis Commercial Loans-FC Indexed - - -

Business Loans - - -Vehicle Loans - - -General Purpose Loans - - -Other - - -

Installment Basis Commercial Loans-FC - - -

Business Loans - - -Vehicle Loans - - -General Purpose Loans - - -Other - - -

Corporate Credit Cards-TRY 44.884 18 44.902With Installments 14.093 - 14.093Without Installment 30.791 18 30.809

Corporate Credit Cards-FC - - -With Installments - - -Without Installments - - -

Overdraft Account-TRY(Corporate) - - -Overdraft Account-FC (Corporate) - - -Total 104.003 17.865 121.868

5.6. Allocation of Loans according to Borrowers:

Current Period Prior Period Public Sector 1.043 1.439 Private Sector 11.177.869 10.809.822

Total 11.178.912 10.811.261




32

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 5. Information on Loans (Cont’d) 5.7. Domestic and Foreign Loans:


Domestic Loans 10.764.725 10.452.831 Foreign Loans 414.187 358.430

Total 11.178.912 10.811.261 5.8. Loans Granted to Subsidiaries and Associates:


Loans Granted to Subsidiaries and Associates Directly 75.451 77.494 Loans Granted to Subsidiaries and Associates Indirectly - -

Total 75.451 77.494

5.9. Specific Provisions Provided against Loans:


Loans and Receivables with Limited Collectability 9.132 6.737Loans and Receivables with Doubtful Collectability 27.663 37.039Uncollectible Loans and Receivables 251.420 259.840

Total 288.215 303.616 5.10. Information on Non-Performing Loans (Net): 5.10.1. Information on Loans and Other Receivables included in the Non-Performing Loans which are

Restructured or Rescheduled:

Group III Group IV Group V Loans and

Receivables with Limited

Collectability

Loans and Receivables with

Doubtful Collectability

Uncollectible Loans and Receivables

Current Period

(Gross Amount Before Specific Provision) 1.222 1.425 4.221

Restructured Loans and Other Receivables 1.178 987 1.949

Rescheduled Loans and Other Receivables 44 438 2.272

Prior Period

(Gross Amount Before Specific Provision) 2.779 4.839 7.333

Restructured Loans and Other Receivables 2.116 2.344 3.966

Rescheduled Loans and Other Receivables 663 2.495 3.367




33

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 5. Information on Loans (Cont’d) 5.10. Information on Non-Performing Loans (Net) (Cont’d): 5.10.2. Information on Movement of Non-Performing Loans:

Group III Group IV Group V


Limited Collectability




Ending Balance of Prior Period 42.035 90.905 314.210 Additions in the Current Period (+) 99.794 12.440 22.816 Transfer from Other NPL Accounts (+) - 28.181 43.696 Transfer to Other NPL Accounts (-) (28.181) (43.696) - Collections in the Current Period (-) (55.648) (19.244) (16.100) Write offs (-) - - (50.089) Corporate and Commercial Loans - - (42.767)

Retail Loans - - (141) Credit Cards - - (7.181) Other - - -

Ending Balance of the Current Period 58.000 68.586 314.533 Specific Provisions (-) (9.132) (27.663) (251.420)

Net Balance at the Balance Sheet 48.868 40.923 63.113 5.10.3. Information on Foreign Currency Non-Performing Loans and Other Receivables:

Group III Group IV Group V Loans and

Receivables with Limited

Collectability




Current Period Ending Balance - - 1.433

Specific Provisions (-) - - (1.037) Net Balance at the Balance Sheet - - 396 Prior Period Ending Balance - - 1.478

Specific Provisions (-) - - (1.087) Net Balance at the Balance Sheet - - 391




34

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 5. Information on Loans (Cont’d) 5.10. Information on Non-Performing Loans (Net) (Cont’d): 5.10.4. Non-Performing Loans and Main Guidelines of Liquidation Process for Loans and Receivables:

If the Bank has collateral components stated in Article 9 of the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”, such components are immediately liquidated by applying managerial or legal procedures. In the absence of collateral component, even if there is an indication of insolvency, the Bank reviews the financial intelligence of the debtor systematically to determine subsequently acquired property holdings and applies the legal procedures. Prior and subsequent to the legal procedures, as a result of reviews performed regarding the financial information provided, the Bank intends to liquidate its loans and other receivables from the companies that have potential development in the production and consequent contribution to the economy by means of the rescheduled agreements.

5.10.5. Explanation on Write–off Policy:

Provision allocations arising from during or after the transfer of any loan receivables to “Non-performing loans” are performed by the Bank’s Loan Monitoring Department within the framework of the Banking Regulations and Supervisory Agency. Additionally, loans are written-off of against the assets, at least once a year, by the Credit Monitoring Agency to the extent that at least one of the following below is met and provision is fully made for all non-performing loans in accordance with the decision made by the Board of Directors: - Receivables with the evidence of insolvency, - Receivables with the document obtained from Collections Agency stating that the receivable cannot be

followed up or; - Receivables assessed as uncollectible within existing conditions by the Law Department although the

collection follow up process is going on.




35

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 6. Information on Held-to-Maturity Investments (Net) 6.1. Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: None. 6.2. Information on Government Bonds Classified as Held- to-Maturity Investments:

The Bank has TRY 75.994Thousand of revenue sharing certificate as of March 31, 2011.


TRY FC TRY FC Government Bonds - - - - Treasury Bills - - - -

Other Public Debt Securities 75.994 - 77.032 -Total 75.994 - 77.032 -

6.3. Information on Held to Maturity Investments:


TRY FC TRY FC

Debt Securities 75.994 - 77.032 - Quoted on a Stock Exchange - - 51.435 - Not Quoted (*) 75.994 - 25.597 -Impairment Provision (-) - - - -Total 75.994 - 77.032 -

(*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed.

6.4. Movement of Held to Maturity Investments:

Current Period Prior Period Beginning Balance 77.032 76.460Foreign Currency Differences on Monetary Assets - -Purchases During Year - 50.000Disposals through Sales and Redemptions - (50.000)Impairment Provision (-) - -Valuation Effects (1.038) 572Closing Balance 75.994 77.032




36

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 7. Information on Associates 7.1. Information on Associates:

Company Name Address (City/ Country)

Bank’s Share Percentage, If Different-Voting Percentage (%)

Bank’s Risk Group Share Percentage (%)

(1) Yeni Mağazacılık A.Ş. (*) İstanbul/Turkey 21,84% 21,84% (2) Landmark Holding A.Ş. (*) İstanbul/ Turkey 21,84% 21,84% (3) Tamweel Holding S.A. (**) Dakar/Senegal 40,00% 40,00% (4) Kredi Garanti Fonu A.Ş. Ankara/ Turkey 1,67% 1,67%

(*) The Bank participated in Yeni Mağazacılık A.Ş. and Landmark Holding A.Ş. with the Financing Method for Participation Banks explained in the regulation No: 19 regarding “Banks’ Lending Transactions” published and became effective in the Official Gazette numbered 26333, dated November 1, 2006 by means of joint investment method. These are recorded as associates in accordance with the Uniform Chart of Accounts published in the Official Gazette numbered 26415 and dated January 26, 2007. (**) As of February 4, 2010, the Bank has paid for TRY 21.548 Thousand and as a consequence, became owner of 40% of Tamweel Africa Holding S.A. that is owned by the Islamic Corporation for the Development of the Private Sector (“ICD”) which is a group establishment of the Islamic Development Bank (“IDB”) and has paid TRY 9.077 Thousand for capital increase on June 8, 2010.As of the reporting date capital registry process has not been finalized yet. .

