ASYA KATILIM BANKASI A.Ş. Annual Report 2012 · 05 04 Bank Asya Annual Report 2012 Vision To be a...

Annual Report 2012ASYA KATILIM BANKASI A.Ş.

01

Section 1/Presentation

Section 2/Management Information and Corporate Governance Principles

Section 3/Financials and Assessments Regarding Risk Management

02 Bank Asya in Brief 05 Vision, Mission, Strategic Objectives 06 Main Indicators 08 Position of Bank Asya in the Industry 010 Comparison of Bank Asya with the Other Participation Banks 014 Growth Strategy of Bank Asya 016Milestones for Bank Asya 018 Capital and Partnership Structure of Bank Asya, and Changes that have taken place during the Operating Cycle 022 Message from the Chairman of the Board of Directors 024 Message from the Chief Executive Officer 030 Macroeconomic Outlook and the Banking Industry 034 Development of the Banking Industry 036 2012 Operating Activities of Bank Asya 048 Corporate Social responsibility Projects 049 Affiliates and and Subsidiaries 053 Conformity Opinion for the Annual Activity Report

056 Board of Directors 058 Audit Committee 060 Executive Management 062 Organization Chart 064 Committees 069Summary Report of the Board of Directors 070 Human Resources (HR) 072 Education 073 Business Volume of the Risk Group the Bank Belongs to, Unresolved Credits and Funds Collected at the end of the Operating Cycle, Operating Income and Expenses 074 Corporate Governance Principles Compliance Report 080 Activities with Support Services 081 Dividend Policy 081 Dividend Proposal for 2012 082 Matters Regarding the General Assembly 084 Briefing Regarding the Agenda

088 Summary Audit Report 089 Financials for the Operating Cycle Including the Reporting Period 090 Assessment of the Financial Standing, Profitability and Solvency 091 Assessment from the Audit Committee Regarding the Operation of Internal Systems 092 Information on Risk Management Policies that are Applied According to Risk Types 094 International Rating Scores

Section 4/Unconsolidated Financial Statements and Footnotes Regarding Financial Statements097 Independent Audit Report

Section 5/Contact Information

190 Bank Asya Branches

02

03

Bank Asya Annual Report 2012

Bank Asya is the youngest and fastest growing participation bank in Turkey. It was established as the sixth private

financing institution in Turkey with the name Asya Finance. Bank Asya has earned an influential, solid and highly regarded position in the banking industry in a short span of time with its dynamic and innovative organization.

Turkey’s first participation bank to go public. Bank Asya implements strategies with determination and places high emphasis on corporate structuring. Bank Asya was formed as the first participation bank with aspirations to establish a sound and extensive capital base.

The bank has embraced a sustainable corporate governance concept. Bank Asya was listed on the Istanbul Stock Exchange (ISE) in 2006 with an initial free float rate of 23 percent. The bank extended its capital base even more by increasing this rate to 53.36 percent in 2012. Paid capital of the bank was 900 million Turkish lira as of the end of 2012.

Groundbreaking products and services in participation banking. Bank Asya continuously and expeditiously develops new range of products and services in all facets of banking so as to fulfill varying customer demands and expectations. It is the first participation bank to have earned the ISO 9001 - Quality System Management Certificate. Bank Asya incessantly pioneers new interest free participation banking products. The bank also toils to ensure that all of its banking products and services are efficaciously attuned to the participation banking system. Accordingly, Bank Asya continues to strengthen its progressive position in the market.

The biggest investment is the one that is made in people. Bank Asya is aware of the fact that a qualified workforce is the main consideration when investing in the future. Bank Asya is the home to young and dynamic employees who welcome development and who are well adjusted to their corporate identity. Thus, the bank entertains high hopes for the future and consistently achieves a growing trend with the strength it gets from its workforce.

Participation bank that sets precedents in technology. What distinguishes Bank Asya from the rest of the participation banks is its valuable workforce and cutting edge technological infrastructure. Investments in technological infrastructure and alternative delivery channels allow Bank Asya to offer improved products and services in 250 branches throughout Turkey and one branch abroad as well as in other delivery channels. The bank especially stands out with the leading-edge payment system products offered for the customers. The best examples of these products are AsyaCard DIT, the most advanced non-touch credit card in Europe, and AsyaPratic DIT, the first prepaid non-touch bank card in Turkey. The bank has remained as a leader in the industry with DIT Mobile and Mobile Wallet KGS products which allow non-touch transactions through mobile telephones.

Introducing more sustainable values. Bank Asya performs banking activities with the responsibility of a true corporate citizen. The bank establishes its strategic objectives in this in direction with the principle of introduction more sustainable values for the stakeholders in its operations as well as in social responsibility projects.

A brand value that rises as a result of unmatched growth dynamics. Bank Asya was founded to provide support for the non-financial sector and for production. As such, it promotes a business model according to the main principles of interest free banking. The bank has transformed this business model into a sound and successful participation banking example through funding, risk and quality policies that is applies by utilizing administrative competence as well as through the ingenuity and unparalleled growth dynamics it displays. Bank Asya is determined to enhance its brand value that it has earned in the domestic and international markets due to a groundbreaking business model which welcomes development. Bank Asya succeeded in maintaining profitability and growth in 2012 according to its projections, thanks to its sound capital structure, extensive customer base and robust finances. The bank continued to protect the leadership position in 2012 with its asset size and collected funds, in addition to cash and non-cash credits it has granted.

Bank Asya aims to spread to a wide community the advantages of the interest free banking system and practices

while performing its duties to support the non-financial sector and production. Bank Asya meets customer demands through innovative retail banking products and services as

well as providing support through solution oriented corporate products and services for the growth of businesses, which help

Turkey prosper. Bank Asya affirms sustainable growth as a trustworthy,

respected and strong participation bank with international banking standards it provides through customer satisfaction

focused banking approach, value of its personnel and technology investments as well as through long-term finance

and non-financial sector investments at home and abroad.

Bank Asya in Brief

Bank Asya carries out its operations

with a focus on strategic targets to ensure sustainable

profitability and to create added value for all of its stakeholders.

05

04 Bank Asya Annual Report 2012

Vision

To be a respected, trustworthy and influential bank that provides services in global standards with the

products it develops.

Mission

To make a contribution to stakeholders as well as to Turkish economy by fulfilling customer demands

and expectations with “Different demands, different solutions” approach and by improving banking

services according to interest free banking principles.

Strategic Objectives

• To emerge as one of the leading participation banks in the world,

• To continue being the participation bank with the highest brand value in Turkey,

• To be in the front lines among the companies that qualified people would want to work in,

• To improve its market share in the industry,

• To spearhead the industry with the innovations it introduces,

• To establish itself as the customer’s first bank,

• To maintain its support to social responsibility projects like community activities or sports events,Visio

n, M

issio

n an

d St

rate

gic

07

06

Main Indicators

Global uncertainties continued as growth rate slowed down in

the domestic market in 2012. Despite of these

developments, Bank Asya increased its total assets

by 24 percent and boosted collected funds to 15,7

billion Turkish lira with a 27 percent improvement.

Main Financial Ratios (%) 2011 2012

Cash Credits / Total Assets (*) 78,63 76,70

Collected Funds / Total Assets 72,12 73,60

The Ratio of Collected Funds that turn into Credits (**) 110,97 106,30

Capital Adequacy Ratio 13,31 13,60

Main Financial Indicators (Million TL) 2011 2012 Difference (%)

Total Assets 17.190 21.390 24,43

Cash Credits (*) 13.452 16.307 21,22

Collected Funds 12.397 15.742 26,98

Equities 2.137 2.349 9,92

Paid-in Capital 900 900 -

Non-Cash Credits 9.349 7.977 -14,68

Net Income for the Period 216 190 -12.04

Number or Branches and Personnel 2011 2012 Difference (%)

Number of Branches 200 251 25,50

Number of Personnel 4.542 5.064 11,49

(*) Cash credit figure includes leasing.

(*) Non-performing credits have been added to the cash credits and assets total with the gross balance.(**) The ratio of collected funds that turn into credits has been calculated by diving the cash credits balance to the balance of collected funds.


8.109

Total Assets

20092008 2010 2011 2012

11.609

14.513

17.190

21.390

Collected Funds

20092008 2010 2011 2012

5.843

9.137

11.167

12.397

15.742

Credits

20092008 2010 2011 2012

6.381

8.355

11.060

13.452

16.307

Equities

20092008 2010 2011 2012

1.4041.708

1.942

2.137

2.349

09


Bank Asya’s Position in the Industry

Credits (%)

Banking Industry

Deposit Banks

Participation Banks

Bank Asya

Total Assets (%)

13 11 25 24 16 15 21 21

Deposits - Collected Funds (%)

11 10 22 27

Number of Personnel (%)

3 3 11 11

Equities (%)

26 28 19 10

Number of Branches (%)

5 4 21 26

08 Bank Asya’s 24 percent growth rate was almost

twice that of the industry average. Similarly, the bank

surpassed the industry average by fivefold in

terms of the number of new branches opened and

fourfold in terms of growth in recruitment.

11


Comparison of Bank Asya with other Participation Banks

70

Total Assets (%)

30

68

Equities (%)

32

67

Number of Personnel (%)

33

67

Collected Funds (%)

33

79

Net Profit and Loss for

the Period (%)

21

70

Number of Branches (%)

30

Bank Asya distinguished itself as the participation

bank recording the highest fund increase with a 27

percent improvement on collected funds in 2012.

The bank performed single-handedly in the industry;

30 percent of the asset totals, 33 percent of the

funds and 32 percent of the credits.

68

Credits (%)

32AWARDSBank Asya crowned the outstanding success of the 2012 operating

cycle with numerous awards and certifications received throughout

the year.

• Bank Asya took the third place in Emea’s “Top Ranking Performers

in the Contact Center World“ organization.

• Bank Asya’s call center was awarded the first place in the “Call

Centers are Competing” category of the Call Center Awards 2012

organization.

• Bank Asya Mobile Branch was elected as the best website in the

Middle East and Africa.

• ŞikayetEndex listed Bank Asya as the fourth most successful bank

according to the complaints and satisfactions points which were

sent by 650,000 “I have a complaint” members.

• Bank Asya took the “Pega Financial Services Customer Experience

Award” with its “CRM Project in 180 Days” feat in the PegaWORLD

2012 event which was held in Dallas on June 2012.

The same project was also rewarded for its technical and infrastructure

works in the “Information Technology Awards” organized by the CIO

Magazine on December 2012.

• Bank Asya’s technological prowess and service competency is

proven each year with the “Straight Through Processing” excellence

awards given by the leading banks of the world. Bank Asya was

deemed worthy of the STP Award by Standard Chartered Bank and

excellence award by Citibank.

• Awards were presented in the “Mixx Awards Turkey 2012” in the

Rahmi Koç Museum on February 13.

The event acknowledges the best establishments in the digital

marketing communication industry as well as the added value they

provide to the business and to the brands they offer services to.

Bank Asya received the Bronze Award in the Mobile Advertising

category with its “Bank Asya Text Message for Ladies’ Gold Party

Days” project in the third Mixx Awards event which was hosted by

IAB Turkey.

Other Participation Banks

Bank Asya

13

12

Bank Asya recorded 24 percent asset growth in 2012.


Growth Strategy of Bank Asya

15

14

Effective Credit and Risk Management

Effective Product and Brand Management

Effective management of resources

• Strong capital base• Fast increase in funds • Greater averages in maturity periods and

high liquidity.• Sustainable high profitability.• Funds acquired from abroad.

• Capital adequacy ratio of 13.60 percent (Tier 1)

• A 27 percent improvement on collected funds.

• Liquidity ratio 22 percent.• Profitability of equity 8.5 percent.• A 25 percent upsurge in foreign credits.

• Improved Customer Relations • Better variety of credits. • More retail and SME credits.

• A 21 percent rise in cash credit volume. • Number 12 in cash credits. • A 29 percent boost in retail credits.

• Advances in innovative products.

• Enchanced brand recognition through sponsorship as well as

effective publicity and advertising.

• Market leader in the number of non-touch card transactions with

AsyaCard DIT.

• A 41 percent rise in credit card revenues.

• Number 11 in the market with 2 million credit cards.

Bank Asya sets its strategies with the desire to become one of the most

distinguished brands in participation banking industry in the world and

in Turkey. Accordingly, the bank has put emphasis on continuously

improving the value it provides to the economy and the society by acting

according to the principles of sustainable growth.

The bank performs business activities by striving to become an exemplary

player in the industry based on quality, productivity and profitability.

Bank Asya invests in technology and people in order to carry out a proactive

and customer-centric service concept. It is a transparent bank with the best

corporate governance principles, and it perpetually improves processes and

systems according to the needs of the era.

Financially

• Sustainable growth and

profitability.

• Strengthening the

financial structure.

• Objectives regarding the

affiliates and subsidiaries.

For Operational

Perfection

• Increasing the use of

technology

• Increasing the

effectiveness of business

processes.

• Risk Management

Improving the

performance of processes.

For Personnel and Their

Development

• Raising the personnel’s

level of knowledge.

• Boosting effective

communication and

competencies.

• Extending strategy and

performance focused

management.

For Stakeholders

• Ensuring the highest level

of customer satisfaction.

• Providing different

solutions for differing

customer demands.

• Securing sustainable

dividend distribution for

shareholders.

Business Continuity

Trust

Strategic Priorities

Productivity

Stable Growth

Effective Risk Management

Competitive Advantages of Bank

Asya

• Leading the participation banks in

terms of asset size, collected funds,

credits and profitability.

• A dynamic and growing organization.

• Well educated and young personnel.

• Customers’ trust for the bank.

• Crisis manageme nt experience.

• Feeling of ownership from the

employees.

• Strong sense of camaraderie

throughout the bank.

• Prioritizing the use of technology

and innovativeness.

Strategic Orientation of Bank Asya

(2011-2015)

Trust, steady growth, effective risk

management, business continuity

and productivity are Bank Asya’s

strategic priorities. Bank Asya

categorizes its clearly identified

strategies under four main headings

in order to implement them

according to its vision.

The bank shapes its road map for

five years based on these strategies

and on the following key objectives;

• Financials

• Operational Perfection

• Stakeholders

• Personnel and Their Development


17

Milestones

Bank Asya was founded as Asya Finans in 1996.

It became the first participation bank to be listed in 2006. In 2011, it succeeded as the first

Turkish institution to receive the “Business

Continuity Management Certification” from the

BSI.

1996It began operations under the title of Asya Finans Kurumu A.Ş. in Altunizade headquarters with 2 million Turkish lira original capital.

1999Become subject to the Banking Law. Increased paid capital to 10 million Turkish lira.

2000Increased the number of branches to 25. Launched Asya Finans Internet Branch.

2004Increased the number of branches to 62. Launched Alo Asya Telephone Banking. Increased paid capital to 120 million Turkish lira.

2008Increased the number of branches to 149. Bank Asya became a name sponsor to the TFF 1. League. Increased paid capital to 900 million Turkish lira. Launched non-touch technology products AsyaCard DIT and AsyaPratic DIT.

2005Increased the number of branches to 72. Increased paid capital to 240 million Turkish lira. Changed Asya Finans Kurumu A.Ş. name to Asya Katılım Bankası A.Ş.

2009Increased the number of branches to 158. Became a partner with Senegal based Tamweel Africa Holding SA. AsyaCard DIT received both the “Best Cash Displacement Initiative” award and the “Best New Credit Card Product Launch” award.Bank Asya founded Tuna GYO A.Ş.

2006Increased the number of branches to 92. Increased paid capital to 300 million Turkish lira. Bank Asya shares started the be traded in the ISE with ASYAB code after offering 23 percent of the shares to the public.

2010Increased the number of branches to 175. AsyaPratic DIT was named the “Best Prepaid MasterCard Product in Turkey.” Bank Asya was included in the MoneyGram service network. Introduced AsyaAssist, Lodestar and DIT Mobile.

2002Increased the number of branches to 28. Increased paid capital to 40 million Turkish lira. Launched ASYA24 ATMs and installment credit cards.

2003Increased the number of branches to 43. Asya Finans became a member of VISA. Increased paid capital to 60 million Turkish lira. Bank Asya became a partner to Işık Sigorta A.Ş.

2007Increased the number of branches to 118. Bank Asya shares included in the ISE 30 Index as of 2007.

2011Increased the number of branches to 200. Bank Asya became the first Turkish institution to receive the “Business Continuity Management Certification” from the BSI. Launched mobile branch operations.Introduced PAKSIT and DIT Mobile. Bank Asya succeeded in becoming the first ever organization in Europe to receive the ISO 10002 Customer Satisfaction Management and the EN 15838 Contact Center quality certificates at the same time. Bank Asya fouded Asya Emeklilik A.Ş World Finance named Bank Asya as the Best Commercial Bank in Turkey.

2012Increased the number of branches to 251, the number of ATMs to 671. Bank Asya Call Center launched operations in its second location in Trabzon. Opened its first branch abroad in Erbil and the first overseas office in India. Took the third place in Emea’s “Top Ranking Performers in the Contact Center World“ organization. Bank Asya’s call center was awarded the first place in the “Call Centers are Competing” category of the Call Center Awards 2012 organization. Bank Asya Mobile Branch was elected as the best website in the Middle East and Africa. ŞikayetEndex listed Bank Asya as the fourth most successful bank according to the complaints and satisfactions points which were sent by 650,000 “I have a complaint” members.Bank Asya took the “Pega Financial Services Customer Experience Award” with its “CRM Project in 180 Days” feat in the PegaWORLD 2012 event which was held in Dallas on June 2012. This year, the same project was also rewarded for the technical and infrastructure works in the “Information Technology Awards” organized by the CIO Magazine.

2001Increased paid capital to 20 million Turkish lira.

1997Increased the number of branches to 15.

1998Increased the number of branches to 16. Launched Asya Finans Credit Card.


Capital and Partnership Structure of Bank Asya and the Changes that Took Place in the Operating Cycle

19

18

Following table provides information regarding the share distribution of the bank as of the end of 2011 and 2012.

Bank Asya 2011 and 2012 Year-End Share Distributions

2011 Year-End % 2012 Year-End %

Group A (Privileged) 360.000.000 40,00 360.000.000 40,00

Group B (Not traded on the ISE) 64.068.038 7,12 59.759.288 6,64

Group B (Traded on the ISE) 475.931.962 52,88 480.240.712 53,36

Total 900.000.000 100 900.000.000 100

Bank Asya is a multi-partner organization with a widespread domestic capital. With the exclusion of the publicly held portion, it has 216 partners with

privileged shares as of the end of 2012.

Shares owned by the Chairman of the Board of Directors, Board Members, Chief Executive Officer and Assistant Chief Executive Officers

Below is information about the shares owned by the Chairman of the Board of Directors, Board Members, Chief Executive Officer and Assistant Chief Executive Officers according to the stock ledger as of December 31, 2012.

Title Name and Last Name Areas of Responsibility

Chairman of the Board of Directors Professor Erhan BİRGİLİ Chairman of the Board of Directors

Board Members Mustafa Talat KATIRCIOĞLU Acting Chairman of the Board of Directors

Ali ÇELİK Board Member

Recep KOÇAK Board Member

Zafer ERTAN Board Member

Mehmet GÖZÜTOK Board Member

Ercüment GÜLER (Ph. D.) Member of the Board and the Audit Committee

Mehmet URUÇ Att. Member of the Board and the Audit Committee

Chief Executive Officer Ahmet BEYAZ Board Member and Chief Executive Officer

Vice Chief Executive Officers Murat DEMİR Commercial Banking Groups

Ahmet AKAR Credit Appropriation Group

Dr. Feyzullah EĞRİBOYUN Treasury Group

Fahrettin SOYLU Banking Operations Group

Mahmut YALÇIN Financial Affairs Group

Talha Salih YAYLA Risk Monitoring Legal Affairs Group

Hakan Fatih BÜYÜKADALI HR Group

Ali TUĞLU Information Technologies Group

Coordinator Abdurrahman KÖSE Retail Banking Group

Group Director Murat AYDOĞAN Support Services Group

Statutory Auditors Atıf BİLGİN Auditor

İrfan HACIOSMANOĞLU Auditor

İzzet AKYAR Auditor

(*) Shares owned by the Chairman of the Board of Directors, Board Members, Chief Executive Officer and Assistant Chief Executive Officers

are at a very insignificant level.



21

20

Information Regarding the Titles and Shares of the Qualified Shareholders (Group A)

Below is the information as of December 31, 2012 on the natural person partners, who are privileged to nominate candidates for the Board of Directors and the Audit Committee as per Articles 32 and 49 of the Articles of Association, which is registered on the bank’s stock ledger, and who have been removed from Group A type of partnership and from mutual relationships with the subsidiaries.

No Name and Last NameDecember 31, 2011

Group A Partners Ratio of Shares (%)

Changes that have Occurred during the

Operating Period (%)

December 31, 2012Group A Partners

Ratio of Shares (%)

1 ALİ AKBULUT 12,70 3,60 16,30 2 ABDULKADİR KONUKOĞLU 5,58 0,00 5,58 3 OSMAN CAN PEHLİVAN 4,00 0,25 4,25 4 HASAN SAYIN 4,85 -1,08 3,77 5 İBRAHİM SAYIN 3,52 0,00 3,52 6 TACETTİN NEGİŞ 4,31 -1,21 3,10 7 FATMA EMİNE BERKSAN 2,50 0,00 2,50 8 MUAMMER İHSAN KALKAVAN 2,36 -0,29 2,07 9 MEHMET SİNAN BERKSAN 1,67 0,00 1,67

10 AYDAN AYDIN SAĞLIK 1,65 0,00 1,65 11 FEHİM ARICI 1,55 0,00 1,55 12 YAVUZ EROĞLU 1,45 0,00 1,45 13 İZZET AKYAR 0,20 1,12 1,32 14 BÜLENT BERKSAN 1,43 -0,15 1,28 15 MEHMET BERKSAN 1,43 -0,17 1,26 16 MUSTAFA TALAT KATIRCIOĞLU 0,17 0,97 1,14 17 HAKAN CEM AKBULUT 1,00 0,13 1,13 18 ABDURRAHMAN KOPUZ 1,10 0,00 1,10 19 A, SELÇUK BERKSAN 1,82 -0,80 1,02 20 Other 42,25 43,04

The ones waiting for permission from the BRSA

4,46 1,29

Total 100,00 100,00

Amendments to the Articles of Association in 2012

Board of Directors of the bank passed a resolution on February 20, 2012 to amend Article 32 of the Articles of Association

of the bank with the title; “Formation of the Board of Directors,” as well as to apply to the Capital Markets Board (CMB), the

Banking Regulation and Supervision Agency (BRSA) and the Ministry of Industry and Commerce for legal proceedings, and to

submit the amendment draft to the first Ordinary General Assembly for approval.

As as result of the amendment draft, a resolution was passed to increase the number of Board Members to nine from seven,

and to change the title in the article from “Deputy Chairman” to “Vice Chairman.”

AMENDMENT DRAFT OF THE ARTICLES OF ASSOCIATION OF ASYA KATILIM BANKASI ANONİM ŞİRKETİ; PREVIOUS TEXT B - FORMATION OF THE BOARD OF DIRECTORS ARTICLE 32:

The Board of Directors shall be made up of seven members that the General Assembly will elect from candidates among the

shareholders, which will be nominated by the ones who have at least 51 percent of the votes of Group A stakeholders in the

General Assembly. Vice Chief Executive Officer shall be a natural member of the Board of Directors when a Chief Executive

Officer is not present. Board Members are required to possess the conditions and qualifications stipulated by the Banking

Law. Members shall elect a Chairman and a Vice Chairman from among themselves. Board Members shall serve in the office

for three years. Members can be reelected after completing their term of service.

In the case a membership becomes vacant for any reason, Board Members shall appoint another one from among the

shareholders. The appointment shall be submitted to the partners for approval at the first General Assembly Meeting.

The General Assembly of Shareholders may remove the Board Members from office anytime. These types of removals shall

not grant the discharged member the right for compensation. Managers’ terms of office do not depend on that of the Board

Members as they may be appointed for longer periods than the Board Members, or without a time restriction. Their authority

to represent and bind as well as the authority to sign shall remain valid until removed by the Board of Directors.

NEW TEXTB- FORMATION OF THE BOARD OF DIRECTORS ARTICLE 32:

The Board of Directors shall be made up of nine members that the General Assembly will elect from candidates among the

shareholders, which will be nominated by the ones who have at least 51 percent of the votes of Group A stakeholders in the

General Assembly. Vice Chief Executive Officer shall be a natural member of the Board of Directors when a Chief Executive

Officer is not present. Board Members are required to possess the conditions and qualifications stipulated by the Banking

Law. Members shall elect a Chairman and a Vice Chairman from among themselves. Board Members shall serve in the office

for three years. Members can be reelected after completing their term of service.

In the case a membership becomes vacant for any reason, Board Members shall appoint another one from among the

shareholders. The appointment shall be submitted to the partners for approval at the first General Assembly Meeting.

The General Assembly of Shareholders may remove the Board Members from office anytime. These types of removals shall

not grant the discharged member the right for compensation. Managers’ terms of office do not depend on that of the Board

Members as they may be appointed for longer periods than the Board Members, or without a time restriction. Their authority

to represent and bind as well as the authority to sign shall remain valid until removed by the Board of Directors.

We hereby declare that our above statements conform with the principles contained in the CMB Communiqué Serial VIII, No.

54, that it fully reflects the information received in connection with the matter(s); that the information complies with books,

records and documents; that we have spent all the necessary efforts to obtain complete and accurate information related to

the matter; and that we are responsible for all statements made in this regard.

Information Regarding the Titles and Shares of the Qualified Natural Person Partners (Group A)

No Title

December 31, 2012 Group A Partners

Ratio of Shares (%)

1 ORTADOĞU TEKSTİL TİC. SAN. A.Ş. 12,23

2 FORUM İNŞAAT DEKORASYON TURİZM SAN. VE TİC. A.Ş. 9,63

3 BJ TEKSTİL TİC. VE SAN. A.Ş. 5,65

4 SÜRAT BASIM YAYIN REKLAMCILIK VE EĞİTİM ARAÇLARI SAN. TİC. A.Ş. 4,98

5 BİRİM BİRLEŞİK İNŞAATÇILIK MÜMESSİLLİK SAN. VE TİC. A.Ş. 4,94

6 SERRA TURİZM LTD. ŞTİ 4,17

7 NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş. 3,65

8 GALAKSİ AVRASYA SANAYİ ÜRÜNLERİ DIŞ TİC. A.Ş. 0,50

9 ASYA KATILIM BANKASI A.Ş. (*) 0,42

10 TEKSEN TEKSTİL END. A.Ş. 0,27

11 OTHER 0,37

(*) The bank purchased 1,500,000 of its pledged stocks at a price of 5,475,000 Turkish lira as a result of the compulsory sale completed on April 15,

2010 as per Article 329 Clause 2 of the Turkish Commercial Code. The acquisition was reflected as reduction on the capital in the capital adequacy table.

23

22

Esteemed Shareholders,

Even though it has been five years since the global crisis, it was a year with many countries, especially developed economies and the Euro zone countries, failing to resolve their main macroeconomic and financial problems, debt crisis stifling the Euro zone and the US tackling uncertainties. In particular, global economic performance continued falling due to rising oil prices because of geopolitical risks.

On contrary to the negative outlook in developed countries, financial markets of the emerging countries achieved relatively positive performances. Financial markets in Turkey, too, had a successful year due to shrinking current deficit in particular and also as a result of the positive macro indicators, the atmosphere of trust in the economy and the credit rating agencies increasing Turkey’s score to investable.

Turkey continues to be a safe harbor for investors in the region. As a matter of fact, the ISE 100 Index soared by 52 percent in 2012 to the content of investors.

In 2012, global uncertainties lingered, Euro zone was marred by a deepened crisis and many European countries technically went into recession, in addition, debt and unemployment ratios climbed in developed countries, whereas, Turkey steer through a year with balanced domestic and foreign demand.

Nevertheless, following a strong and domestic market driven growth at a rate of eight percent that was led by the private sector, Turkey took measures to cool down the economy and the growth rate slowed down in 2012 as foreign demand withered because of the stalling global economy and expanding crisis in the Euro zone.

Turkish economy is projected to grow at a rate of 3 to 3.2 percent in 2012 as the country successfully goes through

the soft landing process, ensuing a well-adjusted slowing down period that was brought on with the measures taken to cool down the economy.

Banking sector in Turkey kept thriving with its strong and sound structure despite uncertainties in the global economy and the recession in Europe.

On the other hand, participation banks improved their share in asset size and collected funds by displaying a higher performance than the industry.

Bank Asya continued to grow and remain profitable with the industry also flourishing in 2012. The bank marched on confidently to carry out the strategy of using its capital more efficiently and establishing an expanded a credit portfolio. Bank Asya has focused on its main business areas of fund allocations and participation fund collection, achieving a growth rate over the industry average in credits and in fund collection.

Bank Asya strives to provide fast and high quality service in all corners of Turkey with a burgeoning service network within the scope of interest free banking principles. As such, the bank increased the number of its branches to 251, including an overseas branch, in 2012.

I would like to take this opportunity to thank devoted employees of Bank Asya as they have transformed the bank into a pioneering force in the industry. I would also like to say thanks to our stakeholders for playing a great role in the bank’s accomplishments as well as strengthening it with their presence and support. Let me also offer my gratitude to our esteemed customers who have embraced Bank Asya as their own for the whole world to see.

With my warmest regards,

Professor Erhan BİRGİLİ

Chairman of the Board of Directors

Message from the Chairman of the Board of Directors

The industry maintained growth in 2012. Accordingly, Bank Asya also succeeded in sustaining its profitability and growth with the objectives of increasing return on equity and extending its credit portfolio.


24

25


Banking sector in Turkey preserved its sound and strong structure in 2012 during a year of persistent global uncertainties. The country maintained a positive outlook in liquidity, asset quality, capital adequacy and profitability indicators. Thus, the industry enjoys an unfaltering system compared to those of developed and emerging countries. Banking Industry has remained adamant in sustaining its growth despite a relative slow down due to a gentle down trend in the first half of 2012.

Funding cost for the banks rose and credit volume performed sluggishly in 2012 as a result of the Central Bank and the BRSA policies that increased credit costs and tightened monetary policies as well as shrinking the domestic demand.With faltering increase rates in deposits, which is the most significant financing source for the banks, the industry had to resort to alternative non-deposit resources in order to reduce the cost of financing, to diversify means of acquiring funds and to diminish the discordance in the balance sheets by extending maturity dates.

In spite of the aforementioned measures and the slow down in the economy, the banking industry succeeded in maintaining its growth. In 2012, the industry recorded a 15 percent rise in total credits and 11 percent in collected funds. The banking industry provided credits in the amount of 813.4 billion Turkish lira with an expansion of 112.8 billion Turkish lira in the same year. Return on equity surged to 14.4 percent with the capital adequacy rate swelling to 17.88 percent from 16.55 percent.

An analysis of the chart in terms of participation banking shows that credits climbed by 24 percent and collected funds by 22 percent, performing better than the industry. Participation banks pressed on, increasing their market share in the industry.They managed to take a six percents share in the industry by racking a 25 percent jump in total assets.

Bank Asya had another accomplished year in 2012 as pioneer among other participation banks. The bank strives to offer the best service to its customers within the scope of interest free banking principles. After setting targets to perform a healthy growth for 2012, Bank Asya fulfilled its objectives in allocating resources and granting funds. Bank Asya protected its leadership in participation banks in asset size, proving itself as major player once again by advancing the bank’s asset totals to 21.4 billion Turkish lira with a 24 percent improvement and collected funds to 15.7 billion Turkish lira with a 27 percent rise.

Reaching more customers with a concept of fast and quality service...

In the past two years, Bank Asya has shifted its focus from larger corporate clients to SMEs and retail customers to provide services to them. In an effort to expand its reach, the bank opened 51 new branches, increasing the total number of branches to 251, including an overseas branch, and the number of ATMs to 671.

These efforts bore fruit as credit amount provided to SME customers burst by 80 percent and credits granted to retail customers went up by 29 percent year-on-year.

Message from the Chief Executive Officer


Bank Asya accomplished another year of growth in 2012, improving its asset total to 21.4 billion Turkish lira with a 24 percent rise.As the biggest participation bank in Turkey, Bank Asya made an impact on real economy in the amount of 24.3 billion Turkish lira through the credits it granted in 2012.

27


As such, we have provided services to an even larger customer base by extending our credit portfolio. Furthermore, the bank secured a place at the top ranks of the industry with 2 million credit cards.

Bank Asya set its sights to perform a 22 percent improvement on credits and 21 percent in collected funds in 2013. The bank plans to extend the number of branches to 281 by initially launching 30 new ones in 2013 in order to reach more customers.Bank Asya is determined to repeat the success of 2012 by maintaining its growth in Retail Banking as well as in SME Banking in 2013. The bank takes pains to open branches in hinterland areas where SMEs and other customers can get easy access. For the next operating period, Bank Asya especially aims to reach export companies and to flourish in cities with export activities .

In addition to extending network of branches, the bank also maintained its organic growth in 2012. Bank Asya surged the number of district offices to 11 and personnel to 5,064.We intend to boost the productivity in using our labor force with the addition of new branches in 2013.

In 2012, Bank Asya also completed major affiliate investments as well as taking significant steps to fill a critical void in the industry in keeping with its mission of providing contemporary banking services according to interest free banking principles. Asya Emeklilik began its operations as

the first interest free pension company in Turkey.The company has already proven that it is on the way to becoming a dominant force in the industry with over 30,000 customers it has acquired in a short period of time.We founded Asya Menkul Değerler A.Ş. to extend our investments to the securities market. We will offer consulting services to our customers to help them put their investments to good use in diverse areas while providing intermediation for public offerings.

Bank Asya also kept its momentum with overseas investments by introducing its first branch abroad in Erbil and the first overseas office in India We are the first participation bank to open a foreign representative office in India. Moreover, we operate banks in Mauritania, Guinea, Senegal and Niger with Tamweel Holding. The bank has set its goals to focus more on the east when investing in foreign countries in 2013.

Asia is the rising star of the day. Accordingly, we plan to concentrate our investments in this region, of which the bank is named after in part. The bank takes into consideration certain criteria when carrying out foreign investment initiatives. These considerations are high growth potential, young population, income level, income distribution, the right environment in the country for participation banking and banking activities.We know that in order to provide better services to our customers, we have to

possess a sound technical infrastructure. Therefore, we never cease to invest in new technology as one of our priorities for 2013 is to expand the use of technology in the bank. Bank Asya’s own 270 strong employees are currently revamping our main banking software so as to enable it to be used by all banking systems in the world.

We offered a variety of gold related products and established a rich product diversity for our customers in 2012. Especially, gold-based checking accounts and participation accounts, as well as the initiation of physical gold purchase and sale transactions become a hit with the customers. These developments in gold-based products drove Bank Asya to the top ranks among other banks in terms product awareness.

Efforts by Bank Asya bore fruit as the bank become industry’s best performer in improvement of gold volume with reserves reaching 13.7 tons in 2012. In particular, ”Reception Day for Gold” drives that were carried out by Bank Asya branches brought in nearly 4 tons of gold to Turkish economy.

Awareness for social responsibility...The bank crowned its accomplishments with a myriad of awards received in 2012. Bank Asya took the number 476 spot among the “Most Valuable Banks in the World” in 2012 according to the Banker magazine.

Bank Asya’s call center was awarded the first place in the “Call Centers are Competing” category of the Call Center

Awards 2012 organization. Bank Asya Mobile Branch was elected as the best website in the Middle East and Africa. The bank took the “Pega Financial Services Customer Experience Award” with its “CRM Project in 180 Days” feat in the PegaWORLD 2012 event which was held in Dallas on June 2012.The same project was also rewarded for its technical and infrastructure works in the “Information Technology Awards” organized by the CIO Magazine on December 2012. Bank Asya came third in Emea’s “Top Ranking Performers in the Contact Center World“ organization.

Bank Asya operates with an awareness for social responsibility as it endeavors more and more each passing day to provide interest free banking products to its customers as well as making the highest contribution to the economy and increasing the share that participation banks have in the industry. In 2012, the bank maintained its support for global organizations like the international summits organized by the Turkish Confederation of Businessmen and Industrialists (TUSKON) and also the Turkish Olympics, in addition to launching the “I am Sending a Child to School” campaign by providing 350,000 Turkish lira for the initiative within the scope of the social responsibility project. We also made other alternatives available for our customers to pitch in to the campaign if they wish to do so by authorizing automatic payment order from their credit cards

or by donating the loose change amount after the dot on their current participation account. Through this project, we aimed to provide scholarship to orphans, to the children of martyrs or veterans, as well as to poor or accomplished children.

Bank Asya strives to offer good quality and fast services in every corners of Turkey with a service network that is expanding according to the principles of interest free banking. The bank is determined to stay on course for growth as a respected, trustworthy and active organization, providing services in international standards with the variety of products it develops.

I would like thank our devout employees for their commitment as a team in the success of Bank Asya as it has become as a pioneering force in participation banking, always offing new products and cutting-edge technological innovations to its customers. I would also like to offer my gratitude and thanks to our esteemed customers who incessantly supported Bank Asya and embraced it as their own. Let me also praise and express my gratitude to our stakeholders as we could count on their continuously support during our operations.

With my warmest regards,

Ahmet BEYAZBoard Member and Chief Executive Officer

Message from the Chief Executive Officer

26

29


Bank Asya succeeded as the best performer in fund increases with a 27 percent improvement in 2012.

31


Macroeconomic Outlook and the Banking Industry

Economic policies of 2012 shifted Turkish economy towards a more balanced growth model with stronger exports in 2012.

Despite starting the year with a positive outlook resulting from the monetary expansion, the markets had to follow

a generally uncertain course throughout the year in 2012 due to European countries failure to draw up a road map, amplifying risks in the Middle East and concerns about growth in emerging countries.

Developments in the International Arena Marco economic weaknesses and risks in developed countries caused the growth rate in emerging countries to go into a falling trend.

Risk perception of the markets has changed a result of the debt crisis in the Euro zone and the problems revolving around the banking industry. Government bond yields of risky countries like Spain and Portugal jumped to record high levels during the period.

Whereas, revenues from government debt securities of countries like Germany and France took the sharpest dive of the history with a desire to avoid risks. Central banks in developed countries were forced into taking additional expansionist measures as the debt crisis curtailed growth in the Euro zone and significantly increased the risks in the market, and the job market in the US recovered slower than expected.

Consequently, the European Central Bank (ECB) cut the policy rates by 0.25 points to 0.75 points and announced that it would acquire bonds from troubled countries in secondary markets only under certain conditions so as to reduce the effects of the debt crisis. The markets were also relieved with the news that the newly elected government of Greece in the June elections would continue with the austerity measures.

The Federal Reserve (FED) took similar measures as well, carrying out the third monetary expansion in order to spark the real estate market and to speed up recovery in the employment. In addition, it announced it would to purchase mortgage bonds from the market each month in the amount of $40 billion.

The FED displayed its determination to continue with the expansionist monetary policies by stating

Gross Domestic Product (GDP) grew by 3.4 percent in the first quarter of 2012, 3 percent in the second quarter, 1.6 percent in the third quarter and 2.6 percent in the first nine months of the year.

Domestic demand shrunk in 2012 as a result of the measures taken by the Central Bank of Turkey (CBT) and other authorities as well as due to policies in effect. The ratio of foreign demand in the GDP rose despite of the problems surrounding Europe which holds a significant share in our exports. This, in return, allowed growth to take a more balanced form.

Foreign demand increased partly due to rising exports to Africa and the Middle East, and also because gold exports were on a relatively higher trend for the period. Medium Term Plan (MTP) announced on October 2012 projects that contribution of exports to the growth will slow down and the growth rate for 2012 will be 3.2 percent with the domestic demand becoming more effective in the results.

Despite of slackening economic activities in the first half of 2012, initial indicators for the last month of the year show that there is a mild

that it was going to keep the interest rates close to zero percent until the middle of 2015.

Global risk appetite rallied in the second half of the year as central banks provided support to the economies of emerging countries and uncertainties surrounding the debt crisis in the Euro zone diminished. Emerging countries drew capital inflow at a fast rate during this period. Control measures resulted in the countries’ bond yields going into a downtrend and gains from the stock markets rising as of the last quarter of the year.

Markets in the US were uneasy with the controversy over the “Fiscal Cliff” on the last month of 2012. However, concerns surrounding the issue were dispelled when the US Senate speedily passed a bill that prevented the fiscal cliff.

Developments in the Domestic ArenaMeasures and economic policies that were implemented in 2012 heralded the first steps of a more sustainable growth model. Economic activity slowed down in Turkey with the fragility of global economy becoming more visible in 2012.

8

66

2,8

0,5

-3,4

3

1,6 1,31,5

-0,5

5,1

3,83,3 3,62,7

7,4

6,25,3

5,6

4

2

0

-2

-4

2008

Developed Countries Emerging Countries The World

2009 2010 2011 2012 (T) 2013 (T)

46,9

77,2 77,0 75,3 72,1

69,2 66,9 63,3 62,0 59,3

55,6 52,3 50,8 48,9

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2010

2011

January

12

February

12

Marc

h 12

April 12

May 12

June 12

July 12

August 12

Septem

ber 12

October 1

2

November 1

2

Decem

ber 12

Global Growth Current Accounts Deficit (Billion US Dollar)

0,7

9.2

8.5

3.01.6

3.4

-4.8

2008 2010 2011 2012/1 2012/2 2012/3

Difference on (GDP) % (Based on Fixed Prices)

2009

33


recovery. Industrial index reached its highest values in September and October without the seasonal and date related effects, while the rate of capacity utilization standing at 74.2 percent.

Even though the economy stalled and imports decreased, foreign trade and current accounts deficit also took a better shape in 2012. As a result of rising exports and declining imports, foreign trade deficit fell down to $105.9 billion at the end of 2011 and to $83.3 billion at the end of 2012. Ratio of exports to imports rose to 64.5 percent in 2012 from 56 percent in 2011. Exports surged to $152.4 billion and imports were $237.3 billion in 2012.

In parallel with the improvement in the balance of foreign trade, current accounts deficit shrunk significantly, dropping to $48.9 billion at the end of 2012 from $77.2 billion at the end of 2011. Risk premiums of emerging countries fell with the increasing global risk appetite in 2012. In particular, expansionary monetary policies that were implemented by many countries in the second half of the year helped strengthen the capital inflow into emerging countries.

Subsequently, Turkish lira had similar performance to those of the currencies of emerging countries. Currency basket sloped as the US Dollar lost value against Turkish lira during this period. Despite of the increase it displayed, real effective exchange rate remained at a relatively narrow margin. Real effective exchange rate (REER) rose due to the fact that risk appetite in global markets went up, macroeconomic indicators regarding Turkey improved and, international ratings agency, Fitch

Ratings increased Turkey’s long-term credit rating. REER advanced to 118.32 percent on December 2012 from 112.42 on January 2012. In the case that REER reaches 120 or 130 percent levels, the CBT warned that it would take measure at different levels to prevent Turkish lira gaining too much value.

A slow down in economic activities caused deceleration in the speed of tax revenues. When increases in primary expenditures were added to this fact, the budget balance was slightly disrupted compared to the year before. During this period, revenues from income and corporate tax weakened, and VAT revenues dropped with shrinking domestic demand. In 2012, Central Government Budget Deficit reached 28.8 billion Turkish lira with primary surplus hitting 19.6 billion Turkish lira. MTP that covers the period between 2013 and 2015 aims to preserve the down trend in the ratio of budget deficit to national income to keep it at around 1.8 percent.

Recent positive outlook on the public net debt stock continued in 2012. It rose to 532 billion Turkish lira by the end of 2012 with a 9.5 percent jump from 518.4 billion Turkish lira at the end of 2010 In the 2013-2015 MTP, the ratio of debt stock to national income is projected to fall down to 36.5 percent in 2012 from 39.9 percent in 2011.

Benchmark bond hit the lowest level of all times at 5.73 percent following the interest that was created for Turkey’s assets after Fitch Ratings increased the country’s credit note. In the mean time, the Undersecretariat of Treasury issued two sukuk certificates; one in US dollar and one

in Turkish lira, for the first time in its history in 2012. High demand for both of the sukuk certificates was a positive first step for the initiative. Sukuk certificate issuance is projected to provide help in increasing domestic savings, expanding the investor base and diversifying financing instruments.

Consumer Price Index (CPI) was 6.16 percent and Producer Price Index (PPI) was 2.45 annually in 2012. Even tough these results meant missing the year-end inflation target of 5 percent, it was still lower than the 7.4 percent rate projected in the last inflation report of the Central Bank. In its October 24 report, the CMB projected inflation to stand between 3.5 and 6.8 percent with the middle range being at 5.3 percent. The same report stipulates the inflation to remain stable at 5 percent in the mid-term.

In its Monetary Policy Meeting on December 2012, the CMB lowered the policy rate by 25 base points to 5.50 with an effort to support the financial stability. The Central Bank chose to narrow the interest rate corridor from the 5 to 12.5 percent margin at the beginning of 2012 by implementing cuts throughout the year. Interest rate for overnight borrowing was lowered to 4.75 percent and debt interest to 8.75 percent in the Monetary Policy Committee meeting on January 2013.

The CBT maintained its policy of keeping interest rates low in times of fast capital inflow so as to balance risks surrounding financial stability. Instead, it continued with macro precautionary measures by using the required reserves channel. The idea behind

In 2012, two large sukuk certificate issuance took place with great interest

for the both of them. These types of certificates

are extremely critical in terms of diversifying

participation banking products and also in

increasing savings in the domestic market.

using this channel is to strengthen the currency and gold reserves as well as relieving the banking system in terms of liquidity management. The CBT announced that it will implement a new structural policy instrument aimed at establishing financial stability. Starting from 2014, the new practice proposes the banks

to gradually allocate additional required reserves according to the leverage ratios on their balance sheets in the last quarter of 2013. The Central Bank stated that as well as the new instrument, in 2013, it will also continue using the policy rate, interest rate corridor, Turkish lira and foreign currency liquidity management as cyclical

instruments, in addition to using term based required reserves and reserve option mechanism as structural instruments. It declared that it would resort to currency purchasing and selling on foreign currency liquidity management instruments only it becomes truly necessary.

135

13121110

9876543

Real Effective Exchange Rate (2003=100)

Consumer Price Index (Percentage Difference in 12 Months)

130

125

120

115

110

105

100

Jan.

08

Apr

.08

July

.08

Oct

.08

Jan.

09

Apr

.09

July

.09

Oct

.09

Jan.

10

Apr

.10

July

.10

Oct

.10

Jan.

11

Apr

.11

July

.11

Oct

.11

Jan.

12

Apr

.12

July

.12

Oct

.12

Jan.

08

Apr

.08

July

.08

Oct

.08

Jan.

09

Apr

.09

July

.09

Oct

.09

Jan.

10

Apr

.10

July

.10

Oct

.10

Jan.

11

Apr

.11

July

.11

Oct

.11

Jan.

12

Apr

.12

July

.12

Oct

.12

35


Asset Growth (Million TL)

Participation Banks Industry Participation Banks / Industry (%)2008 25.770 732.536 3,52

2009 33.628 834.014 4,03

2010 43.339 1.006.667 4,31

2011 56.148 1.217.695 4,61

2012 70.279 1.370.736 5,13

Growth on Collected Fund - Deposit


2009 26.711 514.620 5,19

2010 33.089 617.037 5,36

2011 39.220 695.496 5,64

2012 47.921 771.884 6,21

Growth on Granted Funds (Million TL)


2009 25.372 422.270 6,01

2010 32.412 537.492 6,03

2011 41.526 700.705 5,93

2012 50.323 813.444 6,19

Development of the Banking Industry

Assets of the banking industry grew by 13 percent to reach 1.4 trillion Turkish lira while collected funds in the industry improved by 11 percent to arrive at 772 billion Turkish lira year-on-year in 2012.

December 2012 data puts asset size of the banking industry at 1.4 trillion Turkish lira and collected funds at 773 billion Turkish lira.

The amount of credits is 813 billion Turkish lira.

Asses size of participation banks grew to 70.3 billion Turkish lira in 2012.

Their collected fund reached 47.9 billion Turkish lira with the credit volume standing at 50.3 billion Turkish lira. Participation banks outperformed the industry in active size and collected funds by improving its share. Ratio of the participation banks’ total assets to that of the banking industry rose to 5.13

percent by the end of December 2012 from 4.61 percent in 2011. Share of participation banks in collected funds increased to 6.21 percent in 2012 from 5.64 percent in 2011 with its share in credits climbing to 6.19 percent in 2012 from 5.93 percent year-on-year.

37


Activities of Bank Asya in 2012

The bank performed a 27 percent growth rate in collected funds in 2012.Bank Asya succeeded in reaching 15.7 billion

Turkish lira in collected funds with a 27 percent

improvement year-on-year in 2012 at a year

when persistent uncertainty marred global

markets and growth rate in domestic market

bogged down

Fast growth on annual average current account Bank Asya advanced its annual average current

account to 2.9 billion Turkish lira with a 29

percent improvement in 2012 from 2.2 billion

Turkish lira in 2011.

Growth rate twice that of the industryBank Asya accomplished a 27 percent rise in

collected funds in 2012, attaining a growth rate

higher than those of the industry and the group

it belongs to. Collected fund increase was 11

percent the industry in general and 22 percent

in participation banks in the same year.

High fund target Following the momentum it achieved in collected

funds in 2012, Bank Asya is determined to

preserve this drive with a target of 21 percent

in 2013.

CORPORATE BANKINGBank Asya operates in the financial markets which is one of the industries that experience changes in the swiftest manner. The bank offers fast and effective solutions to answer customer need by utilizing its competitive advantage in corporate banking activities. Bank Asya performs corporate banking activities with a customer-centric, project based and multifaceted service concept as part of its permanent business partnership model with the customers.

Bank Asya provides services in six corporate branches with three in Istanbul and one each in Izmir and Antalya. Highly qualified corporate branch personnel offer strong financing opportunities to 711 companies in 302 different groups through the sound marketing and communication network they have established in corporate branches.

There are a myriad of corporate products and services Bank Asya extends to corporate banking customers as the bank expanded its product portfolio even more in 2012 by adding the Gold Participation Account, Forward Transactions and Private Pension System.

Products offered to corporate costumers • Personal Current Accounts• Participation Accounts• Cash Management• Cash Credits• Non-Cash Credits• Foreign Trade finance• Insurance Services• AsyaCard Business• Gold Participation Accounts• Forward Transactions• Corporate Pension Plans

Developing and changing economic conditions call for particular requirements as well. Bank Asya performs accurate analyses of these requirements and carries out effective marketing activities as a proponent of pioneering initiatives in the interest free banking system and by operating with the principle of constant improvement.

The bank takes into consideration the safety, liquidity and productivity aspects when assessing credit requests from customers.

Corporate MarketingThe size of the risk that Corporate Marketing Office of Bank Asya managed was in line with the bank’s targets and the market conditions in 2012.

Corporate customers opted to make us of their deposits in participation accounts of the Bank Asya after receiving services from the bank in 2012. The volume of the fund from customers in the corporate segment grew more than double compared to the year before.

Bank Asya makes future decisions regarding the corporate banking field by conforming to the principles that have guided the bank in the previous years as well.

Corporate Banking Principles• To call on regularly and stay in constant contact with the customers in order to meet their needs accurately. • To use time fastidiously and get back to customers swiftly when answering their requests.• To establish trust by providing clear answers to customer questions for continuity of business relationships.• To provide a wide variety of services to customers; from credits and cash management to foreign trade brokerage and project financing.• To develop new products and services tailored to customer expectations. • To be open to customers suggestions and to revamping the business processes according to their recommendations.•To increase its weight in the market by improving relationships with current customers and by adding new ones to its portfolio at the same time. • To offer products and services at productive, profitable and competitive prices.• To become organized and come up with results according to corporate objectives. Bank Asya performs Corporate Banking operations in a manner to meet customer demands in every area; from credits and cash management to foreign trade and investment products by utilizing a multifarious product range, professional portfolio teams, technology-based systems and other diverse service channels. As it has done in the past 16 years of its operations, Bank Asya is driven to make an impact on the county’s economy in 2013 by staying true to the company motto of “supporting the producers” and by continuing operations according to the customer-centric marketing concept of the bank and without compromising from corporate values as well as risk focused policies.

After advancing its collected funds by 27 percent in 2012, Bank Asya is determined to maintain this strong momentum in 2013 to rally fund growth by 21 percent and protect its position as the participation bank with the largest asset expansion.

11% 27%

Growth Rate in the Industry in 2012

Growth Rate of Participation Banks in 2012

Growth Rate of Bank Asya in 2012

22%

5.843

9.137

11.167

12.397

15.742

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

14.000.000

16.000.000

18.000.000

2008 2009 2010 2011 2012

Annual Trend on Collected Funds (Million TL)

39


COMMERCIAL BANKINGBank Asya embraces quality and customer-

centric service concept in commercial banking. As

such, it provides fast, effective and innovative

solutions for customer needs.

Bank Asya’s main objective in regards to

commercial banking is to fulfill all banking

requirements of customers by making available

more rewarding financing choices and versatile

solution options in fluctuating and competitive

financial markets. Bank Asya develops long-term

and sustainable relationships with its customers

according to these objectives.

The bank takes into consideration the safety,

liquidity and productivity aspects when

assessing credit requests from corporate

customers. Banka Asya aims to spread the risk

and increase total productivity through customer

and industry segmentation.

Export focused growthBank Asya’s commercial banking practices

provides support to export operations, one of

the main driving forces of growth for Turkish

economy. Developing and emerging markets

will no doubt continue to increase export

opportunities in the coming days.

Bank Asya evolves its operations according

to this fact to remain as a dominant force in

the industry with expert technical personnel,

providing brokerage services for all foreign trade

transactions as well as offering technical service

and innovative foreign trade products.

Bank Asya will continue to offer the most

suitable banking product solutions to export

customers according to its concept of

supporting the producers through a wide variety

of products and professional portfolio teams as

well as effective and cutting-edge information

technology systems.

Profit and loss partnership projectsBank Asya pursues to offer project financing

to its customers by way of profit and loss

partnership projects which are one of the most

important instruments of participation banking.

The bank is currently working on various profit

and loss partnership projects which the Project

Financing Department is assessing and holding

meetings about. Bank Asya is planning to

venture into more projects in the construction,

energy, health, tourism and food industries in

the coming days.

Stable financial leasingFinancial lease transactions are available in

Bank Asya as the bank has previously provided

financing and leasing solutions to some of the

significant investments in Turkey.

Expert technical personnel in financial leasing

finalize customer request expeditiously and

smoothly. Bank Asya will continue to grow in

financial leasing transactions in 2013.

SME BANKINGBank Asya maintained its services for SMEs in

2012. The weight that SME customers hold

in the whole portfolio remained the same

in the 2012 operation period as the bank

provided support to these customers with

credits, cash management and consultancy

services.

Bank Asya completed organizational

structuring for SME Banking in its

Headquarters as well as in Districts and

Branches. Marketing organization was

changed by creating new Sales Coordination

Marketing and SME Product Development

Portfolio departments. SME Banking

operations are being carried out in three

District Offices in Istanbul as well as in the

ones located in Ankara, Izmir Bursa, Konya,

Gaziantep and Trabzon.

In 2012, Bank Asya once again stood

behind SME customers for all of their credit

requirements in their investments, projects,

capacity increase efforts and technological

innovation integrations, in addition to

business development projects to gain

a competitive edge and foreign trade

transactions. Direct Debiting System(DBS)

DBS continued catering to customers’ cash

management needs through Company Card,

Commercial Card, AsyaAssist Card, Checkbook,

POS, Tax, SSI, Bill Payments, Salary Payments,

Insurance and Internet Banking services.

This system allows main companies to

automatically collect the costs of goods

and products from their dealers or regular

customers. It was successfully implemented

in 2012 as well with conclusion of

agreements with 46 main customers and the

integration of 328 dealers with the system.

Bank Asya also provided a collection and

payment service through the Commercial

Card as an alternative to the DBS. The

card is another cash management product

that works through a close circuit system

between the wholesaler/main company and

retailer/dealer. As of 2012, the bank made

Commercial Card agreements with 57 main

companies and integrated 615 dealers to the

system.

In 2012, AsyaAssist Incentive Monitoring

module was launched by the AsyaAssist Card

which provides special assistance services to

business.

Incentive Monitoring system allows SMEs

to find out which incentive program they

can take advantage of according to the city,

district and industry.

They can also get updated information

regarding the programs and get answers to

their questions on the “www. cobanyildizim.

com” website. Incentive Monitoring system

gives quick access for SME costumers about

cost saving opportunities.

AsyaAssist Card extends assistance to

businesses for their medical, legal and

financial consultancy requirements as well

as for needs in emergency situations. The

number of customers taking advantage of

the card rose to 57,900 with a 35 percent

surge in 2012.

Bank Asya pressed on being a robust

participant of public supported projects aimed

for SMEs in 2012.

One of these was the Bank Asya and the

Credit Guarantee Fund (CGF) partner project

of providing credits to businesses which

lacked the guarantee. As of 2012, Bank Asya

extended CGF to 300 SMEs in the amount of

85 million Turkish lira, putting the bank in the

top four banks in the industry in this field.

Bank Asya will persistently make these types

of projects available to SMEs in 2013 as well.

The bank aims for completion and launch

of the SME & Commercial Segmentation

and SME Commercial CRM projects in 2013.

Bank Asya set its sight on displaying a

performance over the industry in SME

Banking. Similarly, it aspires to reach more

SMEs as their solution partner and to become

one the preferred banks by them in the

industry.

Bank Asya succeeded in ranking among the top four banks that extended the most Credit Guarantee Fund (CGF) in the whole banking industry by providing funding to 300 SMEs in the amount of 85 million Turkish lira in 2012.

41


Retail Banking

Bank Asya is growing even more

through retail banking.

As of the end of 2012, there are 251 branches

offering retail banking services with 693

expert personnel. In addition to increases in

the number of branches and personnel, there

have been other significant developments

regarding retail customers. The number of Bank

Asya customers reached 3.9 million with an 18

percent rise.

Bank Asya completed three major retail

banking projects in 2012.

• CRM-Customer Focused Transformation

Project

• Personal Performance Management

• Real Customer Portfolio Management

CRM-Customer Focused Transformation

Project

Bank Asya transformed a product and process

focused organization into a customer-focused

one through the CRM project it initiated in 2010

and launched in January 2012. The project

has allowed the bank to develop a system of

grouping customers according to certain criteria

and enabling it to reach the right customers

through appropriate channels at advantageous

times to offer suitable products and services.

Bank Asya intended to establish a better

understanding of its customers through the

CRM Project. As such, the bank has made great

progress in the direction of developing the right

solutions for its customers by analyzing their

demands and needs.

The “CRM Project in 180 Days” is the last phase

of the great transformation initiative and it

earned Bank Asya the “Pega Financial Services

Customer Experience Award” in the PegaWORLD

2012 event which was held in Dallas on June

2012. The same project was also rewarded

for its technical and infrastructure works in the

“Information Technology Awards” organized by

the CIO Magazine on December 2012.

Retail financing products

Bank Asya strengthened its competitiveness

through housing finance and other financing

products it started offering in parallel with the

strategy of expanding the credit volume in

2012. The result was 29 percent growth in

retail credits compared to 2011.

The bank continued financing housing projects

throughout the year to drive housing credits up

by 32 percent year-on-year.

Private Pension and insurance

activities

Bank Asya remains adamant about providing

a high quality and fast service with a diverse

product range in the banking insurance

segment by closely studying customer needs

and industry trends, and also by taking into

consideration the bank’s risk approach.

The bank has complete infrastructure efforts

on its systems in 2012 so as to speed

up transaction time for insurance product

customers. Revenues from commissions

swelled by 40 percent as a result of the

system integration carried out by Işık Sigorta,

Bank Asya affiliate. With these endeavors,

Bank Asya elevated commission revenues

from insurance products and services over

the industry average.

Bank Asya entered into the Private Pension

System with its affiliate Asya Emeklilik

ve Hayat A.Ş. in May 2012. As the first

participation bank to offer interest free

pension services to customers, Bank Asya

was quickly rewarded for this effort with

the addition of 45,000 participants into

the Private Pension System through Asya

Emeklilik ve Hayat A.Ş.

Gold Banking

Bank Asya began physically acquiring gold in

2012. The bank physically collected four tons

of gold as of the end of the year, developing

into one of the major banks in the industry in

terms of gold accounts.

“Reception Day for Gold” activities held in

branches encouraged acquisition of scrap

gold and made a contribution the Turkish

economy.

Gold participation accounts with varying

maturity dates gave another opportunity

for customers to utilize their gold current

account savings as of May 2012.

Bank Asya began purchase and sale

transactions of physical gram gold bullion

bearing the bank’s logo in 2012.

Retail Customer Growth Trend (Pieces) Growth of Retail Financing Support (Million TL)

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

2008 2009 2010 2011 2012

2,000,000

2,420,000

3,307,000

3,725,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2008 2009 2010 2011 2012

2,860,000

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

2008 2009 2010 2011 2012

2,000,000

2,420,000

3,307,000

3,725,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2008 2009 2010 2011 2012

2,860,000

398 477

930

1.63

2.103

43


Alternative Delivery Channels

Bank Asya grew even more effective in alternative

delivery channels in 2012. There were a number of

noteworthy projects completed in 2012 like the

launching of the second call center in Trabzon, call

center backup operation, CRM channel integration,

ATM software system, which was written and

updated by Bank Asya’s own technology team,

exterior cabin designs of the ATMs, revamped

macro and micro websites, as well as recent mobile

activities with GSM operators.

The number of customers reached by Bank Asya

call center approached 9 million as of 2012. The

bank succeeded in generating a premium of

over 21 million Turkish lira by utilizing alternative

delivery channels through services like Interactive

Voice Response (IVR), Happy Customer and

Outbound calls, SMS information services and

Text-To-Speech (TTS) calls. While premiums from

insurance products jumped by 56 percent to 8.5

Turkish lira year-on-year.

There were a total of 37,000 “Happy Customer”

calls made at an average response time of 14

seconds with a service rate of 92 percent in 2012.

Internet and Mobile Banking

The number of customers using Bank Asya

Internet Branch reached 794,000 with a 20

percent rise year-on-year. The rate of active users

of the Internet Branch grew to 51 percent at

Bank Asya while the industry average stood at 42

percent. The number of Bank Asya Mobile Branch

users expanded to 43,000 from 16,000. In

addition, the average number of logins per month

tripled.

ATM

The number of ATMs surged by 34 percent to

671 with 356 of them being Off-Site when

compared to the previous year.

Social Media

Bank Asya brought new momentum to its

activities on the social media in 2012.

The bank ranked number eight on Facebook and

number five on Twitter among all banks with over

20 million visitors to the corporate website.

Alternative Delivery Channels in 2012

Awards

• The best website in the Middle East and Africa

award for Bank Asya Mobile Branch

• The first place award in the “Call Centers are

Competing” category of the Call Center Awards

2012 organization.

• Third place in Emea’s “Top Ranking Performers in

the Contact Center World“ organization.

• ŞikayetEndex listed Bank Asya as the fourth

most successful bank according to the complaints

and satisfactions points which were sent by

650,000 “I have a complaint” members.

Card and Member Transaction Activities

Bank Asya improved the number credit cards by

five percent year-on-year, reaching over 2 million

credit card customers by the end of 2012.

Credit card revenues thrived by 41 percent to

reach 7.92 billion Turkish lira year-on-year. Bank

Asya realized the highest monthly installment

revenue in the bank’s history in 2012 with the

addition of new member businesses and brands as

well as general and local campaigns, and effective

communication with customers. Total of

installment transactions rose by 85 percent

year-on-year. Bank Asya was successful in

getting ranked at the top three among the

Interbank Card Center (BKM) member banks in

installment credit card revenues. The number

of member businesses that the bank works

with rose to nearly 250. Total number of

member businesses flourished to 75,329 with

total member business revenues reaching

8.4 billion Turkish lira at a rate of 24 percent

improvement compared to 2011. All these

operations put Bank Asya at number 11 spot

in the industry in the number of credit cards

and revenues acquired from them, and at

number 10 place in the number of POSs and

revenues acquired from them.

New Products and Services

Following its introduction in 2011, PAKSIT

practice thrived with great interest from

customers reaching high transaction volumes

throughout 2012. Bank Asya rendered Internet

shopping transactions safe and secure for its

customer by becoming integrated to the BKM

Express system, which was put into effect by

BKM to ensure protection of transactions on

the Internet. The bank collaborated with the

Turkish Confederation of Businessmen and

Industrialists (TUSKON) to complete the pre-

launch of TUSKON Credit Card in 2012.

Non-touch cards, transportation and

campus projects

Bank Asya remained proactive with a number

of diverse transportation projects in 2012.

The bank implemented Public Transportation

Projects comprising the use of AsyaCard

DIT and AsyaPratic DIT in six cities, namely

in Kahramanmaraş, Adıyaman, Karabük,

Safranbolu, Bolu and Karaman.

Marine Transportation Project was another

initiative of the bank, this time put together

with TURYOL. Campus Card practice continued

to be a success in 2012.

Campus Card was offered to students in

11 locations at Adıyaman, Osmaniye Korkut

Ata, Fırat, Düzce, Fatih, Mevlana, Melikşah,

Süleyman Şah, Zirve, Sabahattin Zaim and

Fatih Sultan Mehmet Vakıf universities.

The use of AsyaCard DIT thrived as it can be

obtained easily from all branches just in 15

minutes. The number of AsyaCard DIT users

went up to 942,000 with an 8.4 percent rise

year-on-year. While prepaid AsyaPratic DIT

card reached 298,000 users as of the end

of 2012.

Bank Asya increased the number of credit cards to over 2 million with a five percent improvement in 2012. Credit card revenues climbed to 7.92 billion Turkish lira with a 41 percent rise year-on-year.

262

Branch ATM Off Site ATM Total

239

501

315 356

671700

600

500

400

300

200

100

0

Number of ATMs Growth in the Number of Credit Cards (Pieces)

Growth in Installment Credit Card Revenues (Million TL)

Growth in Credit Card Revenues (Million TL)

Growth in POS Revenues (Million TL)

2.500.000

2.000.000

1.500.000

1.000.000

500.000

0

1.300.000

1.500.000

1.800.000

1.920.0002.020.000

397292

595

867

1.604

9.000

8.000

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

3.237

4.022

4.938

5.8587.920

Mill

ion

9.000

8.000

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

3.92744.737

5.875

6.777

8.495

Mill

ion

2008 2009 2010 2011 2012

20092008 2010 2011 2012

2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

45


International Banking Treasury Transactions

Bank Asya provides international services to its customers with a wide network of over 1,400 correspondent banks in 110 countries throughout the world.

Bank Asya signed the “Murabaha Syndication” credit in the amount of $325 million, or €96.5 million, with the participation of 28 banks from 17 countries in April.

The one-year term credit is made up of two parts and it will be used to finance foreign trade.As of the end of 2012, international sources of

funds acquired by Bank Asya increased to $1 billion with a 25 percent rise. The bank intends to utilize these funds to finance trade. This significant boost in obtaining foreign funds not only serves as proof of the trust put in the bank in global markets, but it also helps diversify resources.

Bank Asya stands by its customers in international markets, providing medium and long term solutions with alternative financing instruments.

The bank maintained its support for the customers in 2012 by extending foreign funds through insurance programs from Export Credit Agencies (ECAs) and GSM102 credits from the U.S. Department of Agriculture (USDA).

In an effort to solidify its international source structure, Bank Asya signed the Murabaha Syndication credit –worth $325 million with a one year term– along with 28 other banks from 17 countries.

The Central Bank of the Republic of Turkey (CBT) took proactive measures to establish financial stability at a time of economic crisis in global markets in 2012. Bank Asya maintained a balanced stand in foreign currency positions despite of these market conditions. The CBT gradually increased throughout the year the upper limit regarding the part of the required reserves, which can be held in foreign currency, and which need to be established for Turkish lira liabilities. The bank also instituted the Reserve Option Coefficients (ROC) practice to determine the foreign currency amount that can established for each unit of Turkish lira required reserves for different levels. All these practices are the result of Bank Asya’s persistence in 2012 in maintaining an effective liquidity management in the handling of the treasury.

The bank focused on customer and branch visits in 2012 in order to expand the portfolio of customers that it provides direct services to. Bank Asya developed new products to offer to its customers by taking into consideration changing market conditions. One of these novelties was the introduction of Forward Exchange services in 2012. The reason for the bank to launch the new service was to gain new customers through a wider product range as well as to make an impact on total profitability by increasing the volume and profitability of the bank’s currency purchases and sales. After reaching a significant volume a short time, Forward Exchange transactions

are projected to make a sizable contribution to the volume and profitability of Bank Asya’s Treasury transactions in 2013 as well. The bank took part in the “Sukuk Certificate” issuance of the Undersecretariat of the Treasury in 2012 with the purpose of diversifying its liquid asset through the sukuk portfolio which was created. Total profitability improved as a result of the sales made to corporate customers from this portfolio.

Gold remained as an attractive investment instrument in 2012 due to declining risk perception in international markets and with the apprehension of a longer global economic recovery. As a result, the weight gold has in transaction volume of the Treasury increased, reaching 13.7 tons in Gold Accounts by the end of 2012. Bank Asya introduce more effective services presentation and competitive pricing by adding new products to its distinguished customers portfolio of the bank’s Treasury Department in 2012. Customer satisfaction rose with transaction volume and profitability also improving. Despite low volatility and weak transaction volume, the bank’s profitability in total currency volume was stimulated with heightened transaction volume of distinguished customers.

Project financingProject financing activities are carried out by the Project Financing Department of Bank Asya. The bank mainly provides support to

countless projects in real estate, energy, tourism, livestock farming and health industries through cash and non-cash credits.

Bank Asya will continue to pursue painstaking and detailed project financing efforts in the coming terms as it did in 2012. Bank Asya maintains its support for the real estate industry through profit and loss partnership (musharaka) project credits which are among the most substantial placement products of participation banking. With an enriched product portfolio in project financing as a result of the three musharaka agreements it signed in 2011 and 2012, the bank plans to get involved in other industries through profit and loss partnership credits in the future. Quality and trust in foreign trade operations

All foreign trade operations are carried out according to banking standards in Bank Asya as the bank offers modern banking solutions that require high amount of know-how and experience. Seven Certified Documentary Credit Specialists (CDCS) of the bank handle foreign trade transactions expeditiously and flawlessly.

Bank Asya’s technological prowess and service competency is proven each year with the “Straight Through Processing” excellence awards given by the leading banks of the world. Bank Asya was deemed worthy of the STP Award by Standard Chartered Bank and excellence award by Citibank.

Bank Asya improves its share in foreign trade.Bank Asya’s contribution in foreign trade operations is rising in parallel with economic developments in Turkey. The bank succeeded in driving its total foreign trade transaction volume to 25.710 million with a 24 percent surge in year-on-year in 2012.

Break down is as follows: Imports; $4.199 billion, imports; $3.123 billion, other transfers; $18.01 billion and guarantees; $378 million. Bank Asya accomplished a 2.5 percent growth rate in imports and 7.5 percent in exports as of the end of 2012.

Foreign Credits (Million USD)

127

303

20092008 2010 2011 2012

402

765

1.0182,5%

7,5%

Import Transactions (Million USD) Export Transactions (Million USD)

2011

4.092

2012

4.199

2011

2.906

2012

3.123

47


Quality Management System Information Technologies

The bank has established a “Asya Quality

Management System” as a consequence of

its quality operations since its foundation. All

organizations related to this system as well as

products and services are continuously improved

by Bank Asya.

Bank Asya strives to meet the needs and

requirements of customers with an organization

and management approach that was created

to suit the foundation objectives of the bank.

Furthermore, it makes every possible effort to

become an institution that all of its personnel

can be proud to be employed by.

The bank sealed this commitment with the ISO

9000:1994 Quality Certification it obtained in

1998. Subsequently, Bank Asya also completed

all the required revisions to gain the right to

obtain the ISO 9001:2008 Quality Management

System certification.

Qality Management System of Bank Asya is

based on the principle that by pursuing “Zero

Error,” which is impossible to attain, the bank

exerts itself to achieve “Perpetual Improvement.”

Main point of the system is to put in writing and

manage all product and service processes.

Organization and Quality Management Service

within the Human Resource and Training

Department is responsible for documenting

and managing product and service processes, in

addition to ensuring continuous improvement of

the Quality Management System by developing

and monitoring the system as well as by

enhancing its productivity and effectiveness

Bank Asya obtain the “Business Continuity

Certification” from the British Standards

Institute (BSI) in 2011 after completing the

necessary infrastructure works according to the

legal regulations regarding corporate business

continuity. Thus, receiving the BS 25999

Thus, becoming the the first Turkish

institution to receive the “Business Continuity

Management Certification” (BCMS) which only

240 organizations and 10 banks possess in the

whole world.

The main objective of the business continuity

management policy is to carry out business

impact analysis to establish critical operations,

and then to functionalize them in shortest

amount of time that the customers can accept.

Bank Asya especially focused on “Permanent

Staff Measurement Works” in an effort to

increase labor productivity in 2012.

Accordingly, the bank completed work load

measurement updates for the headquarter

departments and the branches.

Bank Asya proved its quality once again

by succeeding in becoming the first ever

organization in Europe to receive the ISO 10002

Customer Satisfaction Management and the EN

15838 Contact Center quality certificates at the

same time.

Bank Asya succeeded in becoming the first ever organization in Europe to receive the ISO 10002 Customer Satisfaction Management and the EN 15838 Contact Center quality certificates at the same time.

Bank Asya aims to gain a competitive advantage through customer satisfaction by providing fast and impeccable service through effective utilization of technology. Therefore, the bank focuses its Information Technology (IT) investments on infrastructure works, process improvements and reinforcing alternative delivery channels as well as offering innovational products in card payment systems.

Bank Asya has brought pioneering and cutting-edge practices in the banking information technology field as a result of the R &D works and the projects it has completed. The bank has also ensured business continuity and operational productivity through investments in new technologies and infrastructure. The bank’s completed projects and ground breaking products received awards from a variety of organization once again this year as it was the case in previous years.

Awards

PegaWorld CRM Customer Experience AwardThe CRM Project was brought to life in a short period of time with intense work from technology and business departments, enabling the bank to reach the right customers through appropriate channels at advantageous times to offer suitable products and services. In addition to creating high customer satisfaction, the project also took the “PegaWORLD CRM Customer Experience Award” in the PegaWorld 2012 Conference,” which was held in Dallas with participation from leading banks and insurance companies of the world.

CIO Award goes to Bank Asya for the second time in 2012Bank Asya received CIO Magazine’s “CIO Awards” for the second time with the “CRM Project in 180 Days” project as a result of the emphasis it placed on technology-focused service approach.

Investments and Projects for IT Infrastructure

Measurement of accessibility, performance and qualityIn an effort to provide high quality, fast and uninterrupted service in the main process, Bank Asya initiated the use of the HP BSM product so as to measure real use of the main systems by customers and to monitor robotic controls.

Services provided to affiliatesBank Asya appointed one of its affiliates, Tuna GYO ve Asya Menkul Değerler to provide database warehousing, management of infrastructure systems as well as technical support and operations services.

VirtualizationThe use of virtual servers was increased to 57 percent as a result of the virtualization efforts, which were carried out to reduce the cost of having a physical server and to make it easier to manage it. Physical servers of the virtual server infrastructure, in which tests and developments are performed, were overhauled.

HR practices – IKONThe bank internally developed and put in practice the IKON application, which covers all HR processes like the management by objectives system, performance management system, personnel information system, vacation time management and recruitment processes. The system allows personnel to see the objectives assigned to them as well as the assignments that were successfully completed.

New ATM softwareBank Asya internally developed and implemented a new ATM software by combining in a single package the ATM management, Bank card (Debit Card) management and Prepaid Card (Pratik Card) softwares. This software package is a modular application; as such, it will be possible to offer it for use by other companies. Implementation of this work eliminated the need to outsource this service and removed all related costs, including maintenance and development expenses.

Gold Banking infrastructureAfter initiating gold purchases and sales on record last year, the bank put in operation the technical infrastructure that is needed to purchase and sell gold face-to-face (Reception Day for Gold) with customers in branches this year. Bank Asya created the infrastructure that allows the bank to perform gold purchases and sales, as well as all other related operations through all channels like the branches, the Internet, ATMs, mobile branches or the call center. “Gold Participation Account” is another product developed and offered by the bank through every available channel to help customers make the best of their gold savings.

Innovation with the Internet branch The bank has added a number of new services on the Internet branch so as to allow customers to perform operations without having to come to the branch. The practice also helped in reducing operational costs and improving customer satisfaction. Among these services are personal accounts chart, gold participation account, gold purchase order, SWIFT, collective EFT and money transfer and regular donation order. The bank also revamped and made it easier to use the pages for checks, promissory notes and merchants.

Innovations in Asya Mobile Branch Bank Asya Mobile Branch has become very widely used as mobile technologies and smart phones also became ubiquitous. The bank continued to add new functions to offer better mobile services to costumers. As a part of this effort, new menus were added like campaigns, Paksit, reviewing and closing credit card installments, in addition to gold purchase and sale menu.

Innovations in the call center Following the complete modernization of the Interactive Voice Response (IVR) system, the bank also introduced the same system in English for non-Turkish speaking customers this year. In addition, another practice was put in place, recognizing VIP customers with platinum cards and forwarding them to a special line.

Innovations in payment and collection systemsBank Asya carried out infrastructure works and started implementing practices to allow automatic or bank channelled payments for BES transactions in relation to the activities of Asya Emeklilik, the bank’s affiliate. Moreover, latest items have been added to the collection system like new subscribed institutions for bill payment, the new Direct Billing System (DBS) companies, as well as hajj and umrah collections.

Works regarding decision support systems for credit processes The bank launched a new project aimed at improving processes regarding appropriation of retail credits, credit cards and SME credits, as well as automating the decision making mechanism and adopting to changing market conditions. The purpose of the project is to put in place a decision support system that is completely integrated with the banking practices in all steps of the retail and SME credit processes.

49


Corporate Social Responsibility Projects Affiliates and Subsidiaries

There have a myriad of social responsibility

projects carried out by Bank Asya in diverse

fields since the inception of the bank and 2012

was no different.

Sponsorships

Bank Asya exerts itself to be more than just

a bank, and thus it has completed various

sponsorship projects throughout 2012 with

the responsibility of improving the community’s

bond with the environment, the arts and sports.

Sponsorships in Organizations

Bank Asya continued to sponsor organizations

like INEPO Environmental Olympics and the

Turkish Olympics which are now synonymous

with the bank. Furthermore, it became a sponsor

to commerce and finance organizations such as

TUSKON and Active Academy Finance Summit.

Sponsorships in Culture and Arts

Bank Asya is a stout supporter of culture and

arts. The bank has been the main sponsor of

the Kristal Klaket Short Film Festival of Fatih

University for the past five years, displaying its

commitment to support the development of

Turkish cinema and young generations of film

makers.

Sponsorships in the Media

In 2012, Bank Asya sponsored a number of

programs, columns and pages that can help

improve its corporate image. The bank also

became a sponsor of various Ramadan programs

on television, newspapers and the radio.

Sponsorships in Sports

Bank Asya has also been extending its support

for young talents in the interest of the future

of sports in Turkey. Accordingly, since 2008,

the bank has been a sponsor of Aşkın Karaca,

the young athlete who have accomplished

numerous feats in the “Triple Jump” competitions

in national and international events.

Corporate Social Responsibility Projects

Bank Asya mainly ventures into social

responsibility projects in education and culture

fields. In parallel with this direction, the bank has

developed the “I am Sending a Child to School”

campaign. Bank Asya operates with the principle

that the biggest investment is the one that is

made in people. To help this cause, the bank

has developed a technological infrastructure

especially for this project to make it possible for

customers to donate the loose change amount

after the dot on their current participation

account. Customers can also contribute to the

campaign by authorizing automatic payment

order from their credit cards or current accounts.

In addition, individuals can make a 5 Turkish

lira donation by typing “Eğitim” in the body of

the message and sending it to 5777. Bank

Asya is collaborating with the “Kimse Yok

Mu” (Is Anybody There) Association, a non-

governmental organization, for the “I am Sending

a Child to School” project.

The projects is set to offer scholarships to

1,000 students in its first year with plans to

increase the number in the coming years by

turning the project into a continuous venture.

Various cultural activities are also planned for

the scholarship students at certain days of the

year. Bank Asya intends to to provide support to

these students as they enter into professional

careers and throughout their work life.

In addition to the aforementioned

comprehensive projects and sponsorships, Bank

Asya also maintained it support for a variety

of educational institutions, associations and

foundations with an awareness of corporate

social responsibility, donating over 1.636

Thousand Turkish lira in 2012.

People comes first approach has been the driving principle of Bank Asya since its foundation. Hence, the bank has incessantly strived to make an impact in the community and introduced practices that have become permanent features through social responsibility projects and sponsorships.

About the Affiliates and Subsidiaries

Işık Sigorta A.Ş.

Işık Sigorta went into operation in Istanbul

in 1996 with the mission of creating

awareness, and thereby, winning over

especially the part of the community without

insurance or the ones with a negative

perception of insurance concept.

Bank Asya has a 67.52 percent share in the

60 million Turkish lira capital of Işık Sigorta.

In order to provide better and fast services

to its customers and agents, Işık Sigorta

employs a work force of 155 personnel as

of December 31, 2012 in District Offices of

Istanbul, Ankara, Izmir, Adana and Antalya

as well as in District Agencies in Bursa and

Trabzon.

Işık Sigorta offers services in all areas of

insurance, including automobile insurance,

traffic, fire, engineering, agriculture, health,

personal accident, transportation, legal

protection, non-automobile accident, Turkish

Catastrophe Insurance Pool (TCIP) and liability

insurance. The company has been highly

utilizing technology since its inception, and it

is the first organization to establish an online

network system with the agents.

Issuing online policies has created a great

advantage in business follow up and in the

quality of service.

The company has been providing services to

the agents and customers in the Bank Asya

Headquarters building since November 2007.

Nil Yönetim Hiz. Eml. Tur. San. ve Tic.

A.Ş.

Bank Asya owns 99.93 percent of the capital

of Nil Yönetim Hizmetleri Emlak Turizm

San. ve Tic. A.Ş., which has taken over the

management of Asya Thermal Holiday Village

on a property owned by Tuna Gayrimenkul

Yatırım Ortaklığı.

Asya Kızılcahamam Thermal Holiday Village

is located in Kızılcahamam district, an area

famous for its thermal springs offering

healing cures to countless civilizations over

hundreds of years.

Asya Thermal Holiday Village is built on a

100,000 m² area with a 5-star hotel at a

capacity of 200 beds in 94 rooms, 494

luxury timeshare homes (11,865 timeshare

homes), social facilities, outdoor and indoor

swimming pools and health centers as

well as a shopping mall, culture center and

conference center.

Asya Thermal Holiday Village has played host

to countless conventions and organizations

for domestic and foreign visitors throughout

its history with a name that has become

synonymous with the concepts of vacation,

health and conventions.

Kızılcahamam, even Turkey, has become

globally known as a thermal center thanks to

Asya Thermal Holiday Village.

Tuna Gayrimenkul Yatırım Ortaklığı

A.Ş.

The company changed its name to Tuna

Gayrimenkul Yatırım Ortaklığı from ASYAFİN

Turizm Proje İnşaat Emlak San. ve Tic. A.Ş.

with authorization from the CMB, and began

its activities as of September 30, 2009 with

the intention of investing in real estates,

capital market instruments based on real

estates, real estate projects, real estate

based rights and capital markets instruments,

which are stated on the CMB Communiqué on

Principles Regarding Real Estate Investment

Trusts, and to carry out other activities

stipulated in the Communiqué.

Bank Asya holds a direct share of 22.94

percent in the company’s partnership.

Ratio of Shares

Title Address (City / Country) Partnership Type Ratio of ShareIşık Sigorta A.Ş. Istanbul / Turkey Subsidiary 67,52%Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Istanbul / Turkey Subsidiary 22,94%Asya Emeklilik ve Hayat A.Ş. Istanbul / Turkey Subsidiary 97,99%Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. Istanbul / Turkey Subsidiary 95,00%Asya Kart Teknoloji Hizmetleri A.Ş. Istanbul / Turkey Subsidiary 99,75%Asya Varlık Kiralama A.Ş. Istanbul / Turkey Subsidiary 100,00%Asya Menkul Değerler A.Ş. Istanbul / Turkey Subsidiary 100,00%Nil Yönetim Hizmetleri Em. Tur. San. ve Tic. A.Ş. Ankara / Turkey Subsidiary 99,93%Tamweel Holding S.A. Dakar / Senegal Affiliate 40,00%Yeni Mağazacılık A.Ş. Istanbul / Turkey Affiliate 21,84%Landmark Supply Holding A.Ş. Istanbul / Turkey Affiliate 21,84%Kredi Garanti Fonu A.Ş. Ankara / Turkey Affiliate 1,75%

51


Affiliates and Subsidiaries

Bank Asya Emeklilik ve Hayat A.Ş.

Asya Emeklilik ve Hayat A.Ş. obtained the license

in the pension branch on January 20, 2012, and

in the life and accident groups insurances on May

14, 2012.

Asya Emeklilik ve Hayat A.Ş. was established

and registered in the trade registry on July 1,

2011 according to the authorizations obtained

from the BRSA on May 16, 2011 and from the

Undersecretariat of Treasury General Directorate

of Insurance on June 8, 2011.

Bank Asya holds a 97.99 percent share in the

company’s partnership.

Following its foundation, the company applied

for the operating licenses in the pension branch

on September 16, 2011 and in the life group

insurances branch on December 30, 2011. Asya

Emeklilik ve Hayat A.Ş. obtained the licenses in the

pension branch on January 20, 2012, and in the

life and accident groups insurances on May 14,

2012.

The company started the sales of its first pension

product on May 15, 2012. Asya Emeklilik made

strides in a very short period of time as the first

and only interest free pension company in Turkey.

Pension Monitoring Center put the number of

company’s contracts at 40,388 with 34,790

participants at fund size of 23,623,000

Turkish lira. Target audience of Asya Emeklilik

encompasses individuals with a desire for

a private pension system that is based on

participation banking principles with sensibility

toward earning interest. Funds that will be

established for this purpose are planned to include

fund portfolios with interest free instruments

issued by the Undersecretariat of Treasury in

Turkey; or internationally issued Sukuk and similar

instruments; or stocks, participation accounts and

gold funds suitable for participation banking.

Asya Emeklilik has set all of its objective

according to the sensitivities of its initial target

audience.

Tamweel Africa Holding S.A.