7.2. Information on Associates:

Total Assets Equity Total Fixed

Assets Profit Share

Income

Income from Marketable Securities Portfolio

Current Period Profit/Loss

Prior Period Profit/Loss Fair Value

(1) (*) 43.457 43.407 - - - (17) 38 (*****)175.277 (2) (*) 173.459 (60.969) 51.960 - - (17.957) (18.637) (*****) 56.966 (3) (**) 447.266 73.510 26.832 19.059 - 6.117 (23) - (4) (***) 140.922 135.790 3.090 900 - 2.685 7.848 -

(*) Financial information is provided from the associate’s unaudited financial statements as of March 31, 2011. (**) Financial information is provided from the associate’s audited financial statements as of December 31, 2010. (***) Balances are obtained from unaudited 31 December 2010 financial statements of associate. (****)It is expertise value of the Bank’s associate, Yeni Mağazacılık A.Ş., as of February 4, 2010. (*****) It is the expertise value of the Bank’s associate, Landmark Holding A.Ş., as of February 9, 2010.

7.3. Movement of Associates:

Current Period Prior Period Balance at the Beginning of the Period 86.606 45.063 Movements in Period - 41.543

Purchases - 41.543 Free Shares Obtained - - Dividends from Current Year Income - - Sales - - Revaluation Increase - - Provision for Diminution in Value - -

Balance at the End of the Period 86.606 86.606 Capital Commitments (*) 2.000 2.000 Share Percentage at the End of the Period (%) 1,67%-40,00% 1,67%-40,00%

(*) It consists of capital commitment amounting to TRY 2.000 Thousand to Bank’s associate, Kredi Garanti Fonu A.Ş..




37

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 7. Information on Investments in Associates

7.4 Sectoral Information on the Investments in Associates and the Related Carrying Amounts:

8. Information on Subsidiaries (Net) 8.1. Information on Subsidiaries:

Company Name Address (City/ Country)

Bank’s Share Percentage, If

Different-Voting Percentage (%)

Bank’s Risk Group

Share Percentage (%)(1) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. İstanbul/Turkey 95,00% 95,00% (2) Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş. Ankara/Turkey 99,93% 99,93% (3) Işık Sigorta A.Ş. İstanbul/Turkey 65,42% 65,42% (3) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul/Turkey 22,94% 22,94% (5) Asya Kart Teknoloji Hizmetleri A.Ş. Istanbul/Turkey 99,50% 99,50%

8.2. Information on Subsidiaries:

(*)

Total Assets Equity Total Fixed

Assets Profit Share

Income

Income from Marketable Securities Portfolio

Current Period

Profit/Loss Prior Period Profit/Loss Fair Value

(1)(*) 208 206 - 3 - - 2 -(2)(**) 68.854 64.305 1.946 32 - 414 (83) -(3) (*) 183.659 71.141 1.935 1.953 236 1.670 793 (***) 190.616(4)(**) 150.009 114.314 37.708 96 - (1.752) (82) (****) 192.051(5)(**) 10 8 - - - (2) (2) -

(*) Financial information is provided from the unaudited financial statements of subsidiaries as March 31, 2011. (**) It is expertise value of the Bank’s subsidiary, Işık Sigorta A.Ş., as of February 4, 2010. (***)VAT included fair value is TRY 192.051 Thousand, including land, per expertise appraisal dated January 26, 2010.

Current Period Prior Period Banks - -Insurance Companies - -Factoring Companies - -Leasing Companies - -Finance Companies - -Other Subsidiaries 86.606 86.606




38

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 8. Information on Subsidiaries (Net) (Cont’d) 8.3. Movement of Subsidiaries:

Current Period Prior Period Balance at the Beginning of the Period 144.963 139.810 Movements in Period - 5.153

Purchases - 5.153 Free Shares Obtained - - Dividends from Current Year Income - - Sales - - Revaluation Increase - - Provision for Diminution in Value - -

Balance at the End of the Period 144.963 144.963 Capital Commitments - - Share Percentage at the End of the Period (%) 22,94%-99,93% 22,94%-99,93%

8.4. Sectoral Information on the Financial Subsidiaries and the Related Carrying Amounts:

8.5. Subsidiaries Quoted on the Stock Exchange:

None.

9. Information on Entities under Common Control

None.

Subsidiaries Current Period Prior Period Banks - - Insurance Companies 50.154 50.154 Factoring Companies - - Leasing Companies - - Finance Companies - - Other Subsidiaries 37.857 37.857




39

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 10. Information on Finance Lease Receivables (Net) 10.1. Presentation of Finance Lease Receivables According to Their Remaining Maturities:


Gross Net Gross Net Less than 1 Year 12.183 10.698 5.562 4.820 1 to 4 Years 105.233 92.411 106.620 92.391 More than 4 Years 10.022 8.802 9.532 8.260

Total 127.438 111.911 121.714 105.471 10.2. Information on Net Investments in Finance Leases:

Current Period Prior Period Gross Finance Lease Receivables 127.438 121.714 Unearned Finance Lease Income (-) (15.527) (16.243) Cancelled Finance Lease Amounts (-) - -

Net Receivable from Finance Leases 111.911 105.471 11. Information on Derivative Financial Assets for Hedging Purposes

None.




40

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 12. Information on Tangible Assets

(*) Other tangible assets comprise leasehold improvements, safety box, office equipments, furniture and other fixed assets. (**)TRY 95 Thousand of real estate’s within assets to be disposed off have been qualified as and transferred to assets held for sale. (***) In the current period, the Bank has provided an additional impairment of TRY 246 Thousand and reversed TRY 771 Thousand impairment due to disposals.

Buildings Leased Tangible

Assets Vehicles

Assets to be Disposed off

Other Tangible Assets (*) Total

Cost

Opening Balance - January 1, 2011 12.454 36.106 2.129 226.189 205.116 481.994Additions - - 54 30.931 3.207 34.192

Disposals - - (194) (12.315) (1.281) (13.790)Transfers (**) - - - 95 - 95Impairment Losses /(Reversal) (***) - - - 649 - 649Closing Balance - December 31, 2011 12.454 36.106 1.989 245.549 207.042 503.140

Accumulated Depreciation (-)

Opening Balance - January 1, 2011 2.442 26.667 397 6.138 92.898 128.542Depreciation Expense 76 1.645 112 1.084 8.968 11.885Disposals - - (10) (522) (1.291) (1.823)Transfers - - - - - -Impairment (Losses) /Reversal - - - 124 - 124Closing Balance - December 31, 2011 2.518 28.312 499 6.824 100.575 138.728

Net Book Value - December 31, 2010 10.012 9.439 1.732 220.051 112.218 353.452 Net Book Value - December 31, 2011 9.936 7.794 1.490 238.725 106.467 364.412




41

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 12. Information on Tangible Assets (Cont’d)

(*) Other tangible assets comprise leasehold improvements, safety box, office equipments, furniture and other fixed assets. (**) TRY 7.205 Thousand of the balance is transferred from assets held for sale to tangible assets which is accounted in assets held for sale for more than one year. TRY 8.344 Thousand of real estate’s within assets to be disposed off have been qualified as and transferred to assets held for sale. (***) In the current period, the Bank has provided an additional impairment of TRY 1.619 Thousand and reversed TRY 7.103 Thousand impairment due to disposals. 13. Information on Intangible Assets

13.1. Opening and Ending Book Values and Accumulated Depreciation Balances:


Book Value 20.862 20.728 Accumulated Depreciation (11.152) (10.309)

Net Book Value 9.710 10.419

Buildings Leased Tangible

Assets Vehicles

Assets to be Disposed off

Other Tangible Assets (*) Total

Cost

Opening Balance - January 1, 2010 12.112 38.917 1.293 186.864 163.827 403.013Additions - - 1.873 104.400 45.664 151.937

Disposals - (2.811) (1.037) (69.279) (4.375) (77.502)Transfers (**) - - - (1.234) - (1.234)Impairment (Losses) / Reversal 342 - - 5.438 - 5.780Closing Balance - December 31, 2010 12.454 36.106 2.129 226.189 205.116 481.994

Accumulated Depreciation(-)

Opening Balance - January 1, 2010 2.127 21.632 703 4.127 64.530 93.119Depreciation Expense 309 7.370 338 3.691 32.349 44.057Accumulated Depreciation of Tangible Assets Held for Resale - (2.335) (644) (1.875) (3.981) (8.835)Transfers - - - (95) - (95)Impairment (Losses) / Reversal 6 - - 290 - 296Closing Balance - December 31, 2010 2.442 26.667 397 6.138 92.898 128.542

Net Book Value - December 31, 2009 9.985 17.285 590 182.737 99.297 309.894 Net Book Value - December 31, 2010 10.012 9.439 1.732 220.051 112.218 353.452




42

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) I. Explanations and Disclosures Related to the Assets (Cont’d) 13. Information on Intangible Assets (Cont’d) 13.2. Intangible Assets Movement Table:

Computer Software Cost Opening Balance- January 1, 2011 20.728 Additions 134 Disposals - Closing Balance- March 31, 2011 20.862

Accumulated Amortization (-) Opening Balance- January 1, 2011 10.309 Amortization Expense 843 Disposals - Closing Balance- March 31, 2011 11.152 Net Book Value- December 31, 2010 10.419

Net Book Value- March 31, 2011 9.710

Computer Software Cost Opening Balance- January 1, 2010 17.261 Additions 3.467 Disposals - Closing Balance- December 31, 2010 20.728

Accumulated Amortization (-) Opening Balance- January 1, 2010 7.037 Amortization Expense 3.272 Disposals - Closing Balance- December 31, 2010 10.309 Net Book Value- December 31, 2009 10.224

Net Book Value- December 31, 2010 10.419

14. Information on Investment Properties

None (December 31, 2010: None).




43


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d)

I. Explanations and Disclosures Related to the Assets (Cont’d) 15. Information on Deferred Tax Asset

As of March 31, 2011, deferred tax asset computed on the temporary differences, except for general loan provision and provision for possible risks, is TRY 9.491 Thousand and is recorded in the deferred tax asset account.

Current Period Deferred Tax Base Deferred Tax Asset/(Liability) Retirement Pay Provision and Short-Term Employee Benefits 24.018 4.804Other Provisions 24.983 4.997Deferred Commission Income 39.548 7.910Tangible Assets Tax Base Differences (19.829) (3.967)Valuation of Financial Assets (21.273) (4.255)Other 8 2Deferred Tax Asset (net) 47.455 9.491

Prior Period Deferred Tax Base Deferred Tax Asset/(Liability) Retirement Pay Provision and Short-Term Employee Benefits 23.058 4.612Other Provisions 21.233 4.247Deferred Commission Income 33.145 6.629Tangible Assets Tax Base Differences (23.362) (4.672)Valuation of Financial Assets (5.038) (1.008)Other 17 3Deferred Tax Asset (net) 49.053 9.811

Movement of the deferred tax asset as of March 31, 2011 and December 31, 2010 is stated as below:

Current Period Prior Period Deferred Tax Asset, January 1 9.811 4.754 Deferred Tax Recognized Directly Under Equity 709 (953) Deferred Tax Benefit /(Charge) (1.029) 6.010 Deferred Tax Asset 9.491 9.811




44



I. Explanations and Disclosures Related to the Assets (Cont’d) 16. Information on Assets Held for Sale

Assets held for sale consist of tangible assets which are obtained from non-performing loans and they are recognized as required in accordance with the prevailing the Communiqué of “Principles and Procedures on Bank’s Disposal of Precious Metals and Assets Held for Sale” published on November 1, 2006 in the Official Gazette numbered 26333 in the unconsolidated financial statements. As of March 31, 2011, assets held for sale amounts to TRY 6.210 Thousand (December 31, 2010: TRY 6.509 Thousand).

Current Period Prior Period Opening Balance- January 1 6.509 9.196 Additions - - Outflows (204) (3.791) Transfers (net) (*) (95) 1.139 Impairment Losses Provisions - (3.526) Closing Balance-March 31 6.210 6.509

(*) TRY 95 Thousand of the balance is transferred from assets held for sale to tangible assets which stayed in assets held for sale for more than one year.

17. Information on Other Assets Other assets amount to TRY 95.653 Thousand. Other assets account does not exceed 10% of the total

assets (December 31, 2010: TRY 95.625 Thousand).