Tamweel Africa Holding S.A. was founded on

June 9, 2009. The Islamic Corporation for the

Development of the Private Sector-ICD owns

60 percent of the shares of the Holding with

Bank Asya holding the remaining 40 percent.

Holding is headquartered in Senegal at the

following address; 66 Rue Carnot, 5ème

Etage Résidence Diouma Léna, Dakar.

Following its inception on June 9, 2009,

activities of Tamweel gained momentum after

Bank Asya took a place in the partnership.

Consolidated after tax profit of the group

banks soared to €6.14 million as of the third

quarter of 2012 from €2.98 million at the

end of 2010. Similarly, consolidated total

assets climbed to €354 million from €218

million during the same period.

Holding has established partnerships in

four countries for the purpose of improving

banking products and activities throughout

Africa. The Holding current possess;

50 percent of the Islamic Bank of Niger (IBN),

69 percent of the Islamic Bank of Senegal

(IBS),

50 percent of the Islamic Bank of Guinea (IBG),

100 percent of the Islamic Bank of Mouritania

(IBM).

As of December 31, 2012, there were 10

employees working at the Holding and 308 in

the group’s banks.

There were a total of 28 branches in bank’s

group as of the same date and work is under

way to increase this number to 50 in 2013.

Moreover, the Holding continues to seek

other partnership ventures in Africa as part of

its ever developing activities in participation

banking area.

Yeni Mağazacılık A.Ş.

A101 Yeni Mağazacılık A.Ş. was founded on

March 28, 2008 and opened its first store

with the A101 brand on April 28, 2008.

The company succeeded in exceeding its

target of 101 stores in one month and

reached a total of 121 locations. Chain stores

are managed with the concept of “Hard

Discount,” offering customers good quality

food and consumer goods at low costs and

prices.Information about Foreign Branches and Representative Offices

Numbers Number of Personal Country Total AssestForeign Representative Offices 1 1 India -Foreign Branch 1 9 Iraq 174.915 Turkish lira

53


Compliance Opinion on the Annual Report

We have audited the conformity and agreement of the financial statements on the Annual Report of Asya Katılım Bankası A.Ş., which was

prepared as of December 31, 2012, with the Independent Audit Report, which was prepared as of the end of the accounting period. Bank is

responsible for the Annual Report, which is the subject of the report. As the Independent Auditor, we are responsible for presenting opinion

on the Annual Report to establish whether the financial statements in the this report conform with the audited financial statements and the

explanatory notes.

The audit has been completed in compliance with the Procedures and Principles Concerning the Preparation of the Annual Report by the Banks,

which was brought into force as per the Banking Law No. 5411, and with the principles of independent auditing. These regulations require

meticulous planning and implementation to establish reasonable assurance about whether there are critical errors in the Annual Report. We

believe that the audit we have performed forms a reasonable and adequate basis to establish our opinion.

In our opinion financial statements in the attached Annual Report provides accurate information with all crucial points regarding the financial

state of Asya Katılım Bankası A.Ş. as of December 31, 2012, according to the Procedures and Principles Concerning the Preparation of the

Annual Report by the Banks, which was brought into force as per Article 40 of the Banking Law No. 5411. These financial statements contain

the Summary Report of the Board of Directors and the opinion of the Independent Audit completed by us. In addition, financial statements and

explanatory notes comply with the information that was provided.

DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş.

Member of DELOITTE TOUCHE TOHMATSU LIMITED

Hüseyin GÜRER

Responsible Partner, Lead Auditor, Independent Accountant and Financial Advisor (IAFA)

Istanbul, March 8, 2013

A101 Yeni Mağazacılık A.Ş. plans to increase

the number of locations to 2,405 by

2015 from 1,802 as of the end of 2012.

Operations of A101 are carried out in

Antalya, Trakya, Sakarya, Izmir, Tuzla, Ankara,

Kıraç, Samsun, Bursa, Kayseri, Adana, Konya,

Trabzon and Diyarbakır regions, whereas

warehouse and office activities are handled in

Istanbul Headquarters.

Asya Menkul Değerler A.Ş.

Asya Menkul Değerler A.Ş. was founded in

2012 with a capital of 10 million Turkish lira.

Bank Asya owns 100 percent of the

company. As of December 31, 2012,

there are seven personnel working in the

company. Infrastructure activities and license

applications to the CMB has been completed

to make the company fully operational.

The company strives to offer a fair and

transparent service to help corporate and

individual investors have access to capital

markets according to participation banking

principles

Objective of the company is to provide the

highest quality service to the customers

in corporate financing and capital markets

products. There are plans to commence active

operations at the beginning of 2013 with

the number of personnel reaching 20 by the

end of the year.

*Asya Varlık Kiralama A.Ş.

Asya Varlık Kiralama A.Ş. was established

on December 10, 2012 to perform sukuk

issuance in domestic and international

markets according to Communiqué on the

Principles Regarding Sukuk Certificates

and Asset Lease Companies of the CMB

dated April 1, 2010. Bank Asya owns 100

percent of the company. Asya Varlık Kiralama

A.Ş. Bank Asya plans to issue the sukuk

certificates through public offering.

Iraq / Erbil Foreign Branch

Erbil has been transformed into a commerce

center for the north part of Iraq because of

the security it provides. The city is projected

to take the same identity in the near future

for the rest of the Middle East as well. Bank

Asya ventured into opening a branch in

Northern Iraq since the number of registered

Turkish companies in this region reached

1,300 and Turkey’s exports to Iraq rose to

$12 billion. Thus, the bank open Erbil branch

and began operations on May 7, 2012 with a

$7 million legal capital.

As of December 31, 2012, there were nine

personnel working in Erbil branch, reaching

700 customers. The branch has succeeded

in collecting funds in the amount of nearly

190 million Turkish lira and extending credits

worth 14 million Turkish lira.

India / Mumbai Foreign Representative

Office

Foreign Representative Office commenced its

operations officially on September 1, 2012 in

Mumbai, the biggest finance, commerce and

cultural center, as well as the largest city of

India.

Volume of trade between Turkey and India,

the third largest economy in Asia, was $7.5

billion in 2011, and it is projected to rise even

more in the future.

Operations of the India Representative

Office of Bank Asya comprise of managing,

developing and deepening relationships with

the current corresponding banks in India

as well as establishing new corresponding

banks. Activities of the office also includes

acquiring new customers and acting as a

broker for Bank Asya to fund the projects,

investments and commerce operations of

Indian companies which have commerce and

investment dealings with Turkey.

Indian Banking Law does not allow Bank

Asya to open a branch as a participation

bank as yet. Instead, the law only permits a

representative office to be established.

Representation office can be considered the

first step of the branch openings that are

anticipated to be permitted in the future.

Affiliates and Subsidiaries

55

54

Section II Management Information and Corporate Governance Principles


57


Board of Directors

Terms of Office of the Board Members Board Members shall serve for three years as explained in detail in Article 32 of the Articles of Association regarding the formation of the Board of Directors and the terms of office of the Board Members. Members can be reelected after completing their term of service.

Board of Directors MeetingsThe Board of Directors shall convene at least four times in a financial year according to Article 38 of the Articles of Association. The Board of Directors shall convene as necessitated by the company business and/or upon request from the Chairman. Accordingly, the Board of Directors of the bank generally convenes four times a month with participation from all members, with the exception of the ones stating their excuse for not taking part in the meeting. Board Members receive 5,000 Turkish lira gross salary as per Article 44 of the Articles of Association of the company.

Bank Asya Board of Directors Position Date of Appointment

Professor Erhan BİRGİLİ Chairman of the Board of Directors (2012)

Mustafa Talat KATIRCIOĞLU Board Member and Acting Chairman of the Board of Directors (2012)

Ahmet BEYAZ Board Member and Chief Executive Officer (2012)

Ali ÇELİK Lawyer, Board Member (2012)

Mehmet URUÇ Att. Board Member (2012)

Ercüment GÜLER (Ph. D.) Board Member (2012)

Mehmet GÖZÜTOK Board Member (2012)

Recep KOÇAK Board Member (2012)

Zafer ERTAN Board Member (2013)

1- Professor Erhan BİRGİLİChairman of the Board of DirectorsProfessor Erhan Birgili has completed the post graduate and doctoral programs at Ege

University Faculty of Business Administration Marketing Department and at Dokuz Eylül

University School of Management.

He has performed at various universities and institutes as Faculty Member, Assistant

Principal, Assistant Head of Department, Head of Department, Member of the Board

of Directors of the Faculty, Board Member of the Faculty and Assistant Dean. Mr. Birgili

currently acts as the Member of the Board of Directors, Member of the University

Senate and Dean of the Faculty of Economics and Administrative Sciences at Bursa

Orhangazi University. Professor Erhan Birgili is also a Member of the Istanbul Financial

Center Project Working Group, which is carried out by the Higher Educational Council

(YÖK). He joined Bank Asya as an Auditor on November 2012 and he has been

performing his duties as the Chairman of the Board of Directors since November 2012.

2-Mustafa Talat KATIRCIOĞLUActing Chairman of the Board of DirectorsMustafa Talat Katırcıoğlu holds a Bachelor’s Degree from the Istanbul Technical

University Faculty of Mechanical Engineering. He began his professional career in

1993. Mr. Katırcıoğlu is currently performing his duties as the Chairman of the Board of

Directors at Akasya Yapı, Kaynak Kağıt, Işık Yayıncılık, Sürat Kargo Lojistik ve Hizmetleri,

Akasya Madencilik, Akasya Alçı Maden Üretim and Forum İnşaat, in addition to

acting as the Board Member at Aksan Ak İnşaat, Elbruz Enerji Elektrik Üretim,

Atlaslar Eğitim Hizmetleri, Akdeniz Madencilik ve Toprak, Kaynak Holding and

Özgün İnşaat. He took up the position as the Board Member at Bank Asya in

2012 and became the Acting Chairman of the Board of Directors as of December

2012.

3-Ahmet BEYAZ Board Member and Chief Executive OfficerAhmet Beyaz holds a Bachelor’s Degree in Finance from the Ankara University

Faculty of Political Science and in Financial Law from the Yeditepe University as

well as a Master’s Degree in Business Administration from the University of Illinois.

He started his career in 2001. He has previously served as the Bank Examiner and

as the Chief Bank Examiner.

Mr. Beyaz joined Bank Asya in 2011 as the Acting Chief Executive Officer in

charge of Accounting, Budget Financial Reporting, and Affiliates. He has been

serving as the Chief Executive Officer and Board Member since January 2013

after holding the positions as the Acting Chairman of the Board of Directors and

Managing Member. Ahmet Beyaz is a also a Board Member in Asya Emeklilik ve

Hayat A.Ş., Işık Sigorta A.Ş, Tamweel Holding S.A., Nil Yönetim Hizm. Em. Tur. San

ve Tic. A.Ş., Tuna GYO A.Ş. and Asya Menkul Değerler A.Ş.

4-Ali ÇELİK Board MemberAli ÇELİK began his career as a contractor in 1980. He then founded Çelikeller in

1983, Birim İnşaat in 1987 and Yapı Yatırım in 2000. Mr. Çelik is currently serving

as the Chairman of the Board of Directors at Samanyolu Yayın Holding, STV/Burç

FM, Yumurcak TV, Dünya Radyo, Işık Medya Planlama, Merkür Yayıncılık, Hamle Oto

Kiralama, Yapı Yatırım, Sema Sağlık Hizmetleri ve Özel Sema A.Ş. and Boğazdan

Turizm. He is also performing as a Partner and General Manager at Çelikeller Yapı

and as a Board Member at Hisar Güvenlik, Burç Özel Güvenlik and Hisar Hizmet. Mr.

Çelik has been a Board Member at Bank Asya since 2012.

5- Mehmet URUÇ Att. Member of the Board and the Audit CommitteeMehmet Uruç Att. holds a Bachelor of Laws degree from the Istanbul University

Faculty of Law. He began his duties at Türkiye Vakıflar Bank in 1990 after

performing as a self-employed lawyer for a while. Following his tenure as the

Manager of Legal Affairs in Malatya, Adana and Bursa, Mr. Uruç then joined Bank

Asya as the Chief Legal Advisor in 2011. Mehmet Uruç Att. Asya is currently

serving as the Chairman of the Board of Directors at Kart Teknoloji Hizmetleri A.Ş

where he has been a Board Member since March 2012.

6-Ercüment GÜLER (Ph. D.) Member of the Board and the Audit CommitteeErcüment Güler (Ph. D.) holds a Bachelor’s Degree in Finance from the Ankara

University Faculty of Political Science, a Master’s Degree in Money and Banking

from the Istanbul University and a Doctorate Degree in Banking and Insurance

from the Marmara University. He began his professional career in 1995, serving as

Examiner, Branch Manager and Head of Department in several banks.

Mr. Güler is currently performing as a Board Member at Asya Emeklilik ve Hayat

A.Ş. and Tuna Gayrimenkul Yatırım Ortaklığı, as an Auditor at Işık Sigorta A.Ş. and

also as the Acting Chairman of the Board of Directors at Asya Kart Teknoloji

Hizmetleri A.Ş. Ercüment Güler (Ph. D.) joined Bank Asya in 2011 as the Acting

Chief Executive Officer in charge of Retail Banking. He has also been serving as a

Board Member since March 2012.

7-Mehmet GÖZÜTOK Board MemberMehmet Gözütok holds a Bachelor of Science Degree from Istanbul Ataturk

Training Institute. He began his professional career in 1978 and served as a

Council Member in Maltepe Municipality and Istanbul Metropolitan Municipality

between 1994 and 1999. He is currently serving as the Chairman of the

Board of Directors at Tuna Gayrimenkul Yatırım Ortaklığı, Gözütoklar Yapı İnşaat,

Gözütoklar Orman Ürünleri and Gözütoklar Dış Ticaret, and as the Acting Chairman

of the Board of Directors at Samanyolu Yayın Holding and Samanyolu Yayıncılık,

as well as acting as a Board Member at Özel Sema Sağlık Hizmetleri and Sema

Eğitim Öğretim Hizmetleri.

He has been a Board Member at Bank Asya since 2012.

8-Recep KOÇAK Board MemberRecep Koçak holds a Bachelor of Economics Degree from Istanbul University. He

began his career as an Assistant Specialist at the Insurance Audit Board of the

Prime Ministry Undersecretariat of Treasury in 1993. He lectured Accounting at

the Marmara University School of Banking and Insurance for a while. Mr. Koçak

is currently serving as the Chief Executive Officer and Audit Committee Member

at Işık Sigorta. He is also performing as the Chairman of the Board of Directors

at Türkiye Sigorta ve Reasürans Şirketleri Birliği and as the Member of Board of

Auditors at Tarım Sigortaları Havuz İşletmesi.

Mr. Koçak has been a Board Member at Bank Asya after joining the company in

April 2012.

9-Zafer ERTAN Board MemberDokuz Eylül Üniversitesi Kamu Yönetimi lisans ve Fatih Üniversitesi

Zafer Ertan holds a Bachelor’s Degree in Public Administration from Dokuz Eylül

University and a Master’s Degree in Business Administration. Mr. Ertan began his

career at Bank Asya in 1997, serving at various positions in the Credit Allocations

and Credit Monitoring Departments. He was appointed as the Manager in charge

of Non-Performing Credits in 2008. He then served as the Acting Chief Executive

Officer in charge of Corporate Credit Monitoring, Commercial Credit Monitoring,

Retail Credit Monitoring, Legal Consultancy, and Construction and Real Estate

Departments between 2011 and 2013.

He has been a Board Member since January 2013.

4

7

5

8

1 2 3

6

9

59


Audit Committee

1-Atıf BİLGİN AuditorAtıf Bilgin holds Bachelor’s Degree from the Gazi University Faculty of Education. He has been serving as an

Auditor at Bank Asya since 2006. He is a partner at Tuna Gayrimenkul and Galaksi İnşaat companies and

performs as an Auditor at Nil Yönetim Hizmetleri.

2-İrfan HACIOSMANOĞLU Auditorİrfan Hacıosmanoğlu began his career in 1986. He currently owns several textile companies. Mr.

Hacıosmanoğlu has been an Auditor at Bank Asya since 2009. He is also a partner at Vira Denizcilik Şirketi

and a Board Member at Işık Sigorta.

3-İzzet AKYAR Auditorİzzet Akyar began his career in 1997. He currently owns several textile companies. He is performing as the

Acting Chairman of the Board of Directors at Kaynak Holding and the Chairman of the Board of Directors at

N-T Kitap Kırtasiye, Feta Tekstil, Sürat Bilişim Teknolojileri, Sürat Turizm and Nüans Turizm.

He has been serving as an Auditor at Bank Asya since February 2013.

Audit Committee and Terms of Office

Audit Committee Members shall serve for three years as explained in detail in Article 49 of the Articles

of Association regarding the formation of the Audit Committee and the terms of office of the Audit

Committee Members. Audit Committee Members receive 5,000 Turkish lira gross salary.

Bank Asya Audit Committee Position Date of Appointment

Atif BİLGİN Auditor (2006)

İrfan HACIOSMANOĞLU Auditor (2009)

İzzet AKYAR Auditor (2013)

Changes in the Board of Directors in 2012 • Board Members Salih SARIGÜL ve Ahmet ÇELİK resigned from their posts on January 26, 2012.

Ali ÇELİK and Faruk İLK were appointed to as Board Members to replace them.

• Tacettin NEGİŞ resigned from his post as the Board Member on February 2, 2012.

Talat KATIRCIOĞLU was appointed as Board Member to replace him.

• İsmail Erol İŞBİLEN and Hülagü ÖZCAN resigned from their posts as Audit Committee Members on March 12, 2012.

• Board Members Ercüment Güler (Ph. D.) and Mehmet Uruç Att. were appointed to the Audit Committee.

• Mehmet GÖZÜTOK and Recep KOÇAK were elected as Board Members on the General Assembly on March 31, 2012.

• Behçet AKYAR resigned from his post as the Chairman of the Board of Directors on November 22, 2012. Audit Committee Member

Professor Erhan BİRGİLİ was appointed as the Chairman of the Board of Directors and Board Member to replace him.

• Faruk İLK resigned from his post as Board Member.

Ahmet BEYAZ, Chief Executive Officer of the Bank, was appointed as Managing Member and Board Member to replace him.

Changes in the Board of Directors in 2013• Abdullah ÇELİK resigned from his post as the Chief Executive Officer and Board Member on January 18, 2013. Ahmet BEYAZ,

who was appointed as Managing Member and Board Member on December 6, 2012, replaced him.

• Board Member Zafer ERTAN was appointed as the Acting Chief Executive Officer and Board Member Mustafa Talat KATIRCIOĞLU

was appointed as the Acting Chairman as of January 18, 2013.

Changes in the Audit Committee in 2012• Member Ali AKBULUT resigned from his post as the Audit Committee Member on February 23, 2012 and Mehmet GÖZÜTOK was

appointed as the Auditor.

Changes in the Audit Committee in 2013• İzzet AKYAR was appointed as the Audit Committee Member on January 25, 2013.

1 2 3


Executive Management

61

1-Ahmet BeyazBoard Member and Chief Executive OfficerAhmet Beyaz holds a Bachelor’s Degree in Finance from the Ankara University Faculty of

Political Science and in Financial Law from the Yeditepe University as well as a Master’s

Degree in Business Administration from the University of Illinois. He started his career in

2001. He has previously served as the Bank Examiner and as the Chief Bank Examiner.

Mr. Beyaz joined Bank Asya in 2011 as the Acting Chief Executive Officer in charge of

Accounting, Budget Financial Reporting, and Affiliates. He has been serving as the Chief

Executive Officer and Board Member since January 2013 after holding the positions as

the Acting Chairman of the Board of Directors and Managing Member. Ahmet Beyaz is

a also a Board Member in Asya Emeklilik ve Hayat A.Ş., Işık Sigorta A.Ş, Tamweel Holding

S.A., Nil Yönetim Hizm. Em. Tur. San ve Tic. A.Ş., Tuna GYO A.Ş. and Asya Menkul Değerler

A.Ş.

2-Murat DemirActing Chief Executive OfficerMurat Demir received a Bachelor’s Degree in Economics and Administrative Sciences from

Hacettepe University in 2000. He began his professional career the same year at IsBank.

Mr. Demir held a number of positions at the bank until 2005. He then joined Garanti Bank

as the Portfolio Manager in charge of SMEs. Murat Demir served as the Branch Manager

at Garanti Bank between 2008 and 2011, and took up the sample position at Albaraka

Turk Participation Bank in 2011.

He joined Bank Asya as the Branch Manager in Bursa on August 2011 and has served

as the SME Banking Department Manager since 2012. Mr. Demir was appointed as the

Acting Chief Executive Officer in charge of Commercial and SME Marketing on December

2012.

3-Feyzullah EğriboyunActing Chief Executive OfficerFeyzullah Eğriboyun holds a Bachelor’s Degree in Electrical and Electronic

Engineering as well as in Mathematics from the Boğaziçi University, a Master’s

Degree in Applied Mathematics from the Carnegie Mellon University, and a

Doctorate Degree in Mathematical Finance from the same university. With the

start of his professional career, he performed as a Financial Engineer, Strategist

and Trader in various international participation banks in New York and London

between 1997 and 2011. He lectured finance at the Sabancı University in

2009. Since joining Bank Asya in 2011, Mr. Eğriboyun has been performing his

duties as the Acting Chief Executive Officer in charge of the Treasury, Resource

Development, Investor Relations and Financial Institutions.

4-Ahmet AkarActing Chief Executive OfficerAhmet Akar holds a Bachelor’s Degree in Public Administration from the Ankara

University Faculty of Political Science. He began his professional career in 1995,

serving as an Examiner, Manager and Branch Manager. Mr. Akar joined Bank Asya in

2011 as the Acting Chief Executive Officer in charge of Credit Allocations.

5-Fahrettin SoyluActing Chief Executive OfficerFahrettin Soylu holds a Bachelor’s Degree in Business Administration from the

Ankara University Faculty of Political Science, a Master’s Degree in Business

Administration from the University of Illinois and a Doctorate Degree in Banking

and Insurance from the Marmara University School of Banking and Insurance. After

beginning his professional career in the Undersecretariat of Treasury in 1994, he

served in positions as a Bank Examiner, the Sworn Chief Bank Examiner in the

BRSA, the Acting Director of the Sworn Bank Examiners’ Board, Group President of

Auditors, the Director of the Audit Board-III, the Director of the Risk Management

Bureau, the Director of the Audit Board-II and a member of the Standards

Implementation Group at the Basel Committee on Banking Supervision. Mr. Soylu

has been performing his duties at Bank Asya as the Acting Chief Executive Officer

in charge of Banking Operations since he joined the bank in 2010.

6-Mahmut YalçınActing Chief Executive OfficerMahmut Yalçın holds a Bachelor’s Degree in Business Administration from the

Ankara University Faculty of Political Science and a Master’s Degree in Human

Resources Management from Yıldız Technical University. He began his professional

career in 1999 and served in positions in the banking industry as an Examiner,

Auditor and Manager before joining Bank Asya in 2007. Mr. Yalçın previously

worked as the Director of the Internal Control Center in the bank. He is currently

performing his duties as the Acting Chief Executive Officer in charge of Financial

Affairs.

7-Talha Salih YaylaActing Chief Executive OfficerTalha Salih Yayla holds a Bachelor’s Degree in Law from the Ankara University and

a Master’s Degree in Business Law from the Bilgi University.

He began his professional career in the Non-Performing Credits Department at

IsBank in 2000.

Mr. Yayla served at different capacities at the Legal Consultancy Department of

the same bank as well as taking an active role in internal training processes. He

joined Bank Asya as a Legal Consultant in charge of international affairs in 2011.

Talha Salih Yayla is also a Board Member at Tamweel Africa Holding SA, Bank of

Moritania and United Bank of Albania, in addition to performing his duties as the

Acting Chief Executive Officer in charge of Corporate Credit Monitoring, Commercial

Credit Monitoring, Retail Credit Monitoring and Legal Consultancy Departments.

8-Hakan Fatih BüyükadalıActing Chief Executive OfficerHakan Fatih Büyükadalı received a Bachelor’s Degree in Business Administration

from the Istanbul University in 1997. He began his professional career as an

assistant specialist at the Treasury Department at IsBank in 1998. He served as

an Examiner at the Inspection Committee Directorate of the same bank between

1998 and 2007; as an Assistant Manager at the Human Resources Department

between 2007 and 2012 before joining Bank Asya as the Head of the Inspection

Committee in 2012. Mr. Büyükadalı has been performing his duties as the Acting

Chief Executive Officer in charge of Human Resource since December 2012.

9-Ali TuğluActing Chief Executive OfficerAli Tuğlu holds a Bachelor’s Degree in Computer Engineering from the Istanbul

Technical University and a Master’s Degree in Computer Science from the Virginia

Tech University. After beginning his professional career in 1993, he served as a

Consultant and a Manager in various international organizations in the US, Turkey,

Middle East and Africa. After working as a Segment Management Consultant

for the Middle East, Africa and the Mediterranean regions at Hewlett-Packard, he

joined Bank Asya as the Acting Chief Executive Officer in charge of Information

Technologies in 2008.

10-Abdurrahman KöseCoordinatorAbdurrahman Köse holds a Bachelor’s Degree in International Relations from the

Ankara University and a Master’s Degree in Law from the Yeditepe University.

After beginning his professional career in 2000, he served as a Sworn Bank

Examiner at the Banking Regulation and Supervision Board. He performed as an

executive in the banking industry abroad between 2007 and 2011. Mr. Köse

joined Bank Asya as a Coordinator in 2011 and currently holds this position in the

Retail Banking Group.

11-Murat AydoğanSupport Services GroupMurat Aydoğan holds a Bachelor’s Degree in Economics from Anadolu University

School of Economics. He began his professional career as the Assistant Secretary

General in the Business Life Solidarity Association (ISHAD) in 1993. He then took

several management roles at Işık Sigorta A.Ş. until 1996. Mr. Aydoğan joined Bank

Asya as the Purchasing Manager in 2012 and he has been serving as the Group

Director of Support Services since 2013.

1 2 3 4

5 6 7 8

9 10 11


63

Organization Chart

Audit Coordinator

Acting Chief Executive Officer Acting Chief Executive Officer for Commercial Banking

Murat Demir

Acting Chief Executive Officer Acting Chief Executive Officer for

Operations Group Fahrettin Soylu


IT GroupAli Tuğlu


Financial Affairs GroupMahmut Yalçın

Acting Chief Executive Of-ficer Acting Chief Executive Officer for Risk Monitoring

and Legal Affairs Talha Salih Yayla

Acting Chief Executive Officer Acting Chief

Executive Officer for the Credit Appropriation Group

Ahmet Akar

Acting Chief Executive OfficerActing Chief Executive Officer

for the Treasury Group Feyzullah Eğriboyun

Acting Chief Executive Officer Acting Chief Executive Officer

for the HR Group Hakan Fatih Büyükadalı

Retail Banking Coordinator

Abdurrahman Köse

Support Services Group Director

Murat Aydoğan

Board of Directors Transactions Director

Chief Executive Officer

Risk Management Director

Mehmet KamilTümer

Corporate Marketing Director

Atilla M. Topçu

Banking Services Director

J. Başak Ünal

System Development Director

Mustafa Saraç

Budget and Reporting Director

Kamil Yılmaz

Commercial Credits Monitoring Director 1

Şeref Bacak

Commercial Credit Appropriation Director

Murat DeligözTreasury Director

Cenk Yavuz

HR Director Hakan Aggez

Retail Product and Sales Management Director

Gökhan ÇevikerPurchasing

Director

Legislation and Compliance Director

Fatih Şirin

Administrative Affairs Director

Ömer Fuat Özçelebi

Construction Real Estate Director

Hüseyin Sevil

Corporate Communication

Card Payment Systems Marketing Director

Call CenterDirector

Ahmet Gez

Digital Banking Director

Nevin Kuşkaya

Innovation and Business Development Director

Reşit Altun

Customer RelationsDirector

Nazmi I. Yazıcı

Training and Organization Quality Director Recep Tekçam

Financial Organizations Director

İbrahim Öğüdücü

Resource Development Director

Telat Altun

SME Credits Director

Financial Analysis and Intelligence DirectorCevdet Korkmaz

Corporate Credits Appropriation Director

Özcan Özverim

Project Financing Director

Muhammet Ercüment Solmaz

Retail Credits Appropriation Director

Hasan A. Küçük

Regional Appropriation Director

Investor Relations Director

Commercial Credits Monitoring Director 2

Mehmet Dai

Corporate Credits Monitoring

Kamil Cengiz

Retail Credits Monitoring Director

Sinan Demirkesen

Legal Consultant Ahmet Niyazi

Özaltın

Proceedings Director Yusuf Pınar

Accounting DirectorFuat Akgün

Director of Affiliates Mehmet Arslan

Software Development Director

Bülent Güngör

System Hardware Director

Bekir Başkurt

Information Technology Project Management

Director Mehmet Ergun

Aydemir

Card Technologies Director

Sami Özen

Foreign Transactions Director

Olcay Çakır

Credit Operations Director

Adil Z. Şahin

Cash Management Director

İsrafil Aydın

Payment Systems Operations Director Mustafa Ölmez

Commercial Marketing Director

Emre Türker

SME Banking Marketing Director

Burak Alkaç

Regional Marketing Müdürlükleri

Inspection Committee Director

Eken Berber

Internal Control Center Director

Board of Directors

62

65


Committees

Audit Committee

Duty: Name and Last Name: Main Duty:Member Ercüment GÜLER (Ph. D.) Board Member - Audit CoordinatorMember Mehmet URUÇ Att. Board Member - Audit Coordinator

Audit Committee presents an “Annual Report of the Auditing Committee” to the Board of Directors each term, providing information about the results of the audit and risk managements so as to establish an internal control environment and a risk management system throughout the bank. Audit Committee convened 35 times in 2012. -Audit Committee has gathered with the officials of the independent auditing institution four times for the purpose of assessing independent audit activities.

Credit Committee

Duty: Name and Last Name: Main Duty:Member Ahmet BEYAZ Chief Executive OfficerMember Recep KOÇAK Board MemberMember Zafer ERTAN Board Member

Reserve Member Ercüment GÜLER (Ph. D.) Board Member - Audit CoordinatorReserve Member Mehmet URUÇ Att. Board Member - Audit Coordinator

Credit Committee convenes regularly once a week to evaluate retail, commercial and corporate credit proposals in the bank. It may also convene upon call from the Chairman if deemed necessary. Credit Committee is authorized to issue or deny credits that fall into its area of authority according to the regulations of the Banking Law.- It submits the proposals that fall outside its authority for the approval of the Board of Directors.

Asset and Liability Management Committee

Duty: Name and Last Name: Main Duty:Chairman Ahmet Beyaz Chief Executive OfficerMember Ahmet AKAR Acting Chief Executive Officer, Member Member Ali TUĞLU Acting Chief Executive Officer, Member Member Fahrettin SOYLU Acting Chief Executive Officer, Member Member Feyzullah EĞRİBOYUN Acting Chief Executive Officer, Member Member Hakan Fatih BÜYÜKADALI Acting Chief Executive Officer, Member Member Mahmut YALÇIN Acting Chief Executive Officer, Member Member Murat DEMİR Acting Chief Executive Officer, Member Member Talha Salih YAYLA Acting Chief Executive Officer, Member Member Mehmet Kamil TÜMER Risk Management Director

Asset and Liability Management Committee convenes every week under the chairmanship of the Chief Executive Officer with participation from Acting Chief Executive Officers and Unit Directors who are involved in activities that can have an effect on the balance sheet. Meeting agenda includes assess-ment of the bank’s balance sheet, activities of the business branches, general economic data, current political and economic developments, as well as determining weekly strategies.

Corporate Governance Committee

Duty: Name and Last Name: Main Duty:Chairman Professor Erhan BİRGİLİ Chairman of the Board of DirectorsMember Recep KOÇAK Board MemberMember Mahmut YALÇIN Acting Chief Executive OfficerMember Fahrettin SOYLU Acting Chief Executive OfficerMember Mehmet Kamil TÜMER Risk Management Director

Corporate Governance Committee reports to the Board of Directors. It convenes at least three times a year to monitor the bank’s compliance to corporate governance principles, to carry out efforts so as to bring improvements and to present recommendations to the Board of Directors.

Disciplinary Board

Duty: Name and Last Name: Main Duty:Chairman Ahmet BEYAZ Chief Executive OfficerMember Hakan Fatih BÜYÜKADALI Acting Chief Executive OfficerMember Yusuf PINAR Legal Advisor Member Hakan AĞGEZ HR DirectorReserve Member(In the absence of an Acting Chief Executive Officer in charge of Talha Salih Yayla Acting Chief Executive Officer

Disciplinary Board is responsible for determining whether transactions and activities that require disciplinary action as per the internal legislation of the bank and the disciplinary regulation have been committed, and if so, establishing who the offenders are, what is the level of offense and what is the possible damage. Disciplinary Board convenes under the chairmanship of the Chief Executive Officer with participation from the related Directors to pass resolutions on the agenda items.

Information Technologies Strategy and Steering Committee

Duty: Name and Last Name: Main Duty:Chairman Ahmet BEYAZ Chief Executive OfficerMember Ali TUĞLU Acting Chief Executive OfficerMember Mustafa SARAÇ System Development Director Member Bülent GÜNGÖR System Development Director Member Bekir BAŞKURT System Hardware Director Member Mehmet Ergün AYDEMİR Information Technology Project Management Director Member Sami ÖZEN Card Technologies Director

The committee develops IT strategies to help run the bank’s related activities in a disciplined manner. It also takes actions to develop, design, monitor and steer tactical plans for IT feats that require investment. It monitors unit targets and annual activity plans for the IT Department, as well as making recommendations to related departments about ways to improve IT proceedings, processes, systems, applications and systems; and also about meeting the targets and requirements in regards to risks, resource allocation, organization and relationships with business units.

Information Security Management Committee

Duty: Name and Last Name: Main Duty:Member Fahrettin SOYLU Acting Chief Executive OfficerMember Ali TUĞLU Acting Chief Executive OfficerMember Mahmut YALÇIN Acting Chief Executive OfficerMember Dr. Ender ŞAHİNASLAN IT Risk Management, Compliance and Information Security Director

It establishes the policies, methods, roles and responsibilities regarding information security of the bank, in addition to reviewing them by convening in regular intervals. It also performs the training, work and control activities in order to secure these requirements. Providing business and management support in establishing information security is among the other duties of the committee. This committee is endowed with authority to take any kind of decision on behalf of the Bank for effective and productive management of information security.

Information Technologies Risk Management Committee

Duty: Name and Last Name: Main Duty:Chairman Ali TUĞLU Acting Chief Executive OfficerMember Mehmet Kamil TÜMER Risk Management DirectorMember Mehmet Ergün AYDEMİR Information Technology Project Management DirectorMember Bekir BAŞKURT System Hardware DirectorMember Mustafa SARAÇ System Hardware DirectorMember Sami ÖZEN Card Technologies DirectorMember Bülent GÜNGÖR System Development DirectorMember Dr. Ender ŞAHİNASLAN IT Risk Management, Compliance and Information Security Service Director

The committee is responsible for convening at regular intervals to review and assess IT risks, which are considered to be a part of the operational risk of the bank. It also passes resolutions regarding risks that require the approval and opinion of the management.

67


Committees

Project Financing Credit Committee

Duty: Name and Last Name: Main Duty:Chairman Ahmet BEYAZ Chief Executive OfficerVice Chairman Ahmet AKAR Deputy General ManagerMember Muhammet Ercüment SOLMAZ Project Financing DirectorMember Emre TÜRKER Commercial Marketing DirectorMember Atilla M TOPÇU Corporate Marketing DirectorMember Murat DELİGÖZ Commercial Credits Appropriation DirectorMember Özcan ÖZVERİM Corporate Credits Appropriation Director

Reserve Members

Duty: Name and Last Name: Main Duty:Reserve Member Fatih AKGÜN Project Financing Department ManagerReserve Member Çağlar ÖZDAMAR Project Financing Department Manager

Note: Reserve Members participate in meetings when the Project Financing Manager is not present.

Project Financing Credit Committee assesses project credits and reports to the Board of Directors. It convenes regularly every week during credit appropri-

ation process with the powers and authority of the General Management Credit Committee (GMCC).

Remuneration Committee

Duty: Name and Last Name: Main Duty:Member Ali ÇELİK Board MemberMember Mehmet GÖZÜTOK Board Member

Remuneration Committee reports to the Board of Directors. It was established according to the BRSA Communiqué on the Corporate Governance Princip-les of Banks to monitor and supervise remuneration procedures on behalf of the Board of Directors.

Expense Management Committee

Duty: Name and Last Name: Main Duty:Chairman Mahmut YALÇIN Acting Chief Executive OfficerMember Murat AYDOĞAN Support Services Group DirectorMember Kamil YILMAZ Budget and Reporting DirectorMember Fuat AKGÜN Accounting DirectorMember Ümit ESKİ Expense Management Service Director

Expense Management Committee coordinates effective management activities of the bank’s expenses. It convenes regularly every week to pass resolu-

tions regarding its activities, pre-approve purchase of goods and services within the limits of its authority, and when necessary, invite executives to the

committee to perform pre-purchase benefit and cost analysis.

Compliance Committee

Duty: Name and Last Name: Main Position:Chairman Ahmet BEYAZ Chief Executive Officer Member Hasan Ayhan KÜÇÜK Unit ManagerMember İbrahim ÖĞÜDÜCÜ Unit Manager

Bankada yatırım fonlarının çalışma prensiplerimiz ile uyumu konusunda gerekli mutabakatını sağlamaktır. Business Continuity Steering Committee

Duty: Name and Last Name: Main Position:Chairman Abdurrahman Köse CoordinatorMember Feyzullah Eğriboyun Acting Chief Executive OfficerMember Ali Tuğlu Acting Chief Executive OfficerMember Fahrettin Soylu Acting Chief Executive OfficerMember Mehmet Kamil Tümer Risk Management DirectorMember Ömer Fuat Özçelebi Administrative Affairs DirectorMember Ömer Şanlı IT Service Continuity Coordinator

Member Serdal Mutlu Business Continuity Director

Business Continuity Steering Committee convenes once a year in June to assess the plans and review the outcome of implementation, control

and training activities as well as other developments within the scope of business continuity system. It also takes necessary decisions so as to

initiate corrective and preventive measures in the required areas.

Higher Advisory Committee

Duty: Name and Last Name: Main Position:Chairman Prof. Dr. Hayrettin KARAMAN Higher Advisory Committee MemberMember Prof. Dr. Hamdi DÖNDÜREN Higher Advisory Committee MemberMember Prof. Dr. Hamza AKTAN Higher Advisory Committee Member

Member Doç. Dr. İsak Emin AKTEPE Higher Advisory Committee Member and Reporter

Committee members are responsible for actively examining and advising on issues that are presented to them. The committee makes recom-

mendations to ensure that transactions and operations of the Bank comply with Islamic provisions and principles. It gives approval to docu-

ments when Higher Advisory Committee consent is required so as to safeguard conformity of all Bank products and services to these principles.

The Banks is obligated to obey the Higher Advisory Committee decisions, as well as taking all necessary preventive measures. It is also respon-

sible for obtaining approval from the Committee in matters that requires its permission.

68

69

Bank Asya Annual Report 2012Bank Asya Annual Report 201268

Committees Summary Report of the Board of Directors

General Management Credit Committee

Members:

Duty: Name and Last Name: Main Duty:Chairman Ahmet BEYAZ Chief Executive OfficerMember Ahmet AKAR Acting Chief Executive Officer in charge of AppropriationMember Murat DEMİR Acting Chief Executive Officer in charge of Commercial MarketingMember Özcan ÖZVERİM Unit Manager Member Murat DELİGÖZ Unit Manager Member Atilla M TOPCU Unit Manager Member Emre TÜRKER Unit Manager

Credit Committee reports to the Board of Directors. It convenes regularly once a week to evaluate proposals made to the bank, including the ones related to commercial and corporate credits- Credit Committee is authorized to issue or deny credits that fall into its area of authority according to the regulations of the Banking Law. It submits the proposals that fall outside its authority for the approval of the Board of Directors.

General Management Financial Organizations Committee

Members:

Duty: Name and Last Name: Main Duty:Chairman Ahmet BEYAZ Chief Executive OfficerMember Ahmet AKAR Acting Chief Executive Officer in charge of AppropriationMember Feyzullah EĞRİBOYUN Acting Chief Executive Officer in charge of the Treasury GroupMember Özcan ÖZVERİM Unit ManagerMember İbrahim ÖĞÜDÜCÜ Unit Manager

Credit Committee and General Management Financial Organizations Committee, which reports to the Board of Directors, convene regularly once a week to evaluate proposals made in favor of the bank. These committees are authorized to issue or deny credits that fall into their area of authority according to the Banking Law, regulations and the policies of the Bank. It submits the proposals that fall outside its authority for the approval of the Board of Directors.


Even though four years have passed after the outbreak of the global economic crisis of 2008, it is evident that the world economy still lacks stability and the crisis remains persistent in varying phases. Steps taken by the major central banks in Europe failed to dispel risks regarding the global economy despite improving expectations slightly.

It is extremely gratifying to note that Turkish economy, and the banking industry in particular, display a sound and stable outlook in the face of rampant uncertainty in global economy. As a prominent participation bank in Turkey’s banking industry, Bank Asya set its goals on healthy growth, customer satisfaction and supporting the real economy in 2012.

Bank Asya pursues to offer the best service and price for the financial needs of customers by placing great emphasis on asset quality and sustainable profitability in 250 domestic and one overseas branches as well as one representation office.

Bank Asya boasts a 190 million Turkish lira profit according to the summary financial statements for 2012. The bank closed the year with its asset size soaring to over 21.39 billion Turkish lira at a 24 percent increase year-on-year. Resources that have been acquired by extending the collected funds base were appropriated as credits to corporate, commercial, business and retail banking customers.

Cash credits went up by 21 percent to reach 16.3 billion Turkish lira, making a great impact on growth in the balance sheets. While collected funds, the most critical item in liabilities, swelled to 15.74 billion Turkish lira with a 27 percent rise.

These development summarize the following indicators for Bank Asya in 2012.

• Asset size rose to 21.390 billion Turkish lira with a 24 percent increase.

• Cash credits climbed to 16.307 million Turkish lira with a 21 percent rise.

• Collected Funds increased by 27 percent to reach 15.742 billion Turkish lira.

• Shareholders’ equity surged to 2.349 billion Turkish lira with a 10 percent improvement.

• Net Profits advanced to 190 million Turkish lira.

• Capital adequacy ratio realized at 13.60 percent.

Operating results and financial statements of Bank Asya for the January 1, 2012 and December 31, 2012 period have been submitted for your information and approval.

Best Regards,

Asya Katılım Bankası A.Ş. Board of Directors

71


Human Resources

Bank Asya performs operations with the

understanding that its persevering and devoted

personnel is the most significant element of

success on the way to accomplishing the Bank’s

mission and vision since its inception in 1996

with the purpose of becoming a prominent

organization in the industry.

The Bank is dedicated to providing services to

its customers with 5,064 committed personnel

in 251 domestic and international branches, of

which 50 were opened in 2012.

Bank Asya realizes that sustainable growth and

profitability for any organization in the service

industry is possible only with a highly qualified

work force. Accordingly, the Bank continuously

develops new projects to acquire more personnel

adept at their jobs.

Strategic Partnership and Organization

In an effort to become a global institution,

Bank Asya transformed its HR Department

into a strategic partnership and made it a more

manageable organization under an improved

structure with the direction and support of the

Bank’s executive management. This type of

management style was implemented as a way

to advance the effectiveness of the department

in functioning like a consultant and a mentor.