45



II. Explanations and Disclosures Related to the Liabilities

1.1. Information on Maturity Structure of Deposits:

Current Period Demand

Up to 1 Month

Up to 3 Months

Up to 6 Months

Up to 9 Months

Up to 1 Year

1 Year and Over

Accumulated Profit Sharing

Accounts

Total I. Real Persons Current Deposits-TRY 479.976 - - - - - - - 479.976 II. Real Persons Profit Sharing Accounts-TRY - 1.617.675 1.017.079 230.623 - 176.300 1.980.780 - 5.022.457 III. Other Current Accounts-TRY 666.033 - - - - - - - 666.033 Public Sector 95.758 - - - - - - - 95.758 Commercial Sector 553.141 - - - - - - - 553.141 Other Institutions 16.366 - - - - - - - 16.366 Commercial and Other Institutions 471 - - - - - - - 471 Banks and Finance Houses 297 - - - - - - - 297 Central Bank - - - - - - - - - Domestic Banks 1 - - - - - - - 1 Foreign Banks - - - - - - - - - Banks 296 - - - - - - - 296 Other - - - - - - - - - IV. Profit Sharing Accounts-TRY - 234.230 246.469 22.804 - 61.311 697.855 - 1.262.669 Public Sector - 33 57 100 - - - - 190 Commercial Sector - 225.022 232.251 19.758 - 51.918 673.422 - 1.202.371 Other Institutions - 8.885 14.085 2.946 - 9.393 23.242 - 58.551 Commercial and Other Institutions - 280 76 - - - 1.191 - 1.547 Banks - 10 - - - - - - 10 V. Real Persons Current Deposits-FC 207.689 - - - - - - - 207.689 VI. Real Persons Profit Sharing Accounts-FC - 392.565 463.377 99.776 - 152.994 648.131 - 1.756.843 VII. Other Current Accounts-FC 275.978 - - - - - - - 275.978 Commercial Residents in Turkey 245.307 - - - - - - - 245.307 Commercial Residents in Abroad 11.205 - - - - - - - 11.205 Banks 19.466 - - - - - - - 19.466 Central Bank - - - - - - - - - Domestic Banks - - - - - - - - - Foreign Banks 10.606 - - - - - - - 10.606 Banks 8.860 - - - - - - - 8.860 Other - - - - - - - - - VIII.Profit Sharing Accounts- FC - 109.239 306.290 158.875 - 65.369 558.314 - 1.198.087

Public Sector - 36 - - - - - - 36 Commercial Sector - 103.659 276.123 43.041 - 52.090 500.103 - 975.016 Other Institutions - 445 9.375 101.496 - - 13.973 - 125.289

Commercial and Other Institutions - 2.273 33 301 - 973 35.941 - 39.521 Banks and Finance Houses - 2.826 20.759 14.037 - 12.306 8.297 - 58.225

IX. Precious Metal Deposits 178.292 - - - - - - - 178.292 X. Profit Sharing Accounts Special Fund Pools-TRY - - - - - - - - -

Residents in Turkey - - - - - - - - - Residents Abroad - - - - - - - - -

XI. Profit Sharing Accounts Special Fund Pools-FC - - - - - - - - -


Total(I+II+…..+IX+X+XI) 1.807.968 2.353.709 2.033.215 512.078 - 455.974 3.885.080 - 11.048.024




46



II. Explanations and Disclosures Related to the Liabilities (Cont’d)

1.1. Information on Maturity Structure of Deposits (Cont’d):

Prior Period Demand

Up to 1 Month

Up to 3 Months

Up to 6 Months

Up to 9 Months

Up to 1 Year

1 Year and Over

Accumulated Profit Sharing

Accounts

Total I. Real Persons Current Deposits-TRY 487.918 - - - - - - - 487.918 II. Real Persons Profit Sharing Accounts-TRY - 1.851.180 1.175.698 254.717 - 190.314 1.471.293 - 4.943.202 III. Other Current Accounts-TRY 878.481 - - - - - - - 878.481 Public Sector 90.765 - - - - - - - 90.765 Commercial Sector 771.459 - - - - - - - 771.459 Other Institutions 14.455 - - - - - - - 14.455 Commercial and Other

Institutions 829 - - - - - - - 829 Banks and Finance Houses 973 - - - - - - - 973 Central Bank - - - - - - - - - Domestic Banks - - - - - - - - - Foreign Banks - - - - - - - - - Banks 973 - - - - - - - 973 Other - - - - - - - - - IV. Profit Sharing Accounts-TRY - 466.431 550.401 61.145 - 12.531 262.179 - 1.352.687 Public Sector - 5 64 - - - - - 69 Commercial Sector - 455.276 508.302 28.153 - 8.679 243.774 - 1.244.184 Other Institutions - 10.653 41.960 32.992 - 3.852 17.569 - 107.026 Commercial and Other

Institutions - 497 75 - - - 836 - 1.408 Banks - - - - - - - - - V. Real Persons Current Deposits-FC 261.028 - - - - - - - 261.028 VI. Real Persons Profit Sharing Accounts-FC - 523.290 544.120 122.153 - 132.089 474.593 - 1.796.245 VII. Other Current Accounts-FC 329.903 - - - - - - - 329.903 Commercial Residents in

Turkey 302.274 - - - - - - - 302.274 Commercial Residents in Abroad 20.243 - - - - - - - 20.243 Banks 7.386 - - - - - - - 7.386 Central Bank - - - - - - - - - Domestic Banks - - - - - - - - - Foreign Banks 5.172 - - - - - - - 5.172 Banks 2.214 - - - - - - - 2.214 Other - - - - - - - - - VIII. Profit Sharing Accounts- FC - 252.706 457.861 120.325 - 35.627 127.227 - 993.746

Public Sector - 52 - - - - - - 52 Commercial Sector - 231.416 447.709 37.631 - 34.664 112.202 - 863.622 Other Institutions - 588 5.405 79.313 - - 11.712 - 97.018

Commercial and Other Institutions - 20.629 211 3.381 - 963 3.313 - 28.497

Banks and Finance Houses - 21 4.536 - - - - - 4.557 IX. Precious Metal Deposits 123.372 - - - - - - - 123.372 X. Profit Sharing Accounts Special Fund Pools TRY - - - - - - - - -


XI. Profit Sharing Accounts Special Fund Pools-FC - - - - - - - - -


Total(I+II+…..+IX+X+XI) 2.080.702 3.093.607 2.728.080 558.340 - 370.561 2.335.292 - 11.166.582




47

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) II. Explanations and Disclosures Related to the Liabilities (Cont’d) 1.2. Current and Participation Accounts Attributable to Real Entities/Persons under the Guarantee of

Saving Deposit Insurance Fund Exceeding the Limit of the Deposit Insurance Fund:

Under the Guarantee of Saving

Deposit Insurance Exceeding the Limit of Saving Deposit

Insurance Current Period Prior Period Current Period Prior Period

Real Persons Current and Profit Sharing Accounts that are not Subject to Commercial Activities 3.632.282 3.503.770 3.955.365 4.036.931TRY Accounts 2.979.661 2.854.573 2.498.534 2.545.285FC Accounts 652.621 649.197 1.456.831 1.491.646Foreign Branches’ Deposits under Foreign Authorities’ Insurance - - - -Off-shore Banking Regions’ Deposits under Foreign Authorities’ Insurance - - - -

1.3. Current and Profit Sharing Accounts which are not under the Guarantee of Deposit Insurance Fund:

Current Period Deposits and Other Accounts held at Foreign Branches -Deposits and Other Accounts held by Shareholders and their Relatives 31.032Deposits and Other Accounts of the Chairman and Members of Board of Directors, Chief Executive Officer, Senior Executive Officers and their Relatives 22.885Deposits and Other Accounts held as Assets subject to the Crime defined in the Article 282 of the Turkish Criminal Code no. 5237 dated 26 September 2004 -Deposits at Depository Banks established for Off-Shore Banking Activities in Turkey -Total 53.917

2. Information on Derivative Financial Liabilities Held for Trading

As of March 31, 2011, derivative financial liabilities held for trading amounts to TRY 2.487 Thousand (December 31, 2010: TRY 5.397 Thousand). Current Period Prior Period

TRY FC TRY FC Forward Transactions (*) - 286 - 176 Swap Transactions - 2.201 - 5.221 Futures Transactions - - - - Options - - - - Other - - - - Total - 2.487 - 5.397

(*) Includes forward asset purchase/sale commitments.




48

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) II. Explanations and Disclosures Related to the Liabilities (Cont’d) 3. Information on Borrowings

3.1. Information on Banks and Other Financial Institutions:


TRY FC TRY FC Loans from Central Bank of the Republic of Turkey - - - - From Domestic Banks and Institutions - 47.970 - 45.096 From Foreign Banks, Institutions and Funds - 627.841 - 577.141 Total - 675.811 - 622.237

3.2. Maturity Analysis of Borrowings:


Short-Term - 579.420 - 545.027 Medium-Term and Long-Term - 96.391 - 77.210

Total - 675.811 - 622.237

3.3. Additional Explanation related to the Concentrations of the Bank’s Major Liabilities:

None.

4. Other Liabilities with Exceeding 10% of the Balance Sheet Total (Excluding Off-Balance Sheet

Commitments) and the Breakdown of Such Liabilities Constituting at Least 20% of the Grand Total Other liability items amount to TRY 276.373 Thousand and do not exceed 10% of the total balance sheet total (December 31, 2010: TRY 271.161 Thousand).

5. Information on Financial Lease Obligations None. 6. Information on Derivative Financial Liabilities for Hedging Purposes

None.




49

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) II. Explanations and Disclosures Related to the Liabilities (Cont’d) 7. Explanations on Provisions 7.1. Information on General Provisions:

Current Period Prior Period General Provisions 126.316 117.204 I. Provisions for First Group Loans and Receivables 79.380 85.241

Profit Sharing Accounts’ Share 42.246 43.833 The Bank’s Share 37.112 41.390 Other 22 18

II. Provisions for Second Group Loans and Receivables 29.373 15.711 Profit Sharing Accounts’ Share 8.722 3.084 The Bank’s Share 20.651 12.627 Other - -

Provisions for Non Cash Loans 17.563 16.252 7.2. Movement of General Provisions:

Current Period Opening Balance - January 1, 2011 117.204 Charge for Period 6.917 Reversal of Prior Period Expenses (2.061) Profit Sharing Accounts Share 4.256 Closing Balance- March 31, 2011 126.316 Prior Period Opening Balance – January 1, 2010 89.368 Charge for Period 22.088 Reversal of Prior Period Expenses (1.561) Profit Sharing Accounts Share 7.309 Closing Balance- December 31, 2010 117.204

7.3. Information on Provision for Foreign Exchange Losses on the Foreign Currency Indexed Loans

and Finance Lease Receivables:

As of March 31, 2011, the Bank’s provision for foreign currency indexed loans amounts to TRY 7.925 Thousand (December 31, 2010: TRY 9.962 Thousand). Provisions for foreign currency indexed loans are offset under the loan balance in the financial statements.

7.4. Information on the Specific Provisions Provided for Unindemnified Non-Cash Loans:

As of March 31, 2011, the Bank’s specific provision provided for unindemnified non-cash loans amounts to TRY 21.636 Thousand (December 31, 2010: TRY 9.705 Thousand).




50

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d)

II. Explanations and Disclosures Related to the Liabilities (Cont’d) 7. Explanations on Provisions (Cont’d)

7.5. Information on Other Provisions:

7.5.1. Information on Provisions for Potential Risks:

None (December 31, 2010: None).

7.5.2. Information on Other Provisions:

Other Provisions Current Period Prior Period

Provision for Credit Cards Promotion of Banking Services 4.362 4.212 Provision for Unindemnified Non-Cash Loans 21.636 9.705

Payment Commitment for Checks 11.007 6.170 Litigation Provision 1.021 1.021 Other (*) 16.000 16.000 Total 54.026 37.108

(*) The balance includes provisions accounted for future losses which may be incurred on loan portfolio. 7.5.3. Movement of the Retirement Pay Provision:

Current Period Prior Period Opening Balance - January 1 11.955 7.974 Current Service Cost 1.056 1.736 Interest Cost 137 870 Benefits Paid (363) (782) Settlement/Curtailment/Termination Loss/(Gain) - 561 Actuarial Loss/(Gain) - 1.596 Closing Balance 12.785 11.955

The Bank has reflected the employee benefit provision to the financial statements by using actuarial valuation method stated in TAS 19. As of March 31, 2011 the Bank provided a provision of TRY 11.233 Thousand for the unused vacation pays (December 31, 2010: TRY 11.103 Thousand). The Bank also allocated TRY 3.600 Thousand bonus provision for the current year.

8. Explanations on Taxes Payable

8.1. Information on Current Tax Liability:

As of March 31, 2011, the Bank’s corporate tax payable is TRY 8.245 Thousand after offsetting pre-paid corporate tax (December 31, 2010: TRY 15.726 Thousand).

Current Period Prior Period Provision for Corporate Taxes 78.591 70.346 Prepaid Corporate Tax (70.346) (54.620)

Corporate Tax Payable 8.245 15.726




51

SECTION FIVE (Cont’d) EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) II. Explanations and Disclosures Related to the Liabilities (Cont’d) 8. Information on Current Tax Liability (Cont’d) 8.2. Information on Taxes Payable: 8.3. Premiums:


Social Security Premiums-Employee 2.241 2.522 Social Security Premiums-Employer 3.148 3.543 Bank Social Aid Pension Fund Premium-Employee - - Bank Social Aid Pension Fund Premium-Employer - - Pension Fund Membership Fees and Provisions-Employee - - Pension Fund Membership Fees and Provisions-Employer - - Unemployment Insurance-Employee 159 179 Unemployment Insurance-Employer 318 358 Other - -

Total 5.866 6.602 8.4. Explanations on Deferred Tax Liabilities:

None (December 31, 2010: None). 9. Information on Liabilities Regarding Assets Held for Sale and Discontinued Operations:

None.

10. Information on Subordinated Loans

None. 11. Information on Shareholders’ Equity

11.1. Presentation of Paid-in Capital:


Common Stock 540.000 540.000 Preferred Stock (*) 360.000 360.000

(*) Preferred stockholders have the right to nominate candidates for the Board of Directors and the Audit Committee.