Thus, HR Department was bestowed a more

comprehensive role to amplify its effectiveness

during the growth process.

The department has been divided into different

units according to their functions in order to

manage HR processes more adequately and

to provide better services to the personnel.

Recruitment and Career Unit, Performance

Management Group, Salary Management Group

and Personnel Affairs Management Group

offer services to all Bank personnel as well as

providing operational support and mentoring to

its affiliates.

Bank Asya employs a total of 5,064 personnel

with 3,367 male and 1,697 female workers as

of the end of 2012.

Recruitment

HR and Training Department strives to

accomplish great feats together with Bank Asya

employees by creating a perception “Us” and a

sense of belonging within the organization.

The objective of the recruitment process is to

ensure that the Bank acquires personnel, who

can improve themselves and keep up with

changes, and who are open to learning, as well

as being adept at teamwork with a high sense

of responsibility to represent the vision and

mission of the Bank.

The Bank recruits inexperienced candidates,

deputy examiners, assistant internal auditors,

authorized assistants in marketing and

operations and bank tellers as well as customer

representatives in call centers.

The Bank puts inexperienced candidates through

an evaluation process. During the recruitment

process, personnel are assessed in terms of

their education, experience and qualifications

while they prove that they can adapt to the

requirements of the position and the Bank’s

business culture. The Bank offers equal career

opportunities and high job satisfaction for

personnel after completing this process.

The Bank initially announces job openings

Bank Asya is steadfast in offering the best service to its customers through 251 domestic and foreign branches in 2013 with the appreciation that valuable human resources is the most crucial element of high customer satisfaction.

internally to provide opportunities to its

own employees first. Even though the Bank

takes pains to accommodate the demands

of its personnel in its recruitment policies,

it also seizes upon the chance to work

with other people if it believes they can

make a contribution to the Bank with their

experience and qualifications.

Recruitment of Foreign Personnel

Bank Asya makes an impact on the Turkish

economy with domestic as well as foreign

investments.

Bank Asya opens representation offices

and goes into international partnerships and

ventures with other affiliates to strengthen

its position in these areas.

It employs native or foreign personnel

according to the requirements of the position

at the affiliates.

The Bank uses a variety of resources when

recruiting foreign personnel and especially

prefers to work with foreigners who have

been educated in Turkey with knowledge of

the local environment and who can represent

the Bank in the best possible way. Bank

Asya organizes career days at universities or

contacts foreigners directly and obtains work

permits to have them work in the Bank.

There are currently 16 foreign nationals

working at Bank Asya.

The Bank plans to increase this figure in the

future according to its strategies and needs.

Career Management

Career paths leading even the highest

positions are wide open to all employees

in Bank Asya. Promotions are primarily

carried out consistent with high personal

performance and the contribution this effort

makes to the Bank. In order for the promotion

to be completed, the position needs to be

vacant. In addition, candidates for promotion

are required to have been accomplished and

have completed the minimum tenure at their

present positions, as well as succeeding

in any examination, training, evaluation,

project or interviews. Accordingly, the Bank

appointed a number of managers within the

organization throughout 2012.

HR Support for the Affiliates

HR and Training Directorate of Bank Asya

provides operational and mentoring support

regarding HR processes to affiliates like Asya

Emeklilik A.Ş., Asya Menkul Değerler A.Ş. and

Tuna Gayrimenkul Yatırım Ortaklığı A.Ş.

Performance Management

Adopting the IKON Management by

Objectives System

The Bank began the implementation of the

IKON Management by Objectives System

following its pilot application in the previous

year.

The system measures individual

achievements of all sales personnel in

branches based on objective data.

As in the previous years, Bank Asya carried

out Competency Based Performance

Evaluations for all personnel to test basic,

management and functional competences

through the IKON Performance Management

System. Competency Based Performance

Evaluations

Bank Asya implements a competency based

management system that is built according

to targets. The Bank especially monitors

individual performances of the marketing

personnel in the branches in regards to target

realization. It then combines target based and

competency based results at the end of the

period. Bank Asya sets product and segment

based targets, and takes pains to ensure

that these objectives for the personnel

are reasonable, attainable and realistic. All

competences have been determined for each

particular position in the Bank. Competences

are divided into three groups of basic,

functional and management.

Data obtained from the performance

evaluation system is used for salary

arrangements.

The basis of the performance based salary

management system is established by

putting together the data that is obtained

according to the five-step scaling system

with the salary matrix that is created within

the determined budget. Performance based

reimbursements are made annually.

Operations Personnel and Tellers in

Branches Performance Project

The Bank is designing an application to

measure the performances of Operational

Personnel and Tellers in the branches by

using the IKON Performance System. A

measurement system will be built for the

Tellers in the first phase of the project which

is being handled with participation from

Operational Units.

In the second phase, another system will be

designed for the Operational Personnel of the

branch. Work for the first phase is planned for

completion by January 2013 following test

runs.

CHART for the NUMBER of PERSONNEL and BRANCHES

2011 2012 Difference %Number of Branches 200 251 26%

Number of Personnel 4.542 5.064 11%

CHART for the NUMBER of PERSONNEL ACCORDING TO EDUCATIONAL STATUS

Educational Status Number of Personnel Ratio (%)Master’s Degree or Doctorate 362 7,15Bachelor’s Degree 3.435 67,83Associate’s Degree 634 12,52High School 617 12,18Primary School 16 0,32Total 5.064 100

73


Training Business Volume of the Risk Group the Bank Belongs to, Unresolved Credits and Funds Collected at the end of the Operating Cycle, Operating Income and Expenses


Training policy of Bank Asya aims for the

personnel to perform their duties and

responsibilities effectively and productively by

allowing them to develop professionally. The

other objective of the policy is to evoke their

internal motivation and sustain it.

In addition to the training programs determined

by an annual needs analysis, the bank also

conducts activities to help improve the quality

of service and productivity through training

programs that support HR functions like

reassignment of jobs, career planning and

personnel satisfaction.

According to these objectives, Bank Asya

carried out in-class and on-the-job trainings, as

well as orientations and e-learning programs in

2012. The bank provided training programs in

45 different subjects with 95 in-house trainers

so as to ensure compliance of the training

content with the Bank’s practices, to expand

corporate know-how and culture, and to reduce

costs.

In-class trainings were supported with 25

e-learning programs at 6.8 hours of online

training per each individual.

In order to advance the level of education in

the organization, Bank Asya provided support

for MBA education for 45 personnel upon

their requests. In keeping with its objectives

Bank Asya places great emphasis on vocational development of its personnel. Accordingly, the Bank has provided trainings in 45 different subjects with 25 additional e-learning programs in 2012.

Information Regarding Training Activities in 2012

CRITERION January 1 - December 31, 2012

TOTAL

Number of Groups 792

Number of Participants 4.085

Total Hours of Training 14.776

Total Days of Training 2.111

Number of Personnel x Hours of Training 203.733

Average Day per Person 5,8

Average e-Learning Hour per Person 6,8

Weekday Hour (%) 61

Weekend Hour (%) 39

Outside Trainer (%) 39

In-House Trainer (%) 61

Current Period:

Cash Non-Cash Cash Non-Cash Cash Non-Cash

Credits and Other Receivables (*)

Beginning-of-Period Balance 107.795 16.806 - - 206.072 164.645

End-of-Period Balance 179.214 16.414 - - 207.200 61.246

Dividend and Commission Income 29.970 239 - - 47.911 733

Previous Period:

Cash Non-Cash Cash Non-Cash Cash Non-Cash

Credits and Other Receivables (*)

Beginning-of-Period Balance 77.494 8.921 - - 172.548 42.782

End-of-Period Balance 107.795 16.806 - - 206.072 164.645

Dividend and Commission Income 15.438 - - - 35.797 -

Information Regarding the Collected Funds that Belong to the Bank’s Risk Group:

Personal Current and

Participation Accounts Period Current Period Current Period Current Period

Beginning of the Period 113.796 - 127.638

End of the Period 140.501 - 132.296

Dividend Expense 10.258 - 7.984

Affiliates, Subsidiaries and Partnerships that are Jointly Controlled

Risk Group the Bank Belongs to

Direct and Indirect Partnerships of the Bank

Real and Legal Persons in the Risk Group









(*) Includes Financial Lease Receivables figure of 678,000 Turkish lira in the December 31, 2012 period (December 31, 2011: 3.4 million Turkish lira).

(*) Includes Financial Lease Receivables figure of 3.4 million Turkish lira in the December 31, 2011 period (December 31, 2010: 153,000 Turkish lira).

to growth in overseas locations, the bank

arranged language classes for 82 personnel

to increase the number of employees who can

speak a foreign language.

75


Corporate Governance Principles Compliance Report

Asya Katılım Bankası A.Ş. executes the

organizations, processes and principles

regarding the Corporate Governance as per the

requirements of the Banking Law it is subject to

in particular and also according to other related

legislation. The Bank also discloses to the public,

with prejudice to the provisions of the Banking

Law, the rules and practices that determine the

relationship between the Board of Directors

of the Bank, shareholders and stakeholders in

keeping with its social responsibility approach.

Asya Katılım Bankası A.Ş. has embraced the

equality, transparency, accountability and

responsibility concepts of the Corporate

Governance Principles published by the CMB, and

it aims to follow these principles to the best of its

ability while carrying out the Bank’s activities.

In keeping with this objective, Bank Asya entered

into the Corporate Governance Index of the ISE

as of July 2, 2008. SAHA Kurumsal Yönetim ve

Kredi Derecelendirme Hizmetleri A.Ş. increased the

Bank’s corporate governance rating score to 8.61

(86.14%) from 8.26 (82.56) on its July 2, 2012

report that was provided as a result of the rating

proceedings performed according to

As a result of the rating process in 2012, final

rating score was established as 8.61 after

weighing the four sub-categories separately

according to the Board resolutions of the CMB

regarding the matter. Rating score distribution

according to the sub-categories is as follows:

Shareholders 73,59

Disclosure and Transparency 96,07

Stakeholders 97,30

Board of Directors 78,09

Updated note: The emphasis the Bank places on

the Corporate Governance Principles is evident

with its determination to implement them as

a dynamic and continuous process as well as

with all the improvements achieved by the

company within the time that has passed from

the issuance of the first rating score. The factor

factor behind the increase in the rating score was

the fact that the Board of Directors created a

Corporate Governance Committee and made it

operational. Corporate Governance Committee of

the Bank continues with its efforts to improve

the company’s practices in this regard. Until today,

there has not been a conflict of interest among

the stakeholders in regards to principles, which

have not been implemented as yet with the

exclusion of the ones that are currently in effect.

Corporate Governance Rating Reports of the

Bank published by SAHA Kurumsal Yönetim ve

Kredi Derecelendirme Hizmetleri A.Ş. are provided

on the corporate website at www.bankasya.com.

tr . Best Regards,

Professor Erhan Birgili- Chairman of the Board of

Directors, Recep KOÇAK- Board Member, Mahmut

YALÇIN- Acting Chief Executive Officer, Fahrettin

SOYLU- Acting Chief Executive Officer, Mehmet

Kamil TÜMER- Risk Management Director

Shareholders and Investor Relations

Department

Investor Relations Department, which reports

to the Board of Directors, and the Shareholders

Relations Department, which is associated with

the Accounting and Affiliates Department, carry

out investor relations and other related activities

according to public disclosure and corporate

governance principles.

Investor Relations Department

In keeping with the Bank’s Disclosure Policy,

Investor Relations Department acts as a bridge

between the Board of Directors and the investors

so as to ensure that the Bank’s growth model

and future objectives are clearly understood.

The Department strives to improve the Bank’s

value by increasing awareness and transparency

regarding the company in the financial circles and

in other areas.

With the purpose of achieving this main objective,

Investor Relations Department convenes with the

current and potential investors of the Bank by

participating in national and international Investor

Conferences, and by organizing roadshows;

holds meetings and stays in communication with

Brokerage House Officials and Bank Analysts;

at the end of each quarter, prepares investor

presentations containing information about the

growth of the Bank to disclose them on the

corporate website for all the investors; arranges

teleconferences; and answers verbal or written

information requests regarding the Bank with

the exclusion of undisclosed information about

the Bank, and information that is considered

confidential or a trade secret.

Contact information of the personnel in the

Investor Relations Department is as follows.

Cengiz Önder

Investor Relations / Director

Tel: 0216 633 59 60

Email: [email protected]

Burak Salman


Tel: 0216 633 59 61


Rüştü Altılı


Tel: 0216 633 51 42


Nevzat Mutlu


Tel: 0216 633 59 63


Shareholder Relations Unit

Main duties of this unit are as follows;

• To ensure that shareholder records of are

properly and safely kept, and updated.

• To comply with written information requests

from shareholders, with the exception of

company information that has not been

disclosed to the public and that is considered

to be confidential and/or a trade secret.

• To ensure that the General Assembly is held

in compliance with the applicable laws, the

Articles of Association and internal regulations

• To prepare the documents that may

be useful for shareholders in the General

Assembly Meeting.

• To keep a record of the voting results and

provide the reports to the shareholders.

• To safeguard and supervise all matters

regarding public disclosure, including the

legislation and the Bank’s disclosure policy.

• To create a special area on the corporate

website and to keep it updated in order to

provide information to shareholders about

important developments regarding matters

like the Bank’s partnership arrangement, Board

Members, Annual Report or capital structure;

or regarding matters that are closely related to

the shareholders like quarterly profit and loss

statements, information about the branches

and the personnel, or the General Assembly

resolutions.

Related departments provide reports to

relevant authorities regarding their activities

within the period by using the established

channels. Contact information of the personnel

in the Shareholder Relations Department is as

follows.

Fuat Akgün

Shareholder Relations Unit / Director

Tel: 0216 633 54 60


Özlem Coşkun

Shareholder Relations Unit / Supervisor

Tel: 0216 633 54 57


Alpay Güneralp

Shareholder Relations Unit / Authorized Officer

Tel: 0216 633 54 58


Exercising Shareholders’ Right to Obtain

Information

Bank Asya discloses information to the

shareholders and the public in Turkish and

English simultaneously in the Investor Relations

section on the corporate website at www.

bankasya.com.tr. The website contains

Bank Asya’s stock information, corporate

information for publicity purposes, periodical

financial statements and annual reports, and

presentations as well as information about the

corporate management structure. The Bank

provides “material disclosures” to announce

information that is stipulated by the regulations

in keeping with the Banking Law, Turkish

Commercial Code, Capital Markets Law and the

provisions of the applicable legislation. Related

departments in the Bank answer all questions

from the shareholders under the principle of

equality with the exception of questions that

are considered to be trade secrets.

Investor Relations Department held one-on-one

or group meetings to make presentations to an

average of six current or potential investors and

bank analysts per month in 2012.

The Department also had individual meetings

with a total of 152 investors in 17 foreign

investors conferences, of which in 10 were

domestic and international roadshows and

seven were conferences, as well as in 49

conferences, 45 roadshows and 58 investor/

analyst gatherings.

Information on the General Assembly

General Assembly Meeting announcements

shall be made in the Trade Registry Gazette

and the press by including the Agenda items

and on the sample proxy letter. Invitations

shall also be made by sending letters to the

shareholders.

The Bank held its Ordinary General Assembly

Meeting in the operation cycle at March 31,

2012. Shareholders exercised their rights to

ask questions in the General Assembly and all

of their questions were answered.

Shareholders did not bring forward any

proposals to be added to the Agenda. Voting

by proxy shall be permitted according to the

Bank’s Articles of Association.

Voting Rights and Minority Rights

In the General Assembly, shareholders shall be

entitled to cast one vote for each share they

own in the value of 1 Turkish lira.

Shareholders can vote themselves or by

proxy. Voting shall be done by raising hands.

Nevertheless, secret ballot shall be carried

out if it is requested by one-twentieth of the

votes represented in the General Assembly.

Matters regarding proxy voting shall be

regulated according to applicable legislation.

Article 24 of the Bank’s Articles of Association

covers

77



Dividend Policy and TimingArticles of Association, which is also available

on the corporate website, provides detailed

information regarding the principles of dividend

distribution at Asya Katılım Bankası A.Ş., and

practices regarding the Dividend Distribution

Policy are carried out according to the Articles

of Association. Dividend distribution shall be

performed within the legal timelines stipulated by

the legislation.

General Assembly Agenda includes dividend

distribution proposal from the Board of Directors.

The General Assembly shall pass a resolution on

the proposal after submitting for the review of

the shareholders. Article 54 of the Bank’s Articles

of Association covers this subject.

Transfer of Shares


explains transfer of shares as follows:

Transfer of Group (A) shares, which are all bearer

shares, shall be subject to the approval of the

Board of Directors. The Board of Directors shall

be authorized to refuse the transfer of shares

entirely upon its own decision and without having

to show any reason, or to accept and approve it

under the shape and conditions it sees fit.

Transfer of shares shall inure to the benefit of

the company after being recorded on the stock

ledger.Group (B) shares, which are all bearer shares,

can be transferred according to the regulations of

the Turkish Commercial Code, the Capital Markets

Law and the Central Registry Agency without

requiring the approval of the Board of Directors.

In the case that transfer of shares require the

approval of the BRSA as per the Banking Law,

transfer share shall be performed after obtaining

this approval. Transfer of shares that have been

completed without the necessary approval

cannot be entered into the stock ledger.

Shareholders, who have acquired shares without

the approval of the aforementioned institution,

even though it was required, shall not be entitled

to any shareholder rights other than the dividend.

Public Disclosure and TransparencyCompany Disclosure Policy

Ordinary General Assembly has approved the

Disclosure Policy that was prepared by the Board

of Directors on March 31, 2006 according to

the Corporate Governance Principles in order

to provide timely, accurate, understandable

and concurrent information to all stakeholders,

including the shareholders and the public.

Accordingly, a presentation is prepared regarding

the quarterly financial statements to be shared

with the investors on the corporate website

so as to ensure accurate and prompt flow of

information. Investor Relations Department

participates in investor meetings to provide

information about Bank Asya. In addition,

questions from the investors and shareholders are

answered through telephone of email.

Material Event Disclosures

The Bank made a total of 45 material event

disclosures in 2012 as per the CMB regulations.

Company Website and Contents

Asya Katılım Bankası A.Ş. corporate website is

available at www.bankasya.com.tr. Corporate

website offers detailed information about

the products and services provided by the

Bank in addition to supporting online banking

transactions. Moreover, Investor Relations section

of the website furnishes information in Turkish

and English about the management organization

of the Bank, last version of the Articles of

Association, annual reports, periodical financial

statements, reports and presentations, as well

as invitation, agenda and minutes of the General

Assembly.

The Bank takes pains to ensure the corporate

website is regularly updated.

Disclosure of Real Person Ultimate

Controlling Shareholder(s)

As of December 31, 2012, Bank Asya is an

aggregate corporation with 216 real persons

except for the publicly held part.

None of the shareholders hold shares over 10

percent.

The corporate website discloses information

regarding this matter.

Public Disclosure of Individuals with

Access to Insider Information

A list of individuals who have access to insider

information about the Bank has been published

on the corporate website since 30 April 2009.

Corporate website provides the names of the

Board Members and executive officers who may

be in such a position.

StakeholdersNotification of Stakeholders

The Bank regularly provides information to

the stakeholders as necessary; it has set up

arrangements for answering information requests

from the shareholders, personnel and customers.

Shareholders, customers, personnel and regulatory

organizations are provided adequate information

through these arrangements.

Stakeholder Participation in Management

Bank Asya has always encouraged participation in

management by its personnel.

Accordingly, Asya Recommendation System (ARS)

has been established to allow the personnel to

freely express their views and recommendations

regarding the Bank’s activities without having to

go through an approval mechanism. Authorized

personnel make an assessments these views

and recommendations, and then forward them

to related officials in the management for

implementation of the suitable cases.

Furthermore, the Bank presents annual

awards for some of the implemented

recommendations following an evaluation.

There were a total of 1988 recommendations

offered by the personnel in 2012.

Human Resources Policy

Main principles of the Bank’s Human Resources

Policy are as follows;

• To recruit the right person for the right job

by performing quality and quantity analysis of

the personnel,

• To provide all personnel opportunities for

professional, personal and social growth

through an effective training plans and

program,

• To maintain the highest level of spirits

and motivation as well as productivity and

effectiveness of personnel at all levels,

• To allow personnel to get away from the

daily work stress by organizing activities and

events through the “Yediveren” (Prolific) club

which has been established within the Bank.

• To safeguard and improve material and

spiritual rights of all personnel,

• To provide a work environment that nurtures

self expression for all personnel,

• To offer fair career opportunities for all

personnel by creating position-specific career

maps,

• To objectively asses personnel performances

through the “Target Based Performance

Assessment System,”

• To establish a fair “Salary Management

System” by building a salary scale through the

job evaluation method.

Relations with Customers and

Suppliers

• Bank personnel provides accurate, complete

and timely information about all matters at

all stages of the service relationship with the

customers in regards to all types of products

and services they offer.

•They are obligated to keep confidential and

safeguard all types of customer information

and documents, with the exception of

providing information to authorized persons

and organizations that have the power to

request information and documents.

• Bank Asya personnel perceive service quality

to be a prerequisite for answering customers

needs and expectations at a high level of

service. As such, they take pains to ensure

that technological infrastructure and qualified

human resources, which are the two main

aspect of this concept, are used in a manner

to achieve continuous improvement in service

quality.

• They do not discriminate on the basis of

nationality, religion, gender, or financial or social

status when serving customers.

• Differentiating the organizational structure

or the product range for a an established

target audience, or developing different

approaches for customers in different risk

groups cannot be interpreted as discrimination

against customers or their categorization.

Bank Asya shall examine the reasons for

customer complaints received over the

systems it has developed like the Customer

Request Web Module, Alo AsyaCall Center, and

Happy Customer Hotline.

It shall take the necessary measures to obviate

reoccurrence of justified complaints, as well

as instructing personnel so as to correct

erroneous practices and prevent them from

happening again.

Corporate Social Responsibility

In keeping with its social responsibility

approach and the requirements of the

governing legislation, Bank Asya makes

donations and grants aid to public interest

foundations and associations, in addition to

supporting cultural publications and sponsoring

conventions and conferences related to

finance in general and banking. The Bank

respects individuals as well as their rights and

freedoms and the environment. Accordingly,

it takes these facts into account during all

business processes and makes every effort to

implement them materially and spiritually.

There are currently no legal action against the

Bank for damage to the environment.

Penalties Imposed by Public Authorities

Bank Asya paid all of the fines which were

assessed on the Bank by various public

authorities at a 0.12 percent rate of its

period income for practices in violation of the

legislation.

Board of DirectorsThe Structure and Composition of the

Board of Directors, and Independent

Members

Board of Directors of the Bank shall consist

of the Chairman of the Board of Directors

and eight members. Board Members shall be

elected as per Article 32 of the Bank’s Articles

of Association and the provisions of the

Banking Law.

79



Qualifications of the Board Members

When electing members for the Board of

Directors, the Bank shall comply with the Banking

Law regulations in regards to the qualifications

that Board Members are required to possess.

Mission, Vision and Strategic Objectives

of the Company

Board of Directors has established the vision and

mission of the Bank in a clear and understandable

manner as they appear in the Annual Report and

the corporate website. The mission and vision of

the Bank is as follows.

Mission: To make a contribution to stakeholders

as well as to Turkish economy by fulfilling

customer demands and expectations with

“Different demands, different solutions” approach

and by improving banking services according to

interest free banking principles.

To be a respected, trustworthy and influential

bank that provides services in global standards

with the products it develops. The Board of

Directors regularly monitors and directs the Bank’s

performance throughout the operating period in

regards to achieving its strategic targets.

Risk Management and Internal Control

Mechanism

The Bank has built an effective internal control

and risk management system according to the

provisions of the governing legislation and the

Banking Law in particular.

Internal Control Center, Risk Management

Department and Inspection Committee shall

all report to the Board of Directors. Duties and

authorities of Bank Asya’s Board of Directors shall

be governed by Article 35 of the Bank’s Articles

of Association.

Accordingly, the Board of Directors can make

decisions on all matters that do not require a

General Assembly resolution.

The Board of Directors especially perform the

following actions;

• Prepare and approve internal regulations

governing the matters that pertain to the Bank’s

internal affairs and may be handled by the Chief

Executive Officer, and the matters that may be

handled only with the resolutions of the Credit

Committee or the Board of Directors,

• Supervise all necessary matters and

continuously oversee the day-to-day

administrative activities (Board Members may

obtain this right with the resolution of the Board

of Directors),

• Prepare the annual balance sheet, and profit

and loss statement; submit reports to the General

Assembly of the Shareholders regarding the

Bank’s activities during the operating cycle and

regarding dividend distribution; determine and

organize cash positions and guarantees according

to the relevant legislation; make audit reports

available for inspection 15 days prior to the

General Assembly of the Shareholders,

• Pass resolutions on the structure of all

procedures in regards to the company’s

foundation objectives,

• Determine and pass resolutions on appointment,

promotion, dismissal, annual remuneration and

expense of the Chief Executive Officer and

the personnel directly involved with the Chief

Executive Officer, and of those with signing

authority,

• Pass resolutions to open branches, offices,

liaison offices and regional management offices,

and decide which powers to be bestow on these

offices as per applicable regulations,

• Determine the principles pertaining to the

real estate properties and affiliates that will be

acquired or sold on behalf of the Company,

• Perform all the duties stipulated in the Turkish

Commercial Code and other applicable laws,

regulations and administrative provisions; deals

with all matters other than those assigned to

the General Assembly of Shareholders or to the

Statutory Auditors by laws or under the Articles

of Association.

If it deems necessary as stipulated by Article 319

of the Turkish Commercial Code, the Board of

Directors may decide to delegate its powers of

representation and administration to one or more

of its members, to directors or to committees

made up of these directors for a period of time

and under the terms and conditions it deems

appropriate. The Board of Directors shall have

the authority to grant credits. The Board of

Directors shall be responsible for establishing

policies regarding credit grants and approvals,

and regarding other administrative principles. It

shall also be obligated to take all the necessary

measures to ensure implementation and

monitoring of these policies. The Board o Directors

may delegate its authority to grant credits to a

Credit Committee or to the Chief Executive Officer

in accordance with the requirements of applicable

laws and within the framework of the principles

and procedures that will be determined by the

Board of Directors.

Operating Principles of the Board of

Directors

The Board of Directors shall convene when

necessary and/or upon the invitation of the

Chairman. All members can submit a written

request to the Chairman to call a meeting.

The Board of Directors must convene at least

four times in a fiscal year according to the Bank’s

Articles of Association. However, Bank Asya

has a tradition of holding the Board Meetings

regularly at weekly or biweekly intervals with the

exceptions of special circumstances. This tradition

was maintained in 2011 as well. Board of

Directors meetings are held at the Company

headquarters. However, meetings can also

be held at some other location, city and/or

country with the approval of a majority of

the members. Board of Directors meetings

are conducted according to agendas that are

provided to members prior to the meetings.

Board Members and Auditors can request

the Chairman to include on the Agenda any

items they wish to be discussed. The required

quorum of the Board of Directors shall be

absolute majority of all members. Resolutions

shall be passed by absolute majority of

the members who are present. A written

consent from members shall suffice to pass a

resolution on a proposal that is submitted by

a member unless another member requests a

discussion on it.

Unanimous vote shall be required to pass

resolutions without holding a meeting.

Each Board Member shall have one vote. The

Chairman or Board Members cannot vote by

proxy. In case of a tie in voting regarding the

matter of discussion, deliberations shall be put

off until the next meeting. Deliberated issue

shall be considered rejected if the tie is not

broken in the next meeting. Resolutions of

the Board of Directors shall be entered daily

with a date and number on a ledger, which

has sequential page numbers that have been

approved as per the Turkish Commercial Code

and the Banking Law provisions pertaining to

ledgers; and each resolution shall be signed by

the Board Members.

Prohibition of Transactions with and

Competition against the Company

The Chairman of the Board of Directors and

the Board Members shall be prohibited from

engaging in business with the Company, nor

shall they be allowed to compete against the

Company pursuant to Articles 334 and 335 of

the Turkish Commercial Code.

Nevertheless, the General Assembly of the

Shareholders can authorize the Chairman

of the Board of Directors or the Board

Members in regards to engaging in business or

competing against the Company.


covers the matter.

Code of Ethics

At Ordinary General Assembly dated March 31,

2006, the Bank passed a resolution to adopt

the Codes of Ethics published by the Turkish

Union of Participation Banks, which the Bank is

a member of, in the Bank’s activities as well.

Number, Structure and Independence

of the Committees Established by the

Board of Directors

Pursuant to the Board of Directors resolution

dated February 2, 2006, the Bank has

established the Audit Committee and the

Corporate Governance Committee as per

Article 24 of the Banking Law pertaining to

establishing an Audit Committee and according

to other governing legislation. Board Member

serve in the following active committees that

have been established in pursuant to the

regulations of the legislation.

• Audit Committee

• Credit Committee

• General Management Credit Committee

• General Management Financial Organizations

Committee

• Asset and Liability Management Committee

• Corporate Governance Committee

• Disciplinary Committee

• Information Technologies Strategy and

Steering Committee

• Information Security Management

Committee

• Information Technologies Risk Management

Committee

• Project Financing Credit Committee

• Remuneration Committee

• Expense Management Committee

• Compliance Committee

Remuneration of the Board of

Directors

Chairman of the Board of Directors and the

Board Members shall receive an attendance

fee for each meeting they participate in. The

amount and form of the remuneration shall be

determined at the General Assembly.

In 2012, remuneration of executives were

established as 6.550 Turkish lira (December

31, 2011: 10.297 Turkish lira). In addition to

the remuneration, executives are also provided

real rights.

81


Activities with Outsourcing Services Dividend Policy of the Bank

Dividend Distribution Proposal of the Bank for 2012

Article 54 of the Articles of Association governs the principles of the Bank’s Dividend Distribution Policy. Accordingly;

Company net profit shall be calculated by deducting the Company’s paid or accrued expenses, amortization, depreciation and various provisions

from the year-end income. Net profit shall be respectively distributed as follows after deducting the previous year’s losses, if any.

1. Five percent of the net profit shall be set aside as the legal reserve as per the Turkish Commercial Law, Article 466/1.

2. Primary dividend share shall be allocated from the remaining amount at a rate and figure established by the CBM.

3. Remaining profit shall be distributed in the following manner;

º The part up to 2 percent for the Board Members,

º Five percent for the Directors and Officers.

• The General Assembly shall be authorized to carry forward to the next year or allocate the whole or part of the remaining net profit after

putting aside and deducting the figures stated in Sub-paragraphs 1, 2 and 3. If it deems necessary, the Board of Directors can bring a proposal

to the General Assembly for this purpose. (The provisions of Article 466/3 of the Turkish Commercial Code are reserved.)

• As per the provisions of the Capital Markets Law, the General Assembly shall be authorized to distribute whole or part of the remaining profit

as dividend to shareholders in the following manner, or to set aside whole or part of it as extraordinary reserve.

a) Distribute all of it in cash,

b) Distribute all of it as stock dividend,

c) Distribute in cash and as stock dividend in certain amounts, and leave the remaining sum within the Company, d) Keep the whole amount

within the Company without distributing in cash or as stock dividend.

If it deems necessary, the Board of Directors can bring a proposal to the General Assembly for this purpose.

The Board of Directors shall determine the dividend distribution date as per the provisions of this article.

Outsourced Service Outsourcing Company

Bank Card and Credit Card Printing Services Plastikkart Akıllı Kart İletişim Sistemleri San. ve Tic. A.Ş.

Card Distribution Services . Kuryenet Motorlu Kuryecilikve Dağıtım Hizmetleri A.Ş.

Aktif İleti ve Kurye Hizmetleri A.Ş.

Ekstre Basım ve Dağıtım Hizmetleri Hobim Bilgi İşlem Hizmetleri A.Ş.

POS and Virtual POS Transactions Verifone Elektronik ve Danışmanlık Ltd. Şti.

Ingenico Ödeme Sistem Çözümleri A.Ş.

Kartnet Bilgisayar Sanayi ve Ticaret Ltd. Şti.

İnnova Bilişim Çözümleri A.Ş.

Checkbook Printing Services Güzel Sanatlar Çek Basım Ltd. Şti.

Branch Group Transportation Services. Securverdi Güvenlik Hizmetleri A.Ş.

Desmer Güvenlik Hizmetleri Tic. A.Ş

Brink’s Güvenlik Hizmetleri A.Ş.

ATM Services Banksoft Bilişim Bilgisayar Hizmetleri Ltd. Şti.

Termtech Bilişim Bilgisayar Teknolojileri Tic. Ltd. Şti.

EFT Systems Transactions Global Bilişim A.Ş.

Arşiv Hizmetleri Bonded Kayıt Sistemleri Dağıtım Hizmetleri ve Ticaret A.Ş.

Asya Ekspertiz İşlemleri Key İnternet Hizmetleri Ltd. Şti.

Asya Appraisal Transactions Key İnternet Hizmetleri Ltd. Şti.

Call Center Services SYS Telekomünikasyon Bilgisayar Elektronik San. Ve Tic. A.Ş

Procat Danışmanlık Yazılım Telekom Pazarlama Tic. A.Ş.

Asseco See Teknoloji A.Ş

Mobile Branch Services Infotech Bilişim ve İletişim Teknolojileri A.Ş.

Pozitron Yazılım A.Ş.

SWIFT İdeal Bilişim Hiz. San. ve Tic. Ltd. Şti.

Legal Proceedings System Etcbase Yazılım ve Bilişim Teknolojileri A.Ş

Teknolojileri A.Ş Mobile Investment Services Foreks Bilgi İletişim Hizmetleri A.Ş

Services to Provide Business Continuity and Flexibility IBM Global Services İş ve Teknoloji Hizmetleri ve Tic. Ltd. Şti.

Transportation Project Kartek Kart ve Bilişim Teknolojileri Tic. Ltd. Şti.

BFD Products and Housing Projects Konut Kredisi com tr Danışmanlık A.Ş.

POS Device Transactions Sestek Ses ve İletişim Bilgisayar Teknolojileri A.Ş

İnnova Bilişim Çözümleri A.Ş.

Credit Card Applications Tmob Bilişim Yazılım Teknolojileri Sistemleri A.Ş

80

The Company’s accrued 190,390,200.47 Turkish lira in net profits according to December 31, 2012 balance sheet. On the

March 7, 2012 meeting, the Board of Directors resolved to allocate five percent, or 9,519,510.02 Turkish lira, of this amount

as legal reserves as it is stipulated by its legislation and the Articles of Association; to distribute 19,000,000 Turkish lira of

the remaining amount to shareholders as dividend; to allocate the remaining 161,870,690.45 Turkish lira as extraordinary

reserves for the purpose of strengthening the shareholder’s equity and maintaining the Bank’s growth through internal

resources; and to submit this matter for the approval of the General Assembly.

83


Matters Regarding the General Assembly The Agenda of the March 30, 2013 Ordinary General Assembly Meeting

1- Opening and election of the Executive Board,

2- Authorization of the Executive Board to sign the meeting minutes on behalf of the shareholders,

3- Reading and discussion of the Board of Directors’ 2012 Annual Report,

4- Reading the Audit Report and the Independent Audit Report for 2012,

5- Reading, discussion and approval of the Financial Statements for 2012,

6- Releasing the Board of Directors and Auditors respectively,

7- Discussing and concluding whether to distribute dividends,

8- Settling the remuneration and attendance fees payable to the Board Members,

9- Submitting appointments for vacant Board memberships to the approval of the General Assembly,

10- Discussing and concluding the amendments of articles 2, 8, 9, 11, 16, 17, 18, 19, 20, 21, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 35,

36, 38, 39, 42, 45, 46, 49, 50, 51, 53, 54, 55, 56, 60 and 61 as well as Provisional Article 1 of the Bank’s Articles of Association on the

condition of obtaining the necessary permissions from the relevant authorities,

11- Settling the election of the Independent Auditor which has been determined by the Board of Directors,

12- Approval by the General Assembly the Internal Directive Regarding the Working Principles and Procedures of the General Assembly put

forward by the Board of Directors,

13- Providing information to the General Assembly regarding the grants and donations made in 2012,

14- Bestowing the Board Members the authorization that is required as per Articles 395 and 396 of the Turkish Commercial Code,

15- Submitting information to the shareholders regarding the Remuneration Principles of the Board Members and Executives according to CMB

regulations,

16- Wishes and requests,

Best Regards,

ASYA KATILIM BANKASI A.Ş.

BOARD OF DIRECTORS

Ahmet BEYAZ Zafer ERTAN

Board Member and Chief Executive Officer Board Memberi

Remarks Regarding the General Assembly

Ordinary General Assembly Meeting of the Shareholders for the 2012 fiscal period shall be held at 11:00 AM on Saturday, March 30, 2013 at Saray

Mahallesi Dr. Adnan Büyükdeniz Cad. No: 10, Ümraniye, Istanbul address.

Shareholders may attend the General Assembly Meeting in person or through a representative as well as by themselves or through a representative in

electronic environment. Shareholders or their representatives are required to have an electronic signature certificate if they wish to participate in the

meeting in electronic environment. Shareholders or their representatives wishing to participate in the meeting in electronic environment shall be required

to complete their transactions as per the Communiqué No: 28395 on Attendance to General Assembly Meetings of Joint Stock Companies by Electronic

Means dated August 28, 2012 and Communiqué No: 28396 on Electronic General Assembly Systems Used in the General Assembly Meetings of Joint

Stock Companies dated August 29, 2012. Otherwise, they will not be able to attend the meeting. Shareholders or their representatives shall not be able

to participate in the meeting if they fail to withdraw their request to attend the meeting in electronic environment.

Shareholders who will be represented at the meeting by proxy are required to prepare a letter of proxy and get it notarized according to the sample that

is attached to this invitation, and submit the letter of proxy or the notarized signature circular/statement of signature along with the proxy form prior to

the meeting.

The Company shall make the 2012 Annual Report of the Board of Directors, Audit Committee Report, Financial Statements, Consolidated Financial

Statements, Independent Audit Report and other relevant documents available for the review of the shareholders at the Company Headquarters and the

branches 15 days before the General Assembly Meeting.

You are kindly requested to attend the General Assembly.

Important Note: You are kindly asked to arrive at the meeting location one hour before the start time so we can create the list of attenders and perform

identification control.

Best Regards,

82

85


Detailed Information on the Agenda Items

9- Submitting vacant Board Membership

appointments to the approval of the

General Assembly,

Comment: The Board of Directors

appointed Professor Erhan Birgili as a

Board Member following Behçet AKYAR’s

resignation of his post; Ahmet BEYAZ

following Faruk İLK’s resignation of his post;

and Zafer ERTAN following Abdullah ÇELİK’s

resignation of his post. These appointments

shall submitted to the General Assembly for

approval.

10- Discussing and concluding the

amendments of articles 2, 8, 9, 11, 16,

17, 18, 19, 20, 21, 24, 25, 26, 27, 28, 29,

30, 31, 32, 33, 35, 36, 38, 39, 42, 45, 46,

49, 50, 51, 53, 54, 55, 56, 60 and 61 as

well as Provisional Article 1 of the Bank’s

Articles of Association on the condition of

obtaining the necessary permissions from

the relevant authorities,

Comment: Article amendments, which are

required and deemed suitable by the new

Turkish Commercial Code that entered into

effect on July 2012, shall be completed

and get approved by the related authorities

and finally by the Ministry of Customs and

Trade. Then, final and approved versions of

these amendments shall be submitted to

the approval of the General Assembly.

11- Settling the election of the Independent

Auditor which has been determined by the

Board of Directors,

Comment: The Independent Auditor shall

be elected by the Board of Directors as per

the Turkish Commercial Code and the CMB

legislation, and then this matter shall be

submitted to the approval of the General

Assembly.

12- Approval by the General Assembly the

Internal Directive Regarding the Working

Principles and Procedures of the General

Assembly put forward by the Board of

Directors,

Comment: As per the Turkish Commercial

Code and the applicable legislation, future

General Assemblies shall be held according

to an internal directive of which the

minimum conditions have been established

by the Ministry of Customs and Trade.

This internal directive has to be approved

by the General Assembly. The Board of

Directors’ internal directive regarding the

working principles of the General Assembly,

which it has prepared within this scope, shall

be submitted to the approval of the General

Assembly.

13- Providing information to the General

Assembly regarding the charities and

donations made in 2012,

Comment: The General Assembly shall be

provided with information regarding the

grants and donations that were made in

2012 pursuant to Article 7/b of the CMB

Communique Serial: IV No: 27. This article is

not submitted to the approval of the

General Assembly; it is included on the

Agenda only for the purpose of providing

information to the General Assembly.

14- Bestowing the Board Members the

authorization that is required as per Articles

395 and 396 of the Turkish Commercial

Code,

Comment: Authorizations and permissions

regarding prohibition for the Board Members

on doing business or competing with the

Company, which are stated on Articles 395

and 396 of the Turkish Commercial Code,

shall be submitted for the approval of the

General Assembly.

Pursuant to Articles 395 and 396 of

the Turkish Commercial Code, the Board

Members can do business or compete with

the Company only with the approval of the

General Assembly. The issue of the Board

Members performing such actions shall be

submitted to the approval of the General

Assembly.

15- Shareholders shall be provided information

regarding the Remuneration Principles

of the Board Members and Executives

according to CMB regulations.

Comment: The General Assembly shall

be provided information regarding the

Remuneration Principles of the Board

Members and Executives as per the

Corporate Governance Principles.

16- Wishes and requests,


March 30, 2013

ORDINARY GENERAL ASSEMBLY MEETING

1- Opening and election of the Executive Board,

Comment: A Chairman shall be elected to

preside over the General Assembly as per the

Turkish Commercial Code and the provisions of

the applicable legislation.

2- Authorizing the Chair to sign the Meeting

Minutes,

Comment: The Chair shall be given the

authority to record the meeting minutes

of the General Assembly as per the Turkish

Commercial Code and the provisions of the

applicable legislation.

3- Reading and discussion of the Board of

Directors’ 2012 Annual Report

Comment: Annual Report of the Board

of Directors for the January 1, 2012 and

December 31, 2012 period shall be read and

discussed at the General Assembly.

The aforementioned reports are available at

the Company headquarters and the corporate

website at (http://www.bankasya.com.tr/

yatirimci_ iliskileri/faaliyet_raporlari.jsp)

4- Reading the Audit Report and the Independent

Audit Report for 2012

Comment: Audit Report and the Independent

Audit Report for the January 1, 2012 and

December 31, 2012 period shall be read and

discussed at the General Assembly.



website at(http://www.bankasya.com.tr/

yatirimci_ iliskileri/denetim_raporlari.jsp)

5- Reading, discussion and approval of the

Financial Statements for 2012,

Comment: Financial Statements for the

January 1, 2012 and December 31, 2012

period shall be read, discussed and submitted

to the approval of the General Assembly.



website at(http://www.bankasya.com.tr/

yatirimci_ iliskileri/denetim_raporlari.jsp)

6- Releasing the Board of Directors and Auditors

respectively,

Comment: Submitting to the approval of the

General Assembly the release of the Board of

Directors and Auditors respectively for their

activities, transactions and accounts in 2012

as per the Turkish Commercial Code and the

provisions of the applicable legislation.

7- Discussing and concluding whether to distribute

dividends,

Comment: Board of Directors’ Financial

Statement and profit and loss accounts for

2012 as well as its proposal for this matter

shall be read, discussed and put to vote.