Current Period Prior Period Corporate Taxes Payable 8.245 15.726 Taxation of Securities 7.287 7.179 Property Tax 505 471 Banking Insurance Transaction Tax (BITT) 5.146 6.261 Foreign Exchange Transaction Tax - - Value Added Tax Payable 1.637 1.748 Other 5.753 10.175

Total 28.573 41.560




52


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) II. Explanations and Disclosures Related to the Liabilities (Cont’d) 11. Information on Shareholders’ Equity (Cont’d) 11.1 Paid-in Capital Amount, Explanation as to whether the Registered Share Capital System is

Applicable at Bank if so Amount of the Registered Share Capital Ceiling:

Registered capital system is not applied in the Bank. 11.3. Share Capital Increases and Their Sources; Other Information on Increased Capital Shares in the

Current Period: None. 11.4. Information on Share Capital Increases from Capital Reserves: None. 11.5. Information on Share Capital Increases from Revaluation Funds:

None.

11.6. Capital Commitments in the Last Fiscal Year and at the End of the Following Interim Period, General Purpose of These Commitments and Projected Resources Required to Meet These Commitments:

None.

11.7. Indicators of the Bank’s Income, Profitability and Liquidity for Prior Periods and Possible Effects of These Future Assumptions on the Bank’s Equity due to the Uncertainty of These Indicators:

The Bank carries its activities in profitable level and retains the major portion of its net profit within equity by means of transfers to reserve accounts and capital increases. The Bank, also allocates its equity to highly liquid and profit generating assets.

11.8. Summary of Privileges Granted to Preferred Stocks:

The holders of the preferred stocks have the right to nominate candidates for the Board of Directors and the Audit Committee.

11.9. Explanations on Marketable Securities Value Increase Fund:

Current Period Prior Period From Associates, Subsidiaries, and Entities under Common Control (Joint Vent.) - - Valuation Difference - - Foreign Exchange Difference - - From Financial Assets Available for Sale (1.904) 6.732 Valuation Difference (1.904) 6.732 Foreign Exchange Difference - - Total (1.904) 6.732




53


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments 1. Explanation on Contingent Liabilities

1.1. Nature and Amounts of Irrevocable Loan Commitments:


Asset Purchase-Sale Commitments 332.681 115.567 Time Deposit Purchase-Sale Commitments 2.000 2.000 Capital Commitments for Associates And Subsidiaries 315.244 397.512 Loan Granting Commitments 1.690.013 1.661.296 Commitments for Credit Card Expenditure Limits 6.930 7.257 Commitments for Credit Card And Retail Banking Promotions 632.677 580.319 Payment Commitments for Checks 1.806 1.880 Total 2.981.351 2.765.831

1.2. Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That

Qualify as Financial Guarantees and Other Letters of Credit: 1.2.1. Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That

Qualify as Financial Guarantees and Other Letters of Credit:

Current Period Prior Period Guarantees 8.121.498 7.938.655 Bank Acceptances 170.268 154.318 Letter of Credits 1.137.483 997.362 Other Guarantees 146.866 136.548 Total 9.576.115 9.226.883

1.2.2. Definite Guarantees, Provisional Guarantees, Suretyships and Similar Transactions:

Current Period Prior Period Provisional Letters of Guarantees 5.946.667 5.891.224 Definite Letters of Guarantee 896.708 937.000 Suretyships and Similar Transactions 1.278.123 1.110.431 Total 8.121.498 7.938.655

1.3. Total Amount of Non-Cash Loans:

Current Period Prior Period Non-cash loans Against Cash Risks 148.846 134.953

With Original Maturity of 1 Year or Less 5.582 5.405 With Original Maturity of More than 1 Year 143.264 129.548

Other Non-Cash Loans 9.427.269 9.091.930 Total 9.576.115 9.226.883




54


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments

(Cont’d) 2. Information on Ist and IInd Group Non-Cash Loans I st Group II nd Group

TRY FC TRY FC Non-Cash Loans 4.033.230 5.166.959 132.478 243.448Letters of Guarantee 4.000.663 3.764.830 132.478 223.527Endorsements and Acceptances 23.000 147.268 - -Letters of Credit 2.533 1.115.029 - 19.921Endorsements - - - -Underwriting Commitments - - - -Factoring Commitments - - - -Other Commitments and Contingencies 7.034 139.832 - -

3. Derivative Financial Instruments

Derivative Transactions according to Purposes Trading Hedging Current Period Prior Period Current Period Prior Period Type of Trading Transactions Foreign Currency Related Derivative Transactions (I): 1.619.397 926.555 - -

Forward Transactions - - - -Swap Transactions 1.619.397 926.555 - -Futures Transactions - - - -Option Transactions - - - -

Interest Related Derivative Transactions (II) : - - - - Forward Interest Rate Transaction - - - -

Interest Rate Swap Transactions - - - -Interest Option Transactions - - - -Futures Interest Transactions - - - -

Marketable Securities Call-Put Options (III) - - - -Other Trading Derivative Transactions (IV) - - - -A. Total Trading Derivative Transactions (I+II+III+IV) 1.619.397 926.555 - - Types of Hedging Transactions

Fair Value Hedges - - - -Cash Flow Hedges - - - -Net Investment Hedges - - - -

B. Total Hedging Related Derivatives - - - -Total Derivative Transactions (A+B) 1.619.397 926.555 - -




55



(Cont’d) 3. Derivative Financial Instruments (Cont’d)

As of March 31, 2011, the Bank does not have foreign currency forward transactions. As of December 31, 2010, the breakdown of the Bank’s foreign currency forward transactions based on currencies are disclosed below in their TRY equivalents. Current Period Forward Buy Forward Sell TRY 564.642 203.646USD 201.279 595.319EUR 54.511 -Total 820.432 798.965 Prior Period Forward Buy Forward Sell TRY 268.243 -USD - 463.577EUR 194.735 -Total 462.978 463.577

As of March 31, 2011, the Bank does not have any derivative transactions for the purpose of cash flow hedge.

4. Explanations on Contingent Liabilities and Assets

As of the balance sheet date, there are 181 ongoing court cases against the Bank amounting to TRY 18.476 Thousand and EUR 946 based on the information provided from the legal department of the Bank. For one of the ongoing court cases mentioned above, provision amounting to TRY 1.021 Thousand has been allocated. Total amount of letters of guarantees, guarantees and commitments submitted by the Bank pursuant to its own internal affairs and guarantees given by other institutions submitted by the Bank pursuant to the third parties benefit of the Bank stands at TRY 33.638 Thousand and is recognized under “Other irrevocable commitments” item of off-balance sheet contingencies and commitments.