Financial statements are available at the

Company headquarters and the corporate

website at(http://www. bankasya.com.tr/

yatirimci_iliskileri/denetim_ raporlari.jsp) web

sitesinden ulaşılabilir.

The Company’s accrued 190,390,200.47

Turkish lira in net profits according to

December 31, 2012 balance sheet. On

the March 7, 2012 meeting, the Board of

Directors resolved to allocate five percent,

or 9,519,510.02 Turkish lira, of this amount

as legal reserves as it is stipulated by its

legislation and the Articles of Association;

to distribute 19,000,000 Turkish lira of the

remaining amount to shareholders as dividend;

to allocate the remaining 161,870,690.45

Turkish lira as extraordinary reserves for the

purpose of strengthening the shareholder’s

equity and maintaining the Bank’s growth

through internal resources; and to submit

this matter for the approval of the General

Assembly.

The Board of Directors’ resolution No: 2568

dated March 7, 2013 in this matter shall be

read and submitted to the approval of the

General Assembly.

8- Settling the remuneration and attendance fees

payable to the Board Members,

Comment: Remuneration and attendance

fees payable to the Board Members shall be

established and submitted to the approval of

the shareholders.

84

87

86

CHAPTER III Assessments Regarding Financials and Risk Management


89


Summary Audit Report Summary Financials for the Five Year Period, Including the Report Period

Selected Asset Items (Million TL) 2008 2009 2010 2011 2012

Liquid Assets 1.247 2.572 2.666 2.819 3.887

Credits 6.381 8.355 11.060 13.452 16.307

Fixed Assets 124 137 144 124 142

Total Assets 8.109 11.609 14.513 17.190 21.390

Selected Liability Items (Million TL) 2008 2009 2010 2011 2012

Collected Funds 5.843 9.137 11.167 12.397 15.742

Credits Obtained 458 191 622 1.458 1.815

Shareholders’ Equity 1.404 1.708 1.942 2.137 2.349

Paid-in Capital 900 900 900 900 900

Net Income for the Period 247 301 260 216 190

Total Liabilities 8.109 11.609 14.513 17.190 21.390

Income Statement (Million TL) 2008 2009 2010 2011 2012

Dividend Income 1.068 1.306 1.207 1.278 1.672

Dividend Expense 567 706 613 647 792

Non-dividend Income 421 507 480 490 525

Non-dividend Income 610 729 749 852 1.160

Pre-tax Profit 312 378 324 269 245

Tax Provision 65 77 64 53 55

Net Income for the Period 247 301 260 216 190

2012 Audit Report

We have audited the transactions and accounts of Asya Katılım Bankası A.Ş. for pursuant to the Banking Law No. 5411, the Turkish Commercial Code and

the applicable legislation of the Capital Markets Law, and the provisions of the Bank’s Articles of Association.

It has been determined that the Bank has kept its books in accordance with the Articles of Association and as required by the Tax Procedure Law, the

Turkish Commercial Law and the Banking Law; and all its income and expenses have been based on legal documents.

It has been established that the balance sheet and the income statement dated December 31, 2012 reflect the records for the January 1, 2012 and

December 31, 2012 period.

Respectfully submitted for your information.

Atıf BİLGİN İrfan HACIOSMANOĞLU İzzet AKYAR

88

91


Assessment on the Finances, Profitability and Solvency Audit Committee’s Assessment Regarding the Functions of the Internal Systems

Inspection Committee Inspection Committee performs risk-focused controls with international standards at the Bank’s departments in the headquarters and branches as well as at the partners that are subject to consolidation so as to provide assurance and consultancy services to the Board of Directors by ensuring that business activities of the Bank are carried out in pursuant to the Law and other relevant legislation, in addition to strategies, policies, principles and objectives of the Company; and that the Bank’s internal audit and risk management systems function effectively and adequately.

Internal audit operations are carried out according to the Board of Directors’ approved annual audit plan at the Bank’s departments in the headquarters and branches as well as at the partners that are subject to consolidation. Inspection Committee provides quarterly reports on its activities to the Board of Directors through the Audit Committee.

Within the scope of the inspection procedures, the Committee performed audits in 76 branches in regards to credit risks, operational risks and organization, and provided preventive measures by sharing the results with the related departments and executives in the Company. The Committee performed an audit of one business process at the departments in the headquarters and inspected four affiliates, and then provided reports with the results to the related departments and executives in the Company.

The Committee completed audits and test procedures in regards to nine main processes to form a basis for the Management Statement that will be drawn out by the Board of Directors for 2012.

In addition to the aforementioned functions, the Inspection Committee also performs necessary examinations and investigations at the Bank and the affiliates that are subject subject to consolidation.

Through the inspection functions it performs, the Committee provides risk analysis to

offer administrative, technical, financial, legal and organizational recommendations and consultancy to prevent audit related risks.

Internal Control Center Pursuant to the Banking Law and the principles of the Communiqué on Internal Systems of Banks, Internal Control Center is responsible for planning the Bank’s internal control system and activities as well as their application methods; for monitoring the planned controls; and according to monitoring results, taking the necessary measures to improve the control system and to ensure smooth implementation of internal control activities.

Internal control system encompasses Bank personnel at all levels and it aims ensure that Bank’s assets are preserved, its operations are effective and productive, its accounting and financial reporting system is dependable, and that its activities comply with the internal and external legislations and with the Bank’s policies.

Internal Control Center creates a “Self-Evaluation Workshops for Control” according to its internal legislation and international standards with participation from the department managers and executives in the Bank. The Center utilizes the methods and tools of this workshop when planning and managing the internal control system and internal control activities.

These workshops include collaborating with people from related departments to evaluate the effectiveness, adequacy and compatibility of the current business process controls, and to determine the necessary actions that need to be taken in order to improve the internal control system and to carry out the control operations smoothly. Internal Control Center uses a follow-up schedule to monitor the course of actions that have been planned along with the business department. There were 134 internal self-evaluations that resulted in 275 actions being taken in 2012 for the purpose of assessing the risks and controls in business processes. Implementation of these actions were monitored.

Within the scope of monitoring the controls in 2012, Internal Control Center performed routine internal controls, took inventory and completed reconciliation of the Bank’s assets, as well as carrying out 255 onsite control monitoring at the branches. There were also test operations implemented at 12 departments in the headquarters and the Central Branch to assess the effectiveness of the controls which have been documented regarding the main banking processes. In addition, within the scope of distant control monitoring, the Center performed inquiry scenarios as well as credit customer and guarantee controls, which were created through the ACL program. Controls also included evaluation of 34 information system processes within the scope of COBIT regarding information system controls.

The Center also prepared risk and control catalogs in regards to the related processes, and it continues to determine corrective and improvement measures in addition to its Control Self-Evaluation works. Moreover, within the scope of monitoring financial reporting systems, official reports as well as quarterly and annual financial reports were inspected. In 2012, compliance controls included inspection of 21 new products, services and processes, in addition to compliance inspections in regards to 62 different subjects.

Internal Control Center performs these activities with 40 personnel who possess 17 internationally accepted certificates. These are one of each of the following; Certified Internal Auditor (CIA), Certified Financial Services Auditor (CFSA), Certified Fraud Examiner (CFE), Certified Information Security Manager (CISM), Certification in Control Self-Assessment (CCSA), Certified in the Governance of Enterprise IT (CGEIT), Irish Accounting and Finance Association (IAFA); two Certified Information Systems Auditors (CISA) and CMB licenses; three Certifications in Risk Management Assurance (CRMA) and Certifications in Risk and Information Systems Control (CRISC).

Bank Asya maintained its leadership position

in 2012 in asset size, credit grants, non-cash

credits and collected funds. The Bank completed

the year with a sound and stable balance sheet

structure and a strong shareholders’ equity

position.

Asset Growth

Most of Bank Asya’s asset growth in 2012 was

generated from the credits it granted. Credits

soared to 16.3 billion Turkish lira with a 21

percent rise year-on-year.

Share of credits in total assets was at 76

percent.

Bank Asya’s Available-for-Sale Financial Assets

were 792 million Turkish lira as of the end

of 2012, accounting for 3.7 percent of total

assets.

Growth of Liabilities

Despite fierce competition, Bank Asya’s collected

funds easily surpassed the industry average,

reaching 15.74 billion Turkish lira with a 27

percent growth rate.

Share of collected funds in total liabilities climbed

to 74 percent.

Funds borrowed rose to 1.82 billion Turkish lira

at a rate of 25 percent improvement.

Bank Asya built a more dependable credit

portfolio with a lower risk perception. Capital

adequacy ratio of the Bank stood at 13.6

percent by the end of 2012.

Profitability

Bank Asya succeeded in advancing its net profit

share income to 880 million Turkish lira by with a

39 percent increase year-on-year.

Income from net fee and commission revenues

was 287 million Turkish lira with other operating

revenues standing at the 136 million Turkish lira

mark.

Bank Asya allocated provisions in the amount

of 414 million Turkish lira for credits and other

receivables in 2012. The Bank achieved 190

million Turkish lira net profit for the period.

Solvency

As of the end of the period, Bank Asya has

put 22 percent of its collected funds into

liquid products. In order to avoid liquidity risk,

Bank Asya diversifies fund collection resources

between funds collected from customers and

credits obtained from abroad. The Bank also

takes pains to ensure coherency between

the maturity dates assets and liabilities, and

implements strategies especially to obtain

assets with longer maturity dates in addition

to preserving liquid assets so as to adequately

meet liquidity needs that may arise due to

market fluctuations.

As a result of continuing investments, the Bank

increased the number of branches to 251 with

50 new domestic and one overseas locations. As

the most crucial source of assets for Bank Asya,

collected funds make a positive impact on the

Bank’s ability pay its short-term credits because

they expand to a wide base with a sound

structure and their average maturity terms are

higher than that of the the industry.

Future Projections

Banking industry had a successful year with its

solid poise in 2012.

Sound capital structures and deposit based

funding compositions helped the banks in

Turkey display an unfaltering stand in the face

of economic ripples.

A comparison of the banking industry with those

of in the developed countries show that banks

in Turkey operate with high capital adequacy

and low leverage ratios.

This fact allows Turkey to better position itself

against likely shocks coming from outside.

In the days ahead, Bank Asya is determined

to maintain its efforts to introduce diverse

products and innovations that are in line

with the principles of participation banking.

Bank Asya aims to build a service network to

expand its services beyond familiar banking

services. As such, it plans to establish asset

management companies as well as financial

services organizations like pension and securities

companies in accordance with the participation

banking principles.

Bank Asya aspires to further broaden its already

wide customer base by spreading the branch

network at the same speed in 2013. The Bank

considerably increased the credit amount it has

provided to SMEs and retail customers year-on-

year.

Sukuk Certificate created a new source for the

bank after it was issued in 2013 according

to Participation Banking principles. Bank Asya

intends to develop this product further in the

coming days. The Bank launched brokerage

operations in the private pension system

through its affiliate Asya Emeklilik ve Hayat A.Ş.

as of May 2012.

Bank Asya is determined to repeat the success

of 2012 by maintaining its growth especially in

Retail and SME Banking in 2013.

90

93


Information on Risk Management Policies that are Implemented According to Risk Types Liquidity RiskRisk Management and Treasury Departments along with the senior management at the Bank review the reports, which are prepared according to the provisions of the “Regulation on the Measurement and Assessment of the Liquidity Adequacy of Banks” published by the BRSA; and the Asset and Liability Management Committee takes the necessary measures to ensure that the level stated in the report remain within the legal limits. The Bank performs daily liquidity gap analyses to monitor compliance with maturity dates and the rates that have been established according to these periods in regards to asset and liability items. As part of the process of assessing the possibilities to generate liquidity, the Bank regularly monitors growth trends in participation funds as well as in foreign credits and syndications, especially in terms of maturity date and borrowing conditions

The limits on early warning and final liquidity risk are established in a way to allow revision by combining the results of the gap analysis with the core participation account study, which determines who the loyal participation account customers are. Compliance to these limits are monitored daily and taken into account in the Board of Directors’ decisions.

Assets with varying maturity structures and borrowing ranges will have certain risk levels in the view of financial indicators in the market. The Bank performs duration analyses to calculate and compare these risk levels. There is a “Liquidity Emergency Action Plan” that has been put in place in the Bank to provide solutions in case of liquidity shortage resulting from situations like deterioration in asset quality, increase in frozen assets or unexpected outflow of assets. Following the review of the plan, the Bank established the Liquidity Emergency Action Committee to hold regular meetings throughout 2012.

Operational RiskBank Asya began reporting its operational risk exposure using the “Basic Indicator Method” as of June 1, 2007. The Bank utilizes scenario analyses to establish the impact this amount makes on the Capital Adequacy Standard Ratio.

The amounts exposed to operational risk are also calculated using the Standard and Alternative Standard Approaches stipulated by the BRSA, and then reported to senior management in the Bank.

These methods are planned to be used in the Bank’s legally mandated reports once changes in the regulatory framework have been completed.

Bank Asya accumulates its potential operational risk losses in a format that complies with a “risk catalog” based on event classifications. This loss event data forms a basis for the advanced statistical models that are in the works for development. The Bank is devising action plans to prevent reoccurrence of events with severe financial impact on operational risks.

Business Continuity Management is an integrated management process identifying critical situations the Bank is likely to encounter, and the effect these situations will have on business activities should they actually occur.

Bank Asya’s Business Continuity and Disaster Plan was put into effect in 2007 as a culmination of efforts carried out with a specialized consulting company. Existing plan was revised in 2010 in response to new regulations and developing needs. Management Statement is updated every year and it demonstrates the faith the Board of Director has in the efficiency and productivity of the Bank’s Internal Control and Information Systems. Bank Asya has established operational risk limits regarding system interruptions in order to minimize likely losses it may face as a result of significant disruptions in its activities. It has also put in place monitoring and reporting processes in regards to these limits.

Other RisksThe Bank manages residual, counterparty credit, country, concentration, status and strategy risks in compliance with the policies it has established.

Bank Asya has also built a data management policy so as to ensure accuracy, completeness, reliability and accessibility during the processes of creation, transfer, warehousing, backup, recovery and destruction of the data, which will be used to support the Bank’s business strategies, improve the quality of managerial decision making processes and run operations smoothly.

In addition to the legal capital requirement, Bank Asya also pursues compliance with the Bank’s internal capital adequacy policy, which exhibits its process of fulfilling capital requirement pursuant to risk profile, activity environment and strategic plans.

Risk Management in Consolidated Affiliates Standard ratio calculations arising from risk assessments and legal obligations are calculated on a consolidated basis. In addition, internal systems related functions are carried out in the affiliates as well.

Compliance with Basel Regulations With the start of implementation of the Basel II: International Convergence of Capital Measurement and Capital Standards, the Bank has successfully completed the processes to ensure execution of the Basel II directives, and began providing legal reports within this scope.

Infrastructure works that the Basel III Regulation stipulates are under way. Bank Asya considers these regulations as an opportunity to establish a comprehensive risk management culture that goes far beyond the matter of capital adequacy calculation.

Risk Management DepartmentRisk Management Department is responsible for detection and management according to the legal regulation of the risks, which arise from the risk management system established within the Bank and from the Bank’s activities. The Bank has identified the policies and application methods so as to ensure effective implementation of the system. In addition, risks are measured, controlled and reported.

Rapid changes and development processes in the banking industry pressed the bank to provide support to the internal systems staff with qualified personnel so as to meet the increasing need for audits and to maintain the risk management and internal control systems. Information on Risk Management Policies that are Implemented According to Risk Types The Bank performs risk management activities in accordance with its internal capital adequacy policy and other risk policies that include credit, market, liquidity, operational, residual, counterparty credit, country, concentration, data administration, status and strategy risks which have been established pursuant to banking legislation.

Through these policies the Bank aims to manage the stages that are faced or could be faced while determining, identifying, measuring, monitoring, controlling or reporting risks; and to reduce risks by implementing various precautions and techniques.

Credit RiskThe Bank manages its credit risk by using as base the assessment of credit risk that arises from the Bank’s whole credit allocations. It follows the policies that comprise of the principles, strategies and methods regarding credit allocation, monitoring, follow-up and risk management activities during the credit process.

In addition, the Bank employs early warning mechanisms that focus on possible credit risk situations. These mechanisms allow the Bank to review financial states, information and credit needs of the borrowers whose risk level have risen, in addition to giving the Bank the ability to assess their debt and guarantee levels, and credit limits.

The Bank establishes portfolio qualifications, sectoral/regional group concentrations and growth of credits after grouping them into on and off balance sheet; and then determines whether the reserves, which have been allocated by taking into consideration the value of the guarantee and the Bank’s asset quality, are adequate. The Bank builds scenario analyses for the purpose of proactively managing the credit risk it is exposed to. Executives in the Bank receive periodic reports on these analyses as well as on fluctuations in credit risks and their effects on financial indicators. Bank Asya employs a system that allows ranking of the corporate and commercial credits internally. This system has been structured parametrically to be integrated with statistical models that enable measurement and management of the credit risk.

Rating system functions the early warning and risk management tasks by making it responsive to current and likely breakdowns on the credit structure.

Related departments work in coordination to perform financial position analyses of the indemnified non-cash credits and non-performing credits. Early warning system and final credit risk limits are established by using the debtor rating scores of corporate and commercial credit customers and guarantees that are provided to obtain the credit. The system and the limits are monitored daily and used effectively when making credit decisions. On the other hand, a scorecard model developed by an international company is used to manage risks that arise from retail credits and credit card portfolios. With the emergence of an era in which management of country risks become crucial, the Bank has set its sights on growing in regions and countries where financial and political stability can be maintained.

Accordingly, senior management is provided with regular country risk analysis reports containing credit and political risk factors as well. The Bank also performs operations to establish country risk limits according to its Country Risk Management Policy in an effort to best manage these risks.

Market RiskMarket risk is measured and assessed in accordance with legal and international regulations and with the Bank’s codes of practice pertaining to its “Market Risk Management Policy.”

When managing the market risk, the Bank applies internationally accepted “Value at Risk” method that is applicable to the type of the market activities. Value at risk represents the greatest loss that the Bank’s portfolio value will suffer at a certain time and confidence level as a result of the fluctuations experienced on risk creating factors. The Bank uses its internally developed measurement model concurrently with the “Standard Method” as stipulated by the law. It provides daily reports to the senior management regarding the amount that is subject to market risk as well as conducting daily retrospective tests to prove the dependability of the model. The Bank runs portfolio assessments under current and likely market conditions through scenario analyses and stress tests which are built by applying reserve deviations to its portfolio and the market prices that are employed. The effects of the obtained results on the Bank’s Capital Adequacy Standard Ratio are separately analyzed and reported.Since 2007, the Bank has been using the value-at-risk method in establishing the market risks to provide timely and detailed reports to the Board of Directors.

In addition, the Bank has established value at market risk limits based on an early warning and final versions, and approved it upon the Board of Directors’ decision. These limits have been established based on the values at risk with consideration to the “Historical Simulation Method” and according to the 10-day lock-up period and 98 percent confidence level (which correspondences to 99 percent confidence level with the expected shortfall method) parameters. The limits are revised at regular intervals.

Compliance with the market risk limits are monitored daily, and reports are provided to executive departments. The Asset and Liability Management Committee, the Audit Committee and the Board of Directors are informed in a timely manner in case of limit excess.

92

Name Term of Office Area of Responsibility Educational Status Length of Professional Eken BERBER 1 month Inspection Committee Master’s Degree in Public Administration 18 yearsİrfan YILMAZ (*) 2 months Internal Control Center Bachelor’s Degree in Economics 9 yearslMehmet Kamil Tümer 7 years Risk Management Department Bachelor’s Degree in Business 32 years * İrfan Yılmaz has held the position as the Acting Internal Control Director as of January 2013.

International Rating Scores

Summary Information Regarding the Ratings Performed for the Bank by Rating Agencies

MOODY’S

Mali Güç DOutlook Stable Foreign Currency Long-term Ba2Short-term B1Outlook Stable Turkish Lira Long-term Ba2Short-term Ba1Görünüm Stable National Long-term A3Short-term TR-1

Provided information was obtained from Moody’s Investors Service report dated February 22, 2012.

SAHA Kurumsal Yönetim ve Kredi Derecelendirme Hizmetleri A.Ş. has completed its Corporate Governance Rating Report for Bank Asya in accordance with the CMB Communiqué on the Principles Regarding Rating Activity in Capital Markets and Rating Agencies. Bank Asya’s corporate governance rating score was increased to 86.14 on July 2, 2012 from 82.56 on July 1, 2011.

94


95


INDEPENDENT AUDITORS’ REPORT, UNCONSOLIDATED FINANCIAL STATEMENTS AND NOTES FOR THE YEAR ENDED DECEMBER 31, 2012(Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)

96

97


To the Board of Directors ofAsya Katılım Bankası A.Ş.İstanbul

INDEPENDENT AUDITORS’ REPORTFOR THE PERIOD JANUARY 1, 2012- DECEMBER 31, 2012

We have audited the accompanying unconsolidated balance sheet of Asya Katılım Bankası A.Ş. (the “Bank”) as at December 31, 2012 and the related statements of income, cash flows and changes in shareholders’ equity for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

The Board of Directors of the Bank is responsible for the preparation and fair presentation of the financial statements in accordance with the regulation on “Procedures and Principles Regarding Banks’ Accounting Practices And Maintaining Documents” published in the Official Gazette dated November 1, 2006 and numbered 26333 and Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”) and other regulations, circulars, communiqués and pronouncements in respect of accounting and financial reporting made by Banking Regulation and Supervision Agenc). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the regulation on “Licensing and Operations of Audit Firms in Banking” published in the Official Gazette No: 26333 on November 1, 2006 and the International Standards on Auditing. We planned and performed our audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the consideration of the effectiveness of internal control and appropriateness of accounting policies applied relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independent Auditors’ Opinion

In our opinion, the accompanying unconsolidated financial statements present fairly, in all material respects, the financial position of Asya Katılım Bankası A.Ş. as at December 31, 2012 and the results of its operations and its cash flows for the year then ended in accordance with the prevailing accounting principles and standards set out as per Article 37 of the Banking Act No: 5411 and other regulations, circulars and communiqués in respect of accounting and financial reporting and pronouncements made by Banking Regulation and Supervision Agenc).

Additional Paragraph for the 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 unconsolidated 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 unconsolidated financial statements differ materially from IFRS. Accordingly, the accompanying unconsolidated 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

Hüseyin GürerPartner

İstanbul, February 22, 2013

98

99


SECTION ONEGENERAL 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 1III. 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 2VI. Current or Likely Actual or Legal Barriers to Immediate Transfer of Equity or Repayment of Debts between Parent Bank and Its Subsidiaries 2

SECTION TWOTHE 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 9VII. Statement of Profit Distribution 10

SECTION THREEACCOUNTING PRINCIPLES

I. Explanations on Basis of Presentation 11II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions 12III. Explanations on Forward and Option Contracts and Derivative Instruments 12IV. Explanations on Profit Share Income and Expenses 12V. Explanations on Fees and Commission Income and Expenses 12VI. Explanations on Financial Assets 13VII. Explanations on Impairment of Financial Assets 15VIII. Explanations on Offsetting Financial Assets and Liabilities 16IX. Explanations on Sales and Repurchase Agreements and Lending of Securities 16X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets 16XI. Explanations on Goodwill and Other Intangible Assets 17XII. Explanations on Tangible Assets 17XIII. Explanations on Leasing Transactions 18XIV. Explanations on Provisions and Contingent Liabilities 18XV. Explanations on Liabilities for Employee Benefits 18XVI. Explanations on Taxation 19XVII. Additional Disclosures on Borrowing 19XVIII. Explanations on Issuance of Share Certificates 20XIX. Explanations on Avalized Drafts and Acceptances 20XX. Explanations on Government Incentives 20XXI. Explanations on Segment Reporting 20XXII. Explanations on Other Matters 20

SECTION FOUR

INFORMATION ON FINANCIAL STRUCTURE AND RİSK MANAGEMENT STRATEGY

I. Explanations on Capital Adequacy Standard Ratio 21II. Explanations on Credit Risk 24III. Explanations on Market Risk 31IV. Explanations on Operational Risk 32V. Explanations on Currency Risk 33VI. Explanations on Interest Rate Risk 35VII. Explanations on Liquidity Risk 35VIII. Explanations on Presentation of Financial Assets and Liabilities at Fair Value 41IX. Explanations on Transactions Carried out on Behalf of Other Parties and Fiduciary Assets 42

SECTION FIVEEXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS

I. Explanations and Disclosures Related to the Assets 43II. Explanations and Disclosures Related to the Liabilities 66III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments 74IV. Explanations and Disclosures Related to the Income Statement 78V. Explanations and Disclosures Related to the Statements of Changes in Shareholders’ Equity 84VI. Explanations and Disclosures Related to the Statement of Cash Flows 85VII. Explanations on the Risk Group of the Bank 86VIII. Explanations on the Bank’s Domestic, Foreign, Off-Shore Branches or Investments in Associates and Foreign Representative Offices 87

SECTION SIXOTHER EXPLANATIONS

I. Other Explanations on the Operations of the Bank 87

SECTION SEVENAUDIT REPORT

I. Explanations on the Independent Auditor’s Report 87II. Other Footnotes and Explanations Prepared by the Independent Auditors 87

İÇİNDEKİLERTHE UNCONSOLIDATED FINANCIAL REPORT OF ASYA KATILIM BANKASI A.Ş. FOR THE YEAR ENDED DECEMBER 31, 2012

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 year-endfinancial report prepared in accordance with the Communiqué of Financial Statements and Related Disclo-sures and Footnotes to be Announced to Public by Banks as regulated by Banking Regulation and Supervision Agency, is comprised of the following sections:

• GENERAL INFORMATION ABOUT THE BANK• UNCONSOLIDATED 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• OTHER EXPLANATIONS • INDEPENDENT AUDITORS’ REPORT

The unconsolidated financial statements and related disclosures and footnotes that were subject to independent audit, are prepared in accordance with the Regulation on Accounting Applications for Banks and Safeguarding of Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards and the related statements and guidances and in compliance with the financial records of our Bank and, unless stated otherwise, presented in thousands of Turkish Lira (TL).

Prof.Dr. Erhan BİRGİLİ Ahmet BEYAZ Mahmut YALÇIN Kamil YILMAZChairman of the Board of

DirectorsMember of the Board of

Directors and General ManagerAssistant General Manager

Responsible of Financial Reporting

Manager in Charge of Financial Reporting

Dr. Ercüment GÜLER Mehmet URUÇ

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

ASYA KATILIM BANKASI A.Ş. NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012

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



100

101


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 & Surname / Commercial TitleShare

AmountShare

AmountPaid

SharesUnpaidShares

ORTADOĞU TEKSTİL TİC. SAN. A.Ş. 44.022 12,23 44.022 -

FORUM İNŞAAT DEKORASYON TURİZM SAN. VE TİC. A.Ş. 34.668 9,63 34.668 -

BJ TEKSTİL TİCARET VE SANAYİ A.Ş. 20.350 5,65 20.350 -

ABDULKADİR KONUKOĞLU 20.088 5,58 20.088 -

SÜRAT BASIM YAYIN REKLAMCILIK VE EĞİTİM ARAÇLARI SAN. TİC. A.Ş. 17.936 4,98 17.936 -

BİRİM BİRLEŞİK İNŞAATÇILIK MÜMESSİLLİK SAN. VE TİC. A.Ş. 17.783 4,94 17.783 -

OSMAN CAN PEHLİVAN 15.300 4,25 15.300 -

SERRA TURİZM LTD. ŞTİ. 15.000 4,17 15.000 -

HASAN SAYIN 13.573 3,77 13.573 -

NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş. 13.142 3,65 13.142 -

OTHER 148.138 41,15 148.138 -

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 December 31, 2012.

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. and regulation processes commission on be half of Asya Emeklilik ve Hayat A.Ş..

VI. Current or Likely Actual or Legal Barriers to Immediate Transfer of Equity or Repayment of Debtsbetween Parent Bank and Its Subsidiaries

None.

SECTION ONE

GENERAL INFORMATION

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

Incorporation of Asya Finans Kurumu A.Ş. 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. (“the Bank”) 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 ResponsibilityChairman of the Board of Directors Prof. Dr. Erhan BİRGİLİ Chairman of the Board of Directors

Member of the Board of Directors

Mustafa Talat KATIRCIOĞLU Vice Chairman of the Board of Directors Ali ÇELİK Member of the Board of DirectorsRecep KOÇAK Member of the Board of DirectorsMehmet GÖZÜTOK Member of the Board of DirectorsZafer ERTAN Member of the Board of DirectorsMehmet URUÇ Member of the Board of Directors and the Audit CommitteesDr. Ercüment GÜLER Member of the Board of Directors and the Audit Committees

General Manager Ahmet BEYAZ Member of the Board of Directors and CEO

Assistant General Managers

Murat DEMİR Commercial Banking GroupsAhmet AKAR Loan Allocation GroupFeyzullah EĞRİBOYUN Treasury GroupFahrettin SOYLU Operations GroupMahmut YALÇIN Financial Affairs GroupTalha Salih YAYLA Risk Monitoring Legal Group and Law GroupHakan Fatih BÜYÜKADALI Human Resources GroupAli TUĞLU Information Technologies Group

Coordinator Abdurrahman KÖSE Retial Banking GroupGroup President Murat AYDOĞAN Support Services Group

AuditorsAtıf BİLGİN Auditorİrfan HACIOSMANOĞLU Auditorİzzet AKYAR Auditor

(*) Shares of the Bank owned by the above stated the top management are negligible.(**) Bank Asya Chairman of the Board of Directors, Mr. Behçet AKYAR has resigned from his position as of November 22, 2012. Bank Asya Supervisory Board member Prof. Dr. Erhan BİRGİLİ was appointed as the member and Chairman of the Board of Directors.(***) Bank Asya Board member and President-CEO Mr. Abdullah ÇELİK have announced his resignation, effective on January 18, 2013. Bank Asya’s Board Member Mr. Ahmet BEYAZ was appointed as the President & CEO. (****) Bank Asya’s Executive Vice President Mr. Zafer ERTAN was appointed as the board member, Bank Asya’s Board Member Mr. Mustafa Talat KATIRCIOĞLU was appointed as the Vice Chairman of the Board of Directors. (*****) Mr. Murat DEMİR was appointed as Executive Vice President of Commercial - SME Loan Allocations, Mr. Hakan Fatih BÜYÜKADALI was appointed as Executive Vice President of Human Resources, Mr. Mahmut YALÇIN was appointed as Executive Vice President of Financial Affairs shares and Mr. Salih Talha YAYLA was appointed as Executive Risk Monitoring Legal Group and Law Group.(******) Mr. İzzet AKYAR was appointed as the auditor by the auditors on January 25, 2013.

102

103


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

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

THOUSAND TURKISH LIRA

ASSETS Note

CURRENT PERIODAudited

(31/12/2012)

PRIOR PERIODAudited

(31/12/2011)TRY FC Total TRY FC Total

I. CASH AND BALANCES WITH THE CENTRAL BANK (1) 363.214 2.326.382 2.689.596 527.427 1.152.225 1.679.652

II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Net) (2) - 7.895 7.895 - 1.250 1.250

2.1 Financial assets held for trading - 7.895 7.895 - 1.250 1.250

2.1.1 Public sector debt securities - - - - - -

2.1.2 Share certificates - - - - - -

2.1.3 Derivative financial assets held for trading - 7.895 7.895 - 1.250 1.250

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) 24.961 380.497 405.458 15.882 343.483 359.365

IV. MONEY MARKET PLACEMENTS - - - - - -

V. FINANCIAL ASSETS AVAILABLE FOR SALE (Net) (4) 792.325 - 792.325 779.637 - 779.637

5.1 Share certificates 93 - 93 93 - 93

5.2 Public sector debt securities 792.232 - 792.232 779.544 - 779.544

5.3 Other marketable securities - - - - - -

VI. LOANS AND RECEIVABLES (5) 14.204.785 1.820.735 16.025.520 11.588.089 1.565.682 13.153.771

6.1 Loans and receivables 13.982.568 1.820.730 15.803.298 11.278.387 1.565.242 12.843.629

6.1.1. Loans to Risk Group of the Bank 383.714 2.022 385.736 304.173 6.283 310.456

6.1.2. Public sector debt securities - - - - - -

6.1.3. Other 13.598.854 1.818.708 15.417.562 10.974.214 1.558.959 12.533.173

6.2 Non-performing loans 647.604 1.317 648.921 614.033 1.697 615.730

6.3 Specific provisions (-) (425.387) (1.312) (426.699) (304.331) (1.257) (305.588)

VII. HELD TO MATURITY INVESTMENTS (Net) (6) - - - 77.053 - 77.053

VIII. INVESTMENTS IN ASSOCIATES (Net) (7) 108.967 - 108.967 96.873 - 96.873

8.1 Accounted for under equity method - - - - - -

8.2 Unconsolidated associates 108.967 - 108.967 96.873 - 96.873

8.2.1 Financial investments 50.619 - 50.619 38.525 - 38.525

8.2.2 Non-financial investments 58.348 - 58.348 58.348 - 58.348

IX. INVESTMENTS IN SUBSIDIARIES (Net) (8) 169.473 - 169.473 154.761 - 154.761

9.1 Unconsolidated financial subsidiaries 112.471 - 112.471 97.809 - 97.809

9.2 Unconsolidated non-financial subsidiaries 57.002 - 57.002 56.952 - 56.952

X. ENTITIES UNDER COMMON CONTROL (JOINT VENT.) (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) 271.778 10.092 281.870 277.570 20.181 297.751

11.1 Finance lease receivables 367.612 10.727 378.339 370.569 21.860 392.429

11.2 Operating lease receivables - - - - - -

11.3 Other - - - - - -

11.4 Unearned income ( - ) (95.834) (635) (96.469) (92.999) (1.679) (94.678)

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) 128.099 - 128.099 112.793 - 112.793

XIV. INTANGIBLE ASSETS (Net) (13) 13.779 - 13.779 11.012 - 11.012

14.1 Goodwill - - - - - -

14.2 Other 13.779 - 13.779 11.012 - 11.012

XV. INVESTMENT PROPERTIES (Net) (14) - - - - - -

XVI. TAX ASSET (15) 16.348 - 16.348 19.398 - 19.398

16.1 Current tax asset - - - - - -

16.2 Deferred tax asset 16.348 - 16.348 19.398 - 19.398

XVII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) (16) 151.869 - 151.869 8.724 - 8.724

17.1 Held for sale 151.869 - 151.869 8.724 - 8.724

17.2 Discontinued Operations - - - - - -

XVIII. OTHER ASSETS (17) 587.938 10.887 598.825 436.920 1.139 438.059

TOTAL ASSETS 16.833.536 4.556.488 21.390.024 14.106.139 3.083.960 17.190.099


CURRENT PERIOD

PRIOR PE-RIOD

Audited Audited

LIABILITIES AND EQUITY Note (31/12/2012) (31/12/2011)

TRY FC Total TRY FC Total

I. FUND COLLECTED (1) 9.241.391 6.500.467 15.741.858 7.813.463 4.583.580 12.397.043

1.1 Fund from Risk Group of the Bank 205.170 67.627 272.797 177.714 63.720 241.434

1.2 Other 9.036.221 6.432.840 15.469.061 7.635.749 4.519.860 12.155.609

II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) - 6.581 6.581 - 11.715 11.715

III. FUNDS BORROWED (3) - 1.815.403 1.815.403 - 1.457.830 1.457.830

IV. MONEY MARKET BALANCES - - - 279.207 - 279.207

V. MARKETABLE SECURITIES ISSUED (Net) - - - - - -

VI. SUNDRY CREDITORS 631.557 1.557 633.114 376.682 2.636 379.318

VII. OTHER LIABILITIES (4) 507.235 25.620 532.855 221.158 62.681 283.839

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) 177.495 79.631 257.126 165.608 26.630 192.238

10.1 General loan loss provisions 107.700 74.785 182.485 110.319 20.747 131.066

10.2 Restructuring provisions - - - - - -

10.3 Reserve for employee benefits 39.801 - 39.801 28.854 - 28.854

10.4 Insurance technical reserves (Net) - - - - - -

10.5 Other provisions 29.994 4.846 34.840 26.435 5.883 32.318

XI. TAX LIABILITY (8) 53.812 2 53.814 51.482 1 51.483

11.1 Current tax liability 53.812 2 53.814 51.482 1 51.483

11.2 Deferred tax liability - - - - - -

XII.PAYABLES RELATED TO ASSETS HELD FOR SALE ND DISCONTINUED OPERATIONS (Net)

(9) - - - - - -

12.1 Held for sale - - - - - -

12.2 Discontinued operations - - - - - -

XIII. SUBORDINATED LOANS (10) - - - - - -

XIV. SHAREHOLDERS’ EQUITY (11) 2.349.273 - 2.349.273 2.137.426 - 2.137.426

14.1 Paid-in capital 900.000 - 900.000 900.000 - 900.000

14.2 Supplementary Capital 19.240 - 19.240 (6.017) - (6.017)

14.2.1 Share premium 3.307 - 3.307 3.307 - 3.307

14.2.2 Share cancellation profits - - - - - -

14.2.3 Marketable securities valuation differences 7.853 - 7.853 (13.599) - (13.599)

14.2.4 Tangible assets revaluation differences 8.080 - 8.080 4.275 - 4.275

14.2.5 Intangible assets revaluation differences - - - - - -

14.2.6 Investment property revaluation reserve - - - - - -

14.2.7Bonus shares obtained from associates, subsidiaries and jointly con-trolled entities (Joint Vent.)

- - - - - -

14.2.8 Hedging funds (Effective portion) - - - - - -

14.2.9Accumulated valuation differences from assets held for sale and from discontinued operations

- - - - - -

14.2.10 Other capital reserves - - - - - -

14.3 Profit reserves 1.239.641 - 1.239.641 1.027.353 - 1.027.353

14.3.1 Legal reserves 76.753 - 76.753 65.948 - 65.948

14.3.2 Status reserves - - - - - -

14.3.3 Extraordinary reserves 1.162.885 - 1.162.885 961.405 - 961.405

14.3.4 Other profit reserves 3 - 3 - - -

14.4 Profit or loss 190.392 - 190.392 216.090 - 216.090

14.4.1 Prior year income / (losses) - - - - - -

14.4.2 Current year income / (losses) 190.392 - 190.392 216.090 - 216.090

14.5 Minority shares - - - - - -

TOTAL LIABILITIES AND EQUITY 12.960.763 8.429.261 21.390.024 11.045.026 6.145.073 17.190.099

104

105


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

ASYA KATILIM BANKASI A.Ş.SECTION TWOUNCONSOLIDATED STATEMENT OF INCOME

THOUSAND TURKISH LIRACURRENT PERIOD

Audited(31/12/2012)

PRIOR PERIODAudited

(31/12/2011)Note TRY FC Total TRY FC Total

A. OFF BALANCE SHEET CONTINGENCIES AND COMMITMENTS (I+II+III) 8.217.435 7.670.579 15.888.014 7.698.020 7.183.246 14.881.266 I. GUARANTEES (1), (2) 3.769.272 4.207.580 7.976.852 4.047.507 5.301.252 9.348.759 1.1. Letters of guarantees 3.698.594 2.853.243 6.551.837 3.996.113 3.560.462 7.556.575 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 3.698.594 2.853.243 6.551.837 3.996.113 3.560.462 7.556.575 1.2. Bank loans 20.590 328.613 349.203 27.386 296.584 323.970 1.2.1. Import letter of acceptance 20.590 328.613 349.203 27.386 296.584 323.970 1.2.2. Other bank acceptances - - - - - - 1.3. Letters of credit 2.099 920.926 923.025 2.898 1.331.621 1.334.519 1.3.1. Documentary letters of credit - - - - - - 1.3.2. Other letters of credit 2.099 920.926 923.025 2.898 1.331.621 1.334.519 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 47.989 104.798 152.787 21.110 112.585 133.695 1.7. Other collaterals - - - - - - II. COMMITMENTS (1) 3.789.987 878.379 4.668.366 3.628.894 587.140 4.216.034 2.1. Irrevocable commitments 3.789.987 878.379 4.668.366 3.628.894 587.140 4.216.034 2.1.1. Forward asset purchase commitments 213.268 878.379 1.091.647 498.695 587.140 1.085.835 2.1.2. Share capital commitment to associates and subsidiaries 7.500 - 7.500 10.798 - 10.798 2.1.3. Loan granting commitments 32.415 - 32.415 353.633 - 353.633 2.1.4. Securities underwriting commitments - - - - - - 2.1.5. Commitments for reserve deposit requirements - - - - - - 2.1.6. Payment commitment for checks 815.875 - 815.875 650.723 - 650.723 2.1.7. Tax and fund liabilities from export commitments 1.657 - 1.657 1.883 - 1.883 2.1.8. Commitments for credit card expenditure limits 2.640.066 - 2.640.066 2.066.016 - 2.066.016 2.1.9. Commitments for promotions related with credit cards and banking activities 9.021 - 9.021 7.236 - 7.236 2.1.10. Receivables from short sale commitments - - - - - - 2.1.11. Payables for short sale commitments - - - - - - 2.1.12. Other irrevocable commitments 70.185 - 70.185 39.910 - 39.910 2.2. Revocable commitments - - - - - - 2.2.1. Revocable loan granting commitments - - - - - - 2.2.2. Other revocable commitments - - - - - - III. DERIVATIVE FINANCIAL INSTRUMENTS (4) 658.176 2.584.620 3.242.796 21.619 1.294.854 1.316.473 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 658.176 2.584.620 3.242.796 21.619 1.294.854 1.316.473 3.2.1. Forward foreign currency buy/sell transactions 182.740 181.718 364.458 - - - 3.2.1.1. Forward foreign currency transactions-buy 87.239 94.948 182.187 - - - 3.2.1.2. Forward foreign currency transactions-sell 95.501 86.770 182.271 - - - 3.2.2. Other Forward buy/sell transactions 475.436 2.402.902 2.878.338 21.619 1.294.854 1.316.473 3.3. Other - - - - - - B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) 105.644.718 43.709.015 149.353.733 78.809.965 44.242.640 123.052.605 IV. ITEMS HELD IN CUSTODY 1.076.443 859.592 1.936.035 996.242 821.158 1.817.400 4.1. Assets under management - - - - - - 4.2. Investment securities held in custody 2.885 - 2.885 2.885 - 2.885 4.3. Checks received for collection 789.908 302.562 1.092.470 736.005 316.160 1.052.165 4.4. Commercial notes received for collection 283.639 33.576 317.215 257.343 20.756 278.099 4.5. Other assets received for collection - 153.446 153.446 - 126.829 126.829 4.6. Assets received for public offering - - - - - - 4.7. Other items under custody 7 - 7 5 - 5 4.8. Custodians 4 370.008 370.012 4 357.413 357.417 V. PLEDGED ITEMS 104.568.275 42.849.423 147.417.698 77.813.723 43.421.482 121.235.205 5.1. Marketable securities 937.322 53.808 991.130 820.957 370.522 1.191.479 5.2. Guarantee notes 62.265.947 38.517.707 100.783.654 49.893.921 38.782.884 88.676.805 5.3. Commodity 3.634.267 748.925 4.383.192 2.643.502 759.906 3.403.408 5.4. Warranty - - - - - - 5.5. Properties 27.127.268 2.925.296 30.052.564 18.800.856 2.744.840 21.545.696 5.6. Other pledged items 10.603.471 603.687 11.207.158 5.654.487 763.330 6.417.817 5.7. Pledged items-depository - - - - - - VI. ACCEPTED AVALIZED DRAFTS AND SURETYSHIPS - - - - - -

TOTAL OFF BALANCE SHEET ACCOUNTS (A+B) 113.862.153 51.379.594 165.241.747 86.507.985 51.425.886 137.933.871


STATEMENT OF INCOME Note


(01/01/2012-31/12/2012)

PRIOR PERIODAudited

(01/01/2011-31/12/2011)

I. PROFIT SHARE INCOME (1) 1.672.257 1.278.154

1.1 Profit share on loans 1.586.477 1.201.460

1.2 Profit share from reserve deposits - -

1.3 Profit share from banks 1.514 1.892

1.4 Profit share from money market placements - -

1.5 Profit share from marketable securities portfolio 56.657 58.116

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 55.300 49.234

1.5.4 Investment-held for maturity 1.357 8.882

1.6 Finance lease income 27.609 16.686

1.7 Other profit share income - -

II. PROFIT SHARE EXPENSE (2) (791.932) (646.930)

2.1 Expense on profit sharing accounts (730.856) (593.829)

2.2 Profit share expense on funds borrowed (57.709) (38.562)

2.3 Profit share expense on money market borrowings (3.347) (14.340)

2.4 Expense on securities issued - -

2.5 Other profit share expense (20) (199)

III. NET PROFIT SHARE INCOME (I - II) 880.325 631.224

IV. NET FEES AND COMMISSIONS INCOME/EXPENSE 287.256 259.808

4.1 Fees and commisions received 359.866 319.881

4.1.1 Non-cash loans 122.779 133.643

4.1.2 Other (12) 237.087 186.238

4.2 Fees and commisions paid (72.610) (60.073)

4.2.1 Non-cash loans (15) (12)

4.2.2 Other (12) (72.595) (60.061)

V. DIVIDEND INCOME (3) 3.376 -

VI. NET TRADING INCOME (4) 25.808 39.120

6.1 Securities trading gains / (losses) - -

6.2 Gains /(losses) from derivative financial instruments 130.082 64.210

6.3 Foreign exchange gains / (losses) (104.274) (25.090)

VII. OTHER OPERATING INCOME (5) 136.030 130.545

VIII. NET OPERATING INCOME (III+IV+V+VI+VII) 1.332.795 1.060.697

IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (6) (413.776) (228.198)

X. OTHER OPERATING EXPENSES (-) (7) (673.578) (563.367)

XI. NET OPERATING PROFIT/(LOSS) (VIII-IX-X) 245.441 269.132

XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - -XIII. GAIN/(LOSS) ON EQUITY METHOD - -

XIV. GAIN/(LOSS) ON NET MONETARY POSITION - -

XV. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XI+…+XIV) (8) 245.441 269.132

XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (9) (55.049) (53.042)

16.1 Current income tax (charge)/benefit (57.361) (57.546)

16.2 Deferred tax (charge)/benefit 2.312 4.504

XVII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XV±XVI) (10) 190.392 216.090

XVIII. INCOME ON DISCONTINUED OPERATIONS - -

18.1 Income on assets held for sale - -

18.2 Income on sale of associates, subsidiaries and jointly controlled entities (Joint Vent.) - -

18.3 Income on 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) 190.392 216.090

23.1 Group’s profit/loss 190.392 216.090

23.2 Minority shares - -

Earnings per share 0.21 0.24

106

107


ASYA KATILIM BANKASI A.Ş.SECTION TWOSTATEMENT OF PROFIT AND LOSS ACCOUNTED FOR UNDER EQUITY

AS

YA K

ATIL

IM B

AN

KA

SI A

.Ş.

SE

CTI

ON

TW

OU

NC

ON

SO

LID

ATE

D S

TATE

ME

NT

OF

CH

AN

GE

S IN

SH

AR

EH

OLD

ER

’S E

QU

ITY


CURRENT PERIOD PRIOR PERIOD

Audited Audited

STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY (01/01/2012-31/12/2012) (01/01/2011-31/12/2011)

I. Additions to marketable securities revaluation differences from financial assets available for sale 26.814 (25.414)

II. Tangible assets revaluation differences - -

III. Intangible assets revaluation differences - -

IV. Foreign exchange differences for foreign currency transactions 3 -

V.Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences)

- -

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

- -

VII. The effect of corrections of errors and changes in accounting policies - -

VIII. Other profit loss items accounted for under equity due to TAS - -

IX. Deferred tax of valuation differences (5.362) 5.083

X. Total Net Profit/Loss accounted for under equity (I+II+…+IX) 21.455 (20.331)

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) 21.455 (20.331)

TH

OU

SA

ND

TU

RK

ISH

LIR

A

STA

TE

ME

NT

OF

CH

AN

GE

S O

F S

HA

RE

HO

LDE

R’S

EQ

UIT

Y

Not

eP

aid-

in

Cap

ital

Infla

tion

Adj

ustm

ent

to P

aid-

in

Cap

ital

Sha

re

Pre

miu

m

Sha

re

Cer

tific

ate

Can

cella

tion

Pro

fits

Lega

l R

eser

ves

Sta

tuto

ry

Res

erve

s

E

xtra

ordi

nary

R

eser

veO

ther

R

eser

ve

Cur

rent

P

erio

dN

et In

com

e /

(Exp

ense

)

Prio

r P

erio

dN

et In

com

e /

(Exp

ense

)

Mar

keta

ble

Sec

uriti

es

Rev

alua

tion

Res

erve

Tang

ible

and

In

tang

ible

A

sset

s R

evau

latio

n D

iffer

ence

s

Bon

us S

hare

s O

btai

ned

from

S

ubsi

diar

ies

Hed

ging

Fu

nds

Valu

atio

n D

iff. f

rom

A

sset

s H

eld

for

Sal

e an

d fro

m

Dis

c. O

p.

Tota

l Equ

ity

Exc

ludi

ng

Non

-con

trol

-lin

g In

tere

st

Non

-co

ntro

lling

Inte

rest

Tota

l E

quity

PR

IOR

PE

RIO

DA

udit

ed (0

1/01

-31/

12/2

011)

I.P

rio

r P

erio

d B

alan

ce -

31.

12.2

010

900

.000

-

3

.307

-

5

2.95

0 -

7

14.4

41

-

-

259

.962

6

.732

4

.275

-

-

-

1

.941

.667

-

1

.941

.667

II.

Co

rrec

tio

ns a

cco

rdin

g t

o T

AS

8 -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2.

1.Th

e ef

fect

of c

orre

ctio

ns o

f err

rors

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2.2.

The

effe

cts

of c

hang

es in

acc

ount

ing

polic

y -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

III

.N

ew B

alan

ce (I

+II)

900

.000

-

3

.307

-

5

2.95

0 -

7

14.4

41

-

-

259

.962

6

.732

4

.275

-

-

-

1

.941

.667

-

1

.941

.667

C

hang

es in

per

iod

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

IV.

Incr

ease

/dec

reas

e re

late

d t

o m

erg

er -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

V.

Mar

keta

ble

sec

urit

ies

valu

atio

n d

iffer

ence

s -

-

-

-

-

-

-

-

-

-

(2

0.33

1) -

-

-

-

(2

0.33

1) -

(2

0.33

1)V

I.H

edg

ing

fun

ds

(Eff

ecti

ve P

ort

ion)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

6.1

Cas

h-flo

w h

edge

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

6.2

Hed

ge o

f net

inve

stm

ent i

n fo

reig

n op

erat

ions

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

VII.

Tang

ible

ass

ets

reva

luat

ion

diff

eren

ces

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

VIII

.In

tang

ible

ass

ets

reva

luat

ion

diff

eren

ces

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

IX.

Bo

nus

shar

es o

bta

ined

fro

m a

sso

ciat

es, s

ubsi

dia

ries

and

join

tly

cont

rolle

d e

ntit

ies

(Jo

int

vent

.) -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X.

Fore

ign

exch

ang

e d

iffer

ence

s -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

I.T

he d

isp

osa

l of

asse

ts -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

II.T

he r

ecla

ssifi

cati

on

of

asse

ts -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

III.

The

eff

ect

of

chan

ge

in a

sso

ciat

e’s

equi

ty -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

IV.

Cap

ital

incr

ease

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

14.1

Cas

h -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

14

.2In

tern

al s

ourc

es -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

V.S

hare

pre

miu

m -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

VI.

Sha

re c

ance

llati

on

pro

fits

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

XV

II.In

flati

on

adju

stm

ent

to p

aid

-in

cap

ital

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

XV

III.

Oth

er -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

IXP

erio

d n

et in

com

e/(lo

ss)

-

-

-

-

-

-

-

-

216

.090

-

-

-

-

-

-

2

16.0

90

-

216

.090

X

X.

Pro

fit d

istr

ibut

ion

-

-

-

-

12.

998

-

246

.964

-

-

(2

59.9

62)

-

-

-

-

-

-

-

-

20.1

Div

iden

ds d

istr

ibut

ed -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

20

.2Tr

ansf

ers

to re

serv

es -

-

-

-

1

2.99

8 -

2

46.9

64

-

-

(259

.962

) -

-

-

-

-

-

-

-

20

.3O

ther

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Clo

sing

Bal

ance

(I+

II+III

+-…

...+

XV

I+X

VII+

XV

III)

900

.000

-

3

.307

-

6

5.94

8 -

9

61.4

05

-

216

.090

-

(1

3.59

9) 4

.275

-

-

-

2

.137

.426

-

2

.137

.426

CU

RR

EN

T P

ER

IOD

Aud

ited

(01/

01-3

1/12

/201

2)I.

Pri

or

Per

iod

Bal

ance

- 3

1.12

.201

1 9

00.0

00

-

3.3

07

-

65.

948

-

961

.405

-

-

2

16.0

90

(13.

599)

4.2

75

-

-

-

2.1

37.4

26

-

2.1

37.4

26

Cha

nges

in p

erio

d -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

II.

Incr

ease

/dec

reas

e re

late

d t

o m

erg

er -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

III

.M

arke

tab

le s

ecur

itie

s va

luat

ion

diff

eren

ces

-

-

-

-

-

-

-

-

-

-

21.

452

-

-

-

-

21.

452

-

21.

452

IV.

Hed

gin

g f

und

s (E

ffec

tive

Po

rtio

n) -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

4.

1C

ash-

flow

hed

ge -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

4.

2H

edge

of n

et in

vest

men

t in

fore

ign

oper

atio

ns -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

V.

Tang

ible

ass

ets

reva

luat

ion

diff

eren

ces

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

VI.

Inta

ngib

le a

sset

s re

valu

atio

n d

iffer

ence

s -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

VII.

Bo

nus

shar

es o

bta

ined

fro

m a

sso

ciat

es, s

ubsi

dia

ries

and

join

tly

cont

rolle

d e

ntit

ies

(Jo

int

vent

.) -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

VIII

.Fo

reig

n ex

chan

ge

diff

eren

ces

-

-

-

-

-

-

-

3

-

-

-

-

-

-

-

3

-

3

IX.

The

dis

po

sal o

f as

sets

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X.

The

rec

lass

ifica

tio

n o

f as

sets

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

XI.

The

eff

ect

of

chan

ge

in a

sso

ciat

e’s

equi

ty -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

II.C

apit

al in

crea

se -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

12

.1C

ash

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

12.2

Inte

rnal

sou

rces

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

XIII

.S

hare

pre

miu

m -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

IV.

Sha

re c

ance

llati

on

pro

fits

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

XV.

Infla

tio

n ad

just

men

t to

pai

d-i

n ca

pit

al -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

X

VI.

Oth

er

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

XV

II.P

erio

d n

et in

com

e/(lo

ss)

-

-

-

-

-

-

-

-

190

.392

-

-

-

-

-

-

1

90.3

92

-

190

.392

X

VIII

.P

rofit

dis

trib

utio

n -

-

-

-

1

0.80

5 -

2

01.4

80

-

-

(216

.090

) -

3

.805

-

-

-

-

-

-

18

.1D

ivid

ends

dis

trib

uted

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

18.2

Tran

sfer

s to

rese

rves

-

-

-

-

10.

805

-

201

.480

-

-

(2

16.0

90)

-

3.8

05

-

-

-

-

-

-

18.3

Oth

er -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Clo

sing

Bal

ance

(I+

II+III

+-…

...+

XV

I+X

VII+

XV

III)

900

.000

-

3

.307

-

7

6.75

3 -

1

.162

.885

3

1

90.3

92

-

7.8

53

8.0

80

-

-

-

2.3

49.2

73

-

2.3

49.2

73

108

109


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

ASYA KATILIM BANKASI A.Ş.SECTION TWOPROFIT DISTRIBUTION TABLE


Note


(01/01-31/12/2012)

PRIOR PERIODAudited

(01/01-31/12/2011)

A. CASH FLOWS FROM BANKING OPERATIONS

1.1 Operating profit before changes in operating assets and liabilities 691.653 165.005

1.1.1 Profit share income received 1.720.288 1.217.032

1.1.2 Profit share expense paid (790.598) (645.930)

1.1.3 Dividend received 3.376 -

1.1.4 Fees and commissions received 358.736 308.236

1.1.5 Other income 180.321 91.062

1.1.6 Collections from previously written off loans 14.127 14.509

1.1.7 Payments to personnel and service suppliers (317.086) (264.766)

1.1.8 Taxes paid (70.858) (81.339)

1.1.9 Others (406.653) (473.799)

1.2 Changes in operating assets and liabilities (333.300) 472.664

1.2.1 Net (increase) decrease in financial assets - -

1.2.2 Net (increase) decrease in financial assets at fair value through profit or loss - -

1.2.3 Net (increase) decrease in due from banks and other financial institutions (803.670) 538.259

1.2.4 Net (increase) decrease in loans (3.944.961) (2.193.795)

1.2.5 Net (increase) decrease in other assets 92.273 66.499

1.2.6 Net increase (decrease) in bank deposits (21.759) 101.005

1.2.7 Net increase (decrease) in other deposits 3.607.239 903.693

1.2.8 Net increase (decrease) in funds borrowed 530.598 672.030

1.2.9 Net increase (decrease) in due payables - -

1.2.10 Net increase (decrease) in other liabilities 206.980 384.973

I. Net cash provided from banking operations 358.353 637.669

B. CASH FLOWS FROM INVESTING ACTIVITIES

II. Net cash provided from investing activities 16.149 (427.870)

2.1 Cash paid for purchase of entities under common control, associates and subsidiaries (Joint Vent.) (I.7-I.8) (26.806) (20.065)

2.2 Cash obtained from sale of entities under common control, associates and subsidiaries (Joint Vent.) (I.7-I.8) - -

2.3 Fixed assets purchases (I.12) (61.533) (35.159)

2.4 Fixed assets sales (I.12) 24.740 31.598

2.5 Cash paid for purchase of financial assets available for sale (365.319) (400.000)

2.6 Cash obtained from sale of financial assets available for sale 375.000 -

2.7 Cash paid for purchase of investment securities - -

2.8 Cash obtained from sale of investment securities 77.000 -

2.9 Other (I.13) (6.933) (4.244)

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 (108.330) 18.609

V. Net increase in cash and cash equivalents 266.172 228.408

VI. Cash and cash equivalents at the beginning of the year (1) 669.083 440.675

VII. Cash and cash equivalents at the end of the year (1) 935.255 669.083

THOUSAND TURKISH LIRACURRENT PERIOD

Audited(01/01-31/12/2012)

PRIOR PERIODAudited

(01/01-31/12/2011)

I. DISTRIBUTION OF CURRENT YEAR PROFIT (**)

1.1 CURRENT YEAR PROFIT 245.441 269.1321.2 TAXES AND DUTIES PAYABLE (-) (55.049) (53.042)1.2.1 Corporate Tax (Income Tax) (57.361) (57.546)1.2.2 Income Withholding Tax - - 1.2.3 Other taxes and duties (*) 2.312 4.504

A. NET INCOME FOR THE YEAR (1.1-1.2) 190.392 216.090

1.3 PRIOR YEAR’S LOSSES (-) - - 1.4 FIRST LEGAL RESERVES (-) - 10.805 1.5 OTHER STATUTORY RESERVES (-) - 3.805

B. NET INCOME AVAILABLE FOR DISTRIBUTION [(A-(1.3+1.4+1.5)] 190.392 201.480

1.6 FIRST DIVIDEND TO SHAREHOLDERS (-) - - 1.6.1 To Owners of Ordinary Shares - - 1.6.2 To Owners of Preferred Shares - - 1.6.3 To Owners of Preferred Shares (Preemptive Rights) - - 1.6.4 To Profit Sharing Bonds - - 1.6.5 To Owners of the profit and loss Sharing Certificates - - 1.7 DIVIDEND TO PERSONNEL (-) - - 1.8 DIVIDEND TO BOARD OF DIRECTORS (-) - - 1.9 SECOND DIVIDEND TO SHAREHOLDERS (-) - - 1.9.1 To Owners of Ordinary Shares - - 1.9.2 To Owners of Preferred Shares - - 1.9.3 To Owners of Preferred Shares (Preemptive Rights) - - 1.9.4 To Profit Sharing Bonds - - 1.9.5 To Owners of the profit /loss Sharing Certificates - - 1.10 SECOND LEGAL RESERVE (-) - - 1.11 STATUTORY RESERVES (-) - - 1.12 EXTRAORDINARY RESERVES - 201.480 1.13 OTHER RESERVES - - 1.14 SPECIAL FUNDS - -

II. DISTRIBUTION OF RESERVES

2.1 DISTRIBUTED RESERVES - - 2.2 SECOND LEGAL RESERVES (-) - - 2.3 DIVIDENDS TO SHAREHOLDERS (-) - - 2.3.1 To Owners of Ordinary Shares - - 2.3.2 To Owners of Preferred Shares - - 2.3.3 To Owners of Preferred Shares (Preemptive Rights) - - 2.3.4 To Profit Sharing Bonds - - 2.3.5 To Holders of the profit /loss Sharing Certificates - - 2.4 DIVIDENDS TO PERSONNEL (-) - - 2.5 DIVIDENDS TO BOARD OF DIRECTORS (-) - -

III. EARNINGS PER SHARE

3.1 TO OWNERS OF ORDINARY SHARES 0.21 0.24 3.2 TO OWNERS OF ORDINARY SHARES ( % ) 21 24 3.3 TO OWNERS OF PREFERRED STOCKS - - 3.4 TO OWNERS OF PREFERRED STOCKS ( % ) - -

IV. DIVIDEND PER SHARE

4.1 TO OWNERS OF ORDINARY SHARES - - 4.2 TO OWNERS OF ORDINARY SHARES ( % ) - - 4.3 TO OWNERS OF PREFERRED STOCKS - - 4.4 TO OWNERS OF PREFERRED STOCKS ( % ) - -

(*) Deferred tax benefit which is not subject to distribution is presented in “other tax and duties” line.(**) Profit distribution is agreed on the General Assembly Meeting and as of the reporting date. the General Assembly meeting has not been held. yet.





110

111


SECTION THREE (Cont’d)

ACCOUNTING PRINCIPLES (Cont’d)

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 22% of its funds to liquid instruments (December 31, 2011: 20%).

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 transla-ted 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 statement of inco-me.

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 rates are compared with the expected discounted forward rates at maturity calculated based on the prevailing profit shares as of the ba-lance sheet date and arising foreign exchange differences are recognized in the statement of income. Although some of the derivative transactions provide economic hedging in accordance with TAS 39 “Financial Instruments: Recognition and Measurement” since all necessary conditions for hedge accounting have not been met 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 statement of income 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 commis-sion 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.

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 Mainta-ining Documents published in the Official Gazette No: 26333 dated November 1, 2006, Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”), other communiqués, pronouncements and explanations about accounting and financial repor-ting 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 TAS and TFRS; and other principles, methods and explanations about accounting and financial reporting issued by the BRSA. Certain reclassifications have been made to the prior period financial statements to comply with the current period presentation.

During the current period, the Bank has started to account the general loan agreements in monitoring accounts which were initially followed in custody amd pledged items. The unconsolidated statement of off-balance sheet contingencies and commitments has been restated by classifying the amount of TRY 124.867.159 Thousand from custody and pledge items to monitoring accounts according to the comparability principles during the preparation of December 31, 2012 statement of off-balance sheet contingencies and commit-ments.

In the current period, the Bank has started to follow assets to be disposed off in other assets which were initially accounted in tangible assets. The unconsolidated balance sheet has been restated by classifying the amount of TRY 340.899 Thousand from tangible assets to other assets according to the comparability principles during the preparation of December 31, 2012 balance sheet.

The accompanying financial statements are prepared in accordance with historical cost basis except for financial assets at fair value through profit or loss, financial assets available for sale and revaluation of fixed assets 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 Pro-cedural 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.





112

113




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 December 31, 2012, the Bank has TRY 7.895 Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2011: TRY 1.250 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 statement of income.

As of December 31, 2012, the Bank does not have any held to maturity investments (December 31, 2011: TRY 77.053 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 statement of income. 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 December 31, 2012, the Bank has TRY 792.325 Thousand of available for sale financial assets (December 31, 2011: TRY 779.637 Thousand).



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 information about the market and relevant valuation methods. However, interpretation of market information 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.





114

115




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. In other circumstances, the Bank does not offset financial assets and liabilities.

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

The Bank enters into revenue sharing certificates repurchase agreements with the Central Bank of the Republic of Turkey for the money market transactions. The Bank does not have any repurchase agreement or lending of securities transaction as of December 31, 2012 (December 31, 2011:TRY 279.207 Thousand).

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 December 31, 2012, assets held for sale amounts to TRY 151.869 Thousand (December 31, 2011: TRY 8.724 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 statement of income separately. The Bank has not a discontinued operation.



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 in the statement of income.

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 statement of income.

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 statement of income 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 period, and the remaining amounts are recognized as income in the account of collections from the prior period expenses.

In addition to specific loan loss provisions, general loan loss provision are recognized within the framework of the regulation on “Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves” published in the Official Gazette No. 26333 dated November 1 2006.

Except for specific loan loss provisions, the Bank allocates general loan loss provision in accordance with Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”.

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.





116

117




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 December 31, 2012, the Bank as a lessee has operating leases for vehicles, general management and branches in addition to its assets held through finance 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.

The main actuarial assumptions used in the calculation of severance indemnity pay provision are as follows:

December 31, 2012 (*) December 31, 2011 (*)Discount Rate 7,38% 9,2% - 11,55%Inflation Rate 5,00% 4,5% - 8,75%

(*) According to employees retirement dates, different rates have been used in the range of rates given in the table above.

TRY 3.034 (TRY full amount) salary ceiling, which was effective as of December 31, 2012 was taken into account in the current year calculations. It is assumed that the amount of the salary ceiling will increase each year in line with the inflation rate. The age of retirement is considered as the earliest age possible that an individual can retire and CSO 1980 female/male mortality table is used for the mortality rate.



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 thecost of acquisition over the Bank’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 Bank’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 subsidiaryor 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 statement of income.

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

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

Tangible Asset Useful LifeSafety Boxes 5 yearsOffice Equipment 5 yearsFurniture and Fixtures 5 yearsVehicles 5 yearsLeasehold Improvements 5 yearsBuildings 50 years





118

119




XVI. Explanations on Taxation

Tax expense comprises of current tax and deferred tax expenses.

Current tax payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the statement of income 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 Bank’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 statement of income. If deferred tax is in connection with the assets directly associated with the equity, it shall be directly associated with shareholders’ 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.

XVIII. Explanations on Issuance of Share Certificates

As of December 31, 2012, the Bank does not have issued share certificates.XIX. Explanations on Avalized Drafts and AcceptancesAcceptances are realized simultaneously with the payment dates of the customers and they are presented as probable commitments in the off-balance sheet 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 RetailCorporate and

Commercial Treasury Undistributed Total

Total Assets 3.537.575 12.642.417 1.740.513 3.469.519 21.390.024

Total Liabilities 10.645.810 5.096.048 1.821.984 3.826.182 21.390.024

Net Profit Share Income / (Expense) (*) (242.202) 1.123.205 (678) - 880.325

Net Fees and Commissions Income / (Expense) 22.427 236.569 (1.770) 30.030 287.256

Other Operating Income / (Expense) (14.275) (23.471) 25.808 (910.202) (922.140)

Profit Before Tax (234.050) 1.336.303 23.360 (880.172) 245.441

Tax Provision - - - (55.049) (55.049)

Net Profit for the Period (234.050) 1.336.303 23.360 (935.221) 190.392

(*) 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 RetailCorporate and

Commercial Treasury Undistributed Total

Total Assets 2.546.891 10.829.396 1.854.936 1.958.876 17.190.099

Total Liabilities 8.458.383 3.938.660 1.748.752 3.044.304 17.190.099

Net Profit Share Income / (Expense) (*) (289.384) 911.657 9.187 (236) 631.224

Net Fees and Commissions Income / (Expense) 11.929 229.316 (3.324) 21.887 259.808

Other Operating Income / (Expense) (7.628) (17.078) - (597.194) (621.900)

Profit Before Tax (285.083) 1.123.895 5.863 (575.543) 269.132

Tax Provision - - - (53.042) (53.042)

Net Profit for the Period (285.083) 1.123.895 5.863 (628.585) 216.090

(*) 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.





120

121


SECTION FOUR

INFORMATION ON FINANCIAL STRUCTURE

I. Explanations on Capital Adequacy Standard Ratio

The Bank’s unconsolidated capital adequacy ratio is 13,60%.

Risk Measurement Methods in Calculation of Capital Adequacy Ratio:

Capital adequacy ratio is calculated within the scope of the “Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks (the “Regulation”)”, “Regulation on Credit Risk Mitigation Techniques” and “Regulation on Calculation of Risk Weighted Amounts for Securitizations” published in the Official Gazette No. 28337 dated June 28, 2012 and the “Regulation on Equities of Banks” published in the Official Gazette No. 26333 dated November 1, 2006.

In the calculation of capital adequacy ratio, the data prepared from accounting records in compliance with the current legislation are used. Such accounting data is included in the calculation of credit and market risks subsequent to their designation as “trading book” and “banking book” according to the Regulation.

The items classified as trading book and the items deducted from the equity are not included in the calculation of credit risk. In the calculation of risk weighted assets, the assets subject to amortization or impairment, are taken into account on a net basis after being reduced by the related amortizations and provisions.

In the calculation of the value at credit risk for the cash and non-cash loans and commitments and the receivables from counterparties in such transactions are weighted after netting with specific provisions that are classified under liabilities and calculated based on the “Regulation on Identification of and Provision against Non-Performing Loans and Other Receivables”. The net amounts are then multiplied by the rates stated in the Article 5 of the Regulation, reduced as per the “Regulation on Credit Risk Mitigation Techniques” and then included in the relevant exposure category defined in the article 6 of the Regulation and weighted as per Appendix-1 of the Regulation.

In the calculation of the value at credit risk for the held for trading derivative financial instruments and the receivables from counterparties indicated on the trading accounting are multiplied by the rates presented in the Appendix-2 of the “ Communique on Measurement and Assessment of capital Adequacy of Banks”, is subjected to risk reduction presented in “Communique on Credit Risk Mitigation Techniques” and then included in the relevant exposure category presented in the article 6 of the “Communique on measurement and Assesment of Capital Adequacy of Banks” and weighted to risk weight classification indicated as per Appendix-1 of the Regulation.

SECTION FOUR (Cont’d)

INFORMATION ON FINANCIAL STRUCTURE (Cont’d)

I. Explanations on Capital Adequacy Standard Ratio (Cont’d)

Risk Weightings0% 10% 20% 50% 75% 100% 150% 200% 1250%

Value at Credit Risk Exposure CategoriesConditional and unconditionalreceivables from central governments or central banks 2.411.110 - - - - 220.804 - - -Conditional and unconditionalreceivables from regional or local governments 171 - 7 - - - - - -Conditional and unconditionalreceivables from administrative units and non-commercial enterprises 285 - - - - 45.151 - - -Conditional and unconditionalreceivables from multilateraldevelopment banks - - - - - - - - -Conditional and unconditionalreceivables from internationalorganizations - - - - - - - - -Conditional and unconditionalreceivables from banks and brokerage houses 6.240 - 152.811 104.643 - 489.770 - - -Conditional and unconditionalreceivables from corporates 227.308 - 73 - - 7.366.666 - - -Conditional and unconditional retail receivables 149.436 - - - 3.645.576 1.276 - - -Conditional and unconditionalreceivables secured by mortgages 109.156 - 13 5.924.493 - 368.635 - - -

Past due receivables 608 - - 60.597 - 142.448 20.358 - -Receivables defined in high risk category by BRSA - - - - - - 81.871 10.525 -Securities collateralized by mortgages - - - - - - - - -

Securitization positions - - - - - - - - -Short-term receivables from banks, brokerage houses and corporates - - - - - - - - -Investments similar to collective investment funds - - - - - - - - -

Other receivables 547.563 - 1.316 - - 1.124.342 - - -

Total Value at Risk 3.451.877 - 154.220 6.089.733 3.645.576 9.759.092 102.229 10.525 -

Total Risk Weighted Assets - - 30.844 3.044.867 2.734.182 9.759.092 153.344 21.050 -

Summary information related to capital adequacy ratio:

Current PeriodCapital Requirement for Credit Risk (Amount Subject to Credit Risk *0,08) (CRCR) 1.259.470Capital Requirement for Market Risk (MRCR) 1.553Capital Requirement for Operational Risk (ORCR) (*) 141.840Shareholders’ Equity 2.384.213Shareholders’ Equity / ((TRWA + ASMR + ASOR) *12,5) *100 13,60

(*) 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: 28337 dated June 28, 2012 which is effective from July 1, 2012. Operational risk is calculated by using the Basic Indicator Approach.





122

123





Approaches for Assessment of Adequacy of Internal Capital Requirements for Current and Future Activities:

The “Asya Katılım Bankası A.Ş.’s assessment process of adequacy of internal capital requirements and capital adequacy policies” was prepared in order to describe the assessment process of adequacy of internal capital requirements and capital adequcy policies, and approved byits Board of Directors on September 27, 2012. The purpose of internal review is to manage capital adequacy in terms of volume, nature and complexity of its operations in accordance with the BRSA regulations by considering the best practices. Accordingly, the Bank reviews the nature, components and distribution of its capital adequacy on a regular basis and develops appropriate and efficient strategies and process to manage its capital adequacy. The Bank establishes capital objectives in line with its risk profile, operating environment and strategies. Internal capital adecuacy is determined in a way that it includes all types of risks, and our internal review enables to identify an overall capital

amount and assessment.

II. Explanations on Credit Risk

Credit worthiness of loan customers are monitored and semi-annually and regularly reviewed by the Risk Monitoring Department of the Bank in accordance with the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”. The account statements are obtained based on the prevailing regulations. Credit limits are determined by the Board of Directors, the Credit Committee of the Bank and the Credit Administration. The Bank obtains sufficient guarantees for its risks, comprising of personal surety, real-estate mortgage, cash blockage, and customer cheques.

For the derivative transactions and other similar positions of the Bank, operational limits are set by the Board of Directors and the transactions are performed within these limits.

The Bank monitors restructured and rescheduled loans in accordance with the Communiqué on “Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions”. Financial position and business operation of those customers are analyzed systematically and, principal and profit payments based on the restructured payment plan are monitored whether paid or not by the corresponding departments.

As of December 31, 2012, the risk of the Bank from its top 100 and 200 cash loan customers share in total cash loans ratio is 31,94% and 39,94%.

As of December 31, 2012, the risk of the Bank from its top 100 and 200 non-cash loan customers share in total non-cash loan ratio is 42,34% and 52,96% .

As of December 31, 2012, the cash and non-cash receivables of the Bank from its top 100 and 200 loan customers share in total balance sheet assets and non-cash loan ratio is 29,65% and 38,32%.

As of December 31, 2012 the Bank’s general loan loss provision amount for its credit risk is TRY 182.485 Thousand (December 31, 2011: TRY 131.066 Thousand).




Components of Shareholders’ Equity Items:

CORE CAPITAL Current PeriodPaid-in Capital (*) 894.525 Nominal Capital 894.525 Capital Commitments (-) -Inflation Adjustments to Paid-in Capital -Share Premium 3.307Share Cancellation Profits -Reserves 1.239.641Inflation Adjustments to Reserves -Profit 190.392 Current Period’s Profit 190.392 Prior Periods’ Profit -Provision for Possible Losses (upto 25% of Core Capital) -Income on Sale of Equity Shares and Real Estates 8.080Primary Subordinated Debts -Loss (in excess of Reserves) (-) - Current Period’s Losses - Prior Periods’ Losses -Leasehold Improvements on Operational Leases (-) 47.513Intangible Assets (-) 13.779Deferred Tax Asset in Excess of 10% of Core Capital (-) -Limit excesses as per the 3rd Paragraph of the Article 56 of the Banking Law (-) -Total Core Capital 2.274.653SUPPLEMENTARY CAPITALGeneral Provisions 111.03245 % of Revaluation Surplus on Movables -45 % of Revaluation Surplus on Immovables -Bonus Shares from Associates, Subsidiaries and Joint-Ventures not Accounted in CurrentPeriod’s Profit -Primary Subordinated Debts excluding the Portion included in Core Capital -Secondary Subordinated Debts -45 % of Securities Value Increase Fund 3.534Inflation Adjustments to Other Capital and Profit Reserves and Prior Periods’ Profit / Loss -Total Supplementary Capital 114.566CAPITAL 2.389.219DEDUCTIONS FROM CAPITAL 5.006

Unconsolidated Investments in Entities (domestic / foreign) Operating in Banking and Financial Sectors at 10 % or more -Investments in Entities (domestic / foreign ) Operating in Banking and Financial Sectors at less Than 10 % exceeding 10 % or more of the Total Core and Supplementary Capitals -Loans to Banks, Financial Institutions (domestic / foreign) or Qualified Shareholders in the Form of Secondary Subordinated Debts and Debt Instruments purchased from Such Parties Qualified as Primary or Secondary Subordinated Debts -Loan granted to Customer against the Articles 50 and 51 of the Banking Law -Net Book Values of Immovables exceeding 50 % of the Capital and of Assets Acquired Against Over due Receivables and Held for Sale as per the Article 57 of the Banking Law But Retained more than Five Years 1.598Securitization Positions to be Deducted from Equity -Other (**) 3.408

TOTAL SHARE HOLDERS’ EQUITY 2.384.213

(*) 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.(**) In accordance with the principles of the regulations described in “Measurement and Practices of Bank’s Shareholder’s Equity” published in the Official Gazette No: 26333, Article 10/1, clause (e), dated November 1, 2006, BRSA has published the board decision related to consumer loans for the purpose of acquiring housing in the Official Gazette No: 27789 dated December 18, 2010.





124

125




II. Explanations on Credit Risk (Cont’d)

The table below shows the maximum exposure to credit risk for the components of the financial statements:

Current Period Prior PeriodCentral Bank of the Republic of Turkey 2.140.716 1.360.161Due from Banks 405.458 359.365Derivative Financial Assets Held for Trading 7.895 1.250

Financial Assets Available for Sale 792.325 779.637 Held to Maturity Investments - 77.053

Loans 16.025.520 13.153.771Finance Lease Receivables 281.870 297.751

Total 19.653.784 16.028.988

Contingent Liabilities 7.976.852 9.348.759Commitments 4.668.366 4.216.033

Total 12.645.218 13.564.792

Total Credit Risk Exposure 32.299.002 29.593.780

Profile of Significant Exposures in Major Regions:

Exposure CategoriesConditional

andunconditional

exposures to central

governments or central

banks

Conditional and

unconditional exposures to

banks and brokerage

houses

Conditionaland

unconditionalexposures tocorporates

Conditionaland

unconditionalretail

exposures

Conditionaland

unconditionalexposuressecured byreal estateproperty Other Total

Current Period (***)

Domestic 2.588.652 159.728 7.355.704 3.767.002 6.358.471 1.681.355 21.910.912European Union (EU)Countries - 71.792 120.841 8.653 15.380 3.866 220.532

OECD Countries (*) - 62.666 4.087 86 879 - 67.718

Off-Shore Banking Regions - 3.915 100.659 2.332 4.452 7.596 118.954

USA, Canada - 118.169 28.007 967 14.070 - 161.213

Other Countries - 171.541 68.958 1.106 12.570 64.785 318.960Associates, Subsidiaries and Joint –Ventures - - 136.523 - - 278.440 414.963UnallocatedAssets/Liabilities (**) - - - - - - -

Total 2.588.652 587.811 7.814.779 3.780.146 6.405.822 2.036.042 23.213.252

(*) Includes OECD countries other than EU countries, USA and Canada.(**) Includes asset and liability items that can not be allocated on a consistent basis.(***) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions.




Total amount of exposures after offsetting transactions but before applying credit risk mitigations and the average exposure amounts that are classified in different risk groups and types for the relevant period:

Exposure Categories Current Period (*) Average (**)

Conditional and Unconditional Exposures to Central Governments or Central Banks 2.588.652 2.199.421

Conditional and Unconditional Exposures to Regional Governments or Local Authorities 178 2.692

Conditional and Unconditional Exposures to Administrative Bodies and Noncommercial Undertakings 45.366 38.762

Conditional and Unconditional Exposures to Multilateral Development Banks - -

Conditional and Unconditional Exposures to International Organisations - -

Conditional and Unconditional Exposures to Banks and Brokerage Houses 587.811 428.919

Conditional and Unconditional Exposures to Corporates 7.814.779 7.792.423

Conditional and Unconditional Retail Exposures 3.780.146 3.890.201

Conditional and Unconditional Exposures Secured by Real Estate Property 6.405.822 5.887.318

Past due receivables 224.881 264.274

Items in Regulatory High-Risk Categories 92.396 140.885

Exposures in the form of Bonds Secured by Mortgages - -

Securitisation Positions - -

Short term Exposures to Banks, Brokerage Houses and Corporates - -

Other receivables 1.673.221 1.596.870

(*) Includes total risk amounts before the effect of credit risk mitigation but after credit conversions.(**) Average risk amounts are the arithmetical averages of the amounts in quarterly reports prepared starting from the date of publication of the Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks” (28 June 2012) to the period end.





126

127





Analysis of Maturity-Bearing Exposures According to Remaining Maturities

Term To Maturity

Exposure Categories (*) (**)Up to 1Month

1-3Months

3-6Months

6-12Months

Over 1Year

Conditional and Unconditional Exposures to Central Governments or Central Banks 1.386.001 106.310 - 308.469 380.421

Conditional and Unconditional Exposures to Regional Governments or Local Authorities 173 - - - -

Conditional and Unconditional Exposures to Administrative Bodies and Noncommercial Undertakings 12.391 475 4.724 14.064 13.413

Conditional and Unconditional Exposures to Multilateral Development Banks - - - - -

Conditional and Unconditional Exposures to International Organisations - - - - -

Conditional and Unconditional Exposures to Banks and Brokerage Houses 167.417 2.302 12.634 - -

Conditional and Unconditional Exposures to Corporates 1.891.038 727.952 1.044.087 1.435.711 2.604.306

Conditional and Unconditional Retail Exposures 958.307 161.597 294.732 828.600 959.186

Conditional and Unconditional Exposures Secured by Real Estate Property 675.374 368.004 604.687 849.513 3.877.541

Past due receivables 12.583 444 938 3.331 3.100

Items in Regulatory High-Risk Categories 51.061 578 2.384 33.237 5.136

Exposures in the form of Bonds Secured by Mortgages - - - - -

Securitisation Positions - - - - -

Short term Exposures to Banks, Brokerage Houses and Corporates - - - - -

Other receivables 198.161 - - - -

Total 5.352.506 1.367.662 1.964.186 3.472.925 7.843.103

(*) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions.(**) The risks which do not bear maturity exposure are not included in this table.




Risk Profile by Sectors or Counterparties:

Current Period (**) Exposure Categories (*)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 TRY FC Total

Agriculture - - 22 - - - 168.453 60.048 76.352 4.979 - - - - - 274.712 35.142 309.854

Farming and Stockbreeding - - 22 - - - 129.302 51.568 62.787 3.826 - - - - - 214.830 32.675 247.505

Forestry - - - - - - 23.287 5.537 9.260 668 - - - - - 38.655 97 38.752

Fishery - - - - - - 15.864 2.943 4.305 485 - - - - - 21.227 2.370 23.597

Manufacturing - - 6 - - - 3.931.493 571.583 2.225.015 92.211 - - - - - 4.481.933 2.338.375 6.820.308

Mining and Quarrying - - - - - - 347.650 37.238 250.028 5.901 - - - - - 355.373 285.444 640.817

Production - - 6 - - - 2.714.192 514.293 1.273.996 85.735 - - - - - 3.201.611 1.386.611 4.588.222

Electricity, Gas and Water - - - - - - 869.651 20.052 700.991 575 - - - - - 924.949 666.320 1.591.269

Construction - - - - - - 1.751.337 269.317 1.574.179 36.165 - - - - - 3.040.606 590.392 3.630.998

Services 2.585.670 8 44.170 - - 492.995 1.732.292 363.716 964.500 54.657 - - - - - 3.346.957 2.891.051 6.238.008

Wholesale and Retail Trade - - - - - - 648.377 182.915 270.614 22.887 - - - - - 967.627 157.166 1.124.793

Accomodation and Dining - - 21 - - - 179.808 26.237 153.369 611 - - - - - 199.150 160.896 360.046

Transportation andTelecommunication - - 28 - - - 560.447 62.635 152.619 29.085 - - - - - 443.959 360.855 804.814

Financial Institutions 2.585.670 - - - - 492.995 71.456 3.310 118.452 30 - - - - - 1.183.158 2.088.755 3.271.913

Real Estate and Rental Services - - 1 - - - 43.004 15.224 40.005 530 - - - - - 89.094 9.670 98.764

Professional Services - 8 1.165 - - - 34.265 12.363 18.046 320 - - - - - 55.066 11.101 66.167

Educational Services - - 42.345 - - - 86.443 14.057 119.817 30 - - - - - 169.217 93.475 262.692

Health and Social Services - - 610 - - - 108.492 46.975 91.578 1.164 - - - - - 239.686 9.133 248.819

Others 2.982 170 1.168 - - 94.816 231.204 2.515.482 1.565.776 36.869 92.396 - - - 1.673.221 5.867.290 346.794 6.214.084

Total 2.588.652 178 45.366 - - 587.811 7.814.779 3.780.146 6.405.822 224.881 92.396 - - - 1.673.221 17.011.498 6.201.754 23.213.252

(*) Exposure categories are as per the Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks.(**) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions.1- Conditional and unconditional exposures to central governments or central banks2- Conditional and unconditional exposures to regional governments or local authorities3- Conditional and unconditional exposures to administrative bodies and non-commercial undertakings4- Conditional and unconditional exposures to multilateral development banks5- Conditional and unconditional exposures to international organisations6- Conditional and unconditional exposures to banks and brokerage houses7- Conditional and unconditional exposures to corporates8- Conditional and unconditional retail exposures9- Conditional and unconditional exposures secured by real estate property10- Past due receivables11- Items in regulatory high-risk categories12- Exposures in the form of bonds secured by mortgages13- Short term exposures to banks, brokerage houses and corporates14- Exposures in the form of collective investment undertakings15- Other receivables





128

129





Information on Risk Exposure Categories:

In the calculation of risk-weighted amounts for the determination of risk weights are based on credit ratings issued by rating agencies in accordance with in the article 7 of the “Communique on Measurement and Assesment of Capital Adequacy of Banks”. International credit rating agency grades are used for the receivables from Banks and Corporates being limited receivables from the counterpart residents in abroad. The grades of credit rating agencies authorized by the BRSA are used for residents and banks in Turkey. The grades of credit rating agencies are used to determine the risk weights of credit quality per class.