5. Explanations on Custodian and Intermediary Services None.




56



(Cont’d) 6. Summary Information on the Bank’s Rating by the International Rating Institutions

FITCH RATINGS

Foreign Currency Long Term B+ Short Term B Outlook Stable Turkish Lira Long Term B+ Short Term B Outlook Stable International Long Term A-(tour) Outlook Stable Individual Rating D Support Points 5

The information is obtained from the Fitch Ratings Report as of December 27, 2010.

MOODY’S

The information is obtained from the Moody’s Investor Service report as of February 10, 2011.

Financial Strength D Outlook Stable Foreign Currency Long Term Ba3 Short Term B1 Outlook Stable Turkish Lira Long Term Ba2 Short Term Ba1 Outlook Stable International Long Term A3 Short Term TR-1




57


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitment

(Cont’d) 6. Summary Information on the Bank’s Rating by the International Rating Institutions (Cont’d)

JCR EURASIA

Foreign Currency Long Term BB Short Term B Outlook Stable International Local Currency Long Term BB Short Term B Outlook Stable National Local Rating Long Term A- (Trk) Short Term A- 1 (Trk) Outlook Stable Stand-Alone BC Support Points 3

The information is obtained from the JCR Eurasia Rating report as of June 15, 2010.




58


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) IV. Explanations and Disclosures Related to the Income Statement 1. Information on Profit Share Income 1.1. Information on Profit Share on Loans:

Group I Group II

TRY FC TRY FC

Profit Share on Loans 235.165 15.732 16.227 5.856

Short Term Loans 86.507 3.515 1.556 3.320

Medium and Long Term Loans 145.525 12.217 14.671 2.536

Profit Share on Non-Performing Loans 3.133 - - - Premiums Received from Resource Utilization Support Fund - - - -

1.2. Profit Share from Banks:


TRY FC TRY FC Central Bank of the Republic of Turkey (Reserve Deposit) - - 4.027 -Domestic Banks - - - -Foreign Banks (*) 487 155 6.971 369Branches and Head Office Abroad - - - -

Total 487 155 10.998 369

(*) Foreign banks include profit shares from “murabaha” loans. 1.3. Information on Interest Received from Marketable Securities:


TRY FC TRY FC Financial Assets Held-for-Trading - - - -Financial Assets at Fair Value through Profit or Loss - - - -Financial Assets Available-for-Sale 9.753 - 3.133 -Held-to-Maturity Investments 2.213 - 2.737 -

Total 11.966 - 5.870 - 1.4. Information on Profit Share Income Received from Associates and Subsidiaries:


Profit Share Income Received from Associates and Subsidiaries 6.754 5.984




59


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) IV. Explanations and Disclosures Related to the Income Statement (Cont’d)

2. Information on Profit Share Expenses 2.1. Information on Interest on Funds Borrowed:


TRY FC TRY FC

Banks - 6.299 - 1.445Central Bank of the Republic of Turkey - - - -Domestic Banks - 434 - -Foreign Banks - 5.865 - 1.445Foreign Head Office and Branches - - - -

Other Institutions - - - -Total - 6.299 - 1.445

2.2. Information on Profit Share Expense Given to Associates and Subsidiaries:


Profit Share Expenses Given to Associates and Subsidiaries 1.851 1.495 2.3. Information on Profit Share Expense to Marketable Securities Issued: None.




60


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) IV. Explanations and Disclosures Related to the Income Statement (Cont’d) 2. Information on Profit Share Expenses (Cont’d) 2.4. Distribution of Profit Share Expense on Deposits Based on Maturity of Deposits:

Current Period Profit Sharing Accounts

Account Name

Up to 1 Month

Up to 3 Months

Up to 6 Months

Up to 9 Months

Up to 1

Year

More than

1 Year

Total TRY

Banks and Finance Houses - - - - - - -

Real Person’s Profit Sharing Acc. 30.887 20.137 4.720 - 3.694 30.408 89.846 Public Sector Profit Sharing Acc. 1 1 1 - - - 3 Commercial Sector Profit Sharing Acc. 6.349 7.174 453 - 151 7.238 21.365 Other Institutions Profit Sharing Acc. 169 423 75 - 166 349 1.182

Total 37.406 27.735 5.249 - 4.011 37.995 112.396 FC

Banks and Finance Houses 75 76 22 - 22 25 220 Real Person’s Profit Sharing Acc. 3.809 4.825 1.038 - 1.411 4.668 15.751 Public Sector Profit Sharing Acc. - - - - - - - Commercial Sector Profit Sharing Acc. 1.642 3.530 389 - 379 2.567 8.507 Other Institutions Profit Sharing Acc. 4 92 1.083 - - 126 1.305 Precious Metal Deposits - - - - - - -

Total 5.530 8.523 2.532 - 1.812 7.386 25.783 Grand Total 42.936 36.258 7.781 - 5.823 45.381 138.179

Prior Period Profit Sharing Accounts

Account Name

Up to 1 Month

Up to 3 Months

Up to 6 Months

Up to 9 Months

Up to 1

Year

More than

1 Year

Total TRY

Banks and Finance Houses - - - - - - -

Real Person’s Profit Sharing Acc. 19.001 32.234 10.709 - 7.377 51.330 120.651 Public Sector Profit Sharing Acc. - - - - - - - Commercial Sector Profit Sharing Acc. 1.500 2.631 207 - 1.056 3.199 8.593 Other Institutions Profit Sharing Acc. 32 57 145 - 22 409 665

Total 20.533 34.922 11.061 - 8.455 54.938 129.909 FC

Banks and Finance Houses 115 - - - - - 115 Real Person’s Profit Sharing Acc. 2.378 5.522 3.737 - 3.203 10.754 25.594 Public Sector Profit Sharing Acc. - - - - - - - Commercial Sector Profit Sharing Acc. 319 1.186 1.273 - 522 1.107 4.407 Other Institutions Profit Sharing Acc. - 132 369 - - 83 584 Precious Metal Deposits - - - - - - -

Total 2.812 6.840 5.379 - 3.725 11.944 30.700 Grand Total 23.345 41.762 16.440 - 12.180 66.882 160.609




61


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) IV. Explanations and Disclosures Related to the Income Statement (Cont’d) 3. Information on Dividend Income

None (March 31, 2010: None).

4. Information on Net Trading Income (Net)

Current Period Prior Period Profit 730.973 574.644

Securities Trading Gains - - Gains on Derivative Financial Instruments 34.501 25.980 Foreign Exchange Gains 696.472 548.664

Loss (-) (717.603) (564.129)Securities Trading Losses - - Losses on Derivative Financial Instruments (11.166) (9.447)Foreign Exchange Losses (706.437) (554.682)

5. Information on Other Operating Income

The detail of other operating income is stated as below:

Current Period Prior Period Communication Expense Reversal 393 3.042 Gain on Sale of Assets 6.925 1.030 Reversals from Previous Years’ Expenses (*) 17.020 31.170 Other 3.864 3.729 Total 28.202 38.971

(*) Includes TRY 15.705 Thousand reversals from specific provisions for loans, general loan provision and doubtful fees and other receivables provision. (March 31, 2010: TRY 30.465 Thousand).

6. Provision Expenses of the Bank for Loans and Other Receivables

Current Period Prior Period Specific Provisions for Loans and Other Receivables 33.886 36.059

III. Group Loans and Receivables 10.332 5.114 IV. Group Loans and Receivables 32 3.434 V. Group Loans and Receivables 20.347 24.407 Doubtful Commission, Fee and Other Receivables 3.175 3.104

General Provision Expenses 6.917 6.222 Provision Expenses for Possible Losses - - Marketable Securities Impairment Losses - -

Financial Assets at Fair Value through Profit or Loss - - Financial Assets Available for Sale - -

Impairment Losses on Investment in Associates, Subsidiaries, Entities under Common Control and Held to Maturity Investments - -

Investments in Associates - - Subsidiaries - - Entities under Common Control - - Held to Maturity Investments - -

Other 19.990 2.978 Total 60.793 45.259




62


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) IV. Explanations and Disclosures Related to the Income Statement (Cont’d) 7. Information on Other Operating Expenses


Personnel Expenses 64.321 61.114 Provision for Employee Termination Benefits 1.193 652 Bank Social Aid Provision Fund Deficit Provision - - Impairment Losses on Tangible Assets - - Depreciation Expenses of Tangible Assets 10.801 9.076Impairment Losses on Intangible Assets - -

Impairment Losses on Goodwill - - Amortization Expenses of Intangible Assets 843 741 Impairment Losses on Investments Accounted for under Equity Method - - Impairment Losses on Assets to be Disposed off 246 982Depreciation Expenses of Assets to be Disposed off 1.084 655Impairment Losses on Assets Held for Sale - 223Other Operating Expenses 46.852 38.019

Operating Lease Expenses 13.375 10.773 Repair and Maintenance Expenses 819 518 Advertisement Expenses 7.149 4.528 Other Expenses 25.509 22.200 Loss on Sales of Assets 66 176 Other 8.928 15.192Total 134.334 126.830

8. Information on Continuing Operations Profit or Loss Before Tax

The Bank’s profit before tax is decreased by 25,31% as compared to the prior year figures and total profit before tax amounts to TRY 57.315 Thousand. Profit before tax includes TRY 143.623 Thousand net profit share income, TRY 67.247 Thousand net fees and commission income. Total operating expense amount is TRY 134.334 Thousand.

9. Information on Continuing Operations Tax Provision As of March 31, 2011, current tax expense is TRY 8.245 Thousand (March 31, 2010: TRY 19.896

Thousand) and deferred tax income is TRY 1.029 Thousand (March 31, 2010: TRY 2.389 Thousand deferred tax expense).

10. Information on Operating Profit/Loss After Taxes

The Bank has decreased the net profit by 18.90% in compare to the prior period’s net profit.




63


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) IV. Explanations and Disclosures Related to the Income Statement (Cont’d) 11. Explanations on Net Income / Loss for the Period:

The nature and amount of certain income and expense items from ordinary operations is disclosed if the disclosure for nature, amount and repetition rate of such items is required for the complete understanding of the Bank’s performance for the period: None.

Effect of changes in accounting estimates on income statement for the current and, if any, for subsequent periods: None.

12. The Description and Amounts of Items which Constitute at Least 20% of Other Items in the

Income Statement, If These Liabilities Exceed 10% of the Total Income Statement

Other fees and commissions income/expense are stated as below:

Current Period Prior Period Other Fees and Commission Received

Member Firm-POS Fees and Commission 14.032 13.107 Credit Card Fees and Commission 11.994 8.760 Commissions on Collection and Disbursement 9.270 4.031Other 12.332 9.076

Total 47.628 34.974 Current Period Prior Period Other Fees and Commission Paid

Credit Card Fees and Commission 12.302 9.844 Other 1.981 1.141

Total 14.283 10.985 13. Nature and Amount of Changes in Accounting Estimates which Have Material Effects on the

Current Period or Expected to Have Material Effects on the Subsequent Periods None.




64


EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS (Cont’d) V. Explanations on the Risk Group of the Bank 1. Transaction Volume of the Risk Group of the Bank, Outstanding Loan and Deposit Balances and

Current Income and Expense Amounts 1.1. Current Period :

Risk Group of the Bank Subsidiaries and Associates Direct and Indirect Shareholders Other Entities Included in

the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans and Other Receivables (*)

Balance at Beginning of Period 77.494 8.921 - - 172.548 42.782 Balance at End of Period 75.451 8.038 - - 177.645 47.880

Profit Share and Commission Income 6.754 - - - 16.812 - (*) The risk group balance includes TRY 152 Thousand finance lease receivables (December 31, 2010: TRY 153 Thousand). 1.2. Prior Period :


the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans and Other Receivables (*)

Balance at Beginning of Period 52.357 9.225 - - 220.914 68.491 Balance at End of Period 77.494 8.921 - - 172.548 42.782

Profit Share and Commission Income 5.984 - - - 11.296 7

(*) The risk group balance includes TRY 153 Thousand finance lease receivables (December 31, 2009: TRY 237 Thousand). 1.3. Risk Group Deposits Balances of the Bank:


the Risk Group Current and Profit Sharing Accounts Current Period Current Period Current Period

Balance at Beginning of Period 104.089 - 109.357

Balance at End of Period 108.126 - 119.830

Profit Share Expense 1.851 - 1.370 1.4. Information on Forward and Option Agreements and Other Similar Agreements with Related

Parties:

None. 1.5. Information on Compensation of Key Management Personnel:

During the current period, the total amount of remuneration and benefits provided to the key management personnel of the Bank is TRY 3.910 Thousand (March 31, 2010: TRY 2.342 Thousand). Besides remuneration, the key management personnel also receive some further in kind rights.




65



VI. Explanations on the Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices

1. Explanations on the Bank’s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices

Number Employees Domestic Branches 180 4.231 Country Rep-Offices Abroad (*) - - - Total Assets CapitalBranches Abroad - - - - - Off-shore Branches - - - - -

(*) The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai, India.

2. Explanations on Branch and Agency Openings or Closings of the Bank:

The Bank has opened 5 new branches in the period of January 1– March 31, 2011

SECTION SIX

OTHER EXPLANATIONS

I. Other Disclosures:

1. Subsequent Events:

None.

SECTION SEVEN

INDEPENDENT AUDITOR’S REPORT

I. Explanations on the Independent Auditor’s Report

The financial statements of the Bank for the period January 1 – March 31, 2011 were reviewed by DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Member of Deloitte Touche Tohmatsu Limited).

The independent auditor’s report is presented at the beginning of the financial statements and related notes.

II. Other Footnotes and Explanations Prepared by the Independent Auditors

There is no significant matter or disclosure which may be in connection with the Bank’s operations but not explained in the above sections.

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