Exposures by Risk Weights:

Risk Weights 0% 10% 20% 50% 75% 100% 150% 200% 1250%Deductions from Equity

Exposures beforeCredit Risk Mitigation 2.920.460 - 154.305 6.089.439 3.780.148 10.156.072 102.303 10.525

- 66.298

Exposures after Credit Risk Mitigation 3.451.877 -

154.220

6.089.733 3.645.576

9.759.092

102.229

10.525

- 66.298




Information on Major Sectors and according to Type of Counterparties:

Impaired loans; are the loans that either overdue more than 90 days as of the reporting date or are treated as impaired due to their creditworthiness. For such loans, “Specific Provisons” are allocated as per the Provisioning Regulation.

Past Due Loans; are the loans that overdue up to 90 days but not impaired. For such loans, “General Provisions” are allocated as per the Provisioning Regulation.

Credit RisksImpaired

LoansPast Due

LoansValue

Adjustments Provisions

Agriculture 26.841 5.581 102 20.235

Farming and Stockbreeding 24.271 2.320 44 18.869

Forestry 1.563 1.884 34 918

Fishery 1.007 1.377 24 448

Manufacturing 185.215 124.126 2.316 105.718

Mining and Quarrying 13.377 4.884 94 9.959

Production 170.787 117.994 2.201 95.246

Electricity, Gas and Water 1.051 1.248 21 513

Construction 73.678 495.400 11.775 39.967

Services 280.220 242.378 4.615 209.307

Wholesale and Retail Trade 93.970 48.819 748 66.289

Accomodation and Dining 958 51.137 901 241

Transportation and Telecommunication 181.003 115.425 2.432 140.400

Financial Institutions 79 394 8 78

Real Estate and Rental Services 1.753 21.522 427 1.401

Professional Services 387 59 1 109

Educational Services 67 1.626 32 52

Health and Social Services 2.003 3.396 66 737

Others 82.967 226.560 4.280 51.472

Total 648.921 1.094.045 23.088 426.699

Information on Movements in Value Adjustments and Provisions:

OpeningBalance

Provision forPeriod

ProvisionReversals

OtherAdjustments (*)

Closing Balance

Specific Provisions 305.588 336.298 (56.201) (158.986) 426.699

General Provisions 131.066 60.445 (6.533) (2.493) 182.485

(*) Write-offs and foreign exchange difference are presented on this table.





130

131




III. Explanations on Market Risk (Cont’d)

c) Other price risks:

The Bank does not have investments in equity shares; hence it is not subject to share price risk.

Information on Counterparty Risk:

In counterparty credit risk calculations, the “Fair Value Methodology” is used according to the Appendix-2 Section 3 of the “Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks”. In case of derivative transactions, the total of replacement costs and potential credit risks is considered as the exposure amount. The replacement costs are calculated valuing the contracts at their fair values and the potential credit risks are calculated multiplying the contract amounts with the credit conversion factors set in the appendix of the regulation. Cash guarantees are taken into consideration at the counterparty credit risk mitigation.

Trading Accounts

Interest-Rate Contracts -

Foreign-Exchange-Rate Contracts 5.292

Commodity Contracts -

Equity-Shares Related Contracts -

Other -

Gross Positive Fair Values -

Netting Benefits -

Net Current Exposure Amount -

Collaterals Received -

Net Derivative Position 5.292

IV. Explanations on Operational Risk

The Bank calculates the amount subject to operational risk based on “Basic Indicator Method” by using 2011, 2010 and 2009 year end gross income balances of the Bank, in accordance with the Section 4 of the “Regulation Regarding Measurement and Evaluation of Banks’ Capital Adequacy Ratio” published in the Official Gazette No: 28337 dated June 28, 2012, namely “The Calculation of the Amount Subject to Operational Risk”.

Basic Indicator Method31 December

200931 December

201031 December

2011

Total/ No. ofYears of Positive

Gross IncomeRate

(%) Total

Gross Income 972.762 914.088 949.956 945.602 15 141.840 Value at Operational Risk(Total * 12,5%) 1.773.004




Credit Rating System:

The credit risk is assessed through the internal rating system of the Bank, by classifying loans from highest grade to lowest grade according to the probability of default. As of December 31, 2012 consumer loans are excluded from the internal rating system of the Bank. Additional scoring methodologies are applied for these loans. The risks that are subject to rating models can be allocated as follows:

Share in Total (%)

Category Description of Category Current Period Prior PeriodAbove Average The borrower has a very strong financial structure 34% 35%Average The borrower has an intermediate level of financial structure 37% 35%

Under AverageThe financial structure of the borrower has to be closely monitored in the medium term

11% 13%

Not Graded The borrower is not assessed by the Bank 18% 17%

Total 100% 100%

III. 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: 28337 dated June 28, 2012. Market risk is measured on a monthly basis.

a) Explanations related to market risk:

Amount(I) Capital Requirement to be Employed For General Market Risk - Standard Method 11(II) Capital Requirement to be Employed For Specific Risk - Standard Method - Capital Requirement to be Employed For Specific Risks of Securitization Positions– Standard Method -(III) Capital Requirement to be Employed For Currency Risk - Standard Method 1.119(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 Method -

(VII) Capital Requirement to be Employed For Counterparty Credit Risks - Standard Method 423(VIII) Total Capital Requirement to be Employed For Market Risk in Banks Using Risk Measurement Model -(IX) Total Capital Requirement to be Employed For Market Risk (I+II+III+IV+V+VI) 1.553

(X) Value-At-Market Risk ((12.5*VIII) or (12.5*IX)) 19.413

b) Average market risk table calculated at the end of each month in the current period:

Current PeriodAverage Maximum Minimum

Interest Rate Risk (*) 12.083 33.963 -Common Stock Risk - - -Currency Risk 23.260 37.988 5.913Commodity Risk - - -Settlement Risk - - -Option Risk - - -Counterparty Credit Risk 2.672 5.292 591Total Value Subject to Risk 38.015 77.243 6.504

(*) The Bank calculates by considering market risk of revenue sharing certificates, forward and swap transactions.





132

133




V. Explanations on Currency Risk (Cont’d)

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

EUR USD YEN Other FC TotalCurrent Period - December 31, 2012 Assets

Cash (Cash in TRY, Cash in Foreign Currency, Money in Tran-sit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey 639.596 958.167 - 728.619 2.326.382Due from Banks 71.697 284.363 2.607 21.830 380.497Financial Assets at Fair Value Through Profit or Loss (**) - - - - -Money Market Placements - - - - -Financial Assets Available-for-Sale - - - - -Loans (*) 2.069.982 4.125.409 - - 6.195.391

Subsidiaries, Associates and Entities Under Common Control - - - - -Held-to-Maturity Investments - - - - -Derivative Financial Assets for Hedging Purposes - - - - -Tangible Assets - - - - -Intangible Assets - - - - -Other Assets 1.455 8.453 - 979 10.887

Total Assets 2.782.730 5.376.392 2.607 751.428 8.913.157Liabilities

Current and Profit Sharing Accounts of Banks 10.465 29.296 491 164 40.416Current and Profit Sharing Accounts 1.640.526 3.488.170 462 1.330.893 6.460.051Money Market Borrowings - - - - -Funds Provided from Other Financial Institutions 672.628 1.127.227 - 15.548 1.815.403Marketable Securities Issued - - - - -Sundry Creditors 220 1.297 - 40 1.557Derivative Financial Liabilities for Hedging Purposes - - - - -Other Liabilities (**) 12.685 46.814 71 1.349 60.919

Total Liabilities 2.336.524 4.692.804 1.024 1.347.994 8.378.346Net Balance Sheet Position 446.206 683.588 1.583 (596.566) 534.811Net Off-Balance Sheet Position (443.559) (685.702) (1.464) 599.792 (530.933)

Financial Derivative Assets (***) 205.965 601.698 1.780 656.590 1.466.033Financial Derivative Liabilities (***) 649.524 1.287.400 3.244 56.798 1.996.966Non-Cash Loans (****) 1.385.748 2.719.768 32.197 69.867 4.207.580Prior Period Total Assets 1.766.072 3.867.026 1.200 367.797 6.002.095Total Liabilities 1.842.564 3.300.359 1.227 974.097 6.118.247

Net Balance Sheet Position (76.492) 566.667 (27) (606.300) (116.152)Net Off-Balance Sheet Position 77.106 (581.698) 38 607.267 102.713

Financial Derivative Assets 148.988 234.910 38 608.417 992.353Financial Derivative Liabilities 71.882 816.608 - 1.150 889.640Non-Cash Loans (****) 1.535.113 3.567.860 86.954 111.325 5.301.252

(*) TRY 4.364.564 Thousand foreign currency indexed loans are included in loans line (December 31, 2011: TRY 2.919.385 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 44.334 Thousand (December 31, 2011: TRY 15.111 Thousand) in assets and income accrual from derivative financial instruments amounting to TRY 7.895 Thousand (December 31, 2011 : TRY 1.250 Thousand) in liabilities and expense accrual from derivate financial instruments amounting to TRY 6.581 Thousand (December 31, 2011: TRY 11.715 Thousand), are not taken into consideration in the currency risk calculation.(***) TRY 397.852 Thousand forward asset purchase commitments are added to derivative financial assets and TRY 480.527 Thousand forward asset sale commitments are added to derivative financial liabilities (December 31, 2011: TRY 350.891 Thousand forward asset purchase commitments, and TRY 236.248 Thousand forward asset sale commitments ).(****) The related balances do not have any effect on off balance sheet position.



V. 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.

Currency risk is managed by considering internal currency limits that are designated as Bank’s risk policies. Within the frame of legal limits defined by FC Net General Position / Equity Ratio and internal currency risk limits determined by Board of Directors, decisions are taken by Asset and Liability Committee meet periodically, take decisions for currency and parity risk hedge and those decisions are implemented strictly.

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 December 31, 2012 and the previous five working days are as follows:

December 31, 2012

US Dollar Eur Sterling 100 Japanese Yen

“FC Evaluation Rate” of the Bank 1,7826 2,3563 2,8775 2,0662

Previously;

28.12.2012 (Day 1) 1,7829 2,3581 2,8762 2,0704

27.12.2012 (Day 2) 1,7848 2,3625 2,8805 2,0828

26.12.2012 (Day 3) 1,7877 2,3567 2,8428 2,1042

25.12.2012 (Day 4) 1,7893 2,3605 2,8865 2,1073

24.12.2012 (Day 5) 1,7869 2,3533 2,8910 2,1205

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 1,7788 per US Dollar, TRY 2,3317 per EUR, TRY 2,8680 per GBP and TRY 2,1235 per 100 JPY.





134

135


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

Foreign Currency Sensitivity:

The Bank is mainly exposed to USD and EUR currency risks.

The following table details the Bank’s sensitivity to a 10% increase and decrease in the TRY against USD and EUR. A positive number indicates an increase in profit or loss and other equity in the case of short position and a decrease in the case of long position where the TRY strengthens against USD and EUR.

Change in CurrencyRate in %

Effect on Profit or Loss

Current Period Prior Period

USD 10% increase (211) (1.503)

USD 10% decrease 211 1.503

EUR 10% increase 265 61

EUR 10% decrease (265) (61)

VI. 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.

VII. 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 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.

Current Period 1st Term Period (Weekly) 2nd Term Period (Monthly)

Average (%) 135,92 113,02

Highest (%) 170,66 122,67

Lowest (%) 111,37 103,21

Prior Period 1st Term Period (Weekly) 2nd Term Period (Monthly)Average (%) 135,72 110,28Highest (%) 167,26 121,20Lowest (%) 112,65 100,63



VII. Explanations on Liquidity Risk (Cont’d)

Presentation of Assets and Liabilities According to Their Maturities:

Current Period- December 31, 2012 DemandUp 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 956.317 1.733.279 - - - - - 2.689.596Due from Banks 405.458 - - - - - - 405.458Financial Assets at Fair Value Through Profit or Loss - 7.737 149 9 - - - 7.895Money Market Placements - - - - - - - -Financial Assets Available-for-Sale 93 - 103.342 308.469 380.421 - - 792.325Loans (**) - 2.578.506 2.167.487 5.782.814 5.028.022 528.339 - 16.085.168Held-to-Maturity Investments - - - - - - -Other Assets - 201.195 - - - - 1.208.387 1.409.582Total Assets 1.361.868 4.520.717 2.270.978 6.091.292 5.408.443 528.339 1.208.387 21.390.024

Liabilities Current and Profit Sharing Accounts of Banks 30.214 50.352 11.724 - - - - 92.290Current and Profit Sharing Accounts 3.144.801 6.423.551 1.817.505 3.970.595 293.116 - - 15.649.568Funds Provided from Other Financial Instruments - 88.975 244.364 1.267.268 211.112 3.684 - 1.815.403Money Market Borrowings - - - - - - - -Marketable Securities Issued - - - - - - - -

Sundry Creditors 43.303 589.811 - - - - - 633.114Other Liabilities (***) - 425.559 - 53.814 - - 2.720.276 3.199.649

Total Liabilities 3.218.318 7.578.248 2.073.593 5.291.677 504.228 3.684 2.720.276 21.390.024Net Liquidity Gap (1.856.450) (3.057.531) 197.385 799.615 4.904.215 524.655 (1.511.889) -

Prior Period - December 31, 2011Total Assets 1.231.557 2.703.841 1.755.390 4.759.717 5.119.880 528.231 1.091.483 17.190.099Total Liabilities 3.150.813 5.170.544 1.001.904 4.650.151 728.259 32.573 2.455.855 17.190.099

Net Liquidity Gap (1.919.256) (2.466.703) 753.486 109.566 4.391.621 495.658 (1.364.372) -

(*) 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”.





136

137





Analysis of Financial Liabilities Based on the Remaining Contractual Maturities:

The table below is drawn up based on the undiscounted contractual maturities of the financial assets and liabilities. Profit share expenses to be paid on such liabilities are included in this table. “Adjustments” column indicates items that may lead to potential cash flows in the following period. These items are included in maturity analysis, but not included in the balance sheet value of such financial liabilities.

DemandUp to 1Month

1-3 Months

3-12 Months 1-5 Years

Over 5 Years Adjustments Total

Current Period

Funds Collected 3.175.015 6.473.903 1.829.229 3.970.595 293.116 - - 15.741.858

Funds Borrowed - 89.006 247.255 1.303.579 227.832 4.152 (56.421) 1.815.403

Total 3.175.015 6.562.909 2.076.484 5.274.174 520.948 4.152 (56.421) 17.557.261

Prior Period

Funds Collected 3.121.232 4.212.955 935.086 3.628.191 499.579 - - 12.397.043

Funds Borrowed - 160.400 68.475 995.224 331.087 40.045 (137.401) 1.457.830

Money Market Borrowings - 279.319 - - - - (112) 279.207

Total 3.121.232 4.652.674 1.003.561 4.623.415 830.666 40.045 (137.513) 14.134.080

Analysis of Contractual Expiry by Maturity of the Bank’s Derivative Financial Instruments:

Current PeriodUp to 1Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total

Hedging Derivatives - - - - - -Fair Value Hedges - - - - - -

Held for Trading Transactions 1.543.766 76.137 1.030 - - 1.620.933Forward Sales Contracts 105.104 76.137 1.030 - - 182.271Swap Sales Contracts 1.438.662 - - - - 1.438.662

Total 1.543.766 76.137 1.030 - - 1.620.933

Prior PeriodUp to 1Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total

Hedging Derivatives - - - - - -Fair Value Hedges - - - - - -

Held for Trading Transactions 662.842 - - - - 662.842Forward Sales Contracts - - - - - -Swap Sales Contracts 662.842 - - - - 662.842

Total 662.842 - - - - 662.842




Information on Securitisation Positions:

None.

Information on Credit Risk Mitigation Techniques:

The Bank applies credit risk mitigation according to the simple method that includes risk mitigation calculations considering the fair values of financial collaterals in compliance with the article 33 of the “Regulation on Credit Risk Mitigation Techniques”.

In the credit risk mitigation, cash and cash equivalent items and high-credit-quality debt instruments are used.

The volatility adjustments regarding the receivables, collaterals and currency mismatch of the collaterals are made as per the standard volatility-adjustment approach defined in the article 37 of the regulation.

In cases, where there are maturity mismatches resulting from shorter remaining life of collateral than ofreceivables, the value of collateral is considered as the volatility-adjusted value.

Exposure Categories Amount (*)FinancialCollateral

Other/PhysicalCollateral

Guaranties and

CreditDerivatives

Conditional and Unconditional Exposures to Central Governments or Central Banks 2.591.676 - - -Conditional and Unconditional Exposures to Regional Govern-ments or Local Authorities 367 171 - -Conditional and Unconditional Exposures to Administrative Bodies and Noncommercial Undertakings 59.076 215 - -Conditional and Unconditional Exposures to Multilateral Develop-ment Banks - - - -Conditional and Unconditional Exposures to International Organisa-tions - - - -Conditional and Unconditional Exposures to Banks and Brokerage Houses 1.431.509 6.239 - 4.575Conditional and Unconditional Exposures to Corporates 10.371.747 324.826 - 175.242Conditional and Unconditional Retail Exposures 6.409.204 104.029 - 30.543Conditional and Unconditional Exposures Secured by Real Estate Property 7.347.133 117.602 - 2.372Past due receivables 289.439 99.158 - 759Items in Regulatory High-Risk Categories 92.396 - - -Exposures in the form of Bonds Secured by Mortgages - - - -Securitisation Positions - - - -Short term Exposures to Banks, Brokerage Houses and Corpo-rates - - - -Investments Similar to Collective Investment Funds - - - -Other receivables 1.673.221 - - -

(*) Includes total risk amounts before credit risk mitigation and liquidity conversions.





138

139





Risk Management Objectives and Policies:

The Risk Management Strategy of the Bank includes the optimum allocation of the capital and the realisation of growth framework, maintaining risk-return balance, measuring the risks by methods in compliance with international standards and local regulations in parallel with its activities and under its sustainable and value creating growth strategy.

Risk management procedures aim to establish procedures and limits for risk policies set out for monitoring and controlling the risk return profile embedded in future cash flows and the nature and level of related operations and for amending such policies where required. Risk management procedures also aim to identify, measure, monitor and control such risks that the Bank is exposed to and to determine capital needs in relation to risk profiles.

The Bank explicitly identifies its risk management policies, procedures, limits and activities in accordance with its risk management system. For risk management and assessment, all required procedures for risk policies are identified by the Bank to keep up-to-date policies, comply with the changing conditions and to apply and manage such policies. Consolidated and non-consolidated written policies and application procedures are set out to manage risks that the Bank is exposed to from its banking operations. The Banks’s operating strategies, policies and procedures; compliance with operating volume, nature and complexity of operations; risk strategy and risk appetite; risk monitoring and management capability; past experience and performance; directors expertise; and legal requirements in Law and related legislation are considered in determining risk management policies and procedures. Risk management policies and procedures are required to comply with the changing conditions. The efficiency of risk management policies and procedures is reviewed periodically by the Board of Directors and required adjustments are made accordingly. Risk management policies and procedures also include the application of risk mitigation techniques.

Top management is responsible for complying with and developing risk management strategies, policies and procedures that are approved by the Board of Directors; reporting significant risks to the Board of Directors; reviewing internal control, internal audit and risk reports prepared for each units and eliminating any existing risks, deficiencies or errors or taking the required measures; and participating in the determination of risk limits.

Risk management procedures are determined by the Board of Directors. Top management has a responsibility to the Board of Directors in monitoring and managing inherent risks. Furthermore, Internal Control Center Department, Risk Management Department, Legislation and Compliance Department and Supervisory Board cooperate in coordination with each other separately from other executing units.




Risk Management Objectives and Policies (Cont’d):

The Bank establishes written limits for digitized risks arising from its activities such as; credit risks, market risks, operational risks, and liquidity risks. Risk limits are determined based on the Bank’s risk appetite, operations, size and complexity of its products by the respective top management including the Bank’s Audit Committee, Risk Management Leader, and General Manager and these limits are approved by the Board of Directors.

Risks are assessed by using a continuing developing structure which is established in accordance with international and local regulations, the Bank’s policies and procedures and managed by using internationally accepted techniques.

In determining risk measurement methods and techniques, the nature, volume and complexity of the Bank’s operations, the reason why the model or method is required, model or method assumptions, availability of data to be used, effectiveness of information systems and personnel experience are considered.

The validity and reliability of risk measurement models or techniques are determined by back testing using the existing results.

Risk measurement models or techniques are updated periodically to reflect the changing market conditions. The Bank performs consistent stress tests and scenario analysis for risk management. The results of stress tests and scenario analysis are reviewed regularly by the Bord of Directors and/or Top Management.

For risk management, hedging transactions are also managed by risk mitigation in addition to risk measurement, risk classification and risk provision procedures. For risk monitoring and management, Bank and market data is monitored on a continuous basis. In addition to statutory limits, internal limits are also established for risk classification purposes. The Bank also considers any potential changes arising from economic conditions as well as risks that may be exposed to due to stringent conditions.





140

141




VIII. Explanation on Presentation of Financial Assets and Liabilities at Fair Value

As the loan portfolio has fixed profit sharing rates, estimated fair value is calculated by using the discounted cash flows.

The table below shows the book value and fair value of the financial assets and liabilities. Book value is the sum of the acquisition value and accumulated profit share accruals.

Book Value Fair Value

Current Period Prior Period Current Period Prior Period

Financial Assets 19.423.667 15.717.596 19.537.316 15.695.447

Banks and Other Financial Institutions (*) 2.546.174 1.719.526 2.546.174 1.719.526

Financial Assets Available For Sale 792.325 779.637 792.325 779.637

Held to Maturity Investments - 77.053 - 77.282

Loans (**) 16.085.168 13.141.380 16.198.817 13.119.002

Financial Liabilities 18.190.375 14.513.398 18.152.333 14.457.976

Funds Collected From Banks (***) 92.290 117.559 92.290 117.559Other Current and Profit SharingAccounts (***)

15.649.568 12.279.484 15.649.568 12.279.484Funds Provided From Other FinancialInstitutions

1.815.403 1.457.830 1.777.361 1.402.408

Sundry Creditors 633.114 379.318 633.114 379.318

Money Market Borrowings - 279.207 - 279.207

(*) As receivables from banks and other financial institutions are in short-term nature, their fair value approximates to their book value.(**) In order to calculate the fair value of loans, current profit sharing rates are used as of the balance sheet date. Loan balance also includes finance lease receivables. Fair values of loans are calculated under the assumption that all installments are distributed equally.(***) Book value of the funds collected approximates to their fair value as it is revalued with the year end unit values.



VIII. Explanations on Presentation of Financial Assets and Liabilities at Fair Value (Cont’d)

The following table shows an analysis of financial instruments recorded at fair value, between those whose fair value is recorded on quoted market prices, those involving valuation techniques where all model inputs are observable in the market and, those where the valuation techniques involves the use of non observable inputs:

December 31, 2012 1st Level TRY 2nd Level TRY 3rd Level TRY

Financial Assets

Financial Assets at Fair Value Through Profit or Loss - 7.895 -

Financial Assets Available for Sale 688.888 103.344 -

Total 688.888 111.239 -

Financial Liabilities

Financial Liabilities at Fair Value Through Profit or Loss - 6.581 -

Other Financial Liabilities - - -

Total - 6.581 -

December 31, 2011 1st Level TRY 2nd Level TRY 3rd Level TRY

Financial Assets

Financial Assets at Fair Value Through Profit or Loss - 1.250 -

Financial Assets Available For Sale 399.250 380.294 -

Total 399.250 381.544 -

Financial Liabilities

Financial Liabilities at Fair Value Through Profit or Loss - 11.715 -

Other Financial Liabilities - - -

Total - 11.715 -

IX. Explanations Related to Transactions Carried out on Behalf of Other Parties and Fiduciary Assets

The Bank does not deal with fiduciary operations or transactions made on behalf of other.





142

143


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 167.380 380.183 113.521 204.602Central Bank of the Republic of Turkey 194.650 1.946.066 412.559 947.602

Other 1.184 133 1.347 21Total 363.214 2.326.382 527.427 1.152.225

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

Current Period Prior Period TRY FC TRY FC

Unrestricted Demand Deposit 194.650 212.787 412.559 149.823Unrestricted Time Deposit - - - -Restricted Time Deposit - - - -Other (*) - 1.733.279 - 797.779

Total 194.650 1.946.066 412.559 947.602

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

According to the communiqué No: 2005/1 on “Reserve Deposits”, the banks operating in Turkey are required to keep reserve deposit at the rates varying from 5% to 11,5% for TRY liabilities and at the rates varying from 6% to 12,5% for foreign currency liabilities mainly denominated in US Dollar, Euro and Standard Gold depending on the maturity of the liabilities. Profit share has not been paid for reserve deposits.

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:


TRY FC TRY FCForward Transactions (*) - 1.379 - 1.121Swap Transactions - 6.516 - 129Futures Transactions - - - -Options - - - -Other - - - -

Total - 7.895 - 1.250

(*) Includes forward asset purchase/sale commitments.

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:


TRY FC TRY FCBanks 24.961 380.497 15.882 343.483

Domestic 24.961 101.571 15.882 261.685Foreign - 278.926 - 81.798Branches and Head Office Abroad - - - -

Total 24.961 380.497 15.882 343.483

3.2. Information on Foreign Bank Accounts:

Unrestricted Amount Restricted Amount

Current Period Prior Period Current Period Prior Period

European Union Countries 58.403 24.905 - -

USA, Canada 118.169 36.866 - -

OECD Countries (*) 2.466 9.041 - -

Off-Shore Banking Regions 21 39 - -

Other 99.867 1.174 - 9.773

Total 278.926 72.025 - 9.773

(*) 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 Collateral or Subject to Repurchase Agreements:

4.1.1. Information on Financial Assets Available For Sale Given as Collateral or Blocked:

None.

4.1.2. Information on Financial Assets Available for Sale Subject to Repurchase Agreements:

None (December 31, 2011: The Bank has revenue sharing certificates in “Available for Sale Financial Assets” portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY 322.459 Thousand nominal value and TRY 325.712 Thousand fair value).





144

145





4. Information on Financial Assets Available for Sale (Cont’d)

4.2. Information on Financial Assets Available for Sale:

As of December 31, 2012, the Bank has revenue sharing certificate which has TRY 400.000 Thousand nominal value (December 31, 2011: TRY 775.000 Thousand) and TRY 411.811 Thousand fair value (December 31, 2011: TRY 779.544 Thousand) and has sukuk amounting to TRY 365.319 Thousand nominal value and TRY 380.421 Thousand fair value (December 31, 2011: None) at “Available for Sale Financial Assets” portfolio.


Debt Securities 792.232 783.294 Quoted on a Stock Exchange 688.888 399.250 Not Quoted (*) 103.344 384.044 Share Certificates 93 93 Quoted on a Stock Exchange - - Not Quoted 93 93 Impairment (-) - (3.750)Total 792.325 779.637

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

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 55.863 9.082 57.567 2.565Corporate Shareholders 1.941 2.471 22.986 1.870Real Person Shareholders 53.922 6.611 34.581 695

Indirect Loans Granted to Shareholders 151.337 52.164 148.505 162.080Loans Granted to Employees 16.590 118 14.291 118Total 223.790 61.364 220.363 164.763




5. Information on Loans (Cont’d)

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

Cash Loans Standard Loans and Other Receivables Closely Monitored Loans and Other Receivables (*)Loans and Other

Receivables (Total)Loans and Receivables

with Revised Contract TermsLoans andOther

Receivables (Total)Loans and Receivables with

Revised Contract Terms

Loans

Extension ofRepayment

PlanOther


PlanOther

Export Loans 175.248 1.772 - 3.307 24.847 -Import Loans 158.144 - - - - -Business Loans 9.951.241 1.222 - 479.024 379.567 -Consumer Loans 2.077.719 204 - 23.297 1.575 -Credit Cards 1.435.079 2.403 - 11.087 1.084 -Loans Given to Financial Sector 7.723 - - - - -Others 883.944 14.554 - 105.238 65.019 -

Other Receivables - - - - - -Total 14.689.098 20.155 - 621.953 472.092 -

(*) In addition to the balances mentioned in the table above, the Bank has TRY 4.519 Thousand of closely monitored finance lease receivables (December 31, 2011: TRY 1.384 Thousand).

Number of Extensions Standard Loans and Other Receivables Closely Monitored Loans and Other Receivables

1 or 2 times 20.155 472.092

3, 4 or 5 times - -

Over 5 times - -

Extention Periods (*) Standard Loans and Other Receivables Closely Monitored Loans and Other Receivables

0 - 6 months 3.612 16.719

6 - 12 months 370 51.657

1 – 2 years 187 117.782

2 - 5 years 15.925 285.934

5 years and over 61 -

(*) Extention periods are prepared using the average maturity.





146

147






5.3. Loan Distribution Based on the Maturity Structure:

Standard Loans and Other ReceivablesClosely Monitored Loans and Other

Receivables

Loans and OtherReceivables

(Total)

Loans and Receivables with


Loans and OtherReceivables

(Total)

Loans and Receivables with


Extension ofRepayment Plan Other


Plan Other

Short-Term Loans and Other Receivables

5.227.397 17.233 - 167.333 17.829 -

Loans 5.227.397 17.233 - 167.333 17.829 -

Other Receivables - - - - - -

Medium-Term and Long-Term Loans and Other Receivables

9.461.701 2.922 - 454.620 454.263 -

Loans 9.461.701 2.922 - 454.620 454.263 -

Other Receivables - - - - - -





5.4. Information on Consumer Loans, Retail Credit Cards, Loans Given to Personnel and Personnel Credit Cards:

Short Term Medium-Term and Long-Term TotalConsumer Loans-TRY 4.858 2.088.133 2.092.991

Housing Loans 1.087 1.984.496 1.985.583Vehicle Loans 881 96.684 97.565Consumer Loans 170 6.953 7.123Other 2.720 - 2.720

Consumer Loans-FC Indexed - 1.759 1.759Housing Loans - 1.735 1.735Vehicle Loans - - -Consumer Loans - 24 24Other - - -

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

Retail Credit Cards-TRY 1.371.422 25.977 1.397.399With Installments 590.481 25.977 616.458Without Installment 780.941 - 780.941

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

Personnel Loans-TRY 128 7.917 8.045Housing Loans 6 3.103 3.109Vehicle Loans 111 4.345 4.456Consumer Loans 11 469 480Other - - -

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

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

Personnel Credit Cards-TRY 8.271 274 8.545With Installments 3.902 274 4.176Without Installment 4.369 - 4.369

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

Overdraft Account-TRY(Individuals) - - -Overdraft Account-FC (Individuals) - - -Total 1.384.679 2.124.060 3.508.739





148

149






5.5. Information on Installment Basis Commercial Loans and Corporate Credit Cards:

Medium-Term and Long TermInstallment Basis Commercial Loans-TRY 87.134 224.959 312.093

Business Loans 13.079 41.149 54.228Vehicle Loans 8 5.185 5.193General Purpose Loans - 178.625 178.625Other 74.047 - 74.047

Installment Basis Commercial Loans-FC Indexed 11.119 164.893 176.012

Business Loans 11.119 29.312 40.431Vehicle Loans - - -General Purpose Loans - 135.581 135.581Other - - -

Installment Basis Commercial Loans-FC - - -

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

Corporate Credit Cards-TRY 43.539 170 43.709With Installments 2.118 170 2.288Without Installment 41.421 - 41.421

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

Overdraft Account-TRY(Corporate)- - -

Overdraft Account-FC (Corporate)- - -

Total 141.792 390.022 531.814

5.6. Allocation of Loans According to Borrowers:


Public Sector 904 1.183

Private Sector 15.802.394 12.842.446

Total 15.803.298 12.843.629





5.7. Domestic and Foreign Loans:


Domestic Loans 15.278.257 12.315.468

Foreign Loans 525.041 528.161

Total 15.803.298 12.843.629

5.8. Loans Granted to Subsidiaries and Associates:


Loans Granted to Subsidiaries and Associates Directly 179.214 107.795Loans Granted to Subsidiaries and Associates Indirectly - -

Total 179.214 107.795

5.9. Specific Provisions Provided Against Loans:

Current Period Prior Period9.631 40.541

Loans and Receivables with Doubtful Collectability 47.452 62.435Uncollectible Loans and Receivables 369.616 202.612

Total 426.699 305.588

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:

III Group IV Group V Group

Loans and Receivables with Limited Collectability

Loans and Receivables with Doubtful Collectability

Uncollectible Loans and Receivables

Current Period

(Gross Amount Before Specific Provision) 9.682 12.022 8.954

Restructured Loans and Other Receivables 1.983 779 22

Rescheduled Loans and Other Receivables 7.699 11.243 8.932

Prior Period

(Gross Amount Before Specific Provision) 10.751 13.290 1.700

Restructured Loans and Other Receivables 962 1.468 272

Rescheduled Loans and Other Receivables 9.789 11.822 1.428





150

151






5.10. Information on Non-Performing Loans (Net) (Cont’d):

5.10.2 Information on Movement of Non-Performing Loans:





Ending Balance of Prior Period 211.276 146.824 257.630

Additions in the Current Period (+) 332.665 9.390 20.384

Transfer from Other Non-Performing Loan Accounts (+) - 422.515 377.135

Transfer to Other Non-Performing Loan Accounts (-) (422.515) (377.135) -

Collections in the Current Period (-) (57.576) (67.292) (45.394)

Write-offs (-) - - (158.986)

Corporate and Commercial Loans - - (123.593)

Retail Loans - - (2.516)

Credit Cards - - (32.877)

Other - - -

Ending Balance of the Current Period 63.850 134.302 450.769

Specific Provisions (-) (9.631) (47.452) (369.616)

Net Balance at the Balance Sheet 54.219 86.850 81.153

5.10.3. Information on Foreign Currency Non-Performing Loans and Other Receivables:





Current Period

Ending Balance - - 1.317

Specific Provisions (-) - - (1.312)

Net Balance at the Balance Sheet - - 5

Prior Period

Ending Balance - - 1.697

Specific Provisions (-) - - (1.257)

Net Balance at the Balance Sheet - - 440






5.10.4. Gross and Net Amounts of Non-Performing Loans with Respect to User Groups:

Group III Group IV Group VLoans and

Receivables with Limited Collectability



Current Period (Net)

Loans to Individuals and Corporates (Gross) 63.850 134.302 450.769


Loans to Individuals and Corporates (Net) 54.219 86.850 81.153

Banks (Gross) - - -

Specific Provisions (-) - - -

Banks (Net) - - -

Other Loans and Receivables (Gross) - - -


Other Loans and Receivables (Net) - - -

Prior Period (Net)

Loans to Individuals and Corporates (Gross) 211.276 146.824 257.630


Loans to Individuals and Corporates (Net) 170.735 84.389 55.018

Banks (Gross) - - -


Banks (Net) - - -

Other Loans and Receivables (Gross) - - -


Other Loans and Receivables (Net) - - -

5.10.5. 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.





152

153







5.10.6. Explanation on Write–off Policy:

The Bank provides provisions for non-performing loans and other receivables in accordance with “Regulation on the Procedures and Principles for Determination of Qualifications of Loans and Other Receivables by Banks and Provisions to be Set Aside” published by the Banking Regulations and Supervision Agency.

Non-performing loans and other receivables meeting at least one of the following criteria and for which provision was set aside fully are written off 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.

Write-off process is made in the appropriate periods which are determined by the Board of Directors.

5.11. Other Explanations and Disclosures:

The information related to loan quality is stated as below:

Current Period – December 31, 2012Neither past due nor

ImpairedPast due but not

ImpairedPast due

and Impaired Total

Loans (*)Corporate and Commercial Lending 6.231.200 806.802 319.826 7.357.828Small Business Lending 4.962.648 250.200 255.042 5.467.890Consumer Lending 2.077.923 24.872 7.992 2.110.787Credit Cards 1.437.482 12.171 66.061 1.515.714

Total 14.709.253 1.094.045 648.921 16.452.219

(*) The Bank classifies small medium entities (“SME”) considering the criteria set out in the Council of Ministers’ decision dated September 10, 2012 numbered 3834 and dated November 4, 2012 numbered 28457 published in the Official Gazette and the Communiqué on “Descriptions, Nature and Classification of Small Medium Entities”.

Prior Period – December 31, 2011Neither past due nor

ImpairedPast due but not

ImpairedPast due

and Impaired Total

Loans (*)Corporate and Commercial Lending 5.496.990 385.712 287.399 6.170.101Small Business Lending 3.881.933 512.141 263.544 4.657.618Consumer Lending 1.616.278 13.240 7.009 1.636.527Credit Cards 929.635 7.700 57.778 995.113

Total 11.924.836 918.793 615.730 13.459.359

(*) The Bank classifies small medium entities (“SME”) considering the criteria set out in the Council of Ministers’ decision dated October 19, 2005 numbered 9617 and dated November 18, 2005 and numbered 25997 published in the Official Gazette and the Communiqué on “Descriptions, Nature and Classification of Small Medium Entities”.





5.11. Other Explanations and Disclosures (Cont’d):

The details of guarantees of loan and leasing receivables portfolio are stated as below:

Current Period (*) (**) (***)Neither past due

nor ImpairedPast due but not Impaired

Past due and Impaired Total

Residential, Commercial or Industrial Real Estates 6.556.600 322.872 299.133 7.178.605

Financial Assets 462.215 69.158 15.000 546.373

Other 1.776.657 164.934 40.703 1.982.294

Total 8.795.472 556.964 354.836 9.707.272

(*) Individual loan agreements, general loan agreements, foreign currency cheques, suretyships, customer cheques and notes and other guarantees are not included in the table above.(**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or incumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the “Measurement and Assessment of Capital Adequacy of Banks” published on November 1, 2006 in the Official Gazette numbered 26333.

Prior Period (*) (**) (***)Neither past due

nor ImpairedPast due but not Impaired

Past due and Impaired Total

Residential, Commercial or Industrial Real Estates 4.812.274 365.376 99.616 5.277.266

Financial Assets 516.885 113.870 15.500 646.255

Other 1.392.830 168.083 120.786 1.681.699

Total 6.721.989 647.329 235.902 7.605.220

(*) Individual loan agreements, general loan agreements, foreign currency cheques, surety ships, customer cheques and notes and other guarantees are not included in the table above.(**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or incumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the “Measurement and Assessment of Capital Adequacy of Banks” published on November 1, 2006 in the Official Gazette numbered 26333.





154

155






5.11. Other Explanations and Disclosures (Cont’d):

Aging analysis of past due but not impaired loans per classes of financial statements is stated as below:

Current Period – December 31, 2012Less than 30

Days (*)31-60 Days 61-90 Days

More than 90 Days

Total

Loans and Advances to Customers

Corporate Lending 346.847 291.678 168.277 - 806.802

SME Lending 31.788 78.006 140.406 - 250.200

Consumer Lending 1.325 15.553 7.994 - 24.872

Credit Cards 735 10.892 544 - 12.171

Finance Lease Receivables 517 2.193 1.810 - 4.520

Total 381.212 398.322 319.031 - 1.098.565

(*) The Bank follows up the entire loan balance overdue less than 30 days within the closely monitored loans based on conservatism principal and TRY 211.324 Thousand of such amount is not overdue as of December 31, 2012 (Finance Lease Receivable TRY 4.519 Thousand).

Prior Period – December 31, 2011Less than 30

Days (*)31-60 Days 61-90 Days

More than 90 Days

Total

Loans and Advances to Customers

Corporate Lending 304.216 61.091 20.405 - 385.712

SME Lending 388.047 49.282 74.812 - 512.141

Consumer Lending 2.126 6.729 4.385 - 13.240

Credit Cards 1.730 5.970 - - 7.700

Finance Lease Receivables 1.384 - - - 1.384

Total 697.503 123.072 99.602 - 920.177

(*) The Bank follows up the entire loan balance overdue less than 30 days within the closely monitored loans based on conservatism principal and TRY 621.618 Thousand of such amount is not overdue as of December 31, 2011 (Finance Lease Receivable TRY 1.384 Thousand).




6. Information on Held to Maturity Investments (Net)

6.1. Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements:

6.1.1. Information on Held to Maturity Investments Given as Collateral or Blocked:

None.

6.1.2. Held to Maturity Investments Subject to Repurchase Agreements:

None.

6.2. Information on Government Debt Securities Classified as Held to Maturity Investments:

Held-to-maturity investments of the Bank in the prior period were redeemed during the current period (December 31, 2011: TRY 77.053 Thousand).

Current Period Prior PeriodTRY FC TRY FC

Government Bonds - - - - Treasury Bills - - - -

Other Public Debt Securities - - 77.053 -Total - - 77.053 -

6.3. Information on Held to Maturity Investments:


TRY FC TRY FC

Debt Securities - - 77.053 -

Quoted on a Stock Exchange - - 51.446 -

Not Quoted (*) - - 25.607 -

Impairment Provision (-) - - - -

Total - - 77.053 -

(*) 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:


Beginning Balance 77.053 77.032

Foreign Currency Differences on Monetary Assets - -

Purchases During the Period - -

Disposals through Sales and Redemptions (77.000) -

Impairment Provision (-) - -

Valuation Effect (53) 21

Closing Balance - 77.053





156

157





7. Information on Associates (Cont’d)

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


Banks - -Insurance Companies - -Factoring Companies - -Leasing Companies - -Finance Companies - -Other Subsidiaries 108.967 96.873

8. Information on Subsidiaries (Net)

8.1. Information on Capital Adequacies of Major Subsidiaries:

Işık Sigorta A.Ş.Tuna Gayrimenkul Yatırım

Ortaklığı A.Ş.Paid-in Capital 60.000 100.297Legal reserves 1.833 -Extraordinary reserves 8.261 -Another Reserves 164 23.855Profit/Loss 4.618 (8.967)

Prior Period Profit/Loss - (10.371)Net Income 4.618 1.404

Leasehold Improvements on Operational Leases (-) - -Intangible Assets (-) - -Total Core Capital 74.876 115.185Supplementary Capital - -Capital 74.876 115.185Net Available Equity 74.876 115.185

8.2. Information on Subsidiaries:

Company NameAddress

(City / Country)Bank’s Share Percentage, If

Different-Voting Percentage (%)Bank’s Risk Group

Share Percentage (%)(1) Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş. Ankara / Türkiye 99,93% 99,93%(2) Asya Kart Teknoloji Hizmetleri A.Ş. İstanbul / Türkiye 99,75% 99,75%(3) Asya Emeklilik ve Hayat A.Ş. (*) İstanbul / Türkiye 97,99% 97,99%(4) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. İstanbul / Türkiye 95,00% 95,00%(5) Işık Sigorta A.Ş. İstanbul / Türkiye 67,52% 67,52%(6) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul / Türkiye 22,94% 69,42%(7) Asya Varlık Kiralama A.Ş.(**) İstanbul / Türkiye 100,00% 100,00%(8) Asya Menkul Değerler A.Ş.(**) İstanbul / Türkiye 100,00% 100,00%

(*) The Bank has become the shareholder of Asya Emeklilik ve Hayat A.Ş. established on July 1, 2011.(**) The Bank has established Asya Menkul Değerler A.Ş. on November 2, 2012 and Asya Varlık Kiralama A.Ş. on December 10, 2012.




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 1,75% 1,75%

(*) 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, TRY 4.900 Thousand and TRY 10.883 Thousand for capital increase respectively on June 8, 2010, October 3, 2011 and March 8, 2012. As of the reporting date capital registry process has not been finalized yet.

Total Assets EquityTotal Fixed

AssetsProfit Share

Income

Income from Marketable Securities Portfolio

Current Pe-riod Profit/

LossPrior Period Profit/Loss Fair Value

(1)(*) 348.679 (210.097) 110.052 - - (93.279) (93.799) (****) 175.277

(2)(*) 43.438 43.202 - - - (29) (192) (*****) 56.966

(3)(**) 780.612 137.837 20.466 22.870 - 12.060 13.158 -

(4)(***) 247.800 242.307 3.113 8.322 1 6.695 7.665 -

(*) Financial information is provided from the associate’s unaudited statements as of December 31, 2012.(**) Financial information is provided from the associate’s reviewed statements as of September 30, 2012.(***) Financial information is provided from the associate’s unreviewed statements as of September 30, 2012.(****) It is the 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.

7.2. Movement of Associates:

Current Period Prior PeriodBalance at the Beginning of the Period 96.873 86.606Movements in Period 12.094 10.267

Purchases 12.094 10.267Bonus Shares Obtained - -Dividends from Current Period Income - -Sales - -Revaluation Increase - -Provision for Diminution in Value - -

Balance at the End of the Period 108.967 96.873Capital Commitments - 1.000Share Percentage at the End of the Period (%) 1,75% - 40,00% 1,75% - 40,00%





158

159





8. Information on Subsidiaries (Net) (Cont’d)

8.2. Information on Subsidiaries (Cont’d):

(*) Total Assets EquityTotal Fixed

AssetsProfit Share

IncomeIncome from Marketable

Securities PortfolioCurrent Period

Profit/LossPrior Period Profit/Loss

Fair Value

(1) 72.642 62.001 1.479 56 - (1.958) 149 -(2) 44 44 - - - (7) 9 -(3) 38.399 7.942 501 676 - (10.836) (1.221) -(4) 200 200 - 13 - 5 1 -(5) 228.662 74.876 1.189 12.960 - 4.618 5.786 (**) 190.616(6) 137.833 115.185 36.063 256 - 1.404 (2.054) (***) 192.051(7) 54 48 - - - (2) - -(8) 2.287 2.268 - - - (395) - -

(*) Financial information is provided from the associate’s unaudited financial statements as of December 31, 2012.(**) 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.

8.3. Movement of Subsidiaries:

Current Period Prior PeriodBalance at the Beginning of the Period 154.761 144.963Movements in Period 14.712 9.798

Purchases 14.712 9.798Bonus Shares Obtained - -Dividends from Current Period Income - -Sales - -Revaluation Increase - -Provision for Diminution in Value - -

Balance at the End of the Period 169.473 154.761Capital Commitments (*) 7.500 9.798Share Percentage at the End of the Period (%) 22,94%-99,93% 22,94%-99,93%

(*) Current period amount consists of capital commitment amounting to TRY 7.500 Thousand to the Bank’s subsidiary Asya Menkul Değerler A.Ş. (December 31, 2011: It consists of capital commitment amounting to TRY 9.798 Thousand to the Bank’s subsidary Asya Emeklilik ve Hayat A.Ş.).

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

Subsidiaries Current Period Prior Period Banks - - Insurance Companies 52.468 50.154 Factoring Companies - - Leasing Companies - - Finance Companies - - Other Subsidiaries 60.003 47.655

8.5. Subsidiaries Quoted on the Stock Exchange:

None.

9. Information on Entities under Common Control

None.




10. Information on Finance Lease Receivables (Net) 10.1. Presentation of Finance Lease Receivables According to Their Remaining Maturities:


Gross Net Gross NetLess than 1 Year 8.530 6.355 77.197 58.5721 to 4 Years 227.006 169.124 183.888 139.523More than 4 Years 142.803 106.391 131.344 99.656

Total 378.339 281.870 392.429 297.751

10.2. Information on Net Investments in Finance Leases:


Gross Finance Lease Receivables 378.339 392.429Unearned Finance Lease Income (-) (96.469) (94.678)

Net Receivable from Finance Leases 281.870 297.751

11. Information on Derivative Financial Assets for Hedging Purposes

None.

12. Information on Tangible Assets

BuildingsLeased Tangible

Assets VehiclesOffice

EquipmentsOther Tangi-ble Assets (*) Total

Cost Opening Balance - January 1, 2012 4.220 32.583 1.935 47.863 181.468 268.069Additions 12.725 - 1.007 13.198 34.603 61.533 Disposals - (3.894) (830) (2.191) (1.845) (8.760) Impairment (Losses) / Reversal (213) - - - - (213)Closing Balance - December 31, 2012 16.732 28.689 2.112 58.870 214.226 320.629

Accumulated Depreciation (-)Opening Balance - January 1, 2012 754 29.241 575 25.436 99.270 155.276Depreciation Expense 232 3.261 488 8.832 31.987 44.800Disposals - (3.894) (50) (2.034) (1.568) (7.546)Closing Balance - December 31, 2012 986 28.608 1.013 32.234 129.689 192.530

Net Book Value - December 31, 2011 3.466 3.342 1.360 22.427 82.198 112.793

Net Book Value - December 31, 2012 15.746 81 1.099 26.636 84.537 128.099

(*) Other tangible assets comprise leasehold improvements, safety box, furniture and other fixed assets.





160

161





12. Information on Tangible Assets (Cont’d)

Buildings

Leased Tangible Assets Vehicles

Office Equipments

Other Tangible Assets (*) Total

Cost Opening Balance - January 1, 2011 12.454 36.106 2.129 41.849 163.267 255.805Additions - - 803 8.204 22.913 31.920 Disposals (8.123) (3.523) (714) (2.190) (4.712) (19.262)Transfers - - (283) - - (283)Impairment (Losses) / Reversal (111) - - - - (111)

Closing Balance - December 31, 2011 4.220 32.583 1.935 47.863 181.468 268.069

Accumulated Depreciation (-)Opening Balance - January 1, 2011 2.442 26.667 397 25.125 67.773 122.404Depreciation Expense 282 5.961 312 406 37.190 44.151Disposals (1.970) (3.387) (134) (95) (5.693) (11.279)

Closing Balance - December 31, 2011 754 29.241 575 25.436 99.270 155.276



(*) Other tangible assets comprise leasehold improvements, safety box, furniture and other fixed assets.

13. Information on Intangible Assets

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


Book Value 31.905 24.972 Accumulated Depreciation (18.126) (13.960)

Net Book Value 13.779 11.012




13. Information on Intangible Assets (Cont’d)

13.2. Intangible Assets Movement Table:

Computer Software

Cost

Opening Balance - January 1, 2012 24.972

Additions 6.933

Closing Balance - December 31, 2012 31.905

Accumulated Amortization (-)

Opening Balance - January 1, 2012 13.960

Depreciation Expense 4.166

Closing Balance - December 31, 2012 18.126

Net Book Value - December 31, 2011 11.012


Computer Software

Cost Opening Balance - January 1, 2011 20.728 Additions 4.244 Closing Balance - December 31, 2011 24.972

Accumulated Amortization (-) Opening Balance - January 1, 2011 10.309 Depreciation Expense 3.651 Closing Balance - December 31, 2011 13.960



14. Information on Investment Properties

None (December 31, 2011: None).





162

163





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 December 31, 2012, assets held for sale amounts to TRY 151.869 Thousand (December 31, 2011: TRY 8.724 Thousand).

Current Period Prior PeriodOpening Balance - January 1 8.724 6.509 Additions (**) 141.000 3.239 Disposals (3.120) (3.468) Transfers (net) (*) 5.265 2.481 Impairment Losses - (37)Closing Balance - December 31 151.869 8.724

(*) In current period, TRY 5.265 Thousand of balance is transferred from assets held for sale to assets to be disposed off in other assets which is accounted in assets held for sale for more than one year (December 31, 2011: TRY 3.117 Thousand of balance is transferred from assets held for sale to assets to be disposed off in other assets which is accounted in assets held for sale for more than one year. TRY 5.598 Thousand of real estate’s within assets to be disposed off have been qualified as and transferred to assets held for sale).(**) The Bank has purchased 98,80% shares of Adapazarı Şeker Fabrikaları A.Ş. owned by S.S. Adapazarı Pancar Ekicileri Kooperatifi in order to be off setted from its debts as of the balance sheet date. The Bank Management has an active plan about sale of related shares to third parties and as of reporting date, process related to the sale is on going.

17. Information on Other Assets

Other assets amount to TRY 598.825 Thousand and do not exceed 10% of the total assets (December 31, 2011: TRY 438.059 Thousand). Amounts of TRY 351.935 Thousand (December 31, 2011: TRY 340.899 Thousand) belong to assets to be disposed off.




15. Information on Deferred Tax Asset

As of December 31, 2012, deferred tax asset computed on the temporary differences, except for general loan provision and provision for possible risks, is TRY 16.348 Thousand and is recorded in the deferred tax asset account.

Current Period

Deferred Tax Base Deferred Tax Asset/(Liability)

Deferred Commission Income 67.376 13.475

Employee Benefits 39.801 7.960

Valuation of Financial Assets (26.384) (5.277)

Other Provisions 8.348 1.670

Tangible Assets Tax Base Differences (7.401) (1.480)

Deferred Tax Asset (net) 81.740 16.348

Prior Period

Deferred Tax Base Deferred Tax Asset/(Liability)

Deferred Commissi on Income 60.881 12.176

Employee Benefits 28.854 5.771

Valuation of Financial Assets 16.133 3.227

Other Provisions 5.726 1.145

Tangible Assets Tax Base Differences (14.604) (2.921)

Deferred Tax Asset (net) 96.990 19.398

Movement of the deferred tax asset as of December 31, 2012 and December 31, 2011 is stated as below:

Current Period Prior PeriodDeferred Tax Asset, January 1 19.398 9.811Deferred Tax Recognized Directly Under Equity (5.362) 5.083Deferred Tax Benefit /(Charge) 2.312 4.504Deferred Tax Asset, December 31, 2012 16.348 19.398





164

165




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

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

Prior Period DemandUp 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 TotalI. Real Persons Current Deposits-TRY

560.652 - - - - - - - 560.652

II. Real Persons Profit Sharing Accounts-TRY

- 1.552.244 799.747 163.642 - 121.309 2.314.661 - 4.951.603

III. Other Current Accounts-TRY 951.137 - - - - - - - 951.137 Public Sector 27.575 - - - - - - - 27.575 Commercial Sector 893.823 - - - - - - - 893.823 Other Institutions 28.391 - - - - - - - 28.391 Commercial and Other Institu-

tions1.183 - - - - - - - 1.183

Banks and Participation Banks 165 - - - - - - - 165 Central Bank - - - - - - - - - Domestic Banks - - - - - - - - - Foreign Banks - - - - - - - - - Participation Banks 165 - - - - - - - 165 Other - - - - - - - - -IV. Profit Sharing Accounts-TRY - 227.521 272.785 35.508 - 18.441 795.816 - 1.350.071 Public Sector - 82 10 81 - - 2.590 - 2.763 Commercial Sector - 212.946 266.556 13.819 - 6.071 680.261 - 1.179.653 Other Institutions - 14.474 6.139 21.608 - 12.370 112.215 - 166.806 Commercial and Other Institu-

tions- 19 80 - - - 750 - 849

Banks - - - - - - - - -V. Real Persons Current Deposits-FC

236.574 - - - - - - - 236.574

VI. Real Persons Profit Sharing Accounts-FC

- 390.367 386.765 70.884 - 101.823 807.731 - 1.757.570

VII. Other Current Accounts-FC 420.885 - - - - - - - 420.885 Commercial Residents in Turkey 350.762 - - - - - - - 350.762 Commercial Residents in Abroad 28.486 - - - - - - - 28.486 Banks and Participation Banks 41.637 - - - - - - - 41.637 Central Bank - - - - - - - - - Domestic Banks - - - - - - - - - Foreign Banks 15.737 - - - - - - - 15.737 Participation Banks 25.900 - - - - - - - 25.900 Other - - - - - - - - -VIII. Profit Sharing Accounts- FC - 198.825 264.490 91.093 - 59.129 603.030 - 1.216.567

Public Sector - 30 - - - - 46 - 76Commercial Sector - 147.610 262.053 12.296 - 35.292 575.303 - 1.032.554Other Institutions - 634 342 78.772 - - 23.335 - 103.083

Commercial and Other Institu-tions

- 1.987 10 25 - 1.210 1.865 - 5.097

Banks and Participation Banks - 48.564 2.085 - - 22.627 2.481 - 75.757IX. Precious Metal Deposits 951.984 - - - - - - - 951.984X. Profit Sharing Accounts Special Fund Pools TRY

- - - - - - - - -

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

XI. Profit Sharing Accounts Special Fund Pools-FC

- - - - - - - - -

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

Total(I+II+…..+IX+X+XI) 3.121.232 2.368.957 1.723.787 361.127 - 300.702 4.521.238 - 12.397.043



II. Explanations and Disclosures Related to the Liabilities

1.1. Information on Maturity Structure of Deposits:

Current Period DemandUp 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 TotalI. Real Persons Current Deposits-TRY 638.149 - - - - - - - 638.149II. Real Persons Profit Sharing Accounts-TRY

- 2.159.925 1.021.962 156.958 - 87.361 2.584.773 - 6.010.979

III. Other Current Accounts-TRY 956.407 - - - - - - - 956.407

Public Sector 115.672 - - - - - - - 115.672

Commercial Sector 803.044 - - - - - - - 803.044

Other Institutions 35.947 - - - - - - - 35.947

Commercial and Other Institutions 1.466 - - - - - - - 1.466

Banks and Participation Banks 278 - - - - - - - 278

Central Bank - - - - - - - - -

Domestic Banks 1 - - - - - - - 1

Foreign Banks - - - - - - - - -

Participation Banks 277 - - - - - - - 277

Other - - - - - - - - -

IV. Profit Sharing Accounts-TRY - 412.214 377.038 29.045 - 118.097 699.462 - 1.635.856

Public Sector - 62 3 - - - 3.141 - 3.206

Commercial Sector - 389.204 255.981 14.160 - 111.835 635.148 - 1.406.328

Other Institutions - 22.943 81.097 3.161 - 6.262 58.202 - 171.665

Commercial and Other Institutions - 5 85 - - - 2.971 - 3.061

Banks - - 39.872 11.724 - - - - 51.596

V. Real Persons Current Deposits-FC 262.680 - - - - - - - 262.680VI. Real Persons Profit Sharing Ac-counts-FC

- 667.530 610.379 63.321 - 85.259 996.743 - 2.423.232

VII. Other Current Accounts-FC 449.034 - - - - - - - 449.034

Commercial Residents in Turkey 387.633 - - - - - - - 387.633

Commercial Residents in Abroad 31.465 - - - - - - - 31.465

Banks and Participation Banks 29.936 - - - - - - - 29.936

Central Bank - - - - - - - - -

Domestic Banks - - - - - - - - -

Foreign Banks 26.229 - - - - - - - 26.229

Participation Banks 3.707 - - - - - - - 3.707

Other - - - - - - - - -

VIII. Profit Sharing Accounts- FC - 589.681 878.698 67.547 - 147.262 371.563 - 2.054.751

Public Sector - 18 - - - - 4.935 - 4.953

Commercial Sector - 567.224 858.091 67.547 - 142.476 341.897 - 1.977.235

Other Institutions - 3.336 338 - - - 16.290 - 19.964

Commercial and Other Institutions - 8.978 19.914 - - 4.786 8.441 - 42.119

Banks and Participation Banks - 10.125 355 - - - - - 10.480

IX. Precious Metal Deposits 868.745 - 315.722 11.091 - 4.373 110.839 - 1.310.770X. Profit Sharing Accounts Special Fund Pools-TRY

- - - - - - - - -

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

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

- - - - - - - - -

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

Residents Abroad - - - - - - - - -

Total(I+II+…..+IX+X+XI) 3.175.015 3.829.350 3.203.799 327.962 - 442.352 4.763.380 - 15.741.858





166

167





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 - 41.616 - 24.821

From Foreign Banks, Institutions and Funds - 1.773.787 - 1.433.009

Total - 1.815.403 - 1.457.830

3.2. Maturity Analysis of Borrowings:


TRY FC TRY FC

Short-Term - 1.477.163 - 938.119

Medium-Term and Long-Term - 338.240 - 519.711

Total - 1.815.403 - 1.457.830

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 532.855 Thousand and do not exceed 10% of the total balance sheet total (December 31, 2011: TRY 283.839 Thousand).

5. Information on Financial Lease Obligations

None.

6. Information on Derivative Financial Liabilities for Hedging Purposes

None.




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 PeriodReal Persons Current and Profit Sharing Accounts that are not Subject to Commercial Activities

4.535.700 3.825.673 6.022.383 4.577.635

TRY Accounts 3.128.651 2.775.039 3.520.370 2.737.187FC Accounts 1.407.049 1.050.634 2.502.013 1.840.448Foreign 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 Prior PeriodDeposits and Other Accounts held at Foreign Branches - -Deposits and Other Accounts held by Shareholders and their Relatives 30.798 26.121Deposits and Other Accounts of the Chairman and Members of Board of Directors, Chief Executive Officer, Senior Executive Officers and their Relatives

13.275 32.769

Deposits 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 44.073 58.890

2. Information on Derivative Financial Liabilities Held for Trading

As of December 31, 2012, derivative financial liabilities held for trading amounts to TRY 6.581 Thousand (December 31, 2011: TRY 11.715 Thousand).


TRY FC TRY FC

Forward Transactions (*) - 606 - 2.312

Swap Transactions - 5.975 - 9.403

Futures Transactions - - - -

Options - - - -

Other - - - -

Total - 6.581 - 11.715

(*) Includes forward asset purchase/sale commitments.





168

169





7. Explanations on Provisions (Cont’d)

7.3. Information on Provision for Foreign Exchange Losses on the Foreign Currency Indexed Loans and Finance Lease Receivables:

As of December 31, 2012, the Bank’s provision for foreign currency indexed loans amounts to TRY 25.499 Thousand (December 31, 2011: TRY 2.518 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 December 31, 2012, the Bank’s specific provision provided for unindemnified non-cash loans amounts to TRY 22.585 Thousand (December 31, 2011: TRY 21.016 Thousand).

7.5. Information on Other Provisions:

7.5.1. Information on Provisions for Potential Risks:


7.5.2. Information on Other Provisions:

Other Provisions Current Period Prior Period

Provision for Unindemnified Non Cash Loans 22.585 21.016

Provision for Credit Cards Promotion of Banking Services 5.323 4.434

Provision Amount Allocated for Profit Share Accounts 1.562 3.616

Payment Commitment for Checks 3.925 2.001

Litigation Provision 1.445 1.251

Total 34.840 32.318

7.5.3. Movement of the Retirement Pay Provision:

Current Period Prior PeriodOpening Balance - January 1 15.401 11.955Current Service Cost 2.688 2.166Interest Cost 1.445 1.151Benefits Paid (2.523) (1.188)Settlement/Curtailment/Termination Loss/(Gain) 1.229 336Actuarial Loss/(Gain) 5.091 981Closing Balance - December 31 23.331 15.401

The Bank has reflected the employee benefit provision to the financial statements by using actuarial valuation method stated in TAS 19.

As of December 31, 2012 the Bank provided a provision of TRY 16.470 Thousand for the unused vacation provision (December 31, 2011: TRY 13.453 Thousand).




7. Explanations on Provisions

7.1. Information on General Provisions:

Current Period Prior Period General Provisions 182.485 131.066 I. Provisions for First Group Loans and Receivables 139.887 98.783

Profit Sharing Accounts’ Share 65.328 47.908The Bank’s Share 74.559 50.875Other - -

I. Additional Provision for Second Group Loans and Receiv-ables with Extended Maturities

554 -

Profit Sharing Accounts’ Share 551 -The Bank’s Share 3 -Other - -

II. Provisions for Second Group Loans and Receivables 17.333 15.538Profit Sharing Accounts’ Share 5.505 3.929The Bank’s Share 11.828 11.609Other - -

II. Additional Provision for Second Group Loans and Re-ceivables with Extended Maturities

5.755 -

Profit Sharing Accounts’ Share 69 -The Bank’s Share 5.686 -Other - -

Provisions for Non Cash Loans 18.956 16.745

7.2. Movement of General Provisions:

Current Period Opening Balance - January 1, 2012 131.066 Charge for Period (*) 38.226 Reversal of Prior Period Expenses (6.533) Profit Sharing Accounts Share (*) 22.219

Foreign Exchange Difference (2.493) Closing Balance- December 31, 2012 182.485Prior Period Opening Balance – January 1, 2011 117.204 Charge for Period 9.768 Reversal of Prior Period Expenses (3.925) Profit Sharing Accounts Share 8.019 Closing Balance- December 31, 2011 131.066

(*) The calculation of daily unit value has changed with “Regulation on the Principles and Procedures for Accepting Withdrawal of Deposits and Participations Funds as well as the Prescribed Deposits, Participation Funds Custody and Receivables” published in the Official Gazette No 26333 dated November 1, 2006 and general loan provision charge belonging to profit sharing account is included in this balance starting from January 1, 2012.





170

171





8. Explanations on Taxes Payable

8.1. Information on Current Tax Liability:

As of December 31, 2012, the Bank’s corporate tax payable is TRY 11.307 Thousand after offsetting pre-paid corporate tax (December 31, 2011: TRY 9.011 Thousand).

Current Period Prior PeriodProvision for Corporate Taxes 57.361 57.546 Prepaid Corporate Tax (46.054) (48.535)

Corporate Tax Payable 11.307 9.011

8.2. Information on Taxes Payable:

Current Period Prior PeriodCorporate Taxes Payable 11.307 9.011 Taxation of Securities 9.662 8.599 Property Tax 760 638 Banking Insurance Transaction Tax (BITT) 9.961 10.537 Foreign Exchange Transaction Tax - - Value Added Tax Payable 697 415 Other 12.219 10.317

Total 44.606 39.517

8.3. Premiums:

Current Period Prior PeriodSocial Security Premiums-Employee 3.523 4.574 Social Security Premiums-Employer 4.933 6.417 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 251 325 Unemployment Insurance-Employer 501 650 Other - -

Total 9.208 11.966

8.4. Explanations on Deferred Tax Liabilities:


9. Information on Liabilities Regarding Assets Held for Sale and Discontinued Operations


10. Information on Subordinated Loans


11. Information on Shareholders’ Equity

11.1. Presentation of Paid-in Capital:

Current Period Prior PeriodCommon Stock 540.000 540.000Preferred Stock (*) 360.000 360.000

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




11. Information on Shareholders’ Equity (Cont’d)

11.2. 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 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 PeriodFrom Associates, Subsidiaries, and Entities under Common Control (Joint Vent.)

- -

Valuation Difference - -Foreign Exchange Difference - -From Financial Assets Available for Sale 7.853 (13.599)Valuation Difference 7.853 (13.599)Foreign Exchange Difference - -Total 7.853 (13.599)

11.10. Other:

Per General Assembly dated March 31, 2012, TRY 3.805 Thousand, which is 75% of TRY 5.074 Thousand gain on sale of property recognized in statement of income as of December 31, 2011, has been transferred from “Prior Period Profit/(Loss)” to “Tangible and Intangible Assets Revaluation Differences” in the current period.





172

173




III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments (Cont’d)

2. Information on I st and II nd Group Non-Cash Loans

I st Group II nd Group TRY FC TRY FC

Non Cash Loans 3.631.547 4.087.704 137.725 119.876Letters of Guarantee 3.561.748 2.733.367 136.846 119.876Endorsements and Acceptances 20.590 328.613 - -Letters of Credit 2.099 920.926 -Endorsements - - - -Underwriting Commitments - - - -Factoring Commitments - - - -Other Commitments and Contingencies 47.110 104.798 879 -

3. Derivative Financial Instruments

Derivative Transactions According to Purposes Trading Hedging

Current Period Prior Period Current Period Prior PeriodType of Trading TransactionsForeign Currency Related Derivative Transactions (I)

3.242.796 1.316.473 - -

Forward Transactions 364.458 - - -Swap Transactions 2.878.338 1.316.473 - -Futures Transactions - - - -Option Transactions - - - -

Interest Related Derivative Transactions (II) - - - - Forward 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)

3.242.796 1.316.473 - -

Types of Hedging Transactions - - - -Fair Value Hedges - - - -Cash Flow Hedges - - - -Net Investment Hedges - - - -

B. Total Hedging Related Derivatives - - - -Total Derivative Transactions (A+B) 3.242.796 1.316.473 - -



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:

Current Period Prior PeriodAsset Purchase-Sale Commitments 1.091.647 1.085.835Capital Commitments for Associates And Subsidiaries (*) 7.500 10.798Loan Granting Commitments 32.415 353.633Commitments for Credit Card Expenditure Limits 2.640.066 2.066.016Commitments for Credit Card And Retail Banking Promotions 9.021 7.236Payment Commitments for Checks 815.875 650.723Tax and Fund Liabilities from Export Commitments 1.657 1.883Other Irrevocable Commitments 70.185 39.910Total 4.668.366 4.216.034

(*) Current period amount consists of capital commitment amounting ttoTRY 7.500 Thousand to the Bank’s subsidiary Asya Menkul Değerler A.Ş. (December 31, 2011: It consists of capital commitment amounting to TRY 9.798 Thousand to the Bank’s subsidary Asya Emeklilik ve Hayat A.Ş. and TRY 1.000 Thousand to the Bank’s associates Kredi Garanti Fonu A.Ş.).

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 PeriodGuarantees 6.551.837 7.556.575Bank Acceptances 349.203 323.970Letter of Credits 923.025 1.334.519Other Guarantees 152.787 133.695Total 7.976.852 9.348.759

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

Current Period Prior PeriodProvisional Letters of Guarantees 4.566.757 5.222.228Definite Letters of Guarantee 767.917 759.066Suretyships and Similar Transactions 1.217.163 1.575.281Total 6.551.837 7.556.575

1.3. Total Amount of Non-Cash Loans:

Current Period Prior PeriodNon-cash loans Against Cash Risks 462.751 481.766

With Original Maturity of 1 Year or Less 8.630 6.335With Original Maturity of More than 1 Year 454.121 475.431

Other Non-Cash Loans 7.514.101 8.866.993Total 7.976.852 9.348.759





174

175





6. Summary Information on the Bank’s Rating by the International Rating Institutions MOODY’S

Financial Strength DOutlook Stable

Foreign CurrencyLong Term Ba2 Short Term B1 Outlook Stable

Turkish Lira Long Term Ba2 Short Term Ba1 Outlook Stable

National Long Term A3 Short Term TR-1

The information is obtained from the Moody’s Investor Service report as of February 22, 2012.

SAHA Kurumsal Yönetim ve Kredi Derecelendirme Hizmetleri A.Ş. has completed its Corporate Governance rating report for Bank Asya in accordance with the Turkish Capital Markets Board’s communiqué of “Capital Market Rating Operations and Corporate Governance Principles”. The Bank’s Corporate Governance rating score previously has been identified as 82,56 on July 1, 2011 and revised to 86,14 as of July 2, 2012.




3. Derivative Financial Instruments (Cont’d)

As of December 31, 2012, 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 553.682 104.494

USD 443.609 1.011.084

EUR 87.092 502.730

GOLD 537.480 -

OTHER - 2.625

Total 1.621.863 1.620.933

Prior Period Forward Buy Forward Sell

TRY 12.169 9.450

USD 9.533 653.392

EUR 44.327 -

GOLD 587.602 -

Total 653.631 662.842

As of December 31, 2012, the Bank does not have any derivative transaction held for cash flow hedge purposes.

4. Explanations on Contingent Liabilities and Assets

As of the balance sheet date, there are 273 ongoing court cases against the Bank amounting to TRY 9.259 Thousand, USD 14.658 (full) and EUR 946 (full) based on the information provided from the Legal Department of the Bank (December 31, 2011: There were 204 ongoing court cases against the Bank amounting to TRY 19.825 Thousand, EUR 946 (full)). Amounting to TRY 1.445 Thousand provision has been allocated for some of them at the accompanying financial statements (December 31, 2011: TRY 1.251 Thousand). 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 42.667 Thousand and is recognized under “Guarantee Letters” item of off-balance sheet contingencies and commitments (December 31, 2011: TRY 32.430 Thousand).

5. Explanations on Custodian and Intermediary Services

None.





176

177




IV. Explanations and Disclosures Related to the Statement of Income (Cont’d)

2. Information on Profit Share Expenses

2.1. Information on Interest on Funds Borrowed:


TRY FC TRY FC

Banks - 57.709 - 38.562 Central Bank of the Republic of Turkey - - - - Domestic Banks - 382 - 1.036 Foreign Banks - 57.327 - 37.526 Branches and Foreign Head Office Abroad

- - - -

Other Institutions - - - - Total - 57.709 - 38.562

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


Profit Share Expenses Given to Associates and Subsidiaries 10.258 7.585

2.3. Information on Profit Share Expense to Marketable Securities Issued:

None.



IV. Explanations and Disclosures Related to the Statement of Income

1. Information on Profit Share Income

1.1. Information on Profit Share on Loans:

1st Group 2nd Group TRY FC TRY FC

Profit Share on Loans 1.417.843 114.645 50.464 3.525Short Term Loans 505.994 30.585 6.439 1.867Medium and Long Term Loans 897.722 84.060 44.025 1.658Profit Share on Non-Performing Loans 14.127 - - -Premiums Received from Resource Utilization Sup-port Fund - - - -

1.2. Profit Share from Banks:


Central Bank of the Republic of Turkey (Reserve Deposit)

- - - -

Domestic Banks 2 - 31 -Foreign Banks (*) 988 524 1.289 572Foreign Head Office and Branches - - - -

Total 990 524 1.320 572

(*) Foreign banks include profit shares from “murabaha” loans.

1.3. Information on Interest Received from Marketable Securities:


Financial Assets Held for Trading - - - -Financial Assets at Fair Value through Profit or Loss

- - - -

Financial Assets Available-for-Sale 55.300 - 49.234 -Held to Maturity Investments 1.357 - 8.882 -

Total 56.657 - 58.116 -

1.4. Information on Profit Share Income Received from Associates and Subsidiaries:


Profit Share Income Received from Associates and Subsidiaries 29.970 15.438





178

179





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 NameUp to 1 Month

Up to 3 Months

Up to 6 Months

Up to 9 Months

Up to 1 Year

More than 1 Year

Total

TRYBanks and Finance Houses - 362 126 - - - 488Real Person’s Profit Sharing Acc. 127.221 74.151 10.055 - 8.693 220.184 440.304Public Sector Profit Sharing Acc. 4 1 2 - - 110 117Commercial Sector Profit Sharing Acc. 18.784 24.789 2.832 - 4.315 58.991 109.711Other Institutions Profit Sharing Acc. 1.406 4.684 809 - 893 8.458 16.250

Total 147.415 103.987 13.824 - 13.901 287.743 566.870FC

Banks and Finance Houses 850 703 - - - 66 1.619Real Person’s Profit Sharing Acc. 17.025 21.571 2.090 - 3.488 35.734 79.908Public Sector Profit Sharing Acc. 1 - - - - 55 56Commercial Sector Profit Sharing Acc. 13.242 34.324 4.812 - 7.120 18.564 78.062Other Institutions Profit Sharing Acc. 110 1.098 424 - - 801 2.433Precious Metal Deposits - 1.374 48 - 22 464 1.908

Total 31.228 59.070 7.374 - 10.630 55.684 163.986Grand Total 178.643 163.057 21.198 - 24.531 343.427 730.856

Prior Period Profit Sharing Accounts

Account NameUp to 1 Month

Up to 3 Months

Up to 6 Months

Up to 9 Months

Up to 1 Year

More than 1 Year

Total

TRYBanks and Finance Houses - - - - - - -Real Person’s Profit Sharing Acc. 127.526 70.871 14.933 - 11.874 156.517 381.721Public Sector Profit Sharing Acc. 4 28 6 - - 37 75Commercial Sector Profit Sharing Acc. 17.957 22.520 1.136 - 1.374 52.461 95.448Other Institutions Profit Sharing Acc. 915 2.150 1.026 - 879 3.156 8.126

Total 146.402 95.569 17.101 - 14.127 212.171 485.370FC

Banks and Finance Houses 533 67 406 - 583 29 1.618Real Person’s Profit Sharing Acc. 16.548 14.974 3.078 - 5.010 23.526 63.136Public Sector Profit Sharing Acc. 1 - - - - - 1Commercial Sector Profit Sharing Acc. 5.660 11.252 1.307 - 2.099 18.210 38.528Other Institutions Profit Sharing Acc. 16 166 4.386 - - 608 5.176Precious Metal Deposits - - - - - - -

Total 22.758 26.459 9.177 - 7.692 42.373 108.459Grand Total 169.160 122.028 26.278 - 21.819 254.544 593.829




3. Information on Dividend Income

The Bank has cash dividend income amounting to TRY 3.376 Thousand from its subsidiary, Işık Sigorta A.Ş. (December 31, 2011: None).

4. Information on Net Trading Income (Net)

Current Period Prior Period Profit 4.308.468 6.057.300

Securities Trading Gains - -Gains on Derivative Financial Instruments 257.191 225.104Foreign Exchange Gains 4.051.277 5.832.196

Loss (-) (4.282.660) (6.018.180)Securities Trading Losses - -Losses on Derivative Financial Instruments (127.109) (160.894)Foreign Exchange Losses (4.155.551) (5.857.286)

5. Information on Other Operating Income

The detail of other operating income is stated as below:

Current Period Prior PeriodCommunication Expense Reversal 1.010 1.203 Gain on Sale of Assets 20.807 22.619 Reversals from Previous Years’ Expenses (*) 95.418 88.007 Other 18.795 18.716 Total 136.030 130.545

(*) Includes TRY 82.713 Thousand reversals from specific provisions for loans, general loan provision and doubtful fees and other receivables provision (December 31, 2011: TRY 67.242 Thousand).

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

Current Period Prior Period 336.298 170.277

III. Group Loans and Receivables 41.744 30.827 IV. Group Loans and Receivables 14.135 953 V. Group Loans and Receivables 267.066 127.637 Doubtful Commission, Fee and Other Receivables 13.353 10.860

General Provision Expenses (*) 60.445 9.768 Provision Expenses for Possible Losses - -

Marketable Securities Impairment Losses - - Financial Assets at Fair Value through Profit or Loss - - Financial Assets Available for Sale - -

Impairment Provision Expenses - - Associates - - Subsidiaries - - Entities under Common Control - - Investments Held to Maturity - -

Other 17.033 48.153 Total 413.776 228.198

(*) The calculation of daily unit value has changed with “Regulation on the Principles and Procedures for Accepting Withdrawal of Deposits and Participations Funds as well as the Prescribed Deposits, Participation Funds Custody and Receivables” published in the Official Gazette No 26333 dated November 1, 2006 and general loan provision charge belonging to profit sharing account is included in this balance starting from January 1, 2012.





180

181





7. Information on Other Operating Expenses

Current Period Prior PeriodPersonnel Expenses 317.086 264.766 Provision for Employee Termination Benefits 10.453 4.634 Bank Social Aid Provision Fund Deficit Provision - - Impairment Expenses of Fixed Assets 213 111 Depreciation Expenses of Fixed Assets 44.800 44.151 Impairment Expenses of Intangible Assets - - Impairment Expenses of Goodwill - - Amortization Expenses of Intangible Assets 4.166 3.651 Impairment Provision on Investments Accounted for under Equity Method - - Impairment Expenses of Assets to be Disposed off (*) 154 1.577 Depreciation Expenses of Assets to be Disposed off (*) 7.200 5.378 Impairment Expenses of Assets Held for Sale - 37 Other Operating Expenses 218.022 193.721

Rent Expenses 66.563 57.324 Maintenance Expenses 3.753 3.560 Advertisement Expenses 40.086 30.015 Other Expenses 107.620 102.822 Loss on Sales of Assets 400 2.893 Other 71.084 42.448 Total 673.578 563.367

(*) Depreciation and impairment expenses of assets to be disposed off are presented in other assets.

8. Information on Continuing Operations Profit or Loss before Tax

The Bank’s profit before tax is decreases by 8,80% ( December 31, 2011: 17,01% decreases) as compared to the prior period figures and total profit before tax amounts to TRY 245.411 Thousand (December 31, 2011: TRY 269.132 Thousand). Profit before tax includes TRY 880.325 Thousand (December 31, 2011: TRY 631.224 Thousand) net profit share income, TRY 287.256 Thousand (December 31, 2011: TRY 259.808 Thousand) net fees and commission income. Total operating expense amount is TRY 673.578 Thousand (December 31, 2011: TRY 563.367 Thousand).

9. Information on Continuing Operations Tax Provision

As of December 31, 2012, current tax expense is TRY 57.361 Thousand (December 31, 2011: TRY 57.546 Thousand) and deferred tax income is TRY 2.312 Thousand (December 31, 2011: TRY 4.504 Thousand).

10. Information on Operating Profit/Loss after Taxes

The Bank’s net profit for the current period decreases by 11,89% in compare to the prior period’s net profit.




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 statement of income 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 Statement of Income, If These Liabilities Exceed 10% of the Total Statement of Income Other fees and commissions income/expense are stated as below:

Current Period Prior PeriodOther Fees and Commission Received

Member Firm POS Fees and Commission 81.692 60.590 Credit Card Fees and Commission 70.153 51.726 Expertise Fees 12.829 16.379

Commissions on Collection and Disbursement 16.380 14.395 Money Transfer Commissions 10.393 8.811

Insurance Agency Commissions 10.420 8.285 Other 35.220 26.052

Total 237.087 186.238


Other Fees and Commission Paid

Credit Card Fees and Commission 65.045 53.573

Other 7.550 6.488

Total 72.595 60.061

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.





182

183




VI. Explanations and Disclosures Related to Statement of Cash Flows

1. Cash and Cash Equivalents

1.1. Components of Cash and Cash Equivalents and Accounting Policies Used to Determine Such Components:

“Cash” is defined as cash in TRY and foreign currency, money in transit, cheques purchased and demand deposits in Banks, and “Cash equivalents” is defined as time deposits in Banks having original maturity less than three months and short term “murabaha” (sale at a markup) loans. Deposits held in Central Bank of the Republic of Turkey are not presented as cash equivalents.

1.2. The Effects of the Other Items Stated in the Cash Flow Statement and the Changes in Foreign Currency Exchange rates on Cash and Cash Equivalents:

“Other” item amounting to TRY (406.653) Thousand in “Operating profit before changes in operating assets and liabilities” consists of fees and commission paid, operating lease expenses, repairment and maintenance expenses, advertisement expenses and other operating expenses (December 31, 2011: TRY (473.799) Thousand). “Other Income” amounting to TRY 180.321 Thousand consists of gains on derivative financial transactions, foreign exchange gains and other operating income (December 31, 2011: TRY 91.062 Thousand).

“Net increase/decrease in other assets” amounting to TRY 92.273 Thousand in “Changes in operating assets and liabilities” consists of changes in sundry debtors and other assets (December 31, 2011: TRY 66.499 Thousand). “Net increase/decrease in other liabilities” with a total amount of TRY 206.980 Thousand consists of changes in sundry creditors and other liabilities. (December 31, 2011: TRY 384.973 Thousand).

“Other items” amounting to TRY (6.933) Thousand (31 December 2011: TRY (4.244) Thousand) in “Net cash provided from investing activities” consists of cash paid for purchases of intangible assets.

The effect of changes in foreign exchange rates on cash and cash equivalents as of December 31, 2012 is approximately TRY (108.330) Thousand (December 31, 2011: TRY 18.609 Thousand).

1.3. Cash and Cash Equivalents at the Beginning of the Period:

Current Period Prior PeriodCash 659.310 440.675 Cash in TRY/Foreign Currency 309.718 254.063 Banks-Demand Deposit 349.592 186.612Cash Equivalents 9.773 -

Banks-Time Deposit 9.773 - Murabaha Transactions Classified as Loans - -Total Cash and Cash Equivalents 669.083 440.675

1.4. Cash and Cash Equivalents at the End of the Period:

Current Period Prior PeriodCash 928.186 659.310 Cash in TRY/Foreign Currency 541.810 309.718 Banks-Demand Deposit 386.376 349.592Cash Equivalents 7.069 9.773

Banks-Time Deposit - 9.773 Murabaha Transactions Classified as Loans 7.069 -Total Cash and Cash Equivalents 935.255 669.083



V. Explanations and Disclosures Related to the Statements of Changes in Shareholders’ Equity

1. Increases from Valuation of Financial Assets Available for Sale

Increase resulting from revaluation of financial assets available for sale is TRY 7.853 Thousand (December 31, 2011: TRY 13.599 Thousand decrease).

2. Increases Due to Cash Flow Hedges

None.

3. Reconciliation of Foreign Exchange Differences at Beginning and End of Current Period

None.

4. Dividends Declared Subsequent to the Balance Sheet Date, but Before the Announcement of the Financial Statements

None.

5. Dividends per Share Proposed Subsequent to the Balance Sheet Date

None.

6. Proposals to General Assembly for the Payment Dates of Dividends and if It will not be Distribute the Reasons for This

The Board of Directors has not decided for profit distribution as of the reporting date.

7. Amounts Transferred to Legal Reserves

As of December 31, 2012, amount transferred to legal reserves is TRY 10.805 Thousand (December 31, 2011: TRY 12.998 Thousand).

8. Information on Shares Issued

None.





184

185




VIII. 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 EmployeesDomestic Branches 250 5.051 CountryRep-Offices Abroad (*) 1 1 India Total Assets CapitalBranches Abroad 1 13 Iraq 174.915 - Off-shore Branches - - - - -

(*) The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai and representative office has been opened as at October 1, 2012.

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

The Bank has opened 50 branches in domestic and 1 branch in abroad in the period of January 1- December 31, 2012. Erbil/Iraq branch of the Bank has started its operations as at May 7, 2012. The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai and representative office has been opened as at October 1, 2012.

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 - December 31, 2012 were audited 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.



VII. 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 BankSubsidiaries and

AssociatesDirect and Indirect

Shareholders Other Entities Included in

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

Balance at Beginning of Period 107.795 16.806 - - 206.072 164.645

Balance at End of Period 179.214 16.414 - - 207.200 61.246

Profit Share and Commission Income 29.970 239 - - 47.911 733

(*) The risk group balance includes TRY 678 Thousand finance lease receivables (December 31, 2011: TRY 3.411 Thousand).

1.2. Prior Period:

Risk Group of the BankSubsidiaries and

AssociatesDirect and Indirect

Shareholders Other Entities Included in

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

Balance at Beginning of Period 77.494 8.921 - - 172.548 42.782

Balance at End of Period 107.795 16.806 - - 206.072 164.645

Profit Share and Commission Income 15.438 - - - 35.797 -

(*) The risk group balance includes TRY 3.411 Thousand finance lease receivables (December 31, 2010: TRY 153 Thousand).

1.3. Risk Group Deposits Balances of the Bank:

Risk Group of the Bank

Subsidiaries and Associates

Direct and Indirect Shareholders

Other Entities Included inthe Risk Group

Current and Profit Sharing Accounts Current Period Current Period Current Period

Balance at Beginning of Period 113.796 - 127.638

Balance at End of Period 140.501 - 132.296

Profit Share Expense 10.258 - 7.984

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 6.550 Thousand (December 31, 2011: TRY 10.297 Thousand). Besides remuneration, the key management personnel also receive some further in kind rights.

Date post:	26-Jun-2018
Category:	Documents
Upload:	dangnhu
View:	222 times
Download:	0 times